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EXHIBIT 99.3
Series 1997-2 Supplement to the Master Pooling and Servicing Agreement
dated as of August 21, 1997 among Xxxxxxxx'x Credit Corporation, as Transferor,
Xxxxxxxx'x, Inc., as Servicer, and Norwest Bank Minnesota, National Association,
as Trustee
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EXHIBIT 99.3
XXXXXXXX'X CREDIT CORPORATION
TRANSFEROR
XXXXXXXX'X, INC.
SERVICER
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
TRUSTEE
ON BEHALF OF THE CERTIFICATEHOLDERS
OF THE
XXXXXXXX'X CREDIT CARD MASTER TRUST
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MASTER POOLING AND SERVICING AGREEMENT
DATED AS OF AUGUST 21, 1997
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TABLE OF CONTENTS
PAGE
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Article I Definitions .......................................................................... 1
Section 1.1 Definitions.................................................................... 1
Section 1.2 Other Definitional Provisions.................................................. 20
Article II Appointment of Trustee; Conveyance of Receivables;
Issuance of Certificates ...................................................... 21
Section 2.1 Appointment of Trustee; Conveyance of Receivables.............................. 21
Section 2.2 Acceptance by Trustee.......................................................... 23
Section 2.3 Representations and Warranties Regarding the Transferor........................ 24
Section 2.4 Representations and Warranties of the Transferor Relating
to the Agreement and any Supplement and the Receivables........................ 26
Section 2.5 Covenants of the Transferor and Servicer....................................... 32
Section 2.6 Addition of Accounts; Repurchase of Investor Certificates...................... 35
Section 2.7 Removal of Accounts............................................................ 39
Section 2.8 Discount Option Receivables.................................................... 40
Article III Administration and Servicing of Receivables......................................... 41
Section 3.1 Acceptance of Appointment and Other Matters Relating to
the Servicer .................................................................. 41
Section 3.2 Servicing Compensation......................................................... 43
Section 3.3 Representations, Warranties and Covenants of the Servicer...................... 44
Section 3.4 Reports and Records for the Trustee............................................ 47
Section 3.5 Annual Servicer's Certificate.................................................. 48
Section 3.6 Annual Independent Public Accountants' Servicing Report........................ 48
Section 3.7 Tax Treatment.................................................................. 50
Section 3.8 Adjustments.................................................................... 50
Article IV Rights of Certificateholders and Allocation and Application
of Collections ................................................................ 51
Section 4.1 Establishment of Collection Account and Allocations
with Respect to the Exchangeable Transferor Certificate ....................... 51
Article V Is Reserved And May Be Specified In Any Supplement With
Respect To Any Series ......................................................... 57
Article VI The Certificates..................................................................... 57
Section 6.1 The Certificates............................................................... 57
Section 6.2 Authentication of Certificates................................................. 58
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Section 6.3 Registration of Transfer and Exchange of Certificates.......................... 58
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates.............................. 62
Section 6.5 Persons Deemed Owners.......................................................... 62
Section 6.6 Appointment of Paying Agent.................................................... 63
Section 6.7 Access to List of Certificateholders' Names and Addresses...................... 64
Section 6.8 Authenticating Agent........................................................... 64
Section 6.9 Tender of Exchangeable Transferor Certificate.................................. 65
Section 6.10 Global Certificate; Euro-Certificate Exchange Date............................. 68
Section 6.11 Book-Entry Certificates........................................................ 69
Section 6.12 Notices to Clearing Agency..................................................... 70
Section 6.13 Definitive Certificates........................................................ 70
Section 6.14 Meetings of Certificateholders................................................. 71
Article VII Other Matters Relating To The Trust................................................. 73
Section 7.1 Liability of the Transferor.................................................... 73
Section 7.2 Merger or Consolidation of, or Assumption of
the Obligations of, the Transferor ............................................ 73
Section 7.3 Limitation on Liability of the Transferor...................................... 74
Article VIII Other Matters Relating To The Servicer............................................. 75
Section 8.1 Liability of the Servicer...................................................... 75
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer .................................................. 75
Section 8.3 Limitation on Liability of the Servicer and Others............................. 76
Section 8.4 Indemnification of the Trust and the Trustee................................... 77
Section 8.5 The Servicer Not to Resign..................................................... 78
Section 8.6 Access to Certain Documentation and Information
Regarding the Receivables ..................................................... 78
Section 8.7 Delegation of Duties........................................................... 78
Section 8.8 Examination of Records......................................................... 79
Article IX Pay Out Events....................................................................... 79
Section 9.1 Pay Out Events................................................................. 79
Section 9.2 Additional Rights Upon the Occurrence of Certain Events........................ 80
Article X Servicer Defaults..................................................................... 82
Section 10.1 Servicer Defaults.............................................................. 82
Section 10.2 Trustee to Act; Appointment of Successor....................................... 85
Section 10.3 Notification to Certificateholders............................................. 87
Section 10.4 Waiver of Past Defaults........................................................ 87
Article XI The Trustee.......................................................................... 87
Section 11.1 Duties of Trustee.............................................................. 87
Section 11.2 Certain Matters Affecting the Trustee.......................................... 89
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Section 11.3 Trustee Not Liable for Recitals in Certificates........................... 91
Section 11.4 Trustee May Own Certificates.............................................. 92
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses........................... 92
Section 11.6 Eligibility Requirements for Trustee...................................... 92
Section 11.7 Resignation or Removal of Trustee......................................... 93
Section 11.8 Successor Trustee......................................................... 94
Section 11.9 Merger or Consolidation of Trustee........................................ 94
Section 11.10 Appointment of Co-Trustee or Separate Trustee............................. 94
Section 11.11 Tax Returns and Compliance................................................ 96
Section 11.12 Trustee May Enforce Claims Without Possession of Certificates. ........... 96
Section 11.13 Suits for Enforcement..................................................... 96
Section 11.14 Rights of Certificateholders to Direct Trustee............................ 97
Section 11.15 Representations and Warranties of Trustee................................. 97
Section 11.16 Maintenance of Office or Agency........................................... 97
Article XII Termination.................................................................... 98
Section 12.1 Termination of Trust...................................................... 98
Section 12.2 Optional Purchase; Final Termination Date of
Investor Certificates of any Series ...................................... 99
Section 12.3 Final Payment with Respect to any Series.................................. 100
Section 12.4 Transferor's Termination Rights........................................... 101
Section 12.5 Defeasance................................................................ 102
Article XIII Miscellaneous Provisions...................................................... 103
Section 13.1 Amendment................................................................. 103
Section 13.2 Protection of Right, Title and Interest to Trust.......................... 106
Section 13.3 Limitation on Rights of Certificateholders................................ 107
Section 13.4 Governing Law............................................................. 108
Section 13.5 Notices................................................................... 108
Section 13.6 Severability of Provisions................................................ 109
Section 13.7 Assignment................................................................ 109
Section 13.8 Certificates Nonassessable and Fully Paid................................. 109
Section 13.9 Further Assurances........................................................ 109
Section 13.10 No Waiver; Cumulative Remedies............................................ 109
Section 13.11 Counterparts.............................................................. 110
Section 13.12 Third-Party Beneficiaries................................................. 110
Section 13.13 Actions by Certificateholders............................................. 110
Section 13.14 Merger and Integration.................................................... 110
Section 13.15 Headings.................................................................. 110
Section 13.16 Certificates and Opinions of Counsel...................................... 110
Section 13.17 No Petition Covenant...................................................... 111
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EXHIBITS
Exhibit A: Form of Exchangeable Transferor Certificate
Exhibit B: Form of Assignment of Receivables in Additional Accounts
Exhibit C: Form of Reassignment of Receivables
Exhibit D: Form of Series Closing Date Report
Exhibit E: Form of Monthly Servicer's Certificate
Exhibit F: Form of Annual Servicer's Certificate
Exhibit G: Form of Opinion of Counsel with Respect to the Pooling and
Servicing Agreement and Additional Accounts
Exhibit H: Form of Annual Opinion of Counsel
Exhibit I: Account Agreements
Exhibit J: Form of Depository Agreement (Letter of Representations)
SCHEDULES
Schedule 1 List of Accounts
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THIS MASTER POOLING AND SERVICING AGREEMENT, dated as of
August 21, 1997, is by and among XXXXXXXX'X CREDIT CORPORATION, a Nevada
corporation, as Transferor, XXXXXXXX'X, INC., a Tennessee corporation, as
Servicer, and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as Trustee.
In consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other party and, to the
extent provided herein or in any Supplement, for the benefit of the
Certificateholders and any Enhancement Provider:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"Account" shall mean each consumer revolving credit card
account, originated or acquired by the Sellers, the Transferor or their
Affiliates, including the Bank, which account (i) is identified on the
Servicer's master computer files by the identifying codes specified in the
computer file, microfiche or written list delivered to the Trustee by the
Transferor pursuant to Section 2.1 or Section 2.6, (ii) has been established or
exists pursuant to an Account Agreement between an Eligible Originator and any
Person not a Governmental Authority and (iii) is or will be identified by
account number and Receivable balance as of the Cut-Off Date and as of each
Additional Account Cut-Off Date in each computer file, microfiche or written
list delivered to the Trustee by the Transferor pursuant to Section 2.1 or
Section 2.6. The term "Account" shall include each Transferred Account, and
shall be deemed to refer to an Additional Account only from and after the
Additional Account Closing Date with respect thereto and to an Automatic
Additional Account included automatically pursuant to Section 2.6(d) only from
and after the Creation Date with respect thereto. An "Account" shall be deemed
to refer to any Removed Account only prior to its Removal Date.
"Account Agreements" shall mean the agreements and related
federal Truth-in-Lending Act disclosure statements substantially in the forms
attached as Exhibit I, as such agreements and/or statements and Exhibit I may be
amended, modified or changed from time to time, subject only to Section 2.5(c)
hereof.
"Accumulation Period" shall have, with respect to any Series,
the meaning, if any, specified in the applicable Supplement.
"Additional Account Closing Date" shall mean each date on
which Additional Accounts will be included as Accounts pursuant to Section 2.6.
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"Additional Account Cut-Off Date" shall mean with respect to
any Additional Account, the last day of the Monthly Period preceding the
Additional Account Closing Date.
"Additional Accounts" shall have the meaning specified in
Section 2.6(a).
"Adjusted Investor Amount" shall have the meaning specified in
the Supplements for all outstanding Series.
"Adjustment" shall have the meaning specified in Section
3.8(a).
"Adjustment Payment Obligation" shall have the meaning
specified in Section 3.8(a).
"Affiliate" of any Person shall mean any other Person directly
or indirectly controlling, controlled by or under common control with such
Person.
"Aggregate Adjusted Investor Amount" shall mean the aggregate
Adjusted Investor Amount for all Series outstanding, together with the aggregate
Investor Amounts for those Series that do not have Adjusted Investor Amounts
defined in their respective Supplement(s).
"Aggregate Automatic Addition Limit" shall mean (i) the number
of Eligible Accounts designated as Automatic Additional Accounts, pursuant to
Section 2.6(d), which would either (x) with respect to any period of three (3)
consecutive Monthly Periods commencing in January, April, July or October of a
calendar year equals 15% of the sum of the number of Accounts as of the last
Business Day preceding the commencement of such period (or, the Cut-Off Date,
whichever is later) and the number of Additional Accounts included as Accounts
pursuant to Section 2.6(a) or Section 2.6(b) since such first day or (y) with
respect to any period of twelve (12) consecutive Monthly Periods, equals 20% of
the sum of the number of Accounts as of the last Business Day preceding the
commencement of such period (or, the Cut-Off Date, whichever is later) and the
number of Additional Accounts included as Accounts pursuant to Section 2.6(a) or
Section 2.6(b) since such Business Day or (ii) such higher number of Automatic
Additional Accounts as to which shall meet the Rating Agency Condition.
"Aggregate Investor Amount" shall mean with respect to any
date of determination, the sum of the Investor Amounts with respect to all
Series of Investor Certificates then outstanding.
"Aggregate Investor Percentage" shall mean with respect to any
date of determination, the sum of the applicable Investor Percentages with
respect to all Series then outstanding.
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"Aggregate Principal Receivables" shall mean, for any date of
determination, the aggregate amount of Principal Receivables at the end of such
day.
"Agreement" shall mean this Master Pooling and Servicing
Agreement and all amendments hereof and supplements hereto, including any
Supplement.
"Amortization Period" shall mean, with respect to any Series,
the period following the Revolving Period which shall be the Accumulation
Period, Controlled Amortization Period, Principal Amortization Period, Rapid
Amortization Period or other type of amortization period (as specified in any
related Supplement).
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in Section
9.2(a).
"Assignment" shall have the meaning specified in Section
2.6(c).
"Authorized Newspaper" shall mean one or more newspapers of
general circulation in the Borough of Manhattan, The City of New York printed in
the English language and customarily published on each Business Day, whether or
not published on Saturdays, Sundays and holidays, and shall include The Wall
Street Journal.
"Automatic Additional Accounts" shall have the meaning
specified in Section 2.6(d).
"Bank" shall mean any national banking association or banking
corporation organized under the laws of the United States or any state thereof
that is an Affiliate of the Company that may, as part of its activities,
originate, transfer and/or service Accounts and Receivables.
"Bearer Certificates" shall have the meaning specified in
Section 6.1.
"Bearer Rules" shall mean the provisions of the Code, in
effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder including, to the extent applicable to any Series, proposed or
temporary regulations.
"Book-Entry Certificates" shall mean beneficial interests in
the Investor Certificates, the ownership and transfers of which shall be
evidenced or made through book entries by a Clearing Agency as described in
Section 6.11; provided, that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer permitted and Definitive
Certificates are issued to the Certificate Owners, such Definitive Certificates
shall replace Book-Entry Certificates.
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"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in Birmingham, Alabama; Jackson,
Mississippi; Dallas, Texas; Atlanta, Georgia; Minneapolis, Minnesota or New
York, New York (or, with respect to any Series, any additional city specified in
the related Supplement) are authorized or obligated by law or executive order to
be closed.
"Cede" shall mean Cede & Co. as nominee of The Depository
Trust Company.
"Cedel" shall mean Cedel Bank, societe anonyme or any
successor thereto.
"Certificate" shall mean a certificate of any Series of the
Investor Certificates or the Exchangeable Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose
name a Certificate is registered in the Certificate Register.
"Certificate Interest" shall mean interest payable with
respect to the applicable Series of Investor Certificates pursuant to the
applicable Supplement.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency or on the books
of a Person maintaining an account with such Clearing Agency (directly a
participant or as an indirect participant, in accordance with the rules of such
Clearing Agency), and otherwise shall be (i) the registered owner of Registered
Certificates as shown on the Certificate Register of the Transfer Agent and
Registrar with respect to such Certificates or (ii) the Holder of any Bearer
Certificates.
"Certificate Principal" shall mean principal payable with
respect to the applicable Series of Investor Certificates pursuant to the
applicable Supplement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates, the percentage (or formula on the basis of which such rate shall
be determined) stated in the applicable Supplement; provided that, unless
otherwise provided in the applicable Supplement, in each case such rate shall be
calculated and paid on the basis of a 360-day year consisting of twelve 30-day
months.
"Certificate Register" shall mean the register maintained
pursuant to Section (6.3) providing for the registration of the applicable
Certificates and transfers and exchanges thereof.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended, or any successor provision thereto, including The Depository
Trust Company and Cede.
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"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the
date of issuance of such Series of Certificates, as specified in the related
Supplement.
"Code" or "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.
"Collection Account" shall have the meaning specified in
Section 4.1.
"Collections" shall mean all payments (including Recoveries)
received by the Servicer with respect to the Receivables, in the form of cash,
checks, wire transfers, ATM transfers or other form of payment in accordance
with the related Account Agreements in effect from time to time. Collections
with respect to any Monthly Period shall include (i) interest and other
investment earnings (net of losses and investment expenses) on funds held in the
Excess Funding Account and (ii) the amount of Interchange (if any) allocable to
any Series pursuant to any Supplement with respect to such Monthly Period (to
the extent received by the Trust).
"Common Depositary" shall mean the Person appointed as such as
specified in the related Supplement, in its capacity as common depositary for
the respective accounts of a Foreign Clearing Agency.
"Company" shall mean Xxxxxxxx'x, Inc. and its successors and
assigns.
"Controlled Amortization Period" shall have, with respect to
any Series, the meaning, if any, specified in the applicable Supplement.
"Corporate Trust Office" shall mean the principal office of
the Trustee at which at any particular time its corporate business shall be
administered, which office at the date of the execution of this Agreement is
located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Corporate Trust Services -- Asset-Backed Administration.
"Coupons" shall have the meaning specified in Section 6.1.
"Creation Date" shall mean the date that an Account is
originated and is identified on the Servicer's master computer files.
"Credit Card Guidelines" shall mean the policies and
procedures relating to the operation of the consumer revolving credit card
business of each Eligible Originator, including the policies and procedures for
determining the creditworthiness of customers, the extension of credit,
including special and other promotions, to customers and relating
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to the maintenance of consumer revolving credit card accounts and the collection
of receivables, as such policies and procedures may be amended from time to time
in accordance with Section 2.5(c).
"Cut-Off Date" shall mean the close of business on July 31,
1997.
"Date of Processing" shall mean, with respect to any
transaction, the Business Day on which such transaction is first recorded in the
Servicer's computer master file of consumer revolving credit card accounts
(without regard to the effective date of such recordation).
"Debtor Relief Laws" shall mean the United States Bankruptcy
Code, as amended, and other insolvency, conservatorship, receivership,
reorganization, marshaling of assets or liabilities, liquidation, readjustment
of debts, moratorium, or other similar laws affecting the enforcement, of
creditors' rights in general.
"Default Amount" shall mean, for any Monthly Period, the
aggregate amount of Principal Receivables (other than Ineligible Receivables) in
all Accounts which became Defaulted Accounts during such Monthly Period
(determined in each case as of the date on which the related Account became a
Defaulted Account) minus Recoveries, if any, received during such Monthly
Period, provided the Default Amount shall not be less than $0.
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the Credit Card Guidelines pursuant to which such
Account is governed or the customary and usual servicing procedures of the
Servicer for servicing consumer revolving credit card receivables comparable to
the Receivables, the Servicer has charged off the Receivables in such Account as
uncollectible; in any event, an Account shall be deemed a Defaulted Account no
later than the earlier of (i) the last day of the seventh calendar month in
which the related Obligor has failed to make a qualifying minimum payment on a
delinquent Account and (ii) 30 days after receipt of notice by the Servicer that
the related Obligor has died or has filed a bankruptcy petition or has had a
bankruptcy petition filed against him. Notwithstanding any other provision
hereof, any Receivables in a Defaulted Account which are Ineligible Receivables
shall be treated as Ineligible Receivables rather than as Receivables in
Defaulted Accounts.
"Defeasance" shall have the meaning specified in Section 12.5.
"Defeased Series" shall have the meaning specified in Section
12.5.
"Definitive Certificates" shall have the meaning specified in
Section 6.11.
"Definitive Euro-Certificates" shall have the meaning
specified in Section 6.10.
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"Depository Agreement" shall mean the agreement among the
Transferor, the Trustee and the initial Clearing Agency, in the form attached
hereto as Exhibit J, or as otherwise provided in the related Supplement.
"Determination Date" shall mean, unless otherwise specified in
a Supplement for any Series, with respect to a Monthly Period, a Business Day
occurring in the first 10 days of the succeeding calendar month as selected from
time to time by Servicer prior to each Distribution Date.
"Discount Option" shall have the meaning specified in Section
2.8(c).
"Discount Option Receivables" shall, consistent with Section
2.8, be equal to, on any Date of Processing (commencing with the Cut-Off Date),
the sum of (a) the aggregate Discount Option Receivables at the end of the prior
Date of Processing plus (b) any new Discount Option Receivables created on such
Date of Processing minus (c) any Discount Option Receivable Collections received
on such Date of Processing. The "Discount Option Receivables" created on any
Date of Processing shall mean the product of (i) the amount of Principal
Receivables created on such Date of Processing (without giving effect to the
deduction of the Discount Option Receivables) and (ii) the Discount Percentage;
provided, however, that the aggregate "Discount Option Receivables" at the end
of the Date of Processing preceding the Cut Off Date shall be deemed to be
$5,347,005.
"Discount Option Receivable Collections" shall mean, on any
Date of Processing on and after the date on which the Transferor's exercise of
its discount option pursuant to Section 2.8 is in effect, the product of (a) a
fraction the numerator of which is the amount of Discount Option Receivables and
the denominator of which is the sum of the Principal Receivables and the
Discount Option Receivables, in each case at the end of the prior Monthly
Period, and (b) Collections of Principal Receivables (without giving effect to
Discount Option Receivables) on such Date of Processing.
"Discount Percentage" shall mean the percentage designated by
the Transferor pursuant to Section 2.8 or in any Supplement.
"Dissolution Event" shall have the meaning specified in
Section 9.2(a).
"Distribution Date" shall mean September 15, 1997 and the
fifteenth day of each calendar month thereafter, or, if such fifteenth day is
not a Business Day, the next succeeding Business Day, unless otherwise specified
in the applicable Supplement.
"Eligible Account" shall mean, as of the Cut-Off Date (or,
with respect to Additional Accounts, as of the relevant Additional Account
Cut-Off Date or, with respect to an Account included automatically pursuant to
Section 2.6(d), as of the Creation Date with respect thereto) each Account (i)
in existence and owned by any Eligible Originator or the Transferor, (ii)
payable in United States dollars, (iii) the credit card or cards related
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to which have not been reported lost or stolen or designated counterfeit or
fraudulent, (iv) not identified by the Transferor in its computer files as
having been canceled or charged off due to the Obligor's bankruptcy or
insolvency or death, (v) the receivables in which have not been charged off as
uncollectible prior to the Cut-Off Date or Additional Account Cut-Off Date or
Creation Date, as applicable, in accordance with the Credit Card Guidelines,
(vi) the receivables in which have not been assigned, pledged or sold (other
than pursuant to this Agreement or a Receivables Purchase Agreement), (vii) the
Obligor of which has provided, as its most recent billing address, an address in
the United States or its territories or possessions and (viii) with respect to
which the Transferor or any corporate Affiliate of the Transferor is not the
Obligor.
"Eligible Originator" shall mean (i) each of the Sellers and
their respective successors and assigns, (ii) any of their Affiliates, including
the Bank or (iii) any other originator or acquirer of Receivables that is a
party to a Receivables Purchase Agreement, provided that, with respect to
clauses (ii) and (iii), the Transferor shall have met the Rating Agency
Condition and shall have delivered such notice(s) of compliance with such Rating
Agency Condition to the Trustee and the Servicer.
"Eligible Receivable" shall mean each Receivable which has
arisen under an Eligible Account:
(i) which was created in compliance with all applicable
requirements of law, and pursuant to an agreement which complies with
all applicable requirements of law, in either case the failure to
comply with which would have a material adverse effect upon
Certificateholders,
(ii) with respect to which all material consents,
licenses, approvals or authorizations of, or registrations with, any
governmental authority required to be obtained or given by an Eligible
Originator or by the Transferor in connection with the creation of such
Receivable or the execution, delivery and performance by the Eligible
Originator of the related agreement have been duly obtained or given
and are in full force and effect as of such date of creation;
(iii) as to which upon the transfer of such Receivable to
the Trust by the Transferor, the Trust will have good and marketable
title, free and clear of all Liens (except those Liens permitted by
Section 2.5(b));
(iv) which has been the subject of either a valid transfer
and assignment from the Transferor to the Trust of all of the
Transferor's right, title and interest therein or the grant of a first
priority perfected security interest therein (and in the proceeds
thereof to the extent set forth in Section 9-306 of the UCC as in
effect in the Relevant UCC State), effective until the termination of
the Trust;
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(v) which will at all times be the legal, valid and
binding payment obligation of the Obligor thereof enforceable against
such Obligor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity);
(vi) which constitutes either "chattel paper", an
"account" or a "general intangible" under and as defined in Article 9
of the UCC as then in effect in the Relevant UCC State;
(vii) which, at the time of its transfer to the Trust, has
not been waived or modified except in accordance with the Credit Card
Guidelines or as permitted hereunder;
(viii) which is not at the time of transfer to the Trust,
subject, to the knowledge of the Transferor or the Servicer, any claim
of rescission, setoff, counterclaim or any other defense (including the
defense of usury) of the Obligor, which requires that such Receivable
be charged off in accordance with the Credit Card Guidelines, other
than defenses arising out of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights in general and equity related
defenses;
(ix) as to which, at the time of transfer to the Trust,
the Transferor and the Eligible Originator of such Receivable has
satisfied all obligations required to be satisfied by such time; and
(x) as to which the Eligible Originator and/or the
Transferor has done nothing, at the time of its transfer to the Trust,
to impair the rights of the Trust or Certificateholders therein.
"Eligible Servicer" shall mean the Company, XxXxx'x, Inc. or
any other Affiliate of the Company; the Trustee; or otherwise any entity which,
at the time of its appointment as Servicer, (i) is an established financial
institution having capital or net worth of not less than $50,000,000, (ii) is
servicing a portfolio of consumer revolving credit card accounts, (iii) is
legally qualified and has the capacity to service the Accounts, (iv) has
demonstrated the ability to professionally service a portfolio of similar
consumer revolving credit card accounts in accordance with standards of skill
and care customary in the industry and (v) is qualified to use the software that
is then currently being used to service the Accounts or obtains the right to use
or has its own software which is adequate to perform its duties under this
Agreement.
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"Enhancement" shall mean, with respect to any Series or class
of Certificates within a Series, any letter of credit, guaranteed rate
agreement, maturity guaranty facility, liquidity facility, cash collateral
account, cash collateral guaranty, surety bond, insurance policy, tax protection
agreement, interest rate swap, interest rate cap, spread account, reserve
account or other contract, agreement or arrangement (including the subordination
of a Series or class to another Series or class) for the benefit of
Certificateholders of such Series or class, as set forth in the applicable
Supplement.
"Enhancement Investor Amount" shall have, with respect to any
Series, the meaning specified in the applicable Supplement.
"Enhancement Provider" shall mean, with respect to any Series,
that Person designated as such in the applicable Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated
thereunder.
"Euro-Certificate Exchange Date" shall mean, with respect to
any Series, the date specified in the applicable Supplement.
"Euroclear Operator" shall mean Xxxxxx Guaranty Trust Company
of New York, Brussels Office, as operator of the Euroclear System, or any
successor thereto.
"Euroclear System" shall mean the Euroclear Clearance System,
Societe Cooperative, a Belgian cooperative corporation, all operations of which
are conducted by the Euroclear Operator.
"Excess Funding Account" shall have the meaning specified in
Section 4.1(g).
"Excess Funding Amount" shall mean the amount held in the
Excess Funding Account.
"Exchange" shall mean the procedure described under Section
6.9.
"Exchange Date" shall have, with respect to any Series issued
pursuant to an Exchange, the meaning specified in Section 6.9.
"Exchangeable Transferor Certificate" shall mean the
certificate executed by the Transferor and authenticated by the Trustee,
substantially in the form of Exhibit A and exchangeable as provided in Section
6.9 for one or more Series of Investor Certificates and any reissued
Exchangeable Transferor Certificate.
"Exchange Notice" shall have, with respect to any Series
issued pursuant to an Exchange, the meaning specified in Section 6.9.
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"FASIT" shall mean a financial asset securitization trust as
defined in the Code.
"FDIC" shall mean the Federal Deposit Insurance Corporation,
or any successor thereto.
"Final Termination Date" shall have the meaning specified in
Section 12.1(a).
"Finance Charge Receivables" shall mean (i) Receivables
created in respect of Finance Charges and (ii) Discount Option Receivables.
Collections of Finance Charge Receivables with respect to any Monthly Period
also shall include the sum of (a) the amount of Interchange (if any) allocable
to any Series pursuant to any Supplement with respect to such Monthly Period (to
the extent received by the Trust), (b) the excess, if any, of Recoveries
collected during such Monthly Period over the aggregate amount of Principal
Receivables in Defaulted Accounts charged off during such Monthly Period and
(c) interest, if any, earned (net of investment expenses and losses) on the
Excess Funding Account.
"Finance Charge Shortfalls" shall have, with respect to any
Series, the meaning specified in the applicable Supplement.
"Finance Charges" shall have the meaning specified in the
Account Agreement applicable to each Account, and in all events, notwithstanding
the terms of the Account Agreement, shall include interest, cash advance fees,
annual cardholder fees, late fees, over limit fees, returned check fees and all
other fees and charges on the Account (other than Insurance Charges and service
contract charges).
"Fiscal Year" shall mean the period beginning on the Sunday
following the Saturday that is closest to the 31st of January of each year, and
ending on the Saturday that is closest to the 31st of January of the following
year, or such other fiscal year as may hereafter be designated by each of
Xxxxxxxx'x, Inc. and/or its corporate Affiliates.
"Foreign Clearing Agency" shall mean, with respect to any
Series, Cedel or the Euroclear Operator or any other established clearing agency
for securities outside the United States designated in the applicable
Supplement.
"Global Certificate" shall have the meaning specified in
Section 6.10(a).
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any United States
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"Group" shall mean, with respect to any Series, the group of
Series, if any, in which the related Supplement specifies such Series is to be
included.
"Ineligible Receivable" shall have the meaning specified in
Section 2.4(d)(iii).
"Initial Closing Date" shall mean August 21, 1997.
"Initial Investor Amount" shall mean, with respect to any
Series, the amount specified in the applicable Supplement.
"Insurance Charges" shall mean, with respect to any Account,
the monthly premiums charged to the related Obligor with respect to any
Insurance Policies.
"Insurance Policies" shall mean any credit life or health,
accident or supplemental or other insurance plans offered by or through the
Transferor or any Seller with respect to the Accounts.
"Insurance Proceeds" shall mean amounts received or recovered
pursuant to any Insurance Policies.
"Interchange" shall mean interchange fees payable (whether
directly or as a result of any assignment or transfer) to the Bank, any Seller
or the Transferor, through VISA USA, Inc. and MasterCard International
Incorporated, or any other credit card organization.
"Investor Amount" shall have, with respect to each Series, the
meaning specified in the applicable Supplement.
"Investor Certificate" shall mean any one of the certificates
executed by the Transferor and authenticated by the Trustee substantially in the
form attached to the applicable Supplement.
"Investor Certificateholder" shall mean the holder of record
of an Investor Certificate.
"Investor Charge Offs" shall have, with respect to each
Series, the meaning specified in the applicable Supplement.
"Investor Default Amount" shall mean, with respect to each
Series for any Monthly Period, an amount equal to the product of (a) the Default
Amount for such Monthly Period and (b) the related Investor Percentage for such
Monthly Period.
"Investor Monthly Servicing Fee" shall have, with respect to
each Series, the meaning specified in Section 3.2.
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"Investor Percentage" shall have, with respect to each Series,
the meaning specified in the applicable Supplement.
"Knowledge" or "knowledge" as used with respect to a Person
(including references to such Person being aware of a particular matter) shall
mean those facts that are known or should reasonably have been known after due
inquiry, except as to the Trustee who shall have no duty of inquiry except as
provided in this Agreement, by the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, chief credit officer, general
counsel, any assistant or deputy general counsel, or any senior or executive
vice president of such Person or the vice president of credit administration or
the treasurer, and, except in the case of the Trustee and unless otherwise
provided by this Agreement, the knowledge of any such persons obtained or which
would have been obtained from a reasonable investigation.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the Uniform
Commercial Code (other than any such financing statement filed for informational
purposes only) or comparable law of any jurisdiction to evidence any of the
foregoing.
"Manager" shall mean the managing underwriter of Certificates
of any Series that are offered to the public.
"Minimum Aggregate Principal Receivables" shall mean the sum
of the numerators used to determine Investor Percentages with respect to
Principal Receivables for each Series outstanding for such period.
"Minimum Transferor Amount" shall mean the product of the
Aggregate Adjusted Investor Amount and the Minimum Transferor Interest
Percentage.
"Minimum Transferor Interest Percentage" shall mean the
highest percentage determined in accordance with the definitions of "Minimum
Transferor Interest Percentage" specified in the Supplements for all outstanding
Series.
"Monthly Period" shall mean, unless otherwise provided in a
Supplement, the period from and including the first day of a calendar month to
and including the last day of such calendar month.
"Monthly Servicer's Certificate" shall have the meaning
specified in Section 3.4(c).
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"Monthly Servicing Fee" shall have the meaning specified in
Section 3.2.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Net Worth" shall mean, with respect to the Transferor and at
any time, an amount equal to the aggregate outstanding principal amount of all
Eligible Receivables at such time, minus the aggregate outstanding amount of all
Investor Certificates (other than Investor Certificates held by the Transferor)
at such time, minus the outstanding principal amount at such time of all
subordinated notes, if any, issued by the Transferor in connection with the
Receivables Purchase Agreement entered into with Eligible Originators, minus any
other liabilities of the Transferor, plus, if all of the subordinated notes of
the Transferor have zero balances outstanding, all cash of the Transferor.
"1933 Act" shall mean the United States Securities Act of
1933, as amended.
"1940 Act" shall mean the United States Investment Company Act
of 1940, as amended.
"Obligations" shall have the meaning specified in Section 2.1.
"Obligor" shall mean, with respect to any Account, the Person
or Persons obligated to make payments with respect to such Account, including
any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any
executive or senior vice president or the vice president of credit
administration or the treasurer or more senior officer of either of the
Transferor or the Servicer and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of
independent outside counsel, who may be counsel for the Transferor or its
Affiliates, and which shall be reasonably acceptable to the Trustee.
"Paired Series" shall mean each Series that has been paired
with another Series (which Series may be prefunded or partially prefunded), such
that the reduction of the Investor Amount of such Series results in the increase
of the Investor Amount of such other Series.
"Pay Out Event" shall have, with respect to each Series, the
meaning specified in Section 9.1.
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 6.6 and shall initially be the Trustee.
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"PCC" shall mean Xxxxxxxx'x Credit Corporation and its
successors and assigns.
"Permitted Investments" include (i) direct obligations of, and
obligations fully guaranteed by the United States of America, (ii) demand
deposits, time deposits or certificates of deposit of depository institutions or
trust companies, incorporated under the laws of the United States of America or
any state thereof (including the District of Columbia, and any domestic branch
or agency of any foreign bank), and which are subject to supervision and
examination by federal or state banking or depository institution authorities;
provided, however, that the commercial paper, if any, and short-term unsecured
debt obligations of such depository institution or trust company shall have, at
the time of the Trust's investment or contractual commitment to invest therein,
a credit rating from the Rating Agency in the highest investment category
granted by such Rating Agency, (iii) commercial paper having, at the time of the
Trustee's investment or contracted commitment to invest therein, a rating in the
highest investment category granted by such Rating Agency, (iv) bankers'
acceptances issued by any depository institution or trust company described in
clause (ii) above, (v) money market funds which have the highest rating from, or
have otherwise been approved in writing by the Rating Agencies, (vi) time
deposits (having maturities of not more than 30 days) or notes which are payable
on demand by an entity the commercial paper of which has a rating of the highest
investment category granted by the Rating Agencies, (vii) certain repurchase
obligations involving Permitted Investment instruments so long as the
counterparty thereto has, at the time of such investment, the highest short term
debt rating, or the equivalent from the applicable Rating Agencies, and (viii)
any other investments approved in writing by the applicable Rating Agencies
prior to the Trust's investment therein. For purposes of this paragraph, the
highest short term debt rating shall mean A-1+ or P-1 or the equivalent.
"Person" shall mean any legal person, including any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, limited liability company,
Governmental Authority or other entity of similar nature.
"Principal Account" shall have the meaning specified in each
Supplement.
"Principal Amortization Period" shall have, with respect to
any Series, the meaning, if any, specified in the applicable Supplement.
"Principal Receivables" shall mean Receivables other than
Finance Charge Receivables and Receivables in Defaulted Accounts.
"Principal Sharing Series" shall mean a Series that, pursuant
to the Supplement therefor, is entitled to receive Shared Principal Collections.
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"Principal Shortfalls" shall have, generally, the meaning
specified in Section 4.1(h), and specifically, with respect to any Series, the
meaning specified in the applicable Supplement.
"Publication Date" shall have the meaning specified in Section
9.2(a).
"Principal Terms" shall have, with respect to any Series
issued pursuant to an Exchange, the meaning specified in Section 6.9.
"Qualified Institution" shall mean (i) a depository
institution or trust company, which may include the Trustee, organized under the
laws of the United States or any one of the States thereof including the
District of Columbia (or any domestic branch or agency of any foreign bank), the
deposits in which are insured by the FDIC and which at all times has a
short-term unsecured debt or certificate of deposit rating of at least A-1+ and
P-1 or a long-term unsecured debt rating of at least AAA and Aaa or the
equivalent, as applicable, by each Rating Agency or (ii) a depository
institution, which shall include the Trustee, or such other institution
otherwise acceptable as stated in writing by each Rating Agency rating any
Series; provided, however, that an institution which shall have corporate trust
powers (whether or not such institution takes deposits) and which maintains the
Collection Account, the Excess Funding Account, the Principal Account or any
other account maintained for the benefit of Certificateholders as a fully
segregated trust account with the trust department of such institution shall not
be required to meet the foregoing rating requirements, and provided Xxxxx'x is a
Rating Agency, need only at all times have a long-term unsecured debt rating of
at least Baa3.
"Rapid Amortization Period" shall have, with respect to any
Series, the meaning, if any, specified in the applicable Supplement.
"Rating Agency" shall mean, with respect to any Series, each
nationally recognized statistical rating agency or agencies, if any, selected by
the Transferor to rate the Investor Certificates of such Series.
"Rating Agency Condition" shall mean, with respect to any
action, that each Rating Agency shall have notified the Transferor and the
Trustee in writing that such action will not result in a reduction or withdrawal
of its rating of any outstanding Series with respect to which it is a Rating
Agency.
"Reassignment" shall have the meaning specified in Section
2.7(b).
"Receivable" shall mean any amount owing by an Obligor under
an Account, including any Additional Account or Automatic Additional Accounts,
from time to time, including, without limitation, amounts owing for the payment
of merchandise and services, Insurance Charges, service contract charges,
Finance Charges and all other fees and charges. In calculating the aggregate
amount of Receivables on any day, the amount of Receivables shall be reduced by
the aggregate amount of credit balances, and other
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adjustments stated in Section 3.8 hereof, in the Accounts on such day. Any
Receivables which the Transferor is unable to transfer as provided in Section
2.5(d) shall not be included in calculating the aggregate amount of Receivables.
"Receivables Purchase Agreements" shall mean (i) the amended
and restated receivables purchase agreements dated as of August 21, 1997 between
the Transferor, as purchaser, and each of X. X. Xxxxxxxxx'x, Inc., XxXxx'x,
Inc., Parisian, Inc. and Xxxxxxxx'x, Inc., in each case as Seller, as each such
agreement may be amended, restated or otherwise modified from time to time, and
(ii) any other receivables purchase agreement between a Seller of Receivables
and the Transferor, substantially in the form of the receivables purchase
agreements referred to in clause (i) above.
"Record Date" shall mean, unless otherwise specified with
respect to a Series in the applicable Supplement, with respect to any
Distribution Date, the close of business on the last Business Day of the
immediately preceding calendar month.
"Recoveries" shall mean all amounts (including Insurance
Proceeds, if any) received by the Servicer with respect to Receivables in
Defaulted Accounts.
"Registered Certificates" shall have the meaning specified in
Section 6.1.
"Relevant UCC State" shall mean all jurisdictions where UCC
filings are required to perfect and maintain the security interest of the
Trustee.
"Removal Date" shall have the meaning specified in Section
2.7(a).
"Removal Notice Date" shall have the meaning specified in
Section 2.7(a).
"Removed Accounts" shall have the meaning specified in Section
2.7(a).
"Repurchase Terms" shall mean, with respect to any Series
issued pursuant to an Exchange, the terms and conditions under which the
Transferor may repurchase such Series of Certificates pursuant to Section 12.2
and the related Supplement.
"Requirements of Law" shall mean, with respect to any Person,
the certificate or articles of incorporation or articles of association and the
by-laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation, or determination of an arbitrator or
Governmental Authority, in each case applicable to or binding upon such Person
or to which such Person is subject, whether federal, state or local (including,
but not limited to, usury laws, the federal Truth in Lending Act, and
Regulations B and Z of the Board of Governors of the Federal Reserve System).
"Responsible Officer" shall mean, with respect to the Trustee,
for purposes of this Agreement, any Vice President, Assistant Vice President,
Assistant Secretary or
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Assistant Treasurer of the Corporate Trust Department in Minneapolis, Minnesota
or any trust officer, or any officer of the Trustee customarily performing
functions similar to those performed by the person who at the time shall be such
officers, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with a particular subject, who shall, in any case,
be working in the Asset Backed Securities Group, or any successor thereto
responsible for the administration of this Agreement.
"Revolving Period" shall mean, with respect to each Series,
the period from and including the date of initial issuance of the Investor
Certificates of such Series to, but not including, the day on which an
Amortization Period for such Series commences.
"Sellers" initially shall mean X.X. Xxxxxxxxx'x, Inc.,
XxXxx'x, Inc., Parisian, Inc. and Xxxxxxxx'x, Inc. and their successors and
assigns, and, subject only to the Rating Agency Condition, such other Affiliates
of the Company as the Transferor may designate from time to time, and which may
include the Bank.
"Series" shall mean any Series of Investor Certificates, each
as designated in the applicable Supplement (including any Enhancement Investor
Amount related thereto).
"Service Transfer" shall have the meaning specified in Section
10.1.
"Servicer" shall mean initially Xxxxxxxx'x, Inc. and any
Person thereafter appointed as Successor Servicer as herein provided to service
the Receivables.
"Servicer Default" shall have the meaning specified in Section
10.1.
"Servicing Fee Percentage" shall have, with respect to any
Series, the meaning specified in the applicable Supplement.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to the
Trustee by the Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall have,
generally, the meaning provided in Section 4.1(i), and specifically, with
respect to any Series, the meaning specified in the applicable Supplement.
"Shared Principal Collections" shall have generally the
meaning specified in Section 4.1(h) and specifically, with respect to any
Series, the meaning specified in the applicable Supplement.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services, a Division of The XxXxxx-Xxxx Companies, Inc.
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"Stated Series Termination Date" shall have, with respect to
any Series, the meaning specified in the applicable Supplement.
"Subservicer" shall mean initially XxXxx'x, Inc. and any
Person thereafter appointed by the Servicer as subservicer of the Receivables.
"Successor Servicer" shall have the meaning specified in
Section 10.2.
"Supplement" shall mean, with respect to any Series, a
supplement to this Agreement complying with the terms of Section 6.9, executed
in conjunction with any issuance of any Series.
"Tax Opinion" shall have the meaning specified in Section
6.9(b).
"Termination Notice" shall have, with respect to any Series,
the meaning specified in Section 10.1.
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.3 and initially shall be the Trustee.
"Transferred Account" shall mean a consumer revolving credit
card account with respect to which a credit card account number has been issued
by the Servicer or the Transferor in accordance with the Credit Card Guidelines,
and which can be traced or identified by reference to or by way of the computer
files, or written microfiche lists delivered to the Trustee pursuant to Sections
2.1 and 2.6 as an Account which has been transferred (including such transfers
occurring between the Cut-Off Date and the Initial Closing Date).
"Transferor" shall mean PCC or any successor or assign that is
an Affiliate of the Company, including the Bank, as transferor of the
Receivables to the Trust, provided that each successor or assign, on the
effective date it becomes Transferor, has the Minimum Net Worth specified in
Section 2.5(f) hereof and satisfies the Rating Agency Condition, and except in
the case of the Bank, meets the separate business requirements of Section 2.5(g)
hereof.
"Transferor Amount" shall mean, on any date of determination,
the Aggregate Principal Receivables at the end of the day immediately prior to
such date of determination, plus the Excess Funding Amount at the end of such
day, minus the Aggregate Adjusted Investor Amount at the end of such day, minus
any Enhancement Investor Amount at the end of such day (to the extent not
included in the Aggregate Adjusted Investor Amount).
"Transferor Interest" shall have the meaning specified in
Section 4.1(b).
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"Transferor Interest Percentage" shall mean, on any date of
determination, the Transferor Amount divided by the Aggregate Principal
Receivables.
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Collections of Principal Receivables,
Finance Charge Receivables and Receivables in Defaulted Accounts, one hundred
percent (100%) minus the Aggregate Investor Percentage as calculated on such
date with respect to such categories of Receivables by the Servicer.
"Trust" shall mean the trust created by this Agreement, the
corpus of which shall consist of the Trust Property.
"Trust Property" shall have the meaning specified in Section
2.1(b).
"Trustee" shall mean the institution executing this Agreement
as trustee, the successor to its corporate trust business, or its successor in
interest, or any successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in any specified jurisdiction.
"Undivided Interest" shall mean the undivided interest of any
Certificateholder in the Trust.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
All terms defined in any Supplement or this Agreement shall
have the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions of
all terms defined herein shall include the singular as well as the plural form
of such terms and the masculine of such terms as well as the feminine and neuter
genders of such terms. The terms "include", "including" or "includes" shall mean
including without limitation by way of enumeration or otherwise.
As used herein and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partly defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles on the date of determination. To the extent that
the definitions of accounting terms herein are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained herein shall control.
The agreements and representations and warranties of
Xxxxxxxx'x, Inc. in this Agreement in its capacity as Servicer, shall be deemed
to be the agreements,
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representations and warranties of Xxxxxxxx'x, Inc. solely in such capacity for
so long as it acts in such capacity under this Agreement.
The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of such Supplement or
this Agreement, as the case may be; Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or any
Supplement unless otherwise specified.
ARTICLE II
APPOINTMENT OF TRUSTEE;
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
SECTION 2.1 APPOINTMENT OF TRUSTEE; CONVEYANCE OF RECEIVABLES.
(a) The Transferor appoints and authorizes Norwest Bank
Minnesota, National Association to act as Trustee as provided herein and to
exercise such powers under this Agreement as are delegated to the Trustee by the
terms hereof together with all such powers, obligations and duties as are
reasonably incidental thereto. The Trustee hereby accepts such appointment and
agrees to exercise such powers and perform such functions on behalf of the
Certificateholders from time to time as are specifically delegated to the
Trustee by the terms hereof.
(b) The Transferor does hereby transfer, assign, set-over, and
otherwise convey to the Trust for the benefit of the Certificateholders, without
recourse, all right, title and interest of the Transferor in and to the
Receivables, now existing and hereafter created, all monies due or to become due
with respect thereto (including all Finance Charges, Recoveries and Interchange,
if any) on and after the Cut-Off Date, all of the Transferor's rights, with
respect to the Receivables, under the Receivables Purchase Agreement, and all
proceeds of the foregoing (including Insurance Proceeds). Such property,
together with all monies as are from time to time deposited in the Collection
Account, the Excess Funding Account and any other account or accounts maintained
for the benefit of the Certificateholders and all monies as are from time to
time available under any Enhancement for any Series for payment to
Certificateholders shall constitute the property of the Trust (the "Trust
Property"). The foregoing transfer, assignment, set-over and conveyance does not
constitute and is not intended to result in a creation or an assumption by the
Trust, the Trustee or any Certificateholder of any obligation of the Servicer,
the Transferor, any Seller, any Eligible Originator or any other Person in
connection with the Accounts, the Receivables or under any agreement or
instrument relating thereto including, without limitation, any obligation to any
Obligors, merchant service establishments or insurers.
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In connection with such transfers, the Transferor agrees to
record and file, at its own expense, financing statements (and assignment and
continuation statements with respect to such financing statements when
applicable) with respect to the Receivables now existing and hereafter created
for the transfer of chattel paper, accounts and general intangibles (each as
defined in the UCC in effect in the Relevant UCC State) meeting the requirements
of applicable state law in such manner and in such jurisdictions as are
necessary to perfect the transfers and assignments of the Receivables by the
Transferor to the Trust, and to deliver to the Trustee a file-stamped copy of
such financing statements or other evidence that such filings were made on or
prior to the Initial Closing Date.
In connection with such transfers, the Transferor agrees, at
its own expense, on or prior to the Initial Closing Date to cause the Servicer
to indicate or cause to be indicated clearly and unambiguously in the computer
files of the Transferor and the Sellers that the Receivables created in
connection with the Accounts (other than any Additional Account or any Automatic
Additional Account included pursuant to Section 2.6(d)) have been sold and
transferred to the Transferor pursuant to the Receivables Purchase Agreements or
otherwise and thereupon by the Transferor to the Trust pursuant to this
Agreement for the benefit of the Certificateholders. The Transferor further
agrees to deliver or cause to be delivered to the Trustee (a) on the Initial
Closing Date, a computer file, microfiche or written list containing a true and
complete list of all such Accounts, identified by account number and by
Receivable balance as of the Cut-Off Date and (b) so long as Automatic
Additional Accounts are being included pursuant to Section 2.6(d), on or prior
to the first Distribution Date that occurs after March 31, June 30, September 30
and December 31 of each year and otherwise at any time upon request of the
Trustee, a new computer file, microfiche or written list containing a true and
complete list of all Accounts identified as described in the preceding clause
(a) as of the last day of the most recent Monthly Period or an Officer's
Certificate stating that the file or list of Accounts most recently delivered
pursuant to this subsection remains a true and complete list of all Accounts.
Such file or list shall be marked as Schedule 1 to this Agreement, shall be
delivered to the Trustee as confidential and proprietary information belonging
solely to the Transferor and its Affiliates, and to be used by the Trustee
solely in pursuance of its duties hereunder, and is hereby incorporated into and
made a part of this Agreement. Any such additional file or list shall be marked
as Schedule 1 to this Agreement, shall be delivered to the Trustee as
confidential and proprietary information belonging solely to the Transferor and
its Affiliates, and to be used by the Trustee solely in pursuance of its duties
hereunder, shall replace the then existing Schedule 1 hereto, and shall be
incorporated into and made a part of this Agreement. The Transferor agrees, at
its own expense, by the end of the Monthly Period in which any Transferred
Accounts have been originated to cause the Servicer to indicate or cause to be
indicated clearly and unambiguously in the computer files of the Transferor and
the Sellers that the Receivables created in connection with the Transferred
Accounts have been transferred to the Transferor and thereupon transferred by
the Transferor to the Trust pursuant to this Agreement for the benefit of the
Certificateholders.
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The Transferor hereby grants to the Trustee a first priority
perfected security interest in all of the Transferor's right, title and interest
in and to the Receivables, now existing and hereafter created, all monies due or
to become due with respect thereto on and after the Cut-Off Date (including all
Finance Charge Receivables and Recoveries), and all of the Transferor's rights,
with respect to the Receivables, under the Receivables Purchase Agreement, all
proceeds of the foregoing, such funds as are from time to time deposited in the
Collection Account, the Excess Funding Account and any other account or accounts
maintained for the benefit of Certificateholders, and the benefits of any
Enhancement for any Series for payment to Certificateholders in order to secure
the payment of each Series (the "Obligations"). This Agreement shall constitute
a security agreement under applicable law.
Pursuant to the request of the Transferor, the Trustee has
caused Certificates in authorized denominations evidencing the entire interest
in the Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.2.
SECTION 2.2 ACCEPTANCE BY TRUSTEE.
(a) The Trustee hereby acknowledges its acceptance, as and to
the extent transferred, assigned, set over or otherwise conveyed to the Trust as
provided in Section 2.1(b) hereof, on behalf of the Trust, of all right, title
and interest previously held by the Transferor in and to the Receivables, now
existing and hereafter created, all monies due or to become due with respect
thereto on and after the Cut-Off Date (including Recoveries), all proceeds of
such Receivables, such funds as are from time to time deposited in the
Collection Account and any other account or accounts maintained for the benefit
of Certificateholders, and the benefits of any Enhancement for any Series, and
declares that it shall hold such right, title and interest, upon the trust
herein set forth, and subject to the terms hereof for the benefit of all
Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Transferor
delivered to the Trustee the computer file, microfiche or written list
represented by the Transferor to be the computer file, microfiche or written
list described in the third paragraph of Section 2.1(b).
(b) The Trustee hereby agrees not to use or disclose to any
Person (including any Certificateholder or Certificate Owner) any of the account
numbers, Obligor information or other information contained in the computer
files, microfiches or written lists delivered to the Trustee by the Transferor
pursuant to Sections 2.1 and 2.6, except as is required in connection with the
performance of its duties hereunder, or in connection with audits, examinations,
investigations and other inquiries which are required in connection with the
Trustee's regulatory supervision or in response to a court order, subpoena, or
other judicial or governmental demand or in enforcing the rights of the
Certificateholders or to a Successor Servicer appointed pursuant to Section 10.2
or a successor Trustee appointed pursuant to Section 11.8. The Trustee agrees to
take such
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measures as shall be reasonably necessary or reasonably requested by the
Transferor to protect and maintain the security and confidentiality of such
information.
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
SECTION 2.3 REPRESENTATIONS AND WARRANTIES REGARDING THE
TRANSFEROR.
The Transferor hereby represents and warrants to the Trustee,
on behalf of the Trust, with respect to any Series of Certificates, as of the
date of the related Supplement and the related Closing Date, unless otherwise
stated in such Supplement that:
(i) Organization and Good Standing. The Transferor is a
corporation, duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has full
power, authority and legal right to own its properties and conduct its
business as such properties are presently owned and such business is
presently conducted, to execute, deliver and perform its obligations
under this Agreement, any Supplement hereto and the Receivables
Purchase Agreements and to execute and deliver to the Trustee the
Certificates pursuant hereto.
(ii) Due Qualification. The Transferor is duly qualified
to do business and is in good standing (or is exempt from such
requirements) and has obtained all necessary licenses and approvals
with respect to the Transferor, in each jurisdiction in which failure
to so qualify or to obtain such licenses and approvals would render any
Account Agreement relating to an Account or any Receivable
unenforceable by it or the Trust or would have a material adverse
effect on the Investor Certificateholders or on the Transferor's or the
Servicer's ability to perform their respective obligations under this
Agreement or any Supplement; provided, however, that no representation
or warranty is made with respect to any qualifications, licenses or
approvals which the Trustee would have to obtain to do business in any
state in which the Trustee seeks to enforce any Receivable.
(iii) Due Authorization. The execution and delivery of this
Agreement and any Supplement and the execution and delivery to the
Trustee of the Certificates and the consummation of the transactions
provided for in this Agreement and any Supplement by the Transferor
have been duly authorized by the Transferor by all necessary corporate
action on the part of the Transferor.
(iv) No Violation. The execution and delivery of this
Agreement, any Supplement and the Certificates by the Transferor, the
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performance by the Transferor of the transactions contemplated by this
Agreement and any Supplement and the fulfillment by the Transferor of
the terms hereof and thereof will not conflict with, violate or result
in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default
under, any Requirement of Law applicable to the Transferor or any
indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Transferor is a party or by which it or any of
its properties are bound and which conflict, violation, breach or
default would have a material adverse effect on the Transferor.
(v) No Proceedings. There are no proceedings or
investigations pending or, to the knowledge of the Transferor,
threatened against the Transferor before any court, regulatory body,
administrative agency, arbitrator or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, any
Supplement or the Certificates, (ii) seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by this Agreement, any Supplement or the Certificates,
(iii) seeking any determination or ruling that, in the reasonable
judgment of the Transferor, would materially and adversely affect the
performance by the Transferor of its obligations under this Agreement
or any Supplement, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement, any Supplement or the Certificates or (v) seeking to affect
adversely the federal income tax attributes of the Trust.
(vi) Eligibility of Accounts. As of the applicable Cut-Off
Date or Additional Account Cut-Off Date, each Account was an Eligible
Account and no selection procedures adverse to the Investor
Certificateholders have been employed in selecting the Accounts.
(vii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required to be obtained on or prior to the date as of which
this representation is being made in connection with the execution and
delivery by the Transferor of this Agreement, any Supplement and the
Certificates, the performance by the Transferor of the transactions
contemplated by this Agreement and any Supplement and the fulfillment
by the Transferor of the terms hereof and thereof, have been obtained;
provided, however, that no representation or warranty is made regarding
state securities or "blue sky" laws in connection with any offer or
sale of the Certificates.
(viii) Amount of Receivables; Computer File. As of the
Cut-Off Date, the amount of Receivables was approximately $270,651,000.
The computer files, microfiche or written list delivered pursuant to
Section 2.1
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hereof is complete and accurately reflects the information regarding
the Receivables under the Accounts in all material respects as of the
applicable time referred to in Section 2.1.
(ix) No Insolvency. The Transferor is not insolvent
immediately prior to any transfer of Accounts and Receivables
hereunder, and will not be rendered insolvent immediately following
such transfer.
(x) No Investment Company. The Transferor is not an
investment company subject to registration or regulation under the 1940
Act.
In the event the Bank or another Affiliate of the Company is
substituted for PCC as Transferor, such Affiliate shall, immediately prior to
becoming the Transferor, make the representations and warranties set forth in
this Section 2.3, as of the date of its becoming the Transferor, in an Officer's
Certificate delivered to the Trustee and the Rating Agencies. The
representations and warranties set forth in this Section 2.3 shall survive the
transfer and assignment of the Receivables to the Trust. Upon discovery by the
Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.3, the party
discovering such breach shall give prompt written notice thereof to the others.
SECTION 2.4 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR RELATING
TO THE AGREEMENT AND ANY SUPPLEMENT AND THE RECEIVABLES.
(a) Binding Obligation; Valid Transfer and Assignment.
The Transferor hereby represents and warrants to the Trustee, on behalf of the
Trust, with respect to any Series of Certificates, as of the Cut-Off Date or the
date of the related Supplement and the related Closing Date, unless otherwise
stated in such Supplement that:
(i) Each of this Agreement and any Supplement constitutes
a legal, valid and binding obligation of the Transferor, enforceable
against the Transferor in accordance with its terms, subject to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general and
the rights of creditors of national banking associations and except as
such enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(ii) This Agreement or, in the case of Receivables in
Additional Accounts, the related Assignment constitutes either (A) a
valid transfer and assignment to the Trust of all right, title and
interest of the Transferor in and to the Receivables now existing and
hereafter created and (x) acquired by the Transferor pursuant to the
Receivables Purchase Agreements or (y)
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originated by the Bank, all monies due or to become due with respect
thereto (including all Finance Charge Receivables, Recoveries,
Interchange, if any, and amounts held in any of the accounts
established for the benefit of Certificateholders) on and after the
Cut-Off Date or Additional Account Cut-Off Date or Creation Date, as
applicable, and all proceeds (as defined in the UCC as in effect in the
Relevant UCC State) of such Receivables, and such Receivables and all
proceeds thereof will be held by the Trust free and clear of any Lien
of any Person claiming through or under the Transferor or any of its
Affiliates except for (a) Liens permitted under Section 2.5(b), (b) the
interest of the Transferor as holder of the Exchangeable Transferor
Certificate or any other class of Certificates held by the Transferor
from time to time and (c) any right of the holder of the Exchangeable
Transferor Certificate to receive interest accruing on, and investment
earnings (net of investment losses and expenses) with respect to, the
Collection Account and any other account or accounts maintained for the
benefit of Certificateholders or any Enhancement Provider, if any, as
provided in this Agreement and any Supplement, or (B) a grant of a
security interest (as defined in the UCC as in effect in the Relevant
UCC State) in such property to the Trustee on behalf of the Trust,
which is enforceable with respect to existing Receivables (other than
Receivables in Additional Accounts) and the proceeds thereof (to the
extent set forth in Section 9-306 of the UCC in effect in the Relevant
UCC State) upon execution and delivery of this Agreement, and which
will be enforceable with respect to such Receivables thereafter
created, and the proceeds thereof to such extent, upon such creation.
If this Agreement constitutes the grant of a security interest to the
Trust in such property, upon the filing of the applicable financing
statements and in the case of the Receivables hereafter created and
proceeds thereof upon such creation, the Trust shall have a first
priority perfected security interest in such property and the proceeds
thereof (to the extent set forth in Section 9-306 of the UCC in effect
in the Relevant UCC State), except for Liens permitted under Section
2.5(b). Except as otherwise specifically provided in this Agreement or
any Supplement, neither the Transferor nor any Person claiming through
or under the Transferor shall (other than as a result of such Person
being a Holder of Certificates) have any claim to or interest in the
Collection Account or any other account or accounts maintained for the
benefit of Certificateholders or any Enhancement Provider, except for
any right of the Transferor to receive interest accruing on, and
investment earnings with respect to, any such account as provided in
this Agreement and any Supplement and, if this Agreement constitutes
the grant of a security interest in such property, except for the
interest of the Transferor in such property as a debtor for purposes of
the UCC as in effect in the Relevant UCC State.
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(b) Eligibility of Receivables. The Transferor hereby
represents and warrants to the Trustee, on behalf of the Trust, as of the
Cut-Off Date or Creation Date, as applicable, and in the case of Receivables in
Additional Accounts, as of the related Additional Account Cut-Off Date, that (i)
each Receivable then existing is an Eligible Receivable, and (ii) as of the
Initial Closing Date, and, as of the applicable Additional Account Cut-Off Date
with respect to Additional Accounts, and as of the applicable Distribution Date
on which a computer file, microfiche or written list is delivered pursuant to
Section 2.1(b), and with respect to Automatic Additional Accounts included
automatically pursuant to Section 2.6(d), Schedule 1 to this Agreement is in all
material respects an accurate and complete listing of all the Accounts as of the
Cut-Off Date or the applicable Additional Account Cut-Off Date or the applicable
Creation Date, as the case may be, and the information contained therein with
respect to the identity of such Accounts and the Receivables existing thereunder
is true and correct in all material respects as of such applicable Cut-Off Date
or Additional Account Cut-Off Date or Creation Date. On each day on which any
new Receivable is created and transferred, the Transferor shall be deemed to
represent and warrant to the Trust that each such Receivable created on such day
is an Eligible Receivable.
(c) Notice of Breach. The representations and warranties
set forth in this Section 2.4 shall survive the transfer and assignment of the
Receivables to the Trust and the termination of the rights and obligations of
the Servicer pursuant to Section 10.1. Upon discovery by the Transferor, the
Servicer or the Trustee of a breach of any of the representations and warranties
set forth in this Section 2.4, the party discovering such breach shall give
prompt written notice thereof to the others.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event that a Receivable is
not an Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (iii) of the definition of Eligible
Receivable, and either of the following two conditions is met:
(A) the Lien upon the subject Receivable (1) ranks
prior to the Lien created pursuant to this Agreement,
(2) arises in favor of the United States of America
or any state or any agency or instrumentality thereof
or involves taxes or liens arising under Title IV of
ERISA, or (3) has been consented to by the
Transferor; or
(B) the Lien on the subject Receivable is not of the
types described in clause (A) above, but, as a result
of such breach or event, such Receivable becomes a
Receivable in a Defaulted Account or the Trust's
rights in, to or under such Receivable or its
proceeds are materially impaired or the proceeds of
such Receivable are not available for any reason
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to the Trust free and clear of any Lien except Liens
permitted pursuant to Section 2.5(b);
then, upon the earlier to occur of the discovery of such breach or
event by the Transferor or the Servicer or receipt by the Transferor or
the Servicer of written notice of such breach or event given by the
Trustee, each such Receivable or, at the option of the Transferor, all
such Receivables with respect to the related Account, automatically
shall be removed from the Trust on the terms and conditions set forth
in Section 2.4(d)(iii).
(ii) Removal after Cure Period. In the event of a breach
of any of the representations and warranties set forth in Section
2.4(b)(i) or (ii) with respect to a Receivable (other than 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 (iii) of the
definition of Eligible Receivable), and as a result of such breach or
event, such Receivable becomes a Receivable in a Defaulted Account or
the Trust's rights in, to or under such Receivable or its proceeds are
materially impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien except
Liens permitted pursuant to Section 2.5(b), then, upon the expiration
of 90 days or any longer period specified by the Trustee upon request
by the Servicer (not to exceed an additional 90 days) from the earlier
to occur of the discovery of any such event by the Transferor or the
Servicer or receipt by the Transferor or the Servicer of written notice
of any such event given by the Trustee, each such Receivable or, at the
option of the Transferor, all such Receivables with respect to the
related Account, shall be removed from the Trust on the terms and
conditions set forth in Section 2.4(d)(iii); provided, however, that no
such removal shall be required to be made if, on any day within such
applicable period, (A) such representation and warranty with respect to
such Receivable shall then be true and correct in all material respects
as if such Receivable had been transferred to the Trust on such day,
and (B) the related Account is no longer a Defaulted Account as the
result of the breach of such representation and warranty, and the
Trust's rights in, to or under such Receivable or its proceeds are no
longer materially impaired as a result of a breach of such
representation and warranty, and the proceeds of such Receivable are
available to the Trust free and clear of all Liens resulting in the
breach of such representation and warranty, as applicable.
(iii) Removal Terms and Conditions. When required or
permitted with respect to a Receivable by the provisions of Section
2.4(d)(i) or Section 2.4(d)(ii) (an "Ineligible Receivable"), the
Transferor shall accept reassignment of such Ineligible Receivable by
directing the Servicer to deduct the principal balance of such
Ineligible Receivable from the Aggregate Principal Receivables and to
decrease the Transferor
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Amount by such amount. On and after the date of such removal, each
Ineligible Receivable shall be deducted from the Aggregate Principal
Receivables used in the calculation of any Investor Percentage, the
Transferor Percentage or the Transferor Amount. In the event that the
exclusion of an Ineligible Receivable from the calculation of the
Transferor Amount would cause the Transferor Amount to be reduced below
the Minimum Transfer Amount (after giving effect to the addition of any
Principal Receivables to the Trust) or would otherwise not be permitted
by law, the Transferor shall immediately deposit into the Excess
Funding Account in immediately available funds an amount equal to the
amount by which the Transferor Amount would be reduced below the
Minimum Transfer Amount (or designate Additional Accounts pursuant to
Section 2.6(b) for inclusion as Accounts no later than 10 Business Days
after such event). Any such deposit into the Excess Funding Account in
connection with the reassignment of an Ineligible Receivable shall be
considered a payment in full of the Ineligible Receivable and such
deposit shall be applied in accordance with the provisions of Article
IV. Upon the reassignment to the Transferor of an Ineligible
Receivable, the Trust shall, without further action, be deemed to
transfer, assign, set-over and otherwise convey to the Transferor,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to such Ineligible Receivable, all monies
due or to become due with respect thereto and all proceeds thereof. The
Trustee shall execute such documents and instruments of transfer or
assignment as are prepared by the Transferor and take such other
actions as shall reasonably be requested by the Transferor to effect
the conveyance of such Ineligible Receivable pursuant to this
subsection. In the event that on any day within 90 days, or any longer
period specified by the Trustee upon request by the Servicer (not to
exceed an additional 90 days), of the date on which the removal of
Receivables which are not Eligible Receivables from the Trust pursuant
to this Section is effected, (A) the applicable representations and
warranties with respect to such Receivable shall be true and correct in
all material respects on such date and (B) the Receivable is an
Eligible Receivable, the related Account is no longer a Defaulted
Account and the Trust's rights in, to or under such Receivable or its
proceeds are no longer materially impaired as a result of the breach of
such representation and warranty and the proceeds of such Receivable
are available to the Trust free and clear of all Liens resulting in the
breach of such representation and warranty, the Transferor may, but
shall not be required to, direct the Servicer to include such
Receivable in the Trust. Upon reinclusion of a Receivable in the Trust
pursuant to this subsection, the Transferor shall be deemed to make the
applicable representations and warranties in Section 2.4(b) as of the
date of such addition, as if the Receivable had been created on such
date, and shall execute all such necessary documents and instruments of
transfer or assignment and take such other actions as shall be
necessary to effect and
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perfect the reconveyance of such Receivable to the Trust. The
obligation of the Transferor set forth in this subsection shall
constitute the sole remedy respecting any breach by the Transferor of
the representations and warranties set forth in the above-referenced
subsections with respect to such Receivable available to
Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding any other provision of this Section 2.4(d), a
reassignment of an Ineligible Receivable shall not occur if the Transferor fails
to make a deposit or designation of Additional Accounts required by this Section
2.4(d) with respect to such Ineligible Receivable.
(iv) No Impairment. For the purposes of Sections 2.4(d)(i)
and 2.4(d)(ii), proceeds of a Receivable shall not be deemed to be
impaired hereunder solely because such proceeds are held by the
Servicer for more than the applicable period under Section 9-306(3) of
the UCC as in effect in the Relevant UCC State.
(e) Reassignment of Trust Portfolio. In the event of a breach
of any of the representations or warranties set forth in Sections 2.3(i),
2.3(iii), 2.4(a) or a material amount of Receivables are not Eligible
Receivables, and such event has a materially adverse effect on Investor
Certificateholders (without regard to the amount of any Enhancement), either the
Trustee or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Investor Amount, by notice then given
in writing to the Transferor (and to the Trustee and the Servicer, if given by
the Investor Certificateholders), may direct the Transferor to accept
reassignment of all Receivables within 90 days of such notice, or within such
longer period as may be specified in such notice by the Trustee upon request of
the Servicer (not to exceed an additional 90 days) and the Transferor shall be
obligated to accept such reassignment on a Distribution Date specified by the
Transferor occurring within such applicable period on the terms and conditions
set forth below; provided, however, that no such reassignment shall be required
to be made, and the Transferor shall not be obligated to accept such
reassignment, if, at any time during such applicable period, the representations
and warranties contained in Section 2.3(i), 2.3(iii) and 2.4(a) shall then be
true and correct in all material respects, or there shall no longer be a
material amount of Receivables which are not Eligible Receivables, as the case
may be. The Transferor shall deposit in the Collection Account on the Business
Day immediately prior to such Distribution Date (in immediately available funds)
an amount equal to the reassignment deposit amount for such Receivables for
distribution pursuant to the provisions of Section 12.3. The deposit amount for
such reassignment shall be equal to the Aggregate Investor Amount at the end of
the Business Day preceding the Distribution Date with respect to which such
deposit is made (less the aggregate principal amount, if any, held in the Excess
Funding Account and any Principal Account relating to any Series on such
Distribution Date), plus (i) an amount equal to all accrued but unpaid interest
on the Certificates of all Series at the applicable Certificate Rates through
the end of the respective interest accrual period(s) of such Series
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and (ii) any other unpaid amounts with respect to such Certificates. Payment of
the reassignment deposit amount and all other amounts in the Collection Account
in respect of the preceding Monthly Period shall be considered a prepayment in
full of all such Receivables. On the Distribution Date with respect to which
such amount has been deposited in full into the Collection Account, the
Receivables and all monies due or to become due with respect thereto and all
proceeds relating thereto shall be released to the Transferor and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as shall reasonably be
requested by the Transferor to vest in the Transferor or its designee or
assignee, all right, title and interest of the Trust in and to the Receivables,
all monies due or to become due with respect thereto and all proceeds thereof.
If the Trustee or the Investor Certificateholders give a notice directing the
Transferor to accept reassignment as provided herein and the Transferor is
obligated to accept such reassignment as provided herein, then such obligation
of the Transferor shall constitute the sole remedy respecting a breach of the
representations and warranties contained in Section 2.3(i), 2.3(iii) or 2.4(a)
or there being a material amount of Receivables which are not Eligible
Receivables available to the Investor Certificateholders or the Trustee on
behalf of the Investor Certificateholders.
(f) Nothing contained in this Section 2.4 shall create an
obligation on the part of the Trustee to verify the accuracy or continued
accuracy of the representations or warranties contained in this Section 2.4. The
Trustee shall have no obligation to give any notice pursuant to this Section 2.4
unless a Responsible Officer of the Trustee has actual knowledge of facts which
would permit the giving of such notice.
SECTION 2.5 COVENANTS OF THE TRANSFEROR AND THE SERVICER. The
Transferor and the Servicer hereby each covenant as follows:
(a) Receivables Not to be Evidenced by Instruments. The
Transferor and the Servicer will take no action to cause any Receivable to be
evidenced by any instrument (as defined in the UCC as in effect in the Relevant
UCC State).
(b) Security Interests. Except for the conveyances hereunder,
the Transferor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Receivable,
whether now existing or hereafter created, or any interest therein; the
Transferor will not amend or permit any change to the Receivables Purchase
Agreements that would allow any Seller thereunder to convey, transfer or assign
any Accounts, unless the Rating Agency Condition is satisfied; the Transferor
will notify the Trustee of the existence of any Lien on any Receivable
transferred by the Transferor immediately upon discovery thereof; and the
Transferor will defend the right, title and interest of the Trust in, to and
under the Receivables, whether now existing or hereafter created, against all
claims of third parties claiming through or under the Transferor; provided,
however, that nothing in this Section 2.5(b) shall prevent or be deemed to
prohibit the Transferor from suffering to exist upon any of the Receivables any
Liens for state, municipal or other local taxes and other governmental
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charges if such taxes or governmental charges shall not at the time be due and
payable or if the Transferor shall currently be contesting the validity thereof
in good faith by appropriate proceedings and shall have set aside on its books
adequate reserves under generally accepted accounting principles with respect
thereto; and provided, further, that nothing in this subsection shall prohibit
the Transferor from conveying an interest in the Exchangeable Transferor
Certificate in accordance with Section 6.3(b) hereof.
(c) Account Agreements and Credit Card Guidelines. The
Transferor and the Servicer shall comply, and shall cause the Eligible
Originators to comply with and perform, their respective obligations under the
applicable Account Agreements relating to the Accounts and the Credit Card
Guidelines except insofar as any failure so to comply or perform would not
materially and adversely affect the rights of the Trust or the Investor
Certificateholders hereunder (without regard to the amount of any Enhancement)
or under the Certificates. Subject to compliance with all Requirements of Law,
the failure to comply with which would have a material adverse effect on the
Investor Certificateholders (without regard to the amount of any Enhancement),
the Transferor or the Servicer may change, or cause any Eligible Originator to
change, the terms and provisions of the Account Agreements or the Credit Card
Guidelines in any respect (including, without limitation, the calculation of the
amount, or the timing, of charge offs) as follows: (a) if the Transferor owns a
comparable segment of accounts, then such change shall be made applicable to
such comparable segment of the accounts owned and serviced by the Transferor
that have characteristics the same as, or substantially similar to, the Accounts
that are the subject of such change, and (ii) if the Transferor or the
applicable Eligible Originator does not own such a comparable segment, then the
Transferor will not make or cause to be made any such change with the intent to
materially benefit the Transferor over the Investor Certificateholders.
(d) Account Allocations. In the event that the Transferor is
unable for any reason to transfer Receivables to the Trust in accordance with
the provisions of this Agreement (including, without limitation, by reason of
the application of the provisions of Section 9.2 or an order by any Federal
governmental agency having regulatory authority over the Transferor or an order
of any court of competent jurisdiction that the Transferor not transfer any
additional Receivables to the Trust) then, in any such event, (A) the Transferor
agrees (except as prohibited by any such order) to allocate and pay to the
Trust, after the date of such inability, all Collections (including Collections
of Finance Charge Receivables) with respect to Principal Receivables transferred
to the Trust prior to the occurrence of such event, and all amounts which would
have constituted Collections (including Collections of Finance Charge
Receivables) with respect to such Receivables which would have been Principal
Receivables but for the Transferor's inability to transfer such Receivables to
the Trust (up to an aggregate amount equal to the Aggregate Principal
Receivables in the Trust on such date); (B) the Transferor agrees to have such
amounts applied as Collections in accordance with Article IV; and (C) for only
so long as the allocation and application of such Collections and all amounts
which would have constituted Collections are made in accordance with clauses (A)
and (B) above, Collections of Principal Receivables and all amounts which would
have constituted
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Collections of Principal Receivables but for the Transferor's inability to
transfer Receivables to the Trust which are charged off as uncollectible in
accordance with this Agreement and the Credit Card Guidelines shall continue to
be allocated in accordance with Article IV and all amounts which would have
constituted Collections of Principal Receivables but for the Transferor's
inability to transfer Receivables to the Trust shall be deemed to be Collections
of Principal Receivables for the purpose of calculating the applicable Investor
Percentage and the Aggregate Investor Percentage thereunder. If the Transferor
is unable pursuant to any Requirement of Law to allocate Collections as
described above, the Transferor agrees that it shall, in any such event, and to
the extent not prohibited by law, allocate, after the date that the Transferor
becomes unable to allocate Collections as described above, payments on each
Account with respect to the balance of such Account first to the oldest
Receivable in such Account and to have such payments applied as Collections in
accordance with Article IV.
(e) Delivery of Collections. In the event that the Transferor
receives Collections, the Transferor agrees to pay to the Servicer all payments
received by the Transferor with respect to Collections on the Receivables
promptly after receipt thereof by the Transferor, but in no event later than two
(2) Business Days after the receipt by the Transferor thereof.
(f) Minimum Net Worth of Transferor.
(i) On the date of this Agreement, the Transferor shall
have a Net Worth of at least $10,000,000.
(ii) The Transferor shall make no distributions of
dividends or returns of capital comprising its Net Worth except to the
extent that, after giving effect thereto, the Transferor shall have a
Net Worth at least equal to 10% of the highest balance of Aggregate
Principal Receivables outstanding with respect to the immediately
preceding twelve (12) calendar month period.
(g) Separate Business. Unless the Bank is serving as
Transferor, the Transferor, shall at all times (i) to the extent the
Transferor's office is located in the offices of Xxxxxxxx'x, Inc. or any
Affiliate of Xxxxxxxx'x, Inc., pay fair market rent for its executive office
space located in the offices of Xxxxxxxx'x, Inc., or any Affiliate of
Xxxxxxxx'x, Inc., (ii) have at all times at least two members of its board of
directors who are not and, within the immediately preceding two (2) years, have
not been employees, officers or directors of Xxxxxxxx'x, Inc., or its Affiliates
(except for other bankruptcy remote single purpose entities) or of any major
creditor of Xxxxxxxx'x, Inc. or its Affiliates and are persons who are familiar
and have experience with asset securitization, (iii) maintain the Transferor's
books, financial statements, accounting records and other corporate documents
and records separate from those of Xxxxxxxx'x, Inc. or any other entity, (iv)
not commingle the Transferor's assets with those of Xxxxxxxx'x, Inc. or any
other entity,
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except to the extent otherwise permitted hereunder or for not longer than two
(2) Business Days after any Seller receives payments on Accounts as a result of
in-store payments by Obligors or that have otherwise been received by Sellers on
other Accounts sold to the Transferor and then transferred to the Trust, (v) act
solely in its corporate name and through its own authorized officers and agents,
(vi) make investments directly or by brokers engaged and paid by the Transferor
or its agents (provided that if any such agent is an Affiliate of the Transferor
it shall be compensated at a fair market rate for its services), (vii)
separately manage the Transferor's liabilities from those of Xxxxxxxx'x, Inc. or
any Affiliates of Xxxxxxxx'x, Inc. and pay its own liabilities, including all
administrative expenses, from its own separate assets, except that Xxxxxxxx'x,
Inc. may pay the organizational expenses of the Transferor, and (viii) pay from
the Transferor's assets all obligations and indebtedness of any kind incurred by
the Transferor. The Transferor shall abide by all corporate formalities,
including the maintenance of current minute books, and the Transferor shall
cause its financial statements to be prepared in accordance with generally
accepted accounting principles in a manner that indicates the separate existence
of the Transferor and its assets and liabilities. Except as provided herein or
in the Receivables Purchase Agreements the Transferor shall (i) pay all its
liabilities, (ii) not assume the liabilities of Xxxxxxxx'x, Inc. or any
Affiliate of Xxxxxxxx'x, Inc., (iii) not lend funds or extend credit to
Xxxxxxxx'x, Inc., or any Affiliate of Xxxxxxxx'x, Inc., except pursuant to a
Receivables Purchase Agreement in connection with the purchase of Receivables
thereunder, (iv) not guarantee the liabilities of Xxxxxxxx'x, Inc., or any
Affiliates of Xxxxxxxx'x, Inc., and (v) not own the stock of, or any other
beneficial interest in, any subsidiaries or any other entity. The officers and
directors of the Transferor (as appropriate) shall make decisions with respect
to the business and operations of the Transferor independent of and not dictated
by any controlling entity. The Transferor shall not engage in any business not
permitted by its certificate or articles of incorporation as in effect on the
date hereof, provided such certificate or articles may be amended or changed
subject only to the Rating Agency Condition.
SECTION 2.6 ADDITION OF ACCOUNTS; REPURCHASE OF INVESTOR
CERTIFICATES.
(a) If, (1) as of the end of any Monthly Period, the
Transferor Amount is less than the Minimum Transferor Amount, the Transferor
shall either (i) cause the Trust to repurchase Investor Certificates (to the
extent permitted by and in accordance with the terms of any Supplement with
respect to any Series) or (ii) designate additional Eligible Accounts (the
"Additional Accounts") to be included as Accounts, in either case in a
sufficient amount such that the Transferor Amount as of the end of such Monthly
Period after giving effect to such repurchase or addition would have equaled or
exceeded the Minimum Transferor Amount or (2) as of the end of any Monthly
Period, the Aggregate Principal Receivables are less than the Minimum Aggregate
Principal Receivables, then the Transferor shall designate Additional Accounts
to be included as Accounts in a sufficient amount such that the Aggregate
Principal Receivables after giving
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effect to such designations would have been equal to or greater than the Minimum
Aggregate Principal Receivables. Receivables from such Additional Accounts shall
be transferred to the Trust on or before 10 days following the Determination
Date following such Monthly Period (the "Additional Account Closing Date").
Failure either (i) to cause the Trust to repurchase Investor Certificates if
permitted pursuant to any Supplement or (ii) to add Additional Accounts as
required by this Section 2.6(a), shall be a Pay Out Event with respect to the
affected Series.
(b) In addition to its obligation under Section 2.6(a), the
Transferor may, but shall not be obligated to, designate from time to time
Additional Accounts to be included as Accounts.
(c) The Transferor agrees that any such transfer of
Receivables from Additional Accounts under Section 2.6(a) or (b) shall satisfy
the following conditions:
(i) On or before the fifth Business Day prior to the
Additional Account Closing Date, the Transferor shall give the Trustee
and the Servicer written notice that such Additional Accounts will be
included and specifying the approximate aggregate amount of the
Receivables to be transferred;
(ii) On or prior to the Additional Account Closing Date,
the Transferor shall have delivered to the Trustee a written assignment
(and the Trustee shall have accepted such assignment on behalf of the
Trust for the benefit of the Investor Certificateholders and any
Enhancement Provider) in substantially the form of Exhibit B (the
"Assignment") and shall have clearly indicated in its computer files
that the Receivables created in connection with the Additional Accounts
have been transferred to the Trust and the Transferor shall have
delivered to the Trustee a computer file, microfiche or written list
represented by the Transferor to contain a true and complete list of
all Additional Accounts identified by account number and by Receivable
balance in such Additional Accounts as of the Additional Account
Cut-Off Date, which computer file, microfiche or written list shall be
as of the date of such Assignment incorporated into and made a part of
such Assignment and this Agreement;
(iii) The Transferor shall represent and warrant that (x)
each Additional Account was, as of the Additional Account Cut-Off Date,
an Eligible Account, (y) no selection procedures believed by the
Transferor to be materially adverse to the interests of any outstanding
Series of Investor Certificates or any Enhancement Provider were
utilized in selecting the Additional Accounts from the available
Eligible Accounts in the Transferor's portfolio; and (z) as of the
Additional Account Closing Date, the Transferor is not insolvent and
will not be made insolvent by the transfer of the Receivables of such
Additional Accounts;
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(iv) The Transferor shall represent and warrant that, as
of the Additional Account Closing Date, the Assignment constitutes
either (A) a valid transfer and assignment to the Trust of all right,
title and interest of the Transferor in and to the Receivables then
existing and thereafter created in the Additional Accounts, all monies
due or to become due with respect thereto on and after the Additional
Account Cut-Off Date, Recoveries and all proceeds of such Receivables
(to the extent set forth in Section 9-306 of the UCC as in effect in
the Relevant UCC State), and such Receivables and all proceeds thereof
will be conveyed to the Trust free and clear of any Lien of any Person
claiming through or under the Transferor or any of its Affiliates,
except for (x) Liens permitted under Section 2.5(b) hereunder, (y) the
interest of the holder of the Exchangeable Transferor Certificate or
any other Class of Certificate held by the Transferor from time to time
and (z) any right of the holder of the Exchangeable Transferor
Certificate to receive interest accruing on, and investment earnings
with respect to, the Collection Account and any other account or
accounts maintained for the benefit of Certificateholders or any
Enhancement Provider, if any, as provided in this Agreement and any
Supplement, or (B) a grant of a security interest (as defined in the
UCC as in effect in the Relevant UCC State) in such property to the
Trustee on behalf of the Trust, which is enforceable with respect to
then existing Receivables of the Additional Accounts, and the proceeds
thereof (to the extent set forth in Section 9-306 of the UCC as in
effect in the Relevant UCC State), upon the conveyance of such
Receivables to the Trust, and which will be enforceable with respect to
the Receivables thereafter created in respect of Additional Accounts,
and the proceeds thereof (to the extent set forth in Section 9-306 of
the UCC as in effect in the Relevant UCC State), upon such creation;
and (C) if the Assignment constitutes the grant of a security interest
to the Trust in such property, upon the filing of financing statements
as described in Section 2.1 with respect to such Additional Accounts
and in the case of such Receivables of Additional Accounts thereafter
created and the proceeds thereof (to the extent set forth in Section
9-306 of the UCC in effect in the Relevant UCC State) upon such
creation, the Trust shall have a first priority perfected security
interest in such property, except for Liens permitted under Section
2.5(b) hereunder;
(v) The Transferor shall deliver to the Trustee (with a
copy to the Rating Agencies), an Officer's Certificate confirming the
items set forth in paragraphs (ii), (iii) and (iv) above and paragraph
(vii) below. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying;
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(vi) The Transferor shall deliver to the Trustee and each
Rating Agency, an Opinion of Counsel with respect to the Receivables in
the Additional Accounts substantially in the form of Part One of
Exhibit G;
(vii) The Transferor shall record and file financing
statements with respect to the Receivables then existing and thereafter
created in the Additional Accounts for the transfer of accounts,
general intangibles and chattel paper (each as defined in the UCC in
effect in the Relevant UCC State) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect the transfer and assignment of the Receivables in
Additional Accounts by the Transferor to the Trust; and
(viii) The Rating Agencies shall have received from the
Transferor five (5) Business Days' notice, in the case of Additional
Accounts being added pursuant to Section 2.6(a), and ten (10) Business
Days' notice, in the case of Additional Accounts being added pursuant
to Section 2.6(b), of such proposed addition of Additional Accounts
and, in the event that Additional Accounts are being added pursuant to
Section 2.6(b), the Rating Agency Condition shall have been satisfied.
(d) (i) The Transferor may from time to time, at its sole
discretion, subject to and in compliance with the limitations and
conditions specified below, (x) designate Eligible Accounts originated
by a Seller (other than the initial Sellers) subsequent to its becoming
an Eligible Originator to be included as Accounts as of the applicable
Creation Date ("Automatic Additional Accounts"), and (y) may at any
time discontinue or suspend designating Eligible Accounts to be
included as Automatic Additional Accounts upon written notice to the
Trustee. For purposes of this paragraph, Eligible Accounts shall be
deemed to include only Eligible Accounts (x) of a type included as
Accounts on the Initial Closing Date or any Additional Account Closing
Date or consented to in writing by each Rating Agency and (y) not
prohibited from being included as Accounts pursuant to the terms of any
Supplement. The Transferor acknowledges and agrees with the Trustee,
for the benefit of all Investor Certificateholders of all Series, that
each Account originated or acquired by the Transferor on or after the
Cut Off Date, shall be considered to be Automatic Additional Accounts
constituting Accounts, each within the meaning of the Agreement, on and
as of the applicable Creation Date of each such Account. The foregoing
notwithstanding, Automatic Additional Accounts shall not include any
Account acquired but not originated by any Eligible Originator and any
Master Card or VISA credit cards, prior to the satisfaction of the
Rating Agency Condition with respect thereto.
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(ii) The Transferor shall not be permitted to designate
Automatic Additional Accounts pursuant to clause (i) above with respect
to any period of the three consecutive Monthly Periods commencing in
January, April, July or October of a calendar year, commencing in
October 1997, unless the Rating Agency Condition is otherwise
satisfied, if the number of Automatic Additional Accounts designated
during such period or during any period of twelve (12) consecutive
Monthly Periods would exceed the applicable Aggregate Automatic
Addition Limit.
(iii) The Transferor shall record and file financing
statements with respect to the Receivables then existing and thereafter
created in the Automatic Additional Accounts for the transfer of
accounts, general intangibles and chattel paper (each as defined in the
UCC in effect in the Relevant UCC State) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect the transfer and assignment of the Receivables in
Automatic Additional Accounts by the Transferor to the Trust.
SECTION 2.7 REMOVAL OF ACCOUNTS.
(a) Subject to the conditions set forth below, during the
Revolving Period, the Transferor may, but shall not be obligated to, designate,
from time to time, Accounts for deletion and removal ("Removed Accounts") from
the Accounts and accept reconveyance of all Receivables in the Removed Accounts
without notice to the Investor Certificateholders; provided, however, that the
Transferor shall not make more than one such designation in any Monthly Period.
On or before the tenth Business Day (the "Removal Notice Date") prior to the
date on which the designated Removed Accounts will be reassigned by the Trustee
to the Transferor (the "Removal Date"), the Transferor shall give the Trustee
and the Servicer written notice that the Receivables from such Removed Accounts
are to be reassigned to the Transferor.
(b) The Transferor shall be permitted to designate and
require reassignment to it of Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) On or prior to the Removal Date, the Transferor shall
have delivered or caused to be delivered to the Trustee for execution a
written instrument of reassignment in substantially the form of Exhibit
C (the "Reassignment") and a computer file, microfiche or written list
containing a true and complete list of all Removed Accounts identified
by account number and by the aggregate balance of the Receivables in
such Removed Accounts as of the Removal Notice Date, which computer
file, microfiche or written list shall as of the Removal Date modify,
amend and be made a part of this Agreement;
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(ii) The Transferor shall represent and warrant that no
selection procedures believed by the Transferor to be materially
adverse to the interests of the Certificate Owners of any outstanding
Series of Investor Certificates or any Enhancement Provider were
utilized in selecting the Removed Accounts;
(iii) The removal of any Receivables of any Removed
Accounts on any Removal Date shall not, (a) in the reasonable belief of
the Transferor, result in a Pay Out Event or (b) cause the Transferor
Amount to be less than the Minimum Transferor Amount, and the aggregate
amount of Principal Receivables in the Trust shall not be less than the
Minimum Aggregate Principal Receivables;
(iv) The Rating Agencies shall have delivered to the
Transferor a letter confirming that the Rating Agency Condition has
been satisfied; and
(v) The Transferor shall deliver to the Trustee (with a
copy to the Rating Agencies) an Officer's Certificate confirming the
items set forth in paragraphs (i) through (iv) above. The Trustee may
conclusively rely on such Officer's Certificate, shall have no duty to
make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
Upon satisfaction of the above conditions, the Trustee shall execute
and deliver the Reassignment to the Transferor and take all actions and make all
deliveries contemplated therein, and the Receivables from the Removed Accounts
shall no longer constitute a part of the Trust.
SECTION 2.8 DISCOUNT OPTION RECEIVABLES.
(a) The Transferor has initially designated a percentage (the
"Discount Percentage") of the amount of Receivables arising in the Accounts that
otherwise would be treated as Principal Receivables to be treated as Finance
Charge Receivables in accordance with the provisions of this Section 2.8. The
Discount Percentage shall not apply to Finance Charges or to Receivables in
Defaulted Accounts. The Discount Percentage may be fixed or variable, and the
Transferor has designated 2% as the initial Discount Percentage.
(b) Discount Option Receivables shall be considered Finance
Charge Receivables for all purposes hereunder, including for the purposes of
allocating Collections pursuant to Article IV.
(c) The Transferor may, without notice to or consent of the
Investor Certificateholders, from time to time, elect (the "Discount Option") to
increase the Discount Percentage, to reduce the Discount Percentage, to apply
the Discount Percentage to Receivables created in Accounts not previously
subject to the Discount
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Percentage and to eliminate the Discount Percentage in respect of Receivables
created in Accounts on and after the date of such change or previously subject
to the Discount Percentage; provided however, that the Transferor shall not
redesignate any existing Discount Option Receivables as Principal Receivables
and the Transferor shall not increase the Discount Percentage upon or following
a Pay Out Event, or if such increase would cause the Aggregate Principal
Receivables to be less than the Minimum Aggregate Principal Receivables.
(d) The Transferor shall provide to the Servicer, the Trustee
and each Rating Agency, and the Persons, if any, specified in any Supplement
with respect to each class of Investor Certificates of any then outstanding
Series which is not assigned a rating by any Rating Agency, 30 days' prior
written notice of any designation, increase, reduction or elimination of the
Discount Percentage, and such designation, increase, reduction or elimination
shall become effective on the date specified in such notice unless such
designation, increase, reduction or elimination in the reasonable belief of the
Transferor would 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 with respect
to any Series; provided, however, that if such designation would cause the
Discount Percentage to be less than 1% or more than 3%, the Rating Agency
Condition shall have been satisfied with respect to all outstanding Series that
are assigned a rating by any Rating Agency, and the Persons, if any, specified
in any Supplement with respect to each class of Investor Certificates of any
then outstanding Series which is not assigned a rating by any Rating Agency,
shall have consented to such increase, reduction or elimination.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE RECEIVABLES
SECTION 3.1 ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS
RELATING TO THE SERVICER.
(a) Xxxxxxxx'x, Inc. hereby agrees to act as the Servicer
under this Agreement. The Investor Certificateholders, by their acceptance of
the Investor Certificates, consent to Xxxxxxxx'x, Inc., acting as Servicer.
(b) The Servicer shall service and administer the Receivables
and shall collect payments due under the Receivables in accordance with its
customary and usual policies and procedures in effect for servicing consumer
revolving credit card accounts receivables comparable to the Receivables, as
such policies and procedures may be modified from time to time, and in
accordance with the applicable 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. The Servicer has
designated its
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Affiliate, XxXxx'x, Inc., as the initial Subservicer. Without limiting the
generality of the foregoing and subject to Section 10.1, the Servicer is hereby
authorized and empowered (i) to make withdrawals and payments and to instruct
the Trustee to make withdrawals and payments from the Collection Account, the
Excess Funding Account or any other account or accounts maintained for the
benefit of the Certificateholders or with regard to any Enhancement as set forth
in this Agreement and any Supplement, (ii) unless such power and authority is
revoked by the Trustee on account of the occurrence of a Servicer Default
pursuant to Section 10.1, to instruct the Trustee to take any action permitted
or required under any Enhancement at such time as is set forth in this Agreement
or any Supplement, (iii) to execute and deliver, on behalf of the Trust for the
benefit of the Certificateholders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (iv) to make any filings,
reports, notices, applications, or registrations with, and to seek any consents
or authorizations from, the Securities and Exchange Commission and any state
securities or "blue sky" law authorities on behalf of the Trust as may be
necessary or advisable to comply with any Federal or state securities or "blue
sky" laws or reporting requirements. Prior to receipt by a Responsible Officer
of the Trustee of written notice of a Servicer Default, the Trustee shall
promptly follow the written instructions of the Servicer to withdraw funds from
the Collection Account and any other account or accounts maintained for the
benefit of the Certificateholders or with regard to any Enhancement. The Trustee
shall furnish the Servicer with limited powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder, and the Trustee shall not be held responsible
for any act or omission by the Servicer in its use of such powers of attorney.
(c) In the event that the Transferor is unable for any reason
to transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including by reason of the application of the provisions of Section
9.2 or the order of any Federal governmental agency having regulatory authority
over the Transferor or any court of competent jurisdiction that the Transferor
not transfer any additional Receivables to the Trust) then, in any such event,
(A) the Servicer agrees to allocate, after such date, all Collections (including
Collections of Finance Charge Receivables) with respect to Principal
Receivables, and all amounts which would have constituted Collections (including
Collections of Finance Charge Receivables) with respect to such Receivables
which would have been Principal Receivables but for the Transferor's inability
to transfer such Receivables to the Trust (up to an aggregate amount equal to
the Aggregate Principal Receivables in the Trust as of such date) in accordance
with Section 2.5(d) and to apply such amounts as Collections in accordance with
Article IV and (B) for only so long as all Collections and all amounts which
would have constituted Collections are allocated and applied in accordance with
clause (A) above, Collections of Principal Receivables and all amounts which
would have constituted Collections of Principal Receivables but for the
Transferor's inability to transfer Receivables to the Trust which are
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charged off as uncollectible in accordance with this Agreement shall continue to
be allocated in accordance with Article IV and all amounts which would have
constituted Collections of Principal Receivables but for the Transferor's
inability to transfer Receivables to the Trust shall be deemed to be Collections
of Principal Receivables for the purpose of calculating the applicable Investor
Percentage thereunder; provided, that if the Servicer is unable pursuant to any
Requirement of Law to allocate payments on the Accounts as described above, the
Servicer agrees that it shall, in any such event, allocate, after the date that
the Transferor becomes unable to do so, payments on each Account with respect to
the balance of such Account first to the oldest Receivable in such Account and
to have such payments applied as Collections in accordance with Article IV.
(d) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Servicer in connection with servicing other consumer revolving credit card
account receivables.
(e) The Servicer shall maintain fidelity bond or insurance
coverage against losses through wrongdoing of its officers and employees who are
involved in the servicing of Receivables covering such actions with such
insurers and in such amounts as the Servicer believes to be reasonable from time
to time.
(f) The Servicer shall comply with and perform its obligations
under the Account Agreements and the Credit Card Guidelines except insofar as
any failure to so comply would not materially and adversely affect the rights of
the Trust or the Certificateholders hereunder or under the Certificates.
SECTION 3.2 SERVICING COMPENSATION. As compensation for its
servicing activities hereunder and reimbursement for its expenses as set forth
in the immediately following paragraph, the Servicer shall be entitled to
receive a monthly servicing fee in respect of any Monthly Period (or portion
thereof) prior to the termination of the Trust pursuant to Section 12.1 (the
"Monthly Servicing Fee"). The Monthly Servicing Fee will be payable in arrears
on each Distribution Date in an amount equal to, with respect to each Series
then outstanding, one-twelfth (1/12th) of the product of the Servicing Fee
Percentage for such Series and the sum of the allocable portion of the
Transferor Amount and the Investor Amount of such Series, each as of the last
day of the preceding Monthly Period. The share of the Servicing Fee allocable to
each Series of Investor Certificateholders with respect to any Monthly Period
(or portion thereof) shall be equal to one twelfth (1/12th) of the product of
(A) the Servicing Fee Percentage for such Series and (B) the Investor Amount of
such Series, (after subtracting from the Investor Amount the aggregate amount of
any deposits previously made into any Principal Account) on the last date of the
applicable Monthly Period (or, in the case of the first Distribution Date, the
Initial Investor Amount, unless otherwise specified in any Supplement) (with
respect to any such Series, the "Investor Monthly Servicing Fee"), and shall be
paid to the Servicer pursuant to the applicable Supplement. The Investor Monthly
Servicing Fee will be funded from collections of Finance Charge Receivables
allocable to
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the Investor Amount. The remainder of the Monthly Servicing Fee shall be paid by
the Transferor, and in no event shall the Trust, the Trustee, any Enhancement
Provider or the Investor Certificateholders be liable for the share of the
Monthly Servicing Fee to be paid by the Transferor. In the case of the first
Monthly Period, the Monthly Servicing Fee and the Investor Monthly Servicing Fee
shall accrue from the Initial Closing Date.
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.5 and the reasonable fees and disbursements of
independent accountants and the Subservicer, if any, and all other expenses
incurred by the Servicer in connection with its activities hereunder; provided,
that the Servicer shall not be liable for any liabilities, costs or expenses of
the Trust, the Investor Certificateholders or the Certificate Owners arising
under any tax law, including without limitation any federal, state or local
income or franchise taxes or any other tax imposed on or measured by income (or
any interest or penalties with respect thereto or arising from a failure to
comply therewith), except to the extent incurred as a result of the Servicer's
violation of the provisions of this Agreement. The Servicer shall be required to
pay such expenses for its own account and shall not be entitled to any payment
therefore other than the Monthly Servicing Fee.
SECTION 3.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER. Xxxxxxxx'x, Inc., as initial Servicer, hereby makes, and any successor
Servicer by its appointment hereunder shall make, the following representations,
warranties and covenants with respect to any Series of Certificates, as of the
date of the related Supplement and the related Closing Date, unless otherwise
stated in such Supplement, on which the Trustee has relied in accepting the
Receivables and the other property conveyed pursuant to Section 2.1 in trust and
in authenticating the Certificates:
(a) Organization and Good Standing. The Servicer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has full power, authority and
legal right to own its properties and conduct its business as such properties
are presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement and any Supplement.
(b) Due Qualification. The Servicer is duly qualified to do
business and is in good standing (or is exempt from such requirements) in any
state where such qualification is necessary in order to service the Receivables
as required by this Agreement and any Supplement and has obtained all necessary
licenses and approvals as required under federal and state law, and if the
Servicer shall be required by any Requirement of Law to so qualify or obtain
such license or approval, then it shall do so, except where the failure to be so
qualified or to obtain such license or approval does not materially and
adversely affect the Servicer's ability to perform its obligations hereunder or
the enforceability of any Receivable.
(c) Due Authorization. The execution, delivery, and
performance of this Agreement and any Supplement and the consummation of the
transactions provided
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for in this Agreement and any Supplement have been duly authorized by the
Servicer by all necessary action on the part of the Servicer.
(d) Binding Obligation. Each of this Agreement and any
Supplement constitutes a legal, valid and binding obligation of the Servicer,
enforceable against the Servicer in accordance with its terms, subject to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or other similar laws now or hereinafter in effect
affecting the enforcement of creditors' rights in general (or, to the extent
applicable to the Servicer, the rights of creditors of banks) and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) No Violation. The execution and delivery of this Agreement
and any Supplement by the Servicer, the performance by the Servicer of the
transactions contemplated by this Agreement and any Supplement and the
fulfillment by the Servicer of the terms hereof and thereof, will not conflict
with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the Servicer or any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound, where such conflict,
violation, breach or default would not have a material adverse effect.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by this
Agreement or any Supplement, seeking any determination or ruling that, in the
reasonable judgment of the Servicer, would materially and adversely affect the
performance by the Servicer of its obligations under this Agreement or any
Supplement, or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement or any
Supplement.
(g) Compliance with Requirements of Law. The Servicer shall
duly satisfy its obligations in all material respects on its part to be
fulfilled under or in connection with each Receivable and the corresponding
Account, will maintain in effect all material qualifications required under
Requirements of Law in order to service properly each Receivable and the
corresponding Account and will comply in all material respects with all other
Requirements of Law in connection with servicing each Receivable and the related
Account, the failure to comply with which would have a material adverse effect
on the Certificateholders (without regard to the amount of any Enhancement).
(h) No Rescission or Cancellation. Except in connection with
an Adjustment Payment Obligation pursuant to Section 3.8, the Servicer shall not
permit any rescission or cancellation of any Receivable except as ordered by a
court of competent
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jurisdiction or other Governmental Authority or in the ordinary course of its
business and in accordance with the applicable Credit Card Guidelines.
(i) Protection of Certificateholders' Rights. The Servicer
shall take no action which, nor omit to take any action the omission of which,
would impair the rights of Certificateholders in any Receivable or the rights of
any Enhancement Provider, nor shall it reschedule, revise, waive or defer
payments due on any Receivable except in accordance with the applicable Credit
Card Guidelines.
(j) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental Authority
required to be obtained on or prior to each date as of which this representation
is being made in connection with the execution and delivery by the Servicer of
this Agreement and any Supplement, the performance by the Servicer of the
transactions contemplated by this Agreement and any Supplement and the
fulfillment by the Servicer of the terms hereof and thereof, have been obtained;
provided, however, that no representation or warranty is made regarding state
securities or "blue sky" laws in connection with any distribution of the
Certificates.
(k) Receivables Not to be Evidenced by Instruments. Except in
connection with its enforcement or collection of an Account, the Servicer will
take no action to cause any Receivable to be evidenced by any instrument (as
defined in the UCC as in effect in the Relevant UCC State).
In the event of a breach of any of the representations and warranties
set forth in Section 3.3(g), (h), (i) or (k) with respect to a Receivable, and
such breach has a material adverse effect on the Certificateholders' interest in
such Receivable (without regard to the amount of any Enhancement) then, upon the
expiration of 90 days or any longer period specified by the Trustee upon request
of the Servicer (not to exceed an additional 90 days) from the earlier to occur
of the discovery of any such event by the Servicer or receipt by the Servicer of
written notice of any such event given by the Trustee, unless such breach has
been cured, each such Receivable or, at the option of the Transferor, all such
Receivables with respect to the related Account, shall be assigned and
transferred to the Servicer upon the deposit by the Servicer into the Collection
Account in immediately available funds prior to the next succeeding Distribution
Date of an amount equal to the amount of each such Receivable at the end of the
Monthly Period preceding such Distribution Date, plus the amount of finance
charges at the monthly periodic rate applicable to such Receivable from the last
date billed through the end of such Monthly Period to the extent not included in
the amount of such Receivable. Any such deposit into the Collection Account in
connection with any such assignment of a Receivable shall be considered a
payment in full of such Receivable and such deposit shall be applied in
accordance with the provisions of Article IV. Upon the assignment to the
Servicer of such a Receivable, the Trust shall, without further action, be
deemed to transfer, assign, set-over and otherwise convey to the Servicer,
without recourse, representation or warranty, all the right, title and interest
of the Trust in and to such Receivable, all monies
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due or to become due with respect thereto and all proceeds thereof. The Trustee
shall execute such documents and instruments of transfer or assignment and take
such other actions as shall reasonably be requested by the Servicer to effect
the conveyance of such Receivable pursuant to this subsection. The obligation of
the Servicer set forth in this Section 3.3 shall constitute the sole remedy
respecting any breach by the Servicer of the representations and warranties set
forth in the above-referenced subsections with respect to such Receivable
available to Certificateholders or the Trustee on behalf of Certificateholders.
Notwithstanding any other provision of this Section 3.3, no assignment of a
Receivable to the Servicer pursuant to this Section 3.3 shall occur if the
Servicer fails to make the deposit required by this Section 3.3 with respect to
such Receivable.
SECTION 3.4 REPORTS AND RECORDS FOR THE TRUSTEE
(a) Initial Report. On the Closing Date with respect to each
Series of the Investor Certificates, the Servicer shall prepare and deliver, as
provided in Section 13.5, to the Trustee and the Rating Agencies, and the
Persons, if any, specified in any Supplement with respect to each class of
Investor Certificates of any then outstanding Series which is not assigned a
rating by any Rating Agency, an Officer's Certificate substantially in the form
of Exhibit D setting forth the Aggregate Principal Receivables, the Transferor
Amount, the Discount Option Receivables and the Transferor Interest Percentage
as of the end of the day two Business Days preceding the Closing Date and the
expected Transferor Amount after giving effect to the issuance of such Series.
(b) Daily Reports. For so long as deposits of Collections are
required to be made daily by the Servicer pursuant to Section 4.1(f), on each
Business Day commencing on the Initial Closing Date, the Servicer shall prepare,
maintain at the office of the Servicer and make available for inspection by the
Trustee, a record setting forth the aggregate amount of Collections processed by
the Servicer on the second preceding Business Day. The Servicer shall prepare
such other reports on a daily (or less frequent) basis as may be required by any
Supplement.
(c) Monthly Servicer's Certificate. By 1:00 p.m., Minneapolis,
Minnesota time on each Determination Date, the Servicer shall deliver, as
provided in Section 13.5, to the Trustee, the Paying Agent and the Rating
Agencies, an Officer's Certificate signed by a Servicing Officer substantially
in the form of Exhibit E (the "Monthly Servicer's Certificate") (with the
Monthly Certificateholder's Statement required pursuant to the applicable
Supplement attached) setting forth the following information (which, in the case
of clauses (iii), (iv) and (viii) below, will be stated on the basis of an
original principal amount of $1,000 per Certificate): (i) the aggregate amount
of Collections processed for the immediately preceding Monthly Period and the
aggregate amount of Collections of Finance Charge Receivables and the aggregate
amount of Collections of Principal Receivables processed during such Monthly
Period; (ii) the Investor Percentage with respect to each Series of Certificates
with respect to Collections of Principal Receivables, Finance Charge Receivables
and Defaulted Receivables
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processed during the immediately preceding Monthly Period; (iii) for each Series
and for each class within any such Series, the amount of such distribution
allocable to principal, if applicable; (iv) for each Series and for each class
within any such Series, the amount of such distribution allocable to interest,
if applicable; (v) the aggregate outstanding balance of the Accounts which were
delinquent by 31 to 60 days, 61 to 90 days and 91 days or more as of the close
of business on the last day of the immediately preceding Monthly Period
immediately preceding such Distribution Date; (vi) for each Series and for each
class within any such Series, the Investor Default Amount for the immediately
preceding Monthly Period; (vii) for each Series and for each class within any
such Series, the amount of the Investor Charge Offs and the amount of the
reimbursements thereof for the next succeeding Distribution Date; (viii) for
each Series, the Monthly Servicing Fee for the next succeeding Distribution
Date; (ix) for each Series, the existing deficit controlled amortization amount
or deficit controlled accumulation amount, if applicable; (x) the aggregate
amount of Receivables in the Trust at the close of business on the last day of
the Monthly Period immediately preceding such Distribution Date; (xi) for each
Series, the Investor Amount at the close of business on the last day of the
Monthly Period immediately preceding such Distribution Date; (xii) the available
amount of Enhancement, if any, for each Series; and (xiii) whether a Pay Out
Event with respect to any Series shall have occurred during or with respect to
the immediately preceding Monthly Period. The Trustee shall make such statement
available to the Certificateholders, but shall be under no duty to recalculate,
verify or recompute the information supplied to it under this Section 3.4.
SECTION 3.5 ANNUAL SERVICER'S CERTIFICATE. The Servicer will
deliver, as provided in Section 13.5, to the Trustee, the Rating Agencies and
the Persons, if any, specified in the Supplement with respect to each class of
Investor Certificates of any then outstanding Series which is not assigned a
rating by any Rating Agency, on or before June 30 of each calendar year,
beginning with 1998, an Officer's Certificate substantially in the form of
Exhibit F (a) stating that a review of the activities of the Servicer during the
preceding Fiscal Year (or, in the case of the first such certificate, during the
period from the Initial Closing Date until February 3, 1998) and of its
performance under this Agreement was made under the supervision of the officer
signing such certificate and (b) stating that to the best of such officer's
Knowledge, based on such review, either there has occurred no event which, with
the giving of notice or passage of time or both, would constitute a Servicer
Default and the Servicer has fully performed all its obligations under this
Agreement throughout such year, or, if there has occurred such an event,
specifying each such event known to such officer and the nature and status
thereof. A copy of such Officer's Certificate may be obtained by any Investor
Certificateholder by a request in writing to the Trustee directed to the
Trustee's address specified in Section 13.5 hereof.
SECTION 3.6 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT.
(a) On or before June 30 of each calendar year, beginning with
1998, the Servicer shall cause a firm of nationally recognized independent
public accountants
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(who may also render other services to the Servicer or the Transferor) to
furnish, as specified in Section 13.5, a report prepared in accordance with
standards established by the American Institute of Certified Public Accountants
and, accordingly, including such procedures or examination as they considered
necessary in the circumstances, to the Trustee, the Rating Agencies and the
Persons, if any, specified in any Supplement with respect to each class of
Investor Certificates of any then outstanding Series which is not assigned a
rating by any Rating Agency, and, as may be required by any Series Supplement,
any Enhancement Provider to the effect that, such firm has applied certain
procedures to certain documents and records relating to the servicing of the
Accounts, compared the information contained in the Servicer's certificates
issued during the period covered by the report with such documents and records
and that, based upon such procedures or examination, no matters came to the
attention of such accountants that caused them to believe that such servicing
was not conducted in all material respects, in conformity with Section 3.4(c),
except for such exceptions as such accountants believe to be immaterial and such
other exceptions as shall be set forth in such report. Such procedures or
examination will include comparisons of the mathematical calculations contained
in the Monthly Servicer's Certificates forwarded by the Servicer pursuant to
Section 3.4(c) during the period covered by such report with the Servicer's
computer reports that were the source of such amounts, and such report shall
state that, on the basis of such comparison, such accountants are of the opinion
that such amounts are consistent, except for such exceptions as they believe to
be immaterial and such other exceptions as shall be set forth in such report. In
the event such firm requires the Trustee to agree to the procedures performed by
such firm, the Servicer shall direct the Trustee in writing to so agree; it
being understood and agreed that the Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the
Trustee makes no independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures. A copy of such report may be obtained by any Investor
Certificateholder or Certificate Owner by a request in writing to (i) the
Trustee directed to the Trustee's address specified in Section 13.5 hereof or
(ii) the Servicer at the Servicer's address specified in such Section 13.5.
(b) On or before June 30 of each calendar year, beginning with
1998, the Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer or the
Transferor) to furnish, as specified in Section 13.5, a report to the Trustee,
the Rating Agencies and the Persons, if any, specified in any Supplement with
respect to each class of Investor Certificates of any then outstanding Series
which is not assigned a rating by any Rating Agency, and, as may be required by
any Series Supplement, any Enhancement Provider, to the effect that in
connection with their examination of the Monthly Servicer's Certificates,
nothing came to their attention that caused them to believe that the Servicer
failed to comply with provisions of Sections 3.2, 3.4(c), 4.1 and 8.8 of this
Agreement. In the event such firm requires the Trustee to agree to the
procedures performed by such firm, the Servicer shall direct the Trustee in
writing to so agree; it being understood and agreed that the Trustee will
deliver such letter of agreement in conclusive reliance upon the direction of
the Servicer, and the Trustee makes no independent inquiry or investigation as
to, and shall
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have no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures. A copy of such report may be obtained by any
Investor Certificateholder or Certificate Owner by a request in writing to (i)
the Trustee directed to the Trustee's address specified in Section 13.5 hereof
or (ii) the Servicer at the Servicer's address specified in such Section 13.5.
SECTION 3.7 TAX TREATMENT. The Transferor has structured this
Agreement and the Investor Certificates (other than any Investor Certificates
held by the Transferor) with the intention that such Investor Certificates will
qualify under applicable federal income tax law as indebtedness of the
Transferor or, if specified in the applicable Supplement, an interest in a
partnership, and the Transferor, any entity acquiring any direct or indirect
interest in the Exchangeable Transferor Certificate, each Investor
Certificateholder (or Certificate Owner) by acceptance of its Certificate (or,
in the case of a Certificate Owner, by virtue of such Certificate Owner's
acquisition of a beneficial interest therein) and each holder of an interest in
any Enhancement Investor Amount by its acceptance thereof agrees, and shall be
deemed to agree, to treat such Investor Certificates (or beneficial interest
therein) or Enhancement Investor Amount for purposes of Federal, state and local
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness, or, if specified in the applicable Supplement, an interest in a
partnership. Each Certificateholder agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness or, if specified in the applicable
Supplement, an interest in a partnership, for certain tax purposes. Consistent
with the foregoing, the Trustee shall not: (i) file a Federal income tax return
on behalf of the Trust or apply for a taxpayer identification number on behalf
of the Trust unless required to do so as a result of a determination by the
Internal Revenue Service or pursuant to the terms of a Supplement, or (ii) make
any election pursuant to Treas. Reg. Section 301.7701-3 regarding the Trust
classification for federal tax purposes or any similar election under applicable
state law regarding the Trust's classification for state tax purposes.
SECTION 3.8 ADJUSTMENTS.
(a) If the Servicer adjusts downward the amount of any
Principal Receivable because of a rebate, refund, unauthorized charge or billing
error to an Obligor, or because such Receivable was created in respect of
merchandise or services which were refused, returned or not received by an
Obligor, or if the Servicer otherwise adjusts downward the amount of any
Principal Receivable without receiving Collections therefor or without charging
off such amount as uncollectible, then, in any such case, the Servicer shall
deduct from the Aggregate Principal Receivables and decrease the Transferor
Amount by the amount of such adjustment. Similarly, the amount of the Aggregate
Principal Receivables and the Transferor Amount will be reduced by the amount of
any Principal Receivable which was discovered as having been created through a
fraudulent or counterfeit charge or with respect to which the covenant contained
in Section 2.5(b) was breached. Any adjustment, required pursuant to either of
the two preceding sentences shall be made on or prior to the end of the Monthly
Period in which such adjustment
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(each, an "Adjustment") arises. In the event that, following any such reduction,
the Transferor Amount would be less than the Minimum Transferor Amount, the
Transferor shall immediately pay to the Servicer for deposit into the Excess
Funding Account, in immediately available funds, an amount equal to the amount
by which the Transferor Amount would be reduced below the Minimum Transfer
Amount (" Adjustment Payment Obligation"). In the event that the Servicer
adjusts upwards the principal amount of any Receivable, the Aggregate Principal
Receivables and the Transferor Amount shall be increased by the amount of such
upward adjustment, and any unpaid Adjustment Payment Obligation shall be reduced
by the applicable amount.
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such Collection was
received by the Servicer in the form of a check which is not honored for any
reason or (ii) the Servicer makes a mistake with respect to the amount of any
Collection and deposits an amount that is less than or more than the actual
amount of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored
check or mistake. Any Receivable in respect of which a dishonored check is
received shall be deemed not to have been paid. Notwithstanding the first two
sentences of this paragraph, no adjustments shall be made pursuant to this
paragraph that will change any amount of Collections previously reported
pursuant to Section 3.4(c).
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
SECTION 4.1 ESTABLISHMENT OF COLLECTION ACCOUNT AND
ALLOCATIONS WITH RESPECT TO THE EXCHANGEABLE TRANSFEROR CERTIFICATE.
(a) The Collection Account. The Servicer shall establish and
maintain or cause to be established and maintained in the name of the Trustee,
on behalf of the Trust, with the Trustee or another Qualified Institution a
segregated corporate trust account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Investor Certificateholders. The Trustee shall possess all right,
title and interest in all amounts held from time to time in the Collection
Account and in all proceeds thereof. The Collection Account shall be under the
sole dominion and control of the Trustee for the benefit of the Investor
Certificates. If, at any time, the institution holding the Collection Account
ceases to be a Qualified Institution, the Trustee (or the Servicer on behalf of
the Trustee) shall within five (5) Business Days of a Responsible Officer of the
Trustee receiving written notice or having actual knowledge of such event
establish a new Collection Account meeting the conditions specified above with a
Qualified Institution and shall transfer any cash and/or any investments to such
new Collection Account, and from the date such new Collection Account is
established, it shall be the "Collection Account." The foregoing
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notwithstanding, pursuant to the authority granted to the Servicer in Section
3.1(b), the Servicer shall have the power, revocable by the Trustee, to make
withdrawals and payments from the Collection Account and to instruct the Trustee
to make withdrawals and payments from the Collection Account for the purposes of
carrying out the Servicer's or the Trustee's duties hereunder.
(b) Interest in the Trust. Each Series shall represent
interests in the Trust, including the benefits of Enhancement, if any, to be
provided with respect to such Series as indicated in the Supplement relating to
such Series and the right to receive Collections and other amounts at the times
and in the amounts specified in this Article IV to be deposited in the
Collection Account and any other accounts maintained for the benefit of the
Certificates or to be paid to the Investor Certificateholders of such Series.
The Exchangeable Transferor Certificate shall represent the interest in the
Trust not represented by any Series then outstanding, including the right to
receive Collections and other amounts at the times and in the amounts specified
in this Article IV to be paid to the Transferor (the "Transferor Interest");
provided, however, that the Exchangeable Transferor Certificate shall not
represent any interest in the Collection Account or any other accounts
maintained for the benefit of the Certificateholders or the benefits of
Enhancement, if any, to be provided by an Enhancement Provider issued with
respect to any Series, except as specifically provided in this Article IV.
(c) Administration of the Collection Account. At the written
direction of the Servicer, funds held in the Collection Account to be invested
shall be invested by the Trustee in Permitted Investments selected by the
Servicer. All such Permitted Investments shall be held by the Trustee for the
benefit of the Investor Certificateholders. Investments of funds representing
Collections collected during any Monthly Period shall be invested in Permitted
Investments that will mature so that such funds will be available by the close
of business on the Business Day preceding the Distribution Date next succeeding
such Monthly Period. Any funds held in the Collection Account to be so invested
shall be invested solely in Permitted Investments. All Permitted Investments
shall be held to maturity. The Trustee shall maintain possession of the
negotiable instruments or securities, if any, evidencing such Permitted
Investments. For purposes of determining the availability of funds or balances
in the Collection Account, all investment earnings on such funds shall be deemed
not to be available or on deposit until actually credited to such account. On
each Distribution Date, all interest and other investment earnings (net of
losses and investment expenses) on funds held in the Collection Account shall be
paid to the Holder of the Exchangeable Transferor Certificate. The Transferor at
its option may direct the Servicer's investment of funds pursuant to this
Section 4.1(c).
(d) Allocations For the Exchangeable Transferor Certificate.
Throughout the existence of the Trust, the Servicer shall allocate to the Holder
of the Exchangeable Transferor Certificate an amount equal to the product of (A)
the Transferor Percentage and (B) the aggregate amount of Collections allocated
to Principal Receivables and Finance Charge Receivables, respectively, in
respect of each Monthly Period. Notwithstanding anything to the contrary in
Section 4.1, unless specified in any
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Supplement, the Servicer need not deposit this amount, or any other amounts so
allocated to the Exchangeable Transferor Certificate pursuant to any Supplement,
into the Collection Account and shall pay such amounts as collected to the
Holder of the Exchangeable Transferor Certificate.
(e) Allocation of Collections Between Collections of Principal
Receivables and Collections of Finance Charge Receivables. Collections of
Receivables (other than Recoveries) for any day during a Monthly Period shall be
allocated first to Finance Charge Receivables in an amount equal to the sum of
(i) the amount of Finance Charge Receivables billed during the prior Monthly
Period and (ii) the amount of Finance Charge Receivables for prior Monthly
Periods which were not covered by Collections on Receivables (other than
Recoveries) allocated to Receivables for such Monthly Periods. The balance of
Collections of Receivables for such day shall be allocated to Principal
Receivables. If the Servicer shall at any time be able to determine the actual
amount of Collections processed on any day which are Collections of Finance
Charge Receivables, Collections of Principal Receivables and Recoveries, the
Servicer, upon ten (10) days notice to the Trustee, the Transferor (if the
Servicer is not then the Transferor) and each Rating Agency, may at its option
henceforth allocate Collections received on each day in accordance with the
actual amount of Collections of Finance Charge Receivables (other than
Recoveries), Collections of Principal Receivables and Recoveries collected on
such day.
(f) Collections. The Servicer will apply all Collections with
respect to the Receivables for each Monthly Period as described in this Article
IV and each Supplement. Except as otherwise provided herein or in the applicable
Supplement, the Servicer shall deposit Collections into the Collection Account
no later than the second Business Day following the Date of Processing of such
Collections. Subject to the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, for so long as, and only so
long as, the Company or an Affiliate of the Company shall be the Servicer
hereunder and no Pay Out Event relating to a Servicer Default shall have
occurred and be continuing, and either (i) the Company or such Affiliate shall
maintain a short-term debt or certificate of deposit rating of P-1 by Moody's
and of A-1+ by Standard & Poor's, or (ii) Xxxxxxxx'x, Inc. shall have obtained a
written notification from each Rating Agency to the effect that such Rating
Agency does not intend to downgrade or withdraw its then current rating of any
outstanding Series of Investor Certificates despite the Servicer's inability to
satisfy the rating requirement specified in clause (i), and for two Business
Days following any reduction of either such rating or failure to satisfy the
conditions of clause (ii), the Servicer need not deposit Collections into the
Collection Account or make payments to the holder of the Exchangeable Transferor
Certificate prior to the close of business on the second Business Day following
the Date of Processing, but rather may make a single deposit in the Collection
Account in immediately available funds on the Business Day prior to each
Distribution Date in an amount equal to the Collections with respect to the
Monthly Period preceding such Distribution Date to the extent such amounts and
Collections are allocated to one or more Series in accordance with Article IV.
Collections shall not be required to be invested in Permitted Investments until
such
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time as they are deposited into the Collection Account. The Servicer shall
promptly notify the Trustee of any downgrade or withdrawal of its short-term
credit or certificate of deposit rating or, if an Affiliate of Xxxxxxxx'x, Inc.
is acting as Servicer hereunder, of any such downgrade or withdrawal of any such
rating of such Affiliate.
Should the Servicer be required to make daily deposits of
Collections into the Collection Account pursuant to this subsection, during any
Amortization Period, the Servicer may, subject to the provisions of the
applicable Supplement, cease depositing Collections of Principal Receivables
received in any Monthly Period and allocable to a Series at such time as the
amount of Collections of Principal Receivables allocable to such Series and
deposited into the Collection Account equals the amount of principal scheduled
or permitted to be paid on the next succeeding Distribution Date with respect to
such Series. Collections of Principal Receivables allocable to such Series in
excess of such amount shall be distributed, on a daily basis as they are
collected, to the Transferor.
(g) Excess Funding Account. The Servicer, for the benefit of
the Certificateholders, shall establish and maintain or cause to be established
and maintained in the name of the Trustee, on behalf of the Trust, with a
Qualified Institution a segregated trust account, which may be a subaccount of
the Collection Account, bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Investor Certificateholders
(the "Excess Funding Account"). The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Excess Funding Account
and in all proceeds thereof. The Excess Funding Account shall be under the sole
dominion and control of the Trustee for the benefit of the Investor
Certificateholder. If, at any time, the institution holding the Excess Funding
Account is not the Trustee, or if another Person, such institution ceases to be
a Qualified Institution, the Trustee (or the Servicer on its behalf) shall
within five (5) Business Days of a Responsible Officer of the Trustee receiving
written notice or having actual knowledge of such event establish a new Excess
Funding Account meeting the conditions specified above with a Qualified
Institution and shall transfer any cash and/or any investments to such new
Excess Funding Account, and from the date such new Excess Funding Account is
established, it shall be the "Excess Funding Account." The foregoing
notwithstanding, pursuant to the authority granted to the Servicer in Section
3.1(b), the Servicer shall have the power, revocable by the Trustee, to make
withdrawals and payments from the Excess Funding Account and to instruct the
Trustee to make withdrawals and payments from the Excess Funding Account for the
purposes of carrying out the Servicer's or the Trustee's duties hereunder.
At the written direction of the Servicer, funds held in the
Excess Funding Account to be invested shall be invested by the Trustee in
Permitted Investments selected by the Servicer. All such Permitted Investments
shall be held by the Trustee for the benefit of the Investor Certificateholders.
The Trustee shall maintain for the benefit of the Investor Certificateholders
possession of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. Funds held in the Excess Funding Account on any date
(after giving effect to any withdrawals from the Excess Funding Account on such
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date) will be invested in Permitted Investments that will mature so that funds
will be available at the close of business on the next Business Day following
such date. On each Determination Date, the Servicer shall instruct the Trustee
to withdraw on the next succeeding Distribution Date from the Excess Funding
Account and deposit in the Collection Account all interest and other investment
earnings (net of losses and investment expenses) on funds held in the Excess
Funding Account, for application as Collections of Finance Charge Receivables
with respect to the prior Monthly Period. Interest (including reinvested
interest) and other investment income and earnings on funds held in the Excess
Funding Account shall not be considered part of the Excess Funding Amount for
purposes of this Agreement. On each Business Day (other than following a Pay Out
Event), the Servicer shall determine the amount by which the Transferor Amount
exceeds the Minimum Transferor Amount on such date and shall instruct the
Trustee to withdraw such amount from the Excess Funding Account on such date and
pay such amount to the holder of the Exchangeable Transferor Certificate. On
each Determination Date on which one or more Series is in an Amortization
Period, the Servicer shall determine the aggregate amount of Principal
Shortfalls, if any, with respect to each such Series that is a Principal Sharing
Series (after giving effect to the allocation and payment provisions in the
Supplement with respect to each such Series on the next succeeding Distribution
Date), and the Servicer shall instruct the Trustee to withdraw such amount (up
to the Excess Funding Amount) from the Excess Funding Account on the next
succeeding Distribution Date and allocate such amount among each such Series as
Shared Principal Collections as specified in each related Supplement to the
extent needed to cover the principal payments due to or for the benefit of such
Series.
(h) Principal and Shared Principal Collections. Collections of
Principal Receivables and certain other amounts for any Monthly Period allocated
to any Series in a Group will be used first to cover certain amounts described
in the related Series Supplements (including any required deposits into a
Principal Account or required distributions to Certificateholders of such
Series). For each Distribution Date, the Servicer will determine the amount of
collections of Principal Receivables for any Monthly Period (plus certain other
amounts required by the related Series Supplement) allocated to such Series
remaining after covering such required deposits and distributions and any
similar amount remaining for any other Series in such Group (collectively,
"Shared Principal Collections"), and will allocate the Shared Principal
Collections to cover any principal distributions to Certificateholders and
deposits to Principal Accounts for any Series in such Group which are either
scheduled or permitted and which have not been covered out of collections of
Principal Receivables and certain other amounts for such Series, provided that
the Series Supplement for such Series so provides ("Principal Shortfalls"). If
Principal Shortfalls exceed Shared Principal Collections for any Monthly Period,
Shared Principal Collections will be allocated pro rata among the Series in a
Group entitled to the benefits thereof based on the respective Principal
Shortfalls of such Series. To the extent that Shared Principal Collections
exceed Principal Shortfalls, the balance will be distributed to the holder of
the Exchangeable Transferor Certificate; provided, however, that (i) such Shared
Principal Collections will be distributed to the holder of the Exchangeable
Transferor Certificate only to the extent the Transferor Amount is greater
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than the Minimum Transferor Amount and (ii) in certain circumstances provided in
the applicable Supplement, such Shared Principal Collections will be deposited
in the Excess Funding Account. Any such reallocation of collections of Principal
Receivables and other amounts will not result in a reduction in the Investor
Amount of the Series to which such collections were initially allocated.
(i) Shared Excess Finance Charge Collection. Collections of
Finance Charge Receivables and certain other amounts allocable to any Series
which is included in such Group in excess of the amounts necessary to make
required payments with respect to such Series that are payable out of
collections of Finance Charge Receivables ("Shared Excess Finance Charge
Collections") will be applied to cover any shortfalls with respect to amounts
payable from collections of Finance Charge Receivables allocable to any other
Series included in such Group, pro rata based upon the amount of the shortfall,
if any, with respect to each other Series in such Group, provided, however, that
the sharing of Shared Excess Finance Charge Collections among Series in a Group
will continue only until such time, if any, at which the Transferor shall
deliver to the Trustee a certificate of an authorized officer to the effect
that, in the reasonable belief of the Transferor or its counsel, the continued
sharing of Shared Excess Finance Charge Collections among Series in any Group
would have adverse regulatory implications with respect to the Transferor.
Following the delivery by the Transferor of any such certificate to the Trustee
there will not be any further sharing of Shared Excess Finance Charge
Collections among the Series in a Group. In all cases, any Shared Excess Finance
Charge Collections remaining after covering shortfalls with respect to all
outstanding Series in a Group will be paid to the holder of the Exchangeable
Transferor Certificate.
On each Distribution Date, (i) the Servicer shall allocate
Shared Excess Finance Charge Collections with respect to the Series in a Group
to each Series in such Group, pro rata, in proportion to the Finance Charge
Shortfalls, if any, with respect to each such Series and (ii) the Servicer shall
withdraw (or shall instruct the Trustee to withdraw) from the Collection Account
and pay to the holder of the Exchangeable Transferor Certificate an amount equal
to the excess, if any, of (x) the aggregate amount of Shared Excess Finance
Charge Collections for all such Series for such Distribution Date over (y) the
aggregate amount of Finance Charge Shortfalls for all such Series for such
Distribution Date.
(j) Net Deposits. For so long as Xxxxxxxx'x, Inc. or an
Affiliate of Xxxxxxxx'x, Inc. shall be the Servicer hereunder and a Servicer
Default shall not have occurred and be continuing, the Servicer may make
deposits into the Collection Account or the Excess Funding Account on any date
net of amounts payable as of such date to the Transferor or the Servicer from
amounts held in the Collection Account or the Excess Funding Account, it being
understood that the Investor Monthly Servicing Fee with respect to any Series
shall be payable to the Servicer only in accordance with the provisions
specified in the related Supplement and that the foregoing shall in no event
increase the amount payable to the Transferor or the Servicer hereunder or
pursuant to any Supplement.
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[THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE V
[ARTICLE V IS RESERVED AND MAY BE SPECIFIED
IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
ARTICLE VI
THE CERTIFICATES
SECTION 6.1 THE CERTIFICATES. Subject to Sections 6.10 and
6.11, the Investor Certificates of each Series and any class thereof may be
issued in bearer form (the "Bearer Certificates") with attached interest coupons
and a special coupon (collectively, the "Coupons") or in fully registered form
(the "Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the applicable Supplement. The
Exchangeable Transferor Certificate shall be substantially in the form of
Exhibit A. The Investor Certificates and the Exchangeable Transferor Certificate
shall, upon issue pursuant hereto or to Section 6.9 or Section 6.11, be executed
and delivered by the Transferor (or the Trustee on behalf of the Trust, if
specified in the applicable Supplement) to the Trustee for authentication and
redelivery as provided in Section 6.2. Any Investor Certificates shall be issued
in minimum denominations of $1,000 and in integral multiples of $1,000 in excess
thereof, unless otherwise specified in any Supplement. If specified in the
related Supplement for any Series, the Investor Certificates shall be issued
upon initial issuance as a single certificate in an original principal amount
equal to the Initial Investor Amount as described in Section 6.10. The
Exchangeable Transferor Certificate may also be issued in two or more
certificates. Each Certificate executed by the Transferor shall be executed by
manual or facsimile signature on behalf of the Transferor by its President, any
Executive Vice President, Senior Vice President or the Treasurer. Certificates
bearing the manual or facsimile signature of the individual who was, at the time
when such signature was affixed, authorized to sign on behalf of the Transferor
or the Trustee shall not be rendered invalid, notwithstanding that such
individual has ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or any applicable Supplement, or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided for herein executed by or on behalf of the Trustee by the
manual signature of a Responsible Officer, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence,
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that such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication, except Bearer
Certificates which shall be dated the Issuance Date.
SECTION 6.2 AUTHENTICATION OF CERTIFICATES. Contemporaneously
with the assignment and transfer of the Receivables and the other property to
the Trust, the Trustee shall authenticate and deliver the initial Series of
Investor Certificates upon the order of the Transferor, to the Persons
designated in the related Supplement. The Trustee shall authenticate and deliver
the Exchangeable Transferor Certificate to the Transferor simultaneously with
its delivery of the initial Series of Investor Certificates. Upon an Exchange as
provided in Section 6.9 of the Agreement and the satisfaction of the conditions
specified therein, the Trustee shall authenticate and deliver the Investor
Certificates of additional Series (with the designation provided in the
applicable Supplement), upon the order of the Transferor, to the Persons
designated in such Supplement. Upon the order of the Transferor, the
Certificates of any Series shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations equal to (in the aggregate) the Initial
Investor Amount of such Series of Investor Certificates. If specified in the
related Supplement for any Series, the Trustee shall authenticate and deliver
outside the United States the Global Certificate that is issued upon original
issuance thereof, upon the written order of the Transferor, to the Common
Depositary as provided in Section 6.10 against payment of the purchase price
therefor. If specified in the related Supplement for any Series, the Trustee
shall authenticate Book-Entry Certificates that are issued upon original
issuance thereof, upon the written order of the Transferor, to a Clearing Agency
or its nominee as provided in Section 6.11 against payment of the purchase price
therefor.
SECTION 6.3 REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a) The Trustee shall cause to be kept at the office or agency
to be maintained by a transfer agent and registrar (which initially shall be the
Trustee) (the "Transfer Agent and Registrar") in accordance with the provisions
of Section 6.3(c) a register (the "Certificate Register") in which, subject to
such reasonable regulations as it may prescribe, the Transfer Agent and
Registrar shall provide for the registration of the Registered Certificates and
of transfers and exchanges of the Registered Certificates as herein provided.
The Trustee is hereby initially appointed Transfer Agent and Registrar for the
purpose of registering the Registered Certificates and transfers and exchanges
of the Registered Certificates as herein provided. The Trustee shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' prior written
notice to the Transferor and the Servicer, provided, however, that such
resignation shall not be effective and the Trustee shall continue to perform the
duties of Transfer Agent and Registrar until the Transferor has appointed a
successor Transfer Agent and Registrar acceptable to the Transferor and the
Trustee. If specified in the related Supplement for any Series of Certificates,
the Transferor shall appoint any co-transfer agent and co-registrar chosen by
the Transferor, and acceptable to the Trustee, including, if and so long as the
Registered Certificates are listed on the Luxembourg Stock Exchange or other
stock exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg or the location
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required by such other stock exchange. If specified in such related Supplement,
so long as the Registered Certificates relating to such Supplement are
outstanding, the Transferor shall maintain a co-transfer agent and co-registrar
in New York City or any other city designated in such Supplement and any
reference in this Agreement to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context requires otherwise.
Upon surrender for registration of transfer of any Registered
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Transferor (or the Trustee on behalf of the
Trust, if specified in the applicable Supplement) shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee, one or
more new Registered Certificates in authorized denominations of the same Series
representing like aggregate Undivided Interests in the Trust; provided, however,
that the provisions of this paragraph shall not apply to Bearer Certificates.
At the option of any Holder thereof, Registered Certificates
may be exchanged for other Registered Certificates of the same class and Series
in authorized denominations of like aggregate Undivided Interests in the Trust,
upon surrender of the Registered Certificates to be exchanged at any office or
agency of the Transfer Agent and Registrar maintained for such purpose. At the
option of any Holder thereof, subject to applicable laws and regulations, Bearer
Certificates may be exchanged for other Bearer Certificates or Registered
Certificates of the same class and Series in authorized denominations of like
aggregate Undivided Interests in the Trust, upon surrender of the Bearer
Certificates to be exchanged at an office or agency of the Transfer Agent and
Registrar located outside the United States. Each Bearer Certificate surrendered
pursuant to this Section 6.3 shall have attached thereto all unmatured Coupons,
provided that any Bearer Certificate so surrendered after the close of business
on the Record Date preceding the relevant Distribution Date after the related
Series Termination Date need not have attached the Coupon relating to such
Distribution Date. No Registered Certificates may be exchanged for a Bearer
Certificate.
The preceding provisions of this Section 6.3(a)
notwithstanding, the Trustee or the Transfer Agent and Registrar, as the case
may be, shall not be required to register the transfer or exchange of any
Certificate of any Series for a period of 15 days preceding the due date for any
payment with respect to the Certificates of such Series.
Whenever any Investor Certificates of any Series are
surrendered for exchange, the Transferor (or the Trustee on behalf of the Trust,
if specified in the applicable Supplement) shall execute, and the Trustee shall
authenticate and the Transfer Agent and Registrar shall deliver (in the case of
Bearer Certificates, outside the United States), the Investor Certificates of
such Series which the Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of
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transfer in a form satisfactory to the Trustee and the Transfer Agent and
Registrar duly executed by the Certificateholder thereof or his attorney duly
authorized in writing.
Except as provided in any Supplement, no service charge shall
be made for any registration of transfer or exchange of Investor Certificates,
but the Transfer Agent and Registrar and the Trustee or any co-transfer agent
and co-registrar or co-trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Investor Certificates.
All Investor Certificates (together with any Coupons attached
to Bearer Certificates) surrendered for registration of transfer or exchange
shall be canceled by the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee and the Transferor. The Trustee shall cancel
and mutilate the Global Certificate upon its exchange in full for Definitive
Certificates and shall deliver such canceled and mutilated Global Certificate to
the Transferor. The Trustee shall also forward to the Transferor a copy of each
certificate of each Foreign Clearing Agency to the effect referred to in Section
6.10 which was received by the Trustee with respect to each portion of the
Global Certificate exchanged for Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Sections 6.9 and 7.2 or in any
Supplement, the Transferor's interest in the Exchangeable Transferor Certificate
and other amounts payable to the Transferor pursuant to this Agreement shall not
be sold, transferred, assigned, exchanged, pledged, participated or otherwise
conveyed, unless (i) the Servicer has delivered to the Trustee an Officer's
Certificate stating that such sale, transfer, assignment, exchange, pledge,
participation or conveyance will not, while any Series of Certificates remains
outstanding, reduce the Transferor's retained interest in the Exchangeable
Transferor Certificate below the Minimum Transferor Interest Percentage and (ii)
prior to such sale, transfer, assignment, exchange, pledge, participation or
conveyance, the Rating Agency Condition is satisfied and (iii) the Trustee
receives prior thereto an Opinion of Counsel to the effect that (x) the conveyed
interest in the Exchangeable Transferor Certificate will be treated as either
debt or an interest in a partnership for Federal income tax purposes and that
the conveyance of such interest will not cause the Trust to be characterized for
Federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the Federal or applicable state
income taxation of any outstanding Series of Investor Certificates or any
Certificate Owner and (y) such transfer will not cause a taxable event for
Federal income tax purposes to any Investor Certificateholder.
(c) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, the City of New York (and, if specified in
the related Supplement
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for any Series, Luxembourg (or subject to Section 6.3(a) any other city
designated in such Supplement)), an office or offices or agency or agencies
where Investor Certificates may be surrendered for registration of transfer or
exchange (except that Bearer Certificates may not be surrendered for exchange at
any such office or agency in the United States).
(d) Unless otherwise provided in any related Supplement,
registration of transfer of Registered Certificates containing a legend relating
to the restrictions on transfer of such Registered Certificates (which legend
shall be set forth in the Supplement relating to such Investor Certificates)
shall be effected only if:
(i) (a) the sale is of at least U.S. $500,000 principal
amount of such Certificates and (b) a letter from the purchaser
satisfactory to counsel to the Servicer is executed and received; or
(ii) (a) the Registered Certificates are transferred in
compliance with Rule 144 (or any amendment thereto) or Rule 144A (or
any amendment thereto) under the 1933 Act, and (b) a letter from the
purchaser satisfactory to counsel to the Servicer is executed and
received; or
(iii) the Registered Certificates are sold or otherwise
transferred in any other transaction that does not require registration
under the 1933 Act, and, if the Transferor, the Servicer, the Trustee
or the Transfer Agent and Registrar so request, an Opinion of Counsel
satisfactory to it or them, in form and substance satisfactory to it or
them, is furnished to such effect.
Registered Certificates issued upon registration of transfer
of, or Registered Certificates issued in exchange for, Registered Certificates
bearing the legend referred to above shall also bear such legend unless the
Transferor, the Servicer, the Trustee and the Transfer Agent and Registrar
receive an Opinion of Counsel satisfactory to each of them, to the effect that
such legend may be removed.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall promptly
seek written instructions from the Servicer regarding such transfer. The
Transfer Agent and Registrar and the Trustee shall be entitled to receive
written instructions signed by a Servicing Officer prior to registering any such
transfer or authenticating new Registered Certificates, as the case may be. The
Servicer hereby agrees to indemnify the Transfer Agent and Registrar and the
Trustee and to hold each of them harmless against any loss, liability or expense
incurred on their part and arising out of or in connection with actions taken or
omitted by them in good faith and in the exercise of ordinary care in reliance
on and in accordance with any such written instructions furnished pursuant to
this Section 6.3(d).
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SECTION 6.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons, if any, appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar, the
Trustee and the Transferor such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Transferor
(or the Trustee on behalf of the Trust, if specified in the applicable
Supplement) shall execute and the Trustee shall authenticate and the Transfer
Agent and Registrar shall deliver (in the case of Bearer Certificates, outside
the United States), in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Certificate, a new Certificate of like tenor and aggregate
Undivided Interest, if applicable. In connection with the issuance of any new
Certificate under this Section 6.4, the Trustee or the Transfer Agent and
Registrar may require the payment by the Certificateholder of a sum sufficient
to cover any tax or governmental charges (including those incurred by the
Trustee or the Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found and
presented at any time.
SECTION 6.5 PERSONS DEEMED OWNERS. Prior to due presentation
of a Certificate (other than a Bearer Certificate) for registration of transfer,
the Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent or
representative of any of them may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Article IV and for all other purposes whatsoever, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any
agent or representative of any of them shall be affected by any notice to the
contrary. In the case of a Bearer Certificate, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent or representative of any of them
may treat the bearer of a Bearer Certificate or Coupon as the owner of such
Bearer Certificate or Coupon for the purpose of receiving distributions pursuant
to Article IV and for all other purposes whatsoever, and neither the Trustee,
the Paying Agent, the Transfer Agent and Registrar nor any agent or
representative of any of them shall be affected by any notice to the contrary.
Notwithstanding the foregoing provisions of this Section 6.5, in determining
whether the holders of the requisite Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Transferor, the Servicer or any Affiliate thereof
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Certificates which the Trustee knows to be so owned shall be so disregarded.
Certificates so owned which have been pledged in good faith shall not be
disregarded and may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the United States, the Transferor, the
Servicer or an Affiliate thereof.
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SECTION 6.6 APPOINTMENT OF PAYING AGENT. The Paying Agent
shall make distributions to Investor Certificateholders from the Collection
Account (or any other account or accounts maintained for the benefit of
Certificateholders as specified in the related Supplement for any Series)
pursuant to Articles IV and V. Any Paying Agent shall have the revocable power
to withdraw funds from the Collection Account (or any other account or accounts
maintained for the benefit of Certificateholders as specified in the related
Supplement for any Series) for the purpose of making the distributions referred
to above. The Trustee (or the Servicer if the Trustee is the Paying Agent) may
revoke such power and remove the Paying Agent if the Trustee (or the Servicer if
the Trustee is the Paying Agent) determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect or for other good cause. The Paying Agent shall (unless
otherwise specified in the related Supplement for any Series) initially be the
Trustee and any co-paying agent chosen by the Transferor and acceptable to the
Trustee, including, if and so long as any Series of Investor Certificates is
listed on the Luxembourg Stock Exchange or other stock exchange and such
exchange so requires, a co-paying agent in Luxembourg or the location of such
other stock exchange. The Trustee shall be permitted to resign as Paying Agent
upon 30 days' prior written notice to the Servicer and the Transferor; provided,
however, that such resignation shall not be effective and the Trustee shall
continue to perform the duties of Paying Agent until the appointment of a
successor Paying Agent, pursuant to this Section 6.6. The Transferor shall
notify the Rating Agencies and the Trustee (if it is not then serving as the
Paying Agent) of any resignation or replacement of the Paying Agent. In the
event that the Trustee shall no longer be the Paying Agent, the Transferor shall
appoint a successor to act as Paying Agent and such successor shall be
acceptable to the Trustee. The Trustee shall cause the initial Paying Agent
(unless the initial Paying Agent is the Trustee) and each successor Paying Agent
or any additional Paying Agent appointed by the Transferor to execute and
deliver to the Trustee an instrument in which such initial or successor Paying
Agent or additional Paying Agent shall agree with the Trustee that, as Paying
Agent, such initial or successor Paying Agent or additional Paying Agent will
hold all sums, if any, held by it for payment to the Investor Certificateholders
in trust for the benefit of the Investor Certificateholders entitled thereto
until such sums shall be paid to such Certificateholders. The Paying Agent shall
return all unclaimed funds to the Trustee and upon removal of a Paying Agent
shall also return all funds in its possession to the Trustee. The provisions of
Sections 11.1, 11.2 and 11.3 shall apply to the Trustee also in its role as
Paying Agent, for so long as the Trustee shall act as Paying Agent. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long
as the Investor Certificates of such Series are outstanding and such Investor
Certificates are held by the related Certificate Owners as Definitive
Certificates (for Registered Certificates not held in book-entry form, the
Transferor shall, if the Paying Agent is not located in New York City, appoint a
co-paying agent in New York City acceptable to the Trustee or any other city
designated in such Supplement which, if and so long as any Series of Investor
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Certificates is listed on the Luxembourg Stock Exchange or other stock exchange
and such exchange so requires, shall be in Luxembourg or such other locations
required by such other stock exchange.
SECTION 6.7 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent (or any agent thereof),
within five Business Days after receipt by the Trustee of a request therefor
from the Servicer or the Paying Agent, respectively, in writing, a list in the
form maintained by the Trustee, of the names and addresses of the Investor
Certificateholders (other than Bearer Certificateholders). If Holders
representing Undivided Interests in the Trust aggregating not less than 10% of
the Investor Amount of the Investor Certificates of such Series (the
"Applicants") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Investor Certificateholders of
such Series with respect to their rights under this Agreement or under the
Investor Certificates and is accompanied by a copy of the communication which
such Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses, and having
given the Servicer notice that such request has been made together with copies
of such applications and proposed communications to Investor Certificateholders,
shall afford or shall cause the Transfer Agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Investor Certificateholders (other than Bearer Certificateholders) held by the
Trustee, or shall mail or cause to be mailed such list within five Business Days
after the receipt of such application. Such list shall be as of a date no more
than 45 days prior to the date of receipt of such Applicants' request.
Every Certificateholder, by receiving and holding a
Certificate agrees with the Trustee that none of the Trustee, the Transfer Agent
and Registrar, the Transferor, the Servicer or the Sellers, nor any of their
respective agents or representatives shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Investor
Certificateholders (other than Bearer Certificateholders) hereunder, regardless
of the sources from which such information was derived.
SECTION 6.8 AUTHENTICATING AGENT.
(a) The Trustee may appoint one or more authenticating agents
with respect to the Certificates which shall be authorized to act on behalf of
the Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
reasonably acceptable to the Transferor.
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(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The Trustee
may at any time terminate the agency of an authenticating agent by giving notice
of termination to such authenticating agent and to the Transferor. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time an authenticating agent shall cease to be acceptable to the Trustee or
the Transferor, the Trustee promptly may appoint a successor authenticating
agent. Any successor authenticating agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be appointed
unless acceptable to the Trustee and the Transferor.
(d) The Trustee agrees to pay from its own funds, on behalf of
the Trust, to each authenticating agent from time to time reasonable
compensation for its services under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8,
the Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:
"This is one of the Certificates described in the Master
Pooling and Servicing Agreement.
-----------------------------
as Authenticating Agent
for the Trustee,
By:
--------------------------
Authorized Officer"
SECTION 6.9 TENDER OF EXCHANGEABLE TRANSFEROR CERTIFICATE.
(a) The Transferor and the Trustee may at any time and from
time to time enter into one or more Supplements for the purpose of authorizing
the issuance by
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the Trust to the Transferor, one or more Series of Investor Certificates. Upon
any Exchange, the Trustee shall issue to the Transferor under Section 6.1 for
execution (unless the Trustee is to execute such Series on behalf of the Trust,
as specified in the applicable Supplement) and redelivery to the Trustee for
authentication under Section 6.2 one or more new Series of Investor
Certificates. Any such Series of Investor Certificates shall be substantially in
the form specified in the applicable Supplement and shall bear, upon its face,
the designation for such Series to which it belongs so selected by the
Transferor. Except as specified in the Supplement for any Series as to differing
treatment of the Investor Certificates within such Series, all Investor
Certificates of any Series shall be equally and ratably entitled as provided
herein to the benefits hereof without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement.
(b) The Holder of the Exchangeable Transferor Certificate may
tender the Exchangeable Transferor Certificate to the Trustee in exchange for
(i) one or more newly issued Series of Investor Certificates and (ii) a reissued
Exchangeable Transferor Certificate (any such tender an "Exchange"). The
Transferor may perform an Exchange by notifying the Trustee, in writing at least
three (3) days in advance (an "Exchange Notice") of the date upon which the
Exchange is to occur (an "Exchange Date"). Any Exchange Notice shall state the
designation of any Series to be issued on the Exchange Date and, with respect to
each such Series: (x) its Initial Investor Amount (or the method for calculating
such Initial Investor Amount), if any, which, in the aggregate, at any time, may
not be greater than the current principal amount of the Exchangeable Transferor
Certificate less the product of the Minimum Transferor Interest Percentage and
the Aggregate Principal Receivables at such time, and (y) its Certificate Rate
(or the method for allocating interest payments or other cash flows to such
Series), if any and (z) the applicable Enhancement, if any, for such Investor
Certificates. On the Exchange Date, the Trustee shall authenticate and deliver
any such Series only upon delivery to it of the following: (A) a Supplement in
form satisfactory to the Trustee executed by the Transferor and specifying the
Principal Terms of such Series, (B) the applicable Enhancement, if any, (C) an
Opinion of Counsel to the effect that, unless otherwise specified in the related
Supplement, the newly issued Series of Investor Certificates will be
characterized as either indebtedness or an interest in a partnership under
existing law for Federal income tax purposes and that the issuance of the newly
issued Series of Investor Certificates will not have any material adverse effect
on the Federal income tax characterization of any outstanding Series of Investor
Certificates that have been the subject of a previous opinion of tax counsel or
result in the Trust being taxable as an association for Federal or applicable
state tax purposes (such opinion, a "Tax Opinion"), (D) an agreement, if any,
pursuant to which the Enhancement Provider agrees to provide Enhancement, (E)
written confirmation from each Rating Agency that the Exchange will satisfy the
Rating Agency Condition and (F) the existing Exchangeable Transferor
Certificate, together with a written certification from the Transferor that the
Transferor Amount is at least equal to the Minimum Transferor Amount. Upon
satisfaction of such conditions, the Trustee shall cancel the existing
Exchangeable Transferor Certificate and
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issue, as provided above, such Series of Investor Certificates and new
Exchangeable Transferor Certificate, dated the Exchange Date.
(c) In conjunction with an Exchange, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect to any
Series of Investor Certificates, which may include, without limitation: (i) its
name or designation, (ii) an Initial Investor Amount or the method of
calculating the Initial Investor Amount, (iii) a Certificate Rate or Certificate
Rates (or formula for the determination thereof), (iv) the rights of the Holder
of the Exchangeable Transferor Certificate that have been transferred to the
Holders of such Series pursuant to such Exchange, (v) the interest payment date
or dates and the date or dates from which interest shall accrue, (vi) the method
of allocating Collections of Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which the principal
amount of Investor Certificates of such Series shall amortize or accrete and the
method for allocating Collections of Finance Charge Receivables and Receivables
in Defaulted Accounts, (vii) the names of any accounts to be used by such Series
and the terms governing the operation of any such account, (viii) the Servicing
Fee Percentage, (ix) the Minimum Transferor Interest Percentage, (x) the Minimum
Aggregate Principal Receivables, (xi) the Series Termination Date, (xii) the
terms of Enhancement, if any, (xiii) the Enhancement Provider, if any, (xiv) the
base rate, if any, (xv) the Repurchase Terms or the terms on which the
Certificates of such Series may be remarketed to other investors, (xvi) any
deposit into any account provided for such Series, (xvii) the number of classes
of such Series, and if more than one class, the rights and priorities of each
such class, (xviii) the extent to which the Investor Certificates will be
issuable in temporary or permanent global form, and in such case, the depository
for such global certificate or certificates, the terms and conditions, if any,
upon which such global certificate may be exchanged in whole or in part for
Definitive Certificates, and the manner in which any interest payable on a
temporary or global certificate will be paid, (xix) whether the Certificates may
be issued in bearer form and any limitations imposed thereon and provisions
relating to compliance with applicable laws and rules for bearer instruments,
(xx) the priority of any Series with respect to any other Series, and (xxi) any
other relevant terms of such Series (all such terms, the "Principal Terms" of
such Series). The terms of such Supplement may modify or amend the terms of this
Agreement solely as applied to such new Series. If on the date of the issuance
of such Series, there is issued and outstanding no Series of Investor
Certificates which is currently rated by a Rating Agency, then as a condition to
such Exchange, a nationally recognized investment banking firm or commercial
bank (which may include NationsBanc Capital Markets, Inc.) shall also deliver to
the Trustee an opinion stating, in substance, that the Exchange will not have an
adverse effect on the timing or distribution of payments to such other Series of
Investor Certificates then issued and outstanding.
(d) The creation or sale of any additional interest in the
Trust or the Receivables, whether or not designated as an Exchange (including,
but not limited to, the receipt by the Trust or the Transferor of the proceeds
of any loan or additional loan provided by an Enhancement Provider) shall
require the delivery of a Tax Opinion with respect to such interest.
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SECTION 6.10 GLOBAL CERTIFICATE; EURO-CERTIFICATE EXCHANGE
DATE.
(a) If specified in the related Supplement for any Series, the
Investor Certificates may be initially issued in the form of a single temporary
Global Certificate (the "Global Certificate") in bearer form, without interest
coupons, in the denomination of the Initial Investor Amount and substantially in
the form attached to the applicable Supplement. Unless otherwise specified in
the applicable Supplement, the provisions of this Section 6.10 shall apply to
such Global Certificate. The Global Certificate will be authenticated by the
Trustee upon the same conditions, in substantially the same manner and with the
same effect as the Definitive Certificates. The Global Certificate may be
exchanged as described in this Section 6.10 or in the applicable Supplement for
Bearer Certificates and/or Registered Certificates in definitive form (the
"Definitive Euro-Certificates"). Notwithstanding the foregoing, no Certificates
shall be issued in bearer form unless the Transferor has determined, and
delivers an Opinion of Counsel to the Trustee substantially to the effect that,
the terms and procedures governing issuance and transfer of such Certificates
result in favorable treatment to Investor Certificateholders under the Bearer
Rules.
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Certificates, so advise the Trustee, the
Transferor, the Common Depositary, and each Foreign Clearing Agency in writing
forthwith. Without unnecessary delay, but prior to the Euro-Certificate Exchange
Date, the Transferor will execute and deliver to the Trustee at its office or to
the Trustee's designated agent outside the United States definitive Bearer
Certificates in an aggregate principal amount equal to the Initial Investor
Amount. All Bearer Certificates so issued and delivered will have Coupons
attached. The Global Certificate may be exchanged for an equal aggregate
principal amount of Definitive Euro-Certificates only on or after the
Euro-Certificate Exchange Date. A United States institutional investor will be
required to deliver to the Transferor, the Trustee and the Manager at the time
of its purchase of Registered Certificates a signed certificate substantially in
the form attached to the Supplement for the related Series. Upon any demand for
exchange for Definitive Certificates in accordance with this paragraph, the
Transferor shall cause the Trustee to authenticate and deliver the Definitive
Certificates to the Holder (x) outside the United States, in the case of Bearer
Certificates, and (y) according to the instructions of the Holder, in the case
of Registered Certificates, but only upon presentation to the Trustee of a
written statement substantially in the form attached to the Supplement for the
related Series with respect to the Global Certificate or portion thereof being
exchanged signed by a Foreign Clearing Agency, to the effect that it has
received in writing or by tested telex a certification substantially in the form
of the certificate attached to the Supplement for the related Series, such
certificate being dated no earlier than 15 days prior to the Euro-Certificate
Exchange Date and signed by or on behalf of the person appearing in the records
of a Foreign Clearing Agency as the beneficial owner of the Global Certificate
or portion thereof being exchanged. Upon receipt of such certification, the
Trustee shall cause the Global Certificate to be endorsed in accordance with
paragraph (d) below. Unless otherwise
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provided in the applicable Supplement, any exchange as provided in this Section
6.10(b) shall be made free of charge to the holders and the beneficial owners of
the Global Certificate and to the beneficial owners of the Definitive Euro-
Certificates issued in exchange, except that a person receiving Definitive
Euro-Certificates must bear the cost of insurance, postage, transportation and
the like in the event that such person does not receive such Definitive
Euro-Certificates in person at the offices of a Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency
of any written statement referred to above may be relied upon by the Transferor
and the Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to such Foreign Clearing Agency,
pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such Global
Certificate shall be endorsed by or on behalf of the Trustee to reflect the
reduction of its principal amount by an amount equal to the aggregate principal
amount of such Definitive Euro-Certificate or Certificates. Until so exchanged
in full, such Global Certificate shall in all respects be entitled to the same
benefits under this Agreement as Definitive Euro-Certificates authenticated and
delivered hereunder, except that the beneficial owners of such Global
Certificate shall not be entitled to receive payments of interest on the
Certificates until they have exchanged their beneficial interests in such Global
Certificate for Definitive Euro-Certificates.
SECTION 6.11 BOOK-ENTRY CERTIFICATES. Unless otherwise
provided in any related Supplement, the Investor Certificates, upon original
issuance, will be issued in the form of the requisite number of typewritten
Certificates representing the Book-Entry Certificates, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Transferor. The Investor Certificates shall initially be registered on the
Certificate Register in the name of Cede, the nominee of the Clearing Agency,
and no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Investor Certificates, except as provided in
Section 6.13. Unless and until definitive, fully registered Investor
Certificates (the "Definitive Certificates") have been issued to Certificate
Owners pursuant to Section 6.13:
(i) the provision of this Section 6.11 shall be in full
force and effect;
(ii) the Transferor, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency for all purposes (including the making of distributions on the
Investor Certificates) as the authorized representatives of the
Certificate Owners;
(iii) to the extent that the provisions of this Section
6.11 conflict with any other provisions of this Agreement, the
provisions of this Section 6.11 shall control;
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(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency and/or the Clearing
Agency Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 6.13, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on the Investor Certificates to such Clearing
Agency Participants; and
(v) whenever this Agreement requires or permits actions
to be taken based upon instructions or directions of a specified
percentage of the Investor Amount of any or all Series of Certificates
outstanding, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Certificate Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in Investor Certificates.
SECTION 6.12 NOTICES TO CLEARING AGENCY. Whenever notice or
other communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 6.13, the Trustee, the Servicer and the
Paying Agent shall give all such notices and communications specified herein to
be given to Holders of the Investor Certificates to the Clearing Agencies.
SECTION 6.13 DEFINITIVE CERTIFICATES. If Book-Entry
Certificates have been issued pursuant to Section 6.11 and if (i)(A) the
Transferor advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the Depository
Agreement, and (B) the Trustee or the Transferor is unable to locate a qualified
successor (which successor must be treated as maintaining a book-entry system
within the meaning of Section 163(f)(3) of the Code), (ii) the Transferor at its
option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency with respect to the Certificates
or (iii) after the occurrence of a Servicer Default, Certificate Owners
representing beneficial interests aggregating more than 50% of the Investor
Amount of any Series advise the Trustee and the Clearing Agency through the
Clearing Agency Participants in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Certificate Owners, the Trustee shall notify the Certificate Owners, through
each applicable Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Investor Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing Agency for
registration, the Trustee shall
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issue the Definitive Certificates. None of the Servicer, the Transferor, the
Transfer Agent and Registrar nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
SECTION 6.14 MEETINGS OF CERTIFICATEHOLDERS.
(a) Unless not permitted by the Supplement for any Series
issued in whole or in part in Bearer Certificates, the Transferor, the Servicer
or the Trustee may at any time call a meeting of the Certificateholders of such
Series or of all Series, to be held at such time and at such place as the
Transferor, the Servicer or the Trustee, as the case may be, shall determine,
for the purpose of approving a modification of or amendment to, or obtaining a
waiver of, any covenant or condition set forth in this Agreement with respect to
such Series or in the Certificates of such Series, subject to Section 13.1.
References in this Section 6.14 to Certificateholders shall be deemed to refer
to the Exchangeable Transferor Certificates and only those Series of Investor
Certificates for which this Section 6.14 is applicable. Notice of any meeting of
Certificateholders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given in
accordance with Section 13.5 and at least once in an Authorized Newspaper and,
if and for so long as the Certificates are listed on the Luxembourg Stock
Exchange or other stock exchange and such exchange so requires, in a newspaper
of general circulation in Luxembourg (which newspaper shall be printed in the
English or French language and customarily published on each business day in
Luxembourg) or the location required by such other stock exchange, the first
publication to be not less than 20 nor more than 180 days prior to the date
fixed for the meeting. To be entitled to vote at any meeting of
Certificateholders, a person shall be (i) a Holder of one or more Certificates
of the applicable Series or (ii) a person appointed by an instrument in writing
as proxy by the Holder of one or more Certificates. The only Persons who shall
be entitled to be present or to speak to any meeting of Certificateholders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Transferor, the Servicer and the Trustee and their
respective counsels.
(b) At a meeting of Investor Certificateholders, persons
entitled to vote Investor Certificates evidencing Undivided Interests
aggregating a majority of the Investor Amount of the applicable Series or all
outstanding Series, as the case may be, shall constitute a quorum. No business
shall be transacted in the absence of a quorum, unless a quorum is present when
the meeting is called to order. In the absence of a quorum at any such meeting,
the meeting may be adjourned for a period of not less than 10 days; in the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days; at the reconvening of
any meeting
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further adjourned for lack of a quorum, the Persons entitled to vote at least
25% in Undivided Interest of the applicable Series or all outstanding Series, as
the case may be, shall constitute a quorum for the taking of any action set
forth in the notice of the original meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided above, except that such notice must
be given not less than five (5) days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage of the aggregate principal amount of the
outstanding Investor Certificates which shall constitute a quorum.
(c) Any Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided that such
Certificateholders shall be considered as present or voting only with respect to
the matters covered by such instrument in writing. Subject to the provisions of
Section 13.1, any resolution passed or decision taken at any meeting of Investor
Certificateholder duly held in accordance with this Section 6.14 shall be
binding on all the Investor Certificateholders whether or not present or
represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to the
Servicer and the Trustee, executed by any bank, trust company or recognized
securities dealer, wherever situated, satisfactory to the Servicer and the
Trustee. Each such certificate shall be dated and shall state that on the date
thereof a Bearer Certificate bearing a specified serial number was deposited
with or exhibited to such bank, trust company or recognized securities dealer by
the person named in such certificate. Any such certificate may be issued in
respect of one or more Bearer Certificates specified therein. The holding by the
person named in any such certificate of any Bearer Certificate specified therein
shall be presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding (i) another
certificate bearing a later date issued in respect of the same Bearer
Certificate shall be produced, (ii) the Bearer Certificate specified in such
certificate shall be produced by or certified by a bank, trust company or
recognized securities dealer on behalf of some other person or (iii) the Bearer
Certificate specified in such certificate shall have ceased to be outstanding.
The appointment of any proxy shall be proved by having the signature of the
person executing the proxy guaranteed by any bank, trust company or recognized
securities dealer satisfactory to the Trustee. The holding of Registered
Certificates shall be proved by the Certificate Register or by a certificate or
certificates of the Transfer Agent and Registrar.
(e) The Trustee shall appoint a temporary chairman of the
meeting. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the holders of a majority in Undivided Interest of the
Certificates of such Series represented at the meeting. No vote shall be cast or
counted at any meeting in respect of any Certificate challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote except as a
Certificateholder or proxy. Any meeting of Certificateholders duly called at
which a
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quorum is present may be adjourned from time to time, and the meeting may be
held as so adjourned without further notice.
(f) The vote upon any resolution submitted to any meeting of
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of the Certificateholders or proxies and on which shall be inscribed
the serial number or numbers of the Certificates held or represented by them.
The permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Certificateholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was published as
provided above. The record shall be signed and verified by the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Servicer and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
SECTION 7.1 LIABILITY OF THE TRANSFEROR. The Transferor shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor in such capacity herein.
SECTION 7.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE TRANSFEROR. The Transferor shall not consolidate with or
merge into any other business entity or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) the entity formed by such consolidation or into which
the Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Transferor substantially as
an entirety shall be organized and existing under the laws of the
United States of America or any State or the District of Columbia, a
national banking association or a state banking corporation or other
depository entity whose deposits are insured by the FDIC which is not
subject to the bankruptcy laws of the United States of America, or a
single purpose, bankruptcy remote entity that is organized under the
laws of any state of the United States, in each case, which is
wholly-owned (other than director qualifying
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shares) directly or indirectly, by Xxxxxxxx'x, Inc. or its successors
or assigns, and meets the Rating Agency Condition and if the Transferor
is not the surviving entity, shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the performance of every covenant and
obligation of the Transferor, as applicable, hereunder and shall
benefit from all the rights granted to the Transferor, as applicable,
hereunder. To the extent that any right, covenant or obligation of the
Transferor is inapplicable to the successor entity, such successor
entity shall be subject to such covenant or obligation, or benefit from
such right, as would apply, to the extent practicable, to such
successor entity;
(ii) no Pay Out Event shall occur as a result of any such
consolidation, merger, conveyance or transfer;
(iii) the Transferor has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 7.2 and that all conditions
precedent herein provided for relating to such transaction have been
complied with;
(iv) the Transferor shall have delivered written notice of
such consolidation, merger, conveyance or transfer to the Trustee, each
Rating Agency assigning a rating to any class of Investor Certificates
of any then outstanding Series, each Person, if any, specified in the
Supplement with respect to each class of Investor Certificates of any
then outstanding Series which is not assigned a rating by any Rating
Agency and each Enhancement Provider; and
(v) the Transferor shall have received written notice
from each Rating Agency that such consolidation, merger, conveyance or transfer
will not result in a downgrading or withdrawal of its then current rating of any
outstanding Series or Class of rated Investor Certificates.
(b) The obligations of the Transferor hereunder shall not
be assignable nor shall any Person succeed to the obligations of the Transferor
hereunder except in each case in accordance with the provisions of the foregoing
paragraph.
SECTION 7.3 LIMITATION ON LIABILITY OF THE TRANSFEROR. The
directors, officers, employees, agents and representatives of the Transferor
shall not be under any liability to the Trust, the Servicer, the Trustee, the
Certificateholders, any Enhancement Provider, if any, or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided, however, that this
provision shall not protect the officers, directors, employees or agents of the
Transferor against any
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liability which would otherwise be imposed by reason of bad faith or gross
negligence in the performance of duties hereunder. Except as provided in Section
7.1, the Transferor shall not be under any liability to the Trust, the Servicer,
the Trustee, the Certificateholders, any Enhancement Provider or any other
Person for any action taken or for refraining from the taking of any action in
its capacity as Transferor pursuant to this Agreement or any Supplement, however
arising under this Agreement or any Supplement; provided, however, that this
provision shall not protect the Transferor against any liability which would
otherwise be imposed by reason of its bad faith or gross negligence in the
performance of its duties as Transferor hereunder. The Transferor and any
director, officer, employee, agent or representative of the Transferor may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
SECTION 8.1 LIABILITY OF THE SERVICER. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
SECTION 8.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The Servicer shall not consolidate with or merge
into any other business entity or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the entity formed by such consolidation or into which
the Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer substantially as an
entirety shall be organized and existing under the laws of the United
States of America or any State or the District of Columbia, or shall be
a national banking association, state banking corporation or other
entity which is not subject to the bankruptcy laws of the United States
of America, and if the Servicer is not the surviving entity, shall be
qualified to be an Eligible Servicer and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Trustee,
the performance of every covenant and obligation of the Servicer, as
applicable, hereunder and shall benefit from all the rights granted to
the Servicer, as applicable, hereunder. To the extent that any right,
covenant or obligation of the Servicer is inapplicable to the successor
entity, such successor entity shall be subject to such covenant or
obligation,
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or benefit from such right, as would apply, to the extent practicable,
to such successor entity;
(ii) the Servicer has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 8.2 and that all conditions
precedent herein provided for relating to such transaction have been
complied with;
(iii) the Servicer shall have received written notice from
each Rating Agency that such assignment and succession will not result
in a downgrading or withdrawal of its then current rating of any
outstanding Series of Investor Certificates and shall have delivered
copies of each such notice to the Transferor and the Trustee and each
Person, if any, specified in the Supplement with respect to each class
of Investor Certificates of any then outstanding Series which is not
assigned a rating by any Rating Agency.
(iv) The Transferor shall have delivered 15 Business Days'
prior written notice of such consolidation, merger, conveyance or
transfer to the Trustee, each Rating Agency assigning a rating to any
class of Investor Certificates of any then outstanding Series, and each
Person, if any, specified in the Supplement with respect to each class
of Investor Certificates of any then outstanding Series which is not
assigned a rating by any Rating Agency, and each Enhancement Provider;
and
The Servicer shall promptly advise the Rating Agencies in writing of any such
consolidation, merger, conveyance or transfer.
SECTION 8.3 LIMITATION ON LIABILITY OF THE SERVICER AND
OTHERS. The directors, officers, employees, agents and representatives of the
Servicer shall not be under any liability to the Trust, the Transferor, the
Trustee, the Certificateholders, any Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided, however, that this
provision shall not protect the directors, officers, employees or agents of the
Servicer against any liability which would otherwise be imposed by reason of bad
faith or negligence in the performance of the Servicer's express duties
hereunder. Except as provided in Section 8.4, the Servicer shall not be under
any liability to the Trust, the Transferor, the Trustee, the Certificateholders,
any Enhancement Provider or any other Person for any action taken or for
refraining from the taking of any action in its capacity as Servicer pursuant to
this Agreement or any Supplement, however arising under this Agreement or any
Supplement; provided, however, that this provision shall not protect the
Servicer against any liability which would otherwise be imposed by reason of bad
faith or
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gross negligence in the performance of its duties as Servicer hereunder. The
Servicer and any director, officer, employee, agent, or representative of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the
Receivables in accordance with this Agreement or any Supplement and which in its
reasonable opinion may involve it in any expense or liability.
SECTION 8.4 INDEMNIFICATION OF THE TRUST AND THE TRUSTEE. The
Servicer shall indemnify and hold harmless the Transferor, the Trust, for the
benefit of the Certificateholders, and the Trustee, including its officers,
directors, agents and employees, from and against any loss, liability, expense,
damage or injury suffered or sustained by them and arising out of or relating to
any claims, actions or proceedings brought or asserted by third parties
regarding the activities of the Trust or the Trustee for which the Servicer is
responsible pursuant to this Agreement or any Supplement, including but not
limited to 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 the Servicer
shall not indemnify (a) the Transferor, the Trust or the Trustee or their
respective officers, directors, agents and employees for liabilities imposed by
reason of fraud, negligence or breach of fiduciary duty by (i) the Trustee in
the performance of its duties under this Agreement or (ii) the Transferor or any
Certificateholders, (b) the Transferor, the Trust, the Trustee, the Certificate
Owners or the Certificateholders for liabilities arising from actions taken by
the Trustee at the request of Certificateholders, (c) the Transferor, the Trust,
the Trustee, the Certificate Owners or the Certificateholders as to any losses,
claims or damages incurred by a Certificateholder or a Certificate Owner in its
capacity as an investor, including without limitation losses incurred as a
result of Defaulted Receivables or Receivables which are charged off as
uncollectible or (d) the Trust, the Trustee, the Certificate Owners or the
Certificateholders for any liabilities, costs or expenses of the Trust, the
Trustee or the Certificate Owners or Certificateholders arising under any tax
law, including without limitation any Federal, state or local income or
franchise tax or any other tax imposed on or measured by income (including any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Certificate Owners or the
Certificateholders in connection with the Trust or this Agreement to any taxing
authority. Except as set forth in the preceding sentence, neither the Servicer
nor any of its directors, officers, employees or agents will be under any other
liability to the Trust, the Trustee, the Certificateholders or any other person
for any action taken, or for refraining from taking any action pursuant to this
Agreement. Neither the Transferor nor the Servicer nor any of their respective
directors, officers, employees or agents will be protected against any liability
which would otherwise be imposed by reason of bad faith or gross negligence by
or on behalf of the Transferor or the Servicer in the performance of their
respective duties hereunder. The Transferor and the Servicer will be liable for
any actual damages resulting directly from the material failure to perform any
of their respective obligations under this Agreement. In addition, the Servicer
is not under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its
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servicing responsibilities under this Agreement and which in its opinion may
expose it to any expense or liability. The Servicer shall not be liable for any
acts or omissions of any Successor Servicer.
Subject to Sections 7.1 and 10.2(b) of the Agreement, any
indemnification pursuant to this Section 8.4 shall only be from the assets of
the Servicer. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof and shall
survive the termination of this Agreement, the resignation and removal of the
Trustee and the payment in full of the Certificates.
SECTION 8.5 THE SERVICER NOT TO RESIGN. The Servicer shall not
resign from the obligations and duties hereby imposed on it as such except upon
determination that (i) the performance of its duties hereunder is or will become
impermissible under applicable law, regulation or order and (ii) there is no
reasonable action which the Servicer could take to make the performance of its
duties hereunder permissible under applicable law. Any such determination
permitting the resignation of the Servicer shall be evidenced as to clause (i)
of this Section by an Opinion of Counsel to such effect delivered to the
Trustee. No such resignation will become effective until the Trustee or a
Successor Servicer has assumed the Servicer's responsibilities and obligations
under this Agreement. If the Trustee is unable within 120 days of the date of
such determination to appoint a Successor Servicer pursuant to Section 10.2(a),
the Trustee or its duly appointed agent (which may not be the outgoing Servicer)
shall serve as Successor Servicer hereunder but the Trustee shall have continued
authority to appoint another Person as Successor Servicer.
SECTION 8.6 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE RECEIVABLES. The Servicer shall provide to the Trustee access to
the documentation regarding the Accounts and the Receivables in such cases where
the Trustee is required in connection with the enforcement of the rights of the
Investor Certificateholders, or by applicable statutes or regulations, to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to such
security and confidentiality requirements and procedures as are specified herein
and/or which the Servicer may deem reasonably necessary and (iv) at offices
designated by the Servicer. Nothing in this Section 8.6 shall derogate from the
obligation of the Transferor, the Trustee or the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 8.6 as
a result of such obligation shall not constitute a breach of this Section 8.6.
SECTION 8.7 DELEGATION OF DUTIES. It is understood and agreed
by the parties hereto that the Servicer may delegate certain of its duties
hereunder to any Person, including XxXxx'x, Inc., as Subservicer who agrees to
conduct such duties in accordance with the applicable Credit Card Guidelines and
the terms of this Agreement. The fees of any Person to whom such duties are
delegated shall be paid for by the Servicer, from any source, including the
Monthly Servicing Fee. Any such delegations shall not relieve the
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Servicer of its liability and responsibility with respect to such duties, and
shall not constitute a resignation within the meaning of Section 8.5 hereof. If
any such delegation is not in the ordinary course of business, notification
thereof shall be given by the Servicer to each Rating Agency.
SECTION 8.8 EXAMINATION OF RECORDS. The Transferor and the
Servicer shall clearly and unambiguously identify each Account (including any
Account designated pursuant to Section 2.6) in its computer or other records to
reflect that the Receivables arising in such Account have been conveyed to the
Trust pursuant to this Agreement. The Transferor and the Servicer shall, prior
to the sale or transfer to a third party of any receivable held in its custody,
examine its computer and other records to determine that such receivable is not
a Receivable.
ARTICLE IX
PAY OUT EVENTS
SECTION 9.1 PAY OUT EVENTS. Unless modified with respect to
any Series of Investor Certificates by the Supplement for such Series, if any
one of the following events shall occur:
(a) the Transferor or the Company shall (i) become insolvent
or admit in writing its inability to generally pay its debts as they
become due or voluntarily and generally suspend payment of its
obligations, (ii) voluntarily seek, consent to, or acquiesce in the
benefit or benefits of any Debtor Relief Law, (iii) become a party to
(or be made the subject of) any proceeding provided for by any Debtor
Relief Law, other than as a creditor or claimant, and, in the event
such proceeding is involuntary, (A) within 10 Business Days after the
Transferor or the Company has knowledge of such proceeding or the
filing thereof either (I) the petition instituting same has not been
dismissed or (II) an order has not been entered by the court having
jurisdiction which allows continued transfer to the Trust of Principal
Receivables with no adverse effect to the Trust or the
Certificateholders or (B) an order as contemplated in (A)(II) above
having previously been entered, is no longer in effect other than by
reason of the termination of such proceeding, or (iv) become unable for
any reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement; or
(b) the Trust or the Transferor shall become an "investment
company" within the meaning of the 1940 Act; or
then, a Pay Out Event with respect to all Series of Certificates then
outstanding shall occur without any notice or other action on the part
of the Trustee or all Investor Certificateholders immediately upon the
occurrence of such event. Upon
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actual notice of the occurrence of any Pay Out Event, the Trustee shall
advise (i)each Rating Agency assigning a rating for any class of
Investor Certificates of any then outstanding Series and (ii)each
Person, if any, specified in any Supplement with respect to each class
of Investor Certificates of any then outstanding Series which is not
rated by any Rating Agency, in writing of the occurrence of any Pay Out
Event.
SECTION 9.2 ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN
EVENTS.
(a) If the Transferor voluntarily goes into liquidation or
consents to the appointment of a conservator, receiver or liquidator under any
Debtor Relief Laws with respect to the Transferor or of or relating to all or
substantially all its property, or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a conservator or receiver or liquidator in any Debtor Relief Law proceedings, or
for the winding-up or liquidation of its affairs, shall have been entered
against the Transferor; or the Transferor shall admit in writing its inability
to pay its debts generally as they become due, files a petition to take
advantage of any applicable Debtor Relief Laws, makes an assignment for the
benefit of its creditors or voluntarily suspends payment of its obligations
generally; or the Transferor shall become unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of this Agreement
(such voluntary liquidation, appointment, entering of such decree, admission,
filing, making, suspension or inability, a "Dissolution Event"), the Transferor
shall promptly give notice of such event to the Trustee, and the Transferor
shall on the day of such appointment, voluntary liquidation, entering of such
decree, admission, filing, making, suspension or inability, as the case may be
(the "Appointment Day"), immediately cease to transfer Principal Receivables to
the Trust hereunder. Notwithstanding any cessation of the transfer to the Trust
of additional Principal Receivables, Principal Receivables transferred to the
Trust prior to the occurrence of such Dissolution Event and Collections in
respect of such Principal Receivables and Finance Charge Receivables whenever
created shall continue to be part of the Trust, and such Collections shall
continue to be allocated, deposited and held in accordance with the provisions
of Article IV. Within 15 days of the receipt by the Trustee of the notice of a
Dissolution Event, the Trustee shall (i) publish a notice in an Authorized
Newspaper that a Dissolution Event has occurred and that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables in a commercially
reasonable manner and (ii) send written notice to the Investor
Certificateholders and any Enhancement Provider entitled thereto describing the
provisions of this Section 9.2 and requesting instructions from such Holders,
which notice shall request each Investor Certificateholder to advise the Trustee
in writing that it elects one of the following options: (A) the Investor
Certificateholder wishes the Trustee to instruct the Servicer not to sell,
dispose of or otherwise liquidate the Receivables and to instruct the Servicer
to reconstitute the Trust upon the same terms and conditions set forth herein,
or (B) the Investor Certificateholder wishes the Trustee to instruct the
Servicer to sell, dispose of or otherwise liquidate the Receivables, or (C) the
Investor Certificateholder refuses to advise the Trustee as to the specific
action the Trustee shall instruct the Servicer to take. If after
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90 days from the day notice pursuant to clause (i) above is first published (the
"Publication Date"), the Trustee shall not have received written instructions of
Holders of Investor Certificates aggregating in excess of 50% of the related
Investor Amount of each Series (or in the case of a Series having more than one
class of Investor Certificates, each class of such Series) and each Holder of
any interest in the Exchangeable Transferor Certificate other than the
Transferor to the effect that the Trustee shall instruct the Servicer not to
sell, dispose of, or otherwise liquidate the Receivables and to instruct the
Servicer to reconstitute the Trust upon the same terms and conditions as set
forth herein, the Trustee shall instruct the Servicer to proceed to sell,
dispose of, or otherwise liquidate the Receivables in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids and the Servicer shall proceed to consummate
the sale, liquidation or disposition of the Receivables as provided above with
the highest bidder for the Receivables. If, however, with respect to the portion
of the Receivables allocable to any outstanding Series, the Holders of more than
50% of the principal amount of each class of such Series and each Holder of any
interest in the Exchangeable Transferor Certificate other than the Transferor,
instruct the Trustee not to sell the portion of the Receivables allocable to
such Series, the Trust shall continue with respect to such Series pursuant to
the terms of the Agreement and the Supplement. If specified in the applicable
Supplement, the holder of an Enhancement Investor Amount with respect to a
Series shall be entitled to give instructions pursuant to this Section 9.2 as if
such Enhancement Investor Amount were a class of such Series. The portion of the
Receivables allocable to any Series shall be equal to the sum of (1) the product
of (A) the Transferor Percentage, (B) the Aggregate Principal Receivables and
(C) a fraction the numerator of which is the related Investor Percentage with
respect to Finance Charge Receivables and the denominator of which is the sum of
all Investor Percentages with respect to Finance Charge Receivables of all
Series outstanding and (2) the Investor Amount of such Series. The Transferor or
any of its Affiliates shall be permitted to bid for the Receivables. In addition
the Transferor or any of its Affiliates shall have the right to match any bid by
a third person and be granted the right to purchase the Receivables at such
matched bid price. The Trustee may obtain a prior determination from the
conservator or receiver that the terms and manner of any proposed sale,
disposition or liquidation are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of
the Receivables pursuant to Section (a) above shall be treated as Collections on
the Receivables allocable to the Investor Certificateholders and shall be
allocated and deposited as Collections allocable to the Investor
Certificateholders of the applicable Series in accordance with the provisions of
Article IV; provided that the Trustee shall determine conclusively without
liability for such determination the amount of such proceeds which are allocable
to Finance Charge Receivables and the amount of such proceeds which are
allocable to Principal Receivables. On the day following the Distribution Date
on which such proceeds are distributed to the Investor Certificateholders
(assuming that no Series elects to reconstitute the Trust), the Trust shall
terminate.
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ARTICLE X
SERVICER DEFAULTS
SECTION 10.1 SERVICER DEFAULTS. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer
or deposit or to give instructions or notice to the Trustee to make such
payment, transfer or deposit or to give notice to the Trustee as to any required
drawing or payment under any Enhancement on or before the date occurring five
(5) Business Days after the date such payment, transfer, deposit or drawing or
such instruction or notice is required to be made or given, as the case may be,
under the terms of this Agreement or any Supplement; provided, however, that any
such failure caused by circumstances beyond the Servicer's control shall not
constitute a Servicer Default if the Servicer promptly remedies such failure
within five (5) Business Days after receiving notice of such failure or
otherwise becoming aware of such failure;
(b) failure on the part of the Servicer duly to observe or
perform any other covenants or agreements of the Servicer set forth in this
Agreement or any Supplement, which has a material adverse effect on the
Certificateholders of any Series then outstanding (without regard to the amount
of any Enhancement) and which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by the Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Investor Amount of any
Series adversely affected thereby, and which continues to materially adversely
affect the rights of the Investor Certificateholders of any Series then
outstanding (without regard to the amount of any Enhancement); or the Servicer
shall delegate its duties under this Agreement, except as permitted by Section
8.7;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or any Supplement or in any certificate delivered
pursuant to this Agreement or any Supplement shall prove to have been incorrect
when made, and which has a material adverse effect on the rights of the
Certificateholders of any Series then outstanding (without regard to the amount
of any Enhancement) and which continues to be incorrect in any material respect
and which continues to affect materially and adversely the rights of the
Certificateholders of any Series then outstanding (without regard to the amount
of any Enhancement) for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor
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Certificates evidencing Undivided Interests aggregating more than 50% of the
Investor Amount of any Series adversely affected thereby; or
(d) the Servicer shall consent to the appointment of a
conservator, receiver or liquidator under any Debtor Relief Law proceedings of
or relating to the Servicer or of or relating to all or substantially all of its
property, or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any Debtor Relief Law proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or the Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable Debtor Relief Law, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations
generally;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Investor Amount, by notice then given
in writing to the Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the rights
and obligations of the Servicer as Servicer under this Agreement and in and to
all Receivables and the proceeds thereof and appoint a new Servicer (a "Service
Transfer"). The rights and interests of the Transferor in the Transferor
Interest will not be affected by any Service Transfer.
The Transferor shall have the right to nominate to the Trustee
a potential Successor Servicer. The Trustee shall as promptly as possible
appoint the entity nominated by the Transferor if such entity meets the
eligibility criteria set out herein. If the Transferor does not nominate an
entity to be the Successor Servicer, the Trustee shall as promptly as possible
appoint a Successor Servicer, and if no Successor Servicer has been appointed by
the Trustee and has accepted such appointment by the time the Servicer ceases to
act as Servicer, all authority, power and obligations of the Servicer under this
Agreement will pass to, and be vested in, the Trustee. Prior to any Service
Transfer, the Trustee will seek to obtain bids from potential servicers meeting
the eligibility criteria set out herein, to serve as a Successor Servicer for
servicing compensation not in excess of the Servicing Fee. If the Trustee is
unable to obtain any bids from eligible entities and the Servicer delivers an
Officer's Certificate to the effect that it cannot in good faith cure the
related Servicer Default, then the Trustee will offer the Transferor the right
to accept the reassignment of all of the Receivables. The deposit amount of such
a reassignment shall be equal to the sum of the Aggregate Investor Amount (less
the aggregate amounts held in the Excess Funding Account and in any Principal
Account with respect to any Series) plus accrued and unpaid interest on the
Certificates of all Series plus certain amounts payable to Enhancement
Providers, if applicable.
The Trustee, upon giving or receiving a Termination Notice,
shall immediately notify the Rating Agencies and any Enhancement Provider of
such notice.
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After receipt by the Servicer of such Termination Notice, and on the date that a
Successor Servicer shall have been appointed by the Trustee pursuant to Section
10.2, all authority and power of the Servicer under this Agreement shall pass to
and be vested in a Successor Servicer; and, without limitation, the Trustee is
hereby authorized and empowered (upon the failure of the Servicer to cooperate)
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the Servicer
to execute or deliver such documents or instruments, and to do and accomplish
all other acts or things necessary or appropriate to effect the purposes of such
Service Transfer. The Servicer agrees to take all reasonable actions to
cooperate with the Trustee and such Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder, including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer and in enforcing all rights to
Recoveries. The Servicer shall promptly transfer its electronic records relating
to the Receivables to the Successor Servicer in such electronic form as the
Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and at such times as
the Successor Servicer shall reasonably request. To the extent that compliance
with this Section 10.1 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
reasonably necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in Section 10.1(a) for a period of 10 Business Days
after the applicable grace period or under Section 10.1(b) or (c) for a period
of 60 Business Days after the applicable grace period shall not constitute a
Servicer Default if such delay or failure could not be prevented by the exercise
of reasonable diligence by the Servicer and such delay or failure was caused by
an act of God or public enemy, acts of declared or undeclared war, public
disorder, rebellion, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages, communication system failures or outages or similar causes. The
preceding sentence shall not relieve the Servicer from using its best reasonable
efforts to perform its obligations in a timely manner in accordance with the
terms of this Agreement or any Supplement and the Servicer shall provide the
Trustee, any Enhancement Provider, the Transferor and the Certificateholders
with an Officer's Certificate giving prompt notice of such failure or delay by
it, together with a description of the cause of such failure or delay and its
efforts so to perform its obligations. The Servicer shall immediately notify a
Responsible Officer of the Trustee in writing of any Servicer Default.
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SECTION 10.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.1, the Servicer shall continue to perform all
servicing functions under this Agreement until the date specified in the
Termination Notice or otherwise specified by the Trustee in writing or, if no
such date is specified in such Termination Notice, or otherwise specified by the
Trustee in writing, until a date mutually agreed upon by the Servicer and
Trustee (not to exceed 90 days from the date of delivery of such notice). The
Trustee shall as promptly as possible after the giving of a Termination Notice
appoint a successor servicer (the "Successor Servicer"), with the consent of any
Enhancement Provider, and such Successor Servicer shall accept its appointment
by a written assumption in a form acceptable to the Trustee, the Transferor and
any Enhancement Provider. The Transferor shall have the right to nominate to the
Trustee the name of a potential successor servicer which nominee shall be
selected by the Trustee as the Successor Servicer, subject to the consent of any
Enhancement Provider. The Trustee shall seek bids from potential successor
servicers. If the Trustee is unable to obtain any bids from any potential
successor servicer and the Servicer delivers an Officer's Certificate to the
effect that it cannot in good faith cure the Servicer Default which gave rise to
a transfer of servicing, then the Trustee shall notify each Enhancement Provider
that a sale of the Receivables is proposed and shall provide each Enhancement
Provider an opportunity to bid on the Receivables and shall offer the Transferor
the right of first refusal to purchase the Receivables on terms equivalent to
the best purchase offer as determined by the Trustee, but in no event less than
an amount equal to the Aggregate Investor Amount (less the aggregate amount held
in the Excess Funding Account and any Principal Account with respect to any
Series) on the date of such purchase plus all accrued but unpaid interest on the
Certificates of all Series at the applicable Certificate Rates through the end
of the applicable interest accrual periods of such Series plus any other unpaid
amounts required to be paid pursuant to this Section 10.2 under any Supplement;
provided, however, that, if the Transferor shall not have a rating of P-3 or
Baa3 or higher by Moody's and A-3 or BBB- or higher by Standard & Poor's, no
such reassignment shall occur unless the Transferor shall deliver to the Trustee
and the Rating Agencies an Opinion of Counsel reasonably acceptable to the
Trustee that such reassignment would not constitute a fraudulent conveyance. In
the event that a Successor Servicer has not been appointed and has not accepted
its appointment at the time when the Servicer ceases to act as Servicer, the
Trustee (as trustee hereunder) without further action shall automatically be
appointed the Successor Servicer. Notwithstanding the above, the Trustee shall,
if it is legally unable so to act, petition a court of competent jurisdiction to
appoint any established financial institution having a net worth of not less
than $50,000,000 and whose regular business includes the servicing of consumer
revolving credit card receivables as the Successor Servicer hereunder.
Notwithstanding anything to the contrary in this Agreement, the entire amount of
the reassignment deposit amount shall be distributed to the Investor
Certificateholders of the related Series on the subsequent Distribution Date for
such Series pursuant to Section 12.3 (except for amounts payable to any
Enhancement Provider under the applicable Enhancement Agreement, which amounts
shall be distributed to such Enhancement Provider.)
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(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to all servicing
functions under this Agreement and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer; provided, however, that, the outgoing
Servicer shall not be relieved of any liability hereunder for its actions prior
to the transfer of servicing hereunder; provided further, that the Successor
Servicer shall not be liable for any acts or omissions of the Servicer or for
any breach by the Servicer of any of its representations and warranties
contained herein or in any Supplement or amendment, by Officer's Certificate
delivered in connection herewith, and provided further, that, (i) the outgoing
Servicer shall not indemnify the Trust or the Trustee under Section 8.4 for
acts, omissions or alleged acts or omissions, including any involving negligence
or bad faith by a Successor Servicer and (ii) the outgoing Servicer shall not
pay or reimburse the Trustee pursuant to Section 11.5 for any expense,
disbursement or advance of the Trustee related to or arising as a result of the
negligence or bad faith of the Successor Servicer. Any Successor Servicer, by
its acceptance of its appointment, will automatically agree to be bound by the
terms and provisions of any applicable Enhancement agreement.
(c) In connection with such appointment and assumption, (i)
the Trustee shall be entitled to such compensation, or may make such
arrangements for the compensation of the Successor Servicer out of Collections,
as it and such Successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of the Monthly Servicing Fee permitted to the
Servicer pursuant to Section 3.2, (ii) Xxxxxxxx'x, Inc., as initial Servicer,
agrees to reimburse any reasonable out-of-pocket, system conversion and
modification, moving and related expenses incurred by the Successor Servicer, if
the Servicer is not Xxxxxxxx'x, Inc., or an Affiliate of Xxxxxxxx'x, Inc. or the
Trustee, in connection to the transfer of servicing to a Successor Servicer,
such reimbursement obligation in no event not to exceed $50,000, and (iii) if
the Monthly Servicing Fee payable to the Successor Servicer shall not be
sufficient to cover the actual costs of servicing the Receivables, Xxxxxxxx'x,
Inc., as initial Servicer, agrees to reimburse any excess of the actual costs of
servicing the Receivables over the Monthly Servicing Fee accruing to the
Servicer; provided, however, that such reimbursement obligation may not exceed
the average costs of servicing for similar portfolios of Receivables.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
the Trust pursuant to Section 12.1 and shall pass to and be vested in the
Transferor and, without limitation, the Transferor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor Servicer agrees to
cooperate with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor
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Servicer shall transfer its electronic records relating to the Receivables to
the Transferor in such electronic form as the Transferor may reasonably request
and shall transfer all other records, correspondence and documents to the
Transferor in the manner and at such times as the Transferor shall reasonably
request. To the extent that compliance with this Section 10.2 shall require the
Successor Servicer to disclose to the Transferor information of any kind which
the Successor Servicer deems to be confidential, the Transferor shall be
required to enter into such customary licensing and confidentiality agreements
as the Successor Servicer shall deem necessary to protect its interests.
SECTION 10.3 NOTIFICATION TO CERTIFICATEHOLDERS. Upon the
occurrence of any Servicer Default, the Servicer shall give prompt written
notice thereof to the Trustee, the Rating Agencies and any Enhancement Provider,
and the Trustee shall give notice to the Investor Certificateholders at their
respective addresses appearing in the Certificate Register. Upon any termination
or appointment of a Successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to Investor Certificateholders at their
respective addresses appearing in the Certificate Register, the Rating Agencies
and to any Enhancement Provider. Notice to Holders of Bearer Certificates, if
any, shall be given by publication in the manner described in Section 13.5 of
the Agreement.
SECTION 10.4 WAIVER OF PAST DEFAULTS. The Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 66-2/3% of the
Investor Amount of any Series then outstanding affected by any default by the
Servicer or the Transferor may, on behalf of all Holders of Certificates of such
affected Series, waive any default by the Servicer or the Transferor in the
performance of their respective obligations hereunder and its consequences,
except a default in the failure to make any required deposits or payments of
interest or principal with respect to any Series of Certificates. Upon any such
waiver of a past default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
ARTICLE XI
THE TRUSTEE
SECTION 11.1 DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of a Servicer Default
and after the curing or waiving of all Servicer Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Default has occurred
(which has not been cured or waived), the Trustee (as Trustee and not as
Successor Servicer) shall exercise such of the rights and powers vested
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in it by this Agreement or any Supplement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement or any Supplement, shall
examine them to determine whether they conform as to form to the requirements of
this Agreement or any Supplement, but shall not be required to verify the
accuracy of any information, calculations or conclusions stated therein.
(c) Subject to Section 11.1(a), no provision of this
Agreement or any Supplement shall be construed to relieve the Trustee from
liability for its own negligent action, its own bad faith, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) the Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50%
of the Investor Amount of any Series adversely affected thereby
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement or any Supplement;
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer (other than the Trustee, in its capacity as
Successor Servicer) to comply with the obligations of the Servicer
referred to in clauses (a), (b) and (c) of Section 10.1 unless a
Responsible Officer of the Trustee obtains actual knowledge of such
failure (it being understood that knowledge of the Servicer, in its
capacity as agent for the Trustee, is not attributable to the Trustee)
or the Trustee receives written notice of such failure from the
Servicer, any Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Investor Amount of any
Series adversely affected thereby or any Enhancement Provider; and
(iv) in making a determination of any material and adverse
effect upon Certificateholders or the Investor Certificates, the
Trustee may, as to matters of law, rely exclusively upon an Opinion of
Counsel.
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(d) The Trustee (in its capacity as such) shall not be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder, or in exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
or any Supplement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer or the Successor Servicer under this Agreement or any Supplement except
during such time, if any, as the Trustee shall be the Successor Servicer in
accordance with the terms of this Agreement or any Supplement.
(e) Except for actions expressly authorized by this Agreement
or any Supplement, the Trustee shall take no action reasonably likely to impair
the interests of the Trust in any Receivable now existing or hereafter created
or to impair the value of any Receivable now existing or hereafter created.
(f) Except as specifically provided in this Agreement, the
Trustee shall have no power to vary the corpus of the Trust.
(g) In the event that the Paying Agent or the Transfer Agent
and Registrar shall not be the Trustee and shall fail to perform any obligation,
duty or agreement in the manner or on the day required to be performed by the
Paying Agent or the Transfer Agent and Registrar, as the case may be, under this
Agreement, the Trustee shall be obligated promptly upon a Responsible Officer of
the Trustee having written notice or actual knowledge thereof to perform such
obligation, duty or agreement in the manner so required.
(h) Any action, suit or proceeding brought in respect of one
or more particular Series shall have no effect on the Trustee's rights, duties
and obligations hereunder with respect to any one or more Series not the subject
of such action, suit or proceeding.
(i) The Trustee shall, upon the reasonable request of the
Transferor, enter into any intercreditor agreement relating to the assets of the
Transferor; provided however, that the Trustee shall have received an Officer's
Certificate from the Transferor stating that the Transferor does not believe
that any such intercreditor agreement will materially and adversely affect any
outstanding Investor Certificates of any Series, and the Trustee shall have
received a reliance letter entitling it to rely upon any Opinions of Counsel to
the Transferor delivered in connection with such intercreditor agreement.
SECTION 11.2 CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in acting
on, or in refraining from acting in accord with, any resolution, Officer's
Certificate, Opinion of
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Counsel, certificate of independent public accountants or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document, including, without limitation, any
request or instruction by the Servicer or the Transferor to make any deposit or
payment or any draw on any Enhancement or to transfer any Receivables or
Accounts, prima facie properly executed and submitted to it pursuant to this
Agreement or any Supplement by the proper party or parties;
(b) the Trustee may consult with counsel as to matters of law
and any advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel as to any
actions required to be taken or withheld hereunder;
(c) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement or any Supplement, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders or Certificate
Owners or any Enhancement Provider, pursuant to the provisions of this Agreement
or any Supplement or any Enhancement, unless such Certificateholders or
Certificate Owners or such Enhancement Provider shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee (as Trustee but not as Successor Servicer)
of the obligations, upon the occurrence of any Servicer Default (which has not
been cured or waived), to exercise such of the rights and powers vested in it by
this Agreement or any Supplement, and to use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(d) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement or any Supplement;
(e) except as may be required by Sections 11.1(a) or 11.1(b),
the Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, except to the extent specifically requested in writing so to do by
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Amount of any Series which could be adversely affected
if the Trustee does not perform such acts and the Trustee is reasonably
indemnified therefor;
(f) the Trustee (in its capacity as such) may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or a custodian, and the Trustee (in its
capacity as such) shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed with due care by it
hereunder;
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(g) except as may be required by Sections 11.1(a) or 11.1(b)
hereof, the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or the
Accounts for the purpose of establishing the presence or absence of defects, the
compliance by the Transferor or Servicer with their representations, warranties
or covenants or for any other purpose;
(h) the permissive right of the Trustee to take actions
enumerated in this Agreement or any Supplement shall in no event be construed as
a duty;
(i) whenever in the administration of this Agreement or any
Supplement, the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(j) except with respect to any Enhancement Investor Amount,
the Trustee shall not be deemed to be a fiduciary for the Enhancement Provider,
if any, in its capacity as such, and the Trustee's sole responsibility with
respect to the Enhancement Provider in its capacity as such shall be to perform
those duties with respect to the Enhancement Provider as are specifically set
forth in the related Enhancement agreement and no implied covenants shall be
read into this Agreement against the Trustee with respect to the Enhancement
Provider;
(k) the Trustee shall have no duty (i) to see to any
recording, filing or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest in the Receivables or the Accounts, or to see to the
maintenance of any such recording, filing or depositing or any rerecording,
refiling or redepositing of any thereof or (ii) to confirm or verify the
contents of any reports or certificates of the Servicer delivered to the Trustee
pursuant to this Agreement believed by the Trustee to be genuine and to have
been signed or presented by the proper party or parties; and
(l) in the event the entity serving as Trustee hereunder is
also serving as Paying Agent or Transfer Agent and Registrar hereunder, the
rights, powers, immunities and indemnities afforded to the Trustee hereunder
shall also be afforded to such Paying Agent and Transfer Agent and Registrar.
SECTION 11.3 TRUSTEE NOT LIABLE FOR RECITALS IN CERTIFICATES.
The Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificates of
authentication on the Certificates). Except as set forth in Section 2.2(a) or
Section 11.15, the Trustee makes no representations as to (i) the validity or
sufficiency of this Agreement or any Supplement or of the Certificates (other
than the certificates of authentication on the Certificates), (ii) the existence
or validity of any Receivable, (iii) the validity of any transfer or assignment
of
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any Receivable to the Trust, (iv) the validity of any grant of a security
interest to the Trust in any Receivable, (v) the perfection of any security
interest (whether as of the date hereof or at any future time) in any
Receivable, (vi) the maintenance of or the taking of any action to maintain such
perfection, (vii) the receipt by the Trustee or the Servicer of any Receivable,
(viii) the performance or enforcement of any Receivable, (ix) the compliance by
the Transferor or the Servicer with any covenant or representation, (x) the
breach by the Transferor or the Servicer of any warranty or representation made
hereunder or in any related document or the accuracy of any such warranty or
representation or (xi) any action taken by the Servicer in the name of the
Trustee. The Trustee shall not be accountable for the use or application by the
Transferor of any of the Certificates or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Transferor in respect of
the Receivables or deposited in or withdrawn from the Collection Account or
other accounts now or hereafter established to effectuate the transactions
contemplated herein and in accordance with the terms hereof.
SECTION 11.4 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
SECTION 11.5 THE SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES.
The Servicer covenants and agrees to pay to the Trustee from time to time out of
its own funds, and the Trustee shall be entitled to receive, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder or pursuant to any
Supplement of the Trustee, and, subject to Section 8.4, the Servicer will pay or
reimburse the Trustee (without reimbursement from the Collection Account or
otherwise) upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement or any Supplement (including the reasonable fees
and expenses of its agents and counsel) except any such expense, disbursement or
advance as may arise from its negligence or bad faith and except as provided in
the following sentence. If the Trustee is appointed Successor Servicer pursuant
to Section 10.2, the provisions of this Section 11.5 shall not apply to
expenses, disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer. If Xxxxxxxx'x, Inc. is not the Servicer,
Xxxxxxxx'x, Inc. shall guarantee the payment of all amounts payable to the
Trustee under this Section 11.5, and upon any payment pursuant to such guaranty,
and Xxxxxxxx'x, Inc. shall be subrogated to all rights of the Trustee to recover
such amounts from the Servicer.
The obligations of the Servicer and the Transferor under this
Section 11.5 and Section 8.4 shall survive the termination of the Trust and the
resignation or removal of the Trustee or the Servicer.
SECTION 11.6 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a national banking association, a banking
corporation or a
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trust company organized and doing business under the laws of the United States
of America or any state thereof authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000, a
rating as to its long-term unsecured debt obligations of at least Baa3 by
Moody's (if Moody's shall then be a Rating Agency) and BBB- by Standard & Poor's
(if Standard & Poor's shall then be a Rating Agency) and a rating as to its
short-term deposits or long-term unsecured debt obligations that satisfies the
rating requirement of any other applicable Rating Agency and subject to
supervision or examination by Federal or state authority. If such banking
corporation or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 11.6,
the combined capital and surplus of such corporation or national banking
association shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.6, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.7.
SECTION 11.7 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign as Trustee and be
discharged from the trust hereby created by giving written notice thereof to the
Transferor and the Servicer. Upon receiving such notice of resignation, the
Transferor shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted such appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6, or becomes insolvent, and shall
fail to resign after written request therefor by the Transferor, or if at any
time the Trustee shall be legally unable to act, or shall be adjudged bankrupt
or insolvent, or a receiver or conservator of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Transferor may, but shall not be required
to, remove the Trustee and promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 11.7
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 11.8. Any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
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SECTION 11.8 SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section
11.7 shall execute, acknowledge and deliver to the Transferor and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder and under any Supplement, with like
effect as if originally named as Trustee herein. The predecessor Trustee shall,
upon payment of its reasonable fees and expenses, deliver to the successor
trustee all documents held by it hereunder, and the Transferor and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided
in this Section 11.8 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 11.6 hereof and shall
be an Eligible Servicer, and, the applicable Rating Agencies shall have
consented to such appointment.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.8, such successor trustee shall mail notice of such
succession hereunder to each Rating Agency and all Certificateholders (other
than Holders of Bearer Certificates) at their addresses as shown in the
Certificate Register. Notice to Holders of Bearer Certificates shall be given by
publication in the manner described in Section 13.5 of the Agreement.
SECTION 11.9 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such Person shall be eligible
under the provisions of Section 11.6 and shall be an Eligible Servicer, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
SECTION 11.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provision of this Agreement or
any Supplement, at any time, for the purpose of meeting any legal requirements
of any jurisdiction in which any part of the Trust may at the time be located,
the Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee, or separate trustee, of all
or any part of the Trust, and to vest in such Person, in such capacity and for
the benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 11.10,
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such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.6 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder appointed
with due care; and
(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article XI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement or any Supplement, specifically including
every provision of this Agreement or any Supplement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time
appoint the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect to this Agreement or any
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Supplement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 11.11 TAX RETURNS AND COMPLIANCE.
(a) In the event the Trust shall be required to file tax
returns, the Servicer shall prepare or cause to be prepared and is authorized
hereunder to sign any tax returns required to be filed by the Trust and, to the
extent possible, shall file such returns at least five (5) days before such
returns are due to be filed. The Servicer shall prepare or shall cause to be
prepared all tax information required by law to be distributed to
Certificateholders and Certificate Owners and shall deliver such information to
the Paying Agent at least five (5) days prior to the date it is required by law
to be distributed to Certificateholders and Certificate Owners. The Trustee
shall, upon request, furnish the Servicer with all such information known to the
Trustee as may be reasonably required in connection with the preparation of such
tax returns and shall, upon request, execute such tax returns. In no event shall
the Trustee, the Paying Agent or the Servicer be liable for any liabilities,
costs or expenses of the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including without limitation,
Federal, state, local or foreign income or excise taxes or any other tax imposed
on or measured by income (or any interest or penalty with respect thereto or
arising from a failure to comply therewith), except to the extent that such tax
is imposed as a result of a violation by such Person of the provisions of this
Agreement or any Supplement.
(b) The Trustee and each Paying Agent shall comply with all
Federal withholding requirements respecting payments to Investor
Certificateholders or persons receiving funds from the Trust. In the event the
Trustee or Paying Agent does withhold any amount from interest, principal, or
other payments pursuant to Federal withholding requirements, the Trustee or
Paying Agent shall indicate the amount withheld in writing with any payment to
the person otherwise entitled to such amount.
SECTION 11.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or any
Supplement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
SECTION 11.13 SUITS FOR ENFORCEMENT. If a Servicer Default
shall occur and be continuing, the Trustee, in its discretion, may, subject to
the provisions of Section 10.1, proceed to protect and enforce its rights and
the rights of the Certificateholders
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under this Agreement or any Supplement by such suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or any Supplement or in aid of
the execution of any power granted in this Agreement or any Supplement or for
the enforcement of any other legal, equitable or other remedy as the Trustee,
being advised by counsel, shall deem effectual to protect and enforce any of the
rights of the Trustee or the Certificateholders.
SECTION 11.14 RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE.
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Investor Amount of all Series affected by the conduct
of any proceeding or the exercise of any right conferred on the Trustee shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided, however, that, subject to Section
11.1, the Trustee shall have the right to decline to follow any such direction
if the Trustee, as advised by counsel, determines that the action so directed
may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determines that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders of such Series not
parties to such direction or to the rights of Certificateholders of other
Series; and provided further that nothing in this Agreement or any Supplement
shall impair the right of the Trustee to take any action deemed proper by the
Trustee and which is not inconsistent with such direction.
SECTION 11.15 REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The
Trustee represents and warrants that:
(i) The Trustee is a national banking association,
organized, existing and in good standing under the federal banking laws
of the United States and is, and will remain for the term of this
Agreement, duly qualified and in good standing in the States of
Minnesota and New York;
(ii) The Trustee has full power, authority and right to
execute, deliver and perform this Agreement and any Supplement, and has
taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement and any Supplement; and
(iii) This Agreement and any Supplement has been, or will
be duly executed and delivered by the Trustee, and assuming due
execution and delivery by the other parties thereto constitutes a
legal, valid and binding obligation of the Trustee enforceable against
the Trustee in accordance with its terms.
SECTION 11.16 MAINTENANCE OF OFFICE OR AGENCY. For so long as
any Investor Certificates are held by Certificate Owners in Definitive
Certificates, the Trustee will maintain at its expense in the Borough of
Manhattan, The City of New York, an office
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or offices or agency or agencies where notices and demands to or upon the
Trustee in respect of the Certificates and this Agreement may be served. The
Trustee initially appoints The Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Norwest New York City as its agent for such
purposes in New York. The Trustee will give prompt written notice (or in the
case of Holders of Bearer Certificates, notice by publication in the manner
described in Section 13.5 of the Agreement) to the Servicer and to
Certificateholders of any change in the location of such Corporate Trust Office,
or such other office or agency.
ARTICLE XII
TERMINATION
SECTION 12.1 TERMINATION OF TRUST.
(a) The respective obligations and responsibilities of the
Transferor, the Servicer, the Paying Agent and the Trustee and their agents
hereunder created hereby (other than the obligation of the Trustee to make
payments to Certificateholders as hereafter set forth) shall terminate, except
with respect to the duties described in Sections 2.4(c), 8.4, 11.5 and 12.3(b),
upon the earliest of (i) the day designated by the Transferor after the
Distribution Date following the date on which funds shall have been deposited in
the Collection Account or applicable Principal Account sufficient to pay the
Aggregate Investor Amount and any Enhancement Investor Amount plus applicable
Certificate Interest accrued through such Distribution Date, and (ii) the day on
which the final payment of principal is made to the Certificateholders, and all
right, title and interest to the Receivables and other funds of the Trust (other
than funds held in the Principal Account) will be transferred to the holder of
the Exchangeable Transferor Certificate (the "Final Termination Date");
provided, however, in no event shall the Trust created by this Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx Xxxxxxx Xxxxxx Xxxx, former President of the United
States of America, living on the date of this Agreement. The Servicer shall
promptly notify the Trustee of any prospective termination pursuant to this
Section 12.1.
(b) If on the last Distribution Date in the month immediately
preceding the month in which the Final Termination Date occurs (after giving
effect to all transfers, withdrawals, deposits and drawings to occur on such
date and the payment of principal on any Series of Certificates to be made on
such Distribution Date pursuant to Article IV), the Investor Amount or any
Enhancement Investor Amount of any Series would be greater than zero, the
Servicer shall sell within 30 days after such Distribution Date all of the
Receivables in a commercially reasonable manner and on commercially reasonable
terms which shall include the solicitation of competitive bids and shall
consummate the sale with the highest bidder for the Receivables. The Transferor
or any of its Affiliates shall be permitted to bid for the Receivables. In
addition, the Transferor or any Affiliate shall have the right to match any bid
by a third Person and be granted the right to purchase
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the Receivables at such matched bid price. The proceeds of any such sale shall
be treated as Collections on the Receivables and shall be allocated in
accordance with Article IV; provided, however, that the Trustee shall determine
conclusively the amount of such proceeds which are allocable to Finance Charge
Receivables and the amount of such proceeds which are allocable to Principal
Receivables. Prior to such sale of Receivables, the Servicer shall continue to
collect Collections on the Receivables and allocate such payments in accordance
with the provisions of Article IV.
SECTION 12.2 OPTIONAL PURCHASE; FINAL TERMINATION DATE OF
INVESTOR CERTIFICATES OF ANY SERIES.
(a) If provided in any Supplement with respect to a Series of
Investor Certificates (which provisions must refer specifically to this Section
12.2), on any Distribution Date, the Transferor may, but shall not be obligated
to, purchase such Series by depositing into the Collection Account, prior to
such Distribution Date, an amount equal to the Investor Amount thereof plus
interest accrued and unpaid thereon at the applicable Certificate Rate through
the interest accrual period preceding such Distribution Date plus any other
unpaid amounts required to be paid pursuant to this Section 12.2 under any
Supplement; provided, however that, if the Transferor shall not have a rating of
P-3 or Baa3 or higher by Moody's, and A-3 or BBB- or higher by Standard &
Poor's, no such purchase of any Series of Investor Certificates shall occur
unless the Transferor shall deliver to the Trustee and the Rating Agencies an
Opinion of Counsel reasonably acceptable to the Trustee that such purchase of
any Series of Investor Certificates would not constitute a fraudulent
conveyance. Nothing herein limits the right of the Transferor or any Affiliate
to purchase Investor Certificates on the open market and submit them to the
Trustee for cancellation.
(b) The amount deposited pursuant to Section 12.2(a) shall be
paid to the Investor Certificateholders of the related Series pursuant to
Article IV on the Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Transferor pursuant to
Section 12.2(a) shall be delivered by the Transferor upon such purchase to, and
be canceled by, the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor.
(c) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Stated Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Investor Amount or any Enhancement Investor
Amount of any Series of Certificates is greater than zero on its Stated Series
Termination Date (after giving effect to all transfers, withdrawals, deposits
and drawings to occur on such date and the payment of principal to be made on
such Series on such date), the Trustee will sell or cause to be sold, and pay
the proceeds to all Certificateholders of such Series pro rata in final payment
of all principal of and accrued interest on such Series of Certificates, an
amount of Receivables or interests in Receivables up to 110% of the Adjusted
Investor Amount and any Enhancement Investor Amount of such Series at the close
of business on such date (but not more than
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an amount of Receivables equal to the sum of (1) the product of (A) the
Transferor Percentage, (B) the Aggregate Principal Receivables and (C) a
fraction the numerator of which is the related Investor Percentage with respect
to Finance Charge Receivables and the denominator of which is the sum of all
Investor Percentages with respect to Finance Charge Receivables of all Series
outstanding and (2) the Investor Amount and any Enhancement Investor Amount of
such Series). The Trustee shall conduct the sale of Receivables in a
commercially reasonable manner and on commercially reasonable terms which shall
include the solicitation of competitive bids and shall consummate the sale with
the highest bidder for the Receivables. The Transferor or any of its Affiliates
shall be permitted to bid for the Receivables. In addition, the Transferor or
any Affiliate shall have the right to match any bid by a third Person and be
granted the right to purchase the Receivables at such matched bid price. Any
proceeds of such sale in excess of the outstanding principal and interest due to
Certificateholders of the applicable Series (which shall be paid to such
Holders) shall be paid to the Holder of the Exchangeable Transferor Certificate,
unless the applicable Supplement shall provide otherwise. Upon such Stated
Series Termination Date with respect to the applicable Series of Certificates,
final payment of all amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in Section 12.3.
SECTION 12.3 FINAL PAYMENT WITH RESPECT TO ANY SERIES.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Certificateholders of any Series may
surrender their Certificates for payment of the final distribution with respect
to such Series and cancellation, shall be given (subject to at least two (2)
Business Days' prior notice from the Servicer to the Trustee) by the Trustee to
Investor Certificateholders of such Series mailed not later than the fifth day
of the month of such final distribution (or in the case of the Holders of Bearer
Certificates by the publication by the Trustee of a notice at least once in a
newspaper of general circulation in Luxembourg (which newspaper shall be printed
in the English language and customarily published on each business day in
Luxembourg) and, so long as the Investor Certificates are listed on the
Luxembourg Stock Exchange or other stock exchange and such exchange so requires,
in Luxembourg or the location required by such other stock exchange) specifying
(a) the Distribution Date (which shall be the Distribution Date in the month in
which the deposit is made pursuant to Section 2.4, 9.2, 10.2 or 12.2(a) or such
other section as may be specified in the related Supplement) upon which final
payment of such Investor Certificates will be made upon presentation and
surrender of such Investor Certificates at the office or offices therein
designated, (which, in the case of Bearer Certificates, shall be outside the
United States), (b) the amount of any such final payment and (c) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Investor Certificates at
the office or offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officer's
Certificate setting forth the information specified in the applicable Supplement
covering the period during the then current calendar year through the date of
such notice and setting forth the date of such final distribution. The Trustee
shall give such notice to the Transfer Agent
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and Registrar and the Paying Agent at the time such notice is given to such
Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
Section 12.1(a) or the occurrence of the Stated Series Termination Date with
respect to any Series, all funds then on deposit in the Collection Account shall
continue to be held in trust for the benefit of the Certificateholders and the
Paying Agent or the Trustee shall pay such funds to the Certificateholders upon
surrender of their Certificates (which surrenders and payments, in the case of
Bearer Certificates, shall be made only outside the United States). In the event
that all of the Investor Certificateholders of such Series shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned notice, the Trustee shall give a second written notice
(or in the case of Bearer Certificates, publication notice) to the remaining
Investor Certificateholders of such Series upon receipt of the appropriate
records from the Transfer Agent and Registrar to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within one and one-half years after the second notice all the Investor
Certificates of such Series shall not have been surrendered for cancellation,
the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Investor Certificateholders of such
Series concerning surrender of their Certificates, and the cost thereof shall be
paid out of the funds in the Collection Account held for the benefit of such
Investor Certificateholders. The Trustee shall pay or cause to be paid to the
Transferor upon request all monies held for the payment of principal or interest
which remain unclaimed after two years.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
mutilated and physically canceled by the Transfer Agent and Registrar and be
disposed of in a manner satisfactory to the Trustee and the Transferor.
SECTION 12.4 TRANSFEROR'S TERMINATION RIGHTS. Upon the
termination of the Trust pursuant to Section 12.1 and the surrender of the
Exchangeable Transferor Certificate, the Trustee shall return to the Transferor
(without recourse, representation or warranty) all right, title and interest of
the Trust in the Receivables, whether then existing or thereafter created, and
all monies due or to become due with respect thereto, all proceeds thereof
except for amounts held by the Paying Agent pursuant to Section 12.3(b). The
Trustee shall execute and deliver such instruments of transfer and assignment,
in each case without recourse, and shall file and record UCC termination
statements in all Relevant UCC States as shall be reasonably requested by the
Transferor to vest in itself all right, title and interest which the Trust had
in the applicable Receivables.
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SECTION 12.5 DEFEASANCE. Notwithstanding anything to the
contrary in this Agreement:
(a) The Transferor may at the Transferor's option be
discharged from its obligations hereunder with respect to any Series or all
outstanding Series (the "Defeased Series") on the date the applicable conditions
set forth in subsection 12.5(c) are satisfied (a "Defeasance"); provided,
however, that the following rights, obligations, powers, duties and immunities
shall survive with respect to the Defeased Series until otherwise terminated or
discharged hereunder: (i) the rights of the Holders of Investor Certificates of
the Defeased Series to receive, solely from the trust fund provided for in
Section 12.5(c), payments in respect of principal of and interest on such
Investor Certificates when such payments are due; (ii) the right of any
Enhancement Provider to the repayment of any amount, including interest thereon,
due to it under the applicable Enhancement agreement and Supplement; (iii) the
Transferor's obligations with respect to such Certificates under Sections 6.3
and 6.4; (iv) the rights (including the right to payment of its fees and
expenses), powers, trusts, duties, and immunities of the Trustee, the Paying
Agent and the Transfer Agent and Registrar hereunder; and (v) this Section 12.5.
(b) Subject to Section 12.5(c), the Transferor at its option
may cause Collections allocated to the Defeased Series and available to purchase
Principal Receivables to be applied to purchase Permitted Investments rather
than Principal Receivables.
(c) The following shall be the conditions to Defeasance under
Section 12.5(a):
(i) The Transferor irrevocably shall have deposited or
caused to be deposited with the Trustee (such deposit to be
made from other than the Transferor's funds), under the terms
of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust for
making the payments described below, (A) U.S. Dollars in an
amount, or (B) Permitted Investments which through the
scheduled payment of principal and interest in respect thereof
will provide, not later than the due date of payment thereon,
money in an amount, or (C) a combination thereof, in each case
sufficient to pay and discharge, and which shall be applied by
the Trustee to pay and discharge, all remaining scheduled
interest and principal payments on all outstanding Investor
Certificates of the Defeased Series on the dates scheduled for
such payments in this Agreement and the applicable Supplements
and all amounts owing to the Enhancement Providers with
respect to the Defeased Series;
(ii) prior to its exercise of its right pursuant to this
Section 12.5 with respect to a Defeased Series to substitute
money or Permitted Investments for Receivables, the Transferor
shall have delivered to the Trustee an
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Opinion of Counsel to the effect that such deposit and
termination of obligations will not have any material adverse
impact on the Federal income tax characterization of any
outstanding Series of Investor Certificates that have been the
subject of a previous opinion of tax counsel or result in the
Trust being taxable as an association for Federal or
applicable state (with respect only to those states as to
which state income tax opinions have been delivered previously
and which remain applicable) income tax purposes and an
Opinion of Counsel to the effect that such deposit and
termination of obligations will not result in the Trust being
required to register as an "investment company" within the
meaning of the 1940 Act;
(iii) the Transferor shall have delivered to the Trustee and
any Enhancement Provider an Officer's Certificate of the
Transferor stating the Transferor reasonably believes that
such deposit and termination of obligations will not, based on
the facts known to such officer at the time of such
certification, then cause a Pay Out Event with respect to any
Series or any event that, with the giving of notice or the
lapse of time, would result in the occurrence of a Pay Out
Event with respect to any Series; and
(iv) the Rating Agency Condition shall have been satisfied.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1 AMENDMENT.
(a) This Agreement and any Supplement may be amended from time
to time by the Servicer, the Transferor and the Trustee, without the consent of
any of the Investor Certificateholders, to cure any ambiguity, to revise certain
exhibits and schedules hereto, to correct or supplement any provisions herein
which may be inconsistent with any other provisions herein, to add other
identifying code numbers or identifying characteristics to the definition of
Account or to add any other provisions with respect to matters or questions
raised under this Agreement which shall not be inconsistent with the provisions
of this Agreement, including any matters arising under Section 2.5(d) necessary
to effect the conveyance contemplated thereunder and as otherwise permitted
herein; provided, however, that such action shall not adversely affect in any
material respect the interests of any of the Investor Certificateholders.
Additionally, this Agreement and any Supplement may be amended from time to time
by the Servicer, the Transferor and the Trustee, without the consent of any of
the Certificateholders, to add to, change or eliminate any of the provisions of
this Agreement or any right of Investor Certificateholders hereunder or to
enable Bearer Certificates to be issued in conformity with the Bearer Rules, to
provide that Bearer Certificates may be registrable as to
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principal, to change or eliminate any restrictions on the payment of principal
of, premium, if any, or any interest on Bearer Certificates to comply with the
Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Certificates in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Bearer Certificates of any Series or any related
Coupons in any material respect unless such amendment is necessary to comply
with the Bearer Rules, or any right of the Investor Certificateholders
hereunder, provided that (x) the Servicer shall have furnished the Trustee with
an Officer's Certificate to the effect that the amendment will not materially
and adversely affect the interests of any Certificateholders thereunder, (y)
such amendment will not cause the Trust to be characterized as a corporation for
Federal income tax purposes or otherwise have a material adverse effect on the
Federal income taxation of any Series and (z) the Servicer shall have given each
Rating Agency ten (10) Business Days' prior written notice of such amendment and
shall have received written confirmation from each Rating Agency rating the
affected Series that the Rating Agency Condition will be met. No such amendment,
however, may effect any of the amendments that require unanimous
Certificateholder consent as set forth in Section 13.1(b), or (i) reduce in any
manner the amount of, or delay the timing of, distributions which are required
to be made on any Investor Certificates of any Series, (ii) change the
definition of or the manner of calculating the interest of any
Certificateholder, (iii) alter the requirements for changing the percentage by
which the Minimum Transferor Amount is determined, (iv) change the manner in
which the Transferor Amount is determined, or (v) reduce the percentage required
in Section 13.1(b) to consent to such amendment. Notwithstanding the foregoing,
any amendments providing for the transfer of Receivables to or by, and the
generation of new Receivables by, the Bank as Seller, Transferor or Eligible
Originator, the appointment of the Bank as Servicer, and/or the assignment of
this Agreement including any Supplement to the Bank in connection with such
transfer and any amendments to this Agreement necessary to reflect such Bank and
any related special purpose, bankruptcy remote entity that is an Affiliate of
the Company and that is organized for purposes of purchasing Accounts and
Receivables from such Bank and serving as Transferor, will be deemed not to
materially and adversely affect the interests of the Certificateholders.
Prior to executing any amendment in accordance with this
Section 13.1(a), the Trustee shall receive and shall be permitted to rely upon
an Opinion of Counsel to the effect that the conditions and requirements of this
Section 13.1(a) have been satisfied. The Transferor shall deliver prior written
notice of any amendment pursuant to this Section 13.1(a) to each Rating Agency.
(b) This Agreement and any Supplement may also be amended from
time to time by the Servicer, the Transferor and the Trustee with the consent of
the Holders of Investor Certificates evidencing Undivided Interests aggregating
not less than 50% of the Investor Amount of all Series adversely affected, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this
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Agreement or modifying in any manner the rights of the Investor
Certificateholders of any Series then issued and outstanding; provided, however,
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, distributions which are required to be made on any Investor
Certificate of such Series without the consent of all holders of the related
Investor Certificates, (ii) change the definition of or the manner of
calculating the Investor Amount, the Investor Percentage, the required amount
under any Enhancement or the Investor Default Amount of such Series without the
consent of the related Investor Certificateholders or (iii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of all
holders of the related Investor Certificates of all Series adversely affected
thereby. Any amendment pursuant to this Section 13.1(b) shall require that each
Rating Agency rating the affected Series confirm that such amendment will not
cause a reduction or withdrawal of the rating of any outstanding Series of
Certificates.
(c) Each Certificateholder, by acquiring an interest in a
Certificate, is deemed to consent to any amendment to this Agreement or any
Supplement necessary for the Transferor to elect FASIT status for the Trust or
any portion thereof under the Code, provided that such election may not be made
unless the Transferor delivers to the Trustee an Opinion of Counsel to the
effect that (i) the issuance of FASIT regular interests will not adversely
affect the tax characterization as debt of Certificates of any outstanding
Series or Class with respect to which an Opinion of Counsel was delivered at the
time of their issuance that such Certificates would be characterized as debt,
(ii) following such issuance, the Trust will not be classified for Federal
income tax purposes as an association (or publicly traded partnership) taxable
as a corporation and (iii) such issuance will not cause or constitute an event
in which gain or loss would be recognized for federal income tax consequences by
any Certificateholder.
(d) Promptly after the execution of any such amendment other
than an amendment pursuant to Section 13.1(a), the Trustee shall furnish written
notification (or in the case of Bearer Certificates, publication notice in the
manner described in Section 13.5) of the substance of such amendment to each
Investor Certificateholder, and the Servicer shall furnish written notification
of the substance of such amendment to any related Enhancement Provider and each
Rating Agency.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such Certificateholders shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(f) Any Assignment or Reassignment regarding the addition to
or removal of Receivables from the Trust respectively, as provided in Sections
2.6 and 2.7, respectively, executed in accordance with the provisions hereof
shall not be considered
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amendments to this Agreement, including, without limitation, for the purpose of
Sections 13.1(a), (b),(c) and (g).
(g) Prior to the execution of any amendment to this Agreement,
the Trustee shall be entitled to receive and rely upon an Opinion of Counsel
substantially in the form of Part Two of Exhibit G. The Trustee may, but shall
not be obligated to, enter into any such amendment which affects the Trustee's
own rights, duties or immunities under this Agreement or otherwise.
(h) Notwithstanding anything in this Section 13.1 to the
contrary, any Supplement may be amended on the terms and in accordance with the
procedures specified therein.
SECTION 13.2 PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST.
(a) The Servicer shall cause this Agreement, any Supplement,
all amendments hereto and/or all financing statements, amendments and
continuation statements and any other necessary documents covering the right,
title and interest of the Trust in the property conveyed hereunder to be
promptly recorded, registered and filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the
Trustee hereunder to all property comprising the Trust. The Servicer shall
deliver to the Trustee file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. The Transferor shall cooperate
fully with the Servicer in connection with the obligations set forth above and
will execute any and all documents reasonably required to fulfill the intent of
this Section 13.2(a).
(b) Within 30 days after the Transferor makes any change in
its name, identity or corporate structure which would make any financing
statement, amendment or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC as in effect in the Relevant UCC State, the Transferor shall give the
Trustee notice of any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof.
(c) The Transferor and the Servicer will give the Trustee
prompt written notice of any relocation of any office from which the Servicer
services Receivables or keeps records concerning the Receivables or of its
principal executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements, continuation statements or
amendments as may be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof notwithstanding
any relocation of any office from which the Servicer services Receivables or
keeps records
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concerning the Receivables or of its principal executive office. The Servicer
will at all times maintain each office from which it services Receivables, and
the Transferor and the Servicer will at all times maintain their respective
principal executive offices, within the United States of America.
(d) The Servicer will deliver to the Trustee and each Rating
Agency: (i) upon each date that any Additional Accounts are to be included in
the Accounts pursuant to Section 2.6 (other than Section 2.6(d)), an Opinion of
Counsel substantially in the form of Part One of Exhibit G; and (ii) on or
before June 30 of each year, beginning with June 30, 1998, an Opinion of
Counsel, dated as of a date within 90 days of such day, substantially in the
form of Exhibit H.
SECTION 13.3 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Investor Certificateholder
shall not operate to terminate this Agreement or the Trust, nor shall such death
or incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote
(except as provided herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Investor Certificateholder shall have any right by
virtue of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Certificateholder previously shall have given notice to the Trustee,
and unless the Holders of Certificates evidencing Undivided Interests
aggregating more than 66 2/3% of the Investor Amount of any Series which may be
adversely affected but for the institution of such suit, action or proceeding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Certificateholders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the
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equal, ratable and common benefit of all Certificateholders. For the protection
and enforcement of the provisions of this Section 13.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity. Each Certificate Owner by its acquisition of a
Book Entry Certificate shall be deemed to have consented to the provisions of
this Section 13.3.
SECTION 13.4 GOVERNING LAW. This Agreement shall be construed
in accordance with the laws of the State of New York, and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
SECTION 13.5 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
sent by facsimile transmission to, sent by courier to or mailed by registered
mail, return receipt requested, to (a) in the case of the Transferor and the
Servicer, 0000 Xxxxxxx 00 Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000, Attention: Chief
Financial Officer, facsimile number (000) 000-0000, telephone number (205)
000-0000, (b) in the case of the Trustee, Norwest Bank Minnesota, N.A., Norwest
Center, Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
Corporate Trust Services -- Asset-Backed Administration and (c) as to such other
parties to which notices hereunder or under any Supplement are required to be
given pursuant to the terms of any Supplement, the addresses specified in any
Supplement or, as to each party, such other address as shall be designated by
such party in a written notice to each other party. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Certificateholder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
Any notice required or permitted to be made to Holders of
Bearer Certificates by publication shall be published in an Authorized Newspaper
and, if the Certificates of such Series are then listed on the Luxembourg Stock
Exchange and such stock exchange shall so require, in a newspaper of general
circulation in Luxembourg (which newspaper shall be printed in the English
language and customarily published on each business day in Luxembourg) and, if
the Certificates of such Series are listed on any other stock exchange and such
stock exchange shall so require, in any other city required by such stock
exchange outside the United States, or, if not practicable, elsewhere in Europe.
In case by reason of the suspension of publication of any
Authorized Newspaper or permitted newspaper with respect to Luxembourg or by
reason of any other cause it shall be impracticable to publish any notice to
Holders of Bearer Certificates as provided above, then such notification to
Holders of Bearer Certificates as shall be given with approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to Holders of Bearer
Certificates as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice mailed to Holders of Registered
Certificates as provided above.
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Copies of all notices, reports, certificates and amendments
delivered hereunder shall be mailed to the Rating Agency as follows: Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: ABS
Monitoring Department - 4th Floor; and to Standard & Poor's Ratings Services, 00
Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Asset Backed Surveillance Department.
SECTION 13.6 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
SECTION 13.7 ASSIGNMENT. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 7.2, 8.2, 8.5 and
13.2(b), this Agreement, including any Supplement, may not be assigned by the
Transferor or the Servicer, as the case may be, without the prior consent of
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Investor Amount.
SECTION 13.8 CERTIFICATES NONASSESSABLE AND FULLY PAID. It is
the intention of the parties to this Agreement that the Investor
Certificateholders (and the Certificate Owners) shall not be personally liable
for obligations of the Trust, that the Undivided Interests represented by the
Investor Certificates shall be nonassessable for any losses or expenses of the
Trust or for any reason whatsoever, and that Investor Certificates upon
authentication thereof by the Trustee pursuant to Section 6.2 are and shall be
deemed fully paid.
SECTION 13.9 FURTHER ASSURANCES. The Transferor and the
Servicer agree to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement including, without
limitation, the execution of any financing statements or continuation statements
relating to the property of the Trust for filing under the provisions of the UCC
of each Relevant UCC State.
SECTION 13.10 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
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SECTION 13.11 COUNTERPARTS. This Agreement and any Supplement
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 13.12 NO THIRD-PARTY BENEFICIARIES. This Agreement and
any Supplement will inure to the benefit of and be binding upon the parties
hereto, the Certificateholders and the Certificate Owners and their respective
successors and permitted assigns. Except as otherwise provided in this Agreement
or any Supplement, no other person will have any right or obligation hereunder,
whether as third party beneficiaries or otherwise.
SECTION 13.13 ACTIONS BY CERTIFICATEHOLDERS.
(a) Wherever in this Agreement or any Supplement, a provision
is made that an action may be taken or a notice, demand or instruction given by
Investor Certificateholders, such action, notice or instruction may be taken or
given by any Investor Certificateholder of any Series, unless such provision
requires a specific percentage of Investor Certificateholders of a certain
Series or all Series.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee or the Servicer
in reliance thereon, whether or not notation of such action is made upon such
Certificate.
SECTION 13.14 MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement, including any Supplements, set forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived or supplemented except as
provided herein.
SECTION 13.15 HEADINGS. The cover page, titles, table of
contents, headings and subheadings of this Agreement are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 13.16 CERTIFICATES AND OPINIONS OF COUNSEL.
(a) Any certificate delivered hereunder may be based, insofar
as it relates to legal matters, upon an Opinion of Counsel, unless the Person
delivering such certificate knows, or in the exercise of reasonable care should
know, that such opinion with respect to the matters upon which such certificate
may be based as aforesaid is erroneous. Any Opinion of Counsel or certificate
delivered hereunder may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations
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by, an officer or officers of the Servicer or the Transferor, stating that the
information with respect to such factual matters is in the possession of such
Person, unless the Person delivering such certificate or such counsel knows, or
in the exercise of reasonable care should know, that such certificate, opinion
or representations with respect to such matters are erroneous. Any Opinion of
Counsel delivered hereunder may contain necessary exceptions and qualifications.
(b) Any Opinion of Counsel or certificate delivered hereunder
may be based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representations by an independent public accountant or firm of
accountants, unless such counsel or the Person delivering such certificate, as
the case may be, knows that the certificate or opinions or representations with
respect to the accounting matters upon which the certificate or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous. Any certificate, opinion or representations of
any firm of independent public accountants filed with the Trustee shall contain
a statement that such firm is independent.
(c) Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions or
other instruments hereunder, they may, but need not, be consolidated and form
one instrument.
SECTION 13.17 NO PETITION COVENANT. Notwithstanding any prior
termination of this Agreement, the Transferor, the Servicer, the Trustee, the
Transfer Agent and Registrar and each Paying Agent shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Trust, acquiesce, petition or otherwise invoke or cause the Trust
to invoke the process of any Governmental Authority for the purpose of
commencing or sustaining a case against the Trust under any Federal or state
Debtor Relief Laws, or appointing of a receiver, liquidator, conservator,
assignee, trustee, custodian, sequestrator or other similar official for the
Trust or any substantial part of its property or ordering the winding-up or
liquidation of the affairs of the Trust.
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IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee and Paying Agent have caused this Master Pooling and Servicing Agreement
to be duly executed by their respective officers as of the day and year first
above written.
XXXXXXXX'X CREDIT CORPORATION,
as Transferor
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
XXXXXXXX'X, INC.,
as Servicer
By /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President &
Chief Financial Officer
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Senior Vice President
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