EXHIBIT 4.1
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AMERICAN EXPRESS RECEIVABLES FINANCING
CORPORATION
and
AMERICAN EXPRESS CENTURION BANK
Transferors
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Certificateholders
of the American Express Master Trust
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AMENDED AND RESTATED MASTER POOLING AND SERVICING AGREEMENT
Dated as of May 1, 1998
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TABLE OF CONTENTS
Page
Article I DEFINITIONS................................................................................1
Section 1.01 Definitions..................................................................1
Section 1.02 Other Definitional Provisions...............................................16
Article II APPOINTMENT OF TRUSTEE; CONVEYANCE OF RECEIVABLES ISSUANCE OF CERTIFICATES................18
Section 2.01 Appointment of Trustee; Conveyance of Receivables...........................18
Section 2.02 Acceptance by Trustee.......................................................19
Section 2.03 Representations and Warranties..............................................20
Section 2.04 Representations and Warranties of the Transferors Relating
to the Agreement and any Supplement and the Receivables.....................22
Section 2.05 Covenants of the Transferors................................................27
Section 2.06 Addition of Accounts........................................................29
Section 2.07 Removal of Accounts.........................................................32
Article III ADMINISTRATION AND SERVICING OF RECEIVABLES...............................................34
Section 3.01 Acceptance of Appointment and Other Matters Relating to
the Servicer................................................................34
Section 3.02 Servicing Compensation......................................................35
Section 3.03 Representations, Warranties and Covenants of the Servicer...................36
Section 3.05 Annual Servicer's Certificate...............................................40
Section 3.07 Tax Treatment...............................................................40
Section 3.08 Adjustments.................................................................41
Section 3.09 Remittance Processing Procedures............................................42
Article IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS................43
Section 4.01 Establishment of Collection Account and Special Funding
Account and Allocations with Respect to the Exchangeable Transferor's
Certificates................................................................43
Article V [ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN ANY SUPPLEMENT WITH RESPECT TO ANY
SERIES]...................................................................................47
Article VI THE CERTIFICATES..........................................................................48
Section 6.01 The Certificates............................................................48
Section 6.02 Authentication of Certificates..............................................48
Section 6.03 Registration of Transfer and Exchange of Certificates.......................49
Section 6.04 Mutilated, Destroyed, Lost, or Stolen Certificates..........................52
Section 6.05 Persons Deemed Owners.......................................................52
Section 6.06 Appointment of Paying Agent.................................................53
Section 6.07 Access to List of Certificateholders' Names and Addresses...................53
Section 6.08 Authenticating Agent........................................................54
Section 6.09 Tender of Exchangeable Transferor Certificate...............................55
Section 6.10 Global Certificate; Euro Certificate Exchange Date..........................56
Section 6.11 Book-Entry Certificates.....................................................58
Section 6.12 Notices to Clearing Agency..................................................59
Section 6.13 Definitive Certificates.....................................................59
Section 6.14 Meetings of Certificateholders..............................................59
Article VII OTHER MATTERS RELATING TO THE TRANSFERORS.................................................62
Section 7.01 Liability of the Transferors................................................62
Section 7.02 Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor................................................62
Section 7.03 Limitation on Liability of the Transferors..................................62
Section 7.04 Liabilities.................................................................63
Article VIII OTHER MATTERS RELATING TO THE SERVICER....................................................64
Section 8.01 Liability of the Servicer...................................................64
Section 8.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer................................................64
Section 8.03 Limitation on Liability of the Servicer and Others..........................64
Section 8.04 Indemnification of the Trust and the Trustee................................65
Section 8.05 The Servicer Not to Resign..................................................65
Section 8.06 Access to Certain Documentation and Information
Regarding the Receivables...................................................66
Section 8.07 Delegation of Duties........................................................66
Section 8.08 Examination of Records......................................................66
Article IX PAY OUT EVENTS............................................................................67
Section 9.01 Pay Out Events..............................................................67
Section 9.02 Additional Rights Upon the Occurrence of Certain Events.....................67
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Article X SERVICER DEFAULTS.........................................................................70
Section 10.01 Servicer Defaults...........................................................70
Section 10.02 Trustee to Act; Appointment of Successor....................................72
Section 10.03 Notification to Certificateholders..........................................73
Section 10.04 Waiver of Past Defaults.....................................................73
Article XI THE TRUSTEE...............................................................................75
Section 11.01 Duties of Trustee...........................................................75
Section 11.02 Certain Matters Affecting the Trustee.......................................76
Section 11.03 Trustee Not Liable for Recitals in Certificates.............................78
Section 11.04 Trustee May Own Certificates................................................79
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses.............................79
Section 11.06 Eligibility Requirements for Trustee........................................79
Section 11.07 Resignation or Removal of Trustee...........................................79
Section 11.08 Successor Trustee...........................................................80
Section 11.09 Merger or Consolidation of Trustee..........................................80
Section 11.10 Appointment of Co-Trustee or Separate Trustee...............................81
Section 11.11 Tax Returns.................................................................82
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates................................................................82
Section 11.13 Suits for Enforcement.......................................................82
Section 11.14 Rights of Certificateholders to Direct Trustee..............................83
Section 11.15 Representations and Warranties of Trustee...................................83
Section 11.16 Maintenance of Office or Agency.............................................83
Section 11.17 Indemnification of the Trustee..............................................83
Article XII TERMINATION...............................................................................85
Section 12.01 Termination of Trust........................................................85
Section 12.02 Optional Purchase; Final Termination Date of Investor
Certificates of any Series..................................................85
Section 12.03 Final Payment with Respect to any Series....................................86
Section 12.04 Transferor's Termination Rights.............................................87
Article XIII MISCELLANEOUS PROVISIONS..................................................................89
Section 13.01 Amendment...................................................................89
Section 13.02 Protection of Right, Title and Interest to Trust............................90
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Section 13.03 Limitation on Rights of Certificateholders..................................91
Section 13.04 Governing Law...............................................................92
Section 13.05 Notices.....................................................................92
Section 13.06 Severability of Provisions..................................................93
Section 13.07 Assignment..................................................................93
Section 13.08 Certificates Nonassessable and Fully Paid...................................93
Section 13.09 Further Assurances..........................................................94
Section 13.10 No Waiver; Cumulative Remedies..............................................94
Section 13.11 Counterparts................................................................94
Section 13.12 Third-Party Beneficiaries...................................................94
Section 13.13 Actions by Certificateholders...............................................94
Section 13.14 Merger and Integration......................................................94
Section 13.15 Headings....................................................................95
Section 13.16 Certificates and Opinions of Counsel........................................95
Section 13.17 Effect of Amendment No. 3...................................................95
EXHIBITS
Exhibit A: Form of Exchangeable Transferor Certificate
Exhibit B: Form of Assignment of Receivables in Additional
Accounts
Exhibit C: Form of Reassignment of Receivables
Exhibit D: Form of Initial Report
Exhibit E: Form of Monthly Servicer's Certificate
Exhibit F: Form of Annual Servicer's Certificate
Exhibit G: Form of Opinion of Counsel with Respect to the Pooling
and Servicing Agreement and Additional Accounts
Exhibit H: Form of Annual Opinion of Counsel
Exhibit I: Account Receivables
Exhibit J: Form of Depositary Agreement (Letter of Representations)
Exhibit K: Form of Lock Box Letter
Exhibit L: Form of Opinion of Counsel with Respect to Servicer
Deposit of Collateral
SCHEDULES
Schedule 1: List of Accounts
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Schedule 2: Collection Account
Schedule 3: Fees and Charges included in Receivables
Schedule 4: List of Lock Box Banks
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AMENDED AND RESTATED MASTER POOLING AND SERVICING AGREEMENT,
dated as of May 1, 1998, among AMERICAN EXPRESS RECEIVABLES FINANCING
CORPORATION, a Delaware corporation, and AMERICAN EXPRESS CENTURION BANK, a
Utah-chartered industrial loan company, as Transferors, and AMERICAN EXPRESS
TRAVEL RELATED SERVICES COMPANY, INC., a corporation organized under the laws of
the State of New York, as Servicer and THE BANK OF NEW YORK, a banking
corporation organized under the laws of New York, as Trustee.
Reference is made to that certain Master Pooling and Servicing
Agreement, dated as of June 30, 1992 (the "Original Pooling Agreement"), among
American Express Receivables Financing Corporation, as Transferor; American
Express Travel Related Services Company, Inc., as Servicer; and The Bank of New
York, as Trustee. The parties hereto wish to amend and restate the Original
Pooling Agreement in its entirety in order to, among other things, provide for
the addition of American Express Centurion Bank, a Utah-chartered industrial
loan company, as a Transferor thereunder.
Therefore, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree, for
the benefit of each other and for the benefit of the Certificateholders and the
Enhancement Providers, to amend and restate Article I through and including
Article XIII of the Original Pooling Agreement in their entirety to read as
follows:
ARTICLE I
DEFINITIONS
Section 1. Definitions. Whenever used in this Agreement, the following words
and phrases shall have the following meanings:
"Account" shall mean the portion of each American Express(R)
Card, American Express(R) Gold Card and Platinum Card(R) account, the full
receivable balance of which is due upon receipt of a monthly billing statement,
established pursuant to an Account Agreement between an Account Originator and
any Person, and in each case identified by account number and by the Receivable
balance as of the applicable Cut-Off Date or Additional Account Cut-Off Date in
each computer file or microfiche list delivered to the Trustee by the Servicer
on behalf of the Transferors on the Closing Date and pursuant to Section 2.01
and Section 2.06, as applicable. The definition of Account shall include any
account or accounts (each, a "Related Account") having the following
characteristics: (a) (i) such Related Account was originated in accordance with
the Account Guidelines; (ii) the obligor with respect to such Related Account is
the same Person as the Obligor of the Account related to such Related Account;
(iii) such Related Account is originated as a result of the card associated with
an Account being lost or stolen or as a result of conversions from one type of
Account from or into another type of Account or as a result of the consolidation
of an Obligor's accounts with either of the Account Originators into one
account; and (iv) such Related Account can be traced to, or identified with an
Account identified by account number on the computer file or microfiche list
delivered to the Trustee pursuant to Section 2.01 or 2.06, by reference to or
by way of the computer or other records of a Transferor or (b) (i) such
Related Account is an Account with respect to which a new account number has
been issued under circumstances not requiring standard application and credit
evaluation procedures under the Account Guidelines; and (ii) such Related
Account can be traced or identified as an account into which an Account has been
transferred by reference to or by way of the computer file or microfiche list
delivered to the Trustee pursuant to Sections 2.01 or 2.06. The term "Account"
shall be deemed to refer to an Additional Account only from and after the
Additional Account Closing 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 Agreements" shall mean the Agreements attached as
Exhibit I, as such agreements may be amended from time to time.
"Account Guidelines" shall mean, with respect to the Accounts
of each Account Originator, the policies and procedures of such Account
Originator, relating to the operation of its consumer charge card businesses,
including, without limitation, the policies and procedures for determining the
creditworthiness of customers, the extension of privileges and relating to the
maintenance of accounts and collection of receivables, as such policies and
procedures may be amended from time to time.
"Account Originator" shall mean each of TRS and Centurion
Bank.
"Accumulation Period" with respect to any Series, the period
following the Revolving Period which shall be the Controlled Accumulation Period
or the Early Accumulation Period (each as defined in the related Supplement).
"Additional Account Closing Date" shall mean each date on
which Additional Accounts will be included as Accounts pursuant to Section 2.06.
"Additional Account Cut-Off Date" shall mean with respect to
any Additional Account the last day of the Due Period preceding the Additional
Account Closing Date.
"Additional Account Selection Date" shall have the meaning set
forth in Section 2.06.
"Additional Accounts" shall have the meaning set forth in
Section 2.06.
"Adjustment Payment" shall have the meaning specified in
Section 3.08(a).
"Affiliate" of any Person shall mean any other Person directly
or indirectly controlling, controlled by or under common control with such
Person.
"Aggregate Invested Amount" shall mean with respect to any
date of determination the sum of the Invested Amounts with respect to all Series
of Investor Certificates then outstanding.
"Aggregate Invested Percentage" shall mean with respect to any
date of determination the sum of the applicable Invested Percentages with
respect to all Series of Investor Certificates then outstanding.
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"Agreement" shall mean the Original Pooling Agreement, as (i)
with respect to each Series, supplemented by each related Supplement and (ii)
amended by this Amended and Restated Master Pooling and Servicing Agreement and
as the same may be further amended, supplemented or otherwise modified from time
to time.
"Amortization Period" shall mean, with respect to any Series,
the period following the Revolving Period which shall be the Controlled
Amortization Period, Early Amortization Period or Rapid Amortization Period
(each as defined in any related Supplement).
"Annual Membership Fees" shall mean any annual fees specified
in the various Account Agreements as they may, from time to time be amended.
"Applicants" shall have the meaning specified in Section 6.07.
"Appointment Day" shall have the meaning specified in Section
9.02.
"Authorized Newspaper" shall mean one or more newspapers of
general circulation in the Borough of Manhattan, The City of New York printed in
the English language and customarily published on each Business Day, whether or
not published on Saturdays, Sundays and holidays.
"Average Monthly Privileged Assets Billed Amount" shall mean
for any calendar month, the average amount billed for such month under the
Privileged Assets Program to all American Express Cardmembers who are enrolled
in the Privileged Assets Program, whether or not their related Accounts are
included in the Trust.
"Bearer Certificates" shall mean any certificates issued in
bearer form.
"Bearer Rules" shall mean the provisions of the Internal
Revenue Code, in effect from time to time, governing the treatment of bearer
obligations, including sections 163(f), 871, 881, 1441, 1442 and 4701, and any
regulations thereunder including, to the extent applicable to any Series
proposed or temporary regulations.
"Book-Entry Certificates" shall mean beneficial interests in
the Investor Certificates, ownership and transfers of which shall be evidenced
or made through book entries by a Clearing Agency as described in Section 6.10;
provided, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer permitted and Definitive Certificates
are issued to the Certificate Owners, such Definitive Certificates shall
replace Book-Entry Certificates.
"Business Day" shall mean (i) any day other than (a) a
Saturday or Sunday or (b) any other day on which national banking associations
or state banking institutions in New York, New York, or any other State in which
the principal executive offices of RFC, Centurion Bank, the Trustee, 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 and (ii) with respect to the determination of LIBOR, a London
business Day.
"Cardmember" shall mean the Obligor of an American Express
Card account.
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"Cedel" shall mean Cedel Bank, societe anonyme, or any
successor thereto.
"Centurion Bank" shall mean American Express Centurion Bank, a
Utah-chartered industrial loan company and its successors.
"Certificate" shall mean one of any Series of the Investor
Certificates or the Exchangeable Transferor Certificates.
"Certificateholder" or "Holder" shall mean the Person in whose
name a Certificate is registered in the Certificate Register.
"Certificate Interest" shall mean interest payable with
respect to the applicable Series of Investor Certificates pursuant to Section
4.06.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly or as an
indirect participant, in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal payable with
respect to the applicable Series of Investor Certificates pursuant to the
applicable Supplement.
"Certificate Rate" shall mean, with respect to any Series of
Certificates, the percentage (or formula on the basis of which such rate shall
be determined) stated in the applicable Supplement; provided that, unless
otherwise provided in the applicable Supplement, in each case such rate shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.03, providing for the registration of the applicable
Certificates and transfers and exchanges thereof.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended, or any successor provision thereto.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the
date of issuance of such Series of Certificates, as specified in the related
Supplement.
"Collection Account" shall have the meaning specified in
Section 4.01.
"Collections" shall mean all payments (excluding Recoveries)
received by the Servicer with respect to the Receivables, in the form of cash,
checks, wire transfers, ATM transfers or other form of payment in accordance
with the related Account Agreement in effect from time to time on any
Receivable.
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"Common Depositary" shall mean the Person appointed as such as
specified in the related Supplement, in its capacity as common depositary for
the respective accounts of a Foreign Clearing Agency.
"Controlled Accumulation Period" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Controlled Amortization Period" with respect to any Series,
shall have the meaning specified in the applicable Supplement.
"Conveyance" shall have the meaning set forth in Section 7.05.
"Corporate Trust Office" shall mean the principal office of
the Trustee in The City of New York at which at any particular time its
corporate business shall be administered, which office at the date of the
execution of this Agreement is located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust Division.
"CRC" shall mean Credco Receivables Corp., a Delaware
corporation, and its successors.
"Cut-Off Date" shall mean, for each Account, other than
Additional Accounts, the close of business on June 30, 1992.
"Date of Processing" shall mean, with respect to any
transaction, the Business Day after such transaction is first output in written
form under the Servicer's customary and usual servicing practices, from the
Servicer's computer file of Accounts (without regard to the effective date of
such recordation).
"Default Amount" shall mean, for any Due Period, the product
of (a) the amount of the Receivables in all Accounts which became Defaulted
Accounts during such Due Period at the time such Accounts became Defaulted
Accounts plus any Receivables created in such Due Period on Defaulted Accounts
minus Recoveries, if any, received in such Due Period and (b) one minus the
Yield Factor.
"Defaulted Account" shall mean each Account with respect to
which, in accordance with the Account Guidelines pursuant to which such Account
is governed or the customary and usual servicing procedures of the Servicer for
servicing receivables comparable to the Receivables, the Servicer has charged
off the Receivables in such Account as uncollectible; in any event, an Account
shall be deemed a Defaulted Account no later than when such Account becomes 360
days past due from the date of the initial billing statement. Notwithstanding
any other provision hereof, any Receivables in a Defaulted Account which are
Ineligible Receivables shall be treated as Ineligible Receivables rather than
Receivables in Defaulted Accounts.
"Definitive Certificates" shall have the meaning specified in
Section 6.11.
"Definitive Euro-Certificates" shall have the meaning
specified in Section 6.10.
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"Depository Agreement" shall mean the agreement among the
Transferor, the Trustee and the initial Clearing Agency, dated as of the Initial
Closing Date, in the form attached hereto as Exhibit J.
"Determination Date" shall mean the fifth Business Day prior
to each Distribution Date.
"Distribution Date" shall mean, with respect to the Series
1992-1 Certificates and the 1992-2 Certificates, September 15, 1992 and the
fifteenth day of each calendar month thereafter, or, if such fifteenth day is
not a Business Day, the next succeeding Business Day and, with respect to any
other Series of Certificates, the date specified in the applicable Supplement.
"Due Period" shall mean, unless otherwise provided in a
Supplement, with respect to each Distribution Date, (i) prior to the May 1998
Distribution Date the period from and including the first day of a calendar
month and ending at the close of business on the last day of such calendar
month, (ii) for the June 1998 Distribution Date, the period from and including
May 1, 1998 to and including May 27, 1998, and (iii) commencing with the July
1998 Distribution Date, the period (a) from and including the day following the
last day of the eighth billing cycle applicable to the Accounts ending during
the second preceding calendar month (b) to and including the last day of the
eighth billing cycle applicable to the Accounts ending in the calendar month
immediately preceding the month in which such Distribution Date shall occur;
provided, however, that the initial Due Period with respect to any Series will
commence on the Closing Date with respect to such Series.
"Early Accumulation Period" with respect to any Series, shall
have the meaning specified in the applicable Supplement.
"Early Amortization Period" with respect to any Series, shall
have the meaning specified in the applicable Supplement.
"Eligible Account" shall mean each Account which as of its
Selection Date (or, with respect to Additional Accounts, as of the relevant
Additional Account Selection Date) (i) is an Account and was in existence and
owned by an Account Originator at the close of business on its Selection Date
and whose billed balance is payable in full each month, (ii) is payable in
United States dollars, (iii) is not classified by such Account Originator as
fraudulent, (iv) the card or cards related to which have not been reported lost
or stolen, (v) was created or purchased in accordance with or under underwriting
and credit standards no less stringent than those generally applied by such
Account Originator, (vi) has not been identified by such Account Originator in
its computer files as having a deceased Obligor or having been cancelled due to
the Obligor's bankruptcy or insolvency, (vii) is not classified by such Account
Originator as having been charged off, (viii) the Obligor of which is a
natural person and (ix) has not been identified by such Account Originator as
having been charged off.
Notwithstanding the foregoing, with respect to Additional
Accounts, 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 insolvent, in each case as of the related Additional
Account Selection Date and/or Additional Account Cut-Off Date; provided that (a)
the balance of all Receivables included in such Accounts is reflected on the
books and records of the Account Originator (and is treated for purposes of this
Agreement) as "zero", and (b)
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charging privileges with respect to all such Accounts have been cancelled in
accordance with the Account Guidelines applicable thereto.
"Eligible Institution" shall mean a depositary institution,
which may include the Trustee, organized under the laws of the United States or
any one of the States thereof including the District of Columbia, the deposits
in which are insured by the FDIC and which at all times has a short-term
unsecured debt rating of at least A-l+ or P-1 by the applicable Rating Agency;
provided, however, that an institution which shall have corporate trust powers
and which maintains the Collection Account, any principal funding account, any
interest funding account or any other account maintained for the benefit of
Certificateholders as a fully segregated trust account with the trust department
of such institution shall not be required to meet the foregoing rating
requirements, and need only at all times have a long-term unsecured debt rating
of at least Baa3 by Moody's so long as Xxxxx'x is a Rating Agency.
"Eligible Investments" shall mean (a) negotiable instruments
or securities represented by instruments in bearer or registered or in
book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities,
provided, however, that at the time of the Trust's investment or contractual
commitment to invest therein, the certificates of deposit or short-term
deposits, if any, or long-term unsecured debt obligations (other than such
obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company) of such depositary institution or
trust company shall have a credit rating from Moody's and Standard & Poor's of
P-1 and A-l+, respectively, in the case of the certificates of deposit or
short-term deposits, or a rating not lower than one of the two highest
investment categories granted by Moody's and AAA by Standard & Poor's in the
case of long-term unsecured debt obligations; (iii) certificates of deposit
having, at the time of the Trust's investment or contractual commitment to
invest therein, a rating from Moody's and Standard & Poor's of P-1 and A-l+
respectively; (iv) investments in money market funds rated in the highest
investment category (in case of Standard & Poor's, such rating category being
AAAm or AAAm-G) or otherwise approved in writing by the applicable Rating
Agencies, (b) demand deposits in the name of the Trust or the Trustee on behalf
of the Trust in any depositary institution or trust company referred to in
(a)(ii) above, (c) commercial paper (having original or remaining maturities of
no more than 270 days) having, at the time of the Trust's investment or
contractual commitment to invest therein, a credit rating from Moody's and
Standard & Poor's of P-1 and A-l+, respectively, (d) Eurodollar time deposits
having a credit rating from Moody's and Standard & Poor's of P-1 and A-1+,
respectively, and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i) , (a)(iii) and (d) hereof so long as the
other party to the repurchase agreement has at the time of the Trust's
investment therein a rating from Moody's and Standard & Poor's of P-1 and A-1+,
respectively.
"Eligible Receivable" shall mean each Receivable:
(i) which has arisen under an Eligible Account;
(ii) which was created in compliance with all requirements of
law and pursuant to an agreement which complies with all requirements of law in
either case the
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failure to comply with which would have a material adverse effect upon
Certificateholders;
(iii) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations with, any governmental
authority required to be obtained or given by an Account Originator in
connection with the creation of such Receivable or the execution, delivery and
performance by such Account Originator of the related agreement have been duly
obtained or given and are in full force and effect as of such date of creation;
(iv) as to which at the time of the transfer of such
Receivable to the Trust, the Trust will have good and marketable title, free and
clear of all liens, encumbrances, charges and security interests (except those
permitted by subsection 2.05(b));
(v) which has been the subject of either a valid transfer
and assignment from a Transferor to the Trust of all of such Transferor's right,
title and interest therein or the grant of a first priority perfected security
interest therein (and in the proceeds thereof to the extent set forth in Section
9-306 of the UCC as in effect in the Relevant UCC State), effective until the
termination of the Trust;
(vi) which will at all times be the legal, valid and
binding payment obligation of the Obligor thereof enforceable against such
Obligor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
(vii) which constitutes either an "account" or a "general
intangible" under and as defined in Article 9 of the UCC as then in effect in
the Relevant UCC State;
(viii) which, at the time of its transfer to the Trust,
has not been waived or modified except as permitted hereunder;
(ix) which is not subject to any right of rescission, setoff,
counterclaim or other defense (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;
(x) as to which the related Account Originator and
Transferor have satisfied all obligations to be fulfilled at the time it is
transferred to the Trust; and
(xi) as to which the related Account Originator and
Transferor have done nothing, at the time of its transfer to the Trust, to
impair the rights of the Trust or Certificateholders therein.
"Enhancement" shall mean, with respect to any Series or class
of Certificates within a Series, any letter of credit, guaranteed rate
agreement, maturity guaranty facility, cash collateral account, cash collateral
guaranty, tax protection agreement, interest rate swap, interest
8
rate cap or other contract or agreement for the benefit of Certificateholders of
such Series or class, as applicable.
"Enhancement Provider" shall mean, with respect to any Series,
that Person designated as such in the applicable Supplement.
"Estimated Trust Privileged Assets Billed Amounts" shall mean,
for any calendar month, the product of (i) the number of Accounts that were
enrolled in the Privileged Assets Program at the end of such calendar month,
(ii) the Average Monthly Privileged Assets Billed Amount for such month and
(iii) 1.25; provided, that if the Servicer has modified its computer programs
such that it can determine the actual Privileged Assets Billed Amounts billed
with respect to the Accounts, such actual amounts shall constitute the Estimated
Trust Privileged Assets Billed Amounts.
"Euro-Certificate Exchange Date" shall mean with respect to
any Series, the date specified in the applicable Supplement.
"Euroclear Operator" shall mean Xxxxxx Guaranty Trust Company
of New York, Brussels office as operator of the Euroclear System or any
successor thereto.
"Excess Allocation Series" shall mean any Series that,
pursuant to the Supplement related to such Series, is entitled to receive
certain excess Yield Collections as more fully described in such Supplement.
"Excess Principal Collections" shall mean, with respect to a
Distribution Date, the aggregate amount for all outstanding Series of Principal
Collections which the related Supplements specify are to be treated as "Excess
Principal Collections" for such Distribution Date.
"Exchange" shall mean the procedure described under Section
6.09.
"Exchangeable Transferor Certificate" shall mean the
certificate executed by the Transferors and authenticated by the Trustee,
substantially in the form of Exhibit A and exchangeable as provided in Section
6.09 for one or more Series of Investor Certificates and the reissued
Exchangeable Transferor Certificate.
"Exchange Date" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.09.
"Exchange Notice" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.09.
"FDC" shall mean First Data Corporation, a Delaware
corporation, or any of its subsidiaries.
"FDIC" shall mean the Federal Deposit Insurance Corporation,
or any successor thereto.
"Final Termination Date" shall have the meaning specified in
subsection 12.01(a).
9
"Foreign Clearing Agency" shall mean with respect to any
Series, Cedel or the Euroclear Operator or any other established clearing agency
for securities outside the United States designated in the applicable
Supplement.
"Global Certificate" shall have the meaning set forth in
subsection 6.10(a).
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any United States
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Ineligible Receivable" shall have the meaning specified in
subsection 2.04(d).
"Initial Closing Date" shall mean August 3, 1992.
"Initial Invested Amount" shall mean, with respect to any
Series, the amount stated in the applicable Supplement.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
"Invested Amount" shall mean, with respect to any Series, the
meaning specified in the applicable Supplement.
"Invested Percentage" shall have, with respect to each Series,
the meaning set forth in the applicable Supplement.
"Investor Certificate" shall mean any one of the certificates
executed by (i) prior to May 1, 1998, the Transferor or (ii) after May 1, 1998,
the Transferors and, in each case, authenticated by the Trustee and
substantially in the form attached to the applicable Supplement.
"Investor Certificateholder" shall mean the holder of record
of an Investor Certificate.
"Investor Charge-Offs" shall have, with respect to each
Series, the meaning specified in the applicable Supplement.
"Investor Default Amount" shall mean, with respect to each
Series for any Due Period, an amount equal to the product of (a) the Default
Amount and (b) the related Floating Allocation Percentage for such Due Period.
"Investor Monthly Servicing Fee" shall have, with respect to
each Series, the meaning specified in Section 3.02.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the Uniform
Commercial Code
10
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing;
provided, however, that any assignment pursuant to Section 7.02 hereof shall not
be deemed to constitute a Lien.
"Lock Box Letters" shall mean such letters, in substantially
the form of Exhibit K hereto, delivered by TRS as Servicer to the Trustee
pursuant to Section 3.09 hereof.
"Manager" shall mean the managing underwriter of any Series.
"Minimum Transferor Percentage" shall mean, with respect to
any Due Period with respect to any Series, the percentage specified in the
applicable Supplement.
"Minimum Trust Principal Component" shall mean the aggregate
of the amounts set forth in each Supplement for each outstanding Series as the
"Minimum Trust Principal Component" for such Series.
"Monthly Servicing Fee" shall have the meaning specified in
Section 3.02.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Obligor" shall mean, with respect to any Account, the Person
or Persons obligated to make payments with respect to such Account, including
any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any
Vice President or more senior officer of either of the Transferor or the
Servicer and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of
independent counsel, who may be counsel for either of the Transferors, and which
shall be reasonably acceptable to the Trustee.
"Original Pooling Agreement" shall mean the Master Pooling and
Servicing Agreement, dated as of June 30, 1992, among RFC, TRS and the Trustee
related to the establishment of the Trust, as supplemented by any Supplement.
"PA Removal Date" means the Determination Date on which
designated Accounts are removed pursuant to subsection 2.07(c).
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 6.06 and shall initially be the Trustee.
"Payment Service Centers" shall mean the service centers
operated by TRS for the purpose of receiving and processing Cardmember
remittances in respect of Accounts, currently located in Chicago, Illinois and
any additional service centers operated by TRS or any agent of TRS from time to
time. TRS agrees to provide prompt notice to the Trustee of any additional
Payment Service Centers.
"Pay Out Event" shall have, with respect to each Series, the
meaning specified in Section 9.01.
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"Person" shall mean any legal person, including any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, Governmental Authority or other
entity of similar nature.
"Principal Collections" shall mean Collections other than
Yield Collections.
"Principal Funding Account" shall have, with respect to each
Series, the meaning, if any, specified in the applicable Supplement.
"Principal Shortfalls" shall mean, with respect to a
Distribution Date, the aggregate amount for all outstanding Series which the
related Supplements specify are "Principal Shortfalls" for such Distribution
Date.
"Principal Terms" shall have the meaning, with respect to any
Series issued pursuant to an Exchange, specified in Section 6.09.
"Privileged Assets Applied Dilution Factor" for a Due Period
shall mean the percentage equal to (i) the highest Privileged Assets Monthly
Dilution Rate for the rolling 12 month period ending with the calendar month in
which the last day of such Due Period occurs plus (ii) the product of the
Standard Deviation Factor and 3. The Standard Deviation Factor shall mean the
square root of the result of (a) the sum of the square of the differences
between the Privileged Assets Monthly Dilution Rate for each month occurring in
such 12 month period and the average Privileged Assets Monthly Dilution Rate for
such 12 month period divided by (b) 12.
"Privileged Assets Billed Amounts" shall mean amounts billed
under the Privileged Assets Program to Cardmembers enrolled in such Program.
"Privileged Assets Calculated Amount" shall mean, for a Due
Period, the product of (i) one minus the Yield Factor, (ii) the Estimated Trust
Privileged Assets Billed Amounts for the calendar month in which the last day of
the preceding Due Period occurs and (iii) the Privileged Assets Applied Dilution
Factor for such preceding Due Period.
"Privileged Assets Monthly Dilution Rate" for a calendar month
shall mean one minus the Privileged Assets Monthly Payment Rate for such month;
provided, that for this purpose the Privileged Assets Monthly Payment Rate shall
be capped at 100%.
"Privileged Assets Monthly Payment Rate" for a calendar month
shall be calculated by dividing the total remittances received under the entire
Privileged Assets Program during such calendar month by the total Privileged
Assets Billed Amounts for the prior month.
"Privileged Assets Program" shall mean the program offered by
an Account Originator in conjunction with one or more of its affiliated
insurance subsidiaries, currently called "Privileged Assets", pursuant to which
Cardmembers who enter into an annuity contract with the insurance affiliate can
choose a monthly contribution amount, which amount is billed to their American
Express(R) Card, American Express(R) Gold Card or Platinum Card(R) Accounts.
Payment of such billed contribution amounts is voluntary.
"Rapid Amortization Period" with respect to any Series, shall
have the meaning specified in the applicable Supplement.
"Rating Agency" shall mean, with respect to any Series, each
statistical rating agency or agencies selected by the Transferors to rate the
Investor Certificates of such Series.
12
"Receivable" shall mean any amount owing by the Obligor under
an Account (including Defaulted Accounts), including any Related Account or
Additional Account, from time to time (including, without limitation, amounts
owing for the payment of merchandise and services and Annual Membership Fees)
and the administrative fees and charges described on Schedule 3 hereto). In
calculating the aggregate amount of Receivables on any day, the amount of
Receivables shall be reduced by the aggregate amount of credit balances, and
other adjustments stated in Section 3.08 hereof, in the Accounts on such day.
Any Receivables which the Transferor is unable to transfer as provided in
subsection 2.05(d) shall not be included in calculating the aggregate amount of
Receivables. For purposes of the computer file or microfiche list to be
delivered to the Trustee pursuant to Section 2.01 and 2.06, for purposes of
Schedule 1 to this Agreement and Schedule 1 to each Assignment of Receivables in
Additional Accounts in the form of Exhibit B to this Agreement and for purposes
of calculating the amount of the Receivables on any day, including without
limitation, in the reports to be delivered pursuant to Section 3.04(c), to
calculate the amount of Receivables transferred to the Trust and for purposes of
any calculation using the term "Receivables", the Privileged Assets Billed
Amounts may be treated in the same manner as Receivables and included in all
such calculations and reports, subject to the requirements provided in the
definition of "Trust Principal Component" and Section 2.07(c). Privileged Assets
Billed Amounts shall not constitute Receivables but shall be treated as
aforesaid, and the Transferor and Servicer representations and warranties shall
not apply to the Privileged Assets Billed Amounts. Receivables in a Defaulted
Account will cease to be included as Receivables at such time as they are sold
as part of the Servicer's collection efforts.
"Receivable Purchase Agreement" shall mean the receivable
purchase agreement, dated as of June 30, 1992, between RFC, as purchaser, and
TRS as seller as amended from time to time.
"Record Date" shall mean, unless otherwise specified with
respect to a Series in the applicable Supplement, with respect to any
Distribution Date, the last Business Day of the immediately preceding calendar
month.
"Recoveries" shall mean all amounts received with respect to
Receivables in Defaulted Accounts, net of expenses allocable thereto, including
the net proceeds of any sale of such Receivables.
"Related Account" shall have the meaning specified for such
term contained in the definition of the term "Account" herein.
"Relevant UCC State" shall mean all jurisdictions where UCC
filing is required to perfect and maintain the security interest of the Trustee.
"Remittance Banks" shall mean the institutions holding
accounts into which TRS shall deposit payments received through the Payment
Service Centers from Cardmembers in respect of Accounts.
"Removal Date" shall mean the date on which the Receivables in
certain designated Removed Accounts will be reassigned by the Trustee to a
Transferor.
13
"Removal Notice Date" shall mean the tenth Business Day prior
to a Removal Date.
"Removed Accounts" shall have the meaning set forth in
Section 2.07.
"Removed PA Accounts" means the Accounts that are designated
for deletion and removal on the PA Removal Date pursuant to subsection 2.07(c)
"Repurchase Terms" shall mean, with respect to any Series
issued pursuant to an Exchange, the terms and conditions under which the
Transferors may repurchase such Series of Certificates pursuant to Section
12.02.
"Requirements of Law" for 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 of the Trustee
assigned by it to administer its corporate trust matters.
"Revolving Period" shall mean, with respect to each Series,
the period from and including the date of initial issuance of the Investor
Certificates of such Series to, but not including, the day on which an
Amortization Period or an Accumulation Period for such Series commences.
"RFC" shall mean American Express Receivables Financing
Corporation, a Delaware corporation, and its successors.
"Selection Date" shall mean, for each Account, the close of
business on the cycle billing date for such Account occurring in the monthly
period beginning on the close of business on March 1, 1992 and ending at the
close of business on March 31, 1992.
"Series" shall mean any Series of Investor Certificates, each
as designated in the applicable Supplement.
"Series Factor" shall mean, unless any Series is issued in
more than one class as stated in any related Supplement with respect to any
Series and any Due Period, a number carried out to eight decimals (and rounded
to seven decimals) representing the ratio of the applicable Invested Amount as
of the end of the last day of the preceding Due Period to the applicable Initial
Invested Amount.
"Servicer" shall mean initially TRS and thereafter any Person
appointed as successor as herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section
10.01.
14
"Service Transfer" shall have the meaning specified in Section
10.01.
"Servicing Fee Percentage" shall mean, with respect to any
Series, the percentage specified in the applicable Supplement.
"Servicing Officer" shall mean any officer of the Servicer
involved in, or responsible for, the administration and servicing of the
Receivables whose name appears on a list of servicing officers furnished to the
Trustee by the Servicer, as such list may from time to time be amended.
"Special Funding Account" shall have the meaning set forth in
Section 4.01.
"Standard & Poor's" shall mean Standard & Poor's, a division
of the XxXxxx-Xxxx Company, or any successor thereto.
"Stated Series Termination Date" shall mean, with respect to
any Series, the date stated in the applicable Supplement as the termination date
for such Series.
"Successor Servicer" shall have the meaning specified in
Section 10.02.
"Supplement" shall mean, with respect to any Series, a
supplement to this Agreement complying with the terms of Section 6.09, executed
in conjunction with any issuance of any Series.
"Termination Notice" shall have, with respect to any Series,
the meaning specified in Section 10.01.
"Transferee's Certificate" shall have the meaning set forth in
Section 7.05.
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.03 and shall initially be the Trustee.
"Transferor Amount" shall mean, on any date of determination,
the Trust Principal Component at the end of the day immediately prior to such
date of determination, minus the Aggregate Invested Amount at the end of such
day and plus the principal amount on deposit in the Special Funding Account and
in any principal funding account at the end of such day.
"Transferor Interest" shall have the meaning specified in
Section 4.01(a).
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Collections, Yield
Collections and Receivables in Defaulted Accounts or otherwise, one hundred
percent minus the sum for all Outstanding Series of the Invested Percentages
calculated on such date with respect to such categories of Receivables as
calculated by the Servicer.
"Transferor" shall mean either RFC or Centurion Bank, in each
case, as a transferor of Receivables.
15
"TRS" shall mean American Express Travel Related Services
Company, Inc., a New York corporation and its successors and assigns.
"Trust" shall mean the trust created by this Agreement, the
corpus of which shall consist of the Trust Property.
"Trust Average Monthly Payment Rate" for a Due Period means
Collections on Receivables, excluding Recoveries for such Due period, divided by
the aggregate amount of billed Receivables as of the beginning of such Due
Period.
"Trustee" shall mean the institution executing this Agreement
as trustee, or its successor in interest, or any successor trustee appointed as
herein provided.
"Trust Principal Component" shall mean, for any Due Period,
the product of the aggregate amount of Receivables at the end of the prior Due
Period and one minus the Yield Factor or, for any other date of determination,
the product of the aggregate amount of Receivables as of the date so specified
in this Agreement and one minus the Yield Factor; provided, however, that there
shall be subtracted from each such product the Privileged Assets Calculated
Amount for the prior Due Period for the purpose of calculating (A) the
Transferor Amount as a percentage of the Trust Principal Component pursuant to
Section 2.06(a)(1), (B) the Trust Principal Component pursuant to Section
2.06(a)(2), (C) the Transferor Amount as a percentage of the Trust Principal
Component pursuant to Section 2.07(a) and 2.07(b)(iii), (D) the Trust Principal
Component and the Transferor Amount as a percentage of the Trust Principal
Component pursuant to Section 2.07(c), (E) the Transferor Amount as a percentage
of the Trust Principal Component pursuant to the fourth sentence of Section
3.08(a), (F) the Transferor Amount as a percentage of the Trust Principal
Component pursuant to Section 4.01(f), (G) the Trust Principal Component
pursuant to Section 6.09(b), (H) the Transferor Amount as a percentage of the
Trust Principal Component pursuant to Section 9.01(d) and (I) any amount for any
other purpose with respect to a Series as specified in the related Supplement.
"Trust Property" shall have the meaning specified in Section
2.01.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in any specified jurisdiction.
"Undistributed Principal Collections" shall have the meaning
specified in subsection 4.01(f).
"Undivided Interest" shall mean the undivided interest of any
Certificateholder in the Trust.
"Yield Collections" shall mean an amount equal to Collections
received with respect to each Account multiplied by the Yield Factor.
"Yield Factor" shall mean, initially, 3.0% and thereafter such
amount as is determined pursuant to subsection 2.05(g).
Section 1.02 Other Definitional Provisions.
16
(a) All terms defined in any Supplement or this Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions of
all terms defined herein shall include the singular as well as the plural form
of such terms and the masculine of such terms as well as the feminine and neuter
genders of such terms.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.01, and accounting terms partly defined in Section 1.01 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles on the date of determination. To the extent that
the definitions of accounting terms herein are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained herein shall control.
(c) The agreements and representations and warranties of TRS in this
Agreement in its capacity as Servicer, shall be deemed to be the agreements,
representations and warranties of TRS solely in such capacity for so long as it
acts in such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of such Supplement or
this Agreement, as the case may be; Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement or any
Supplement unless otherwise specified; and the word "including" means including
without limitation.
[END OF ARTICLE I]
ARTICLE II
APPOINTMENT OF TRUSTEE;
CONVEYANCE OF RECEIVABLES
ISSUANCE OF CERTIFICATES
Section 2.01 Appointment of Trustee; Conveyance of Receivables. (a) The
Transferors appoint and authorize The Bank of New York to act as Trustee as
provided herein and to exercise such powers under this Agreement as are
delegated to the Trustee by the terms hereof together with all such powers
as are reasonably incidental thereto. The Trustee hereby accepts such
appointment and agrees to exercise such powers and perform such functions on
behalf of the Certificateholders from time to time as are specifically delegated
to the Trustee by the terms hereof.
(b) RFC does hereby transfer, assign, set-over, and otherwise convey to the
Trust for the benefit of the Certificateholders, without recourse, all right,
title and interest of RFC in and to the Receivables, now existing and hereafter
created, all monies due or to become due with respect thereto (including
Recoveries) on and after the Cut-Off Date, all proceeds of such Receivables, and
all right, title and interest of RFC in, to and under the Receivable Purchase
Agreement. Centurion Bank does hereby transfer, assign, set-over, and otherwise
convey to the Trust for the benefit of the Certificateholders, without recourse,
all right, title and interest of Centurion Bank in and to the Receivables, now
existing and hereafter created, all monies due or to become due with respect
thereto (including Recoveries) on and after the Cut-Off Date and all proceeds of
such Receivables. The property described in the two immediately preceding
sentences, together with all monies as are from time to time deposited in the
Collection Account, the Special Funding Account and any other account or
accounts maintained for the benefit of the Certificateholders and all monies as
are from time to time available under any Enhancement for any Series for payment
to Certificateholders shall constitute the property of the Trust (the "Trust
Property"). The foregoing transfers, assignments, set-overs and conveyances do
not constitute and are not intended to result in a creation or an assumption by
the Trust, the Trustee or any Certificateholder of any obligation of the
Servicer, either Transferor or any other Person in connection with the Accounts,
the Receivables or under any agreement or instrument relating thereto including,
without limitation, any obligation to any Obligors, merchant service
establishments or insurers.
In connection with such transfer, each Transferor agrees to
record and file, at its own expense, financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables now existing and hereafter created for the transfer
of accounts and general intangibles (both as defined in the UCC in effect in the
Relevant UCC State) meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the transfers and
assignments of the Receivables by such Transferor to the Trust, and to deliver a
file-stamped copy of such financing statements or other evidence of such filings
to the Trustee on or prior to the Closing Date.
In connection with such transfer, the Servicer agrees, on
behalf of the Transferors, at its own expense, to indicate clearly and
unambiguously in its computer files that the Receivables created in connection
with the Accounts (other than any Additional Account) have been transferred to
the Trust pursuant to this Agreement for the benefit of the Certificateholders.
18
On behalf of the Transferors, the Servicer further agrees to deliver to the
Trustee (a) a computer file or microfiche list containing a true and complete
list of all such Accounts, identified by account number and by Receivables
balance as of the applicable Cut-Off Date and (b) within twenty Business Days of
any request by the Trustee, a new computer file or microfiche list containing a
true and complete list of all Accounts identified as described in the preceding
clause (a). Such files or lists shall be marked as Schedule 1 to this Agreement,
delivered to the Trustee as confidential and proprietary, and are hereby
incorporated into and made a part of this Agreement. The Servicer agrees, on
behalf of the Transferors, at its own expense, by the end of the Due Period in
which any Related Accounts have been originated to indicate clearly and
unambiguously in its computer files that the Receivables created in connection
with the Related Accounts have been transferred to the Trust pursuant to this
Agreement for the benefit of the Certificateholders.
Each Transferor hereby grants to the Trustee a first priority
perfected security interest in all of such Transferor's right, title and
interest in and to the Receivables, now existing and hereafter created, all
monies due or to become due with respect thereto on and after the Cut-Off Date
applicable to the Receivables conveyed to the Trust by such Transferor
(including Recoveries), all proceeds of such Receivables, such funds as are from
time to time deposited in the Collection Account, the Special Funding Account
and any other account or accounts maintained for the benefit of
Certificateholders, and the benefits of any Enhancement for any Series for
payment to Certificateholders. This Agreement shall constitute a security
agreement under applicable law.
Pursuant to the request of the Transferors, the Trustee has
caused Certificates in authorized denominations evidencing the entire interest
in the Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.02,
Section 2.02 Acceptance by Trustee. (a) The Trustee hereby
acknowledges its acceptance, to the extent validly transferred, assigned, set
over or otherwise conveyed to the Trust as provided in subsection 2.01(b)
hereof, on behalf of the Trust, of all right, title and interest previously held
by each Transferor in and to the Receivables, now existing and hereafter
created, all monies due or to become due with respect thereto on and after the
Cut-Off Date applicable to the Receivables conveyed to the Trust by such
Transferor (including Recoveries), all proceeds of such Receivables, such funds
as are from time to time deposited in the Collection Account, the Special
Funding Account, and any other account or accounts maintained for the benefit of
Certificateholders, and benefits of any Enhancement for any Series and declares
that it shall hold such right, title and interest, upon the trust herein set
forth, and subject to the terms hereof for the benefit of all
Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Servicer
delivered to the Trustee, on behalf of the Transferors, the computer files or
microfiche lists represented by the Servicer to be the computer files or
microfiche lists described in the fourth paragraph of Section 2.01.
(b) The Trustee hereby agrees not to disclose to any Person (including
any Certificateholder or Certificate Owner) any of the account numbers or other
information contained in the computer files or microfiche lists delivered to the
Trustee by the Servicer on behalf of the Transferors pursuant to Sections 2.01
and 2.06, except as is required in connection with the performance of its duties
hereunder or in enforcing the rights of the Certificateholders or
19
to a successor Servicer appointed pursuant to Sections 8.05 or 10.02 or a
successor Trustee appointed pursuant to Section 11.08. The Trustee agrees to
take such measures as shall be reasonably requested by the Transferors to
protect and maintain the security and confidentiality of such information, and,
in connection therewith, shall allow the Transferor or the Servicer on behalf of
the Transferor to inspect the Trustee's security and confidentiality
arrangements from time to time during normal business hours. The Trustee shall
provide the Transferors with written 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.
Section 2. Except as otherwise provided below, each Transferor hereby
severally represents and warrants to the Trustee, on behalf of the Trust, with
respect to any Series of Certificates, as of the date of any Supplement and the
related Closing Date, unless otherwise stated in such Supplement that:
(i) Organization and Good Standing. As to RFC, that RFC is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware, and has 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, and to execute,
deliver and perform its obligations under this Agreement, any Supplement and the
Receivable Purchase Agreement and to execute and deliver to the Trustee the
Certificates pursuant hereto. As to Centurion Bank, that Centurion Bank is a
Utah-chartered industrial loan company, duly organized and validly existing in
good standing under the laws of the State of Utah, and has 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, and to
execute, deliver and perform its obligations under this Agreement and any
Supplement and to execute and deliver to the Trustee the Certificates pursuant
hereto.
(ii) Due Qualification. Such Transferor is duly qualified to do
business and is in good standing as a foreign corporation, 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 conduct of its business or render any Receivable unenforceable;
provided, however, that no representation or warranty is made with respect to
any qualifications, licenses or approvals which the Trustee would have to obtain
to do business in any state in which the Trustee seeks to enforce any
Receivable.
(iii) Due Authorization. As to RFC, that the execution and delivery
of this Agreement, any Supplement and the Receivable Purchase Agreement and the
execution and delivery to the Trustee of the Certificates and the consummation
of the transactions provided for in this Agreement, any Supplement and the
Receivable Purchase Agreement have been duly authorized by RFC by all necessary
corporate action on the part of RFC. As to Centurion Bank, that the execution
and delivery of this Agreement and any Supplement and the execution and delivery
to the Trustee of the Certificates and the consummation of the transactions
provided for in this Agreement and any Supplement have been duly authorized by
Centurion Bank by all necessary corporate action on the part of Centurion Bank.
(iv) No Violation. As to RFC, that the execution and delivery of
this Agreement, any Supplement, the Receivable Purchase Agreement and the
Certificates, the performance of the transactions contemplated by this
Agreement, any Supplement and the Receivable Purchase Agreement and the
fulfillment of the terms hereof will not conflict with, violate or result in any
breach of any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
Requirement of Law applicable to RFC or any material indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which RFC is a party
or by which it or any of its properties are bound. As to Centurion Bank, the
execution and delivery of this Agreement, any Supplement and the Certificates,
the performance of the transactions contemplated by this Agreement and any
Supplement and the fulfillment of the terms hereof will not conflict with,
violate or result in any breach of any of the material terms and provisions of,
or constitute (with or without notice or lapse of time or both) a material
default under, any Requirement of Law applicable to Centurion Bank or any
material indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which Centurion Bank is a party or by which it or any of its
properties are bound.
(v) No Proceedings. As to RFC, there are no proceedings or
investigations pending or, to the best knowledge of RFC, threatened against RFC,
before any court, regulatory body, administrative agency, arbitrator or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement, any Supplement, the Receivable Purchase Agreement or the
Certificates, (ii) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement, any
Supplement, the Receivable Purchase Agreement or the Certificates, (iii) seeking
any determination or ruling that, in the reasonable judgment of RFC, would
materially and adversely affect the performance by RFC of its obligations under
this Agreement, any Supplement or the Receivable Purchase Agreement, (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement, any Supplement, the Receivable
Purchase Agreement or the Certificates or (v) seeking to affect adversely the
Federal or State of New York income tax attributes of the Trust. There are no
proceedings or investigations pending or, to the best knowledge of Centurion
Bank, threatened against Centurion Bank, before any court, regulatory body,
administrative agency, arbitrator or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, any Supplement,
or the Certificates, (ii) seeking to prevent the issuance of the Certificates or
the consummation of any of the transactions contemplated by this Agreement, any
Supplement, or the Certificates, (iii) seeking any determination or ruling that,
in the reasonable judgment of Centurion Bank, would materially and adversely
affect the performance by Centurion Bank of its obligations under this Agreement
or any Supplement, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement, any Supplement, or the Certificates or (v) seeking to affect
adversely the Federal or State of New York income tax attributes of the Trust.
21
(vi) Eligibility of Accounts. As of the Selection Date applicable to
each Account, such Account was an Eligible Account.
(vii) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority required
to be obtained on or prior to the date as of which this representation is being
made in connection with the execution and delivery of this Agreement, any
Supplement, the Receivable Purchase Agreement and the Certificates, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof, have been obtained.
(viii) Amount of Receivables; Computer File. As of the June 30, 1992
Cut-Off Date, the amount of Receivables was $2,433,528,576. The computer files
or microfiche lists delivered pursuant to Section 2.01 hereof, at the time of
their delivery, were complete and accurately reflected the information regarding
the Receivables under the Accounts in all material respects.
The representations and warranties set forth in this Section
2.03 shall survive the transfer and assignment of the Receivables to the Trust,
and termination of the rights and obligations of the Servicer pursuant to
Section 10.01. Upon discovery by any of the Transferors, the Servicer or the
Trustee of a breach of any of the foregoing representations and warranties, the
party discovering such breach shall give prompt written notice to the others.
Section 2.03 Representations and Warranties of the Transferors Relating to
the Agreement and any Supplement and the Receivables.
(a) Binding Obligation; Valid Transfer And Assignment. Each Transferor
hereby severally represents and warrants to the Trustee, on behalf of the Trust,
with respect to any Series of Certificates, as of the date of any Supplement and
the related Closing Date, unless otherwise stated in such Supplement that:
(i) As to RFC, each of this Agreement, any Supplement and the
Receivable Purchase Agreement, constitutes a legal, valid and binding
obligation of RFC, enforceable against RFC, in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in
equity). As to Centurion, each of this Agreement and any Supplement to
which Centurion Bank shall be a party constitutes a legal, valid and
binding obligation of Centurion Bank, enforceable against Centurion Bank,
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(ii) This Agreement constitutes either (A) a valid transfer and
assignment to the Trust of all right, title and interest of such Transferor
in and to the Receivables now existing and hereafter created, all monies
due or to become due with respect thereto on and after the Cut-Off Date
applicable to the Receivables conveyed by such Transferor to
23
the Trust, Recoveries, and all proceeds (as defined in the UCC as in effect
in the Relevant UCC State) of such Receivables, such funds as are from time
to time deposited in the Collection Account, Special Funding Account and
any other account or accounts maintained for the benefit of
Certificateholders and the benefits of any Enhancement, and such
Receivables and all proceeds thereof will be held by the Trust free and
clear of any Lien of any Person claiming through or under such Transferor
or any of its Affiliates except for (x) Liens permitted under subsection
2.05(b), (y) the interest of such Transferor as a holder of the
Exchangeable Transferor Certificate and (z) any right of the holder of the
Exchangeable Transferor Certificate to receive interest accruing on, and
investment earnings with respect to, the Collection Account or any other
account or accounts maintained for the benefit of Certificateholders as
provided in this Agreement and any Supplement or (B) a grant of a security
interest (as defined in the UCC as in effect in the Relevant UCC State) in
such property to the Trustee on behalf of the Trust, which is enforceable
with respect to existing Receivables (other than Receivables in Additional
Accounts) and the proceeds thereof to the extent set forth in Section 9-306
of the UCC in effect in the Relevant UCC State upon execution and delivery
of this Agreement, and which will be enforceable with respect to such
Receivables thereafter created, and the proceeds thereof to such extent,
upon such creation. If this Agreement constitutes the grant of a security
interest to the Trust in such property, upon the filing of the applicable
financing statements and in the case of the Receivables hereafter created
and proceeds thereof upon such creation, the Trust shall have a first
priority perfected security interest in such property to the extent set
forth in Section 9-306 of the UCC in effect in the Relevant UCC State
relating to such Receivables, except for Liens permitted under subsection
2.05(b) hereunder. Neither such Transferor nor any Person claiming through
or under such Transferor shall have any claim to or interest in the
Collection Account or any other account or accounts maintained for the
benefit of Certificateholders, except for any right of the Transferors to
receive interest accruing on, and investment earnings with respect to, any
such account as provided in this Agreement and any Supplement and, if this
Agreement constitutes the grant of a security interest in such property,
except for the interest of such Transferor in such property as a debtor for
purposes of the UCC as in effect in the Relevant UCC State. The Receivable
Purchase Agreement constitutes a transfer to RFC of all right, title and
interest of TRS in and to the Receivables purported to be sold thereunder,
whether then existing or thereafter created in the applicable Accounts and
the proceeds thereof.
(b) Eligibility of Receivables. Each Transferor hereby severally
represents and warrants to the Trustee, on behalf of the Trust as of the
Cut-Off Date applicable to the Receivables conveyed by such Transferor to
the Trust and on each Additional Account Cut-Off Date applicable to
Receivables to be conveyed by it to the Trust that (i) each such Receivable
then existing is an Eligible Receivable, (ii) all material information with
respect to the Accounts and Receivables provided to the Trustee by such
Transferor was true and correct in all material respects as of the
Selection Date or the related Additional Account Selection Date, (iii) each
Receivable then existing 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 2.05(b)) and in
compliance, in all material respects, with all Requirements of Law
applicable to such Transferor, (iv) with respect to each such Receivable
then existing, all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required to
be obtained, effected or given by such Transferor, in connection with the
conveyance of such Receivable to the Trust have been duly obtained,
effected or given and are in full force and effect, (v) as of the Initial
Closing Date, and, as of the applicable Additional Account Cut-Off Date
with respect to Additional Accounts, Schedule 1 to this Agreement is and
will be an accurate and complete listing of all the Accounts in all
material respects as of such Cut-Off Date or applicable Additional Account
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 and will be true and correct in all material respects as of
such applicable Cut-Off Date or Additional Account Cut-Off Date and (vi) no
selection procedure believed by such Transferor to be adverse to the
interests of the Investor Certificateholders have been used in selecting
the initial Accounts. On each day on which any new Receivable is created,
such Transferor shall be deemed to represent and warrant to the Trust that
(A) each Receivable created on such day is an Eligible Receivable, (B) each
Receivable created on such day has been conveyed to the Trust in
compliance, in all material respects, with all Requirements of Law
applicable to such Transferor, (C) with respect to each such Receivable,
all consents, licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by such Transferor, in connection with the conveyance of
such Receivable to the Trust have been duly obtained, effected or given and
are in full force and effect and (D) the representations and warranties set
forth in subsection 2.04(a) are true and correct with respect to each
Receivable created on such day as if made on such day.
(c) Notice of Breach. The representations and warranties set forth in
this Section 2.04 shall survive the transfer and assignment of the
Receivables to the Trust and the termination of the rights and obligations
of the Servicer pursuant to Section 10.01. Upon discovery by either
Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.04, the party
discovering such breach shall give prompt written notice to the others.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach with respect to a
Receivable of any of the representations and warranties set forth in
subsection 2.04(b)(iii) or in the event that a Receivable is not an
Eligible Receivable as a result of the failure to satisfy the conditions
set forth in clause (iv) of the definition of an Eligible Receivable, and
either of the following two conditions is met:
(A) the Lien upon the subject Receivable (1) ranks prior to the Lien
created pursuant to this Agreement, (2) arises in favor of the United States of
America or any state or any agency or instrumentality thereof or involves taxes
or liens arising under Title IV of the Employee Retirement Income Security Act
of 1974, or (3) has been consented to by TRS or either Transferor; or
(B) the Lien on the subject Receivable is not of the types described in
clause (A) above, and as a result of such breach or event such Receivable
becomes a Receivable in a Defaulted Account, or the related Transferor's or the
Trust's rights in, to or under such Receivable or its proceeds are materially
impaired or the proceeds of such Receivable are not available for any reason to
the Trust free and clear of any Lien except Liens permitted pursuant to
subsection 2.05(b);
24
then, upon the earlier to occur of the discovery of such breach or event by such
Transferor or the Servicer or receipt by the Transferors or the Servicer of
written notice of such breach or event given by the Trustee, each such
Receivable or, at the option of such Transferor, all such Receivables with
respect to the related Account shall be automatically removed from the Trust on
the terms and conditions set forth below in subsection 2.04(d)(iii).
(ii) Removal after Cure Period. In the event of a breach of any of the
representations and warranties set forth in subsection 2.04(b)(i), (ii),
(iv) or (v) with respect to a Receivable (other than in the event that a
Receivable is not an Eligible Receivable as a result of the failure to
satisfy the conditions set forth in clause (iv) of the definition of
Eligible Receivable), and as a result of such breach or event such
Receivable becomes a Receivable which is not an Eligible Receivable, the
Account related to such Receivable becomes a Defaulted Account or the
Trust's rights in, to or under such Receivable or its proceeds are
materially impaired or the proceeds of such Receivable are not available
for any reason to the Trust free and clear of any Lien except Liens
permitted pursuant to subsection 2.05(b), then, upon the expiration of 60
days or any longer period agreed upon by the Trustee (not to exceed an
additional 60 days) from the earlier to occur of the discovery of any such
event by the Transferors or the Servicer, or receipt by the Transferors or
the Servicer of written notice of any such event given by the Trustee, each
such Receivable or, at the option of the Transferors, all such Receivables
with respect to the related Account, shall be removed from the Trust on the
terms and conditions set forth in subsection 2.04(d)(iii); provided,
however, that no such removal shall be required to be made if, on any day
within such applicable period, (A) such representations and warranties with
respect to such Receivable shall then be true and correct in all material
respects as if such Receivable had been created on such day, and (B) such
Receivable is an Eligible Receivable, the related Account is no longer a
Defaulted Account as the result of the breach of such representation and
warranty (including those implied by law), and the Trust's rights in, to or
under such Receivable or its proceeds are no longer impaired as the result
of the breach of such representation and warranty, and the proceeds of such
Receivable have become available to the Trust free and clear of all Liens
resulting in the breach of such representation or warranty, as applicable.
(iii) Removal Terms and Conditions. When required or permitted with
respect to a Receivable (an "Ineligible Receivable") by the provisions of
subsection 2.04(d)(i) or subsection 2.04(d)(ii) above, the Transferors
shall remit to the Servicer, for deposit into the Special Funding Account,
the balance of such Receivable within two Business Days of the date on
which such Receivable became an Ineligible Receivable. Any such deposit
into the Special Funding Account in connection with the reassignment of an
Ineligible Receivable shall be considered a payment in full of the
Ineligible Receivable and such deposit shall be applied in accordance with
the provisions of Article IV. Upon the reassignment to the Transferors of
an Ineligible Receivable, the Trust shall, without further action be deemed
to transfer, assign, set-over and otherwise convey to the Transferors,
without recourse, representation or warranty (including those implied by
law), all the right, title and interest of the Trust in and to such
Ineligible Receivable, all monies due or to become due with respect thereto
and all proceeds thereof. The Trustee shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Transferors to effect the conveyance
25
of such Ineligible Receivable pursuant to this subsection and as shall be
specified in an Opinion of Counsel delivered to the Trustee to the effect
that such documents and instruments comply herewith. In the event that on
any day within 60 days, or any longer period agreed upon by the Trustee
(not to exceed an additional 60 days), of the date on which the removal of
Receivables which are not Eligible Receivables from the Trust pursuant to
this Section is effected, (A) the applicable representations and warranties
with respect to such Receivable shall be true and correct in all material
respects on such date and (B) the Receivable is an Eligible Receivable, the
Account corresponding to the Receivable is no longer a Defaulted Account
and the Trust's rights in, to or under such Receivable or its proceeds are
no longer impaired as a result of the breach of such representation or
warranty and the proceeds of such Receivable are available to the Trust
free and clear of all Liens resulting in the breach of such representation
and warranty, or (C) either Transferor has cured the breach of the
representation or warranty, as applicable, the Transferors may, but shall
not be required to, direct the Servicer to include such Receivable in the
Trust. Upon reinclusion of a Receivable in the Trust pursuant to this
subsection, the Transferors shall have been deemed to have made the
applicable representations and warranties in subsection 2.04(b) as of the
date of such addition, as if the Receivable had been created on such date,
and shall execute all such necessary documents and instruments of transfer
or assignment and take such other actions as shall be necessary to effect
and perfect the reconveyance of such Receivable to the Trust. The
obligation of the Transferors set forth in this subsection shall constitute
the sole remedy respecting any breach of the representations and warranties
set forth in the above-referenced subsections with respect to such
Receivable available to Certificateholders or the Trustee on behalf of
Certificateholders.
Notwithstanding any other provision of this subsection
2.04(d), a reassignment of an Ineligible Receivable shall not occur if the
Transferors fail to make the deposit required by this subsection 2.04(d) with
respect to such Ineligible Receivable.
(iv) No Impairment. For the purposes of subsections 2.04(d)(i) and
2.04(d)(ii) above, proceeds of a Receivable shall not be deemed to be
impaired hereunder solely because such proceeds are held by the Servicer
for more than the applicable period under Section 9-306(3) of the UCC as in
effect in the Relevant UCC State.
(e) Reassignment of Trust Portfolio. In the event of (1) a breach of
any of the representations or warranties set forth in subsection 2.03(i) or
2.04(a) or (2) a material amount of Receivables are not Eligible Receivables,
and in either case such event has a material adverse effect on Investor
Certificateholders, either the Trustee or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Aggregate
Invested Amount, by notice then given in writing to the Transferors (and to the
Trustee and the Servicer, if given by the Investor Certificateholders), may
direct the Transferors to accept reassignment of all Receivables within 60 days
of such notice, or within such longer period as may be specified in such notice
(not to exceed an additional 60 days) and the Transferors shall be obligated to
accept such reassignment on a Distribution Date specified by the Transferors
occurring within such applicable period on the terms and conditions set forth
below; provided, however, that no such reassignment shall be required to be made
if, on the Business Day prior to such Distribution Date the representations and
warranties contained in subsection 2.03(i) and 2.04(a) shall then be true and
correct in all material respects, or there shall no longer be a material amount
of Receivables
27
which are not Eligible Receivables, as the case may be. The Transferors shall
deposit on the Business Day prior to the Distribution Date (in immediately
available funds) an amount equal to the reassignment deposit amount for such
Receivables in the Collection Account for distribution to the Investor
Certificateholders pursuant to Section 12.03. The deposit amount for such
reassignment shall be equal to the Aggregate Invested Amount on the Record Date
related to the applicable Distribution Date on which such deposit is made (less
the aggregate principal amount on deposit in any principal funding account) plus
an amount equal to all accrued but unpaid interest on the Certificates of all
Series at the applicable certificate rates through the end of the interest
accrual periods of such Series. Payment of the reassignment deposit amount and
all other amounts in the Collection Account in respect of the preceding Due
Period shall be considered a prepayment in full of all such Receivables. On the
Distribution Date with respect to which such amount has been deposited in full
into the Collection Account, the Receivables and all monies due or to become due
with respect thereto and all proceeds relating thereto shall be released to the
Transferors and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as shall be reasonably requested by the Transferors to vest in the
Transferors or their designees or assignees, all right, title and interest of
the Trust in and to the Receivables, all monies due or to become due with
respect thereto and all proceeds thereof and as shall be specified in an Opinion
of Counsel delivered to the Trustee to the effect that such documents and
instruments comply herewith. If the Trustee or the Investor Certificateholders
give a notice directing the Transferors to accept reassignment as provided
herein, the obligation of the Transferors to accept reassignment of the
Receivables pursuant to this subsection 2.04(e) shall constitute the sole remedy
respecting a breach of the representations and warranties contained in
subsection 2.03(i) or 2.04(a) or there being a material amount of Receivables
which are not Eligible Receivables available to the Investor Certificateholders
or the Trustee on behalf of the Investor Certificateholders.
(f) Nothing contained in this Section 2.04 shall create an obligation
on the part of the Trustee to verify the accuracy or continued accuracy of the
representations or warranties contained in this Section 2.04. The Trustee shall
have no obligation to give any notice pursuant to this Section 2.04 unless it
has actual knowledge of facts which would permit the giving of such notice.
Section 2.05 Covenants of the Transferors. Each Transferor hereby severally
covenants that:
(a) Receivables Not to be Evidenced by Promissory Notes or Chattel
Paper. Such Transferor will take no action to cause any Receivable to be
evidenced by any instrument (as defined in the UCC as in effect in the Relevant
UCC State). Each Receivable shall be payable pursuant to a contract which does
not create a Lien on any goods purchased thereunder.
(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,
whether now existing or hereafter created, or any interest therein; such
Transferor will notify the Trustee of the existence of any Lien on any
Receivable transferred by such Transferor immediately upon discovery thereof;
and such Transferor will defend the right, title and interest of the Trust in,
to and under the Receivables, whether now existing or hereafter created, against
all claims of third parties claiming through or under such Transferor; provided,
however, that nothing in this subsection 2.05(b) shall prevent or
27
be deemed to prohibit TRS or either Transferor from suffering to exist upon any
of the Receivables any Liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if TRS or 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; provided, further,
that nothing in this subsection shall prohibit the Transferors from
participating an interest in the Exchangeable Transferor Certificate pursuant to
subsection 6.03(b) hereof.
(c) Account Agreements and Guidelines. Such Transferor shall cause the
Account Originators to comply with and perform its obligations under the
applicable Account Agreements relating to the Accounts and the Account
Guidelines except insofar as any failure so to comply or perform would not
materially and adversely affect the rights of the Trust or the Investor
Certificateholders hereunder or under the Certificates. Subject to compliance
with all Requirements of Law the failure to comply with which would have a
material adverse effect on the Investor Certificateholders, an Account
Originator may change the terms and provisions of its Account Agreements or its
Account Guidelines in any respect (including, without limitation, the
calculation of the amount, or the timing, of Charge-Offs) as follows: (a) if
such Account Originator owns a comparable segment of accounts then such change
shall be made applicable to such comparable segment of the accounts owned and
serviced by it that have characteristics the same as, or substantially similar
to, the Accounts that are the subject of such change, and (b) if such Account
Originator does not own such a comparable segment, then it will not make any
such change with the intent to materially benefit itself, or any Transferor over
the Investor Certificateholders.
(d) Account Allocations. In the event that such Transferor is unable
for any reason to transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including, without limitation, by reason of the
application of the provisions of Section 9.02 or an order of any court of
competent jurisdiction that such Transferor not transfer any additional
Receivables to the Trust) then, in any such event, (A) such Transferor agrees
(except as prohibited by any such order) to allocate and pay to the Trust, after
the date of such inability, all Principal Collections, and all amounts which
would have constituted Principal Collections but for such Transferor's inability
to transfer such Receivables (up to an aggregate amount equal to the amount of
Trust Principal Component in the Trust on such date); (B) such Transferor agrees
to have such amounts applied as Collections in accordance with Article IV, and
(C) for only so long as the allocation and application of all Collections and
all amounts which would have constituted Collections are made in accordance with
clauses (A) and (B) above, Principal Collections and all amounts which would
have constituted Principal Collections but for such Transferor's inability to
transfer Receivables to the Trust which are charged off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance with
the related Supplement, and all amounts which would have constituted Principal
Collections but for such Transferor's inability to transfer Receivables to the
Trust shall be deemed to be Principal Collections for the purpose of calculating
the applicable Invested Percentage thereunder. If such Transferor is unable
pursuant to any Requirement of Law to allocate Collections as described above,
such Transferor agrees that it shall, in any such event, allocate, after the
date that it becomes unable to do so, payments on each Account with respect to
the balance of such Account first to the oldest receivable in such Account and
to have such payments applied as Collections in accordance with Article IV.
28
(e) Delivery of Collections. In the event that such Transferor receives
Collections, such Transferor agrees to pay to the Servicer all payments received
by it with respect to Collections on the Receivables as soon as practicable
after receipt thereof by it, but in no event later than two Business Days after
the receipt by it thereof.
(f) Notice of Liens. Such Transferor shall notify the Trustee promptly
after becoming aware of any Lien on any Receivable other than the conveyances
hereunder.
(g) Change in Yield Factor. Provided that no Pay Out Event shall have
occurred and be continuing, without notice to or the consent of
Certificateholders of any Series, the Transferors may, upon ten Business Days
prior written notice to the Servicer and the Trustee, require that the Yield
Factor be changed from and after the close of business on the date set forth in
such notice as of the effective date of such change. The Transferors may not
increase the Yield Factor above 5.0%. Any such change shall be subject to the
satisfaction of the following conditions:
(i) Such change in the Yield Factor shall not, in the reasonable belief
of the Transferors cause a Pay Out Event to occur or an event which, with
notice or the lapse of time or both would constitute a Pay Out Event.
(ii) Such change in the Yield Factor shall not cause the Yield Factor
to be reduced below the initial Yield Factor.
(iii) The Rating Agencies shall have received ten Business Days' notice
of such proposed change and the Transferors shall have received written
confirmation that such proposed change shall not cause the downgrade or
withdrawal of any rating assigned to any outstanding Series by Moody's (if
Moody's shall then be a Rating Agency).
(iv) Each Transferor shall deliver to the Trustee an Officer's
Certificate confirming the items set forth in paragraphs (i) through (iii)
above and the Trustee may conclusively rely on such Officer's Certificates,
shall have no duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying.
In the event that the Servicer is not required to make daily deposits of
Collections in the Collection Account at the date of such change, the
Transferors may specify either the first day of the current Due Period or
the first day of the next succeeding Due Period as the effective date of
such change. If the Servicer is then required to make daily deposits of
Collections in the Collection Account at the time of such change, the
Transferors may specify that the date upon which all of the conditions
specified in this subsection 2.05(g) have been complied with is the
effective date of this change.
Section 2.06 Addition of Accounts.
(a) If, (1) as of the end of any two consecutive Due Periods, the
Transferor Amount as a percentage of the Trust Principal Component is less than
the Minimum Transferor Percentage, the Transferors shall designate additional
Eligible Accounts (the "Additional Accounts") to be included as Accounts in a
sufficient amount such that the Transferor Amount as a percentage of the Trust
Principal Component after giving effect to such addition at least equals
29
the Minimum Transferor Percentage, or (2) as of the end of any Due Period, the
Trust Principal Component is less than the Minimum Trust Principal Component,
then the Transferor shall designate Additional Accounts to be included as
Accounts in a sufficient amount such that the Trust Principal Component will be
equal to or greater than the Minimum Trust Principal Component. Receivables from
such Additional Accounts shall be transferred to the Trust, in the case of
subclause (i), on or before 15 days following the Determination Date related to
the second of such Due Periods and, in the case of subclause (2), on or before
15 days following such Determination Date (the "Additional Account Closing
Date").
(b) In addition to its obligation under subsection 2.06(a), the
Transferors may, but shall not be obligated to, designate from time to time
Additional Accounts to be included as Accounts.
(c) The Transferors agree that any such transfers of Receivables from
Additional Accounts under subsection 2.06(a) or (b) shall satisfy the following
conditions:
(i) On or before the tenth Business Day prior to the Additional
Account Closing Date, the Transferors shall give the Trustee and the
Servicer written notice that such Additional Accounts will be included
and specifying the approximate aggregate amount of the Receivables to
be transferred;
(ii) On or prior to the Additional Account Closing Date, the
Transferors shall have delivered to the Trustee a written assignment (and
the Trustee shall have accepted such assignment on behalf of the Trust for
the benefit of the Investor Certificateholders and any Enhancement
Provider) in substantially the form of Exhibit B (the "Assignment") and
shall have clearly indicated in their respective computer files that the
Receivables created in connection with the Additional Accounts have been
transferred to the Trust and the Servicer shall have delivered to the
Trustee a computer file or microfiche list represented by the Servicer to
contain a true and complete list of all Additional Accounts identified by
account number and by Receivable balance in such Additional Accounts as of
the Additional Account Cut-Off Date, which computer file or microfiche list
shall be as of the date of such Assignment incorporated into and made a
part of such Assignment and this Agreement;
(iii) The Transferors shall severally represent and warrant that (x)
each Additional Account was, as of the date of its selection (the
"Additional Account Selection Date"), an Eligible Account, (y) no selection
procedures believed by the Transferors to be materially adverse to the
interests of any Series of Investor Certificates or any Enhancement
Provider were utilized in selecting the Additional Accounts from the
available Eligible Accounts in each Transferor's portfolio; and (z) as of
the Additional Account Closing Date, neither Transferor is insolvent or
will be made insolvent by the transfer of the Receivables of such
Additional Accounts;
(iv) The Transferors shall represent and warrant, that, as of the
Additional Account Closing Date, the Assignment constitutes either (x) a
valid transfer and assignment to the Trust of all right, title and interest
of the Transferors in and to the Receivables then existing and thereafter
created in the Additional Accounts, all monies due or to become due with
respect thereto on and after the Additional Account Cut-Off
30
Date, Recoveries and all proceeds of such Receivables to the extent set
forth in Section 9-306 of the UCC as in effect in the Relevant UCC State,
and such Receivables and all proceeds thereof will be conveyed to the Trust
free and clear of any Lien of any Person claiming through or under either
Transferor or any of its Affiliates, except for (i) Liens permitted under
subsection 2.05(b) hereunder, (ii) the interest of the holder of the
Exchangeable Transferor Certificate and (iii) any right of the holder of
the Exchangeable Transferor Certificate to receive interest accruing on,
and investment earnings with respect to, the Collection Account and any
other account or accounts maintained for the benefit of Certificateholders
as provided in this Agreement and any Supplement or (y) a grant of a
security interest (as defined in the UCC as in effect in the Relevant UCC
State) in such property to the Trustee on behalf of the Trust, which is
enforceable with respect to then existing Receivables of the Additional
Accounts, and the proceeds thereof to the extent set forth in Section 9-306
of the UCC as in effect in the Relevant UCC State upon the conveyance of
such Receivables to the Trust, and which will be enforceable with respect
to the Receivables thereafter created in respect of Additional Accounts,
and the proceeds (to the extent set forth in Section 9-306 of the UCC as in
effect in the Relevant UCC State) thereof upon such creation; and (z) if
the Assignment constitutes the grant of a security interest to the Trust in
such property, upon the filing of financing statements as described in
Section 2.01 with respect to such Additional Accounts and in the case of
such Receivables of Additional Accounts thereafter created and the proceeds
thereof to the extent set forth in Section 9-306 of the UCC in effect in
the Relevant UCC State, upon such creation, the Trust shall have a first
priority perfected security interest in such property, except for Liens
permitted under subsection 2.05(b) hereunder;
(v) Each Transferor shall deliver to the Trustee (with a copy to the
Rating Agencies) an Officer's Certificate confirming the items set forth in
paragraphs (ii), (iii) and (iv) above and (vii) below and the Trustee may
conclusively rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein and shall incur no
liability in so relying;
(vi) The Transferors shall deliver to the Trustee and each Rating
Agency an Opinion of Counsel with respect to the Receivables in the
Additional Accounts substantially in the form of Part One of Exhibit G; and
(vii) The Rating Agencies shall have received ten (10) Business Days'
notice of such proposed addition of Additional Accounts; in the event that
Additional Accounts are being added pursuant to subsection 2.06(b), the
Transferors shall have received written confirmation from Moody's (if
Moody's shall then be a Rating Agency) that such addition would not result
in a downgrade or withdrawal of its then current rating of any outstanding
Series of Investor Certificates; and, in the event that the number of
Additional Accounts designated with respect to any three consecutive Due
Periods would exceed 15% of the number of Accounts as of the first day of
the calendar year during which such Due Periods commence or the number of
Additional Accounts designated during any such calendar year would exceed
20% of the number of Accounts as of the first day of such calendar year,
the Transferors shall have received written confirmation from Standard &
Poor's, (if Standard & Poor's shall then be a Rating Agency) that such
addition would not result in a downgrade or withdrawal of its then current
rating of any outstanding Series of Investor Certificates.
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Section 2.07 Removal of Accounts.
(a) Subject to the conditions set forth below, on each Determination
Date on which the Transferor Amount as a percentage of the Trust Principal
Component exceeds 20% at the end of the related Due Period, the Transferors may,
but shall not be obligated to, designate, from time to time, Accounts for
deletion and removal ("Removed Accounts") from the Accounts; provided, however,
that the Transferors shall not make more than one such designation in any Due
Period. On or before the tenth Business Day (the "Removal Notice Date") prior to
the date on which the designated Removed Accounts will be reassigned by the
Trustee to the Transferors (the "Removal Date"), the Transferors shall give the
Trustee and the Servicer written notice that the Receivables from such Removed
Accounts are to be reassigned to the Transferors.
(b) The Transferors shall be permitted to designate and require
reassignment to them of Receivables from Removed Accounts only upon satisfaction
of the following conditions:
(i) On or prior to the Removal Date, the Transferors shall have
delivered to the Trustee for execution a written instrument of reassignment
in substantially the form of Exhibit C (the "Reassignment") and a computer
file or microfiche list containing a true and complete list of all Removed
Accounts identified by account number and by the aggregate balance of the
Receivables in such Removed Accounts as of the Removal Notice Date, which
computer file or microfiche list shall as of the Removal Date modify and
amend and be made a part of this Agreement;
(ii) The Transferors shall severally represent and warrant that no
selection procedures believed by the Transferors to be materially adverse
to the interests of any outstanding Series of Investor Certificates or any
Enhancement Provider were utilized in selecting the Removed Accounts to be
removed from the Trust;
(iii) The removal of any Receivables of any Removed Accounts on any
Removal Date shall not, (a) in the reasonable belief of the Transferors,
cause a Pay Out Event to occur or an event, which with notice or lapse of
time or both would constitute a Pay Out Event, to occur and (b) cause the
Transferor Amount as a percentage of the Trust Principal Component to be
less than the Minimum Transferor Percentage on such Removal Date;
(iv) The Rating Agencies shall have received ten Business Days'
notice of such proposed removal of Accounts and the Transferors shall have
received written notice from the Rating Agencies that such removal would
not result in a downgrade or withdrawal of the then current rating of any
outstanding Series of the Investor Certificates; and
(v) Each Transferor shall have delivered to the Trustee and the
Rating Agencies an Officer's Certificate confirming the items set forth in
(i) through (iv) above. The Trustee may conclusively rely on such Officer's
Certificates, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
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Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferors, and the Receivables
from the Removed Accounts shall no longer constitute a part of the Trust.
(c) The Transferors shall be required to designate Accounts for
deletion and removal from the Accounts and to require the Trustee to reassign
the designated Accounts to the Transferor on a Determination Date (the "PA
Removal Date") no later than 120 days after the first Determination Date in
which:
(i) Estimated Trust Privileged Assets Billed Amounts for the month in
which the last day of the second preceding Due Period occurs exceed 1% of
Trust Principal Component for the Due Period immediately preceding such
Determination Date, unless the Transferor Amount as a percentage of the
Trust Principal Component for such immediately preceding Due Period equals
or exceeds 17%; or
(ii) The average of the Privileged Assets Monthly Payment Rates for the
six month period ending on the last day of the second preceding Due Period
does not equal at least 110% of the Trust Average Monthly Payment Rate for
the Due Period immediately preceding such Determination Date, unless the
Transferor Amount as a percentage of the Trust Principal Component for such
immediately preceding Due Period equals or exceeds 17%.
The Accounts that shall be designated for deletion and removal pursuant
to this Subsection 2.07(c) (the "Removed PA Accounts") shall consist of all
Accounts that are enrolled in the Privileged Assets Program as of a date 60 days
or less prior to the PA Removal Date; provided, that the Transferors shall not
be required to designate for removal more Accounts than is necessary to reduce
the Estimated Trust Privileged Assets Billed Amounts determined under Section
2.07(c)(i) to 0.50% of the Trust Principal Component.
Upon satisfaction of the requirements of subsection 2.07(b)(i) with
respect to the PA Removed Accounts and the delivery by the Transferors to the
Trustee and the Rating Agencies of an Officer's Certificate confirming such
item, the Trustee shall execute and deliver the Reassignment to the Transferors,
and the Receivables from the Removed PA Accounts shall no longer constitute a
part of the Trust. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying.
[END OF ARTICLE II]
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) TRS has agreed to act, and has acted, as the Servicer under the
Original Pooling Agreement, and TRS hereby agrees to act as the Servicer under
this Agreement. Investor Certificateholders by their acceptance of the Investor
Certificates shall be deemed to consent to TRS acting as Servicer.
(b) The Servicer shall service and administer the Receivables and shall
collect payments due under the Receivables in accordance with its customary and
usual servicing procedures for servicing consumer charge card receivables
comparable to the Receivables and in accordance with the applicable Account
Guidelines and shall have full power and authority, acting alone or through any
party properly designated by it hereunder, to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing and subject to
Section 10.01, the Servicer is hereby authorized and empowered (i) to make
withdrawals and payments and to instruct the Trustee to make withdrawals and
payments from the Collection Account, the Special Funding Account or any other
account or accounts maintained for the benefit of the Certificateholders as set
forth in this Agreement and any Supplement, (ii) unless such power and authority
is revoked by the Trustee on account of the occurrence of a Servicer Default
pursuant to Section 10.01 of the Agreement to instruct the Trustee to take any
action permitted or required under any Enhancement at such time as set forth in
this Agreement and any Supplement (iii) to execute and deliver, on behalf of the
Trust for the benefit of the Certificateholders, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables, (iv) to make any filings, reports,
notices of applications, or registrations with, and to seek any consents or
authorizations from, the Securities and Exchange Commission and any state
securities laws authority on behalf of the Trust as may be necessary or
advisable to comply with any Federal or state securities laws or reporting
requirements and (v) to delegate its servicer, collection, enforcement and
administrative duties hereunder with respect to the Accounts and the Receivables
to FDC or other Person who agrees to conduct such duties in accordance with the
Account Guidelines; provided, however, that the Servicer shall notify each
Rating Agency in writing of any significant delegation of its duties to a Person
other than FDC and which is not in the ordinary course of the Servicer's
business. No such delegation will relieve the Servicer of its liability and
responsibility with respect to such duties. The Trustee shall promptly follow
the written instructions of the Servicer to withdraw funds from the Collection
Account, the Special Funding Account and any other account or accounts
maintained for the benefit of Certificateholders and with regard to any
Enhancement. The Trustee shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder and the Trustee shall not be
held responsible for any act or omission by the Servicer in its use of such
powers of attorney.
34
(c) In the event that a Transferor is unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of this Agreement
(including, without limitation, by reason of the application of the provisions
of Section 9.02 or the order of any court of competent jurisdiction that such
Transferor not transfer any additional Receivables to the Trust) then, in any
such event, (A) the Servicer agrees to allocate, after such date, all Principal
Collections, and all amounts which would have constituted Principal Collections
but for such Transferor's inability to transfer such Receivables (up to an
aggregate amount equal to the Trust Principal Component in the Trust as of such
date) in accordance with subsection 2.05(d) and to apply such amounts as
Collections in accordance with Article IV and (B) for only so long as all
Collections and all amounts which would have constituted Collections are
allocated and applied in accordance with clause (A) above, Principal Collections
and all amounts which would have constituted Principal Collections but for such
Transferor's inability to transfer Receivables to the Trust which are charged
off as uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with Article IV and all amounts which would have
constituted Principal Collections but for such Transferor's inability to
transfer Receivables to the Trust shall be deemed to be Principal Collections
for the purpose of calculating the applicable Invested Percentage thereunder;
provided, that if the Servicer is unable pursuant to any Requirement of Law to
allocate payments on the Accounts as described above, the Servicer agrees that
it shall, in any such event, allocate, after the date that the Transferor
becomes unable to do so, payments on the Accounts with respect to the
receivables in such Accounts first to the oldest receivables in such Accounts.
(d) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other consumer charge card receivables.
(e) The Servicer shall maintain fidelity bond coverage insuring against
losses through wrongdoing of its officers and employees who are involved in the
servicing of Receivables covering such actions with such insurers and in such
amounts as the Servicer believes to be reasonable from time to time.
(f) The Servicer shall apply payments received by the Servicer in
respect of Accounts to Receivables and to Privileged Assets Billed Amounts in
accordance with the applicable guidelines provided in the authorization
agreement pursuant to which Cardmembers enroll in the Privileged Assets Program
or as otherwise determined by the Servicer pursuant to a Cardmember request in
accordance with the Servicer's practices for the Privileged Assets Program;
provided, that in no event shall payments be applied as annuity contributions
under the Privileged Assets Program in priority to past due card charges.
Section 3.02 Servicing Compensation. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Due Period (or portion thereof) prior to
the termination of the Trust pursuant to Section 12.01 (the "Monthly Servicing
Fee"), payable in arrears on each Distribution Date in an amount equal to the
sum of, with respect to all Series then outstanding, one-twelfth of the product
of the applicable Servicing Fee Percentages and the sum of an allocable portion
of the Transferor Amount and the Invested Amount of each Series each as of the
last day of the second preceding Due Period. The
35
share of the Monthly Servicing Fee allocable to each Series of Investor
Certificateholders with respect to any Due Period (or portion thereof) shall be
equal to one-twelfth of the product of (A) the Servicing Fee Percentage for such
Series and (B) the Invested Amount of such Series (after subtracting from the
Invested Amount the aggregate amount of any deposits previously made into any
principal funding account) on the last day of the second preceding Due Period
(or, in the case of the first Distribution Date, the Initial Invested Amount)
with respect to any such Series, the "Investor Monthly Servicing Fee") and shall
be paid to the Servicer pursuant to the applicable Supplement. The remainder of
the Monthly Servicing Fee shall be paid by the Transferor and in no event shall
the Trust, the Trustee or the Investor Certificateholders be liable for the
share of the Monthly Servicing Fee to be paid by the Transferors. In the case of
the first Due Period, the Monthly Servicing Fee and the Investor Monthly
Servicing Fee shall accrue from the initial Cut-Off Date.
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.05 and the reasonable fees and disbursements of
independent accountants and all other expenses incurred by the Servicer in
connection with its activities hereunder, and include, without limitation, all
other fees and expenses of the Trust provided for in Section 8.04 hereof;
provided, that the Servicer shall not be liable for any liabilities, costs or
expenses of the Trust, the Investor Certificateholders or the Certificate owners
arising under any tax law, including without limitation any Federal, state or
local income or franchise taxes or any other tax imposed on or measured by
income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith), except to the extent incurred as a result of the
Servicer's violation of the provisions of this Agreement. The Servicer shall be
required to pay such expenses for its own account and shall not be entitled to
any payment therefor other than the Monthly Servicing Fee.
Section 3.03 Representations, Warranties and Covenants of the Servicer.
TRS, as initial Servicer, hereby makes, and any successor Servicer by its
appointment hereunder shall make, the following representations, warranties and
covenants with respect to any Series of Certificates, as of the date of the
related Supplement and its Closing Date unless otherwise stated in such
Supplement, on which the Trustee has relied in accepting the Receivables and the
other property conveyed pursuant to Section 2.01 in trust and in authenticating
the Certificates:
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, and has 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, and to execute, deliver and perform its
obligations under this Agreement and any Supplement.
(b) Due Qualification. The Servicer is duly qualified to do business
and is in good standing (or is exempt from such requirements) as a foreign
corporation in any state where such qualification is necessary in order to
service the Receivables as required by this Agreement and any Supplement and has
obtained all necessary licenses and approvals as required under Federal and
state law, and if the Servicer shall be required by any Requirement of Law to so
qualify or register or obtain such license or approval, then it shall do so
except where the failure to obtain such license or approval does not materially
affect the Servicer's ability to perform its obligations hereunder or the
enforceability of any Receivable.
36
(c) Due Authorization. The execution, delivery, and performance of this
Agreement and any Supplement, and the consummation of the transactions provided
in this Agreement and any Supplement have been duly authorized by the Servicer
by all necessary corporate action on the part of the Servicer.
(d) Binding Obligation. This Agreement and any Supplement constitute a
legal, valid and binding obligation of the Servicer, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereinafter in effect, affecting the
enforcement of creditors' rights in general and as such enforceability may be
limited by general principles of equity (whether considered in a proceeding at
law or in equity).
(e) No Violation. The execution and delivery of this Agreement and any
Supplement by the Servicer, and the performance of the transactions contemplated
by this Agreement and any Supplement and the fulfillment of the terms hereof
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 material default under, any
Requirement of Law applicable to the Servicer or any material indenture
contract, agreement, mortgage, deed of trust or other instrument to which the
Servicer is a party or by which it is 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 its obligations in all material respects on its part to be fulfilled
under or in connection with each Receivable and the corresponding Account, will
maintain in effect all material qualifications required under Requirements of
Law in order to service properly each Receivable and the corresponding Account
and will comply in all material respects with all other Requirements of Law in
connection with servicing each Receivable and the related Account the failure to
comply with which would have a material adverse effect on the
Certificateholders.
(h) No Rescission or Cancellation. Except in connection with an
Adjustment Payment pursuant to Section 3.08, the Servicer shall not permit any
rescission or cancellation of any Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority.
(i) Protection of Certificateholders' Rights. The Servicer shall take
no action which, nor omit to take any action the omission of which, would impair
the rights of Certificateholders in any Receivable or the rights of any
Enhancement Provider, nor shall it
37
reschedule, revise, waive or defer payments due on any Receivable except in
accordance with the applicable Account Guidelines.
(j) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority required
in connection with the execution and delivery by the Servicer of this Agreement,
the performance by the Servicer of the transactions contemplated by this
Agreement and the fulfillment by the Servicer of the terms hereof, have been
obtained, except such as are required by state securities or "Blue Sky" laws in
connection with the distribution of any Series.
(k) Receivables Not to be Evidenced by Promissory Notes or Chattel
Paper. The Servicer will take no action to cause any Receivable to be evidenced
by any instrument (as defined in the UCC as in effect in the Relevant UCC
State). Each Receivable shall be payable pursuant to a contract which does not
create a Lien on any merchandise purchased thereunder.
In the event of a breach of any of the representations and
warranties set forth in subsection 3.03(g), (h), (i) or (j) with respect to a
Receivable, and such breach has a material adverse effect on the
Certificateholders' Interest in such Receivable then, upon the expiration of 60
days or any longer period agreed upon by the Trustee (not to exceed an
additional 60 days) from the earlier to occur of the discovery of any such event
by the Servicer, or receipt by the Servicer of written notice of any such event
given by the Trustee, each such Receivable or, at the option of the Transferors,
all such Receivables with respect to the related Account, shall be assigned and
transferred to the Servicer upon the deposit on the Business Day preceding the
Distribution Date related to the Due Period in which such assignment obligation
arose by the Servicer in the Collection Account of an amount equal to the
balance of any such Receivable provided, however, that if the Servicer is then
required pursuant to subsection 4.01(g) to deposit funds into the Collection
Account more frequently than monthly, the Servicer shall make such deposit no
later than two Business Days after the obligation to accept such assignment
arose. Any such deposit into the Collection Account in connection with any such
assignment of a Receivable shall be considered a payment in full of such
Receivable and such deposit shall be applied in accordance with the provisions
of Article IV. Upon the assignment to the Servicer of such a Receivable, the
Trust shall, without further action be deemed to transfer, assign, set-over and
otherwise convey to the Servicer, without recourse, representation or warranty
(including those implied by law), all the right, title and interest of the Trust
in and to such Receivable, all monies due or to become due with respect thereto
and all proceeds thereof. The Trustee shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Servicer to effect the conveyance of any such
Receivable pursuant to this Section and as shall be specified in an Opinion of
Counsel delivered to the Trustee to the effect that such documents and
instruments comply herewith. The obligation of the Servicer set forth in this
Section shall constitute the sole remedy respecting any breach of the
representations and warranties set forth in the above referenced subsections
with respect to such Receivable available to Certificateholders or the Trustee
on behalf of Certificateholders. Notwithstanding any other provision of this
Section 3.03, no assignment of a Receivable to the Servicer pursuant to this
Section 3.03 shall occur if the Servicer fails to make the deposit required by
this Section 3.03 with respect to such Receivable.
38
Section 3.04 Reports and Records for the Trustee.
(a) Initial Report. On the day on which a Series of the Investor
Certificates are issued (the "Closing Date"), the Servicer shall prepare and
deliver, as provided in Section 13.05, to the Trustee and the Rating Agencies,
an Officer's Certificate substantially in the form of Exhibit D setting forth
the Trust Principal Component as of the end of the Due Period immediately
preceding the Closing Date.
(b) Daily Reports. For so long as deposits of Collections are required
to be made daily by the Servicer pursuant to Section 4.01(g), on each Business
Day commencing on the Closing Date the Servicer shall prepare, and make
available for inspection by the Trustee and maintain at the office of the
Servicer a record setting forth the aggregate amount of Collections processed by
the Servicer on the immediately preceding Business Day.
(c) Monthly Servicer's Certificate. On each Determination Date the
Servicer shall forward, as provided in Section 13.05, to the Trustee, the Paying
Agent and the Rating Agencies, an Officer's Certificate signed by a Servicing
officer substantially in the form of Exhibit E (with the Monthly
Certificateholder's Statement required pursuant to the applicable Supplement
attached) setting forth the following information (which, in the case of clauses
(iii) , (iv) and (v) below, will be stated on the basis of an original principal
amount of $1,000 per Certificate): (i) the aggregate amount of Collections
processed for the Due Period for such Determination Date and the aggregate
amount of Yield Collections and the aggregate amount of Principal Collections
processed during such Due Period; (ii) the Invested Percentage on the last day
of the preceding Due Period of each Series of Certificates with respect to
Principal Collections, the Invested Percentage on the last day of the preceding
Due Period of each Series of Certificates with respect to Yield Collections and
Defaulted Receivables; (iii) for each Series and for each class within any such
Series, the total amount to be distributed to Investor Certificateholders on the
next succeeding Distribution Date; (iv) for each Series and for each class
within any such Series, the amount of such distribution allocable to principal;
(v) for each Series and for each class within any such Series, the amount of
such distribution allocable to interest; (vi) the aggregate outstanding balance
of the Accounts which were delinquent by 30 to 59, 60 to 89, 90 to 119 and by
120 days or more as of the close of business on the last day of the Due Period
immediately preceding such Distribution Date (calculated from the day a charge
is first included within an unpaid "Previous Balance" on any monthly billing
statement and is determined by reference to each such Account's billing cycle
closing date occurring immediately prior to such last day); (vii) for each
Series and each class within a Series, the Investor Default Amount for the
immediately preceding Due Period; (viii) for each Series and each class within a
Series, the amount of the Investor Charge-Offs and the amount of the
reimbursements of Investor Charge-Offs for such Distribution Date; (ix) for each
Series, the Investor Monthly Servicing Fee for such Distribution Date; (x) for
each Series, the existing Deficit Controlled Amortization Amount, if applicable;
(xi) the aggregate amount of Receivables in the Trust at the close of business
on the last day of the Due Period preceding such Distribution Date; (xii) for
each Series, the Invested Amount at the close of business on the last day of the
Due Period immediately preceding such Distribution Date; (xiii) the available
amount of any Enhancement for each Series; (xiv)for each Series and each class
within a Series, the Series Factor as of the end of the related Due Period; (xv)
the Yield Factor or Yield Factors applicable with respect to the related Due
Period; (xvi) whether a Pay Out Event with respect to any Series shall have
occurred during or with respect to the related Due Period; and (xvii) the
Special Funding Account balance, if any. The
39
Trustee shall be under no duty to recalculate, verify or recompute the
information supplied to it under this Section 3.04.
Section 3.05 Annual Servicer's Certificate. The Servicer will deliver,
as provided in Section 13.05, to the Trustee and the Rating Agencies on or
before March 31 of each calendar year, beginning with 1993, an Officer's
Certificate substantially in the form of Exhibit F stating (a) that a review of
the activities of the Servicer during the preceding calendar year and of its
performance under this Agreement was made under the supervision of the officer
signing such certificate and (b) that, to the best of such officer's knowledge,
based on such review, either there has occurred no event which, with the giving
of notice or passage of time or both, would constitute a Servicer Default and
the Servicer has fully performed all its obligations under this Agreement
throughout such year, or, if there has occurred such event or a Pay Out Event,
specifying each such event known to such officer and the nature and status
thereof. A copy of such officer's Certificate may be obtained by any Investor
Certificateholder or Certificate Owner by a request in writing to the Trustee
addressed to the Corporate Trust Office.
Section 3.06 Annual Independent Public Accountants' Servicing Report.
(a) On or before March 31 of each calendar year, beginning with 1993,
the Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish, as provided in Section 13.05, a report to the Trustee,
the Rating Agencies and, as required, any Enhancement Provider to the effect
that such firm has applied certain procedures agreed upon with the Servicer to
certain documents and records relating to the administration and servicing of
Accounts under this Agreement and any Supplement, and that, based upon such
agreed upon procedures such firm will provide a report stating that the
servicing was conducted in compliance with Article III and IV and Section 8.08
of this Agreement and any Supplement, except for such exceptions or errors as
they believe to be immaterial and such other exceptions as shall be set forth in
such statement. A copy of such report may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with 1993
the Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or Transferor)
to furnish, as provided in Section 13.05, a report prepared using generally
accepted auditing standards to the Trustee, any Enhancement Provider, as
required, and the Rating Agencies to the effect that they have compared the
mathematical calculations of each amount set forth in the monthly certificates
forwarded by the Servicer pursuant to subsection 3.04(c) during the period
covered by such report (which shall be the period from January 1 of the
preceding calendar year to and including December31 of such calendar year) with
the Servicer's computer reports which were the source of such amounts and that
on the basis of such 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. A
copy of such report may be obtained by any Investor Certificateholder or
Certificate Owner by a request in writing to the Trustee addressed to the
Corporate Trust Office.
Section 3.07 Tax Treatment. The Transferors have structured this
Agreement and the Investor Certificates (other than any Investor Certificates
held by the Transferors) have been (or
40
will be) issued with the intention that such Investor Certificates will qualify
under applicable tax law as indebtedness of the Transferors, and the
Transferors, any entity acquiring any direct or indirect interest in the
Exchangeable Transferor Certificate and each Investor Certificateholder (or
Certificate Owner) by acceptance of its Certificate (or, in the case of a
Certificate Owner by virtue of such Certificate Owner's acquisition of a
beneficial interest therein) agree to treat such Investor Certificates (or
beneficial interest therein) for purposes of Federal, state and local income or
franchise taxes and any other tax imposed on or measured by income as
indebtedness. Each Certificateholder agrees that it will cause any Certificate
Owner acquiring an interest in a Certificate through it to comply with this
Agreement as to treatment as indebtedness for certain tax purposes.
Section 3.08 Adjustments. (a) If the Servicer adjusts downward the
amount of any Receivable because of a rebate, refund, unauthorized charge or
billing error to an Obligor, because such Receivable was created in respect of
merchandise which was refused or returned by an Obligor, or if the Servicer
otherwise adjusts downward the amount of any Receivable without receiving
Collections therefor or without charging off such amount as uncollectible, then,
in any such case, the amount of the Trust Principal Component used to calculate
the Transferor Amount, the Transferor Interest and the Floating Allocation
Percentage and the Fixed Allocation Percentage applicable to any Series will be
reduced by the product of one minus the Yield Factor and the amount of such
adjustment. Similarly, the amount of the Trust Principal Component used to
calculate the Transferor Amount, the Transferor Interest and the Floating
Allocation Percentage and the Fixed Allocation Percentage applicable to any
Series will be reduced by the product of one minus the Yield Factor and the
amount of any Receivable which was discovered as having been created through a
fraudulent or counterfeit charge or with respect to which the covenant contained
in subsection 2.05(b) was breached. Any adjustment required pursuant to either
of the two preceding sentences shall be made on or prior to the end of the Due
Period in which such adjustment obligation arises. In the event that, following
any such exclusion, the Transferor Amount as a percentage of the Trust Principal
Component would be less than 3%, within two Business Days of the date on which
such adjustment obligation arises, the Transferor shall pay to the Servicer, for
deposit into the Special Funding Account, in immediately available funds in an
amount equal to the amount by which the Transferor Amount would be reduced below
the product of 3% and the Trust Principal Component. Any amount deposited into
the Special Funding Account in connection with the adjustment of a Receivable
(an "Adjustment Payment") shall be applied in accordance with Article IV and the
terms of each Supplement. In the event that the Servicer adjusts upwards the
amount of any Receivable, the Trust Principal Component shall be increased by
the product of such upward adjustment and one minus the Yield Factor.
(b) If (i) the Servicer makes a deposit into the Special Funding
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 Special Funding Account to reflect such
dishonored check or mistake. Any Receivable in respect of which a dishonored
check is received shall be deemed not to have been paid. Notwithstanding the
first two sentences of this paragraph, no adjustments shall be made
41
pursuant to this paragraph that will change any amount of Collections previously
reported pursuant to Section 3.04(c).
(c) Any Privileged Assets Billed Amounts that remain unpaid 60 days
after the date of their initial billing statement shall be treated by the
Servicer in the same manner as a Receivable which the Servicer has adjusted
downward without receiving Collections therefor or without charging off such
amount as uncollectible in accordance with Section 3.08(a), and such adjustment
shall be made on or prior to the end of the Due Period in which such adjustment
obligation arises.
Section 3.09 Remittance Processing Procedures. (a) TRS, as initial
Servicer, hereby represents and warrants to the Trustee (it being acknowledged
that the Trustee has relied on such representation and warranty in accepting the
Receivables and the other property conveyed pursuant to Section 2.01 in trust
and in authenticating the Certificates) that the Remittance Banks listed on
Schedule 4 hereto are, as of the original Cut-Off Date, the only institutions
holding any accounts into which TRS deposits payments received through the
Payment Service Centers from Obligors in respect of Accounts. TRS shall be
permitted to replace or delete banks from any new schedule and shall promptly
provide a revised schedule to the Trustee, and prior to depositing any payments
received from Obligors in respect of Accounts with any new bank, it shall
deliver to the Trustee the Lock Box Letter referred to in Section 3.09(b) below
executed by TRS and acknowledged by such bank (each such bank, a "Lock Box
Bank").
(a) TRS covenants and agrees that, for the term of this Agreement,
unless otherwise agreed to by the Trustee, it shall deposit all payments
received through the Payment Service Centers from Obligors in respect of
Accounts only into accounts maintained at banks which are Remittance Banks. TRS
agrees to provide prompt notice to the Trustee of any additional Payment Service
Centers.
(b) Within ninety (90) days of the Initial Closing Date, TRS, as
initial Servicer, shall deliver to the Trustee, with respect to all accounts
maintained at Lock Box Banks into which payments from Obligors in respect of
Accounts are deposited, Lock Box Letters in substantially the form of Exhibit K
attached hereto, each of which shall be executed on behalf of TRS and
acknowledged by the respective Lock Box Bank.
(c) The Trustee, on behalf of Certificateholders, acknowledges that the
accounts maintained by TRS at the Lock Box Banks will contain funds in addition
to payments made by Obligors in respect of Accounts and that the conduct of TRS'
business as presently conducted will depend on the prompt receipt by TRS of such
funds. The Trustee shall have no right, title or interest in any funds on
deposit in such accounts to the extent that such funds do not represent payments
made by Obligors in respect of Accounts and to the extent the Trustee is
exclusively responsible for instructions to the Lock Box Banks, the Trustee
shall instruct the Lock Box Banks to immediately remit such funds to the
Transferors.
[END OF ARTICLE III]
42
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.01 Establishment of Collection Account and Special Funding
Account and Allocations with Respect to the Exchangeable Transferor's
Certificates.
(a) The Collection Account. The Trustee, for the benefit of the
Certificateholders, shall establish and maintain or cause to be established and
maintained in the name of the Trustee, on behalf of the Trust, with an Eligible
Institution a segregated account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders. 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 Investor
Certificateholders. If, at any time, the institution holding the Collection
Account ceases to be an Eligible Institution, the Trustee (or the Servicer on
its behalf) shall within five Business Days establish a new Collection Account
meeting the conditions specified above with an Eligible Institution, transfer
any cash and/or any investments to such new Collection Account and from the date
such new Collection Account is established, it shall be the Collection Account.
Pursuant to the authority granted to the Servicer in subsection 3.01(b), the
Servicer shall have the power, revocable by the Trustee, to make withdrawals and
payments from the Collection Account and to instruct the Trustee to make
withdrawals and payments from the Collection Account for the purposes of
carrying out the Servicer's or Trustee's duties hereunder.
Each Series of Investor Certificates shall represent interests in the
Trust, including the benefits of any Enhancement to be provided by an
Enhancement Provider issued with respect to such Series as indicated in the
Supplement relating to such Series and the right to receive Collections and
other amounts at the times and in the amounts specified in this Article IV to be
deposited in the Collection Account and any other accounts maintained for the
benefit of the Certificateholders or paid to the Investor Certificateholders.
The Exchangeable Transferor Certificates shall represent the interest in the
Trust not represented by any Series of Investor Certificates then outstanding,
including the right to receive Collections and other amounts at the times and in
the amounts specified in this Article IV to be paid to the Transferors (the
"Transferor Interest"), provided, however, that such Exchangeable Transferor
Certificate shall not represent any interest in the Collection Account and any
other accounts maintained for the benefit of the Certificateholders or the
benefits of any Enhancement to be provided by an Enhancement Provider issued
with respect to any Series, except as specifically provided in this Article IV.
(b) Administration of the Collection Account. At the written direction
of the Servicer, funds on deposit in the Collection Account to be so invested
shall be invested by the Trustee in Eligible Investments. All such Eligible
Investments shall be held by the Trustee for the benefit of the
Certificateholders. Investments of funds representing Collections collected
during any Due Period shall be invested in Eligible Investments that will mature
so that such funds will be available before 11:00 a.m. (New York City time) on
the Distribution Date related to such Due Period. Any funds on deposit in the
Collection Account to be so invested shall be
43
invested solely in Eligible Investments. All Eligible Investments shall be held
to maturity. The Trustee shall maintain possession of the negotiable instruments
or securities, if any, evidencing the Eligible Investments described in clause
(a) of the definition thereof from the time of purchase thereof until the time
of maturity. On each Distribution Date, all interest and other investment
earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be paid to the Holder of the Exchangeable Transferor
Certificate, provided, however, that for Distribution Dates with respect to any
Rapid Amortization Period or Early Amortization Period such interest and
earnings shall be considered Yield Collections hereunder.
(c) Identification of Account. Schedule 2, which is hereby incorporated
into and made a part of this Agreement, identifies the Collection Account by
setting forth the account number of such account, the account designation of
such account and the name of the institution with which such account has been
established.
(d) Allocations For the Exchangeable Transferor Certificate. Throughout
the existence of the Trust, the Servicer shall allocate to the Holder of the
Exchangeable Transferor Certificate an amount equal to the product of (A) the
Transferor Percentage and (B) the aggregate amount of such Collections allocated
to Principal Collections and Yield Collections, respectively, in respect of such
Due Period. Notwithstanding anything to the contrary in subsection 4.01(g),
unless specified in any Supplement, the Servicer need not deposit this amount,
and any other amounts so allocated to the Exchangeable Transferor Certificate
pursuant to any Supplement, into the Collection Account and shall pay such
amounts as collected to the Holder of the Exchangeable Transferor Certificate.
(e) Allocations of Collections Between Yield Collections and Principal
Collections. At all times and for all purposes of this Agreement and any
Supplement, the Servicer shall allocate all Collections received for any period
between Yield Collections and Principal Collections. Such Collections shall be
allocated such that the product of (i) such Collections and (ii) the Yield
Factor in effect with respect to such period shall be considered Yield
Collections and the remainder of such Collections shall be considered Principal
Collections.
(f) Undistributed Principal Collections. On each Distribution Date, (A)
the Servicer shall allocate Excess Principal Collections to each Series as set
forth in the related Supplement and (B) the Servicer shall withdraw from the
Collection Account and pay to the Transferors (i) an amount equal to the excess,
if any, of (x) the aggregate amount for all outstanding Series of Principal
Collections which the related Supplements specify are to be treated as "Excess
Principal Collections" for such Distribution Date over (y) the aggregate amount
for all outstanding Series which the related Supplements specify are "Principal
Shortfalls" for such Distribution Date and, without duplication, (ii) the
aggregate amount for all outstanding Series of that portion of Principal
Collections which the related Supplements specify are to be allocated and paid
to the Transferors with respect to such Distribution Date; provided, however,
that such amounts shall be paid to the Transferors only if the Transferor Amount
(determined after giving effect to any Receivables transferred to the Trust on
such date) exceeds 3% of the Trust Principal Component. The amount held in the
Collection Account as a result of the proviso in the preceding sentence
("Undistributed Principal Collections") shall be paid to the Transferors at the
time the Transferor Amount as a percentage of the Trust Principal Component
44
exceeds 3%; provided, however, that any Undistributed Principal Collections on
deposit in the Collection Account at any time during which any Series is in its
Amortization Period or Accumulation Period shall be allocated and distributed in
accordance with the terms of each Supplement.
(g) Collections. All payments received by the Servicer in respect of
Accounts and applied by the Servicer to payment of Privileged Assets Billed
Amounts shall be treated in the same manner as Collections with respect to the
Receivables for purposes of this Agreement. The Servicer will apply all
Collections with respect to the Receivables for each Due Period as described in
this Article IV and each Supplement. Except as otherwise provided below, the
Servicer shall deposit Collections into the Collection Account on the Date of
Processing of such Collections. Subject to the express terms of any Supplement,
but notwithstanding anything else in this Agreement to the contrary, for so long
as, and only so long as, TRS or an Affiliate of TRS shall be the Servicer
hereunder and (i) maintain a short-term credit rating (which may be an implied
rating) of P-1 by Moody's and of A-1 by Standard & Poor's, or (ii) obtain a
guarantee with respect to the Servicer's deposit and payment obligations
hereunder pursuant to a guaranty in form and substance acceptable to each Rating
Agency provided the guarantor maintains a short-term credit rating of P-1 by
Moody's and of A-1+ by Standard & Poor's, or (iii) obtains a written
notification from each Rating Agency to the effect that such Rating Agency does
not intend to downgrade or withdraw its then current rating of any outstanding
Series of Certificates despite the Servicer's inability to satisfy the rating
requirement specified in clause (i), and for two Business Days following any
reduction of either such rating or failure to satisfy the conditions of either
clause (ii) or (iii), the Servicer may, but need not, deposit Collections or
amounts received from the Transferors pursuant to subsection 2.04(d)(iii) or
subsection 3.08(a) into the Collection Account or make payments to the holder of
the Exchangeable Transferor Certificate prior to the close of business on the
Date of Processing, but rather may make a single deposit in the Collection
Account in immediately available funds on the Business Day prior to each
Distribution Date in an amount equal to the sum of amounts received from the
Transferors pursuant to subsection 2.04(d)(iii) and subsection 3.08(a) with
respect to the Due Period for each such Distribution Date and the Collections
with respect to the Due Period for each such Distribution Date to the extent
such amounts and Collections are allocated to the Investor Certificateholders in
accordance with Article IV. Collections shall not be required to be invested in
Eligible Investments until such time as they are deposited into the Collection
Account. The Servicer shall notify the Trustee of any downgrade or withdrawal of
its short-term credit rating.
Should the Servicer be required to make daily deposits of Collections
into the Collection Account pursuant to this subsection, during any Amortization
Period or Accumulation Period, the Servicer may cease depositing Principal
Collections received in any Due Period and allocable to a Series in any
Amortization Period or Accumulation Period at such time as an amount of
Principal Collections allocable to such Series and deposited into the Collection
Account or Principal Funding Account, as applicable, equals the amount of
principal scheduled or permitted to be paid or deposited on the next succeeding
Distribution Date with respect to such Series. Principal Collections allocable
to such Series in excess of such amount shall, subject to the provisos in
subsection 4.01(f) and the next succeeding paragraph, be distributed on a daily
basis as they are collected to the Transferors.
45
Should the Servicer be required to make daily deposits of Collections
into the Collection Account pursuant to this subsection, during any Amortization
Period or Accumulation Period, the Servicer may cease depositing Excess
Principal Collections received with respect to a Due Period at such time as such
Excess Principal Collections deposited into the Collection Account or Principal
Funding Account, as applicable, with respect to each Series in an Amortization
Period or Accumulation Period together with Principal Collections allocable to
such Series and deposited into the Collection Account with respect to such Due
Period equals the amount of principal scheduled or permitted to be paid or
deposited with respect to such Series on the next succeeding Distribution Date.
Should the Servicer be required to make daily deposits of Collections
in the Collection Account or Principal Funding Account pursuant to this
subsection, Excess Principal Collections in excess of amounts allocable to
Series which are in their Amortization Period or Accumulation Period and
deposited in the Collection Account or Principal Funding Account, as applicable,
pursuant to the preceding sentence shall, subject to the provisos in subsection
4.01(f), be distributed to the Transferors on a daily basis.
(h) The Special Funding Account. The Trustee, for the benefit of the
Certificateholders, shall establish and maintain or cause to be established and
maintained in the name of the Trustee, on behalf of the Trust, with an Eligible
Institution a segregated account (the "Special Funding Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Certificateholders. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Special Funding
Account and in all proceeds thereof. The Special Funding Account shall be under
the sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders. If, at any time, the institution holding the Special Funding
Account ceases to be an Eligible Institution, the Trustee (or the Servicer on
its behalf) shall within five Business Days establish a new Special Funding
Account meeting the conditions specified above with an Eligible Institution,
transfer any cash and/or any investments to such new Special Funding Account and
from the date such new Special Funding Account is established, it shall be the
Special Funding Account. Pursuant to the authority granted to the Servicer in
subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee,
to make withdrawals and payments from the Special Funding Account and to
instruct the Trustee to make withdrawals and payments from the Special Funding
Account for the purposes of carrying out the Servicer's or Trustee's duties
hereunder.
(i) Administration of the Special Funding Account. At the written
direction of the Servicer, funds on deposit in the Special Funding Account to be
so invested shall be invested by the Trustee in Eligible Investments. All such
Eligible Investments shall be held by the Trustee for the benefit of the
Certificateholders. Investments of funds representing Collections collected
during any Due Period shall be invested in Eligible Investments that will mature
so that such funds will be available before 11:00 a.m. (New York City time) on
the Distribution Date related to such Due Period. Any funds on deposit in the
Special Funding Account to be so invested shall be invested solely in Eligible
Investments. All Eligible Investments shall be held to maturity. The Trustee
shall maintain possession of the negotiable instruments or securities, if any,
evidencing the Eligible Investments described in clause (a) of the definition
thereof from the time of purchase thereof until the time of maturity. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Special Funding Account shall be
paid to the Holder of the Exchangeable Transferor Certificate,
46
provided, however, that for Distribution Dates with respect to any Rapid
Amortization Period or Early Amortization Period such interest and earnings
shall be considered Yield Collections hereunder. The Servicer shall deposit all
amounts received from the Transferors pursuant to subsection 2.04(d)(iii) and
all Adjustment Payments received from the Transferors pursuant to subsection
3.08(a) in the Special Funding Account on the Date of Processing of such
payments.
The Transferors may, at their option, instruct the Trustee to deposit
into the Special Funding Account Trust Excess Principal Collections which are
otherwise payable to the Transferors pursuant to the provisions set forth above.
On each Business Day on which funds are on deposit in the Special Funding
Account and on which no Series is in an Early Accumulation Period or Early
Amortization Period, the Servicer shall determine the amount (if any) by which
the Transferor Amount as a percentage of the Trust Principal Component exceeds
the Minimum Transferor Percentage on such date and may instruct the Trustee to
withdraw any such excess from the Special Funding Account and pay such amount to
the Transferors; provided, however, that, if an Accumulation Period or
Amortization Period has commenced and is continuing with respect to one or more
outstanding Series, any funds on deposit in the Special Funding Account shall be
treated as Trust Excess Principal Collections and shall be allocated and
distributed in accordance with this Article IV and the terms of each Supplement.
Schedule 2 identifies the Special Funding Account by setting forth the
account number of such account, the account designation of such account and the
name of the institution with which such account has been established.
[THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE V
[ARTICLE V IS RESERVED AND
MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
47
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates. Subject to Sections 6.10 and 6.11, the
Investor Certificates of each Series and any class thereof may be issued in
bearer form (the "Bearer Certificates") with attached interest coupons and a
special coupon (collectively, the "Coupons") or in fully registered form (the
"Registered Certificates"), and shall be substantially in the form of the
exhibits with respect thereto attached to the applicable Supplement. The
Exchangeable Transferor Certificate shall be substantially in the form of
Exhibit A. The Investor Certificates and the Exchangeable Transferor Certificate
shall, upon issue pursuant hereto or to Section 6.09 or Section 6.11, be
executed and delivered by the Transferors to the Trustee for authentication and
redelivery as provided in Section 6.02. Any Investor Certificates shall be
issued in minimum denominations of $1,000 and in integral multiples of $1,000 in
excess thereof, unless otherwise specified in any Supplement. If specified in
the related Supplement for any Series, the Investor Certificates shall be issued
upon initial issuance as a single certificate in an original principal amount
equal to the Initial Invested Amount as described in Section 6.10. The
Exchangeable Transferor Certificate may also be issued in two or more
certificates. Each Certificate shall be executed by manual or facsimile
signature on behalf of the Transferors by their respective Chairman of the
Board, President, Vice Chairman of the Board or any Vice President. Certificates
bearing the manual or facsimile signature of the individual who was, at the time
when such signature was affixed, authorized to sign on behalf of each such
Transferor or the Trustee shall not be rendered invalid, notwithstanding that
such individual has ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or any applicable Supplement or be valid for any purpose unless there
appears on such Certificate a certificate of authentication substantially in the
form provided for herein executed by or on behalf of the Trustee by the manual
signature of a 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. All
Certificates shall be dated the date of their authentication, except Bearer
Certificates which shall be dated the Issuance Date.
Section 6.02 Authentication of Certificates. Contemporaneously with the
assignment and transfer of the Receivables, whether now existing or hereafter
created, and the other Trust Property to the Trust, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates that is
issued upon original issuance, upon the order of the Transferors, to the
underwriters, The Trustee shall authenticate and deliver the Exchangeable
Transferor Certificate to the Transferors simultaneously with its delivery of
the initial Series of Investor Certificates. Upon an Exchange as provided in
Section 6.09 of the Agreement and the satisfaction of certain other conditions
specified therein, the Trustee shall authenticate and deliver the Investor
Certificates of additional Series (with the designation provided in the
applicable Supplement), upon the order of the Transferors, to the Persons
designated in such Supplement. Upon the order of the Transferors, the
Certificates of any Series shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations equal to (in the aggregate) the Initial
Invested Amount of such Series of Investor Certificates. If specified in the
related Supplement for any Series, the Trustee shall authenticate and deliver
outside the United States the Global Certificate that is
48
issued upon original issuance thereof, upon the written order of the
Transferors, to the Common Depositary as provided in Section 6.10 against
payment of the purchase price therefor. If specified in the related Supplement
for any Series, the Trustee shall authenticate Book-Entry Certificates that are
issued upon original issuance thereof, upon the written order of the
Transferors, to a Clearing Agency or its nominee as provided in Section 6.11
against payment of the purchase price thereof.
Section 6.03 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (which may be the Trustee) (the
"Transfer Agent and Registrar") in accordance with the provisions of subsection
6.03(c) of the Agreement a register (the "Certificate Register") in which,
subject to such reasonable regulations as it may prescribe, the Transfer Agent
and Registrar shall provide for the registration of the Registered Certificates
and of transfers and exchanges of the Registered Certificates as herein
provided. The Trustee is hereby initially appointed Transfer Agent and Registrar
for the purpose of registering the Registered Certificates and transfers and
exchanges of the Registered Certificates as herein provided. The Trustee shall
be permitted to resign as Transfer Agent and Registrar upon 30 days' written
notice to the Transferors and the Servicer; provided, however, that such
resignation shall not be effective and the Trustee shall continue to perform the
duties of Transfer Agent and Registrar until the Transferors have appointed a
successor Transfer Agent and Registrar acceptable to the Transferors and the
Trustee. If specified in the related Supplement for any Series of Certificates,
the Transferors shall appoint any co-transfer agent and co-registrar chosen by
the Transferors, and acceptable to the Trustee, including, if and so long as the
Registered Certificates are listed on the Luxembourg Stock Exchange or other
stock exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg or the location required by such other stock
exchange. If specified in such related Supplement, so long as the Registered
Certificates relating to such Supplement are outstanding, the Transferors shall
maintain a co-transfer agent and co-registrar in New York City or any other city
designated in such Supplement and any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar unless the context requires otherwise.
Upon surrender for registration of transfer of any Registered
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Transferors shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferee one or more new Registered Certificates in authorized denominations
of the same Series representing like aggregate Undivided Interests in the Trust;
provided, however, that the provisions of this paragraph shall not apply to
Bearer Certificates.
At the option of any Registered Certificateholder, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be exchanged at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose. At the option of a Bearer Certificateholder, subject to applicable laws
and regulations, Bearer Certificates may be exchanged for other Bearer
Certificates or Registered Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust, upon surrender
of the Bearer Certificates to be exchanged at an office or agency of the
Transfer Agent and Registrar located outside the United States, Each Bearer
Certificate surrendered
49
pursuant to this Section 6.03 shall have attached thereto all unmatured Coupons,
provided that any Bearer Certificate so surrendered after the close of business
on the Record Date preceding the relevant Distribution Date after the related
Series Termination Date need not have attached the Coupon relating to such
Distribution Date.
The preceding provisions of this Section 6.03 notwithstanding the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange of any Certificate of any
Series for a period of 15 days preceding the due date for any payment with
respect to the Certificates of such Series.
Whenever any Investor Certificates of any Series are so surrendered for
exchange, the Transferors shall execute, and the Trustee shall authenticate and
the Transfer Agent and Registrar shall deliver (in the case of Bearer
Certificates, outside the United States), the Investor Certificates of such
Series which the Certificateholder making the exchange is entitled to receive.
Every Investor Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar duly executed
by the Certificateholder thereof or his attorney duly authorized in writing.
Except as provided in any Supplement, no service charge shall be made
for any registration of transfer or exchange of Investor Certificates, but the
Transfer Agent and Registrar and the Trustee or any co-transfer agent and
co-registrar or co-trustee may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer
or exchange of Investor Certificates.
All Investor Certificates (together with any Coupons attached to Bearer
Certificates) surrendered for registration of transfer or exchange shall be
cancelled by the Transfer Agent and Registrar and disposed of in a manner
satisfactory to the Trustee and the Transferors. The Trustee shall cancel and
mutilate the Global Certificate upon its exchange in full for Definitive
Certificates and shall deliver such cancelled and mutilated Global Certificate
to the Transferors. The Trustee shall also forward to the Transferors a copy of
each certificate of each Foreign Clearing Agency to the effect referred to in
Section 6.10 of the Agreement which was received by the Trustee with respect to
each portion of the Global Certificate exchanged for Definitive Certificates.
The Transferors shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Sections 6.09 and 7.02, the Transferors'
interest in the Exchangeable Transferor Certificate shall not be sold,
transferred, assigned, exchanged, pledged, participated or otherwise conveyed,
unless (A) (i) the Servicer has delivered to the Trustee an Officer's
Certificate stating that such sale, transfer, assignment, exchange, pledge or
conveyance will not, while any Series of Certificates remains outstanding,
reduce the Transferors' retained interest in the Exchangeable Transferor
Certificate below the Minimum Transferor Percentage for any Series then
outstanding and (ii) the Trustee receives prior to such sale, transfer,
assignment, exchange, pledge, participation or conveyance written confirmation
from each
50
Rating Agency that such transfer, assignment, exchange, pledge, participation
or conveyance will not result in such Rating Agency's reducing or withdrawing
its rating on any then outstanding Series rated by it or (B) such transfer,
assignment, exchange, pledge or conveyance is made to CRC and, in the case of
(A), the Trustee receives prior thereto an Opinion of Counsel to the effect
that (x) the conveyed interest in the Transferor Exchangeable Certificate will
be treated as either debt or an interest in a partnership for Federal income
tax purposes and that the conveyance of such interest will not cause the Trust
to be characterized for Federal income tax purposes as an association taxable
as a corporation or otherwise have any material adverse impact on the Federal or
applicable state income taxation of any outstanding Series of Investor
Certificates or any Certificate Owner and (y) such transfer will not cause a
taxable event for federal income tax purposes to any Investor Certificateholder.
(c) The Transfer Agent and Registrar will maintain at its expense in
the Borough of Manhattan, the City of New York (and, if specified in the related
Supplement for any Series, Luxembourg (or subject to Section 6.03(a) of the
Agreement any other city designated in such Supplement)), an office or offices
or agency or agencies where Investor Certificates may be surrendered for
registration of transfer or exchange (except that Bearer Certificates may not be
surrendered for exchange at any such office or agency in the United States).
(d) Unless otherwise provided in any related Supplement, registration
of transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall
be set forth in the Supplement relating to such Investor Certificates) shall
be effected only if:
(i) (a) the sale is of at least U.S $500,000 principal amount of such
Certificates and (b) a letter from the purchaser satisfactory to counsel to
the Servicer is executed and received; or
(ii) (a) the Registered Certificates are transferred in compliance with
Rule 144 (or any amendment thereto) or Rule 144A (or any amendment thereto)
under the United States Securities Act of 1933, as amended, and (b) a
letter from the purchaser satisfactory to counsel to the Servicer is
executed and received; or
(iii) the Registered Certificates are sold or otherwise transferred in
any other transaction that does not require registration under the United
States Securities Act of 1933 as amended, and, if the Transferor, the
Servicer, the Trustee, the Transfer Agent or Registrar so request, an
Opinion of Counsel satisfactory to it, in form and substance satisfactory
to it, is furnished to such effect.
Registered Certificates issued upon registration of transfer of, or
Registered Certificates issued in exchange for, Registered Certificates bearing
the legend referred to above shall also bear such legend unless the Transferor,
the Servicer, the Trustee and the Transfer Agent and Registrar receive an
Opinion of Counsel satisfactory to each of them, to the effect that such legend
may be removed.
Whenever a Registered Certificate containing the legend set forth in
the related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
written instructions from the Servicer
51
regarding such transfer. The Transfer Agent and Registrar and the Trustee shall
be entitled to receive written instructions signed by a Servicing Officer prior
to registering any such transfer or authenticating new Retired Certificates, as
the case may be. The Servicer hereby agrees to indemnify the Transfer Agent and
Registrar and the Trustee and to hold each of them harmless against any loss,
liability or expense incurred without bad faith on their part arising out of or
in connection with actions taken or omitted by them in reliance on and in
accordance with any such written instructions furnished pursuant to this
subsection 6.03(d).
Section 6.04 Mutilated, Destroyed, Lost, or Stolen Certificates. If (a) any
mutilated Certificate (together, in the case of Bearer Certificates, with all
unmatured Coupons (if any) appertaining thereto) is surrendered to the Transfer
Agent and Registrar, or the Transfer Agent and Registrar receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there is delivered to the Transfer Agent and Registrar, the Trustee and the
Transferors 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 Transferors shall
execute and the Trustee shall authenticate and the Transfer Agent and Registrar
shall deliver (in the case of Bearer Certificates, outside the United States),
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate Undivided Interest,
if applicable, In connection with the issuance of any new Certificate under this
Section 6.04, 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 expenses (including the fees and expenses of the Trustee and
Transfer Agent and Registrar) connected therewith. Any duplicate Certificate
issued pursuant to this Section 6.04 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 6.05 Persons Deemed Owners. Prior to due presentation of a
Certificate (other than a Bearer Certificate) for registration of transfer, the
Trustee, the Paying Agent, the Transfer Agent and Registrar and any agent of any
of them may treat the person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Article IV hereof and for all other purposes whatsoever, and 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. In the case of a
Bearer Certificate, the Trustee, the Paying Agent, the Transfer Agent and
Registrar and any agent of any of them may treat the bearer of a Bearer
Certificate or Coupon as the owner of such Bearer Certificate or Coupon for the
purpose of receiving distributions pursuant to Article IV and for all other
purposes whatsoever, and neither the Trustee, the Paying Agent, the Transfer
Agent and Registrar nor any agent of any of them shall be affected by any notice
to the contrary. Notwithstanding the foregoing provisions of this Section 6.05,
in determining whether the holders of the requisite interests have given any
request, demand, authorization, direction, notice, consent or waiver hereunder
Certificates owned by the Transferor, the Servicer or any affiliate thereof (as
defined in Rule 405 under the Securities Act of 1933, as amended), shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Certificates so owned
which have been pledged in good faith shall not be disregarded and may be
regarded as
52
outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Certificates and that the pledgee
is not the United States, the Servicer or an affiliate thereof (as defined
above).
Section 6.06 Appointment of Paying Agent. The Paying Agent shall make
distributions to Investor Certificateholders from the Collection Account (or any
other account or accounts maintained for the benefit of Certificateholders as
specified in the related Supplement for any Series) pursuant to Articles IV and
V hereof. Any Paying Agent shall have the revocable power to withdraw funds from
the Collection Account (or any other account or accounts maintained for the
benefit of Certificateholders as specified in the related Supplement for any
Series) for the purpose of making 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 in any material respect. The Paying Agent shall
initially be the Trustee and any co-paying agent chosen by the Transferors and
acceptable to the Trustee, including, if and so long as any Series of Investor
Certificates is listed on the Luxembourg Stock Exchange or other stock exchange
and such exchange so requires, a co-paying agent in Luxembourg or the location
of such other stock exchange. The Trustee shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Servicer and the Transferors. The
Transferors shall notify the Rating Agencies of any resignation or replacement
of the Paying Agent. In the event that the Trustee shall no longer be the Paying
Agent, the Transferors shall appoint a successor to act as Paying Agent and such
successor shall be acceptable to the Trustee. The Trustee shall cause the
initial Paying Agent and each successor Paying Agent or any additional Paying
Agent appointed by the Transferors to execute and deliver to the Trustee an
instrument in which such initial or successor Paying Agent or additional Paying
Agent shall agree with the Trustee that, as Paying Agent, such initial or
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Investor Certificateholders in trust for the
benefit of the Investor Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. The Paying Agent shall return all
unclaimed funds to the Trustee and upon removal of a Paying Agent shall also
return all funds in its possession to the Trustee. The provisions of Sections
11.01, 11.02 and 11.03 of the Agreement shall apply to the Trustee also in its
role as Paying Agent, for so long as the Trustee shall act as Paying Agent. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding, the Transferors shall, if
the Paying Agent is not located in New York City, appoint a co-paying agent in
New York City (for Registered Certificates only) acceptable to the Trustee or
any other city designated in such Supplement which, if and so long as any Series
of Investor Certificates is listed on the Luxembourg Stock Exchange or other
stock exchange and such exchange so requires, shall be in Luxembourg or the
location required by such other stock exchange.
Section 6.07 Access to List of Certificateholders' Names and Addresses. The
Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to the Servicer or the Paying Agent (or any agent thereof), within
five Business Days after receipt by the Trustee of a request therefor from the
Servicer or the Paying Agent, respectively, in writing, a list in the form
maintained by the Trustee, of the names and addresses of the Investor
Certificateholders (other than Bearer Certificateholders). If Holders
representing Undivided Interests in the Trust
53
aggregating not less than 10% of the Invested Amount of the Investor
Certificates of such Series (the "Applicants") apply in writing to the Trustee,
and such application states that the Applicants desire to communicate with other
Investor Certificateholders of such Series with respect to their rights under
this Agreement or under the Investor Certificates and is accompanied by a copy
of the communication which such Applicants propose to transmit, then the
Trustee, after having been adequately indemnified by such Applicants for its
costs and expenses, shall afford or shall cause the Transfer Agent and Registrar
to either afford such Applicants access during normal business hours to the most
recent list of Certificateholders (other than Bearer Certificateholders) held by
the Trustee, or mail or cause to be mailed such list within five Business Days
after the receipt of such application. Such list shall be as of a date no more
than 45 days prior to the date of receipt of such Applicants' request.
Every Certificateholder, by receiving and holding a Certificate agrees
with the Trustee that 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
Certificateholder, (other than Bearer Certificateholders) hereunder, regardless
of the sources from which such information was derived.
Section 6.08 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
reasonably acceptable to the Transferors.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Transferor. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Transferors. 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
Transferors, 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 Transferors.
(d) The Servicer agrees to pay, on behalf of the Trust, to each
authenticating agent from time to time reasonable compensation for its services
under this Section 6.08.
54
(e) The provisions of Sections 11.01, 11.02 and 11.03 of the Agreement
shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.08, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication, in substantially the
following form:
This is one of the Certificates described in the Master Pooling and
Servicing Agreement.
------------------------------------------
------------------------------------------
as Authenticating Agent
for the Trustee,
By:_______________________________________
Authorized Officer
Section 6.09 Tender of Exchangeable Transferor Certificate.
(a) Upon any Exchange, the Trustee shall issue to the Transferors under
Section 6.01 of the Agreement for execution and redelivery to the Trustee for
authentication under Section 6.02 of the Agreement one or more new Series of
Investor Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the applicable Supplement and shall bear,
upon its face, the designation for such Series to which it belongs so selected
by the Transferors. Except as specified in any Supplement for a related Series,
all Investor Certificates of any Series shall be equally and ratably entitled as
provided herein to the benefits hereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement and
the applicable Supplement.
(b) The Transferors may tender the Exchangeable Transferor Certificate
to the Trustee in exchange for (i) one or more newly issued Series of Investor
Certificates and (ii) a reissued Exchangeable Transferor Certificate (any such
tender an "Exchange"). The Transferors may perform an Exchange by notifying the
Trustee, in writing at least three days in advance (an "Exchange Notice") of the
date upon which the Exchange is to occur (an "Exchange Date"). Any Exchange
Notice shall state the designation of any Series to be issued on the Exchange
Date and, with respect to each such Series: (x) its Initial Invested Amount (or
the method for calculating such Initial Invested Amount), if any, which, in the
aggregate, at any time, may not be greater than the current principal amount of
the Exchangeable Transferor Certificate less the product of the Minimum
Transferor Percentage and the Trust Principal Component at such time, and (y)
its Certificate Rate (or the method for allocating interest payments or other
cash flow to such Series), if any. On the Exchange Date, the Trustee shall only
authenticate and deliver any such Series upon delivery to it of the following:
(A) a Supplement in form satisfactory to the Trustee executed by the Transferors
and specifying the Principal Terms of such Series, (B) the applicable
Enhancement, if any, (C) an opinion of Counsel to the effect that the newly
issued Series of Investor Certificates will be characterized as either
indebtedness or an interest in a partnership
55
under existing law for Federal income tax purposes and that the issuance of the
newly issued Series of Investor Certificates will not have any material adverse
impact on the Federal income tax characterization of any outstanding Series of
Investor Certificates that have been the subject of a previous opinion of tax
counsel, (D) an agreement, if any, pursuant to which the Enhancement Provider
agrees to provide Enhancement, (E) written confirmation from each Rating Agency
that the Exchange will not result in such Rating Agency's reducing or
withdrawing its rating on any then outstanding Series rated by it and (F) the
existing Exchangeable Transferor Certificate. Upon satisfaction of such
conditions, the Trustee shall cancel the existing Exchangeable Transferor
Certificate and issue, as provided above, such Series of Investor Certificates
and new Exchangeable Transferor Certificate, dated the Exchange Date.
(c) In conjunction with an Exchange, the parties hereto shall execute a
Supplement, which shall specify the relevant terms with respect to any Series of
Investor Certificates, which may include, without limitation: (i) its name or
designation, (ii) an Initial Invested Amount or the method of calculating the
Initial Invested Amount, (iii) a Certificate Rate (or formula for the
determination thereof), (iv) the rights of the Holders of the Exchangeable
Transferor Certificate that have been transferred to the Holders of such Series
pursuant to such Exchange (including any rights to allocations of Yield
Collections and Principal Collections), (v) the interest payment date or dates
and the date or dates from which interest shall accrue, (vi) the method of
allocating Principal Collections for such Series and, if applicable, with
respect to other Series and the method by which the principal amount of Investor
Certificates of such Series shall amortize or accrete and the method for
allocating Yield Collections and Receivables in Defaulted Accounts, (vii) the
names of any accounts to be used by such Series and the terms governing the
operation of any such account, (viii) the Servicing Fee Percentage, (ix) the
Minimum Transferor Percentage, (x) the Minimum Trust Principal Component, (xi)
the Series Termination Date, (xii) the terms of any Enhancement, (xiii) the
Enhancement Provider, (xiv) the base rate, if any, (xv) the Repurchase Terms or
the terms on which the Certificates of such Series may be remarketed to other
investors, (xvi) any deposit into any account provided for such Series, (xvii)
the number of Classes of such Series, and if more than one Class, the rights and
priorities of each such Class, (xviii) the extent to which the Investor
Certificates will be issuable in temporary or permanent global form, and in such
case, the depository for such global certificate or certificates, the terms and
conditions, if any, upon which such global certificate may be exchanged in whole
or in part for Definitive Certificates, and the manner in which any interest
payable on a temporary or global certificate will be paid, (xix) whether the
Certificates may be issued in bearer form and any limitations imposed thereon,
(xx) the priority of any Series with respect to any other Series, (xxi) whether
such Series will be an Excess Allocation Series, and (xxii) any other relevant
terms of such Series (all such terms, the "Principal Terms" of such Series). If
on the date of the issuance of such Series there is issued and outstanding no
Series of Investor Certificates which is currently rated by a Rating Agency,
then as a condition to such Exchange a nationally recognized investment banking
firm or commercial bank shall also deliver to the Trustee an officer's
certificate stating, in substance, that the Exchange will not have an adverse
effect on the timing or distribution of payments to such other Series of
Investor Certificates then issued and outstanding.
Section 6.10 Global Certificate; Euro Certificate Exchange Date.
(a) If specified in the related Supplement for any Series, the Investor
Certificates may be initially issued in the form of a single temporary Global
Certificate (the "Global
56
Certificate") in bearer form, without interest coupons, in the denomination of
the Initial Invested Amount and substantially in the form attached to the
applicable Supplement. Unless otherwise specified in the applicable Supplement,
the provisions of this Section 6.10 shall apply to such Global Certificate. The
Global Certificate will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same effect as the
Definitive Certificates, The Global Certificate may be exchanged as described
below for Bearer and/or Registered Certificates in definitive form (the
"Definitive Euro-Certificates"). Notwithstanding the foregoing, no Certificates
shall be issued in bearer form unless the Transferors have determined, and
deliver an Opinion of Counsel to the Trustee substantially to the effect that,
the terms and procedures governing issuance and transfer of such Certificates
result in favorable treatment to Investor Certificateholders under the Bearer
Rules.
(b) The Manager shall, upon its determination of the date of completion
of the distribution of the Certificates, so advise the Trustee, the Transferors,
the Common Depositary, and each Foreign Clearing Agency in writing forthwith.
Without unnecessary delay, but prior to the Euro-Certificate Exchange Date, the
Transferors will execute and deliver to the Trustee at its office or designated
agent outside the United States definitive Bearer Certificates in an aggregate
principal amount equal to the Initial Invested Amount. All Bearer Certificates
so issued and delivered will have Coupons attached. The Global Certificate may
be exchanged for an equal aggregate principal amount of Definitive
Euro-Certificates only on or after the Euro-Certificate Exchange Date.
Notwithstanding the preceding sentence, a United States institutional investor
may at any time exchange the portion of the Global Certificate beneficially
owned by it for an equal aggregate principal amount of Registered Certificates
bearing the applicable legend set forth in the related Supplement and having, a
minimum denomination of $500,000, which may be in temporary form if the
Transferors so elect. A United States institutional investor will be required to
deliver to the Transferors, the Trustee and the Manager at the time of its
purchase of Registered Certificates a signed certificate substantially in the
form attached to the Supplement for the related Series. Upon any demand for
exchange for Definitive Certificates in accordance with this paragraph, the
Transferors shall cause the Trustee to authenticate and deliver the Definitive
Certificates to the Holder (x) outside the United States, in the case of Bearer
Certificates, and (y) according to the instructions of the Holder, in the case
of Registered Certificates, but only upon presentation to the Trustee of a
written statement, substantially in the form attached to the Supplement for the
related Series with respect to the Global Certificate or portion thereof being
exchanged, signed by a Foreign Clearing Agency, to the effect that it has
received in writing or by tested telex a certification substantially in the form
of (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 attached to the
Supplement for the related Series signed by the Manager (which sold the relevant
Certificates) or (ii) in all other cases, the alternative certificate attached
to the Supplement for the related Series, the alternative certificate referred
to in this clause (ii) being dated no earlier than 15 days prior to the
Euro-Certificate Exchange Date and signed by or on behalf of the person
appearing in the records of a Foreign Clearing Agency as the beneficial owner of
the Global Certificate or portion thereof being exchanged. Upon receipt of such
certification, the Trustee shall cause the Global Certificate to be endorsed in
accordance with paragraph (d) below. Unless otherwise provided in the applicable
Supplement, any exchange as provided in this subsection 6.10(b) shall be made
free of charge to the holders and the beneficial owners of the Global
Certificate and to the beneficial owners of the Definitive Euro-Certificates
issued in
57
exchange, except that a person receiving Definitive Euro-Certificates must bear
the cost of insurance, postage, transportation and the like in the event that
such person does not receive such Definitive Euro-Certificates in person at the
offices of a Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of any
written statement referred to above may be relied upon by the Transferor and the
Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to such Foreign Clearing Agency,
pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such Global
Certificate shall be endorsed by or on behalf of the Trustee to reflect the
reduction of its principal amount by an amount equal to the aggregate principal
amount of such Definitive Euro-Certificate or Certificates. Until so exchanged
in full, such Global Certificate shall in all respects be entitled to the same
benefits under this Agreement as Definitive Euro-Certificates authenticated and
delivered hereunder except that the beneficial owners of such Global Certificate
shall not be entitled to receive payments of interest on the Certificates until
they have exchanged their beneficial interests in such Global Certificate for
Definitive Euro-Certificates.
Section 6.11 Book-Entry Certificates. Unless otherwise provided in any
related Supplement, the Investor Certificates, upon original issuance, will be
issued in the form of the requisite number of typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of the Transferors.
The Investor Certificates shall initially be registered on the Certificate
Register in the name of CEDE & Co., the nominee of the Clearing Agency, and no
Certificate owner will receive a definitive certificate representing such
Certificate owner's interest in the Investor Certificates, except as provided in
Section 6.13 of the Agreement. Unless and until definitive, fully registered
Investor Certificates (the "Definitive Certificates") have been issued to
Certificate Owners pursuant to Section 6.13 of the Agreement:
(i) the provision of this Section 6.11 shall be in full force and
effect;
(ii) the Transferor, the Servicer, the Paying Agent, the Transfer Agent
and Registrar and the Trustee may deal with the Clearing Agency and the
Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates) as the authorized
representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.11 conflict
with any other provisions of this Agreement, the provisions of this Section
6.11 shall control;
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and the Clearing Agency Participants and shall be
limited to those established by law and agreements between such Certificate
Owners and the Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 6.13 of the Agreement, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of principal and
interest on the Investor Certificates to such Clearing Agency Participants;
and
58
(v) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of a specified percentage of the
Invested Amount of any or all Series of Certificates outstanding, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Certificate
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
Investor Certificates.
Section 6.12 Notices to Clearing Agency. Whenever notice or other
communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 6.13 of the Agreement, the Trustee, the
Servicer and the Paying Agent shall give all such notices and communications
specified herein to be given to Holders of the Investor Certificates to the
Clearing Agencies.
Section 6.13 Definitive Certificates. If Book-Entry Certificates have been
issued pursuant to Section 6.11 and if (i)(A) the Transferors advise the Trustee
in writing that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement, and (B) the
Trustee or the Transferors are unable to locate a qualified successor, (ii) the
Transferors at their option, advise the Trustee in writing that they elects to
terminate the book-entry system through the Clearing Agency with respect to the
Certificates or (iii) after the occurrence of a Servicer Default, Certificate
Owners representing beneficial interests aggregating more than 50% of the
Invested Amount, of any Series advise the Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners, the Trustee shall notify all Certificate Owners,
through each applicable Clearing Agency, of the occurrence of any such event and
of the availability of Definitive Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Investor Certificates by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration the Trustee shall issue the Definitive Certificates.
Neither the Transferors, the Transfer Agent and Registrar nor the Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Clearing Agency shall be deemed to be imposed
upon and performed by the Trustee to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
Section 6.14 Meetings of Certificateholders
(a) Unless not permitted by the Supplement for any Series issued in
whole or in part in Bearer Certificates, the Transferors, the Servicer or the
Trustee may at any time call a meeting of the Certificateholders of such Series
or of all Series, to be held at such time and at such place as the Transferors,
the Servicer or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a waiver
of, any covenant or condition set forth in this Agreement with respect to such
Series or in the Certificates of such Series, subject to Section 13.01 of the
Agreement. References in this Section to Certificateholders shall be deemed to
refer to the Exchangeable Transferor Certificates and only those Series of
Investor Certificates for which this Section 6.14 is applicable. Notice of any
59
meeting of Certificateholders, setting forth the time and place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given in accordance with Section 13.05 of the Agreement and at least once in an
Authorized Newspaper and, if and for so long as the Certificates are listed on
the Luxembourg Stock Exchange or other stock exchange and such exchange so
requires, in a newspaper of general circulation in Luxembourg (which newspaper
shall be printed in the English or French language and customarily published on
each business day in Luxembourg) or the location required by such other stock
exchange, the first publication to be not less that 20 nor more than 180 days
prior to the date fixed for the meeting. To be entitled to vote at any meeting
of Certificateholders, a person shall be (i) a Holder of one or more
Certificates of the applicable Series or (ii) a person appointed by an
instrument in writing as proxy by the Holder of one or more Certificates. The
only Persons who shall be entitled to be present or to speak to any meeting of
Certificateholders shall be the Persons entitled to vote at such meeting and
their counsel and any representatives of the Transferors, the Servicer and the
Trustee and their respective counsels.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing Undivided Interests aggregating a majority
of the Invested Amount of the applicable Series or all outstanding Series, as
the case may be, shall constitute a quorum. No business shall be transacted in
the absence of a quorum, unless a quorum is present when the meeting is called
to order. In the absence of a quorum at any such meeting, the meeting may be
adjourned for a period of not less than 10 days; in the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days; at the reconvening of any meeting further
adjourned for lack of a quorum, the Persons entitled to vote at least 25% in
Undivided Interest of the applicable Series or all outstanding Series, as the
case may be, shall constitute a quorum for the taking of any action set forth in
the notice of the original meeting. Notice of the reconvening of any adjourned
meeting shall be given as provided above except that such notice must be given
not less than five days prior to the date on which the meeting is scheduled to
be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the aggregate principal amount of the outstanding
Investor Certificates which shall constitute a quorum.
(c) Any Certificateholder who has executed an instrument in writing
appointing a person as proxy shall be deemed to be present for the purposes of
determining a quorum and be deemed to have voted; provided that such
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 of the Agreement, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
6.14 shall be binding on all the Investor Certificateholders whether or not
present or represented at the meeting.
The holding of Bearer Certificates shall be proved by the production of such
Bearer Certificates or by a certificate, satisfactory to the Servicer and the
Trustee, executed by any bank, trust company or recognized securities dealer,
wherever situated, satisfactory to the Servicer and the Trustee. Each such
certificate shall be dated and shall state that on the date thereof a Bearer
Certificate bearing a specified serial number was deposited with or exhibited to
such bank, trust company or recognized securities dealer by the person named in
such certificate. Any such certificate may be issued in respect of one or more
Bearer Certificates specified therein. The holding by the person named in any
such certificate of any Bearer Certificate specified therein
60
shall be presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding (i) another
certificate bearing a later date issued in respect of the same Bearer
Certificate shall be produced, (ii) the Bearer Certificate specified in such
certificate shall be produced by some other person or (iii) the Bearer
Certificate specified in such certificate shall have ceased to be outstanding.
The appointment of any proxy shall be proved by having the signature of the
person executing the proxy guaranteed by any bank, trust company or recognized
securities dealer satisfactory to the Trustee. The holding of Registered
Certificates shall be proved by the Certificate Register or by a certificate or
certificates of the Transfer Agent and Registrar.
The Trustee shall appoint a temporary chairman of the meeting. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of
the holders of a majority in Undivided Interest of the Certificates of such
Series represented at the meeting. No vote shall be cast or counted at any
meeting in respect of any Certificate challenged as not outstanding and ruled by
the chairman of the meeting to be not outstanding, The chairman of the meeting
shall have no right to vote except as a Certificateholder or proxy. Any meeting
of Certificateholders duly called at which a quorum is present may be adjourned
from time to time, and the meeting may be held as so adjourned without further
notice.
(d) The vote upon any resolution submitted to any meeting of
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of the Certificateholders or proxies and on which shall be inscribed
the serial number or numbers of the Certificates held or represented by them.
The permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Certificateholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was published as
provided above. The record shall be signed and verified by the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Servicer and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
[END OF ARTICLE VI]
61
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFERORS
Section 7.01 Liability of the Transferors. Each Transferor shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by such Transferor.
Section 7.02 Merger or Consolidation of, or Assumption of the Obligations
of, a Transferor. Neither 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) 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 organized and existing under the laws of the United States of
America or any State or the District of Columbia, 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, as applicable hereunder and shall benefit
from all the rights granted to such Transferor, as applicable hereunder.
(To the extent that any right, covenant or obligation of such Transferor,
is inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity.);
(ii) such Transferor has delivered to the Trustee an Officer's
Certificate signed by a Vice President of such Transferor and an Opinion of
Counsel each stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 7.02 and
that all conditions precedent herein provided for relating to such
transaction have been complied with; and
(iii) the Rating Agencies have advised the Transferors and the Trustee
that the rating of the Certificates, after giving effect to such assignment
and succession, will not be lowered or withdrawn.
(b) The obligations of each Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of either
Transferor hereunder except in each case in accordance with the provisions
of the foregoing paragraph.
Section 7.03 Limitation on Liability of the Transferors. The directors,
officers, employees or agents of the Transferors shall not be under any
liability to the Trust, the Trustee, the Certificateholders or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided, however, that this
provision shall not protect the officers, directors, employees or agents of the
Transferors against any liability which would
62
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Except as provided in
Section 7.04, neither Transferor will be under any liability to the Trust, the
Trustee, the Certificateholders or any other Person for any action taken or
for refraining from the taking of any action in its capacity as a Transferor
pursuant to this Agreement or any Supplement whether arising from express or
implied duties under this Agreement or any Supplement; provided, however, that
this provision shall not protect a Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Each Transferor may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder.
Section 7.04 Liabilities. Notwithstanding Section 7.03, by entering into
this Agreement, each of RFC and Centurion Bank, jointly and severally, agrees to
be liable, directly to the injured party, for the entire amount of any losses,
claims, damages or liabilities (other than those incurred by a Certificateholder
in the capacity of an investor in the Investor Certificates) arising out of or
based on the arrangement created by this Agreement and the actions of the
Servicer taken pursuant hereto as though this Agreement created a partnership
under the Uniform Partnership Act. Each of RFC and Centurion Bank, jointly and
severally, agrees to pay, indemnify and hold harmless each Investor
Certificateholder against and from any and all such losses, claims, damages and
liabilities except to the extent that they arise from any action by such
Investor Certificateholder. Subject to Sections 8.03 and 8.04, in the event of a
Service Transfer, the Successor Servicer will indemnify and hold harmless RFC
and Centurion Bank for any losses, claims, damage and liabilities of RFC or
Centurion Bank, as applicable, as described in this Section 7.04 arising from
the actions or omissions of such Successor Servicer. The amount of each
Transferor's liability under this Section 7.04 shall be subordinate to the
security interest of the Trust in the Receivables and shall be payable from the
assets of such Transferor at the time such liability is asserted and at any time
thereafter.
[END OF ARTICLE VII]
63
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01 Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.02 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:
(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 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, shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the Trustee, the
performance of every covenant and obligation of the Servicer hereunder. (To
the extent that any right, covenant or obligation of the Transferor, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity); and
(ii) the Servicer has delivered to the Trustee an officer's Certificate
and an Opinion of Counsel each stating that such consolidation,, merger,
conveyance or transfer and such supplemental agreement comply with this
Section 8.02 and that all conditions precedent herein provided for relating
to such transaction have been complied with. The Servicer shall promptly
advise the Rating Agencies in writing of any such merger, consolidation,
conveyance or transfer.
Section 8.03 Limitation on Liability of the Servicer and Others. The
directors, officers, employees or agents of the Servicer shall not be under any
liability to the Trust, the Transferors, the Trustee, the Certificateholders, or
any other Person hereunder or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the execution of this
Agreement and any Supplement and the issuance of the Certificates; provided,
however, that this provision shall not protect the directors, officers,
employees and agents of the Servicer against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Except as provided in Section 8.04, the
Servicer shall not be under any liability to the Trust, the Trustee, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Servicer pursuant to this
Agreement or any Supplement whether arising from express or implied duties under
this Agreement or any Supplement; provided, however, that this provision shall
not protect the Servicer against any liability which would otherwise be imposed
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of
64
reckless disregard of obligations and duties hereunder. The Servicer may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Receivables in
accordance with this Agreement or any Supplement which in its reasonable opinion
may involve it in any expense or liability.
Section 8.04 Indemnification of the Trust and the Trustee. The Servicer
shall indemnify and hold harmless the Trust, for the benefit of the
Certificateholders, and the Trustee, including its officers, directors and
employees from and against any loss, liability, expense, damage or injury
arising out of or relating to any claims, actions or proceedings brought or
asserted by third parties which are suffered or sustained by reason of any acts
or omissions of the Servicer pursuant to this Agreement or any Supplement,
including but not limited to any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided,
however, that the Servicer shall not indemnify the Trust, the Trustee or its
officers, directors or employees or the Investor Certificateholders for any
liability, cost or expense of the Trust or the Trustee or its officers,
directors or employees if any such claims, actions or proceedings relate to any
action taken by the Trustee at the request of the Investor Certificateholders or
any Federal, state or local income or franchise taxes (or any interest or
penalties with respect thereto) required to be paid by the Trustee or the
Investor Certificateholders in connection herewith to any taxing authority.
Subject to Sections 7.01 and 7.04 and subsection 10.02(b) of the Agreement, any
indemnification pursuant to this Section shall only be from the assets of the
Servicer. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof and shall
survive the termination of the Agreement and payment in full of the
certificates.
Section 8.05. The Servicer Not to Design. The Servicer shall not resign
from the obligations and duties hereby imposed on it as such except (a) upon
determination that (i) the performance of its duties hereunder is or will become
impermissible under applicable law, regulation or order and (ii) there is no
reasonable action which the Servicer could take to make the performance of its
duties hereunder permissible under applicable law, or (b) upon the satisfaction
of the following conditions, (i) the assumption, by an agreement supplemental
hereto, executed by and delivered to the Trustee, of the obligations and duties
of the Servicer hereunder by the proposed successor Servicer, (ii) the written
confirmation by the Rating Agencies that the then rating of any Series of
Certificates then outstanding will not, solely as a result of such transfer, be
reduced or withdrawn, (iii) the delivery to the Trustee of an Opinion of Counsel
substantially to the effect that (A) such transfer will not adversely affect the
treatment of any Series of Certificates then outstanding after such transfer as
debt for Federal and state income tax purposes, and (B) such transfer will not
have any material adverse impact on the federal or state income taxation of the
Trust or an Investor Certificateholder or any Certificate Owner, and (iv) the
proposed successor Servicer has a net worth of not less than $50,000,000 and its
regular business includes the servicing of charge card or revolving credit
receivables. Any determination pursuant to clause (a) of this Section permitting
the resignation of the Servicer shall be evidenced as to clause (a)(i) of this
Section by an Opinion of Counsel to such effect delivered to the Trustee.
Notwithstanding anything in this Agreement or any Supplement to the contrary,
any Successor Servicer appointed under clause (b) of this Section shall be
65
deemed to be a Successor Servicer as defined hereunder. No such resignation
shall become effective until the Trustee or its duly appointed agent (which may
not be the outgoing Servicer) or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02 hereof. If the Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer pursuant to subsection 10.02(a),
the Trustee or its duly appointed agent (which may not be the outgoing Servicer)
shall serve as Successor Servicer hereunder but the Trustee shall have continued
authority to appoint another Person as Successor Servicer.
Section 8.06 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 the
Investor Certificateholders, or by applicable statutes or regulations, to review
such documentation such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to such
security and confidentiality procedures as the Servicer may deem reasonably
necessary and (iv) at offices designated by the Servicer. Nothing in this
Section 8.06 shall derogate from the obligation of the Transferors, the Trustee
or the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors and the failure of the Servicer to provide
access as provided in this Section 8.06 as a result of such obligation shall not
constitute a breach of this Section 8.06.
Section 8.07 Delegation of Duties. It is understood and agreed by the
parties hereto that the Servicer may delegate its duties hereunder to any Person
who agrees to conduct such duties in accordance with the applicable Account
Guidelines. The fees of any Person to whom such duties are delegated are, and
shall continue to be, for the account of the Servicer. Any such delegations do
not and shall not relieve the Servicer of its liability and responsibility with
respect to such duties, and do not and shall not constitute a resignation within
the meaning of Section 8.05 hereof. If any such additional delegation is to a
Person other than FDC or a subsidiary of FDC or American Express Company or
otherwise is not in the ordinary course of business, notification thereof shall
be given to each Rating Agency.
Section 8.08 Examination of Records. The Transferors and the Servicer shall
clearly and unambiguously identify each Account (including any Additional
Account designated pursuant to Section 2.06) in its computer or other records to
reflect that the Receivables arising in such Account have been conveyed to the
Trust pursuant to this Agreement. The Transferors and the Servicer shall, prior
to the sale or transfer to a third party of any receivable held in its custody,
examine its computer and other records to determine that such receivable is not
a Receivable.
[END OF ARTICLE VIII]
ARTICLE IX
PAY OUT EVENTS
Section 9.01 Pay Out Events. Unless modified with respect to any Series of
Investor Certificates by any related Supplement, if any one of the following
events shall occur:
(a) any of RFC, Centurion Bank or TRS 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 it 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 any of RFC,
Centurion Bank or TRS and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or any of RFC, Centurion
Bank or TRS shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its obligations; or either
Transferor shall become unable for any reason to transfer Receivables to
the Trust in accordance with the provisions of this Agreement;
(b) the Trust shall become an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(c) after any applicable grace period, a failure by either Transferor
to convey the Receivables in Additional Accounts to the Trust when
required; and
(d) on any Determination Date, the Transferor Amount as of the last
day of the prior Due Period was less than 3.0% of the Trust Principal
Component as of the last day of the prior Due Period;
then, a Pay Out Event with respect to all Series of Certificates then
outstanding shall occur with out any notice or other action on the part of the
Trustee or all Investor Certificateholders immediately upon the occurrence of
such event. The Trustee shall advise the Rating Agencies in writing of the
occurrence of any Pay Out Event.
Section 9.02 Additional Rights Upon the Occurrence of Certain Events.
(a) If any of RFC, Centurion Bank or TRS voluntarily goes into
liquidation or consents 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 any of RFC, Centurion Bank
or TRS or of or relating to all or substantially all their respective 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 any of RFC, Centurion Bank or TRS; or
any of RFC, Centurion Bank or TRS shall admit in writing its inability to pay
67
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations; or
either Transferor shall become unable for any reason to transfer Receivables to
the Trust in accordance with the provisions of this Agreement (such voluntary
liquidation, appointment entering of such decree, admission, filing, making,
suspension or inability, a "Dissolution Event"), the Transferors or TRS shall
promptly give notice of such event to the Trustee, and TRS shall on the day of
such appointment, voluntary liquidation, entering of such decree, admission,
filing, making, suspension or inability, as the case may be (the "Appointment
Day"), immediately cease to sell Receivables to RFC under the Receivable
Purchase Agreement and the Transferors will immediately cease to transfer
Receivables to the Trust hereunder. Within 15 days of the receipt by the Trustee
of the notice of a Dissolution Event, the Trustee shall (i) publish a notice in
an Authorized Newspaper that a Dissolution Event has occurred and that the
Trustee intends to sell, dispose of or otherwise liquidate the Receivables in a
commercially reasonable manner and (ii) send written notice to the Investor
Certificateholders describing the provisions of this Section 9.02 and requesting
instructions from such Holders, which notice shall request each Investor
Certificateholder to advise the Trustee in writing that it elects one of the
following options: (A) the Investor Certificateholder wishes the Trustee to
instruct the Servicer not to sell, dispose of or otherwise liquidate the
Receivables, or (B) the Investor Certificateholder wishes the Trustee to
instruct the Servicer to sell, dispose of or otherwise liquidate the Receivables
and to instruct the Servicer to reconstitute the Trust upon the same terms and
conditions set forth herein, or (C) the Investor Certificateholder refuses to
advise the Trustee as to the specific action the Trustee shall instruct the
Servicer to take. If after 90 days from the day notice pursuant to clause (i)
above is first published (the "Publication Date"), the Trustee shall not have
received written instructions of Holders of Investor Certificates representing
Undivided Interests aggregating in excess of 50% of the related Invested Amount
of each Series (or in the case of a series having more than one class of
investor certificates, each class of such series) to the effect that the Trustee
shall not instruct the Servicer to sell, dispose of, or otherwise liquidate the
Receivables and to instruct the Servicer to reconstitute the Trust upon the same
terms and conditions as set forth herein, the Trustee shall instruct the
Servicer to proceed to sell, dispose of, or otherwise liquidate the Receivables
in a commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids and the Servicer shall
proceed to consummate the sale, liquidation or disposition of the Receivables as
provided above with the highest bidder for the Receivables. If, however, with
respect to the portion of the Receivables allocable to any outstanding Series,
the holders of more than 50% of the principal amount of each class of such
Series instruct the Trustee not to sell the portion of the Receivables allocable
to such Series, the Trust shall continue with respect to such Series pursuant to
the terms of the Agreement and the Supplement. The portion of the Receivables
allocable to any Series shall be determined in the same manner as such
determination would be made pursuant to Section 12.02(c). The Transferors or any
of their respective Affiliates shall be permitted to bid for the Receivables. In
addition the Transferors or any of their respective Affiliates shall have the
right to match any bid by a third person and be granted the right to purchase
the Receivables at such matched bid price. The Trustee may obtain a prior
determination from the conservator or receiver that the terms and manner of any
proposed, sale, disposition or liquidation are commercially reasonable. The
provisions of Sections 9.01 and 9.02 shall not be deemed to be mutually
exclusive.
68
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided that the Trustee shall determine conclusively
without liability for such determination the amount of such proceeds which are
allocable to Yield Collections and the amount of such proceeds which are
allocable to Principal Collections. On the day following the Distribution Date
on which such proceeds are distributed to the Investor Certificateholders, the
Trust shall terminate.
[END OF ARTICLE IX]
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 to make such payment,
transfer or deposit or to give notice to the Trustee as to any required drawing
or payment under any Enhancement on or before the date occurring five Business
Days after the date such payment, transfer, deposit or drawing or such
instruction or notice is required to be made or given, as the case may be, under
the terms of this Agreement or any Supplement; provided, however, that any such
failure caused by a nonwillful act of the Servicer shall not constitute a
Servicer Default if the Servicer promptly remedies such failure within five
Business Days after receiving notice of such failure or otherwise becoming aware
of such failure;
(b) failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement or any
Supplement, which has a material adverse effect on the Certificateholders of any
Series then outstanding and which continues unremedied for a period of 60 days
after the date on which the written notice of such failure requiring the same to
be remedied shall have been given to the Servicer and which continues to
materially adversely affect the rights of the Holders of Investor Certificates
of any Series; the Servicer shall delegate its duties under this Agreement,
except as permitted by Section 8.07;
(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 Certificateholders of
any Series then outstanding and which continues to be incorrect in any material
respect and which continues to affect materially and adversely the rights of the
Certificateholders of any Series for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the Servicer and the Trustee by
the Holders of Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of any Series adversely affected thereby;
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; 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;
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then, so long as such Servicer Default shall not have been remedied, either the
Trustee or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested Amount, by notice then
given in writing to the Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the rights
and obligations of the Servicer as Servicer under this Agreement and in and
to the Receivables and the proceeds thereof and appoint a new Servicer (a
"Service Transfer"). The rights and interests of the Transferor Interest will
not be affected by any Service Transfer. The Trustee, upon giving or receiving a
Termination Notice shall immediately notify the Rating Agencies and any
Enhancement Provider of such notice. 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 Service
Transfer. 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 Recoveries. The Servicer shall promptly transfer its
electronic records relating to the Receivables to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably request. To
the extent that compliance with this Section 10.01 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 interest.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.01(a) for a period of 10 Business Days after the
applicable grace period or under subsection 10.01(b) or (c) for a period of 60
Business Days after the applicable grace period, shall not constitute a Servicer
Default if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages or similar causes. The preceding sentence shall not relieve the
Servicer from using its best efforts to perform its obligations in a timely
manner in accordance with the terms of this Agreement and the Servicer shall
provide the Trustee, any Enhancement Provider, the Transferors and the Holders
of Investor Certificates with an Officer's Certificate giving prompt notice of
such failure or delay by it, together with a description of the cause of such
failure or delay and its efforts so to perform its obligations. The Servicer
shall immediately notify the Trustee in writing of any Servicer Default.
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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 in writing or, if no such date is
specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee (not to exceed 90
days from the date of delivery of such notice). The Trustee shall as promptly as
possible after the giving of a Termination Notice appoint a successor servicer
(the "Successor Servicer"), with the consent of any Enhancement Provider, and
such Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Trustee, the Transferors and any Enhancement Provider.
The Transferors shall have the right to nominate to the Trustee the name of a
potential successor servicer which nominee shall be selected by the Trustee as
the Successor Servicer, subject to the consent of any Enhancement Provider. The
Trustee may obtain bids from any potential successor servicer. If the Trustee is
unable to obtain any bids from any potential successor servicer and the Servicer
delivers an Officer's Certificate to the effect that it cannot in good faith
cure the Servicer Default which gave rise to a transfer of servicing, then the
Trustee shall offer the Transferors the right to accept reassignment of all the
Receivables; provided, however, that no such reassignment shall occur unless the
Transferors shall deliver to the Trustee and the Rating Agencies an Opinion of
Counsel reasonably acceptable to the Trustee that such reassignment would not
constitute a fraudulent conveyance by the Transferor. The reassignment deposit
amount for such a reassignment shall be equal to the Aggregate Invested Amount
(less the aggregate principal amount on deposit in any principal funding
account), plus (i) accrued interest thereon, at the applicable Certificate Rate
(through the end of the Due Period for the subsequent Distribution Date of
reassignment), and (ii) any unpaid amounts payable to any Enhancement Provider
under the applicable Enhancement agreement. In the event that a Successor
Servicer has not been appointed and has not accepted its appointment at the time
when the Servicer ceases to act as Servicer, the Trustee (as trustee hereunder)
without further action shall automatically be appointed the Successor Servicer.
Notwithstanding the above, the Trustee shall, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint any established financial
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of charge card or revolving credit receivables
as the Successor Servicer hereunder. Notwithstanding anything to the contrary in
this Agreement, the entire amount of the reassignment deposit amount shall be
distributed to the Investor Certificateholders of the related Series on the
subsequent Distribution Date for such Series pursuant to Section 12.03 (except
for the applicable Repayment Amount and other amounts payable to any Enhancement
Provider under the applicable Enhancement agreement, which amounts shall be
distributed to such Enhancement Provider.)
(b) Upon its appointment., the Successor Servicer shall be the
successor in all respects 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; provided, however, that, the outgoing
Servicer shall not be relieved of any liability hereunder for its actions prior
to the transfer of servicing hereunder; and provided further, that, (i) the
outgoing Servicer shall not indemnify the Trust or the Trustee under Section
8.04 for acts, omissions or alleged acts or omissions by a Successor
72
Servicer and (ii) the outgoing Servicer shall not pay or reimburse the Trustee
pursuant to Section 11.05 for any expense, disbursement or advance of the
Trustee related to or arising as a result of the negligence or bad faith of
the Successor Servicer. Any Successor Servicer, by its acceptance of its
appointment, will automatically agree to be bound by the terms and provisions of
any applicable Enhancement agreement.
(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Monthly Servicing Fee permitted to the Servicer
pursuant to Section 3.02.
(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
Transferors and, without limitation, the Transferors are 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 Transferors 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 Transferors in such electronic form as the
Transferors may reasonably request and shall transfer all other records,
correspondence and documents to the Transferors in the manner and at such times
as the Transferors shall reasonably request. To the extent that compliance with
this Section 10,02 shall require the Successor Servicer to disclose to the
Transferors information of any kind which the Successor Servicer deems to be
confidential, the Transferors 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. Upon the occurrence of
any Servicer Default, the Servicer shall give prompt written notice thereof to
the Trustee, the Rating Agencies and any Enhancement Provider, and the Trustee
shall give notice to the Investor Certificateholders at their respective
addresses appearing in the Certificate Register. Upon any termination or
appointment of a Successor Servicer pursuant to this Article X, the Trustee
shall give prompt written notice thereof to Investor Certificateholders at their
respective addresses appearing in the Certificate Register, the Rating Agencies
and to any Enhancement Provider. Notice to Holders of Bearer Certificates shall
be given by publication in the manner described in Section 13.05 of the
Agreement.
Section 10.04 Waivering of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 66-2/3% of the
Invested Amount of any Series then outstanding affected by any default by the
Servicer or either Transferor may, on behalf of all Holders of Certificates of
such affected Series, waive any default by the Servicer or such Transferor in
the performance of their respective obligations hereunder and its consequences,
except a default in the failure to make any required deposits or payments of
interest or principal with respect to any Series of Certificates. Upon any such
waiver of a past default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied for
73
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
[END OF ARTICLE X]
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ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of a Servicer Default or Pay
Out Event and after the curing or waiving of all Servicer Defaults or Pay Out
Events which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement. If a Servicer Default or
Pay Out Event has occurred (which has not been cured or waived), the Trustee (as
trustee and not Successor Servicer) shall exercise such of the rights and powers
vested in it by this Agreement or any Supplement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement or any Supplement, shall examine them to determine
whether they conform as to form to the requirements of this Agreement or any
Supplement, but shall not be required to verify the accuracy of any information,
calculations or conclusions stated therein. The Trustee shall give prompt
written notice to the Certificateholders (or, in the case of Holders of Bearer
Certificates, notice by publication in the manner described in Section 13.05 of
the Agreement) of any material lack of conformity of any such instrument to the
applicable requirements of this Agreement or any Supplement discovered by the
Trustee which would entitle a specified percentage of the Investor
Certificateholders to take any action pursuant to this Agreement or any
Supplement.
(c) Subject to Section 11.01(a) of this Agreement, no provision of this
Agreement or any Supplement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct; provided, however, that:
(i) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(ii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested
Amount of any Series adversely affected thereby relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement or any Supplement;
(iii) the Trustee shall not be charged with knowledge of any failure by
the Servicer (other than the Trustee, in its capacity as Successor
Servicer) to comply with the obligations of the Servicer referred to in
clauses (a), (b) and (c) of Section 10.01 unless a Responsible Officer of
the Trustee obtains actual knowledge of such failure (it being
75
understood that knowledge of the Servicer, in its capacity as agent for
the Trustee, is not attributable to the Trustee) or the Trustee receives
written notice of such failure from the Servicer or any Holders of
Investor Certificates evidencing Undivided Interests aggregating more than
50% of the Invested Amount of any Series adversely affected thereby;
(iv) in making a determination of any material and adverse effect upon
Certificateholders, the Investor Certificates, the Trustee may, as to
matters of law, rely exclusively upon an Opinion of Counsel.
(d) The Trustee (in its capacity as such) shall not be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
or any Supplement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer or the Successor Servicer under this Agreement or any Supplement except
during such time, if any, as the Trustee shall be the Successor Servicer in
accordance with the terms of this Agreement or any Supplement.
(e) Except for actions expressly authorized by this Agreement or any
Supplement, the Trustee shall take no action reasonably likely to impair the
interests of the Trust in any Receivable now existing or hereafter created or to
impair the value of any Receivable now existing or hereafter created.
(f) Except as specifically provided in this Agreement, the Trustee
shall have no power to vary the corpus of the Trust.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall not be the Trustee and fail to perform any obligation,
duty or agreement in the manner or on the day required to be performed by
the Paying Agent or the Transfer Agent and Registrar, as the case may be,
under this Agreement, the Trustee shall be obligated promptly upon its
knowledge thereof to perform such obligation, duty or agreement in the manner so
required but shall not be required to make a payment out of its own funds.
(h) Any action, suit or proceeding brought in respect of one or more
particular Series shall have no effect on the Trustee's rights, duties and
obligations hereunder with respect to any one or more Series not the subject of
such action, suit or proceeding.
Section 11.02 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.01:
(a) the Trustee may request, rely on and shall be protected in acting
on, or in refraining from acting in accord with, any resolution, Officer's
Certificate, Opinion of Counsel, certificate of independent public accountants
or any other certificate statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document, including,
without limitation, any request or instruction by the Servicer or the Transferor
to make any deposit or payment or any draw on any Enhancement or to transfer any
Receivables or
76
Accounts, believed by it to be genuine and to have been signed or presented to
it pursuant to this Agreement or any Supplement by the proper party or parties;
(b) the Trustee may consult with counsel as to matters of law and any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel as to any actions required to be
taken or withheld hereunder;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Supplement, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders or Certificate
Owners, pursuant to the provisions of this Agreement or any Supplement, unless
such Certificateholders or Certificate Owners, shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee (as Trustee but not as Successor Servicer) of the
obligations, upon the occurrence of any Servicer Default (which has not been
cured or waived), to exercise such of the rights and powers vested in it by this
Agreement or any Supplement, and to use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs;
(d) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement or any
Supplement;
(e) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, except to the extent specifically requested in writing so to do by
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Invested Amount of any Series which could be adversely affected
if the Trustee does not perform such acts and the Trustee is reasonably
indemnified therefor;
(f) the Trustee (in its capacity as such) may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian, and the Trustee (in its capacity as
such) shall not be responsible for any misconduct or negligence on the part of
any such agent, attorney or custodian appointed with due care by it hereunder;
(g) except as may be required by subsection 11.01(a) or 11.01(b)
hereof, the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or the
Accounts for the purpose of establishing the presence or absence of defects, the
compliance by the Transferor or Servicer with their representations, warranties
or covenants or for any other purpose;
(h) whether or not therein expressly so provided, every provision of
this Agreement or any Supplement relating to the conduct or affecting the
eligibility of or affording
77
protection to the Trustee (in its capacity as such) shall be subject to the
provisions of Sections 11.01, 11.02 and 11.03;
(i) the permissive right of the Trustee to take actions enumerated in
this Agreement or any Supplement shall not be construed as a duty;
(j) whenever in the administration of this Agreement or any Supplement,
the Trustee shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(k) no implied covenants or obligations shall be read into this
Agreement against the Trustee;
(l) without limiting the generality of this Section or Section 11.01,
the Trustee shall have no duty (i) to see to any recording, filing, or
depositing of the Agreement or any agreement referred to therein or any
financing statement or continuation statement evidencing a security interest in
the Receivables or the Accounts, or to see to the maintenance of any such
recording, filing or depositing or any rerecording, refiling or redepositing of
any thereof, or (ii) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee pursuant to the Agreement
believed by the Trustee to be genuine and to have been signed or presented by
the proper party or parties; and
(m) the Trustee shall not be deemed to be a fiduciary for the
Enhancement Provider, if any, in its capacity as such, and the Trustee's sole
responsibility with respect to the Enhancement Provider in its capacity as such,
shall be to perform those duties with respect to the Enhancement Provider as are
specifically set forth in the Agreement and no implied covenants shall be read
into the Agreement against the Trustee with respect to the Enhancement Provider.
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 certificates of authentication on the
Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to (i) the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificates of authentication
on the Certificates), (ii) the existence or validity of any Receivable, (iii)
the validity of any transfer or assignment of any Receivable to the Trust, (iv)
the validity of any grant of a security interest to the Trust in any Receivable,
(v) the perfection of any security interest (whether as of the date hereof or at
any future time) in any Receivable, (vi) the maintenance of or the taking of any
action to maintain such perfection, (vii) the receipt by the Trustee or the
Servicer of any Receivable, (viii) the performance or enforcement of any
Receivable, (ix) the compliance by the Transferor or the Servicer with any
covenant or representation, (x) the breach by the Transferor or the Servicer of
any warranty or representation made hereunder or in any related document or the
accuracy of any such warranty or representation or (xi) any action taken by the
Servicer in the name of the Trustee. The Trustee shall not be accountable for
the use or application by the Transferor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Transferors in respect of the Receivables or deposited in or withdrawn
from the Collection Account or other Accounts now or hereafter established to
effectuate the transactions contemplated herein and in accordance with the terms
hereof.
Section 1l.04. Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Investor Certificates
with the same rights as it would have if it were not the Trustee.
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer 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, subject to Section 8.04, the Servicer will
pay or reimburse the Trustee (without reimbursement from the Collection Account
or otherwise) upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement or any Supplement (including the reasonable fees
and expenses of its agents and counsel) except any such expense, disbursement or
advance as may arise from its negligence or bad faith and except as provided in
the following sentence. If the Trustee is appointed Successor Servicer pursuant
to Section 10.02, 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; provided that the Transferors will indemnify,
defend and save harmless the Trustee for any loss, liability or expense incurred
by it as Successor Servicer which is not otherwise reimbursed hereunder, except
to the extent such loss, liability or expense is due to its negligence or bad
faith as Successor Servicer.
The obligations of the Servicer and the Transferor under this Section
11.05, Section 7.04, Section 8.04 and Section 11.17 shall survive the
termination of the Trust and the resignation or removal of the Trustee or the
Servicer.
Section 11.06. Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times be a corporation or national banking association organized
and doing business under the laws of the United States of America or any state
thereof authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, a rating as to its
long-term unsecured debt obligations of at least Baa3 by Moody's (if Moody's
shall then be a Rating Agency) and a rating as to its short-term deposits or
long-term unsecured debt obligations that satisfies the rating requirement of
any other applicable Rating Agency and subject to supervision or examination by
Federal or state authority. If such corporation or national banking association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 11.06, the combined capital and surplus of such
corporation or national banking association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 11.06, 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 as Trustee and be discharged
from the trust hereby created by giving written notice thereof to the
Transferors and the Servicer. Upon receiving such notice of resignation, the
Transferors shall promptly appoint a successor trustee
79
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.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.06 hereof and shall fail to resign after
written request therefor by the Transferors, 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
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 and shall promptly pay all fees owed to the outgoing
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 hereof and payment of all fees and expenses owed to
the outgoing Trustee. Any such 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 hereof
shall execute, acknowledge and deliver to the Transferors and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder and under any Supplement, with like effect as if
originally named as Trustee herein. The predecessor Trustee shall upon payment
of its fees and expenses deliver to the successor trustee all documents held by
it hereunder, and the Transferors 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 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.08 hereof, such successor trustee shall mail notice of such
succession hereunder to all Certificateholders (other than Holders of Bearer
Certificates) at their addresses as shown in the Certificate Register. Notice to
Holders of Bearer Certificates shall be given by publication in the manner
described in Section 13.05 of the Agreement.
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
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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 Person shall be eligible
under the provisions of Section 11.06 hereof, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provision of this Agreement or any
Supplement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust may at the time be located, the
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee, or separate trustee, of all
or any part of the Trust, and to vest in such Person, in such capacity and for
the benefit of the Certificateholders, such title to the trust, or any part
thereof, and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 11.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any laws of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder appointed with due care; and
(iii) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee,
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement or any
Supplement, specifically including
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every provision of this Agreement or any Supplement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time appoint the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement or any Supplement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be required to file
tax returns, the Servicer shall prepare or cause to be prepared and is
authorized hereunder to sign any tax returns required to be filed by the Trust
and, to the extent possible, shall file such returns at least five days before
such returns are due to be filed. The Servicer shall prepare or shall cause to
be prepared all tax information required by law to be distributed to
Certificateholders and Certificate Owners and shall deliver such information to
the Paying Agent at least five days prior to the date it is required by law to
be distributed to Certificateholders and Certificate Owners. The Servicer will
furnish to the Trustee an opinion of Counsel as to the preparation of all tax
returns of the Trust. In no event shall the Trustee, the Paying Agent, the
Transferors 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 or local income
or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to comply
therewith), except to the extent that such tax is imposed as a result of a
violation by such Person of the provisions of this Agreement or any Supplement.
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates All rights of action and claims under this Agreement or any
Supplement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
Section 11.13 Suits for Enforcement If a Servicer Default shall occur and
be continuing, the Trustee, in its discretion may, subject to the provisions of
Section 10.01, proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement or any Supplement, by such suit, action
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or any
Supplement or in aid of the execution of any power granted in this Agreement or
any Supplement or for the enforcement of any other legal, equitable or other
remedy as the Trustee, being advised by counsel, shall deem effectual to protect
and enforce any of the rights of the Trustee or the Certificateholders.
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Section 11.14 Rights of Certificateholders to Director Trustee. Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Invested Amount of any Series affected by the conduct of any proceeding
or the exercise of any right conferred on the Trustee shall have the right to
direct the times, 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 or any Supplement shall impair the right
of the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction.
Section 11.15. Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(i) The Trustee is a banking corporation, organized, existing and in
good standing under the laws of the State of New York;
(ii) The Trustee has full power, authority and right to execute,
deliver and perform this Agreement and any Supplement, and has taken all
necessary action to authorize the execution, delivery and performance by it
of this Agreement and any Supplement; and
(iii) This Agreement and any Supplement has been duly executed and
delivered by the Trustee, and assuming due execution and delivery by the
other parties thereto constitutes a legal, valid and binding obligation of
the Trustee enforceable against the Trustee in accordance with its terms.
Section 11.16 Maintenance of Office or Agency. The Trustee will maintain
at its expense in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where notices and demands to or upon the Trustee
in respect of the Certificates and this Agreement may be served. The Trustee
initially appoints its Corporate Trust Office as its office for such purposes in
New York. The Trustee will give prompt written notice (or in the case of Holders
of Bearer Certificates, notice by publication in the manner described in Section
13.05 of the Agreement) to the Servicer and to Certificateholders of any change
in the location of the Certificate Register or any such office or agency.
Section 11.17 Indemnification of the Trustee. The Transferors shall
indemnify the Trustee for, and hold it harmless against, any loss, liability or
expense incurred without negligence or willful misconduct on the part of the
Trustee arising out of any third-party claim or alleged third-party claim in
connection with the exercise or performance of any of its powers or duties under
this Agreement, The Trustee shall have a lien on any and all amounts which are
payable to the Transferors with respect to amounts due and owing to the Trustee
pursuant to this Section 11.17. The amount of the Transferors' liability under
this Section 11.17 shall be subordinate to the security interest of the Trust in
the Receivables and shall be payable from the assets of the Transferors at the
time such liability is asserted and at any time thereafter.
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[END OF ARTICLE XI]
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ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust.
(a) The respective obligations and responsibilities of each Transferor,
the Servicer, the Paying Agent and the Trustee and their agents hereunder
created hereby (other than the obligation of the Trustee to make payments to
Certificateholders as hereafter set forth) shall terminate, except with respect
to the duties described in Sections and subsections 2.04(c), 7.04, 8.04, 11.05,
11.17 and 12.03(b), upon the earlier of (i) the day following the date on which
funds shall have been deposited in the Collection Account sufficient to pay the
Aggregate Invested Amount plus applicable Certificate Interest accrued through
the last day of the interest accrual period preceding such Distribution Date in
full on all Series of Investor Certificates and (ii) July 15, 2092 (the "Final
Termination Date") provided, however, that in no event shall the trust created
by this Agreement continue beyond the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, formerly United
States representative at the Court of St. Xxxxx, of the Commonwealth of
Massachusetts, living on the date of this Agreement.
(b) If on the Distribution Date in the month immediately preceding the
month in which the Final Termination Date occurs (after giving effect to all
transfers, withdrawals, deposits and drawings to occur on such date and the
payment of principal on any Series of Certificates to be made on such
Distribution Date pursuant to Article IV) the Invested Amount of any Series
would be greater than zero, the Servicer shall sell on or prior to the
succeeding Distribution Date all of the Receivables in a commercially reasonable
manner and on commercially reasonable terms which shall include the solicitation
of competitive bids and shall consummate the sale with the highest bidder for
the Receivables. Each of the Transferors or any of their respective Affiliates
shall be permitted to bid for the Receivables. In addition, each of the
Transferors or their respective Affiliates shall have the right to match any bid
by a third Person and be granted the right to purchase the Receivables at such
matched bid price. The proceeds of any such sale shall be treated as Collections
on the Receivables and shall be allocated in accordance with Article IV;
provided, however, that the Trustee shall determine conclusively the amount of
such proceeds which are allocable to Yield Collections and the amount of such
proceeds which are allocable to Principal Collections. Prior to such sale of
Receivables, the Servicer shall continue to collect Collections on the
Receivables and allocate such payments in accordance with the provisions of
Article IV.
Section 12.02 Optional Purchase; Final Termination Date of Investor
Certificates of any Series.
(a) If provided in any Supplement with respect to a Series on any
Distribution Date either or both of the Transferors may, but shall not be
obligated to, purchase any such Series of Investor Certificates by depositing
into the Collection Account, on the Distribution Date, an amount equal to the
Invested Amount thereof plus interest accrued and unpaid thereon at the
applicable Certificate Rate through the interest accrual period related to such
Distribution
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Date on which the purchase will be made; provided, however, that no
such purchase of any Series of Investor Certificates shall occur unless the
Transferors shall deliver to the Trustee and the Rating Agencies an Opinion of
Counsel reasonably acceptable to the Trustee that such purchase of any Series of
Investor Certificates would not constitute a fraudulent conveyance of any
Transferor. Nothing herein limits the right of TRS or any Affiliate to purchase
Investor Certificates on the open market and submit them to the Trustee for
cancellation.
(b) The amount deposited pursuant to subsection 12.02(a) of the
Agreement shall be paid to the Investor Certificateholders of the related Series
pursuant to Article IV on the Distribution Date following the date of such
deposit. All Certificates of a Series which are purchased by either or both of
the Transferors pursuant to subsection 12.02(a) of the Agreement shall be
delivered by the Transferors 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 Transferors.
(c) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Stated Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Invested Amount of any Series of Certificates
is greater than zero on its Stated Series Termination Date (after giving effect
to all transfers, withdrawals, deposits and drawings to occur on such date and
the payment of principal to be made on such Series on such date), the Trustee
will sell or cause to be sold, and pay the proceeds to all Certificateholders of
such Series pro rata in final payment of all principal of and accrued interest
on such Series of Certificates, an amount of Receivables or interests in
Receivables up to 110% of the Invested Amount of such Series at the close of
business on such date (but not more than an amount of Receivables equal to the
sum of (1) the product of (A) the Transferor Percentage, (B) the Trust Principal
Component and (C) a fraction the numerator of which is the related Invested
Percentage of Yield Collections and the denominator of which is the sum of all
Invested Percentages with respect to Yield Collections of all Series outstanding
and (2) the Invested Amount of such Series). The Trustee shall conduct the sale
of Receivables in a commercially reasonable manner and on commercially
reasonable terms which shall include the solicitation of competitive bids and
shall consummate the sale with the highest bidder for the Receivables. The
Transferors or any of their respective Affiliates shall be permitted to bid for
the Receivables. In addition, the Transferors or any of their respective
Affiliates shall have the right to match any bid by a third Person and be
granted the right to purchase the Receivables at such matched bid price, Any
proceeds of such sale in excess of such principal and interest paid shall be
paid to the Holder of the Exchangeable Transferor Certificate. Upon such Stated
Series Termination Date with respect to the applicable Series of Certificates,
final payment of all amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in Section 12.03 of the Agreement.
Section 12.03 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the Distribution Date
upon which the Investor Certificateholders of any Series may surrender their
Certificates for payment of the final distribution with respect to such Series
and cancellation, shall be given (subject to at least two Business Days' prior
notice from the Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of such final distribution (or in the case of the Holders of Bearer
Certificates by the publication by the Trustee
86
of a notice at least once in a newspaper of general circulation in Luxembourg
(which newspaper shall be printed in the English language and customarily
published on each business day in Luxembourg) and, so long as the Investor
Certificates are listed on the Luxembourg Stock Exchange or other stock exchange
and such exchange so requires, in Luxembourg or the location required by such
other stock exchange) specifying (a) the Distribution Date (which shall be the
Distribution Date in the month in which the deposit is made pursuant to Section
2.07 or subsection 12.02(a) of the Agreement) upon which final payment of such
Investor Certificates will be made upon presentation and surrender of such
Investor Certificates at the office or offices therein designated, (which, in
the case of Bearer Certificates, shall be outside the United States), (b) the
amount of any such final payment and (c) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Investor Certificates at the office or
offices therein specified. The Servicer's notice to the Trustee in accordance
with the preceding sentence shall be accompanied by an Officers' Certificate
setting forth the information specified in the applicable Supplement covering
the period during the then current calendar year through the date of such notice
and setting forth the date of such final distribution. The Trustee shall give
such notice to the Transfer Agent and Registrar and the Paying Agent at the time
such notice is given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to subsection
12.01(a) of the Agreement or the occurrence of the Stated Series Termination
Date with respect to any Series pursuant to Section 12.02 of the Agreement, all
funds then on deposit in the Collection Account shall continue to be held in
trust for the benefit of the Certificateholders and the Paying Agent or the
Trustee shall pay such funds to the Certificateholders upon surrender of their
Certificates (which surrenders and payments, in the case of Bearer Certificates,
shall be made only outside the United States). In the event that all of the
Investor Certificateholders of such Series shall not surrender their
Certificates for cancellation within six months after the date specified in the
above-mentioned notice, the Trustee shall give a second written notice (or in
the case of Bearer Certificates, publication notice) to the remaining Investor
Certificateholders of such Series upon receipt of the appropriate records from
the Transfer Agent and Registrar to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one and one-half years after the second notice all the Investor Certificates of
such Series shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Investor Certificateholders of such Series concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds in the Collection Account held for the benefit of such Investor
Certificateholders.
(c) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be cancelled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferors.
Section 12.04 Transferor's Termination Rights. Upon the termination of
Trust pursuant to Section 12.01 and the surrender of the Exchangeable
Transferor Certificate, the Trustee shall return to the Transferors (without
recourse, representation or warranty) all right, title and interest of the Trust
in the Receivables, whether then existing or hereafter created, and all monies
due or to become due with respect thereto, all proceeds thereof except for
amounts held by the Paying Agent pursuant to subsection 12.03(b). The Trustee
shall execute and deliver
87
such instruments of transfer and assignment, in each case without recourse, as
shall be reasonably requested by the Transferors to vest in itself all right,
title and interest which the Trust had in the applicable Receivables and the
Trustee shall be entitled to receive and rely conclusively upon an Opinion of
Counsel as to its execution and delivery of such instruments being in compliance
herewith.
[END OF ARTICLE XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment
(a) This Agreement and any Supplement may be amended from time to time
by the Servicer, the Transferors and the Trustee, without the consent of any of
the investor Certificateholders, to cure any ambiguity, to correct or supplement
any provisions herein which may be inconsistent with any other provisions herein
or to add any other provisions with respect to matters or questions raised under
this Agreement which shall not be inconsistent with the provisions of this
Agreement, including (i) any matters arising under subsection 2.05(d) of the
Agreement necessary to effect the conveyance contemplated thereunder, (ii) to
add, modify or eliminate such provisions as the Transferors may deem necessary
or advisable in order to enable all or a portion of the Trust (A) to qualify as,
and to permit an election to be made to cause the Trust to be treated as, a
"financial asset securitization investment trust" as described in the provisions
of Section 860L of the Internal Revenue Code and (B) to avoid the imposition of
state or local income or franchise taxes imposed on the Trust's property or its
income and (iii) the addition or deletion of a sale of Receivables and
termination of the Trust upon the occurrence of an insolvency of either of the
Transferors; provided, however, that such action shall not adversely affect in
any material respect the interests of any of the Investor Certificateholders.
Additionally, this Agreement and any Supplement may be amended from time to time
by the Servicer, the Transferors and the Trustee, without the consent of any of
the Certificateholders, to add to or change any of the provisions of this
Agreement to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
of (or premium, if any) or any interest on Bearer Certificates to comply with
the Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Certificates in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Bearer Certificates of any Series or any related
Coupons in any material respect unless such amendment is necessary to comply
with the Bearer Rules. Prior to executing any amendment in accordance with this
subsection 13.01(a), the Trustee shall receive and shall be permitted to rely
upon an Opinion of Counsel to the effect that the conditions and requirements of
this subsection 13.01(a) have been satisfied.
(b) This Agreement and any Supplement may also be amended from time to
time by the Servicer, the Transferors and the Trustee, without the consent of
any of the Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Holders of Investor
Certificates; provided that (i) the Servicer shall have provided an Opinion of
Counsel to the Trustee to the effect that such amendment will not materially and
adversely affect the interests of the Investor Certificateholders of any
outstanding Series (or 100% of the class of Certificateholders so affected shall
have consented), (ii) such amendment shall not, as evidenced by an Opinion of
Counsel, cause the Trust to be characterized for Federal income tax purposes as
an association taxable as a corporation or otherwise have any material adverse
impact on the Federal income taxation of any outstanding Series of Investor
Certificates or any Certificate Owner and (iii) the Rating Agencies shall
confirm that such amendment shall not
89
cause a reduction or withdrawal of the rating of any outstanding Series of
Certificates; provided, further, that such amendment shall not reduce in any
manner the amount of, or delay the timing of, distributions which are required
to be made on any Investor Certificate of such Series without the consent of the
related Investor Certificateholder, change the definition of or the manner of
calculating the interest of any Investor Certificateholder of such Series
without the consent of the related Investor Certificateholder or reduce the
percentage pursuant to clause (b) required to consent to any such amendment, in
each case without the consent of all such Investor Certificateholders.
(c) This Agreement and any Supplement may also be amended from time to
time by the Servicer, the Transferors and the Trustee with the consent of the
Holders of Investor Certificates evidencing Undivided Interests aggregating not
less than 66-2/3% of the Invested Amount of all Series adversely affected, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or modifying in any manner the rights of
the Investor Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificate of such Series without the consent of the related
Investor Certificateholders, (ii) change the definition of or the manner of
calculating the Invested Amount, the Invested Percentage, the applicable
available amount under any Enhancement or the Investor Default Amount of such
Series without the consent of each related Investor Certificateholders or (iii)
reduce the aforesaid percentage required to consent to any such amendment,
without the consent of each related Investor Certificateholder.
(d) Promptly after the execution of any such amendment or consent the
Trustee shall furnish written notification (or in the case of Bearer
Certificates, publication notice in the manner described in Section 13.05 of the
Agreement) of the substance of such amendment to each Investor
Certificateholder, and the Servicer shall furnish written notification of the
substance of such amendment to any related Enhancement Provider and each Rating
Agency.
(e) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such Certificateholders
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(f) Any Assignment or Reassignments regarding the addition to or
removal of Receivables from the Trust respectively, as provided in Sections 2.06
and 2.07, respectively, of the Agreement executed in accordance with the
provisions hereof shall not be considered amendments to this Agreement,
including, without limitation, for the purpose of subsections 13.01(a), (b), (c)
and (g) of the Agreement,
(g) Prior to the execution of any amendment to the Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
substantially in the form of Part Two of Exhibit G, The Trustee may, but shall
not be obligated to enter into any such amendment which affects the Trustee's
own rights, duties or immunities under the Agreement or otherwise.
Section 13.02 Protection of Right, Title and Interest to Trust.
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(a) The Servicer shall cause this Agreement, any Supplement, all
amendments hereto and/or all financing statements, amendments and continuation
statements and any other necessary documents covering the right, title and
interest of the Trust in the property conveyed hereunder to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the right, title and interest of the Trustee hereunder
to all property comprising the Trust. The Servicer shall deliver to the Trustee
file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. Each 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
subsection 13.02(a).
(b) Within 30 days after either Transferor makes any change in its
name, identity or corporate structure which would make any financing statement,
amendment or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC as in
effect in the Relevant UCC State, 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 interest in the property
conveyed hereunder.
(c) The Transferors and the Servicer will give the Trustee prompt
written notice of any relocation of any office from which the Servicer services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements, continuation statements or
amendments as may be necessary to continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof notwithstanding
any relocation of any office from which the Servicer services Receivables or
keeps records concerning the Receivables or of its principal executive office.
The Servicer will at all times maintain each office from which it services
Receivables, and the Transferors and the Servicer will at all times maintain
their respective principal executive offices within the United States of
America.
(d) The Servicer will deliver to the Trustee: (i) upon each date that
any Additional Accounts are to be included in the Accounts pursuant to Section
2.06 hereof, an Opinion of Counsel substantially in the form of Part One of
Exhibit G; and (ii) on or before March 1 of each year, beginning with 1993 an
Opinion of Counsel, dated as of a date within 90 days of such day, substantially
in the form of Exhibit H.
Section 13.03 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Investor Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim at 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.
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(b) No Investor Certificateholder shall have any right to vote (except
as provided herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Investor Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given notice to the Trustee, and unless
the Holders of Certificates evidencing Undivided Interests aggregating more than
66-2/3% of the Invested Amount of any Series which may be adversely affected but
for the institution of such suit, action or proceeding shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Certificateholders shall
have the right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Certificateholders of any other of the Certificates, or to
obtain or seek to obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 13.03, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity. Each
Certificate Owner by its acquisition of a Book Entry Certificate shall be deemed
to have consented to the provisions of this Section 13.03.
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. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if sent by
facsimile transmission and confirmed by personal delivery or overnight
delivery, to (a) in the case of the RFC, to American Express Receivables
Financing Corporation, 000 Xxxxx Xxxxxx, Xxxxxxxx Xxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, Attention: Secretary, telecopy number (000) 000-0000, with
copies to American Express Travel Related Services Company, Inc., American
Express Tower, World Financial Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: General Counsel, (b) in the case of Centurion Bank, to
American Express Centurion Bank, 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxx, Xxxx 00000,
Attention: President, telecopy number (000) 000-0000, (c) in the case of the
Servicer, to American Express Travel Related Services Company, Inc., 000 Xxxxx
Xxxxxx, Xxxxxxxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxx
Xxxxxxxxx, telecopy number (000) 000-0000, with copies to American Express
Travel Related Services Company, Inc., American Express Tower, World Financial
Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel,
(d) in the case of the Trustee, to The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
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Division, telecopy number (000) 000-0000; or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.
Any notice required or permitted to be made to Holders of Bearer
Certificates by publication shall be published in an Authorized Newspaper and,
if the Certificates of such Series are then listed on the Luxembourg Stock
Exchange and such stock exchange shall so require, in a newspaper of general
circulation in Luxembourg (which newspaper shall be printed in the English
language and customarily published on each business day in Luxembourg) and, if
the Certificates of such Series are listed on any other stock exchange and such
stock exchange shall so require, in any other city required by such stock
exchange outside the United States, or, if not practicable, elsewhere in Europe.
In case by reason of the suspension of publication of any Authorized
Newspaper or permitted newspaper with respect to Luxembourg or by reason of any
other cause it shall be impracticable to publish any notice to Holders of Bearer
Certificates as provided above, then such notification to Holders of Bearer
Certificates as shall be given with approval of the Trustee shall constitute
sufficient notice to such Holders for every purpose hereunder. Neither the
failure to give notice by publication to Holders of Bearer Certificates as
provided above, nor any defect in any notice so published, shall affect the
sufficiency of any notice mailed to Holders of Registered Certificates as
provided above.
Copies of all notices, reports, certificates and amendments
delivered hereunder shall be mailed to the Rating Agency as follows: Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: ABS
Monitoring Department - 4th Floor and Standard & Poor's Ratings Group, 00
Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Asset Backed Surveillance Department.
Section 13.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
Section 13.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 7.02, 7.05, 8.02 and 8.05, this
Agreement, including any Supplement, may not be assigned by either Transferor or
the Servicer, as the case may be, without the prior consent of Holders of
Investor Certificate, evidencing Undivided Interests aggregating more than 51%
of the Aggregate Invested Amount,
Section 13.08. Certificates Nonassessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders (and the
Certificate owners) shall not be personally liable for obligations of the Trust,
that the Undivided Interests represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
93
whatsoever, and that Certificates upon authentication thereof by the Trustee
pursuant to Section 6.02 are and shall be deemed fully paid.
Section 13.09 Further Assurances. The Transferor and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Agreement including, without limitation, the
execution of any financing statements or continuation statements relating to the
property of the Trust for filing under the provisions of the UCC of the Relevant
UCC State.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement and any Supplement may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement and any Supplement
will inure to the benefit of and be binding upon the parties hereto, the
Certificateholders and the Certificate Owners and their respective successors
and permitted assigns. Except as otherwise provided in this Agreement, no other
person will have any right or obligation hereunder provided, however, that if so
specified in the applicable Supplement, an Enhancement Provider may be deemed to
be a third party beneficiary of this Agreement.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement or any Supplement a provision is made
that an action may be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or given by
any Investor Certificateholder of any Series, unless such provision requires a
specific percentage of Investor Certificateholders of a certain Series or all
Series.
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
Section 13.14 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement 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 hot be
modified, amended, waived or supplemented except as provided herein.
94
Section 13.15 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 13.16 Certificates and Opinions of Counsel.
(a) Any certificate delivered may be based, insofar as it relates to
legal matters, upon an Opinion of Counsel, unless the Person delivering such
certificate knows, or in the exercise of reasonable care should know, that such
opinion with respect to the matters upon which such certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel or certificate delivered
hereunder may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer or a Transferor, stating that the information with respect to such
factual matters is in the possession of such Person, unless the Person
delivering such certificate or such counsel knows, or in the exercise of
reasonable care should know, that such certificate opinion or representations
with respect to such matters are erroneous. Any Opinion of Counsel delivered
hereunder may contain necessary exceptions and qualifications.
(b) Any Opinion of Counsel or certificate delivered hereunder may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representations by an independent public accountant or firm of
accountants, unless such counsel or the Person delivering such certificate as
the case may be, knows that the certificate or opinions or representations with
respect to the accounting matters upon which the certificate or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous. Any certificate, opinion or representations of
any firm of independent public accountants filed with the Trustee shall contain
a statement that such firm is independent.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments, hereunder, they may, but need not, be consolidated and form one
instrument.
Section 13.17 Effect of Amendment No. 3. Reference is made to Amendment No.
3 to the Original Pooling Agreement, dated as of September 12, 1994. This
Agreement contains the Amemdment No. 3 to the Original Pooling Agreement. Such
Amendment No. 3 provides that it shall be null and void and of no further force
and effect on the date specified by the Servicer in an Officer's Certificate
delivered to the Trustee stating that the Servicer has modified its computer
programs such that from and after such date no amounts billed to Cardmembers
under the Privileged Assets Program will be included in any calculation of
Receivables balances. This Agreement shall be deemed amended to delete all
provisions hereof contained in such Amendment No. 3 as of the date so specified
by the Servicer.
[END OF ARTICLE XXXX]
00
IN WITNESS WHEREOF, the Transferors, the Servicer and the
Trustee have caused this Pooling and Servicing Agreement to be duly executed by
their respective officers as of the day and year first above written.
AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION,
as Transferor
By:_________________________________
Name:
Title:
AMERICAN EXPRESS CENTURION BANK,
as Transferor
v By:_________________________________
Name:
Title:
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.,
as Servicer
By:_________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee and Paying Agent
By:_________________________________
Name:
Title:
96
