EXHIBIT 4.1
OH&S DRAFT
11/10/97
_____________________________________________________________________________
CC CREDIT CARD CORPORATION,
as Transferor,
THE TRAVELERS BANK,
as Servicer,
and
THE BANK OF NEW YORK,
as Trustee
TRAVELERS BANK CREDIT CARD MASTER TRUST I
POOLING AND SERVICING AGREEMENT
Dated as of __________ ____, 1997
_____________________________________________________________________________
PAGE
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions......................................... 1
Section 1.02. Other Definitional Provisions....................... 21
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables........................... 22
Section 2.02. Acceptance by Trustee............................... 23
Section 2.03 Representations and Warranties of Each Transferor
Relating to Such Transferor......................... 24
Section 2.04. Representations and Warranties of Each Transferor
Relating to the Agreement, the Receivables Transfer
Agreements and Any Supplement and the Receivables... 26
Section 2.05. Reassignment of Ineligible Receivables.............. 28
Section 2.06. Reassignment of Receivables in Trust Portfolio...... 29
Section 2.07. Covenants of the Transferor......................... 30
Section 2.08. Covenants of Each Transferor with Respect to
Receivables Transfer Agreements..................... 33
Section 2.09. Addition of Accounts................................ 34
Section 2.10. Removal of Accounts and Participation Interests..... 38
Section 2.11. Account Allocations................................. 39
Section 2.12. Discount Option..................................... 40
Section 2.13. Security Interest Granted by the Account Owners..... 41
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to
the Servicer........................................ 42
Section 3.02. Servicing Compensation.............................. 43
Section 3.03. Representations, Warranties and Covenants of the
Servicer............................................ 43
Section 3.04. Reports and Records for the Trustee................. 46
i
PAGE
Section 3.05. Annual Certificate of Servicer...................... 47
Section 3.06. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available............ 47
Section 3.07. Tax Treatment....................................... 47
Section 3.08. Notices to The Travelers Bank....................... 48
Section 3.09. Adjustments......................................... 48
Section 3.10. Reports to the Commission........................... 48
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. Rights of Certificateholders........................ 49
Section 4.02. Establishment of Collection Account and Excess Funding
Account............................................. 49
Section 4.03. Collections and Allocations......................... 51
Section 4.04. Shared Collections.................................. 52
Section 4.05. Additional Withdrawals from the Collection Account.. 53
Section 4.06. Allocation of Trust Assets to Series or Groups...... 54
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates.................................... 56
Section 6.02. Authentication of Certificates...................... 56
Section 6.03. New Issuances....................................... 56
Section 6.04. Registration of Transfer and Exchange of Certificates..
58
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates... 61
Section 6.06. Persons Deemed Owners............................... 61
Section 6.07. Appointment of Paying Agent......................... 62
Section 6.08. Access to List of Registered Certificateholders' Names
and Addresses....................................... 62
Section 6.09. Authenticating Agent................................ 63
Section 6.10. Book-Entry Certificates............................. 64
Section 6.11. Notices to Clearing Agency.......................... 64
ii
PAGE
Section 6.12. Definitive Certificates............................. 64
Section 6.13. Global Certificate; Exchange Date................... 65
Section 6.14. Meetings of Certificateholders...................... 66
Section 6.15. Uncertificated Classes.............................. 68
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.01. Liability of the Transferor......................... 69
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor...................... 69
Section 7.03. Limitations on Liability of the Transferor.......... 70
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01. Liability of the Servicer........................... 71
Section 8.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer........................ 71
Section 8.03. Limitation on Liability of the Servicer and Others.. 71
Section 8.04. Servicer Indemnification of the Trust and the Trustee..
72
Section 8.05. The Servicer Not To Resign.......................... 72
Section 8.06. Access to Certain Documentation and Information
Regarding the Receivables........................... 73
Section 8.07. Delegation of Duties................................ 73
Section 8.08. Examination of Records.............................. 73
ARTICLE IX
PAY OUT EVENTS
Section 9.01. Trust Pay Out Events................................ 74
Section 9.02. Rights Upon the Occurrence of an Insolvency Even.... 74
ARTICLE X
SERVICER DEFAULTS
Section 10.01. Servicer Defaults................................... 75
Section 10.02. Trustee To Act, Appointment of Successor............ 77
Section 10.03. Notification to Certificateholders.................. 78
iii
PAGE
ARTICLE XI
THE TRUSTEE
Section 11.01. Duties of Trustee........................................ 79
Section 11.02. Certain Matters Affecting the Trustee.................... 80
Section 11.03. Trustee Not Liable for Recitals in Certificates.......... 81
Section 11.04. Trustee May Own Certificates............................. 82
Section 11.05. The Transferor To Pay Trustee's Fees and Expenses........ 82
Section 11.06. Eligibility Requirements for Trustee..................... 82
Section 11.07. Resignation or Removal of Trustee........................ 82
Section 11.08. Successor Trustee........................................ 83
Section 11.09. Merger or Consolidation of Trustee....................... 83
Section 11.10. Appointment of Co-Trustee or Separate Trustee............ 83
Section 11.11. Tax Returns.............................................. 85
Section 11.12. Trustee May Enforce Claims Without Possession of
Certificates............................................. 85
Section 11.13. Suits for Enforcement.................................... 85
Section 11.14. Rights of Certificateholders To Direct Trustee........... 86
Section 11.15. Representations and Warranties of Trustee................ 86
Section 11.16. Maintenance of Office or Agency.......................... 86
ARTICLE XII
TERMINATION
Section 12.01. Termination of Trust..................................... 87
Section 12.02. Final Distribution....................................... 87
Section 12.03. Transferor's Termination Rights.......................... 88
Section 12.04. Defeasance............................................... 88
Section 12.05. Optional Purchase........................................ 90
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. Amendment; Waiver of Past Defaults....................... 91
Section 13.02. Protection of Right, Title and Interest to Trust......... 92
Section 13.03. Limitation on Rights of Certificateholders............... 93
SECTION 13.04. GOVERNING LAW............................................ 94
Section 13.05. Notices; Payments........................................ 94
Section 13.06. Rule 144A Information.................................... 95
Section 13.07. Severability of Provisions............................... 95
iv
PAGE
Section 13.08. Assignment............................................... 95
Section 13.09. Certificates Nonassessable and Fully Paid................ 95
Section 13.10. Further Assurances....................................... 95
Section 13.11. Nonpetition Covenant..................................... 95
Section 13.12. No Waiver; Cumulative Remedies........................... 96
Section 13.13. Counterparts............................................. 96
Section 13.14. Third-Party Beneficiaries................................ 96
Section 13.15. Actions by Certificateholders............................ 96
Section 13.16. Merger and Integration................................... 96
Section 13.17. Headings................................................. 96
Section 13.18. Construction of Agreement................................ 97
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in Additional Accounts
Exhibit C Form of Reassignment of Receivables in Removed Accounts
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Representation Letter
Exhibit E-3 ERISA Legend
Exhibit F-1 Form of Certificate of Foreign Clearing Agency
Exhibit F-2 Form of Alternate Certificate to be delivered to Foreign Clearing
Agency
Exhibit F-3 Form of Certificate to be delivered to Foreign Clearing Agency
Exhibit G-1 Form of Opinion of Counsel with respect to Amendments
Exhibit G-2 Form of Opinion of Counsel with respect to Accounts
Exhibit H Amendment to Section 9.02
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
v
POOLING AND SERVICING AGREEMENT dated as of __________ __, 1997, among
CC CREDIT CARD CORPORATION, a Delaware corporation, as Transferor, THE TRAVELERS
BANK, a Delaware state-chartered banking corporation, as Servicer, and THE BANK
OF NEW YORK, a New York banking corporation, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Certificateholders
and any Series Enhancer (to the extent provided herein and in any Supplement):
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used in this Agreement, the following
words and phrases shall have the following meanings, and the definitions of such
terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms.
"ACCOUNT" shall mean each Initial Account and each Additional Account, but
shall exclude any Account in which all the Receivables are either reassigned or
assigned to the Transferor or its designee or the Servicer in accordance with
the terms of this Agreement. The definition of Account shall include each
account into which an Account is transferred (a "Transferred Account"); provided
that (i) such transfer is made in accordance with the Credit Card Guidelines and
(ii) such Transferred Account can be traced or identified, by reference to or by
way of the computer files or microfiche lists delivered to the Trustee pursuant
to Section 2.01 or 2.09, as an account into which an Account has been
transferred. The term "Account" shall be deemed to refer to an Additional
Account only from and after the Addition Date with respect thereto, and the term
"Account" shall be deemed to refer to any Removed Account only prior to the
Removal Date with respect thereto.
"ACCOUNT OWNER" shall mean The Travelers Bank, The Travelers Bank USA or
any other entity which is the issuer of the credit card relating to an Account
pursuant to a Cardholder Agreement.
"ACCUMULATION PERIOD" shall mean, with respect to any Series, or any Class
within a Series, a period following the Revolving Period, which shall be the
accumulation or other period, including any controlled accumulation period or
rapid accumulation period, in which Collections of Principal Receivables are
accumulated in an account for the benefit of the Investor Certificateholders of
such Series, or a Class within such Series, in each case as defined for such
Series in the related Supplement.
1
"ACT" shall mean the Securities Act of 1933, as amended.
"ADDITION" shall mean the designation of (i) additional Eligible Accounts
to be included as Accounts or (ii) Participation Interests to be included as
Trust Assets pursuant to subsection 2.09(a), (b) or (d).
"ADDITION CUT-OFF DATE" shall mean, with respect to any Additional Accounts
or Participation Interests to be included in the Trust, the date specified in
the related Assignment.
"ADDITION DATE" shall mean (i) with respect to Additional Accounts, the
date on which the Receivables in such Additional Accounts are conveyed to the
Trust pursuant to subsection 2.09(a), (b) or (d) and (ii) with respect to
Participation Interests, the date from and after which such Participation
Interests are to be included as Trust Assets pursuant to subsection 2.09(a) or
(b).
"ADDITIONAL ACCOUNT" shall mean each consumer revolving credit card account
established pursuant to a Cardholder Agreement, which account is designated
pursuant to subsection 2.09(a), (b) or (d) to be included as an Account and is
identified in a computer file or microfiche list delivered to the Trustee by the
Transferor pursuant to Sections 2.01 and 2.09.
"ADDITIONAL TRANSFERORS" shall have the meaning specified in subsection
2.09(e).
"ADVERSE EFFECT" shall mean, with respect to any action, that such action
will (a) result in the occurrence of a Pay Out Event or Reinvestment Event with
respect to any Series or (b) materially adversely affect the amount or timing of
distributions to be made to the Investor Certificateholders of any Series or
Class pursuant to this Agreement and the related Supplement.
"AFFILIATE" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" shall mean the power to
direct the management and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"AGGREGATE INVESTOR AMOUNT" shall mean, as of any date of determination,
the sum of (i) the aggregate Investor Amounts of all Series of Certificates
issued and outstanding on such date of determination PLUS (ii) the sum of the
Enhancement Investor Amounts, if any, for all outstanding Series on such date of
determination.
"AGGREGATE SERIES PERCENTAGE" shall mean, with respect to Principal
Receivables, Defaulted Receivables and Finance Charge Receivables as of any date
of determination, the sum of the Series Percentages for such categories of
Receivables for all
2
outstanding Series on such date of determination; PROVIDED, HOWEVER, that the
Aggregate Series Percentage shall not exceed 100%.
"AGREEMENT" shall mean this Pooling and Servicing Agreement and all
amendments hereof and supplements hereto, including, with respect to any Series
or Class, the related Supplement.
"AMORTIZATION PERIOD" shall mean, with respect to any Series, or any Class
within a Series, a period following the Revolving Period, which shall be the
controlled amortization period, the principal amortization period, the rapid
amortization period, the optional amortization period, the limited amortization
period or other amortization period, in each case as defined with respect to
such Series in the related Supplement.
"APPLICANTS" shall have the meaning specified in Section 6.08.
"ASSIGNMENT" shall have the meaning specified in subsection 2.09(c)(vii).
"AUTHORIZED NEWSPAPER" shall mean any newspaper or newspapers of general
circulation in the Borough of Manhattan, the City of New York, printed in the
English language (and, with respect to any Series or Class, if and so long as
the Investor Certificates of such Series or Class are listed on the Luxembourg
Stock Exchange and such exchange shall so require, in Luxembourg, printed in any
language satisfying the requirements of such exchange) and customarily published
on each business day at such place, whether or not published on Saturdays,
Sundays or holidays.
"AUTOMATIC ADDITIONAL ACCOUNT" shall have the meaning specified in
subsection 2.09(d)(i).
"BEARER CERTIFICATES" shall have the meaning specified in Section 6.01.
"BENEFIT PLAN" shall have the meaning specified in subsection 6.04(c) .
"BOOK-ENTRY CERTIFICATES" shall mean beneficial interests in the Investor
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 6.10.
"BUSINESS DAY" shall mean any day other than (a) a Saturday or Sunday, (b)
any other day on which banks in New York, New York (or, with respect to any
Series, any additional city specified in the related Supplement) or any other
State in which the principal executive offices of the Servicer, the Trustee, The
Travelers Bank, The Travelers Bank USA or other Account Owner, as the case may
be, are located, are authorized or obligated by law, executive order or
governmental decree to be closed, or (c) for purposes of any particular Series,
any other day specified in the applicable Series Supplement.
"CARDHOLDER AGREEMENT" shall mean, with respect to a consumer revolving
credit card account, the agreements between an Account Owner, and the related
Obligor governing the terms and conditions of such account, as such agreements
may be amended,
3
modified or otherwise changed from time to time and as distributed (including
any amendments and revisions thereto) to holders of such account.
"CASH ADVANCE FEES" shall have the meaning specified in the Cardholder
Agreement applicable to each Account for cash advance fees or similar terms.
"CEDEL" shall mean Cedel Bank, societe anonyme, a professional depository
incorporated under the laws of Luxembourg, and its successors.
"CERTIFICATE" shall mean any one of the Investor Certificates or the
Transferor Certificates.
"CERTIFICATEHOLDER" or "HOLDER" shall mean an Investor Certificateholder or
a Person in whose name any one of the Transferor Certificates is registered.
"CERTIFICATEHOLDERS' INTEREST" shall have the meaning specified in Section
4.01.
"CERTIFICATE OWNER" shall mean, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"CERTIFICATE RATE" shall mean, with respect to any Series or Class, the
certificate rate specified therefor in the related Supplement.
"CERTIFICATE REGISTER" shall mean the register maintained pursuant to
Section 6.04, providing for the registration of the Registered Certificates and
the Transferor Certificates and transfers and exchanges thereof.
"CLASS" shall mean, with respect to any Series, any one of the classes of
Investor Certificates of that Series.
"CLEARING AGENCY" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, and serving as a clearing agency for a Series or Class of Book-Entry
Certificates.
"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 closing date
specified in the related Supplement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
4
"COLLECTION ACCOUNT" shall have the meaning specified in Section 4.02.
"COLLECTIONS" shall mean all payments by or on behalf of Obligors
(including Insurance Proceeds) received in respect of the Receivables, in the
form of cash, checks (to the extent collected), wire transfers, electronic
transfers, ATM transfers or other form of payment in accordance with the
Cardholder Agreement in effect from time to time. All Recoveries will be
treated as Collections of Finance Charge Receivables. As specified in any
Participation Interest Supplement or Supplement, Collections shall include
amounts received with respect to Participation Interests.
"COMMISSION" shall have the meaning specified in subsection 3.01(b).
"COMPANION SERIES" shall mean (i) each Series which 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, as described in the related
Supplements, and (ii) such other Series.
"CONTRACTUALLY DELINQUENT" with respect to an Account, shall mean an
Account as to which the required minimum payment set forth on the related
billing statement has not been received by the due date thereof.
"CORPORATE TRUST OFFICE" shall mean the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Agreement is located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"COUPON" shall have the meaning specified in Section 6.01.
"CREDIT CARD GUIDELINES" shall mean the written policies and procedures of
The Travelers Bank, The Travelers Bank USA or any other Account Owner, as the
case may be, relating to the operation of its consumer revolving lending
business, including, without limitation, the written policies and procedures for
determining the creditworthiness of credit card account customers, the extension
of credit to credit card account customers and relating to the maintenance of
credit card accounts and collection of receivables with respect thereto, as such
policies and procedures may be amended, modified, or otherwise changed from time
to time.
"DATE OF PROCESSING" shall mean, with respect to any transaction or receipt
of Collections, the Business Day such transaction or receipt of Collections is
first recorded on the Servicer's computer file of consumer revolving credit card
accounts (without regard to the effective date of such recordation).
"DEFAULTED AMOUNT" shall mean, with respect to any Monthly Period, an
amount (which shall not be less than zero) equal to (a) the amount of Principal
Receivables which became Defaulted Receivables in such Monthly Period, minus (b)
the amount of any Defaulted Receivables included in any Account the Receivables
of which the Transferor or
5
the Servicer became obligated to accept reassignment or assignment in accordance
with the terms of this Agreement during such Monthly Period; PROVIDED, HOWEVER,
that, if an Insolvency Event occurs with respect to the Transferor, the amount
of such Defaulted Receivables which are subject to reassignment to the
Transferor in accordance with the terms of this Agreement shall not be added to
the sum so subtracted and, if any of the events described in subsection 10.01(d)
occur with respect to the Servicer, the amount of such Defaulted Receivables
which are subject to reassignment or assignment to the Servicer in accordance
with the terms of this Agreement shall not be added to the sum so subtracted.
"DEFAULTED RECEIVABLES" shall mean, with respect to any Monthly Period, all
Principal Receivables which are charged off as uncollectible in such Monthly
Period in accordance with the Credit Card Guidelines and the Servicer's
customary and usual servicing procedures for servicing consumer revolving credit
card and other revolving credit account receivables comparable to the
Receivables. A Principal Receivable shall become a Defaulted Receivable on the
day on which such Principal Receivable is recorded as charged off on the
Servicer's computer master file of consumer revolving credit card accounts but,
in any event, shall be deemed a Defaulted Receivable no later than the day the
related Account becomes ____ days Contractually Delinquent unless the Obligor
cures such default by making a partial payment which satisfies the criteria for
curing delinquencies set forth in the applicable Credit Card Guidelines.
"DEFEASANCE" shall have the meaning specified in subsection 12.04(a).
"DEFEASED SERIES" shall have the meaning specified in subsection 12.04(a).
"DEFINITIVE CERTIFICATES" shall have the meaning specified in Section 6.10.
"DEFINITIVE EURO-CERTIFICATES" shall have the meaning specified in Section
6.13.
"DEPOSITARIES" shall mean the Person specified in the applicable
Supplement, in its capacity as depositary for the respective accounts of any
Clearing Agency or any Foreign Clearing Agencies.
"DEPOSITORY AGREEMENT" shall mean, if applicable with respect to any Series
or Class, the depository agreement among the Transferor, the Trustee and a
Clearing Agency, or as otherwise provided in the related Supplement.
"DETERMINATION DATE" shall mean, unless otherwise specified in the related
Supplement, with respect to any Distribution Date, the third Business Day
preceding such Distribution Date.
"DISCOUNT OPTION COLLECTIONS" shall have the meaning specified in Section
2.12. The aggregate amount of Discount Option Collections on any Date of
Processing occurring on or after each Discount Option Date shall equal the
product of (a) the amount of any Collections of Principal Receivables received
on such Date of Processing and (b) the Discount Percentage.
6
"DISCOUNT OPTION DATE" shall mean each date on which a Discount Percentage
designated by the Transferor pursuant to Section 2.12 takes effect.
"DISCOUNT PERCENTAGE" shall mean the percentages, if any, designated by the
Transferor pursuant to Section 2.12.
"DISTRIBUTION DATE" shall mean, unless otherwise defined in a Supplement
with respect to a Series, the fifteenth day of each calendar month or, if such
fifteenth day is not a Business Day, the next succeeding Business Day.
"DOLLARS", "$" or "U.S. $" shall mean United States Dollars.
"ELIGIBLE ACCOUNT" shall mean a consumer revolving credit card account
owned by The Travelers Bank or The Travelers Bank USA, in the case of the
Initial Accounts, or The Travelers Bank or The Travelers Bank USA or other
Account Owner, in the case of Additional Accounts, which accounts are identified
by The Travelers Bank or The Travelers Bank USA as of the Trust Cut-Off Date
with respect to an Initial Account or by The Travelers Bank, The Travelers Bank
USA or other Account Owner as of the related Addition Cut-Off Date with respect
to an Additional Account as having the following characteristics:
(a) is in existence and maintained by The Travelers Bank or The Travelers
Bank USA, in the case of the Initial Accounts, or The Travelers Bank, The
Travelers Bank USA or other Account Owner in the case of Additional Accounts;
(b) is payable in Dollars;
(c) except as provided below, has not been identified as an account the
credit card or cards with respect to which have been reported to the applicable
Account Owner as having been lost or stolen;
(d) the Obligor of which has provided, as his or her billing address, an
address located in the United States (or its territories or possessions or
military address);
(e) has an Obligor who has not been identified by the applicable Account
Owner as an employee of such Account Owner or any Affiliate thereof;
(f) except as provided below, does not have any Receivables which are
Defaulted Receivables; and
(g) except as provided below, does not have any Receivables which have been
identified by the applicable Account Owner or the relevant Obligor as having
been incurred as a result of fraudulent use of any related credit card.
Eligible Accounts may include Accounts, the Receivables of which have been
written off, or with respect to which the Servicer believes the related Obligor
is bankrupt, or as to which certain Receivables have been identified by the
Obligor as having been incurred
7
as a result of fraudulent use of any credit cards, or as to which any credit
cards have been reported to the Account Owner or the Servicer as lost or stolen,
in each case as of the Trust Cut-Off Date, with respect to the Initial Accounts,
and as of the related Addition Cut-Off Date, with respect to Additional
Accounts; provided that (a) the balance of all Receivables included in such
Accounts is reflected on the books and records of the Account Owner (and is
treated for purposes of this Agreement) as "zero," and (b) charging privileges
with respect to all such Accounts have been canceled in accordance with the
relevant Credit Card Guidelines.
"ELIGIBLE DEPOSIT ACCOUNT" shall mean either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), acting as a trustee for
funds deposited in such account, so long as any of the securities of such
depository institution shall have a credit rating from each Rating Agency in one
of its generic credit rating categories which signifies investment grade.
"ELIGIBLE INSTITUTION" shall mean a depository institution (which may be
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 of a
foreign bank) which depository institution at all times (a) has either (i) a
long-term unsecured debt rating of A1 or better by Moody's or (ii) a certificate
of deposit rating of P-1 by Moody's, (b) has either (i) a long-term unsecured
debt rating of AAA by Standard & Poor's or (ii) a certificate of deposit rating
of A-1+ by Standard & Poor's and (c) is a member of the FDIC. Notwithstanding
the previous sentence, any institution the appointment of which satisfies the
Rating Agency Condition shall be considered an Eligible Institution. If so
qualified, the Trustee or the Servicer may be considered an Eligible Institution
for the purposes of this definition.
"ELIGIBLE INVESTMENTS" shall mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies incorporated under the laws of the United States of America
or any state thereof (or domestic branches of foreign banks) and subject to
supervision and examination by federal or state banking or depository
institution authorities; PROVIDED, that at the time of the Trust's
investment or contractual commitment to invest therein, the short-term debt
rating of such depository institution or trust company shall be in the
highest investment category of each Rating Agency;
8
(c) commercial paper or other short-term obligations having, at the
time of the Trust's investment or contractual commitment to invest therein,
a rating from each Rating Agency in its highest investment category;
(d) notes or bankers' acceptances (having original maturities of no
more than 365 days) issued by any depository institution or trust company
referred to in (b) above;
(e) investments in money market funds rated in the highest investment
category by each Rating Agency or otherwise approved in writing by each
Rating Agency;
(f) time deposits, other than as referred to in clause (e) above, with
a Person the commercial paper of which has a credit rating from each Rating
Agency in its highest investment category; or
(g) any other investments approved in writing by each Rating Agency.
"ELIGIBLE RECEIVABLE" shall mean each Receivable:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance with all Requirements of Law
applicable to the institution which owned the Receivable at the time of its
creation, the failure to comply with which would have a material adverse
effect on Investor Certificateholders, and pursuant to a Cardholder
Agreement which complies in all material respects with all Requirements of
Law applicable to the Account Owner, the failure to comply with which would
have a material adverse effect on Investor Certificateholders;
(c) with respect to which all material consents, licenses, approvals
or authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained or given by the Account
Owner, in connection with the creation of such Receivable or the execution,
delivery and performance by the Account Owner of its obligations, if any,
under the related Cardholder Agreement have been duly obtained or given and
are in full force and effect as of such date of creation of such
Receivable;
(d) as to which, at the time of the transfer of such Receivable to the
Trust, the Transferor or the Trust will have good and marketable title
thereto, free and clear of all Liens (other than any Lien for municipal or
other local taxes if such taxes are not then due and payable or if the
Transferor is then contesting the validity thereof in good faith by
appropriate proceedings and has set aside on its books adequate reserves
with respect thereto);
9
(e) which has been the subject of either a valid transfer and
assignment from the Transferor to the Trust of all the Transferor's right,
title and interest therein or the grant of a first priority perfected
security interest therein (and in the proceeds thereof), effective until
the termination of the Trust;
(f) which at and after the time of transfer to the Trust is the legal,
valid and binding payment obligation of the Obligor thereon, legally
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);
(g) which constitutes either an "account" or a "general intangible"
under and as defined in Article 9 of the UCC;
(h) which, at the time of its transfer to the Trust, has not been
waived or modified except as permitted in accordance with the Credit Card
Guidelines and which waiver or modification is reflected in the Servicer's
computer file of revolving credit card accounts;
(i) which, at the time of its transfer to the Trust, is not subject to
any right of rescission, setoff, counterclaim or any other defense of the
Obligor (including the defense of usury), other than defenses arising out
of applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or equity) or as to which the
Servicer is required by Section 3.09 to make an adjustment;
(j) as to which, at the time of its transfer to the Trust, the Account
Owner has satisfied all its obligations required to be satisfied by such
time; and
(k) as to which, at the time of its transfer to the Trust, none of the
Transferor, the Servicer, The Travelers Bank, The Travelers Bank USA or any
other Account Owner, as the case may be, has taken any action which, or
failed to take any action the omission of which, would, at the time of its
transfer to the Trust, impair the rights of the Trust or the
Certificateholders therein.
"ELIGIBLE SERVICER" shall mean the Trustee, or if the Trustee is not acting
as Servicer, an entity which, at the time of its appointment as Servicer, (a) is
servicing a portfolio of revolving credit card accounts, (b) is legally
qualified and has the capacity to service the Accounts, (c) is qualified to use
the software that is then being used to service the
10
Accounts or obtains the right to use, or has its own software, which is adequate
to perform its duties under this Agreement, (d) has demonstrated the ability to
professionally and competently service a portfolio of similar accounts in
accordance with high standards of skill and care, and (e) has a net worth of at
least $50,000,000 as of the end of its most recent fiscal quarter.
"ENHANCEMENT AGREEMENT" shall mean any agreement, instrument or document
governing the terms of any Series Enhancement or pursuant to which any Series
Enhancement is issued or outstanding.
"ENHANCEMENT INVESTOR AMOUNT" shall have the meaning, if applicable with
respect to any Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EUROCLEAR OPERATOR" shall mean Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"EXCESS ALLOCATION SERIES" shall mean a Series that, pursuant to the
Supplement therefor, is entitled to receive certain excess Collections of
Finance Charge Receivables , as more specifically set forth in the Supplement.
"EXCESS FINANCE CHARGE COLLECTIONS" shall have the meaning specified in
subsection 4.04(b).
"EXCESS FUNDING ACCOUNT" shall have the meaning specified in Section 4.02.
"EXCESS FUNDING AMOUNT" shall mean the amount on deposit in the Excess
Funding Account.
"EXCESS SPREAD" with respect to each Series shall have the meaning
specified in the applicable Supplement.
"EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS" shall have the meaning
specified in subsection 4.04(c).
"EXCHANGE DATE" shall mean, with respect to any Series, any date that is
after the related Closing Date, in the case of Definitive Euro-Certificates in
registered form, or upon presentation of certification of non-United States
beneficial ownership (as described in Section 6.13), in the case of Definitive
Euro-Certificates in bearer form.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor.
"FINANCE CHARGE RECEIVABLES" shall mean all amounts billed to the Obligors
on any Account in respect of (i) Periodic Finance Charges, (ii) annual
membership fees and
11
annual service charges, (iii) Late Fees, (iv) Overlimit Fees, (v) Cash Advance
Fees and (vi) all other fees and charges with respect to the Accounts designated
by the Transferor to be included as Finance Charge Receivables. All Recoveries
will be treated as Collections of Finance Charge Receivables. Finance Charge
Receivables shall also include the interest portion of Participation Interests
as shall be determined pursuant to the applicable Participation Interest
Supplement or Supplement.
"FINANCE CHARGE SHORTFALL" shall have the meaning specified in subsection
4.04(b).
"FIRREA" shall mean the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
"FOREIGN CLEARING AGENCY" shall mean Cedel and the Euroclear Operator.
"GLOBAL CERTIFICATE" shall have the meaning specified in subsection
6.13(a).
"GOVERNMENTAL AUTHORITY" shall mean the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROUP" 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 RECEIVABLES" shall have the meaning specified in subsection
2.05(a).
"INITIAL ACCOUNT" shall mean each MasterCard-Registered Trademark- and
VISA-Registered Trademark-(1) account established pursuant to a Cardholder
Agreement between The Travelers Bank or The Travelers Bank USA and any Person,
and identified by account number and by the Receivable balance in a computer
file or microfiche list delivered to the Trustee by the Transferor on or prior
to the Initial Closing Date pursuant to Section 2.01.
"INITIAL CLOSING DATE" shall mean __________ __, 1997.
"INSOLVENCY EVENT" shall have the meaning specified in subsection
9.01(a)(i).
"INSURANCE PROCEEDS" shall mean any amounts recovered by the Servicer
pursuant to any credit insurance policies covering any Obligor with respect to
Receivables under such Obligor's Account.
"INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940, as
amended from time to time.
______________
(1) MasterCard and VISA are registered trademarks of MasterCard
International Incorporated and of VISA USA, Inc., respectively.
12
"INVESTOR AMOUNT" shall mean, with respect to any Series
and for any date, an amount equal to the Investor Amount specified in the
related Supplement.
"INVESTOR CERTIFICATEHOLDER" shall mean the Person in
whose name a Registered Certificate is registered in the Certificate Register
or the bearer of any Bearer Certificate (or the Global Certificate, as the
case may be) or Coupon.
"INVESTOR CERTIFICATES" shall mean any certificated or
uncertificated interest in the Trust designated as, or deemed to be, an
"Investor Certificate" in the related Supplement.
"LATE FEES" shall have the meaning specified in the
Cardholder Agreement applicable to each Account for late fees or similar
terms.
"LIEN" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect
as any of the foregoing and the filing of any financing statement under the
UCC (other than any such financing statement filed for informational purposes
only) or comparable law of any jurisdiction to evidence any of the foregoing,
excluding any lien or filing pursuant to this Agreement; PROVIDED, HOWEVER,
that any assignment or transfer pursuant to subsection 6.03(c) or (d) or
Section 7.02 shall not be deemed to constitute a Lien.
"MANAGER" shall mean the lead manager, manager or
co-manager or Person performing a similar function with respect to an
offering of Definitive Euro-Certificates.
"MASTERCARD" shall mean MasterCard International
Incorporated.
"MONTHLY PERIOD" shall mean, with respect to each
Distribution Date, unless otherwise provided in a Supplement, the period from
and including the first day of the preceding calendar month to and including
the last day of such calendar month; PROVIDED, HOWEVER, that the initial
Monthly Period with respect to any Series will commence on the Closing Date
with respect to such Series.
"MONTHLY SERVICING FEE" shall have the meaning specified
in Section 3.02.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc., or
its successor.
"NOTICES" shall have the meaning specified in subsection
13.05(a).
"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, but excluding any merchant.
"OFFICER'S CERTIFICATE" shall mean, unless otherwise
specified in this Agreement, a certificate delivered to the Trustee signed by
the Chairman of the Board,
13
President, any Vice President or the Treasurer of the Transferor or the
Servicer, as the case may be.
"OPINION OF COUNSEL" shall mean a written opinion of
counsel, who may be counsel for, or an employee of, the Person providing the
opinion and who shall be reasonably acceptable to the Trustee.
"OVERLIMIT FEES" shall have the meaning specified in the
Cardholder Agreement applicable to each Account for overlimit fees or similar
terms if such fees are provided for with respect to such Account.
"PARTICIPATION INTERESTS" shall have the meaning
specified in subsection 2.09(a)(ii).
"PARTICIPATION INTEREST SUPPLEMENT" shall mean a
Supplement entered into pursuant to subsections 2.09(a)(ii) and 13.01(a) in
connection with the conveyance of Participation Interests to the Trust.
"PARTICIPATING TRANSFEROR" shall have the meaning
specified in subsection 2.09(c)(i).
"PAYING AGENT" shall mean any paying agent and co-paying
agent appointed pursuant to Section 6.07 and shall initially be the Trustee;
PROVIDED, that if the Supplement for a Series so provides, a Paying Agent may
be appointed with respect to such Series.
"PAY OUT EVENT" shall mean, with respect to each Series,
a Trust Pay Out Event or a Series Pay Out Event.
"PERIODIC FINANCE CHARGES" shall have the meaning
specified in the Cardholder Agreement applicable to each Account for finance
charges (due to periodic rate) or any similar term.
"PERSON" shall mean any legal person, including any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other
entity of similar nature.
"PRINCIPAL RECEIVABLE" shall mean all amounts charged by
Obligors for merchandise and services and cash advances, but shall not
include Finance Charge Receivables or Defaulted Receivables. Principal
Receivables shall also include the principal portion of Participation
Interests as shall be determined pursuant to the applicable Participation
Interest Supplement or Supplement. In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal Receivables shall
be reduced by the aggregate amount of credit balances in the Accounts on such
day. Any Receivables which the related Transferor is unable to transfer as
provided in Section 2.10 shall not be included in calculating the aggregate
amount of Principal Receivables, except to the extent so provided in Section
2.10.
14
"PRINCIPAL SHARING SERIES" shall mean a Series that,
pursuant to the Supplement therefor, is entitled to receive Shared Principal
Collections.
"PRINCIPAL SHORTFALLS" shall have the meaning specified
in subsection 4.04(a).
"PRINCIPAL TERMS" shall mean, with respect to any Series,
(i) the name or designation; (ii) the Initial Investor Amount, the Series
Investor Amount and the Series Invested Amount (or method for calculating
such amounts); (iii) the Certificate Rate (or method for the determination
thereof); (iv) the payment date or dates and the date or dates from which
interest shall accrue; (v) the method for allocating Collections to
Certificateholders of such Series; (vi) the designation of any Series
Accounts and the terms governing the operation of any such Series Accounts;
(vii) the method of calculating the servicing fee with respect thereto;
(viii) the terms of any form of Series Enhancement with respect thereto; (ix)
the terms on which the Investor Certificates of such Series may be exchanged
for Investor Certificates of another Series, repurchased by the Transferor or
remarketed to other investors; (x) the Series Termination Date; (xi) the
number of Classes of Investor Certificates of such Series and, if such Series
consists of more than one Class, the rights and priorities of each such
Class; (xii) the extent to which the Investor Certificates of such Series
will be issuable in temporary or permanent global form (and, in such case,
the depositary for such Global Certificate or Certificates, the 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); (xiii)
whether the Investor Certificates of such Series may be issued as Bearer
Certificates and any limitations imposed thereon; (xiv) the priority of such
Series with respect to any other Series; (xv) the Group, if any, to which
such Series belongs; (xvi) whether or not such Series is a Principal Sharing
Series, whether such Series is an Excess Allocation Series, and whether such
Series is entitled to share Excess Transferor Finance Charge Collections and
Shared Transferor Principal Collections; and (xvii) any other terms of such
Series.
"RATING AGENCY" shall mean, with respect to any
outstanding Series or Class, each statistical rating agency selected by the
Transferor to rate the Investor Certificates of such Series or Class, as
specified in the related Supplement.
"RATING AGENCY CONDITION" shall mean, with respect to any
action, that each Rating Agency shall have notified the Transferor in writing
that such action will not result in a reduction or withdrawal of the rating
of any outstanding Series or Class with respect to which it is a Rating
Agency.
"REASSIGNMENT" shall have the meaning specified in
Section 2.09.
"RECEIVABLE" shall mean all amounts shown on the
Servicer's records as amounts payable by Obligors on any Account from time to
time, including amounts payable for Principal Receivables and Finance Charge
Receivables. Receivables which become Defaulted Receivables will cease to be
included as Receivables as of the day on which they become Defaulted
Receivables.
15
"RECEIVABLES TRANSFER AGREEMENTS" shall mean, (i) the
receivables transfer agreement between The Travelers Bank and the Transferor
and (ii) the receivables transfer agreement between The Travelers Bank USA
and the Transferor, each dated as of __________ __, 1997, and in each case as
amended from time to time in accordance with the terms thereof, and (iii) any
receivables transfer agreement, substantially in the form of such agreements
dated as of __________ __, 1997, entered into between the Transferor and an
Account Owner in the future; PROVIDED, that before the Transferor shall enter
into any additional receivables transfer agreement as described in (iii) of
this definition, (A) the Rating Agency Condition is satisfied with respect to
such receivables transfer agreement and (B) the Transferor shall have
delivered to the Trustee an Officer's Certificate to the effect that such
officer reasonably believes that the execution and delivery of such
receivables transfer agreement and the purchase of Receivables from the
Account Owner named therein will not have an Adverse Effect.
"RECORD DATE" shall mean, with respect to any
Distribution Date, the last Business Day of the preceding Monthly Period,
except as otherwise provided with respect to a Series in the related
Supplement.
"RECOVERIES" shall mean all amounts, including Insurance
Proceeds, received by the Servicer with respect to Receivables which have
previously become Defaulted Receivables, net of any out-of-pocket costs and
expenses of collection (including attorneys fees and expenses deducted
therefrom).
"REGISTERED CERTIFICATEHOLDER" shall mean the Holder of a
Registered Certificate.
"REGISTERED CERTIFICATES" shall have the meaning
specified in Section 6.01.
"REINVESTMENT EVENT" shall mean, with respect to any
Series, such event, if any, specified in the Supplement as a Reinvestment
Event with respect to such Series.
"REMOVAL CUT-OFF DATE" shall have the meaning specified
in subsection 2.10(b).
"REMOVAL DATE" shall have the meaning specified in
subsection 2.10(a).
"REMOVAL NOTICE DATE" shall have the meaning specified in
subsection 2.10(a).
"REMOVED ACCOUNTS" shall have the meaning specified in
Section 2.10.
"REQUIRED DESIGNATION DATE" shall have the meaning
specified in subsection 2.09(a).
"REQUIRED PRINCIPAL BALANCE" shall mean, as of any date of
determination, an amount equal to the difference between (a) the sum of the
Series Investor Amounts for each Series outstanding on such date, MINUS (b) the
Excess Funding Amount.
16
"REQUIRED TRANSFEROR AMOUNT" shall mean, with respect to
any date, an amount equal to (i) the product of the Required Transferor
Percentage and (ii)(a) the aggregate amount of Principal Receivables times
(b) one minus the Discount Percentage.
"REQUIRED TRANSFEROR PERCENTAGE" shall mean ____%;
PROVIDED, HOWEVER, that the Transferor may reduce the Required Transferor
Percentage upon (x) 30 days' prior notice to the Trustee and each Rating
Agency, (y) satisfaction of the Rating Agency Condition with respect thereto
and (z) delivery to the Trustee of a certificate of a Vice President or more
senior officer of each Transferor stating that such Transferor reasonably
believes that such reduction will not, based on the facts known to such
officer at the time of such certification, then or thereafter have an Adverse
Effect; PROVIDED FURTHER, that the Required Transferor Percentage shall not
at any time be less than 2%.
"REQUIREMENTS OF LAW" with respect to any Person shall
mean the certificate of incorporation or articles of association and by-laws
or other organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether Federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System).
"RESPONSIBLE OFFICER" shall mean any officer within the
Corporate Trust Office (or any successor group of the Trustee) including any
Vice President, any Assistant Secretary, any Assistant Treasurer, or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"REVOLVING CREDIT AGREEMENT" shall mean the revolving
credit agreement dated as of __________ ____, ____, between the Transferor
and Commercial Credit Company.
"REVOLVING PERIOD" shall mean, with respect to any
Series, the period specified as such in the related Supplement.
"RTC" shall mean the Resolution Trust Corporation or any
successor.
"RULE 144A" shall mean Rule 144A under the Act, as such
Rule may be amended from time to time.
"SERIES" shall mean any series of Investor Certificates
established pursuant to a Supplement.
"SERIES ACCOUNT" shall mean any deposit, trust, escrow or
similar account maintained for the benefit of any Series or Class, as
specified in any Supplement.
17
"SERIES ENHANCEMENT" shall mean the rights and benefits
provided to the Investor Certificateholders of any Series or Class pursuant
to any letter of credit, surety bond, cash collateral account, cash
collateral guaranty, spread account, guaranteed rate agreement, maturity
liquidity facility, tax protection agreement, interest rate swap agreement,
interest rate cap agreement or other similar arrangement. The subordination
of any Series or Class to another Series or Class shall be deemed to be a
Series Enhancement.
"SERIES ENHANCER" shall mean the Person or Persons
providing any Series Enhancement, other than the Investor Certificateholders
of any Series or Class which is subordinated to another Series or Class.
"SERIES INVESTED AMOUNT" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"SERIES INVESTOR AMOUNT" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"SERIES PAY OUT EVENT" shall mean, with respect to any
Series, each event, if any, specified in the Supplement as a Series Pay Out
Event with respect to such Series.
"SERIES PERCENTAGE" shall have, with respect to Principal
Receivables, Finance Charge Receivables and Defaulted Receivables, and any
Series of Certificates, the meaning stated in the related Supplement.
"SERIES TERMINATION DATE" shall mean, with respect to any
Series, the termination date for such Series specified in the related
Supplement.
"SERVICER" shall mean initially The Travelers Bank and
its permitted successors and assigns, in its capacity as Servicer pursuant to
this Agreement, and thereafter any Person appointed Successor Servicer as
herein provided.
"SERVICER DEFAULT" shall have the meaning specified in
Section 10.01.
"SERVICING FEE" shall have the meaning specified in
Section 3.02.
"SERVICING FEE RATE" shall mean, with respect to any
Series, the servicing fee rate specified in the related Supplement.
"SERVICING OFFICER" shall mean any officer of the
Servicer, or any attorney-in-fact 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 PRINCIPAL COLLECTIONS" shall have the meaning
specified in subsection 4.04(d).
18
"SHARED TRANSFEROR PRINCIPAL COLLECTIONS" shall have the
meaning specified in Section 4.04(d).
"STANDARD & POOR'S" shall mean Standard & Poor's
Corporation or its successor.
"SUCCESSOR SERVICER" shall have the meaning specified in
subsection 10.02(a).
"SUPPLEMENT" shall mean, with respect to any Series, a
Supplement to this Agreement, executed and delivered in connection with the
original issuance of the Investor Certificates of such Series pursuant to
Section 6.03, and all amendments thereof and supplements thereto.
"SUPPLEMENTAL CERTIFICATE" shall have the meaning
specified in subsection 6.03(c).
"TAX OPINION" shall mean, with respect to any action, an
Opinion of Counsel to the effect that, (a) for Federal income tax purposes,
such action will not adversely affect the tax characterization as debt of the
Investor Certificates of any outstanding Series or Class that were
characterized as debt at the time of their issuance, (b) such action will not
cause the Trust to be deemed to be an association (or publicly traded
partnership) taxable as a corporation and (c) such action will not cause or
constitute an event in which gain or loss would be recognized by any Investor
Certificateholder or the Trust.
"TERMINATION NOTICE" shall have the meaning specified in
Section 10.01.
"TRANSFER AGENT AND REGISTRAR" shall have the meaning
specified in Section 6.04.
"TRANSFER DATE" shall mean the Business Day immediately
preceding each Distribution Date.
"TRANSFER RESTRICTION EVENT" shall have the meaning
specified in Section 2.10.
"TRANSFEROR" shall mean (a) CC Credit Card Corporation, a
wholly-owned special purpose subsidiary of Commercial Credit Company and
incorporated in the state of Delaware, or its successor under this Agreement
and (b) any Additional Transferor or Transferors. References to "each
Transferor" shall refer to each entity mentioned in the preceding sentence
and references to "the Transferor" shall refer to all such entities.
"TRANSFEROR AMOUNT" shall mean, on any date of
determination, an amount equal to the difference between (i) the sum of (a)
an amount equal to the product of (x) the aggregate amount of Principal
Receivables at the end of the day immediately prior to such date of
determination times (y) one minus the Discount Percentage, PLUS (b) the
Excess Funding Amount at the end of the day immediately prior to such date of
determination, MINUS (ii) the sum of the Series Invested Amounts for each
Series outstanding on such date at the end of such day.
19
"TRANSFEROR CERTIFICATE" shall mean the certificate
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A, as the same may be modified in
accordance with subsection 2.09(e).
"TRANSFEROR CERTIFICATES" shall mean, collectively, the
Transferor Certificate and any outstanding Supplemental Certificates.
"TRANSFEROR PERCENTAGE" shall mean, on any date of
determination, when used with respect to Principal Receivables, Finance
Charge Receivables and Defaulted Receivables, a percentage equal to 100%
MINUS the Aggregate Series Percentage with respect to such categories of
Receivables.
"TRANSFEROR'S INTEREST" shall have the meaning specified
in Section 4.01.
"TRANSFERRED ACCOUNT" shall have the meaning set forth in
the definition of "Account."
"THE TRAVELERS BANK" shall mean The Travelers Bank, a
Delaware state-chartered banking corporation, and its successors and assigns.
"THE TRAVELERS BANK USA" shall mean The Travelers Bank
USA, a Delaware state-chartered bank corporation, and its successors and
assigns.
"TRUST" shall mean the Travelers Bank Credit Card Master
Trust I created by this Agreement.
"TRUST ASSETS" shall have the meaning specified in
Section 2.01.
"TRUST CUT-OFF DATE" shall mean __________ __, 1997.
"TRUSTEE" shall mean The Bank of New York, in its
capacity as trustee on behalf of the Trust, or its successor in interest, or
any successor trustee appointed as herein provided.
"TRUST PAY OUT EVENT" shall mean each event specified in
subsection 9.01(a).
"UCC" shall mean the Uniform Commercial Code, as amended
from time to time, as in effect in the State of Delaware or any other state
or states where the filing of a financing statement is required to perfect
the Trust's interest in the Receivables and the proceeds thereof or in any
other specified jurisdiction.
"UNITED STATES" shall mean the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
20
"VICE PRESIDENT" when used with respect to the Transferor
or the Servicer shall mean any vice president thereof whether or not
designated by a number or word or words added before or after the title "vice
president."
"VISA" shall mean VISA USA, Inc.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) With respect to any Series, all terms used herein and
not otherwise defined herein shall have meanings ascribed to them in the
related Supplement.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document,
and accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles or regulatory accounting principles, as applicable. To the extent
that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles or regulatory accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The agreements, representations and warranties of CC
Credit Card Corporation and The Travelers Bank in this Agreement in each of
their respective capacities as Transferor and as Servicer, shall be deemed to
be the agreements, representations and warranties of CC Credit Card
Corporation and The Travelers Bank solely in each such capacity for so long
as CC Credit Card Corporation and The Travelers Bank act in each such
capacity under this Agreement.
(e) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified;
and the term "including" means "including without limitation."
(f) Unless otherwise specifically provided herein, the
failure of this Agreement to specify the meaning of a term or the
applicability of a provision to any Series shall not preclude the meaning of
such term or the applicability of such provision with respect to such Series
being set forth in the Supplement therefor.
[END OF ARTICLE I]
21
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. CONVEYANCE OF RECEIVABLES. By execution
of this Agreement, CC Credit Card Corporation as Transferor, does hereby
sell, transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, for the benefit of the Certificateholders, all its
right, title and interest in, to and under the Receivables existing at the
close of business on the Initial Closing Date, in the case of Receivables
arising in the Initial Accounts, and on each Addition Date, in the case of
Receivables arising in the Additional Accounts, and in each case thereafter
created from time to time until the termination of the Trust, all Recoveries
allocable to the Trust as provided herein, all monies due or to become due
and all amounts received with respect thereto and all proceeds (including
"proceeds" as defined in the UCC) thereof. Such property, together with all
monies on deposit in the Collection Account, the Excess Funding Account, the
Series Accounts and any Series Enhancement shall constitute the assets of the
Trust (the "Trust Assets"). The foregoing does not constitute and is not
intended to result in the creation or assumption by the Trust, the Trustee,
any Investor Certificateholder or any Series Enhancer of any obligation of
The Travelers Bank, The Travelers Bank USA or other Account Owner, or the
Servicer, the Transferor, any Additional Transferor or any other Person in
connection with the Accounts or the Receivables or under any agreement or
instrument relating thereto, including any obligation to Obligors, merchant
banks, merchant clearance systems, VISA, MasterCard or insurers. The
foregoing sale, transfer, assignment, set over and conveyance to the Trust
shall be made to the Trustee, on behalf of the Trust, and each reference in
this Agreement to such sale, transfer, assignment set over and conveyance
shall be construed accordingly.
The Transferor agrees to record and file, at its own
expense, financing statements (and continuation statements when applicable)
with respect to the Receivables now existing and hereafter created meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain the perfection of,
the sale and assignment of the Receivables to the Trust, and to deliver a
file stamped copy of each such financing statement or other evidence of such
filing (which may, for purposes of this Section 2.01, consist of telephone
confirmation of such filing) to the Trustee on or prior to the Initial
Closing Date, in the case of Receivables arising in the Initial Accounts, and
(if any additional filing is so necessary) the applicable Addition Date, in
the case of Receivables arising in Additional Accounts. The Trustee shall be
under no obligation whatsoever to file such financing or continuation
statements or to make any other filing under the UCC in connection with such
sale and assignment.
The Transferor further agrees, at its own expense, (a) on
or prior to (x) the Initial Closing Date, in the case of the Initial
Accounts, (y) the applicable Addition Date, in the case of Additional
Accounts, and (z) the applicable Removal Date, in the case of Removed
Accounts, to indicate in the appropriate computer files that Receivables
created in connection with the Accounts (other than Removed Accounts) have
been conveyed to the Trust pursuant to this Agreement for the benefit of the
Certificateholders (or conveyed to the
22
Transferor or its designee in the case of Removed Accounts) by including (or
deleting in the case of Removed Accounts) in such computer files the code "___,"
(or any other code specified in an Assignment) in the __________ field of such
computer files, and (b) on or prior to the Initial Closing Date, each Addition
Date and each Removal Date, as applicable, to deliver to the Trustee a computer
file or microfiche list containing a true and complete list of all such Accounts
specifying for each such Account, as of the Trust Cut-Off Date, in the case of
the Initial Accounts, the applicable Addition Cut-Off Date, in the case of
Additional Accounts, and the applicable Removal Cut-Off Date, in the case of
Removed Accounts, its account number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables outstanding in such
Account. Such file or list, as supplemented from time to time to reflect
Additional Accounts and Removed Accounts, shall be marked as Schedule 1 to this
Agreement and is hereby incorporated into and made a part of this Agreement.
The Transferor agrees not to alter the code or field referenced in clause (a)
above with respect to any Account during the term of this Agreement unless and
until such Accounts become Removed Accounts or unless and until (i) the
Transferor shall give written notice of any such alteration to the Trustee, such
written notice to be as of the date of its receipt by the Trustee incorporated
into and made part of this Agreement, and (ii) the Trustee and the Transferor
shall execute and file any UCC financing statement or amendment thereof
necessitated by such alteration.
Section 2.02. ACCEPTANCE BY TRUSTEE.
(a) The Trustee hereby acknowledges its acceptance on
behalf of the Trust of all right, title and interest to the property, now
existing and hereafter created, conveyed to the Trust pursuant to Section
2.01 and declares that it shall maintain such right, title and interest, upon
the trust herein set forth, 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 or microfiche list relating to the Initial Accounts
described in the last paragraph of Section 2.01.
(b) The Trustee hereby agrees not to disclose to any
Person (or to any other department or operating division of the Trustee,
other than the corporate trust department of the Trustee or, if the Trustee
shall be appointed the Successor Servicer, such other departments or
operating divisions of the Trustee as shall be necessary to fulfill its
duties as Servicer), any of the account numbers or other information
contained in the computer files or microfiche lists marked as Schedule 1 or
otherwise delivered to the Trustee from time to time, except (i) to a
Successor Servicer or as required by a Requirement of Law applicable to the
Trustee, (ii) in connection with the performance of the Trustee's duties
hereunder, (iii) in enforcing the rights of Certificateholders, (iv) to bona
fide creditors or potential creditors of any Account Owner, the Servicer or
any Transferor for the limited purpose of enabling any such creditor to
identify Receivables or Accounts subject to this Agreement or the Receivables
Transfer Agreements or (v) after consultation with the Transferor, as
requested by any Person in connection with the financing statements filed
pursuant to this Agreement. The Trustee also agrees not to use any of the
foregoing information for any purpose other than for the purposes provided
for in this Agreement. The Trustee agrees to take such measures as shall be
reasonably requested by the Transferor to protect and maintain the security
and confidentiality of such information and, in connection therewith, will
allow the
23
Transferor to inspect the Trustee's security and confidentiality arrangements
from time to time during normal business hours. The Trustee shall provide the
Transferor with notice five Business Days prior to any disclosure pursuant to
this subsection 2.02(b).
(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 or any Supplement.
Section 2.03. REPRESENTATIONS AND WARRANTIES OF EACH
TRANSFEROR RELATING TO SUCH TRANSFEROR. Each Transferor hereby represents
and warrants to the Trust as of each Closing Date (but only if it was a
Transferor on such date) that:
(a) ORGANIZATION AND GOOD STANDING. Such Transferor is a
corporation duly organized and validly existing in good standing under the
laws of the jurisdiction of its organization or incorporation, and has in all
material respects, full corporate 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 Receivables Transfer Agreement to which
it is a party and each applicable Supplement and to execute and deliver to
the Trustee the Certificates pursuant hereto.
(b) DUE QUALIFICATION. Such Transferor is duly qualified
to do business and is in good standing as a foreign corporation (or is exempt
from such requirements), and has obtained all necessary licenses and
approvals, in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would (i) render any Cardholder Agreement
relating to an Account specified in a Receivables Transfer Agreement with
such Transferor or any Receivable transferred to the Trust by such Transferor
unenforceable by such Transferor, the Servicer or the Trustee or (ii) would
have a material adverse effect on the interests of the Certificateholders
hereunder or under any Supplement; PROVIDED, HOWEVER, that no representation
or warranty is made with respect to any qualification, licenses or approvals
which the Trustee has or may be required at any time to obtain, if any, in
connection with the transactions contemplated hereby.
(c) DUE AUTHORIZATION. The execution, delivery and
performance of this Agreement, each Receivables Transfer Agreement to which
it is a party and each Supplement by such Transferor and the execution and
delivery to the Trustee of the Certificates and the consummation by such
Transferor of the transactions provided for in this Agreement, each
Receivables Transfer Agreement to which it is a party and each Supplement
have been duly authorized by such Transferor by all necessary corporate
action on the part of such Transferor and this Agreement, each Receivables
Transfer Agreement to which it is a party and each Supplement will remain,
from the time of its execution, an official record of such Transferor.
(d) NO CONFLICT. The execution and delivery by such
Transferor of this Agreement, each Receivables Transfer Agreement to which it
is a party, each Supplement and the Certificates, the performance by such
Transferor of the transactions contemplated by this Agreement, each
Receivables Transfer Agreement to which it is a party and each
24
Supplement and the fulfillment by such Transferor of the terms hereof and
thereof applicable to such Transferor will not conflict with or violate any
Requirement of Law applicable to such Transferor or conflict with, result in any
breach of any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which such Transferor is a party or by which it or any of its properties are
bound.
(e) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the best knowledge of such Transferor,
threatened against such Transferor, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of this Agreement, any Receivables Transfer
Agreement to which it is a party, 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 Receivables
Transfer Agreement to which it is a party, any Supplement or the
Certificates, (iii) seeking any determination or ruling that, in the
reasonable judgment of such Transferor, would materially and adversely affect
the performance by such Transferor of its obligations under this Agreement,
any Receivables Transfer Agreement to which it is a party, or any Supplement,
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement, any Receivables
Transfer Agreement to which it is a party, any Supplement or the Certificates
or (v) seeking to affect adversely the income tax attributes of the Trust
under the United States Federal or any State income or franchise tax systems.
(f) ALL CONSENTS REQUIRED. All approvals,
authorizations, consents, orders or other actions of any Person or of any
governmental body or official required to be obtained, effected or given by
such Transferor in connection with the execution and delivery by such
Transferor of this Agreement, any Receivables Transfer Agreement to which it
is a party, each Supplement and the Certificates, the performance by such
Transferor of the transactions contemplated by this Agreement, each
Receivables Transfer Agreement to which it is a party and each Supplement and
the fulfillment by such Transferor of the terms hereof and thereof, have been
duly obtained, effected or given and are in full force and effect; PROVIDED,
HOWEVER, that such Transferor makes no representation or warranty regarding
state securities or "blue sky" laws in connection with the distribution of
the Certificates.
(g) INSOLVENCY. No Insolvency Event with respect to such
Transferor has occurred and the transfer of the Receivables by such
Transferor to the Trust has not been made in contemplation of the occurrence
thereof.
The representations and warranties of each Transferor set
forth in this Section 2.03 shall survive the transfer and assignment by such
Transferor of the respective Receivables to the Trust. Upon discovery by
such Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties by such Transferor set forth in this Section
2.03, the party discovering such breach shall give prompt written notice to
the others. Such Transferor agrees to cooperate with the Servicer and the
Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this
25
Section 2.03, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the relevant Closing Date.
Section 2.04. REPRESENTATIONS AND WARRANTIES OF EACH
TRANSFEROR RELATING TO THE AGREEMENT, THE RECEIVABLES TRANSFER AGREEMENTS AND
ANY SUPPLEMENT AND THE RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. Each Transferor hereby
represents and warrants to the Trust as of each Closing Date and, with respect
to Additional Accounts the Receivables in which are being transferred by such
Transferor to the Trust, as of the related Addition Date (but only if, in either
case, it was a Transferor on such date) that:
(i) this Agreement, any Receivables Transfer
Agreement to which it is a party, each Supplement and, in
the case of Additional Accounts, the related Assignment,
each constitutes a legal, valid and binding obligation of
such Transferor enforceable against such Transferor in
accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors'
rights generally from time to time in effect or general
principles of equity (whether considered in a suit at law
or in equity);
(ii) as of the Initial Closing Date and as of the
related Addition Date with respect to Additional Accounts,
the portion of Schedule 1 to this Agreement under such
Transferor's name, as supplemented on such date, is an
accurate and complete listing in all material respects of
all the Accounts the Receivables in which were transferred
by such Transferor as of the Trust Cut-Off Date or such
Addition Cut-Off Date, as the case may be, and the
information contained therein with respect to the identity
of such Accounts and the Receivables existing thereunder is
true and correct in all material respects as of the Trust
Cut-Off Date or such Addition Cut-Off Date, as the case may
be;
(iii) each Receivable conveyed to the Trust by
such Transferor has been conveyed to the Trust free and
clear of any Lien of any Person claiming through or under
such Transferor or any of its Affiliates (other than Liens
permitted under subsection 2.07(b)) and in compliance, in
all material respects, with all Requirements of Law
applicable to such Transferor;
(iv) all authorizations, consents, orders or
approvals of or registrations or declarations with any
Governmental Authority required to be obtained, effected or
given by such Transferor in connection with the conveyance
by such Transferor of Receivables to the Trust have been
duly obtained, effected or given and are in full force and
effect;
(v) either this Agreement or, in the case of
Additional Accounts, the related Assignment constitutes a
valid sale, transfer and
26
assignment to the Trust of all right, title and interest of
such Transferor in the Receivables conveyed to the Trust by
such Transferor and the proceeds thereof or, if this
Agreement or, in the case of Additional Accounts, the
related Assignment does not constitute a sale of such
property, it constitutes a grant of a "security interest"
(as defined in the UCC) in such property to the Trust,
which, in the case of existing Receivables and the proceeds
thereof, is enforceable upon execution and delivery of this
Agreement or, with respect to then-existing Receivables in
Additional Accounts, as of the applicable Addition Date,
and which will be enforceable with respect to such
Receivables hereafter and thereafter created and the
proceeds thereof upon such creation. Upon the filing of the
financing statements pursuant to Sections 2.01 and 2.09
and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trust
shall have a first priority perfected security or ownership
interest in such property and proceeds except for (x) Liens
permitted under subsection 2.07(b), (y) the interests of
the Transferor as Holder of the Transferor Certificate or
any Supplemental Certificate, and (z) the Transferor's
right, if any, to interest accruing on and investment
earnings, if any, in respect of the Collection Account or
any Series Account, as provided in this Agreement or the
related Supplement; PROVIDED, HOWEVER, that such Transferor
makes no representation or warranty with respect to the
effect of Section 9-306 of the UCC on the rights of the
Trustee to proceeds held by such Transferor;
(vi) except as otherwise expressly provided in
this Agreement or any Supplement, neither such Transferor
nor any Person claiming through or under such Transferor
has any claim to or interest in the Collection Account, the
Excess Funding Account, any Series Account or any Series
Enhancement;
(vii) on the Trust Cut-Off Date, each Initial
Account specified in Schedule 1 with respect to such
Transferor is an Eligible Account and, on the applicable
Addition Cut-Off Date, each related Additional Account
specified in Schedule 1 with respect to such Transferor
is an Eligible Account;
(viii) on the Trust Cut-Off Date, each Receivable
then existing and conveyed to the Trust by such Transferor
is an Eligible Receivable and, on the applicable Addition
Cut-Off Date, each Receivable contained in any related
Additional Account and conveyed to the Trust by such
Transferor is an Eligible Receivable;
(ix) as of the date of the creation of any new
Receivable in an Account specified in a Receivables
Transfer Agreement with such Transferor, such Receivable
is an Eligible Receivable; and
(x) no selection procedures believed by such
Transferor to be materially adverse to the interests of
the Investor Certificateholders have been used in selecting
the Initial Accounts or Additional Accounts.
27
(b) NOTICE OF BREACH. The representations and warranties
of each Transferor set forth in this Section 2.04 shall survive the transfer
and assignment by such Transferor of Receivables to the Trust. Upon
discovery by such Transferor, the Servicer or the Trustee of a breach of any
of the representations and warranties by such Transferor set forth in this
Section 2.04, the party discovering such breach shall give prompt written
notice to the others. Such Transferor agrees to cooperate with the Servicer
and the Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this Section 2.04, each reference
to a Supplement shall be deemed to refer only to those Supplements in effect
as of the date of the relevant representations or warranties.
Section 2.05. REASSIGNMENT OF INELIGIBLE RECEIVABLES.
(a) REASSIGNMENT OF RECEIVABLES. In the event (i) any
representation or warranty contained in subsection 2.04(a)(ii), (iii), (iv),
(vii), (viii), (ix) or (x) is not true and correct in any material respect as
of the date specified therein with respect to any Receivable or the related
Account transferred to the Trust by such Transferor and as a result of such
breach any Receivables in the related Account become Defaulted Receivables or
the Trust's rights in, to or under such Receivables or the proceeds of such
Receivables are impaired or such proceeds are not available for any reason to
the Trust free and clear of any Lien, unless cured within 60 days (or such
longer period, not in excess of 150 days, as may be agreed to by the Trustee)
after the earlier to occur of the discovery thereof by such Transferor or
receipt by such Transferor of notice thereof given by the Trustee, or (ii) it
is so provided in subsection 2.07(a) with respect to any Receivables
transferred to the Trust by such Transferor, then such Transferor shall
accept reassignment of all Receivables in the related Account ("Ineligible
Receivables") on the terms and conditions set forth in paragraph (b) below;
PROVIDED, HOWEVER, that such Receivables will not be deemed to be Ineligible
Receivables and will not be reassigned to such Transferor if, on any day
prior to the end of such 60-day or longer period, (x) either (A) in the case
of an event described in clause (i) above the relevant representation and
warranty shall be true and correct in all material respects as if made on
such day or (B) in the case of an event described in clause (ii) above the
circumstances causing such Receivable to become an Ineligible Receivable
shall no longer exist and (y) such Transferor shall have delivered to the
Trustee an Officer's Certificate describing the nature of such breach and the
manner in which the relevant representation and warranty became true and
correct.
(b) PRICE OF REASSIGNMENT. The Servicer shall deduct the
portion of the Ineligible Receivables reassigned to each Transferor which are
Principal Receivables from the aggregate amount of Principal Receivables used
to calculate the Transferor Amount, the Series Percentages and any other
percentage used to allocate within or among Series that is applicable to any
Series. In the event that, following the exclusion of such Principal
Receivables from the calculation of the Transferor Amount, the Transferor
Amount would be less than the Required Transferor Amount, not later than
12:00 noon, New York City time, on the first Distribution Date following the
Monthly Period in which such reassignment obligation arises, the relevant
Transferor shall make a deposit into the Excess Funding Account in
immediately available funds in an amount equal to the amount by which the
Transferor Amount would be reduced below the Required Transferor Amount (up
to the amount of such Principal Receivables).
28
Upon the deposit, if any, required to be made to the
Excess Funding Account as provided in this Section and the reassignment of
Ineligible Receivables, the Trustee, on behalf of the Trust, shall
automatically and without further action be deemed to sell, transfer, assign,
set over and otherwise convey to the relevant Transferor or its designee,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to such Ineligible Receivables, all monies due
or to become due and all amounts received 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 relevant Transferor to effect the conveyance of Ineligible
Receivables pursuant to this Section. The obligation of each Transferor to
accept reassignment of any Ineligible Receivables, and to make the deposits,
if any, required to be made to the Excess Funding Account as provided in this
Section, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Certificateholders (or the Trustee on behalf of
the Certificateholders).
Section 2.06. REASSIGNMENT OF RECEIVABLES IN TRUST
PORTFOLIO. In the event any representation or warranty of a Transferor set
forth in subsection 2.03(a) or (c) or subsection 2.04(a)(i), (v) or (vi) is
not true and correct in any material respect and such breach has a material
adverse effect on the Certificateholders' Interest in the Receivables
transferred to the Trust by such Transferor, then either the Trustee or the
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount, by notice then given to such Transferor and the Servicer
(and to the Trustee if given by the Investor Certificateholders), may direct
such Transferor to accept a reassignment of the Receivables transferred to
the Trust by such Transferor if such breach and any material adverse effect
caused by such breach is not cured within 60 days of such notice (or within
such longer period, not in excess of 150 days, as may be specified in such
notice), and upon those conditions such Transferor shall be obligated to
accept such reassignment on the terms set forth below; PROVIDED, HOWEVER,
that such Receivables will not be reassigned to such Transferor if, on any
day prior to the end of such 60-day or longer period (i) the relevant
representation and warranty shall be true and correct in all material
respects as if made on such day and (ii) such Transferor shall have delivered
to the Trustee a certificate of an authorized officer describing the nature
of such breach and the manner in which the relevant representation and
warranty became true and correct.
The relevant Transferor shall deposit in the Collection
Account in immediately available funds not later than 12:00 noon, New York
City time, on the first Distribution Date following the Monthly Period in
which such reassignment obligation arises, in payment for such reassignment,
an amount equal to the sum of the amounts specified therefor with respect to
each outstanding Series in the related Supplement. Notwithstanding anything
to the contrary in this Agreement, such amounts shall be distributed on such
Distribution Date in accordance with Article IV and the terms of each
Supplement.
Upon the deposit, if any, required to be made to the
Collection Account as provided in this Section and the reassignment of the
Receivables, the Trustee, on behalf of the Trust, shall automatically and
without further action be deemed to sell, transfer, assign, set over and
otherwise convey to the relevant Transferor or its designee, without
recourse, representation or warranty, all the right, title and interest of
the Trust in and to such
29
Receivables, all monies due or to become due and all amounts received 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 relevant Transferor to effect
the conveyance of such Receivables pursuant to this Section. The obligation
of each Transferor to accept reassignment of any Receivables, and to make the
deposits, if any, required to be made to the Collection Account as provided
in this section, shall constitute the sole remedy respecting the event giving
rise to such obligation available to Certificateholders (or the Trustee on
behalf of the Certificateholders) or any Series Enhancer.
Section 2.07. COVENANTS OF THE TRANSFEROR. Each
Transferor hereby covenants as follows:
(a) RECEIVABLES TO BE ACCOUNTS OR GENERAL INTANGIBLES.
Except in connection with the enforcement or collection of a Receivable, such
Transferor will take no action to cause any Receivable transferred by it to
the Trust to be evidenced by any instrument or chattel paper (as defined in
the UCC) and, if any such Receivable is so evidenced, it shall be deemed to
be an Ineligible Receivable in accordance with subsection 2.05(a) and shall
be reassigned to such Transferor in accordance with subsection 2.05(b);
PROVIDED, HOWEVER, that Receivables evidenced by notes taken from Obligors in
the ordinary course of business of the Servicer's collection efforts shall
not be deemed Ineligible Receivables solely as a result thereof.
(b) SECURITY INTERESTS. Except for the conveyances
hereunder, such Transferor will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Receivable transferred by it to the Trust, whether now existing or
hereafter created, or any interest therein; such Transferor will immediately
notify the Trustee of the existence of any Lien on any such Receivable; and
such Transferor shall defend the right, title and interest of the Trust in,
to and under such Receivables, whether now existing or hereafter created,
against all claims of third parties claiming through or under such
Transferor; PROVIDED, HOWEVER, that nothing in this subsection 2.07(b) shall
prevent or be deemed to prohibit such Transferor from suffering to exist upon
any of the Receivables transferred by it to the Trust any Liens for municipal
or other local taxes if such taxes shall not at the time be due and payable
or if such Transferor shall currently be contesting the validity thereof in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto.
(c) TRANSFEROR'S INTEREST. Except for the conveyances
hereunder, in connection with any transaction permitted by Section 7.02 and
as provided in Sections 2.09(e) and 6.03, such Transferor agrees not to
transfer, assign, exchange or otherwise convey or pledge, hypothecate or
otherwise grant a security interest in the Transferor's Interest represented
by the Transferor Certificate or any Supplemental Certificate and any such
attempted transfer, assignment, exchange, conveyance, pledge, hypothecation
or grant shall be void.
(d) DELIVERY OF COLLECTIONS. In the event that such
Transferor receives Collections, such Transferor agrees to pay the Servicer
all such Collections as soon as
30
practicable after receipt thereof but in no event later than two Business
Days after the Date of Processing by the Transferor.
(e) NOTICE OF LIENS. Such Transferor shall notify the
Trustee promptly after becoming aware of any Lien on any Receivable other
than the conveyances hereunder and under the Receivables Transfer Agreements
or Liens permitted under subsection 2.07(b).
(f) AMENDMENT OF THE CERTIFICATE OF INCORPORATION. Such
Transferor will not amend in any material respect its Certificate of
Incorporation without providing the Rating Agency with notice no later than
the fifth Business Day prior to such amendment (unless the right to such
notice is waived by the Rating Agency) and satisfying the Rating Agency
Condition.
(g) OTHER INDEBTEDNESS. Such Transferor shall not incur
any additional debt, unless (i) such debt is incurred pursuant to the
Revolving Credit Agreement or (ii) the Rating Agency is provided with notice
no later than the fifth Business Day prior to the incurrence of such
additional debt (unless the right to such notice is waived by the Rating
Agency) and the Rating Agency Condition is satisfied with respect to the
incurrence of such debt.
(h) SEPARATE CORPORATE EXISTENCE. Such Transferor shall:
(i) Maintain in full effect its existence, rights
and franchises as a corporation under the laws of the state
of its incorporation and will obtain and preserve its
qualification to do business in each jurisdiction in which
such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement and any
Receivables Transfer Agreement to which it is a party and
each other instrument or agreement necessary or appropriate
to proper administration hereof and permit and effectuate
the transactions contemplated hereby.
(ii) Maintain its own deposit account or
accounts, separate from those of any Affiliate of such
Transferor, with commercial banking institutions. The
funds of such Transferor will not be diverted to any other
Person or for other than the corporate use of such
Transferor, and, except as may be expressly permitted by
this Agreement or any Receivables Transfer Agreement to
which it is a party, the funds of such Transferor shall not
be commingled with those of any Affiliate of such
Transferor.
(iii) Ensure that, to the extent that it shares
the same officers or other employees as any of its
stockholders or Affiliates, the salaries of and the
expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of
the salary and benefit costs associated with all such
common officers and employees.
(iv) Ensure that, to the extent that it jointly
contracts with any of its stockholders or Affiliates to do
business with vendors or service
31
providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities,
and each such entity shall bear its fair share of such
costs. To the extent that such Transferor contracts or
does business with vendors or service providers where the
goods and services provided are partially for the benefit
of any other Person, the costs incurred in so doing shall be
fairly allocated to or among such entities for whose
benefit the goods and services are provided, and each such
entity shall bear its fair share of such costs. All
material transactions between such Transferor and any of
its Affiliates shall be only on an arm's-length basis and
shall receive the approval of such Transferor's Board of
Directors including at least one Independent Director
(defined below).
(v) Maintain a principal executive and
administrative office through which its business is
conducted and a telephone number separate from those of its
stockholders and Affiliates. To the extent that such
Transferor and any of its stockholders or Affiliates have
offices in contiguous space, there shall be fair and
appropriate allocation of overhead costs among them, and
each such entity shall bear its fair share of such expenses.
(vi) Conduct its affairs strictly in accordance
with its Certificate of Incorporation and observe all
necessary, appropriate and customary corporate formalities,
including, but not limited to, holding all regular and
special stockholders' and directors' meetings appropriate
to authorize all corporate action, keeping separate and
accurate minutes of such meetings, passing all resolutions
or consents necessary to authorize actions taken or to be
taken, and maintaining accurate and separate books, records
and accounts, including, but not limited to, payroll and
intercompany transaction accounts. Regular stockholders'
and directors' meetings shall be held at least annually.
(vii) Ensure that its Board of Directors shall at
all times include at least one Independent Director (for
purposes hereof, "INDEPENDENT DIRECTOR" shall mean any
member of the Board of Directors of such Transferor that is
not and has not at any time during the preceding five years
been (x) a director, officer, consultant, agent, employee,
affiliate or shareholder of any Affiliate of such
Transferor or any affiliate or subsidiary thereof, or of
any major creditor thereof, and who is not the beneficial
owner, at the time of such individual's appointment as an
Independent Director, of more than 1,000 shares in the
aggregate of all classes of common stock of an Affiliate of
such Transferor, or if greater, such number of shares the
value of which constitutes no more than 10% of such
individual's net worth or (y) a member of the immediate
family of any of the foregoing).
(viii) Ensure that decisions with respect to
its business and daily operations shall be independently
made by such Transferor (although the officer making any
particular decision may also be an officer or director of
an
32
Affiliate of such Transferor) and shall not be dictated by
an Affiliate of such Transferor.
(ix) Act solely in its own corporate name and
through its own authorized officers and agents, and no
Affiliate of such Transferor shall be appointed to act as
agent of such Transferor, except as expressly contemplated
by this Agreement or any Receivables Agreement to which it
is a party. The Transferor shall at all times use its own
stationery.
(x) Other than as provided in the Revolving Credit
Agreement, ensure that no Affiliate of such Transferor
shall advance funds to such Transferor, and no Affiliate of
such Transferor will otherwise guaranty debts of, such
Transferor; PROVIDED, HOWEVER, that an Affiliate of such
Transferor may provide funds to such Transferor in
connection with the capitalization of such Transferor,
including capital necessary to assure that such Transferor
has "substantial assets" as described in Treasury
Regulation Section 301.7701-2(d)(2).
(xi) Other than organizational expenses and as
expressly provided herein, pay all expenses, indebtedness
and other obligations incurred by it.
(xii) Not enter into any guaranty, or otherwise
become liable, with respect to any obligation of any
Affiliate of such Transferor other than with respect to
Section 7.04, nor shall such Transferor make any loans to
any Person.
(xiii) Ensure that any financial reports required
of such Transferor shall be issued separately from, but may
be consolidated with, any reports prepared for any of its
Affiliates.
(xiv) Ensure that at all times it is adequately
capitalized to engage in the transactions contemplated in
its Certificate of Incorporation.
Section 2.08. COVENANTS OF EACH TRANSFEROR WITH RESPECT
TO RECEIVABLES TRANSFER AGREEMENTS. Each Transferor hereby covenants that it
will at all times enforce the covenants and agreements of the Account Owners
under the terms of the Receivables Transfer Agreements to which it is a
party, including covenants to the effect set forth below:
(a) PERIODIC FINANCE CHARGES AND OTHER FEES. (i) Except
(x) as otherwise required by any Requirements of Law, or (y) as is deemed by
the Account Owner to be necessary in order for it to maintain its credit card
business on a competitive basis based on a good faith assessment by it of the
nature of its competition in the credit card business, it shall not at any
time reduce the annual percentage rate of the Periodic Finance Charges
assessed on the Receivables transferred by it to the Transferor or other fees
charged on any of the Accounts owned by it if, as a result of any such
reduction, either (i) such Account Owner's reasonable expectation is that
such reduction will cause a Pay Out Event or Reinvestment
33
Event to occur or (ii) such reduction is not also applied to any comparable
segments of consumer revolving credit card accounts owned by such Account
Owner which have characteristics the same as, or substantially similar to,
such Accounts.
(b) CARDHOLDER AGREEMENTS AND CREDIT CARD GUIDELINES.
Such Account Owner shall comply with and perform its obligations under the
Cardholder Agreements relating to the Accounts owned by it and the Credit
Card Guidelines and all applicable rules and regulations of MasterCard and
VISA or their respective substantial equivalents except insofar as any
failure so to comply or perform would not materially and adversely affect the
rights of the Trust or the Certificateholders hereunder. Subject to
compliance with all Requirements of Law, such Account Owner may change the
terms and provisions of the Cardholder Agreements or the Credit Card
Guidelines with respect to any of the Accounts owned by it in any respect
(including the calculation of the amount or the timing, of charge-offs and
the Periodic Finance Charges and other fees to be assessed thereon) only if
in the reasonable judgment of such Account Owner such change is made
applicable to any comparable segment of the consumer revolving credit card
accounts owned by such Account Owner which have characteristics the same as,
or substantially similar to, such Accounts.
(c) MASTERCARD AND VISA. Such Account Owner, to the
extent applicable to Accounts owned or serviced by such Account Owner, shall
use its best efforts to remain, either directly or indirectly, a member in
good standing of the MasterCard system, the VISA system and any other similar
entity's or organization's system relating to any other type of consumer
revolving credit card accounts included as Accounts.
Each Transferor further covenants that it will not enter
into any amendments to a Receivables Transfer Agreement or enter into a new
Receivables Transfer Agreement unless the Rating Agency Condition has been
satisfied.
Section 2.09. ADDITION OF ACCOUNTS.
(a)ADDITIONAL ACCOUNTS. (i) REQUIRED ADDITIONS. If on any
Determination Date, as of the close of business on the last Business
Day of the preceding Monthly Period, either (x) the Transferor Amount
is less than the Required Transferor Amount or (y) an amount equal to
the product of (A) the aggregate amount of Principal Receivables and
(B) one minus the Discount Percentage is less than the Required
Principal Balance, the Transferor shall on or prior to the close of
business on the 10th Business Day following such Determination Date
(the "Required Designation Date"), unless the Transferor Amount
exceeds the Required Transferor Amount or the aggregate amount of
Principal Receivables exceeds the Required Principal Balance, as the
case may be, in either case as of the close of business on any day
after the last Business Day of such Monthly Period and prior to the
Required Designation Date, cause to be designated additional Eligible
Accounts to be included as Accounts as of the Required Designation
Date or any earlier date in a sufficient amount such that, after
giving effect to such addition, the Transferor Amount as of the close
of business on the applicable Addition Date is at least equal to the
Required Transferor Amount on such date and the aggregate amount of
34
Principal Receivables exceeds the Required Principal Balance on such
date. The failure of any condition set forth in paragraph (c) below,
as the case may be, shall not relieve the Transferor of its
obligation pursuant to this paragraph; PROVIDED, HOWEVER, that the
failure of the Transferor to transfer Receivables to the Trust as
provided in this clause (i) solely as a result of the unavailability
of a sufficient amount of Eligible Receivables shall not constitute a
breach of this Agreement; PROVIDED FURTHER, that any such failure
which has not been timely cured may nevertheless result in the
occurrence of a Pay Out Event.
(ii) OPTIONAL PARTICIPATION INTERESTS. In lieu of, or in
addition to, designating Additional Accounts pursuant to clause (i)
above, the Transferor may, subject to the conditions specified in
paragraph (c) below, convey to the Trust participations (including
100% participations) representing undivided interests in a pool of
assets primarily consisting of revolving credit card receivables,
consumer loan receivables (secured and unsecured), and any interests
in any of the foregoing, including securities representing or backed
by such receivables, and other self-liquidating financial assets
(including any "Eligible Assets" as such term is defined in Rule 3a-7
under the Investment Company Act (or any successor to such Rule)) and
collections thereon ("Participation Interests"). The addition of
Participation Interests in the Trust pursuant to this paragraph (a)
or paragraph (b) below shall be effected by a Participation Interest
Supplement, dated the applicable Addition Date and entered into
pursuant to subsection 13.01(a).
(b) RESTRICTED ADDITIONS. Each Transferor may from time
to time, at its sole discretion, subject to the conditions specified below,
designate additional Eligible Accounts to be included as Accounts or
Participation Interests to be included as Trust Assets, in either case as of
the applicable Addition Date.
(c) CONDITIONS TO REQUIRED ADDITIONS, OPTIONAL
PARTICIPATION INTERESTS AND RESTRICTED ADDITIONS. On the Addition Date with
respect to any Additional Accounts or Participation Interests designated
pursuant to subsection 2.09(a) or (b), the Trust shall purchase the
Receivables in such Additional Accounts (and such Additional Accounts shall
be deemed to be Accounts for purposes of this Agreement) or shall purchase
such Participation Interests, in each case as of the close of business on the
applicable Addition Date, subject to the satisfaction of the following
conditions:
(i) on or before the tenth Business Day
immediately preceding the Addition Date, each Transferor
which owns any such Additional Account or is transferring
any such Participation Interest to the Trust (a
"Participating Transferor") shall have given the Trustee
and each Rating Agency written notice that the Additional
Accounts or Participation Interests will be included and
specifying the applicable Addition Date, the Addition
Cut-Off Date, and the approximate number of accounts
expected to be added and the approximate aggregate balances
expected to be outstanding in the accounts to be added (in
the case of Additional Accounts);
35
(ii) in the case of Additional Accounts, the
Participating Transferor shall have delivered to the
Trustee copies of UCC-1 financing statements covering such
Additional Accounts, if necessary to perfect the Trust's
interest in the Receivables arising therein;
(iii) as of each of the Addition Cut-Off Date
and the Addition Date, no Insolvency Event with respect to
the Participating Transferor or the Account Owner of the
Additional Accounts shall have occurred nor shall the
transfer of the Receivables arising in the Additional
Accounts or of the Participation Interests to the Trust
have been made in contemplation of the occurrence thereof;
(iv) except in the case of an Addition pursuant
to subsection 2.09(a)(i), the Rating Agency Condition shall
have been satisfied;
(v) each Participating Transferor shall have
delivered to the Trustee an Officer's Certificate, dated
the Addition Date, stating that (x) in the case of
Additional Accounts, as of the applicable Addition Cut-Off
Date, the Additional Accounts are all Eligible Accounts,
(y) to the extent applicable, the conditions set forth in
clauses (ii) through (iv) above have been satisfied and (z)
such Participating Transferor reasonably believes that the
addition by such Participating Transferor of the
Receivables arising in the Additional Accounts or of the
Participation Interests to the Trust will not, based on the
facts known to such officer at the time of such addition,
then or thereafter cause a Pay Out Event or Reinvestment
Event to occur with respect to any Series;
(vi) the Participating Transferors shall have
delivered to the Trustee and each Rating Agency an Opinion
of Counsel, which counsel shall be outside counsel, dated
the Addition Date, in accordance with subsection 13.02(d);
(vii) in the case of designation of Additional
Accounts, Participating Transferors shall have delivered to
the Trustee (x) the computer file or microfiche list
required to be delivered pursuant to Section 2.01 with
respect to such Additional Accounts and (y) a duly
executed, written assignment (including an acceptance by
the Trustee the benefit of the Certificateholders),
substantially in the form of Exhibit B (the
"Assignment"); and
(viii) unless each Rating Agency otherwise
consents, the number of Additional Accounts designated
pursuant to subsection 2.09(a) with respect to any of the
three consecutive Monthly Periods commencing in January,
April, July and October of each calendar year, in January
1998, shall not exceed 15% of the number of Accounts as of
the first day of the calendar year during which such
Monthly Periods commence and the number of Additional
Accounts designated pursuant to subsection 2.09(a)
36
during any calendar year shall not exceed 20% of the
number of Accounts as of the first day of such calendar
year.
(d) AUTOMATIC ACCOUNT ADDITIONS.
(i) Each Transferor may from time to time, at its
sole discretion, subject to and in compliance with the
limitations specified in clause (ii) below and the
applicable conditions specified in clauses (iii) through
(vii) below, designate Eligible Accounts ("Automatic
Additional Accounts") to be included as Accounts as of the
applicable Addition Date. For purposes of this paragraph,
Eligible Accounts shall be deemed to include only consumer
revolving credit card accounts of the same nature as those
included as Initial Accounts.
(ii) Unless each Rating Agency otherwise
consents, the number of Automatic Additional Accounts
designated with respect to any of the three consecutive
Monthly Periods commencing in January, April, July and
October of each calendar year, commencing in January 1998,
shall not exceed 15% of the number of Accounts as of the
first day of the calendar year during which such Monthly
Periods commence and the number of Automatic Additional
Accounts designated during any such calendar year shall not
exceed 20% of the number of Accounts as of the first day of
such calendar year.
(iii) Within 30 days after the Addition Date
with respect to any Automatic Additional Accounts, the
relevant Transferor shall have delivered to the Trustee and
each Rating Agency an Opinion of Counsel (which counsel
shall be outside counsel) in accordance with subsection
13.02(d), with respect to the Automatic Additional Accounts
included as Accounts on such Addition Date, confirming the
validity and perfection of the transfer of such Automatic
Additional Accounts. If such Opinion of Counsel with
respect to any Automatic Additional Accounts is not so
received, the ability of such Transferor to designate
Automatic Additional Accounts will be suspended until such
time as each Rating Agency otherwise consents in writing.
If such Transferor is unable to deliver an Opinion of
Counsel with respect to any Automatic Additional Account,
such inability shall be deemed to be a breach of the
representation in subsection 2.04(a)(viii) with respect to
the Receivables in such Automatic Additional Account for
purposes of Section 2.05; PROVIDED, that the cure period
for such breach shall not exceed 30 days.
(iv) Each Participating Transferor shall have
delivered to the Trustee copies of UCC-1 financing
statements covering such Automatic Additional Accounts,
if necessary to perfect the Trust's interest in the
Receivables arising therein.
(v) As of each of the Addition Cut-Off Date and
the Addition Date, no Insolvency Event with respect to any
Participating Transferor or the Account Owner of the
Additional Accounts shall have occurred nor shall the
37
transfer of the Receivables arising in the Automatic
Additional Accounts to the Trust have been made in
contemplation of the occurrence thereof.
(vi) Each Participating Transferor shall have
delivered to the Trustee an Officer's Certificate, dated
the Addition Date, stating that (x) as of the applicable
Addition Cut-Off Date, such Automatic Additional Accounts
are all Eligible Accounts, (y) to the extent applicable,
the conditions set forth in clauses (ii) through (v) above
have been satisfied and (z) such Participating Transferor
reasonably believes that the addition by such Participating
Transferor of the Receivables arising in such Automatic
Additional Accounts will not, based on the facts known to
such officer at the time of such addition, then or
thereafter cause a Pay Out Event to occur with respect to
any Series.
(vii) The Participating Transferor shall have
delivered to the Trustee (x) the computer file or
microfiche list required to be delivered pursuant to
Section 2.01 with respect to such Automatic Additional
Accounts and (y) a duly executed Assignment.
(e) ADDITIONAL TRANSFERORS. The Transferor may designate
Affiliates of the Transferor to be included as Transferors ("Additional
Transferors") under this Agreement by an amendment hereto pursuant to
subsection 13.01(a) and, in connection with such designation, the Transferor
shall surrender the Transferor Certificate to the Trustee in exchange for a
newly issued Transferor Certificate modified to reflect such Additional
Transferor's interest in the Transferor's Interest; PROVIDED, HOWEVER, that
prior to any such designation and exchange the conditions set forth in
subsection 6.03(c) or 6.03(d), as applicable, shall have been satisfied with
respect thereto.
Section 2.10. REMOVAL OF ACCOUNTS AND PARTICIPATION
INTERESTS. On any day of any Monthly Period each Transferor shall have the
right to require the reassignment to it or its designee of all the Trust's
right, title and interest in, to and under the Receivables then existing and
thereafter created, all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof in or with respect to the
Accounts specified in a Receivables Transfer Agreement with such Transferor
(the "Removed Accounts") or Participation Interests conveyed to the Trust by
such Transferor upon satisfaction of the following conditions:
(a) on or before the fifth Business Day immediately
preceding the Removal Date (the "Removal Notice Date"), such Transferor shall
have given the Trustee, the Servicer, each Rating Agency and any Series
Enhancer written notice of such removal, specifying the date for removal of
the Removed Accounts or Participation Interests (the "Removal Date");
(b) with respect to Removed Accounts, on or prior to the
date that is ten Business Days after the Removal Date, such Transferor shall
have amended Schedule 1 by delivering to the Trustee a computer file or
microfiche list containing a true and complete list of the Removed Accounts
specifying for each such Account, as of the last day of the Monthly Period
preceding the Removal Notice Date (the "Removal Cut-Off Date"), its
38
account number, the aggregate amount outstanding in such Account and the
aggregate amount of Principal Receivables outstanding in such Account;
(c) with respect to Removed Accounts, such Transferor
shall have represented and warranted as of the Removal Date that the list of
Removed Accounts delivered pursuant to paragraph (b) above, as of the Removal
Cut-Off Date, is true and complete in all material respects;
(d) the Rating Agency Condition shall have been satisfied
with respect to such removal;
(e) such Transferor shall have delivered to the Trustee
an Officer's Certificate, dated the Removal Date, to the effect that such
Transferor reasonably believes that (i) such removal will not, based on the
facts known to such officer at the time of such certification, then or
thereafter cause a Pay Out Event or Reinvestment Event to occur with respect
to any Series and (ii) no selection procedure believed by such Transferor to
be materially adverse to the interests of the Investor Certificateholders of
any Series as of the Removal Date have been used in selecting the Removed
Accounts or Participation Interests; and
(f) as of the Removal Cut-Off Date, no more than 10% of
the Receivables outstanding are more than thirty days Contractually
Delinquent.
Upon satisfaction of the above conditions, the Trustee
shall execute and deliver to the relevant Transferor or its designee a
written reassignment in substantially the form of Exhibit C (the
"Reassignment") and shall, without further action, be deemed to sell,
transfer, assign, set over and otherwise convey to such Transferor or its
designee, effective as of the Removal Date, without recourse, representation
or warranty, all the right, title and interest of the Trust in and to the
Participation Interests or Receivables arising in the Removed Accounts, all
monies due and to become due and all amounts received with respect thereto
and all proceeds thereof. In addition, the Trustee shall execute such other
documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by the relevant Transferor to effect
the conveyance of Participation Interests or Receivables pursuant to this
Section 2.09.
Section 2.11. ACCOUNT ALLOCATIONS. In the event that
any 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 9.02 or any order of any
Governmental Authority (a "Transfer Restriction Event"), then, in any such
event, (a) such Transferor and the Servicer agree (except as prohibited by
any such order) to allocate and pay to the Trust, after the date of such
inability, all Collections of Receivables transferred to the Trust by such
Transferor, including Collections of Receivables transferred to the Trust by
such Transferor prior to the occurrence of such event, and all amounts which
would have constituted Collections but for such Transferor's inability to
transfer Receivables (up to an aggregate amount equal to the amount of
Receivables transferred to the Trust by such Transferor in the Trust on such
date), (b) such Transferor and the Servicer agree that such amounts will be
applied as Collections in accordance with Article IV and the terms of
39
each Supplement and (c) for so long as the allocation and application of all
Collections and all amounts that would have constituted Collections are made
in accordance with clauses (a) and (b) above, Principal Receivables and all
amounts which would have constituted Principal Receivables but for such
Transferor's inability to transfer Receivables to the Trust which are written
off as uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with Article IV and the terms of each Supplement.
For the purpose of the immediately preceding sentence, such Transferor and
the Servicer shall treat the first received Collections with respect to the
Accounts as allocable to the Trust until the Trust shall have been allocated
and paid Collections in an amount equal to the aggregate amount of Principal
Receivables in the Trust as of the date of the occurrence of such event. If
such Transferor or the Servicer is unable pursuant to any Requirements of Law
to allocate Collections as described above, such Transferor and the Servicer
agree that, after the occurrence of such event, payments on each Account with
respect to the principal balance of such Account shall be allocated first to
the oldest principal balance of such Account and shall have such payments
applied as Collections in accordance with Article IV and the terms of each
Supplement. The parties hereto agree that Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables which have been
conveyed to the Trust shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and Collections with respect thereto shall continue
to be allocated and paid in accordance with Article IV and the terms of each
Supplement.
Section 2.12. DISCOUNT OPTION.
(a) The Transferor shall have the option to designate at
any time and from time to time a percentage or percentages, which may be a
fixed percentage or a variable percentage based on a formula (the "Discount
Percentage"), of all or any specified portion of the Collections of Principal
Receivables received after the Discount Option Date to be treated as
Collections of Finance Charge Receivables ("Discount Option Collections").
The Transferor shall also have the option of reducing or withdrawing the
Discount Percentage, at any time and from time to time, on and after such
Discount Option Date. If the Transferor, pursuant to the first Series
Supplement, designates a Discount Percentage to be effective on the Initial
Closing Date, then such Discount Percentage shall be effective as of the
Initial Closing Date and the Initial Closing Date shall be a Discount Option
Date. Thereafter the Transferor shall provide to the Servicer, the Trustee
and any Rating Agency 30 days' prior written notice of any change in the
Discount Percentage and the date on which such change will become effective
and such change will become effective on the designated date (i) unless such
designation in the reasonable belief of the Transferor would cause a Pay Out
Event or Reinvestment Event with respect to any Series to occur, or an event
which, with notice or lapse of time or both, would constitute a Pay Out Event
or Reinvestment Event with respect to any Series and (ii) if such designation
would cause the Discount Percentage to be greater than [3]% or less than [1]
%, only if the Rating Agency Condition shall have been satisfied with respect
to such designation.
40
(b) After the Discount Option Date, Discount Option
Collections shall be treated as Collections of Finance Charge Receivables.
Section 2.13. SECURITY INTEREST GRANTED BY THE ACCOUNT
OWNERS. To the extent that any transfer of Receivables or other property by
an Account Owner pursuant to a Receivables Transfer Agreement is determined
to be other than an absolute assignment of such Receivables or other
property, then such Account Owner hereby grants to the Trustee hereunder a
security interest in and to all of its right, title, and interest, in, to and
under (i) the Receivables existing at the close of business on the Initial
Closing Date and thereafter created from time to time and arising in the
Initial Accounts and the Receivables existing on each applicable Addition
Cut-Off Date and thereafter created from time to time and arising in any
Additional Accounts, including the Automatic Additional Accounts, and in each
case, thereafter created from time to time until the termination of the
Trust, (ii) all Recoveries allocable to the foregoing Accounts and all
Recoveries which are identified as relating to specific Defaulted
Receivables, and (iii) all monies due or to become due thereunder and all
amounts received with respect thereto and all proceeds (including, without
limitation, "proceeds" as such term is defined in the UCC) thereof. With
respect to the foregoing collateral, the Trustee shall have all of the rights
the Trustee has hereunder and under the Receivables Transfer Agreements.
[END OF ARTICLE II]
41
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01. ACCEPTANCE OF APPOINTMENT AND OTHER
MATTERS RELATING TO THE SERVICER.
(a) The Travelers Bank agrees to act as the Servicer
under this Agreement and the Certificateholders by their acceptance of
Certificates consent to The Travelers Bank acting as Servicer.
(b) The Servicer shall service and administer the
Receivables, shall collect payments due under the Receivables and shall
charge off as uncollectible Receivables, all in accordance with its customary
and usual servicing procedures for servicing credit card receivables
comparable to the Receivables and in accordance with the Credit Card
Guidelines. The Servicer shall have full power and authority, acting alone
or through any party properly designated by it hereunder, to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing,
subject to Section 10.01 and provided The Travelers Bank is the Servicer, the
Servicer or its designee (rather than the Trustee) is hereby authorized and
empowered (i) to make withdrawals and payments or to instruct the Trustee to
make withdrawals and payments from the Collection Account, the Excess Funding
Account and any Series Account, as set forth in this Agreement or any
Supplement, and (ii) to take any action required or permitted under any
Series Enhancement, as set forth in this Agreement or any Supplement. Without
limiting the generality of the foregoing and subject to Section 10.01, the
Servicer or its designee is hereby authorized and empowered to make any
filings, reports, notices, applications and registrations with, and to seek
any consents or authorizations from, the Securities and Exchange Commission
(the "Commission") and any state securities authority on behalf of the Trust
as may be necessary or advisable to comply with any Federal or state
securities laws or reporting requirements. The Trustee shall furnish the
Servicer with any powers of attorney or other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(c) 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 credit card receivables.
(d) The Servicer shall comply with and perform its
servicing obligations with respect to the Accounts and Receivables in
accordance with the Cardholder Agreements relating to the Accounts and the
Credit Card Guidelines and all applicable rules and regulations of VISA,
MasterCard and any other similar entity or organization relating to any other
type of consumer revolving credit card accounts included as Accounts, except
insofar as any failure to so comply or perform would not materially and
adversely affect the Trust or the Investor Certificateholders.
42
(e) The Servicer shall pay out of its own funds, without
reimbursement, all expenses incurred in connection with the Trust and the
servicing activities hereunder including expenses related to enforcement of
the Receivables, fees and disbursements of the Trustee, any Paying Agent and
any Transfer Agent and Registrar (including the reasonable fees and expenses
of its counsel) and independent accountants and all other fees and expenses,
including the costs of filing UCC financing and continuation statements and
the costs and expenses relating to obtaining and maintaining the listing of
any Investor Certificates on any stock exchange, that are not expressly
stated in this Agreement to be payable by the Trust or the Transferor (other
than Federal, state, local and foreign income, franchise and other taxes, if
any, or any interest or penalties with respect thereto, assessed on the
Trust).
(f) The Servicer agrees that upon a request by the
Transferor it will use its reasonable best efforts to obtain and maintain the
listing of the Investor Certificates of any Series or Class on any specified
security exchange. If any such request is made, the Servicer shall give
notice to the Transferor and the Trustee on the date on which such Investor
Certificates are approved for such listing and within three Business Days
following receipt of notice by the Servicer of any actual, proposed or
contemplated delisting of such Investor Certificates by any such securities
exchange. The Trustee or the Servicer, each in its sole discretion, may
terminate any listing on any such securities exchange at any time subject to
the notice requirements set forth in the preceding sentence.
Section 3.02. SERVICING COMPENSATION. As full
compensation for its servicing activities hereunder and as reimbursement for
any expense incurred by it in connection therewith, the Servicer shall be
entitled to receive a servicing fee (the "Servicing Fee") with respect to
each Monthly Period, payable monthly on the related Distribution Date, in an
amount equal to one-twelfth of the product of (a) the weighted average of the
Servicing Fee Rates with respect to each outstanding Series (based upon the
Servicing Fee Rate for each Series and the Investor Amount (or such other
amount as specified in the related Supplement) of such Series, in each case
as of the last day of the prior Monthly Period) and (b) the amount of
Principal Receivables on the last day of the prior Monthly Period. The share
of the Servicing Fee allocable to (i) the Certificateholders' Interest of a
particular Series with respect to any Monthly Period (the "Monthly Servicing
Fee") and (ii) the Enhancement Investor Amount, if any, of a particular
Series with respect to any Monthly Period will each be determined in
accordance with the relevant Supplement. The portion of the Servicing Fee
with respect to any Monthly Period not so allocated to the
Certificateholders' Interest or the Enhancement Investor Amount, if any, of a
particular Series shall be paid by the Holders of the Transferor Certificates
on the related Distribution Date and in no event shall the Trust, the
Trustee, the Investor Certificateholders of any Series or any Series Enhancer
be liable for the share of the Servicing Fee with respect to any Monthly
Period to be paid by the Holders of the Transferor Certificates.
Section 3.03. REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SERVICER. The Travelers Bank, as initial Servicer, hereby makes, and
any Successor Servicer by its appointment hereunder shall make, on each
Closing Date (and on the date of any such appointment), the following
representations, warranties and covenants:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a
Delaware state-chartered banking corporation duly organized, validly existing
and in good standing under the laws of its
43
state of incorporation, and has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Agreement
and each Supplement and, in all material respects, to own its properties and
conduct its business as such properties are presently owned and as such
business is presently conducted.
(b) DUE QUALIFICATION. The Servicer is duly qualified to
do business and is in good standing as a foreign corporation (or is exempt
from such requirements), and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would have a material adverse effect on the
interests of the Investor Certificateholders hereunder or under any
Supplement.
(c) DUE AUTHORIZATION. The execution, delivery, and
performance of this Agreement and each Supplement, and the other agreements
and instruments executed or to be executed by the Servicer as contemplated
hereby, have been duly authorized by the Servicer by all necessary corporate
action on the part of the Servicer and this Agreement and each Supplement
will remain, from the time of its execution, an official record of the
Servicer.
(d) BINDING OBLIGATION. This Agreement and each
Supplement constitutes a legal, valid and binding obligation of the Servicer,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect, affecting the enforcement of
creditors' rights in general and the rights of creditors of Delaware
state-chartered banking corporations and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at law
or in equity).
(e) NO VIOLATION. The execution and delivery of this
Agreement and each Supplement by the Servicer, the performance of the
transactions contemplated by this Agreement and each Supplement and the
fulfillment of the terms hereof and thereof applicable to the Servicer will
not conflict with, violate, result in any breach of any of the material terms
and provisions of, or constitute (with or without notice or lapse of time or
both) a default under, any Requirement of Law applicable to 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 or any of its
properties are bound.
(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 all obligations on its part to be fulfilled under or in
connection with the Receivables and the related Accounts, will maintain in
effect all qualifications required under Requirements of Law in order
44
to service the Receivables and the related Accounts properly and will comply
in all material respects with all other Requirements of Law in connection
with servicing the Receivables and the related Accounts, the failure to
comply with which would have a material adverse effect on the interests of
the Certificateholders.
(h) NO RESCISSION OR CANCELLATION. Subject to Section
3.09, the Servicer shall not permit any rescission or cancellation of a
Receivable except as ordered by a court of competent jurisdiction or other
Governmental Authority or in the ordinary course of its business and in
accordance with the Credit Card Guidelines.
(i) PROTECTION OF CERTIFICATEHOLDERS' RIGHTS. The
Servicer shall take no action which, nor omit to take any action the omission
of which, would substantially impair the rights of Certificateholders in any
Receivable or Account, nor shall it, except in the ordinary course of its
business and in accordance with the Credit Card Guidelines, reschedule,
revise or defer Collections due on the Receivables.
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES.
Except in connection with its enforcement or collection of a Receivable, the
Servicer will take no action to cause any Receivable to be evidenced by any
instrument (as defined in the UCC) and, if any Receivable is so evidenced, it
shall be reassigned or assigned to the Servicer as provided in this Section;
PROVIDED, HOWEVER, that Receivables evidenced by notes taken from Obligors in
the ordinary course of business of the Servicer's collection efforts shall
not be deemed Ineligible Receivables solely as a result thereof.
(k) ALL CONSENTS REQUIRED. All approvals,
authorizations, consents, orders or other actions of any Person or of any
governmental body or official required in connection with the execution and
delivery by the Servicer of this Agreement and each Supplement, the
performance by the Servicer of the transactions contemplated by this
Agreement and each Supplement and the fulfillment by the Servicer of the
terms hereof and thereof, have been obtained; PROVIDED, HOWEVER, that the
Servicer makes no representation or warranty regarding state securities or
"blue sky" laws in connection with the distribution of the Certificates.
For purposes of the representations and warranties set
forth in this Section 3.03, each reference to a Supplement shall be deemed to
refer only to those Supplements in effect as of the relevant Closing Date or
the date of appointment of a Successor Servicer, as applicable.
In the event any of the representations, warranties or
covenants of the Servicer contained in paragraph (g), (h), (i) or (j) with
respect to any Receivable or the related Account is breached, and as a result
of such breach the Trust's rights in, to or under any Receivable in the
related Account or the proceeds of such Receivable are impaired or such
proceeds are not available for any reason to the Trust free and clear of any
Lien, then no later than the expiration of 60 days (or such longer period,
not in excess of 150 days, as may be agreed to by the Trustee) from the
earlier to occur of the discovery of such event by the Servicer, or receipt
by the Servicer of notice of such event given by the Trustee, all Receivables
in the Account or Accounts to which such event relates shall be reassigned or
assigned to the Servicer on the terms and conditions set forth below;
PROVIDED, HOWEVER, that such Receivables will not be reassigned or assigned
to the Servicer if, on any day prior to the end of such 60-day or longer
period, (i)
45
the relevant representation and warranty shall be true and correct, or the
relevant covenant shall have been complied with, in all material respects and
(ii) the Servicer shall have delivered to the Trustee a certificate of an
authorized officer describing the nature of such breach and the manner in
which such breach was cured.
If The Travelers Bank is the Servicer, such reassignment
or assignment shall be accomplished in the manner set forth in subsection
2.05(b) as if the reassigned or assigned Receivables were Ineligible
Receivables (including the requirement, if applicable, to reduce the
aggregate amount of Principal Receivables used to calculate the Transferor
Amount, the Series Percentages and any other percentage used to allocate
within or among Series applicable to any Series and to make deposits into the
Excess Funding Account). If The Travelers Bank is not the Servicer, the
Servicer shall effect such assignment by making a deposit into the Collection
Account in immediately available funds on the Transfer Date following the
Monthly Period in which such assignment obligation arises in an amount equal
to the amount of such Receivables, which deposit shall be considered a
Collection of Principal Receivables and shall be applied in accordance with
Article IV and the terms of each Supplement.
Upon each such reassignment or assignment to the
Servicer, the Trustee, on behalf of the Trust, shall automatically and
without further action be deemed to sell, transfer, assign, set over and
otherwise convey to the Servicer, without recourse, representation or
warranty, all right, title and interest of the Trust in and to such
Receivables, all monies due or to become due and all amounts received 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 be reasonably requested by the Servicer to effect the
conveyance of any such Receivables pursuant to this Section. The obligation
of the Servicer to accept reassignment or assignment of such Receivables, and
to make the deposits, if any, required to be made to the Collection Account
or the Excess Funding Account as provided in the preceding paragraph, shall
constitute the sole remedy respecting the event giving rise to such
obligation available to Certificateholders (or the Trustee on behalf of
Certificateholders) or any Series Enhancer.
Section 3.04. REPORTS AND RECORDS FOR THE TRUSTEE.
(a) DAILY RECORDS. On each Business Day, the Servicer,
with prior written notice by the Trustee shall make or cause to be made
available at the office of the Servicer on any Business Day during normal
business hours for inspection by the Trustee a record setting forth (i) the
Collections in respect of Principal Receivables and in respect of Finance
Charge Receivables processed by the Servicer on the second preceding Business
Day in respect of the Accounts and (ii) the amount of Receivables as of the
close of business on the second preceding Business Day. The Servicer shall,
at all times, maintain its computer files with respect to the Accounts in
such a manner so that the Accounts may be specifically identified.
(b) MONTHLY SERVICER'S CERTIFICATE. Not later than the
Determination Date immediately preceding each Distribution Date, the Servicer
shall, with respect to each outstanding Series, deliver to the Trustee, the
Paying Agent and each Rating Agency a certificate of a Servicing Officer in
substantially the form set forth in the related Supplement.
46
Section 3.05. ANNUAL CERTIFICATE OF SERVICER. The
Servicer shall deliver to the Trustee and each Rating Agency, on or before
March 31, of each calendar year, beginning with March 31, 1999, an Officer's
Certificate (with appropriate insertions) substantially in the form of
Exhibit D.
Section 3.06. ANNUAL SERVICING REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS; COPIES OF REPORTS AVAILABLE.
(a) On or before March 31, of each calendar year,
beginning with March 31, 1999, 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 a report (addressed to the
Trustee) to the Trustee, the Servicer and each Rating Agency to the effect
that they have applied certain procedures agreed upon with the Servicer and
examined certain documents and records relating to the servicing of Accounts
under this Agreement and each Supplement and that, on the basis of such
agreed-upon procedures, nothing has come to the attention of such accountants
that caused them to believe that the servicing (including the allocation of
Collections) has not been conducted in compliance with the terms and
conditions set forth in Articles III and IV and Section 8.08 of this
Agreement and the applicable provisions of each Supplement, except for such
exceptions as they believe to be immaterial and such other exceptions as
shall be set forth in such statement. Such report shall set forth the agreed
upon procedures performed.
(b) On or before March 31, of each calendar year,
beginning with March 31, 1999, 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 a report (addressed to the
Trustee) to the Trustee, the Servicer and each Rating Agency to the effect
that they have applied certain procedures agreed upon with the Servicer to
compare the mathematical calculations of certain amounts set forth in the
Servicer's certificates delivered pursuant to subsection 3.04(b) during the
period covered by such report with the Servicer's computer reports which were
the source of such amounts and that on the basis of such agreed-upon
procedures and comparison, such accountants are of the opinion that such
amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such statement.
(c) A copy of each certificate and report provided
pursuant to subsection 3.04(b), 3.05 or 3.06 may be obtained by any Investor
Certificateholder or Certificate Owner by a request to the Trustee addressed
to the Corporate Trust Office.
Section 3.07. TAX TREATMENT. Unless otherwise specified
in a Supplement with respect to a particular Series, the Transferor has
entered into this Agreement, and the Certificates will be issued, with the
intention that, for Federal, state and local income and franchise tax
purposes only, the Investor Certificates of each Series which are
characterized as indebtedness at the time of their issuance will qualify as
indebtedness secured by the Receivables. The Transferor, by entering into
this Agreement, and each Certificateholder, by the acceptance of any such
Certificate (and each Certificate Owner, by its acceptance of an interest in
the applicable Certificate), agree to treat such Investor Certificates for
Federal, state and local income and franchise tax purposes as indebtedness.
Each Holder of such Investor
47
Certificate agrees that it will cause any Certificate Owner acquiring an
interest in a Certificate through it to comply with this Agreement as to
treatment as indebtedness under applicable tax law, as described in this Section
3.07.
Section 3.08. NOTICES TO THE TRAVELERS BANK. In the
event that The Travelers Bank is no longer acting as Servicer, any Successor
Servicer shall deliver to The Travelers Bank each certificate and report
required to be provided thereafter pursuant to subsection 3.04(b), 3.05 or
3.06.
Section 3.09. ADJUSTMENTS.
(a) If the Servicer adjusts downward the amount of any
Receivable because of a rebate, refund, unauthorized charge or billing error
to an account holder, or because such Receivable was created in respect of
merchandise which was refused or returned by an account holder, or if the
Servicer otherwise adjusts downward the amount of any Receivable without
receiving Collections therefor or charging off such amount as uncollectible,
then, in any such case, the amount of Principal Receivables used to calculate
the Transferor Amount, the Series Percentages and any other percentage used
to allocate within or among Series applicable to any Series will be reduced
by the amount of the adjustment. Similarly, the amount of Principal
Receivables used to calculate the Transferor Amount, the Series Percentages
and any other percentage used to allocate within or among Series applicable
to any Series will be reduced by the amount of any Receivable which was
discovered as having been created through a fraudulent or counterfeit charge.
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 obligation arises. In the event that, following the exclusion of
such Principal Receivables from the calculation of the Transferor Amount, the
Transferor Amount would be less than the Required Transferor Amount, not
later than 12:00 noon, New York City time, on the Distribution Date following
the Monthly Period in which such adjustment obligation arises, the Transferor
which transferred such Principal Receivables to the Trust shall make a
deposit into the Excess Funding Account in immediately available funds in an
amount equal to the amount by which the Transferor Amount would be below the
Required Transferor Amount (up to the amount of such Principal Receivables).
(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.
Section 3.10. REPORTS TO THE COMMISSION. The Servicer
shall, on behalf of the Trust, cause to be filed with the Commission any
periodic reports required to be filed under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder. The Transferor shall, at the expense of the Servicer,
cooperate in any reasonable request of the Servicer in connection with such
filings.
[END OF ARTICLE III]
48
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. RIGHTS OF CERTIFICATEHOLDERS. The
Investor Certificates shall represent fractional undivided interests in the
Trust, which, with respect to each Series, shall consist of the right to
receive, to the extent necessary to make the required payments with respect
to the Investor Certificates of such Series at the times and in the amounts
specified in the related Supplement, the portion of Collections allocable to
Investor Certificateholders of such Series pursuant to this Agreement and
such Supplement, funds on deposit in the Collection Account and the Excess
Funding Account allocable to Certificateholders of such Series pursuant to
this Agreement and such Supplement, funds on deposit in any related Series
Account and funds available pursuant to any related Series Enhancement
(collectively, with respect to all Series, the "Certificateholders'
Interest"), it being understood that the Investor Certificates of any Series
or Class shall not represent any interest in any Series Account or Series
Enhancement for the benefit of any other Series or Class. The Transferor
Certificates shall represent the ownership interest in the remainder of the
Trust Assets not allocated pursuant to this Agreement or any Supplement to
the Certificateholders' Interest, including the right to receive Collections
with respect to the Receivables and other amounts at the times and in the
amounts specified in this Agreement or any Supplement to be paid to the
Holders of the Transferor Certificates (the "Transferor's Interest");
PROVIDED, HOWEVER, that the Transferor Certificates shall not represent any
interest in the Collection Account, the Excess Funding Account, any Series
Account or any Series Enhancement, except as specifically provided in this
Agreement or any Supplement; PROVIDED FURTHER, that the foregoing shall not
be construed to limit the Trustee's obligations to make payments to the
Holders of the Transferor Certificates, the Transferor and the Servicer as
and when required under this Agreement and any Supplement.
Section 4.02. ESTABLISHMENT OF COLLECTION ACCOUNT AND
EXCESS FUNDING ACCOUNT. The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account (or Eligible Deposit
Accounts) bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders (the "Collection
Account"). The Trustee shall possess all right, title and interest in all
funds on deposit 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 Certificateholders. Except
as expressly provided in this Agreement, the Servicer agrees that it shall
have no right of setoff or banker's lien against, and no right to otherwise
deduct from, any funds held in the Collection Account for any amount owed to
it by the Trustee, the Trust, any Certificateholder or any Series Enhancer.
If, at any time, the Collection Account ceases to be an Eligible Deposit
Account, the Trustee (or the Servicer on its behalf) shall within ten
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Collection Account
meeting the conditions specified above, transfer any cash or any investments
to such new Collection Account and from the date such new Collection Account
is established, it shall be the "Collection Account."
49
Unless otherwise agreed to by each Rating Agency, if at
any time neither The Travelers Bank nor any Affiliate of The Travelers Bank
is the Servicer, the Collection Account will be moved from The Travelers Bank
if then maintained there.
Funds on deposit in the Collection Account (other than
amounts deposited pursuant to Section 2.06, 9.02, 10.01 or 12.02) shall at
the direction of the Servicer be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Trustee for the benefit of the Certificateholders. The Trustee
shall maintain for the benefit of the Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. Investments of funds representing Collections collected during
any Monthly Period shall be invested in Eligible Investments that will mature
so that funds will be available at the close of business on the Transfer Date
following such Monthly Period. Unless directed by the Servicer, funds
deposited in the Collection Account on a Transfer Date with respect to the
next following Distribution Date are not required to be invested overnight.
For purposes of determining the availability of funds or the balances in the
Collection Account for any reason under this Agreement, all investment
earnings net of investment expenses and losses on such funds shall be deemed
not to be available or on deposit.
The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the
Trust, an Eligible Deposit Account bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
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 Certificateholders. Except as expressly provided in this
Agreement, the Servicer agrees that it shall have no right of setoff or
banker's lien against, and no right to otherwise deduct from, any funds held
in the Excess Funding Account for any amount owed to it by the Trustee, the
Trust, any Certificateholder or any Series Enhancer. If, at any time, the
Excess Funding Account ceases to be an Eligible Deposit Account, the Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Excess Funding Account meeting the conditions
specified above, transfer any cash 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."
Unless otherwise agreed to by each Rating Agency, if at
any time neither The Travelers Bank nor any Affiliate of The Travelers Bank
is the Servicer, the Excess Funding Account will be moved from The Travelers
Bank if then maintained there.
Funds on deposit in the Excess Funding Account shall at
the direction of the Servicer be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Trustee for the benefit of the Certificateholders. The Trustee
shall maintain for the benefit of the Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. Funds on deposit in the Excess Funding Account on any date
(after giving effect to any withdrawals from the Excess Funding Account on
such date) will be invested in Eligible Investments that will mature so that
funds will be available at the close of business on the Transfer Date
following such date. Unless
50
directed by the Servicer, funds deposited in the Excess Funding Account on a
Transfer Date with respect to the next following Distribution Date are not
required to be invested overnight. On each Transfer Date, the Servicer shall
instruct the Trustee to withdraw on the related 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 on
deposit 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 on deposit in the Excess Funding Account shall not be
considered part of the Excess Funding Amount for purposes of this Agreement.
On any Transfer Date on which no Series is in an Accumulation Period or
Amortization Period, the Servicer shall determine the amount by which the
Transferor Amount exceeds the Required Transferor Amount on such date and
shall instruct the Trustee to withdraw such amount from the Excess Funding
Account on the related Distribution Date and pay such amount to the Holders
of the Transferor Certificates. On any Transfer Date on which one or more
Series is in an Accumulation Period or 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), and the Servicer shall instruct the Trustee to
withdraw such amount (up to the Excess Funding Amount) from the Excess
Funding Account on the succeeding Distribution Date and allocate such amount
among each such Series as Shared Principal Collections as specified herein
and in each related Supplement.
Section 4.03. COLLECTIONS AND ALLOCATIONS.
(a) COLLECTIONS. The Servicer will apply or will
instruct the Trustee to apply all funds on deposit in the Collection Account
as described in this Article IV and in each Supplement. Except as otherwise
provided below or as expressly provided in any Supplement with respect to
Collections allocated to the related Series, 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 The Travelers Bank remains the Servicer and
(x) The Travelers Bank maintains a certificate of deposit rating of A-1 or
better by Standard & Poor's and P-1 by Moody's (or such other rating below
A-1 or P-1, as the case may be, which is satisfactory to each Rating Agency),
(y) Commercial Credit Company has a commercial paper rating of at least A-1
and P-1 by Standard & Poor's and Moody's, The Travelers Bank remains a direct
or indirect majority-owned Travelers Group Inc. subsidiary and certain other
arrangements are made satisfactory to each Rating Agency or (z) any other
arrangement that satisfies the Rating Agency Condition, the Servicer need not
make daily deposits of collections into the Collection Account, but may make
a single monthly deposit into the Collection Account in immediately available
funds. Subject to the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, with respect to any Monthly
Period, whether the Servicer is required to make deposits of Collections
pursuant to the first or the second preceding sentence, (i) the Servicer will
only be required to deposit Collections into the Collection Account up to the
aggregate amount of Collections required to be deposited into any Series
Account or, without duplication, distributed on or prior to the related
Distribution Date to Investor Certificateholders or to any Series Enhancer
pursuant to the terms of any Supplement or Enhancement Agreement and (ii) if
at any time prior to such
51
Distribution Date the amount of Collections deposited in the Collection
Account exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to withdraw the excess from the
Collection Account.
(b) ALLOCATIONS FOR THE TRANSFEROR CERTIFICATES.
Throughout the existence of the Trust, unless otherwise stated in any
Supplement, the Servicer shall allocate to the Holders of the Transferor
Certificates an amount equal to the product of (A) the Transferor Percentage
and (B) the aggregate amount of such Collections allocated to Principal
Receivables and Finance Charge Receivables, respectively, in respect of each
Monthly Period. Notwithstanding anything in this Agreement to the contrary,
unless otherwise stated in any Supplement, the Servicer need not deposit this
amount or any other amounts so allocated to the Transferor Certificates
pursuant to any Supplement into the Collection Account and shall pay, or be
deemed to pay, such amounts as collected to the Holders of the Transferor
Certificates.
The payments to be made to the Holders of the Transferor
Certificates pursuant to this subsection 4.03(b) do not apply to deposits to
the Collection Account or other amounts that do not represent Collections,
including payment of the purchase price for Receivables pursuant to Section
2.06 or 10.01, proceeds from the sale, disposition or liquidation of
Receivables pursuant to Section 9.02 or 12.02 or payment of the purchase
price for the Certificateholders' Interest of a specific Series pursuant to
the related Supplement.
Section 4.04. SHARED COLLECTIONS.
(a) On each Distribution Date, (i) the Servicer shall
allocate Shared Principal Collections to each Principal Sharing Series, pro
rata, in proportion to the Principal Shortfalls, if any, with respect to each
such Series and (ii) the Servicer shall withdraw from the Collection Account
and pay to the Holders of the Transferor Certificates an amount equal to the
excess, if any, of (x) the aggregate amount for all outstanding Series of
Collections of Principal Receivables which the related Supplements or this
Agreement specify are to be treated as "Shared Principal Collections" for
such Distribution Date over (y) the aggregate amount for all outstanding
Principal Sharing Series which the related Supplements specify are "Principal
Shortfalls" for such Distribution Date; PROVIDED, HOWEVER, that if, on any
Distribution Date the Transferor Amount is less than or equal to the Required
Transferor Amount or if an amount equal to the product of (i) the aggregate
amount of Principal Receivables and (ii) one minus the Discount Percentage is
less than the Required Principal Balance, the Servicer will not distribute to
the Holders of the Transferor Certificates any Shared Principal Collections
that otherwise would be distributed to the Holders of the Transferor
Certificates but shall deposit such funds in the Excess Funding Account.
(b) On each Distribution Date, (i) the Servicer shall
allocate Excess Finance Charge Collections (as described below) to each
Excess Allocation Series pro rata, in proportion to the Finance Charge
Shortfalls (as described below), if any, with respect to each such Series and
(ii) the Servicer shall withdraw from the Collection Account and pay to the
Holders of the Transferor Certificates an amount equal to the excess, if any,
of (x) the aggregate amount for all outstanding Series of Collections of
Finance Charge Receivables which the related Supplements specify are to be
treated as "Excess Finance Charge Collections" for such Distribution Date
over (y) the aggregate amount for all outstanding Series which the related
52
Supplements specify are "Finance Charge Shortfalls" for such Series and such
Distribution Date; PROVIDED, HOWEVER, that the sharing of Excess Finance
Charge Collections among Series will continue only until such time, if any,
at which the Transferror shall deliver to the Trustee an Officer's
Certificate to the effect that, in the reasonable belief the Transferor the
continued sharing of Excess Finance Charge Collections among Series would
have adverse regulatory implications with respect to the Transferor.
Following the delivery by the Transferor of such an Officer's Certificate to
the Trustee there will not be any further sharing of Excess Finance Charge
Collections among Series.
(c) The Servicer will determine the amount of
Collections of Finance Charge Receivables for any Monthly Period allocated to
the Transferor's Interest but not due to the Holder of any Supplemental
Certificate and other amounts otherwise payable to the Transferor with
respect to Collections of Finance Charge Receivables regardless of whether
such collections were initially allocated to the Transferor or any Series
(the "Excess Transferor Finance Charge Collections") and such Excess
Transferor Finance Charge Collections shall be applied to cover any Finance
Charge Shortfalls in each Series entitled to Excess Transferor Finance Charge
Collections, pro rata, based upon the amount of the Finance Charge Shortfall,
if any of each such Series (in each case after giving effect to the
application of Excess Finance Charge Collections, if any, to such Series).
In all cases, any Excess Transferor Finance Charge Collections remaining
after covering shortfalls with respect to all designated Series will be
treated as Shared Transferor Principal Collections.
(d) The Servicer will determine the amount of
Collections of Principal Receivables for any Monthly Period allocated to the
Transferor's Interest but not due to the Holder of any Supplemental
Certificate and other amounts payable to the Transferor with respect to
collections of Principal Receivables, regardless of whether such Collections
were initially allocated to the Transferor or any Series, plus the amount of
Excess Transferor Finance Charge Collections remaining after application to
each Series to cover Finance Charge Shortfalls as provided in subsection
4.04(c) above (collectively, "Shared Transferor Principal Collections"). The
Servicer will allocate the Shared Transferor Principal Collections to cover
any Principal Shortfalls that have not been covered out of the Shared
Principal Collections allocated to each Series that has been designated in
the applicable Supplement as being entitled to receive Shared Transferor
Principal Collections. If Principal Shortfalls remaining after the
application of Shared Principal Collections exceed Shared Transferor
Principal Collections for any Monthly Period, Shared Transferor Principal
Collections will be allocated pro rata among each Series which in accordance
with the Supplement for such Series is designated as being entitled to
received Shared Transferor Principal Collections, and the balance will be
paid to the Holder of the Transferor Certificate.
Section 4.05. ADDITIONAL WITHDRAWALS FROM THE COLLECTION
ACCOUNT. On or before the Determination Date with respect to any Monthly
Period, the Servicer shall determine the amounts payable to The Travelers
Bank, The Travelers Bank USA or any other Account Owner with respect to such
Monthly Period under the applicable Receivables Transfer Agreement in respect
of amounts on deposit in the Collection Account that were not transferred to
the Transferor under such Receivables Transfer Agreement, and the Servicer
shall withdraw such amounts from the Collection Account and pay such amount
to The Travelers Bank, The Travelers Bank USA or other Account Owner, as
applicable.
53
Section 4.06. ALLOCATION OF TRUST ASSETS TO SERIES OR
GROUPS. To the extent so provided in the Supplement for any Series or in an
amendment to the Pooling and Servicing Agreement executed pursuant to
subsection 13.01(a), Receivables conveyed to the Trust pursuant to Section
2.01 and Receivables or Participation Interests conveyed to the Trust
pursuant to Section 2.09 or any Participation Interest Supplement, and all
Collections received with respect to such Receivables or Participation
Interests, may be allocated in whole or in part to one or more Series or
Groups as may be provided in such Supplement or amendment, PROVIDED, HOWEVER,
that any such allocation shall be effective only upon satisfaction of the
following conditions:
(i) on or before the fifth Business Day
immediately preceding such allocation, the Servicer shall
have given the Trustee and each Rating Agency written
notice of such allocation;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such allocation; and
(iii) the Servicer shall have delivered to the
Trustee an Officer's Certificate, dated the date of such
allocation, to the effect that the Servicer reasonably
believes that such allocation will not have an Adverse
Effect.
Any such Supplement or amendment may provide that (i) such allocation
to one or more particular Series or Groups may terminate upon the occurrence of
certain events specified therein and (ii) that upon the occurrence of any such
event, such assets and any Collections with respect thereto, shall be
reallocated to other Series or Groups or to all Series, all as shall be provided
in such Supplement or amendment.
[END OF ARTICLE IV]
54
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Distributions shall be made to, and reports shall be
provided to, Certificateholders as set forth in the applicable Supplement.
[END OF ARTICLE V]
55
ARTICLE VI
THE CERTIFICATES
Section 6.01. THE CERTIFICATES. The Investor
Certificates of any Series or Class may be issued in bearer form ("Bearer
Certificates") with attached interest coupons and any other applicable coupon
(collectively, the "Coupons") or in fully registered form ("Registered
Certificates") and shall be substantially in the form of the exhibits with
respect thereto attached to the applicable Supplement. The Transferor
Certificate will be issued in registered form, substantially in the form of
Exhibit A, and shall upon issuance be executed and delivered by The Travelers
Bank to the Trustee for authentication and redelivery as provided in Section
6.02. Except as otherwise provided in Section 6.03 or in any Supplement,
Bearer Certificates shall be issued in minimum denominations of $100,000 and
Registered Certificates shall be issued in minimum denominations of $1,000
and in integral multiples of $1,000 in excess thereof. If specified in any
Supplement, the Investor Certificates of any Series or Class shall be issued
upon initial issuance as a single certificate evidencing the aggregate
original principal amount of such Series or Class as described in Section
6.13. The Transferor Certificate shall be a single certificate and shall
initially represent the entire Transferor's Interest. Each Certificate shall
be executed by manual or facsimile signature on behalf of The Travelers Bank
by its respective President or any Vice President. Certificates bearing the
manual or facsimile signature of an individual who was, at the time when such
signature was affixed, authorized to sign on behalf of The Travelers Bank
shall not be rendered invalid, notwithstanding that such individual ceased to
be so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such Certificates.
No Certificates shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein executed by
or on behalf of the Trustee by the manual signature of a duly authorized
signatory, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. Bearer Certificates shall be dated
the related Closing Date. All Registered Certificates and Transferor
Certificates shall be dated the date of their authentication.
Section 6.02. AUTHENTICATION OF CERTIFICATES. The
Trustee shall authenticate and deliver the Investor Certificates of each
Series and Class that are issued upon original issuance to or upon the order
of the Transferor against payment to the Transferor of the purchase price
therefor. The Trustee shall authenticate and deliver the Transferor
Certificate to the Transferor simultaneously with its delivery of the
Investor Certificates of the first Series to be issued hereunder. If
specified in the related Supplement for any Series or Class, the Trustee
shall authenticate and deliver outside the United States the Global
Certificate that is issued upon original issuance thereof.
Section 6.03. NEW ISSUANCES.
(a) The Transferor may from time to time direct the
Trustee, on behalf of the Trust, to authenticate one or more new Series of
Investor Certificates. The Investor Certificates of all outstanding Series
shall be equally and ratably entitled as provided herein to the benefits
56
of this Agreement without preference, priority or distinction, all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement except, with respect to any Series or Class, as provided in the
related Supplement.
(b) On or before the Closing Date relating to any new
Series, the parties hereto will execute and deliver a Supplement which will
specify the Principal Terms of such new Series. The terms of such Supplement
may modify or amend the terms of this Agreement solely as applied to such new
Series. The obligation of the Trustee to authenticate the Investor
Certificates of such new Series and to execute and deliver the related
Supplement is subject to the satisfaction of the following conditions:
(i) on or before the fifth day immediately
preceding the Closing Date, the Transferor shall have given
the Trustee and the Servicer notice of such issuance and
the Closing Date; and on or before the tenth day
immediately preceding the Closing Date, the Transferor
shall have given each Rating Agency notice of such issuance;
(ii) the Transferor shall have delivered to the
Trustee the related Supplement, in form satisfactory to the
Trustee, executed by each party thereto;
(iii) the Transferor shall have delivered to the
Trustee any related Enhancement Agreement executed by each
of the parties thereto, other than the Trustee;
(iv) the Rating Agency Condition shall have been
satisfied with respect to such issuance;
(v) the Transferor shall have delivered to the
Trustee an Officer's Certificate, dated the Closing Date,
to the effect that the Transferor reasonably believes that
such issuance will not, based on the facts known to such
officer at the time of such certification, then or
thereafter cause a Pay Out Event or a Reinvestment Event to
occur with respect to any Series; and
(vi)the Transferor shall have delivered to the
Trustee and each Rating Agency a Tax Opinion, dated the
Closing Date, with respect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by the Transferor.
(c) The Transferor may surrender the Transferor
Certificate to the Trustee in exchange for a newly issued Transferor
Certificate and one or more additional certificates (each a "Supplemental
Certificate"), the terms of which shall be defined in a supplement to this
Agreement (which supplement shall be subject to subsection 13.01(a) only to
the extent that it amends any of the terms of this Agreement), to be
delivered to or upon the order of the Transferor (or the Holder of a
Supplemental Certificate, in the case of the transfer or exchange thereof, as
provided below), upon satisfaction of the following conditions:
57
(i) The Transferor shall have given written
notice to each Rating Agency of such exchange;
(ii) the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) shall not be
less than 2% of the total amount of Principal Receivables
as of the date of, and after giving effect to, such
exchange; and
(iii) if any Series of Investor Certificates are
outstanding that were characterized as debt at the time of
their issuance, the Transferor shall have delivered to the
Trustee and each Rating Agency a Tax Opinion, dated the
date of such exchange (or transfer or exchange as provided
below), with respect thereto.
Any Supplemental Certificate may be transferred or exchanged only upon
satisfaction of the conditions set forth in clause (ii) above.
(d) The Transferor Certificate (or any interest therein)
may be transferred to a Person which is a member of the "affiliated group" of
which Commercial Credit Company is the "common parent" (as such terms are
defined in Section 1504(a) of the Code); provided that (i) if any Series of
Investor Certificates are outstanding that were characterized as debt at the
time of their issuance, the Transferor shall have delivered to the Trustee
and each Rating Agency a Tax Opinion, dated the date of such transfer, with
respect thereto, and (ii) any such transferee shall be deemed to be a
"Transferor" for purposes of Sections 7.04 and 9.02.
Section 6.04. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a)The Trustee shall cause to be kept at the office or
agency to be maintained in accordance with the provisions of Section 11.16 a
register (the "Certificate Register") in which, subject to such reasonable
regulations as it may prescribe, a transfer agent and registrar (which may be
the Trustee) (the "Transfer Agent and Registrar") shall provide for the
registration of the Registered Certificates and of transfers and exchanges of
the Registered Certificates as herein provided. The Transfer Agent and
Registrar shall initially be the Trustee and any co-transfer agent and
co-registrar chosen by the Transferor and acceptable to the Trustee,
including, if and so long as any Series or Class is listed on the Luxembourg
Stock Exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg. 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.
The Trustee may revoke such appointment and remove any
Transfer Agent and Registrar if the Trustee determines in its sole discretion
that such Transfer Agent and Registrar failed to perform its obligations
under this Agreement in any material respect. Any Transfer Agent and
Registrar shall be permitted to resign as Transfer Agent and Registrar upon
30 days' notice to the Transferor, the Trustee and the Servicer; PROVIDED,
HOWEVER, that such resignation shall not be effective and such Transfer Agent
and Registrar shall continue to perform its duties as Transfer Agent and
Registrar until the Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to the Transferor.
58
Subject to paragraph (c) below, upon surrender for
registration of transfer of any Registered Certificate at any office or
agency of the Transfer Agent and Registrar maintained for such purpose, one
or more new Registered Certificates (of the same Series and Class) in
authorized denominations of like aggregate fractional undivided interests in
the Certificateholders' Interest shall be executed, authenticated and
delivered, in the name of the designated transferee or transferees.
At the option of a Registered Certificateholder,
Registered Certificates (of the same Series and Class) may be exchanged for
other Registered Certificates of authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest, upon
surrender of the Registered Certificates to be exchanged at any such office
or agency; Registered Certificates, including Registered Certificates
received in exchange for Bearer Certificates, may not be exchanged for Bearer
Certificates. At the option of the Holder of a Bearer Certificate, subject
to applicable laws and regulations, Bearer Certificates may be exchanged for
other Bearer Certificates or Registered Certificates (of the same Series and
Class) of authorized denominations of like aggregate fractional undivided
interests in the Certificateholders' Interest, upon surrender of the Bearer
Certificates to be exchanged at an office or agency of the Transfer Agent and
Registrar located outside the United States. Each Bearer Certificate
surrendered pursuant to this Section shall have attached thereto all
unmatured Coupons; provided that any Bearer Certificate, so surrendered after
the close of business on the Record Date preceding the relevant payment date
after the expected final payment date need not have attached the Coupon
relating to such payment date (in each case, as specified in the applicable
Supplement).
Whenever any Investor Certificates are so surrendered for
exchange, the Transferor shall execute, 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 which the
Investor 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 transfer in a form
satisfactory to the Trustee or the Transfer Agent and Registrar duly executed
by the Investor Certificateholder or the attorney-in-fact thereof duly
authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Investor Certificates, but the Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any such transfer
or exchange.
All Investor Certificates (together with any Coupons)
surrendered for registration of transfer and exchange or for payment shall be
canceled and disposed of in a manner satisfactory to the Trustee. The
Trustee shall cancel and destroy any Global Certificate upon its exchange in
full for Definitive Euro-Certificates and shall deliver a certificate of
destruction to the Transferor. Such certificate shall also state that a
certificate or certificates of a Foreign Clearing Agency to the effect
referred to in Section 6.13 was received with respect to each portion of the
Global Certificate exchanged for Definitive Euro-Certificates.
59
The Travelers Bank shall execute and deliver to the
Trustee 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, each Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its
expense in each of the Borough of Manhattan, the City of New York, and, if
and so long as any Series or Class is listed on the Luxembourg Stock
Exchange, Luxembourg, an office or agency where Investor Certificates may be
surrendered for registration of transfer or exchange (except that Bearer
Certificates may not be surrendered for exchange at any such office or agency
in the United States).
(c)(i) Registration of transfer of Investor Certificates containing
a legend substantially to the effect set forth on Exhibit E-1 shall
be effected only if such transfer (x) is made pursuant to an
effective registration statement under the Act, or is exempt from the
registration requirements under the Act, and (y) is made to a Person
which is not an employee benefit plan, trust or account, including an
individual retirement account, that is subject to ERISA or that is
described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of a plan's
investment in such entity (a "Benefit Plan"). In the event that
registration of a transfer is to be made in reliance upon an
exemption from the registration requirements under the Act, the
transferor or the transferee shall deliver, at its expense, to the
Transferor, the Servicer and the Trustee, an investment letter from
the transferee, substantially in the form of the investment and ERISA
representation letter attached hereto as Exhibit E-2, and no
registration of transfer shall be made until such letter is so
delivered.
Investor Certificates issued upon registration or transfer
of, or Investor Certificates issued in exchange for, Investor
Certificates bearing 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 an Investor Certificate containing the legend
referred to above is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall
promptly seek instructions from the Servicer regarding such transfer
and shall be entitled to receive instructions signed by a Servicing
Officer prior to registering any such transfer. The Transferor
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 without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by them
in relation to any such instructions furnished pursuant to this
clause (i).
(ii) Registration of transfer of Investor Certificates
containing a legend to the effect set forth on Exhibit E-3 shall be
effected only if such transfer is made to a Person which is not a
Benefit Plan. By accepting and holding any
60
such Investor Certificate, an Investor Certificateholder shall be
deemed to have represented and warranted that it is not a Benefit
Plan. By acquiring any interest in a Book-Entry Certificate which
contains such legend, a Certificate Owner shall be deemed to have
represented and warranted that it is not a Benefit Plan.
(iii) If so requested by the Transferor, the Trustee will
make available to any prospective purchaser of Investor Certificates
who so requests, a copy of a letter provided to the Trustee by or on
behalf of the Transferor relating to the transferability of any
Series or Class to a Benefit Plan.
Section 6.05. 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 and the Trustee 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 shall execute, 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 fractional undivided interest. In connection with
the issuance of any new Certificate under this Section, the Trustee or the
Transfer Agent and Registrar may require the payment by the Certificateholder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee and Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust, as
if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 6.06. PERSONS DEEMED OWNERS. The Trustee, the
Paying Agent, the Transfer Agent and Registrar and any agent of any of them
may (a) prior to due presentation of a Registered Certificate for
registration of transfer, treat the Person in whose name any Registered
Certificate is registered as the owner of such Registered Certificate for the
purpose of receiving distributions pursuant to the terms of the applicable
Supplement and for all other purposes whatsoever, and (b) treat the bearer of
a Bearer Certificate or Coupon as the owner of such Bearer Certificate or
Coupon for the purpose of receiving distributions pursuant to the terms of
the applicable Supplement and for all other purposes whatsoever; and, in any
such case, neither the Trustee, the Paying Agent, the Transfer Agent and
Registrar nor any agent of any of them shall be affected by any notice to the
contrary. Notwithstanding the foregoing, in determining whether the Holders
of the requisite Investor Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by any of the Transferor, the Servicer, any other Holder of a
Transferor Certificate, the Trustee 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 actually knows to be so owned shall be so
disregarded. Certificates so owned which have been pledged in good faith
shall not be disregarded and may be regarded as outstanding if the pledgee
61
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 Transferor,
the Servicer, any other Holder of a Transferor Certificate or any Affiliate
thereof.
Section 6.07. APPOINTMENT OF PAYING AGENT. The Paying
Agent shall make distributions to Investor Certificateholders from the
Collection Account or any applicable Series Account pursuant to the
provisions of the applicable Supplement and shall report the amounts of such
distributions to the Trustee. Any Paying Agent shall have the revocable power
to withdraw funds from the Collection Account or any applicable Series
Account for the purpose of making the distributions referred to above. The
Trustee may revoke such power and remove the Paying Agent if the Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement or any Supplement in any
material respect. The Paying Agent shall initially be the Trustee and any
co-paying agent chosen by the Transferor and acceptable to the Trustee,
including, if and so long as any Series or Class is listed on the Luxembourg
Stock Exchange and such exchange so requires, a co-paying agent in Luxembourg
or another western European city. Any Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' notice to the Trustee. In the event
that any Paying Agent shall resign, the Trustee shall appoint a successor to
act as Paying Agent. The Trustee shall cause each successor or additional
Paying Agent to execute and deliver to the Trustee an instrument in which
such successor or additional Paying Agent shall agree with the Trustee that
it 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
Investor Certificateholders. The Paying Agent shall return all unclaimed
funds to the Trustee and upon removal shall also return all funds in its
possession to the Trustee. The provisions of Sections 11.01, 11.02, 11.03
and 11.05 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.
Section 6.08. ACCESS TO LIST OF REGISTERED
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, within five Business Days after receipt by the Trustee of a
request therefor, a list in such form as the Servicer or the Paying Agent may
reasonably require, of the names and addresses of the Registered
Certificateholders. If any Holder or group of Holders of Investor
Certificates of any Series or all outstanding Series, as the case may be,
evidencing not less than 10% of the aggregate unpaid principal amount of such
Series or all outstanding Series, as applicable (the "Applicants"), apply to
the Trustee, and such application states that the Applicants desire to
communicate with other Investor Certificateholders with respect to their
rights under this Agreement or any Supplement or under the Investor
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses, shall
afford or shall cause the Transfer Agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Registered Certificateholders of such Series or all outstanding Series, as
applicable, held by the Trustee, within five Business Days after the receipt
of such application. Such list shall be as of a date no more than 45 days
prior to the date of receipt of such Applicants' request.
62
Every Registered Certificateholder, by receiving and
holding a Registered Certificate, agrees with the Trustee that neither the
Trustee, the Transfer Agent and Registrar, nor any of their respective
agents, shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Registered
Certificateholders hereunder, regardless of the sources from which such
information was derived.
Section 6.09. 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 certificate of authentication executed on behalf of
the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor and the Servicer.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an authenticating
agent without the execution or filing of any power or any further act on the
part of the Trustee or such authenticating agent. An authenticating agent
may at any time resign by giving 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. The Transferor agrees to pay to each authenticating agent
from time to time reasonable compensation for its services under this
Section. The provisions of Sections 11.01, 11.02 and 11.03 shall be
applicable to any authenticating agent.
(c) Pursuant to an appointment made under this Section,
the Certificates may have endorsed thereon, in lieu of 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 Pooling and Servicing
Agreement.
____________________________
____________________________
as Authenticating Agent
for the Trustee,
by____________________________
Authorized Officer
63
Section 6.10. BOOK-ENTRY CERTIFICATES. Unless otherwise specified
in the related Supplement for any Series or Class, the Investor Certificates,
upon original issuance, shall be issued in the form of one or more typewritten
Investor Certificates representing the Book-Entry Certificates, to be delivered
to the Clearing Agency, by, or on behalf of, the Transferor. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the Clearing Agency or its nominee, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in Section 6.12. Unless and
until definitive, fully registered Investor Certificates ("Definitive
Certificates") have been issued to the applicable Certificate Owners pursuant to
Section 6.12 or as otherwise specified in any such Supplement:
(a) the provisions of this Section shall be in full force and effect;
(b) the Transferor, the Servicer and the Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes (including
the making of distributions) as the authorized representatives of the respective
Certificate Owners;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control; and
(d) the rights of the respective Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or the Clearing Agency Participants.
Pursuant to the Depository Agreement, unless and until Definitive Certificates
are issued pursuant to Section 6.12, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the related Investor Certificates to
such Clearing Agency Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Investor
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of Investor Certificates, such direction or consent may be
given by Certificate Owners (acting through the Clearing Agency and the Clearing
Agency Participants) owning Investor Certificates evidencing the requisite
percentage of principal amount of Investor Certificates.
Section 6.11. NOTICES TO CLEARING AGENCY. Whenever any notice or
other communication is required to be given to Investor Certificateholders of
any Series or Class with respect to which Book-Entry Certificates have been
issued, unless and until Definitive Certificates shall have been issued to the
related Certificate Owners, the Trustee shall give all such notices and
communications to the applicable Clearing Agency.
Section 6.12. DEFINITIVE CERTIFICATES. If Book Entry Certificates
have been issued with respect to any Series or Class and (a) the Transferor
advises the Trustee that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Series or Class and the Trustee or the Transferor are
64
unable to locate a qualified successor,(b) the Transferor, at its option,
advises the Trustee that it elects to terminate the book-entry system with
respect to such Series or Class through the Clearing Agency or (c) after the
occurrence of a Servicer Default, Certificate Owners of such Series or Class
evidencing more than 50% of the aggregate unpaid principal amount of such Series
or Class advise the Trustee and the Clearing Agency through the Clearing Agency
Participants that the continuation of a book-entry system with respect to the
Investor Certificates of such Series or Class through the Clearing Agency is no
longer in the best interests of the Certificate Owners with respect to such
Certificates, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Clearing Agency, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of any such Certificates by
the Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Transferor shall execute and the Trustee shall
authenticate and deliver such Definitive Certificates. Neither the Transferor
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 such 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 such Definitive Certificates as Investor
Certificateholders hereunder.
Section 6.13. GLOBAL CERTIFICATE; EXCHANGE DATE.
(a) If specified in the related Supplement for any Series or Class,
the Investor Certificates for such Series or Class will initially be issued in
the form of a single temporary global Certificate (the "Global Certificate") in
bearer form, without interest coupons, in the denomination of the entire
aggregate principal amount of such Series or Class and substantially in the form
set forth in the exhibit with respect thereto attached to the related
Supplement. The Global Certificate will be executed by the Transferor and
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 below for Bearer or Registered
Certificates in definitive form (the "Definitive Euro-Certificates").
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Investor Certificates of such Series or
Class, so advise the Trustee, the Transferor, the Depositaries, and each Foreign
Clearing Agency forthwith. Without unnecessary delay, but in any event not
prior to the Exchange Date, the Transferor will execute and deliver to the
Trustee at its London office or its designated agent outside the United States
definitive Bearer Certificates in an aggregate principal amount equal to the
entire aggregate principal amount of such Series or Class. 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 Exchange Date. An
institutional investor that is a U.S. Person may exchange the portion of the
Global Certificate beneficially owned by it only for an equal aggregate
principal amount of Registered Certificates bearing the applicable legend set
forth in the form of Registered Certificates attached to the related Supplement
and having a minimum denomination of $500,000, which may be in temporary form if
the Transferor so elects. The Transferor may waive the $500,000 minimum
denomination
65
requirement if it so elects. Upon any demand for exchange for Definitive
Euro-Certificates in accordance with this paragraph, the Transferor shall cause
the Trustee to authenticate and deliver the Definitive Euro-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 in either case only upon presentation to the Trustee of a
written statement substantially in the form of Exhibit F-1 with respect to the
Global Certificate or portion thereof being exchanged, signed by a Foreign
Clearing Agency and dated on the Exchange Date or a subsequent date, to the
effect that it has received in writing or by tested telex a certification
substantially in the form of (i) in the case of beneficial ownership of the
Global Certificate or a portion thereof being exchanged by a United States
institutional investor pursuant to the second preceding sentence, the
certificate in the form of Exhibit F-2 signed by the Manager which sold the
relevant Certificates or (ii) in all other cases, the certificate in the form of
Exhibit F-3, the certificate referred to in this clause (ii) being dated on the
earlier of the first actual payment of interest in respect of such Certificates
and the date of the delivery of such Certificate in definitive form. Upon
receipt of such certification, the Trustee shall cause the Global Certificate to
be endorsed in accordance with paragraph (d) below. Any exchange as provided in
this Section 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 6.14. MEETINGS OF CERTIFICATEHOLDERS.
(a) If at the time any Bearer Certificates are issued and outstanding
with respect to any Series or Class to which any meeting described below
relates, the Servicer or the Trustee may at any time call a meeting of Investor
Certificateholders of any Series or Class or of all Series, to be held at such
time and at such place as 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,
any Supplement or the Investor Certificates or of taking any other action
permitted to be taken by Investor Certificateholders hereunder or under any
Supplement. Notice of any meeting of Investor
66
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 13.05, the first mailing and 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 Investor Certificateholders a person shall be
(i) a Holder of one or more Investor Certificates of the applicable Series or
Class or (ii) a person appointed by an instrument in writing as proxy by the
Holder of one or more such Investor Certificates. The only persons who shall be
entitled to be present or to speak at any meeting of Investor 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 counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing a majority of the aggregate unpaid
principal amount of the applicable Series or Class 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 meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days; at the reconvening of any meeting further adjourned
for lack of a quorum, the persons entitled to vote Investor Certificates
evidencing at least 25% of the aggregate unpaid principal amount of the
applicable Series or Class 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
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 applicable
Investor Certificates which shall constitute a quorum.
(c) Any Investor 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
Investor Certificateholder 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 13.01, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
shall be binding on all 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, executed by any bank, trust company or recognized securities dealer,
wherever situated, satisfactory to the Servicer. 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
67
certificate shall be produced by 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.
(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 Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Series or Class or all outstanding Series, as the case may be, represented at
the meeting. No vote shall be cast or counted at any meeting in respect of any
Investor 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 an Investor Certificateholder or proxy. Any meeting of
Investor Certificateholders duly called at which a 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 Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Investor 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 Investor
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.
Section 6.15. UNCERTIFICATED CLASSES. Notwithstanding anything to
the contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificates.
[END OF ARTICLE VI]
68
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.01. LIABILITY OF THE TRANSFEROR. Each Transferor
(including any Additional Transferors) shall be severally and not jointly liable
for the obligations, covenants, representations and warranties of such
Transferor arising under or related to this Agreement or any Supplement. Each
Transferor shall be liable only to the extent of the obligations specifically
undertaken by it in its capacity as a Transferor.
Section 7.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE TRANSFEROR.
(a) No Transferor shall consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person unless:
(i)(x) the corporation formed by such consolidation or into
which such Transferor is merged or the Person which acquires by
conveyance or transfer the properties and assets of such Transferor
substantially as an entirety shall be, if such Transferor is not the
surviving entity, organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
be a savings and loan association, a national banking association, a
bank or other entity which is not subject to Title 11 of the United
States Code or is a special purpose corporation whose powers and
activities are limited to substantially the same degree as provided
in the Certificate of Incorporation of CC Credit Card Corporation
and, if such 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 such Transferor hereunder; and
(y) such Transferor or the surviving entity as the case may be has
delivered to the Trustee (with a copy to each Rating Agency) 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, that such
supplemental agreement is a valid and binding obligation of such
surviving entity enforceable against such surviving entity in
accordance with its terms, or enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally from time to
time in effect or general principles of equity (whether considered in
a suit at law or in equity), and that all conditions precedent herein
provided for relating to such transaction have been complied with;
(ii) the Rating Agency Condition shall have been satisfied
with respect to such consolidation, merger, conveyance or
transfer; and
(iii) if any Series of Investor Certificates are
outstanding that were characterized as debt at the time of their
issuance, the relevant Transferor shall
69
have delivered to the Trustee and each Rating Agency a Tax Opinion,
dated the date of such consolidation, merger, conveyance or transfer,
with respect thereto.
(b) The obligations, of the Transferor hereunder shall not be
assignable nor shall any Person succeed to such obligations or rights of the
Transferor hereunder except in each case in accordance with the provisions of
the foregoing paragraph.
Section 7.03. LIMITATIONS ON LIABILITY OF THE TRANSFEROR. Subject
to Section 7.01, neither the Transferor nor any of its directors, officers,
employees, incorporators or agents acting in such capacities shall be under any
liability to the Trust, the Trustee, the Certificateholders, the Certificate
Owners, any Series Enhancer, any other Transferor or any other Person for any
action taken or for refraining from the taking of any action in good faith in
such capacities pursuant to this Agreement, it being expressly understood that
such liability is expressly waived and released as a condition of, and
consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; PROVIDED, HOWEVER, that this provision shall not
protect any Transferor or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. Each Transferor and any director, officer,
employee or agent of such Transferor may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person (other than
such Transferor) respecting any matters arising hereunder.
[END OF ARTICLE VII]
70
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01. LIABILITY OF THE SERVICER. The Servicer shall be
liable under this Article only to the extent of the obligations specifically
undertaken by the Servicer in its capacity as Servicer.
Section 8.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a)(i) the corporation formed by such consolidation or
into which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be, if the Servicer is not the
surviving entity, a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia and, if the Servicer is not the surviving entity, such
corporation 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 Servicer hereunder;
(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, that such
supplemental agreement is a valid and binding obligation of such
surviving entity enforceable against such surviving entity in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and that all
conditions precedent herein provided for relating to such transaction
have been complied with;
(b) the Rating Agency Condition shall have been satisfied with
respect to such assignment and succession; and
(c) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety shall be an
Eligible Servicer.
Section 8.03. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Except as provided in Section 8.04, neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer in its capacity as
Servicer shall be under any liability to the Trust, the Trustee, the
Certificateholders, any Series Enhancer or any other Person for any action taken
or for refraining from the taking of any action in good faith in its capacity as
Servicer pursuant
71
to this Agreement; PROVIDED, HOWEVER, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Servicer and any director, officer, employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person (other than the Servicer)
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Servicer in accordance with this Agreement and which
in its reasonable judgment may involve it in any expense or liability. The
Servicer may, in its sole discretion, undertake any such legal action which it
may deem necessary or desirable for the benefit of the Certificateholders with
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder.
Section 8.04. SERVICER INDEMNIFICATION OF THE TRUST AND THE TRUSTEE.
The Servicer shall indemnify and hold harmless the Trust and the Trustee from
and against any loss, liability, expense, damage or injury suffered or sustained
by reason of any acts or omissions of the Servicer with respect to the Trust
pursuant to this Agreement, including any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any action, proceeding or claim; PROVIDED, HOWEVER, that the
Servicer shall not indemnify the Trustee if such acts, omissions or alleged acts
or omissions constitute or are caused by fraud, negligence, or willful
misconduct by the Trustee; PROVIDED FURTHER, that the Servicer shall not
indemnify the Trust, the Investor Certificateholders or the Certificate Owners
for any liabilities, costs or expenses of the Trust with respect to any action
taken by the Trustee at the request of the Investor Certificateholders; PROVIDED
FURTHER, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners as to any losses, claims or damages
incurred by any of them in their capacities as investors, including without
limitation losses incurred as a result of Defaulted Receivables; and PROVIDED
FURTHER, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners 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,
local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by the Trust, the
Investor Certificateholders or the Certificate Owners in connection herewith to
any taxing authority. Indemnification pursuant to this Section shall not be
payable from the Trust Assets. The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof.
Section 8.05. THE SERVICER NOT TO RESIGN. The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under any Requirement of Law and (ii) there is no reasonable action
which the Servicer could take to make the performance of its duties hereunder
permissible under any such Requirements of Law. Any determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee. No resignation shall become effective
until the Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02. If within 120 days of the date of the determination that the
72
Servicer may no longer act as Servicer the Trustee is unable to appoint a
Successor Servicer, the Trustee shall serve as Successor Servicer.
Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
institution that is an Eligible Servicer as the Successor Servicer hereunder.
The Trustee shall give prompt notice to each Rating Agency upon the appointment
of a Successor Servicer.
Section 8.06. 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
Certificateholders or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to the
Servicer's normal security and confidentiality procedures and (d) at reasonably
accessible offices in the continental United States designated by the Servicer.
Nothing in this Section shall derogate from the obligation of the Transferor,
the Trustee and the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the Servicer
to provide access as provided in this Section as a result of such obligation
shall not constitute a breach of this Section.
Section 8.07. DELEGATION OF DUTIES. In the ordinary course of
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement; PROVIDED, HOWEVER, in the case of significant
delegation to a Person other than to an Account Owner or any Affiliate of an
Account Owner, (i) at least 30 days prior written notice shall be given to the
Trustee and each Rating Agency of such delegation and (ii) at or prior to the
end of such 30-day period the Servicer shall have determined that the Rating
Agency Condition has been met. Any such delegations shall not relieve the
Servicer of its liability and responsibility with respect to such duties, and
shall not constitute a resignation within the meaning of Section 8.05.
Section 8.08. EXAMINATION OF RECORDS. The Servicer shall clearly
and unambiguously indicate in its computer files or other records that the
Receivables arising in the Accounts have been conveyed to the Trustee, on behalf
of the Trust, pursuant to this Agreement for the benefit of the
Certificateholders. 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.
[END OF ARTICLE VIII]
73
ARTICLE IX
PAY OUT EVENTS
Section 9.01. TRUST PAY OUT EVENTS. If any one of the following
events shall occur with respect to the Trust ("Trust Pay Out Events"):
(i) any Transferor or any of the Account Owners shall
consent to the appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to such Transferor
or Account Owner or of or relating to all or substantially all of its
property, or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of
a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against such Transferor or Account Owner; or
any Transferor or Account Owner shall admit in writing its inability
to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization
statute, make any assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations (any such event, an
"Insolvency Event");
(ii) the Trust shall become subject to regulation by the
Commission as an "investment company" within the meaning of the
Investment Company Act; or
(iii) a Transfer Restriction Event shall occur;
then, a Pay Out Event shall occur with respect to each Series without any notice
or other action on the part of the Trustee or the Investor Certificateholders,
immediately upon the occurrence of such event.
Section 9.02. RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT. If
the Transferor causes an Insolvency Event to occur with respect to the
Transferor or if an Insolvency Event otherwise occurs with respect to the
Transferor, the Transferor shall on the day any such Insolvency Event occurs
immediately cease to transfer Principal Receivables to the Trust and shall
promptly give notice to the Trustee thereof. Notwithstanding any cessation of
the transfer to the Trust of additional Principal Receivables transferred to the
Trust prior to the occurrence of such Insolvency Event and Collections in
respect of such Principal Receivables and Finance Charge Receivables, whenever
created, accrued in respect of such Principal Receivables shall continue to be a
part of the Trust Assets.
[END OF ARTICLE IX]
74
ARTICLE X
SERVICER DEFAULTS
Section 10.01. 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 pursuant to the terms
of this Agreement or any Supplement on or before the date occurring five
Business Days after the date such payment, transfer or deposit or such
instruction or notice is required to be made or given, as the case may be, under
the terms of this Agreement or any Supplement;
(b) failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement or any Supplement which has a material adverse effect on the
interests hereunder of the Investor Certificateholders of any Series or Class
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
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount (or, with respect to any such failure that does not relate to
all Series, 50% of the aggregate Investor Amount of all Series to which such
failure relates); or the Servicer shall delegate its duties under this
Agreement, except as permitted by Section 8.02 or 8.07, a Responsible Officer of
the Trustee has actual knowledge of such delegation and such delegation
continues unremedied for 15 days after the date on which written notice thereof,
requiring the same to be remedied, shall have been given to the Servicer by the
Trustee, or to the Servicer and the Trustee by Holders of Investor Certificates
evidencing more than 50% of the Aggregate Investor Amount;
(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, which has a material adverse effect on the rights of the Investor
Certificateholders of any Series or Class and which continues to be incorrect in
any material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount (or, with respect to any such representation, warranty or
certification that does not relate to all Series, 50% of the aggregate Investor
Amount of all Series to which such representation, warranty or certification
relates); or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar 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
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar 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;
75
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
insolvency or reorganization statute, make any assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; then, in the event
of any Servicer Default, so long as the Servicer Default shall not have been
remedied, either the Trustee or the Holders of Investor Certificates evidencing
more than 50% of the Aggregate Investor Amount, by notice then given to the
Servicer (and to the Trustee if given by the Investor Certificateholders) (a
"Termination Notice"), may terminate all but not less than all the rights and
obligations of the Servicer as Servicer under this Agreement and in and to the
Receivables and the proceeds thereof; PROVIDED, HOWEVER, if within 60 days of
receipt of a Termination Notice the Trustee does not receive any bids from
Eligible Servicers in accordance with subsection 10.02(c) to act as a Successor
Servicer and receives an Officer's Certificate of the Servicer to the effect
that the Servicer cannot in good faith cure the Servicer Default which gave rise
to the Termination Notice, the Trustee shall offer the Transferor the right at
its option to purchase the Certificateholders' Interest on the Distribution Date
next succeeding 60 days after the receipt by the Servicer of a Termination
Notice.
The purchase price for the Certificateholders' Interest shall be
equal to the sum of the amounts specified therefor with respect to each
outstanding Series in the related Supplement. The Transferor shall notify the
Trustee prior to the Record Date for the Distribution Date of the purchase if it
is exercising such option. If the Transferor exercises such option, the
Transferor shall (x) if the Transferor's short-term deposits or long-term
unsecured debt obligations are not rated at the time at least P-3 or Baa3,
respectively, by Moody's, deliver to the Trustee an Opinion of Counsel (which
must be an independent outside counsel) to the effect that, in reliance on
certain certificates to the effect that the Receivables constitute fair value
for consideration paid therefor and as to the solvency of the Transferor, the
purchase would not be considered a fraudulent conveyance and (y) deposit the
purchase price into the Collection Account not later than 12:00 noon, New York
City time, on such Distribution Date in immediately available funds. The
purchase price shall be allocated and distributed to Investor Certificateholders
in accordance with Article IV and the terms of each Supplement.
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 10.02, 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 transfer of servicing rights. The Servicer agrees 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 Insurance
Proceeds. The Servicer shall promptly transfer its electronic records relating
to the Receivables to the Successor Servicer in
76
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 10.01 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 necessary to protect its interests.
Notwithstanding the foregoing, any delay in or failure of performance
under subsection 10.01(a) for a period of 5 Business Days or under subsections
10.01(b) or (c) for a period of 60 days (in addition to any period provided in
subsections 10.01(a), (b) or (c)) shall not constitute a Servicer Default until
the expiration of such additional 5 Business Days or 60 days, respectively, if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, terrorism, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Servicer from using its best efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Agreement
and any Supplement and the Servicer shall provide the Trustee, each Rating
Agency, the Holders of the Transferor Certificates and the Investor
Certificateholders with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of its efforts to so perform
its obligations.
Section 10.02. TRUSTEE TO ACT, APPOINTMENT OF SUCCESSOR.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.01, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee or until a date mutually agreed
upon by the Servicer and Trustee. The Trustee shall as promptly as possible
after the giving of a Termination Notice appoint an Eligible Servicer as a
successor servicer (the "Successor Servicer"), and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Trustee. In the event that a Successor Servicer has not been appointed or has
not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Trustee without further action shall automatically be appointed
the Successor Servicer. The Trustee may delegate any of its servicing
obligations to an Affiliate of the Trustee or agent in accordance with Sections
3.01(b) and 8.07. Notwithstanding the foregoing, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established institution qualifying as an Eligible Servicer as the Successor
Servicer hereunder. The Trustee shall give prompt notice to each Rating Agency
upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor to the Servicer with respect to 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.
77
(c) In connection with any Termination Notice, the Trustee will
review any bids which it obtains from Eligible Servicers and shall be permitted
to appoint any Eligible Servicer submitting such a bid as a Successor Servicer
for servicing compensation not in excess of the aggregate Servicing Fees for all
Series; PROVIDED, HOWEVER, that the Holders of the Transferor Certificates shall
be responsible for payment of the Transferor's portion of such aggregate
Servicing Fees and that no such monthly compensation paid out of Collections
shall be in excess of such aggregate Servicing Fees. Each Holder of a
Transferor Certificate agrees that, if the Travelers Bank (or any Successor
Servicer) is terminated as Servicer hereunder, the portion of the Collections in
respect of Finance Charge Receivables that such Holders are entitled to receive
pursuant to this Agreement or any Supplement shall be reduced by an amount
sufficient to pay such Holders' share (determined by reference to the
Supplements with respect to any outstanding Series) of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.01 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 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 10.02 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 10.03. NOTIFICATION TO CERTIFICATEHOLDERS. Within two
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give notice thereof to the Trustee and each Rating Agency and the
Trustee shall give notice to the Investor Certificateholders. Upon any
termination or appointment of a Successor Servicer pursuant to this Article, the
Trustee shall give prompt notice thereof to the Investor Certificateholders.
[END OF ARTICLE X]
78
ARTICLE XI
THE TRUSTEE
Section 11.01. DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of a Servicer Default and
after the curing of all Servicer Defaults which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If a Responsible Officer has received written notice that a Servicer
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement.
(c) Subject to subsection 11.01(a), no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct; PROVIDED,
HOWEVER, that:
(i) the Trustee shall not be personally 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 more than 50% of the Investor Amount
of any Series 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 in relation to such
Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer referred to in clauses (a) and (b) of
Section 10.01 unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure or the Trustee receives written
notice of such failure from the Servicer or any Holders of Investor
Certificates evidencing not less than 10% of the Investor Amount of
any Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the
79
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 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 under
this Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to (i) impair the interests of
the Trust in any Receivable now existing or hereafter created or (ii) impair the
value of any Receivable now existing or hereafter created.
(f) The Trustee shall have no power to vary the corpus of the Trust,
except as expressly provided in this Agreement.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the manner
or on the day required to be performed by the Paying Agent or the Transfer Agent
and Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated as soon as possible upon knowledge of a Responsible Officer thereof
and receipt of appropriate records, if any, to perform such obligation, duty or
agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its consumer
revolving credit card receivables (other than the Receivables) to another
Person, upon the written request of the Transferor, the Trustee will enter into
such intercreditor agreements with the transferee of such receivables as are
customary and necessary to separately identify the rights, if any, of the Trust
and such other Person in the Transferor's consumer revolving credit card
receivables; PROVIDED, that the Trustee shall not be required to enter into any
intercreditor agreement which could adversely affect the interests of the
Certificateholders and, upon the request of the Trustee, the Transferor will
deliver an Opinion of Counsel on any matters relating to such intercreditor
agreement, reasonably requested by the Trustee.
Section 11.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in acting on, or
in refraining from acting in accord with, any Assignment, the initial report,
the annual Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Certificateholder's statement, any
resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to this Agreement by the
proper party or parties;
(b) the Trustee may consult with counsel, 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 advice or Opinion of Counsel;
80
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement Agreement, or
to institute, conduct or defend any litigation hereunder or in relation hereto,
at the request, order or direction of any of the Certificateholders, or any
Enhancement Provider, pursuant to the provisions of this Agreement or any
Enhancement Agreement, unless such Certificateholders or any 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 of the
obligations, upon the occurrence of any Servicer Default (which has not been
cured), to exercise such of the rights and powers vested in it by this Agreement
and any Series Enhancement, and to use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of person's own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any investigation into
the facts of matters stated in any Assignment, the initial report, the annual
Servicer's certificate, the monthly payment instructions and notification to the
Trustee, the monthly Certificateholder's statement, any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing so to do
by Holders of Investor Certificates evidencing more than 50% of the Investor
Amount of any Series which could be adversely affected if the Trustee does not
perform such acts;
(f) the Trustee 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 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; and
(g) except as may be required by subsection 11.01(a) 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 with its representations and warranties or for any other purpose.
Section 11.03. 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 certificate of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. 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 or the Holders of the Transferor
Certificates in respect of the Receivables or deposited in or withdrawn from the
Collection Account, the Excess Funding Account or any Series Account by the
Servicer.
81
Section 11.04. TRUSTEE MAY OWN CERTIFICATES. Subject to Section
6.06, the Trustee in its individual or any other capacity may become the owner
or pledgee of Investor Certificates or Supplemental Certificates with the same
rights as it would have if it were not the Trustee.
Section 11.05. THE TRANSFEROR TO PAY TRUSTEE'S FEES AND EXPENSES.
The Transferor covenants and agrees to pay to the Trustee from time to time, 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 of the Trustee, and the Transferor will pay or
reimburse the Trustee (without reimbursement from the Collection Account or
otherwise) upon its request for all reasonable expenses, disbursements and
advances (if any) incurred or made by the Trustee (including the fees and
expenses of Trustee's counsel) in accordance with any of the provisions of this
Agreement except any such expense, disbursement or advance as may arise from its
own negligence or bad faith and except as provided in the following sentence.
If the Trustee is appointed Successor Servicer pursuant to Section 10.02, the
provisions of this Section 11.05 shall not apply to expenses, disbursements and
advances made or incurred by the Trustee in its capacity as Successor Servicer.
The obligations of the Transferor under this Section 11.05 shall survive the
termination of the Trust and the resignation or removal of the Trustee.
Section 11.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a bank or a corporation organized and doing
business under the laws of the United States of America or any state thereof and
subject to supervision or examination by Federal or state authority and
authorized under such laws to exercise corporate trust powers that either (x)
has a long-term unsecured debt rating of at least Baa3 by Moody's and BBB- by
Standard & Poor's and, in the case of an entity that is subject to risk-based
capital adequacy requirements, risk-based capital of at least $50,000,000 or, in
the case of an entity that is not subject to risk-based capital adequacy
requirements, a combined capital and surplus of at least $50,000,000 or (y)
shall otherwise be acceptable to each Rating Agency. If such bank or
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 11.06, the combined capital and surplus of such
bank or corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section 11.06, the Trustee shall resign immediately in the manner and with
the effect specified in Section 11.07.
Section 11.07. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
82
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 and shall fail to resign after
written request therefor by the Servicer or the Transferor, or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver 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 Servicer or 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 11.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.08 and any liability of the Trustee arising hereunder
shall survive such appointment of a successor trustee.
Section 11.08. SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section 11.07
shall execute, acknowledge and deliver to the Transferor, to the Servicer and to
its predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements 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 11.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 11.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall provide notice of
such succession hereunder to all Investor Certificateholders and the Servicer
shall provide such notice to each Rating Agency and any Series Enhancer entitled
thereto pursuant to the relevant Supplement.
Section 11.09. 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
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06, 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.
83
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, 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 co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section 11.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable; PROVIDED, HOWEVER, that the Trustee
shall exercise due care in the appointment of any co-trustee. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 11.06 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 11.08.
(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; 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, specifically including every provision of this Agreement
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.
84
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11. TAX RETURNS. In the event the Trust shall be
required to file tax returns, the Servicer, as soon as practicable after it is
made aware of such requirement, shall prepare or cause to be prepared any tax
returns required to be filed by the Trust and, to the extent possible, shall
file such returns at least five days before such returns are due to be filed.
The Trustee is hereby authorized to sign any such return on behalf of the Trust.
The Servicer shall prepare or shall cause to be prepared all tax information
required by law to be distributed to Certificateholders and shall deliver such
information to the Trustee at least five days prior to the date it is required
by law to be distributed to Certificateholders. The Servicer, upon request,
will furnish the Trustee with all such information known to the Servicer as may
be reasonably required in connection with the preparation of all tax returns of
the Trust. In no event shall the Trustee 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).
Section 11.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or any
Series of 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 any Series of Certificates in respect of which such judgment
has been obtained.
Section 11.13. SUITS FOR ENFORCEMENT.
(a) If a Servicer Default shall occur and be continuing, the
Trustee, in its discretion may, subject to the provisions of Sections 10.01 and
11.14, proceed to protect and enforce its rights and the rights of any Series of
Certificates under this Agreement by a suit, action or proceeding in equity or
at law or otherwise, whether for the specific performance of any covenant or
agreement contained in this Agreement or in aid of the execution of any power
granted in this Agreement or for the enforcement of any other legal, equitable
or other remedy as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or any Series
of Certificates.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting the Certificates or the rights
85
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Certificateholder in any such proceeding.
Section 11.14. RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE.
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount (or, with respect to any remedy, trust or power that does not
relate to all Series, 50% of the aggregate Investor Amount of all Series to
which such remedy, trust or power relates) shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee;
PROVIDED, HOWEVER, that, subject to Section 11.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee being 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, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction; and PROVIDED
FURTHER, that nothing in this Agreement shall impair the right of the Trustee to
take any action deemed proper by the Trustee and which is not inconsistent with
such direction of such Holders of Investor Certificates.
Section 11.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The
Trustee represents and warrants as of each Closing Date that:
(a) the Trustee is a banking corporation organized, existing and
authorized to engage in the business of banking under the laws of the State of
New York.
(b) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement and each Supplement, and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement and each Supplement; and
(c) this Agreement and each Supplement has been duly executed and
delivered by the Trustee.
Section 11.16. MAINTENANCE OF OFFICE OR AGENCY. The Trustee will
maintain at its expense an office or agency (the "Corporate Trust Office") where
notices and demands to or upon the Trustee in respect of the Certificates and
this Agreement may be served (a) in the Borough of Manhattan, the City of New
York, in the case of Registered Certificates and Holders thereof, and (b) in
London or Luxembourg, in the case of Bearer Certificates and Holders thereof, if
and for so long as any Bearer Certificates are outstanding. The Corporate Trust
Office shall initially be located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. The Trustee will give prompt notice to the Servicer and to Investor
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
[END OF ARTICLE XI]
86
ARTICLE XII
TERMINATION
Section 12.01. TERMINATION OF TRUST. The Trust and the respective
obligations and responsibilities of the Transferor, the Servicer and the Trustee
created hereby (other than the obligation of the Trustee to make payments to
Investor Certificateholders as hereinafter set forth) shall terminate, except
with respect to the duties described in Sections 7.04, 8.04 and 12.02(b), upon
the earliest of (i) January 1, 2044, (ii) the day following the payment date on
which the Investor Amount and the Enhancement Investor Amount, if any, for each
Series is zero (provided that the Transferor has delivered a written notice to
the Trustee electing to terminate the Trust) and (iii) the time provided in
subsection 9.02(b).
Section 12.02. FINAL DISTRIBUTION.
(a) The Servicer shall give the Trustee at least 30 days' prior
notice of the payment date on which the Investor Certificateholders of any
Series or Class may surrender their Investor Certificates for payment of the
final distribution on and cancellation of such Investor Certificates (or, in the
event of a final distribution resulting from the application of Sections 2.06,
9.02 or 10.01, notice of such payment date promptly after the Servicer has
determined that a final distribution will occur, if such determination is made
less than 30 days prior to such payment date). Such notice shall be accompanied
by an Officer's Certificate setting forth the information specified in Section
3.05 covering the period during the then-current calendar year through the date
of such notice. Not later than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable to Investor
Certificateholders, the Trustee shall provide notice to Investor
Certificateholders of such Series or Class specifying (i) the date upon which
final payment of such Series or Class will be made upon presentation and
surrender of Investor Certificates of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Investor Certificates at the office or offices therein specified (which, in the
case of Bearer Certificates, shall be outside the United States). The Trustee
shall give such notice to the Transfer Agent and Registrar and the Paying Agent
at the time such notice is given to Investor Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the termination of the Trust),
except as otherwise provided in this paragraph, all funds then on deposit in the
Collection Account and any Series Account allocated to such Investor
Certificateholders shall continue to be held in trust for the benefit of such
Investor Certificateholders and the Paying Agent or the Trustee shall pay such
funds to such Investor Certificateholders upon surrender of their Investor
Certificates (and any excess shall be paid in accordance with the terms of any
relevant Enhancement Agreement). In the event that all such Investor
Certificateholders shall not surrender their Investor Certificates for
cancellation within six months after the date specified in the notice from the
Trustee described in paragraph (a), the Trustee shall give a second notice to
the remaining such Investor Certificateholders to surrender their Investor
Certificates for cancellation and receive the final distribution with respect
thereto
87
(which surrender and payment, in the case of Bearer Certificates, shall be
outside the United States). If within one year after the second notice all such
Investor Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining such Investor Certificateholders concerning
surrender of their Investor Certificates, and the cost thereof shall be paid out
of the funds in the Collection Account or any Series Account held for the
benefit of such Investor Certificateholders. The Trustee and the Paying Agent
shall pay to the Transferor any monies held by them for the payment of principal
or interest that remains unclaimed for two years. After payment to the
Transferor, Investor Certificateholders entitled to the money must look to the
Transferor for payment as general creditors unless an applicable abandoned
property law designates another Person.
(c) In the event that the Investor Amount with respect to any Series
is greater than zero on its Series Termination Date or such earlier date as is
specified in the related Supplement (after giving effect to deposits and
distributions otherwise to be made on such date), the Trustee will sell or cause
to be sold on such Series Termination Date, in accordance with the procedures
and subject to the conditions described in such Supplement, Principal
Receivables and the related Finance Charge Receivables (or interests therein) in
an amount equal to 100% of the Investor Amount and accrued and unpaid interest
thereon with respect to such Series on such date (after giving effect to such
deposits and distributions; PROVIDED, HOWEVER, that in no event shall such
amount exceed such Series' Percentages of Receivables on such Series Termination
Date). The proceeds from any such sale shall be allocated and distributed in
accordance with the terms of the applicable Supplement.
Section 12.03. TRANSFEROR'S TERMINATION RIGHTS. Upon the
termination of the Trust pursuant to Section 12.01 and the surrender of the
Transferor Certificates, the Trustee shall sell, assign and convey to the
Holders of the Transferor Certificates or their designee, without recourse,
representation or warranty, all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, all monies due or to
become due and all amounts received with respect thereto and all proceeds
thereof, except for amounts held by the Trustee pursuant to subsection 12.02(b).
The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested by
the Transferor to vest in the Holders of the Transferor Certificates or any of
their designees all right, title and interest which the Trust had in the
Receivables and such other related assets.
Section 12.04. DEFEASANCE. Notwithstanding anything to the contrary
in this Agreement or any Supplement:
(a) The Transferor may at its 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
12.04(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 subsection 12.04(c),
payments in respect of principal of and interest on such Investor Certificates
when such payments are due; (ii) the Transferor's obligations with respect
88
to such Certificates under Sections 6.04 and 6.05; (iii) the rights, powers,
trusts, duties, and immunities of the Trustee, the Paying Agent and the
Registrar hereunder; and (iv) this Section 12.04.
(b) Subject to subsection 12.04(c), the Transferor at its option may
cause Collections allocated to the Defeased Series and available to purchase
additional Receivables to be applied to purchase Eligible Investments rather
than additional Receivables.
(c) The following shall be the conditions to Defeasance under
subsection 12.04(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 or any Affiliate of 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) Dollars in an amount, or (B)
Eligible 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 (without
relying on income or gain from reinvestment of such amount), 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 Series Enhancers with
respect to the Defeased Series;
(ii) a statement from a firm of nationally recognized
independent public accountants (who may also render other services to
the Transferor) to the effect that such deposit is sufficient to pay
the amounts specified in clause (i) above;
(iii) prior to its first exercise of its right pursuant to
this Section 12.04 with respect to a Defeased Series to substitute
money or Eligible Investments for Receivables, if any Series of
Investor Certificates are outstanding that were characterized as debt
at the time of their issuance, the Transferor shall have delivered to
the Trustee an Opinion of Counsel to the effect that such deposit and
termination of obligations will not cause the Trust to be an
association or publicly traded partnership taxable as a corporation,
and (in any case) an Opinion of Counsel to the effect that (A) 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 Investment Company Act and (B) if the Transferor's
short-term deposit or long-term unsecured debt obligations are not
rated at least P-3 or Baa3, respectively, by Xxxxx'x, such deposit
and termination of obligations would not be a fraudulent conveyance
(based in reliance on certain certificates to the effect that the
Receivables and termination of obligations constitute fair value for
consideration paid therefor and as to the solvency of the
Transferor);
89
(iv) the Transferor shall have delivered to the Trustee 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 or Reinvestment 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
(v) the Rating Agency Condition shall have been satisfied
and the Transferor shall have delivered copies of such written notice
to the Servicer and the Trustee.
Section 12.05. OPTIONAL PURCHASE.
(a) If so provided in any Supplement, the Transferor may, but shall
not be obligated to, cause a final distribution to be made in respect of the
related Series of Investor Certificates on a specified Distribution Date or when
the Investor Amount reaches a specified level or under any circumstances
specified in such Supplement by depositing into the Collection Account or the
applicable Series Account, not later than the Transfer Date preceding such
Distribution Date, for application in accordance with Section 12.02, the amount
specified in such Supplement; PROVIDED, HOWEVER that if the short-term deposits
or long-term unsecured debt obligations of the Transferor are not rated at the
time of such purchase of Receivables at least P-3 or Baa3, respectively, by
Xxxxx'x, no such event shall occur unless the Transferor shall deliver an
Opinion of Counsel reasonably acceptable to the Trustee that such deposit into
the Collection Account or any Series Account as provided in the related
Supplement would not constitute a fraudulent conveyance of the Transferor (based
in reliance on certificates to the effect that the Receivables constitute fair
value for consideration paid therefor and as to the solvency of the Transferor).
(b) The amount deposited pursuant to subsection 12.05(a) shall be
paid to the Investor Certificateholders of the related Series pursuant to
Section 12.02 on the related Distribution Date following the date of such
deposit. All Certificates of a Series which are purchased by the Transferor
pursuant to subsection 12.05(a) shall be delivered by the Transferor upon such
purchase to, and be cancelled by, the Transfer Agent and Registrar and be
disposed of in a manner satisfactory to the Trustee and the Transferor. The
Investor Amount of each Series which is purchased by the Transferor pursuant to
subsection 12.05(a) shall, for the purposes of the definitions of "Series
Invested Amount" and "Transferor Amount," be deemed to be equal to zero on the
Distribution Date following the making of the deposit, and the Transferor Amount
shall thereupon be deemed to have been increased by the Series Invested Amount
of such Series.
[END OF ARTICLE XII]
90
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. AMENDMENT; WAIVER OF PAST DEFAULTS.
(a) This Agreement or any Supplement may be amended from time to time
(including in connection with (x) the provision of additional Series Enhancement
for the benefit of the Certificateholders of any Series (or the reduction of
such Series Enhancement), (y) the addition of a Participation Interest to the
Trust or (z) the designation of an Additional Transferor) by the Servicer, the
Transferor (including, if applicable, any Additional Transferor being
designated) and the Trustee without the consent of any of the
Certificateholders, PROVIDED that (i) the Transferor shall have delivered to the
Trustee an Officer's Certificate to the effect that the Transferor reasonably
believes that such action will not have an Adverse Effect and (ii) the Rating
Agency Condition shall have been satisfied with respect to any such amendment.
In addition, this Agreement or any Supplement may be amended from time to time
under this subsection 13.01(a) by the parties hereto if the provisions set forth
in clause (i) of the preceding sentence are satisfied, but without notice to or
the consent of the Certificateholders and without satisfaction of the Rating
Agency Condition, for any one or more of the following purposes: (A) to enable
all or a portion of the Trust to qualify as, and to permit an election to be
made to cause the Trust to be treated as a "financial asset securitization
investment trust" under the Code (and, in connection with any such election, to
modify or eliminate existing provisions relating to the intended federal income
tax treatment of the Certificates and the Trust), (B) to enable the Trust to
qualify as a partnership for purposes of any state tax laws (including any
amendment to Section 9.02 to read in its entirety substantially as set forth in
Exhibit H hereto),
(b) This Agreement or 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 not less than 66-2/3% of the
aggregate Investor Amount of the Investor Certificates of all adversely affected
Series, for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or any Supplement or of
modifying in any manner the rights of the Certificateholders; PROVIDED, HOWEVER,
that no such amendment shall (i) reduce in any manner the amount of or delay the
timing of any distributions to be made to Investor Certificateholders or
deposits of amounts to be so distributed or the amount available under any
Series Enhancement without the consent of each affected Certificateholder, (ii)
change the definition of or the manner of calculating the interest of any
Investor Certificateholder without the consent of each affected Investor
Certificateholder, (iii) reduce the aforesaid percentage required to consent to
any such amendment without the consent of each Investor Certificateholder or
(iv) adversely affect the rating of any Series or Class by each Rating Agency
without the consent of the Holders of Investor Certificates of such Series or
Class evidencing not less than 66-2/3% of the aggregate Investor Amount of the
Investor Certificates of such Series or Class. Any amendment to be effected
pursuant to this paragraph shall be deemed not to adversely affect any
outstanding Series with respect to which the Transferor shall deliver an Opinion
of Counsel, addressed and delivered to the Trustee, that such action will not,
in such counsel's reasonable opinion, have an Adverse Effect with respect to
such Series. The Trustee may, but shall not be obligated to,
91
enter into any such amendment which affects the Trustee's rights, duties or
immunities under this Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), the Trustee shall furnish
notification of the substance of such amendment to each Investor
Certificateholder, and the Servicer shall furnish notification of the substance
of such amendment to each Rating Agency.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions of
subsection 6.03(b) shall not be considered an amendment to this Agreement for
the purposes of this Section.
(f) The Holders of Investor Certificates evidencing more than
66-2/3% of the aggregate Investor Amount of the Investor Certificates of each
Series, or with respect to any Series with two or more Classes, of each Class
(or with respect to any default that does not relate to all Series, 66-2/3% of
the aggregate Investor Amount of the Investor Certificates of each Series to
which such default relates or, with respect to any such Series with two or more
Classes, of each Class) may, on behalf of all Certificateholders, waive any
default by the Transferor or the Servicer in the performance of their
obligations hereunder and its consequences, except the failure to make any
distributions required to be made to Investor Certificateholders or to make any
required deposits of any amounts to be so distributed. Upon any such waiver of
a past default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto except to the extent expressly so waived.
Section 13.02. PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST.
(a) The Servicer shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation statements and
any other necessary documents covering the Certificateholders' and the Trustee's
right, title and interest to the Trust to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Certificateholders and 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
paragraph.
(b) Within 30 days after any Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed
92
in accordance with paragraph (a) seriously misleading within the meaning of
Section 9-402(7) (or any comparable provision) of the UCC, such 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) Each Transferor and the Servicer will give the Trustee prompt
notice of any relocation of any office from which it services Receivables or
keeps records concerning the Receivables or of its principal executive office
and whether, as a result of such relocation, the applicable provisions of the
UCC would require the filing of any amendment of any previously filed financing
or continuation statement or of any new financing statement and shall file such
financing statements or amendments as may be necessary to perfect or to continue
the perfection of the Trust's security interest in the Receivables and the
proceeds thereof. Each Transferor and the Servicer will at all times maintain
each office from which it services Receivables and its principal executive
offices within the United States.
(d) The Servicer will deliver to the Trustee: (i) upon the execution
and delivery of each amendment of this Agreement or any Supplement, an Opinion
of Counsel to the effect specified in Exhibit G-1; (ii) on each Addition Date on
which any Additional Accounts (other than Automatic Additional Accounts) are to
be designated as Accounts pursuant to subsections 2.09(a) or (b) and on each
date specified in subsection 2.09(d)(iii) with respect to the designation of
Automatic Additional Accounts as Accounts, an Opinion of Counsel substantially
in the form of Exhibit G-2, and on each Addition Date on which any Participation
Interests are to be included in the Trust pursuant to subsections 2.09(a) or
(b), an Opinion of Counsel covering the same substantive legal issues addressed
by Exhibit G-2 but conformed to the extent appropriate to relate to
Participation Interests; and (iii) on or before March 31, of each year,
beginning with March 31, 1999, an Opinion of Counsel substantially in the form
of Exhibit G-2.
Section 13.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholders' 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 expressly provided in this Agreement) or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the Investor
Certificateholders from time to time as partners or members of an association,
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
Investor Certificateholder previously shall have
93
made, and unless the Holders of Investor Certificates evidencing more than 50%
of the aggregate unpaid principal amount of all Investor Certificates (or, with
respect to any such action, suit or proceeding that does not relate to all
Series, 50% of the aggregate unpaid principal amount of the Investor
Certificates of all Series to which such action, suit or proceeding relates)
shall have made, a request to 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 such request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Investor Certificateholder with every
other Investor Certificateholder and the Trustee, that no one or more Investor
Certificateholders shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the Investor
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Investor Certificateholder, or to enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all Investor Certificateholders except as otherwise expressly
provided in this Agreement. For the protection and enforcement of the
provisions of this Section, each and every Investor Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 13.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.05. NOTICES; PAYMENTS.
(a) All demands, notices, instructions, directions and communications
(collectively, "Notices") under this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered at, mailed by registered
mail, return receipt requested, or sent by facsimile transmission (i) in the
case of the Transferor or the Servicer, to
____________________________________________________________, (ii) in the case
of the Trustee, to The Bank of New York, 000 Xxxxxxx Xxxxxx, 00 Xxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Trust Department -- Trustee, (iii) in the
case of Xxxxx'x, to 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: ABS
Monitoring Department, 4th Floor (facsimile no. 212-553-4600), (iv) in the case
of Standard & Poor's, to 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Asset
Backed Group, 15th Floor (facsimile no. 212-412-0323), (v) in the case of the
Paying Agent or the Transfer Agent and Registrar, to
__________________________________________________ and (vi) to any other Person
as specified in any Supplement; or, as to each party, at such other address or
facsimile number as shall be designated by such party in a written notice to
each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. No Notice
shall be required to be mailed to a Holder of Bearer Certificates or Coupons but
shall be given as provided below. Any Notice so mailed
94
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Investor Certificateholder receives
such Notice. In addition, (a) if and so long as any Series or Class is listed
on the Luxembourg Stock Exchange and such Exchange shall so require, any Notice
to Investor Certificateholders shall be published in an Authorized Newspaper of
general circulation in Luxembourg within the time period prescribed in this
Agreement and (b) in the case of any Series or Class with respect to which any
Bearer Certificates are outstanding, any Notice required or permitted to be
given to Investor Certificateholders of such Series or Class shall be published
in an Authorized Newspaper within the time period prescribed in this Agreement.
Section 13.06. RULE 144A INFORMATION. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, each of the Transferor, the
Trustee, the Servicer and any Series Enhancer agree to cooperate with each other
to provide to any Investor Certificateholders of such Series or Class and to any
prospective purchaser of Certificates designated by such an Investor
Certificateholder, upon the request of such Investor Certificateholder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act.
Section 13.07. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Certificates or the rights of the Certificateholders.
Section 13.08. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.02, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing not less than 66-2/3% of the Aggregate Investor Amount.
Section 13.09. CERTIFICATES NONASSESSABLE AND FULLY PAID. It is the
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by the Trustee pursuant to Section 6.02 are and shall be
deemed fully paid.
Section 13.10. 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 the execution of any
financing statements or continuation statements relating to the Receivables for
filing under the provisions of the UCC of any applicable jurisdiction.
Section 13.11. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, the Servicer, the Trustee, each Transferor, each
Series Enhancer and each Holder of a Transferor Certificate shall not, prior to
the date which is one year and one day
95
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 bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property or ordering the winding-up or liquidation of the affairs of the
Trust.
Section 13.12. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided under this
Agreement are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 13.13. COUNTERPARTS. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
Section 13.14. THIRD-PARTY BENEFICIARIES. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the
Certificateholders, any Series Enhancer (to the extent provided in this
Agreement and the related Supplement) and their respective successors and
permitted assigns. Except as otherwise expressly provided in this Agreement, no
other Person will have any right or obligation hereunder.
Section 13.15. ACTIONS BY CERTIFICATEHOLDERS. (a) Wherever in
this Agreement a provision is made that an action may be taken or a Notice
given by Certificateholders, such action or Notice may be taken or given by
any Certificateholder, unless such provision requires a specific percentage
of Certificateholders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Certificate shall bind such Holder and every
subsequent Holder of such Certificate and of any Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.16. MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.17. HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
96
Section 13.18. CONSTRUCTION OF AGREEMENT. The Transferor hereby
grants a security interest to (i) the Trustee for the benefit of the
Certificateholders and (ii) any Series Enhancer to the extent of the Enhancement
Investor Amount, if any, provided for in the relevant Supplement (which
interest, in the case of any Series Enhancer will be subordinated to the
interest of the Investor Certificateholders), in all of the Transferor's right,
title and interest in, to and under the Receivables now existing and hereafter
created, all monies due or to become due and all amounts received with respect
thereto and all "proceeds" thereof and any other Trust Assets, to secure all the
Transferor's and Servicer's obligations hereunder, including, without
limitation, the Transferor's obligation to sell or transfer Receivables
hereafter created to the Trust and the Servicer's obligation to remit
Collections hereunder (collectively, the "Obligations"). This Agreement shall
constitute a security agreement under applicable law.
97
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
CC CREDIT CARD CORPORATION,
Transferor,
by ____________________________
Name:
Title:
THE TRAVELERS BANK,
Servicer,
by _____________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee,
by _____________________________
Name:
Title:
[Signature page to the Pooling and Servicing Agreement]
Exhibit H
AMENDED PROVISIONS FOR SECTION 9.02
Section 9.02. RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT.
(a) If the Transferor causes an Insolvency Event to occur with
respect to the Transferor or if an Insolvency Event otherwise occurs with
respect to the Transferor, the Transferor shall on the day any such Insolvency
Event occurs (the "APPOINTMENT DATE") immediately cease to transfer Principal
Receivables to the Trust and shall promptly give notice to the Trustee thereof.
Notwithstanding any cessation of the transfer to the Trust of additional
Principal Receivables transferred to the Trust prior to the occurrence of such
Insolvency event and Collections in respect of such Principal Receivables and
Finance Charge Receivables, whenever created, accrued in respect of such
Principal receivables shall continue to be a part of the Trust Assets. Upon the
Appointment Date, this Agreement and the Trust shall terminate, subject to the
liquidation, winding-up, insolvency, bankruptcy, reorganization and dissolution
procedures described below. Within 15 days of the Appointment Date, the Trustee
shall (i) publish a notice in an Authorized Newspaper that an Insolvency Event
has occurred, that the Trust has terminated and that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables on commercially
reasonable terms and in a commercially reasonable manner and (ii) give notice to
Certificateholders describing the provisions of this Section and requesting
instructions from such Holders. Unless the Trustee shall have received
instructions within 90 days from the date notice pursuant to clause (i) above is
first published from (x) Holders of Investor Certificates evidencing more than
50% of the aggregate unpaid principal amount of each Series or, with respect to
any Series with two or more Classes, of each Class, (y) each Transferor (other
than a Transferor that is the subject of such Insolvency Event), including any
Additional Transferor and any Holder of a Supplemental Certificate and any
permitted assignee or successor under Section 7.02, and (z) any other Person
specified in any related Supplement to the effect that such Persons disapprove
of the liquidation of the Receivables and wish to reconstitute the Trust
pursuant to the terms of this Agreement (as amended in connection with such
reconstitution), the Trustee shall promptly sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms, which may include the solicitation of competitive
bids. The Trustee may obtain a prior determination from any such conservator,
receiver or liquidator of a Transferor that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable. The provisions of
this Section 9.02 and any provisions in a Supplement regarding an Insolvency
Event shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables and any Participation Interests pursuant to paragraph (a)
("INSOLVENCY PROCEEDS") shall be immediately deposited in the Collection
Account. The Trustee shall determine conclusively the amount of the Insolvency
Proceeds which are deemed to be Finance Charge Receivables and Principal
Receivables, allocating Insolvency Proceeds to Finance Charge Receivables and
Principal Receivables in the same proportion as the amount of Finance Charge
Receivables and Principal Receivables bear to one another on the prior
Determination Date. The Insolvency Proceeds shall
H-1
be allocated and distributed to Investor Certificateholders in accordance with
the terms of each Supplement.
H-2
