EXECUTION COPY
WORLD FINANCIAL NETWORK NATIONAL BANK,
Transferor and Servicer
and
THE BANK OF NEW YORK,
Trustee
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST III
POOLING AND SERVICING AGREEMENT
Dated as of January 30, 1998
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2. Other Interpretive Provisions. . . . . . . . . . . . . 21
ARTICLE II CONVEYANCE OF RECEIVABLES . . . . . . . . . . . . . . . . . 22
SECTION 2.1. Conveyance of Receivables. . . . . . . . . . . . . . . 22
SECTION 2.2. Acceptance by Trustee. . . . . . . . . . . . . . . . . 24
SECTION 2.3. Representations and Warranties of Transferor
Relating to Transferor . . . . . . . . . . . . . . . 24
SECTION 2.4. Representations and Warranties of Transferor
Relating to Transaction Documents and the
Receivables . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.5. Reassignment of Ineligible Receivables . . . . . . . . 29
SECTION 2.6. Reassignment of Receivables in Trust Portfolio . . . . 30
SECTION 2.7. Covenants of Transferor. . . . . . . . . . . . . . . . 31
SECTION 2.8. Addition of Accounts . . . . . . . . . . . . . . . . . 33
SECTION 2.9. Removal of Accounts. . . . . . . . . . . . . . . . . . 36
SECTION 2.10. Discount Option. . . . . . . . . . . . . . . . . . . . 38
SECTION 2.11. Additional Transferors . . . . . . . . . . . . . . . . 39
SECTION 2.12. Additional Credit Card Originators . . . . . . . . . . 39
ARTICLE III ADMINISTRATION AND SERVICING. . . . . . . . . . . . . . . . 39
SECTION 3.1. Acceptance of Appointment and Other Matters
Relating to Servicer . . . . . . . . . . . . . . . . 39
SECTION 3.2. Servicing Compensation . . . . . . . . . . . . . . . . 40
SECTION 3.3. Representations, Warranties and Covenants of
Servicer . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.4. Reports to Trustee . . . . . . . . . . . . . . . . . . 45
SECTION 3.5. Annual Certificate of Servicer . . . . . . . . . . . . 46
SECTION 3.6. Annual Servicing Report of Independent
Public Accountants; Copies of Reports
Available. . . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.7. Tax Treatment. . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.8. Notices to WFN . . . . . . . . . . . . . . . . . . . . 47
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SECTION 3.9. Adjustments. . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS. . . . . . . . . . . . . . . 48
SECTION 4.1. Rights of Holders. . . . . . . . . . . . . . . . . . . 48
SECTION 4.2. Establishment of Collection Account and
Excess Funding Account . . . . . . . . . . . . . . . 49
SECTION 4.3. Collections and Allocations. . . . . . . . . . . . . . 50
SECTION 4.4. Shared Principal Collections . . . . . . . . . . . . . 52
SECTION 4.5. Excess Finance Charge Collections. . . . . . . . . . . 52
ARTICLE V DISTRIBUTIONS AND REPORTS . . . . . . . . . . . . . . . . . 53
ARTICLE VI THE CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.1. The Certificates . . . . . . . . . . . . . . . . . . . 53
SECTION 6.2. Authentication of Certificates . . . . . . . . . . . . 53
SECTION 6.3. New Issuances. . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.4. Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.5. Mutilated, Destroyed, Lost or Stolen Certificates. . . 60
SECTION 6.6. Persons Deemed Owners. . . . . . . . . . . . . . . . . 61
SECTION 6.7. Appointment of Paying Agent. . . . . . . . . . . . . . 61
SECTION 6.8. Access to List of Registered Holders'
Names and Addresses. . . . . . . . . . . . . . . . . 62
SECTION 6.9. Authenticating Agent . . . . . . . . . . . . . . . . . 62
SECTION 6.10. Book-Entry Certificates. . . . . . . . . . . . . . . . 63
SECTION 6.11. Notices to Clearing Agency . . . . . . . . . . . . . . 64
SECTION 6.12. Definitive Certificates. . . . . . . . . . . . . . . . 65
SECTION 6.13. Global Certificate . . . . . . . . . . . . . . . . . . 65
SECTION 6.14. Uncertificated Classes . . . . . . . . . . . . . . . . 65
ARTICLE VII OTHER MATTERS RELATING TO
TRANSFEROR . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.1. Liability of Transferor. . . . . . . . . . . . . . . . 66
SECTION 7.2. Merger or Consolidation of, or Assumption
of the Obligations of, Transferor. . . . . . . . . . 66
SECTION 7.3. Limitations on Liability of Transferor . . . . . . . . 67
SECTION 7.4. Liabilities. . . . . . . . . . . . . . . . . . . . . . 68
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ARTICLE VIII OTHER MATTERS RELATING TO SERVICER. . . . . . . . . . . . . 68
SECTION 8.1. Liability of Servicer. . . . . . . . . . . . . . . . . 68
SECTION 8.2. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer. . . . . . . . . . . 68
SECTION 8.3. Limitation on Liability of Servicer and Others . . . . 69
SECTION 8.4. Servicer Indemnification of the Trust and Trustee. . . 70
SECTION 8.5. Servicer Not to Resign . . . . . . . . . . . . . . . . 70
SECTION 8.6. Access to Certain Documentation and
Information Regarding the Receivables. . . . . . . . 71
SECTION 8.7. Delegation of Duties . . . . . . . . . . . . . . . . . 71
ARTICLE IX EARLY AMORTIZATION EVENTS . . . . . . . . . . . . . . . . . 71
SECTION 9.1. Early Amortization Events. . . . . . . . . . . . . . . 71
SECTION 9.2. Additional Rights upon Certain Events. . . . . . . . . 72
ARTICLE X SERVICER DEFAULTS . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.1. Servicer Defaults. . . . . . . . . . . . . . . . . . . 73
SECTION 10.2. Trustee to Act; Appointment of Successor . . . . . . . 76
SECTION 10.3. Notification to Holders. . . . . . . . . . . . . . . . 78
SECTION 10.4. Waiver of Past Defaults. . . . . . . . . . . . . . . . 78
ARTICLE XI TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.1. Duties of Trustee. . . . . . . . . . . . . . . . . . . 78
SECTION 11.2. Certain Matters Affecting Trustee. . . . . . . . . . . 80
SECTION 11.3. Trustee Not Liable for Recitals in Certificates. . . . 81
SECTION 11.4. Trustee Not to Own Certificates. . . . . . . . . . . . 82
SECTION 11.5. Servicer to Pay Trustee's Fees and Expenses. . . . . . 82
SECTION 11.6. Eligibility Requirements for Trustee . . . . . . . . . 82
SECTION 11.7. Resignation or Removal of Trustee. . . . . . . . . . . 83
SECTION 11.8. Successor Trustee. . . . . . . . . . . . . . . . . . . 83
SECTION 11.9. Merger or Consolidation of Trustee . . . . . . . . . . 84
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee. . . . . 84
SECTION 11.11. Tax Return . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 11.12. Trustee May Enforce Claims Without
Possession of Certificates . . . . . . . . . . . . . 86
SECTION 11.13. Suits for Enforcement. . . . . . . . . . . . . . . . . 86
SECTION 11.14. Rights of Holders to Direct Trustee. . . . . . . . . . 86
SECTION 11.15. Representations and Warranties of Trustee. . . . . . . 87
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SECTION 11.16. Maintenance of Office or Agency. . . . . . . . . . . . 87
SECTION 11.17. Confidentiality. . . . . . . . . . . . . . . . . . . . 87
ARTICLE XII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 12.1. Termination of Trust . . . . . . . . . . . . . . . . . 88
SECTION 12.2. Final Distribution . . . . . . . . . . . . . . . . . . 88
SECTION 12.3. Transferor's Termination Rights. . . . . . . . . . . . 90
ARTICLE XIII MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . 90
SECTION 13.1. Amendment; Waiver of Past Defaults . . . . . . . . . . 90
SECTION 13.2. Protection of Right, Title and Interest to Trust . . . 92
SECTION 13.3. Limitation on Rights of Holders. . . . . . . . . . . . 93
SECTION 13.4. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.5. Notices, Payments. . . . . . . . . . . . . . . . . . . 94
SECTION 13.6. Rule 144A Information. . . . . . . . . . . . . . . . . 95
SECTION 13.7. Severability of Provisions . . . . . . . . . . . . . . 95
SECTION 13.8. Certificates Nonassessable and Fully Paid. . . . . . . 95
SECTION 13.9. Further Assurances . . . . . . . . . . . . . . . . . . 95
SECTION 13.10. Nonpetition Covenant . . . . . . . . . . . . . . . . . 96
SECTION 13.11. No Waiver; Cumulative Remedies . . . . . . . . . . . . 96
SECTION 13.12. Counterparts . . . . . . . . . . . . . . . . . . . . . 96
SECTION 13.13. Third-Party Beneficiaries. . . . . . . . . . . . . . . 96
SECTION 13.14. Actions by Holders . . . . . . . . . . . . . . . . . . 96
SECTION 13.15. Merger and Integration . . . . . . . . . . . . . . . . 97
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EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in
Supplemental Accounts
Exhibit C Form of Reassignment of Receivables in
Removed Accounts
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Form of Undertaking Letter
Exhibit E-3 ERISA Legend
Exhibit F-1 Form of Opinion of Counsel with respect
to Amendments
Exhibit F-2 Form of Opinion of Counsel with respect
to Addition of Supplemental Accounts
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POOLING AND SERVICING AGREEMENT, dated as of January 30, 1998 between
WORLD FINANCIAL NETWORK NATIONAL BANK, a national banking association ("WFN"),
as Transferor and as Servicer, and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Holders and any
Enhancement Provider to the extent provided herein and in any Supplement:
ARTICLE I DEFINITIONS
SECTION I.1. DEFINITIONS. When used in this Agreement, the following
words and phrases have the following meanings. The definitions of such terms are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
"ACCOUNT" means each Initial Account, each Automatic Additional Account
and each Supplemental Account, but excludes any Account all the Receivables in
which are either reassigned or assigned to Transferor or its designee or
Servicer in accordance with this Agreement and any inactive Accounts which in
accordance with the Credit Card Guidelines have been removed from the computer
records of the Credit Card Originator. The term "Account" includes each account
into which an Account is transferred (a "TRANSFERRED ACCOUNT") so long as (a)
such transfer is made in accordance with the Credit Card Guidelines and (b) such
Transferred Account can be traced or identified, by reference to or by way of
the Account Schedule delivered to Trustee pursuant to SECTION 2.1 or 2.8(d), as
an account into which an Account has been transferred. The term "Account"
includes an Automatic Additional Account or a Supplemental Account only from and
after its Addition Date and includes any Removed Account only prior to its
Removal Date.
"ACCOUNT SCHEDULE" means a computer file or microfiche list containing a
true and complete list of Accounts, identified by account number and setting
forth the Receivable balance as of (a) the Trust Cut Off Date (for the Account
Schedule delivered on the Initial Closing Date), (b) the end of the related
Monthly Period (for any Account Schedule relating to Automatic Additional
Accounts) or (c) the related Addition Cut Off Date (for any Account Schedule
delivered in connection with any designation of Supplemental Accounts).
"ACQUIRED PORTFOLIO RECEIVABLE" means any receivable acquired by
Transferor from an Other Originator in connection with Transferor's acquisition
of a portfolio of revolving credit card accounts from such Other Originator
(prior to the transfer of such receivable to the Trust pursuant to this
Agreement).
"ADDITION" means the designation of additional Eligible Accounts to be
included as Accounts pursuant to SECTION 2.8(a), (b) or (c) or of Participation
Interests to be included as Trust Assets pursuant to SECTION 2.8(b) or (c), as
applicable.
"ADDITION CUT OFF DATE" means the date as of which any Supplemental
Accounts or Participation Interests are designated for inclusion in the Trust,
as specified in the related Assignment.
"ADDITION DATE" means (a) as to Supplemental Accounts, the date on which
the Receivables in such Supplemental Accounts are conveyed to the Trust pursuant
to SECTION 2.8(b) or (c), as applicable, (b) as to Automatic Additional
Accounts, the date on which such accounts are created or otherwise become
Automatic Additional Accounts and (c) as to Participation Interests, the date
from and after which such Participation Interests are to be included as Trust
Assets pursuant to SECTION 2.8(b) or (c).
"ADDITIONAL ACCOUNT" means an Automatic Additional Account or a
Supplemental Account.
"ADJUSTED INVESTED AMOUNT" is defined, as to any Series, in the related
Supplement.
"AFFILIATE" means, as to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For this purpose, "control" means the power to direct the management and
policies of a Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and "controlling" and "controlled"
have correlative meanings.
"AGREEMENT" means this Pooling and Servicing Agreement and, for purposes
of any Series, the related Supplement.
"AMORTIZATION PERIOD" means, as to any Series or any Class within a
Series, any period specified in the related Supplement during which a share of
principal collections is set aside to repay the principal investment in that
Series (excluding repayments of a Variable Interest during its revolving
period).
"APPLICANTS" is defined in SECTION 6.8.
"APPOINTMENT DATE" is defined in SECTION 9.2(a).
"APPROVED PORTFOLIO" means any Identified Portfolio and any additional
portfolio that is designated as an Approved Portfolio pursuant to SECTION
2.8(e).
"ASSIGNMENT" is defined in SECTION 2.8(d)(ii).
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"AUTHORIZED NEWSPAPER" means any newspaper or newspapers of general
circulation in the Borough of Manhattan, The City of New York printed in the
English language (and, with respect to any Series or Class, if and so long as
the Investor Certificates of such Series or Class are listed on the Luxembourg
Stock Exchange and such exchange shall so require, in Luxembourg, printed in any
language satisfying the requirements of such exchange) and customarily published
on each business day at such place, whether or not published on Saturdays,
Sundays or holidays.
"AUTOMATIC ADDITION SUSPENSION DATE" is defined in SECTION 2.8(a).
"AUTOMATIC ADDITION TERMINATION DATE" is defined in SECTION 2.8(a).
"AUTOMATIC ADDITIONAL ACCOUNT" means each open end credit card account in
any Approved Portfolio that is established pursuant to a Credit Card Agreement
coming into existence after (a) the Trust Cut Off Date (in the case of an
account in the Identified Portfolio) or (b) the Addition Cut Off Date relating
to the first Addition Date on which receivables from accounts in the applicable
portfolio are transferred to the Trust (in the case of an account in any other
Approved Portfolio) and, in either case, prior to the Automatic Addition
Termination Date or an Automatic Addition Suspension Date, or subsequent to a
Restart Date. In addition, accounts in an Approved Portfolio that were in
existence, but were not Eligible Accounts, on (x) the Trust Cut Off Date (in the
case of an account in the Identified Portfolio) or (y) the Addition Cut Off Date
relating to the first Addition Date on which receivables from accounts in the
applicable portfolio are transferred to the Trust (in the case of an account in
any other Approved Portfolio) but which, in either case, become Eligible
Accounts prior to the Automatic Addition Termination Date or an Automatic
Addition Suspension Date, or subsequent to a Restart Date, shall also be
"Automatic Additional Accounts" and shall be deemed, for purposes of the
definition of "Eligible Account" and SECTION 2.8(a), to have been created on the
first day after the Trust Cut Off Date or applicable Addition Cut Off Date on
which they are Eligible Accounts.
"BANC ONE" means Banc One, Dayton, N.A., a national banking association.
"BASE RATE" is defined, as to any Series, in the related Supplement.
"BEARER CERTIFICATE" is defined in SECTION 6.1.
"BENEFIT PLAN" is defined in SECTION 6.4(c).
"BOOK-ENTRY CERTIFICATES" means beneficial interests in the Investor
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in SECTION 6.10.
"BUSINESS DAY" means any day other than (a) a Saturday or Sunday, (b) any
other day on which national banking associations or state banking institutions
in New York, New York or
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Columbus, Ohio 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 related Supplement.
"CERTIFICATE" means an Investor Certificate, a Supplemental
Certificate or the Transferor Certificate.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"CERTIFICATE REGISTER" is defined in SECTION 6.4.
"CLASS" means any class of Investor Certificates of any Series.
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means 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" means, as to any Series, the date on which that Series is
issued.
"CO-BRANDING AGREEMENT" means an agreement entered into by Transferor
with Service Merchandise, relating to the origination by Transferor of
MasterCard and/or VISA credit card accounts and which includes benefits for the
obligors of such accounts provided by Service Merchandise.
"COLLECTION ACCOUNT" is defined in SECTION 4.2.
"COLLECTIONS" means all payments (including Recoveries of Principal
Receivables or Finance Charge Receivables and Insurance Proceeds, whether or not
treated as Recoveries) received by Servicer with respect to the Receivables,
including In-Store Payments, in the form of cash, checks (to the extent
collected), wire transfers or other form of payment in accordance with the
Credit Card Agreement in effect from time to time on any Receivables. If so
specified in any Supplement, Collections shall also include any payments
received by Servicer with respect to Participation Interests.
"COMMISSION" means the Securities and Exchange Commission.
"CONFIDENTIAL INFORMATION" is defined in SECTION 11.17.
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"CORPORATE TRUST OFFICE" is defined in SECTION 11.16.
"COUPON" is defined in SECTION 6.1.
"CREDIT CARD AGREEMENT" means, as to any Account, the agreements between
the Credit Card Originator that owns the Account (including WFN as assignee of
an Other Originator) and the related Obligor that govern the Account, as amended
or otherwise modified from time to time.
"CREDIT CARD GUIDELINES" means the written policies and procedures of the
Credit Card Originator relating to the operation of its consumer revolving
lending business, including written policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers and the maintenance of credit card accounts and collection of
related receivables, as amended or otherwise modified from time to time.
"CREDIT CARD ORIGINATOR" means (i) WFN and/or any transferee of the
Accounts from WFN or (ii) any other originator of Accounts which is designated
from time to time pursuant to SECTION 2.12 and, directly or indirectly, enters
into a receivables purchase agreement with Transferor.
"CREDIT CARD PROCESSING AGREEMENT" means one or more agreements between
the Credit Card Originator (including WFN as assignee of an Other Originator)
and a Merchant pursuant to which the Credit Card Originator agrees to extend
open end credit card accounts to customers of the Merchant and the Merchant
agrees to allow purchases to be made at its retail establishments, or in its
catalogue sales business, under such accounts.
"DAILY REPORT" is defined in SECTION 3.4(a).
"DATE OF PROCESSING" means, as to any transaction, the Business Day on
which the transaction is first recorded on Servicer's computer file of consumer
revolving accounts (without regard to the effective date of such recordation).
"DEBTOR RELIEF LAWS" means Title 11 of the United States Code and all
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
readjustment of debt, marshalling of assets or similar debtor relief laws of the
United States, any state or any foreign country from time to time in effect,
affecting the rights of creditors generally.
"DEFAULTED RECEIVABLE" means, as to any date of determination, all
Principal Receivables in any Account which are charged off as uncollectible on
that date in accordance with the Credit Card Guidelines and Servicer's customary
and usual servicing procedures for servicing open end credit card account
receivables comparable to the Receivables. A Principal Receivable in any Account
shall
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become a Defaulted Receivable on the day on which such Principal Receivable
is recorded as charged off in accordance with the Credit Card Guidelines.
"DEFERRED PAYMENT RECEIVABLES" means any amount owed by any Merchant to
Transferor in respect of accrued finance charges on any Principal Receivable
incurred in connection with a deferred payment plan.
"DEFINITIVE CERTIFICATES" is defined in SECTION 6.10.
"DEFINITIVE EURO-CERTIFICATES" is defined in SECTION 6.13.
"DEPOSITORY AGREEMENT" means, as to any Series or Class, any agreement
among Transferor, Trustee and any applicable Clearing Agency.
"DETERMINATION DATE" means, unless otherwise specified in any Supplement
with respect to the related Series, the second Business Day preceding each
Distribution Date.
"DISCOUNT OPTION RECEIVABLES" means, on any Date of Processing on and
after the date on which Transferor's exercise of its discount option pursuant to
SECTION 2.10 takes effect, the sum of (a) the product of the Discount Percentage
and the aggregate Principal Receivables (before subtracting Finance Charge
Receivables which are Discount Option Receivables) at the end of the prior day
(which amount, prior to the date on which Transferor's exercise of its discount
option takes effect and with respect to Receivables generated prior to such
date, shall be zero), plus (b) any New Discount Option Receivables created on
such day, minus (c) any Discount Option Receivables Collections received on such
Date of Processing.
"DISCOUNT OPTION RECEIVABLES COLLECTIONS" means on any Date of Processing
on and after the date on which Transferor's exercise of its discount option
pursuant to SECTION 2.10 takes effect, the product of (a) a fraction the
numerator of which is the amount of the Discount Option Receivables and the
denominator of which is the sum of the Principal Receivables plus the amount of
Discount Option Receivables in each case (for both numerator and denominator) at
the end of the prior Monthly Period and (b) Collections of Principal
Receivables, prior to any reduction for Finance Charge Receivables which are
Discount Option Receivables, received on such Date of Processing.
"DISCOUNT PERCENTAGE" is defined in SECTION 2.10.
"DISTRIBUTION DATE" means, with respect to any Series, the date specified
in the related Supplement.
"DOCUMENT DELIVERY DATE" means the Initial Closing Date in the case of
Initial Accounts, the Addition Date in the case of Supplemental Accounts and the
Removal Date in the case of Removed Accounts.
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"EARLY AMORTIZATION EVENT" means, as to any Series, each event specified
in SECTION 9.1 and each additional event, if any, specified in the relevant
Supplement as an Early Amortization Event for that Series.
"ELIGIBLE ACCOUNT" means an open end credit card account in an Approved
Portfolio owned by the Credit Card Originator that, as of the Trust Cut Off Date
(in the case of an Initial Account), the date of creation thereof (in the case
of an Automatic Additional Account) or the related Addition Cut Off Date (in the
case of a Supplemental Account):
(a) is in existence and is serviced by the Credit Card Originator,
any Affiliate of the Credit Card Originator or an Other Originator;
(b) is payable in United States dollars;
(c) except as provided below, has not been identified as an
account (i) the credit cards for which have been reported to the Credit
Card Originator or the related Other Originator (if any) as lost or
stolen or (ii) the Obligor of which is the subject of a bankruptcy
proceeding;
(d) none of the Receivables in which have been, sold, pledged,
assigned or otherwise conveyed to any Person (except by an Other
Originator to Transferor or otherwise pursuant to this Agreement), unless
any such pledge or assignment is released on or before the Initial
Closing Date or the Addition Date, as applicable;
(e) except as provided below, none of the Receivables in which are
Defaulted Receivables or have been identified by the Credit Card
Originator or the related Other Originator (if any), or by the relevant
Obligor to the Credit Card Originator or the related Other Originator (if
any), as having been incurred as a result of fraudulent use of a credit
card; and
(f) has an Obligor who has provided as his or her most recent
billing address, an address located in the United States or a United
States military address, PROVIDED that an account shall not fail to be an
"Eligible Account" solely due to the Obligor having provided a billing
address not satisfying the foregoing if as of the Trust Cut Off Date (in
the case of an Initial Account), the end of the most recently ended
Monthly Period (in the case of an Automatic Additional Account) or the
related Addition Cut Off Date (in the case of a Supplemental Account) the
aggregate Principal Receivables in Accounts the most recent billing
address for which does not satisfy the foregoing made up less than 2% (or
any higher percentage as to which the Rating Agency Condition has been
satisfied) of the aggregate Principal Receivables.
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Notwithstanding the foregoing, Eligible Accounts may include accounts, the
receivables in which have been written off, or as to which the Credit Card
Originator or related Other Originator (if any) believes the related Obligor is
bankrupt and certain receivables that have been identified by the Obligor as
having been incurred as a result of fraudulent use of credit cards or any credit
cards have been reported to the Credit Card Originator or the related Other
Originator (if any) as lost or stolen, so long as (1) the balance of all
receivables included in such accounts is reflected on the books and records of
the Credit Card Originator (and is treated for purposes of this Agreement) as
"zero" and (2) charging privileges with respect to all such accounts have been
canceled and are not reinstated.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof, including the District of Columbia (or
any domestic branch of a foreign bank), and acting as a trustee for funds
deposited in such account, so long as any of the securities of such depository
institution shall have a credit rating from each of Xxxxx'x, S&P and, if rated
by Fitch, Fitch in one of its generic credit rating categories that signifies
investment grade.
"ELIGIBLE INSTITUTION" means (a) a depository institution (which may be
Trustee or an affiliate) organized under the laws of the United States or any
one of the states thereof (i) that has either (A) a long-term unsecured debt
rating of "A2" or better by Xxxxx'x or (B) a certificate of deposit rating of
"P-1" by Xxxxx'x, (ii) that has either (A) a long-term unsecured debt rating of
"AAA" by S&P or (B) a certificate of deposit rating of at least "A-1" by S&P,
(iii) that, if rated by Fitch, has either (A) a long-term unsecured debt rating
of "AAA" by Fitch or (B) a certificate of deposit rating of at least "F-1" by
Fitch and (iv) the deposits of which are insured by the FDIC or (b) any other
institution that is acceptable to each Rating Agency, Servicer and Trustee.
"ELIGIBLE INVESTMENTS" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of
America;
(b) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depository
institutions or trust companies incorporated under the laws of the United
States of America or any state thereof (or domestic branches of foreign
banks) and subject to supervision and examination by federal or state
banking or depository institution authorities; PROVIDED that at the time
of the Trust's investment or contractual commitment to invest therein,
the short-term debt rating of such depository institution or trust
company shall be in the highest investment category of each of Xxxxx'x,
S&P and, if rated by Fitch, Fitch;
8
(c) commercial paper or other short-term obligations having, at
the time of the Trust's investment or contractual commitment to invest
therein, a rating from each of Xxxxx'x, S&P and, if rated by Fitch, Fitch
in its highest investment category;
(d) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC, with a Person the commercial paper
of which has a credit rating from each of Xxxxx'x, S&P and, if rated by
Fitch, Fitch in its highest investment category;
(e) notes or bankers acceptances (having original maturities of no
more than 365 days) issued by any depository institution or trust company
referred to in CLAUSE (b);
(f) investments in money market funds (including funds of Trustee
or its affiliates as well as funds for which Trustee and its affiliates
may receive compensation) rated in the highest investment category by
each of Xxxxx'x, S&P and, if rated by Fitch, Fitch or otherwise approved
in writing by each Rating Agency;
(g) time deposits, other than as referred to in CLAUSE (d), with a
Person the commercial paper of which has a credit rating from each of
Xxxxx'x, S&P and, if rated by Fitch, Fitch in its highest investment
category; or
(h) any other investments approved in writing by each Rating
Agency, PROVIDED that making such investments shall not cause the Trust
to be required to register as an investment company within the meaning of
the Investment Company Act.
"ELIGIBLE RECEIVABLE" means a Receivable:
(a) that has arisen under an Eligible Account;
(b) that was created in compliance with the Credit Card Guidelines
and all Requirements of Law applicable to the Credit Card Originator (or,
in the case of an Acquired Portfolio Receivable, the related Other
Originator) the failure to comply with which would have a material
adverse effect on Investor Holders, and pursuant to a Credit Card
Agreement that complies with all Requirements of Law applicable to the
Credit Card Originator (and, in the case of an Acquired Portfolio
Receivable, the related Other Originator during the time prior to the
transfer of such Acquired Portfolio Receivable to Transferor), the
failure to comply with which would have a material adverse effect on
Investor Holders;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations with, any Governmental Authority
required to be obtained or made by the Credit Card Originator (and, in
the case of an Acquired Portfolio Receivable, the related Other
Originator with respect to such actions prior to the transfer of such
Acquired Portfolio Receivable to Transferor) in connection with the
creation of such Receivable or the
9
execution, delivery and performance by the Credit Card Originator
(and, in the case of an Acquired Portfolio Receivable, the
related Other Originator with respect to such actions
prior to the transfer of such Acquired Portfolio Receivable to
Transferor) of the related Credit Card Agreement, have been duly obtained
or made and are in full force and effect as of the date of creation of
such Receivable, but failure to comply with this CLAUSE (c) shall not
cause a Receivable not to be an Eligible Receivable if, and to the extent
that, the failure to so obtain or make any such consent, license,
approval, authorization or registration would not have a material adverse
effect on the Investor Holders;
(d) as to which, at the time of its transfer to the Trust,
Transferor or the Trust will have good and marketable title free and
clear of all Liens (other than any Lien permitted by SECTION 2.7(b));
(e) that is the subject of a valid transfer and assignment (or the
grant of a security interest) from Transferor to the Trust of all
Transferor's right, title and interest therein;
(f) that at and after the time of transfer to the Trust is the
legal, valid and binding payment obligation of the Obligor thereof,
legally enforceable against such Obligor in accordance with its terms,
except as enforceability may be limited by applicable Debtor Relief Laws,
and by general principles of equity (whether considered in a suit at law
or in equity);
(g) that constitutes an account, a general intangible or chattel
paper;
(h) as to which, at the time of its transfer to the Trust,
Transferor has not taken any action which, or failed to take any action
the omission of which, would, at the time of transfer to the Trust,
impair the rights therein of the Trust or the Holders;
(i) that, at the time of its transfer to the Trust, has not been
waived or modified except as permitted in accordance with SECTION 3.3(h);
(j) that, at the time of its transfer to the Trust, is not
subject to any right of rescission, setoff, counterclaim or any other
defense of the Obligor (including the defense of usury), other than
defenses arising out of Debtor Relief Laws and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or equity) or as to which Servicer makes an
adjustment pursuant to SECTION 3.9; and
(k) as to which, at the time of its transfer to the Trust, the
Transferor has satisfied all obligations to be fulfilled at the time it
is transferred to the Trust.
"ELIGIBLE SERVICER" means Trustee, a wholly owned subsidiary of Trustee,
an Other Originator or an entity that, at the time of its appointment as
Servicer: (a) is servicing a portfolio of
10
consumer open end credit card accounts or other consumer open end credit
accounts; (b) is legally qualified and has the capacity to service the
Accounts; (c) is qualified (or licensed) to use the software that is then
being used to service the Accounts or obtains the right to use, or has its
own, software which is adequate to perform its duties under this Agreement;
(d) has, in the reasonable judgment of Trustee, the ability to professionally
and competently service a portfolio of similar accounts; and (e) has a net
worth of at least $50,000,000 as of the end of its most recent fiscal quarter.
"ENHANCEMENT" means the rights and benefits provided to the Investor
Holders of any Series or Class pursuant to any letter of credit, surety bond,
cash collateral account, guaranty collateral invested amount, spread account,
guaranteed rate agreement, maturity guaranty facility, tax protection agreement,
interest rate swap agreement, interest rate cap agreement or other similar
arrangement. The subordination of any Class to another Class, or a cross support
feature which requires collections on Receivables allocated to one Series to be
paid as principal and/or interest with respect to another Series shall be deemed
to be an Enhancement for the Class or Series benefitting from the subordination
or cross support feature.
"ENHANCEMENT AGREEMENT" means any agreement, instrument or document
governing any Enhancement or pursuant to which any Enhancement is issued or
outstanding.
"ENHANCEMENT PROVIDER" means the Person or Persons providing any
Enhancement, other than the Investor Holders of any Class which is subordinated
to another Class.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"EXCESS FINANCE CHARGE COLLECTIONS" means all amounts that any Supplement
designates as "Excess Finance Charge Collections."
"EXCESS FUNDING ACCOUNT" is defined in SECTION 4.2.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FDIC" means the Federal Deposit Insurance Corporation.
"FINANCE CHARGE RECEIVABLES" means, with respect to any Monthly Period,
the sum of (a) all amounts billed to the Obligors on any Account at the
beginning of such Monthly Period in respect of Periodic Finance Charges, (b)
Late Fees, return check fees and any other fees that may after the Trust Cut Off
Date be charged with respect to any Account, to the extent that Servicer
designates such fees to be treated as Finance Charge Receivables in an Officer's
Certificate delivered to Trustee, (c) Discount Option Receivables and (d)
Deferred Payment Receivables. Collections of Finance Charge Receivables with
respect to any Monthly Period include the amount of Interchange (if any)
allocable to any Series of Certificates pursuant to the related Supplement with
respect to such
11
Monthly Period (to the extent received by the Trust and deposited into the
Finance Charge Account or any Series Account, as the case may be, on the
Transfer Date following such Monthly Period). Except as otherwise specified
in any Supplement as to the related Series, Recoveries shall be treated as
Collections of Finance Charge Receivables.
"FINANCE CHARGE SHORTFALLS" is defined, as to any Series, in the related
Supplement.
"FITCH" means Fitch IBCA, Inc.
"FLOW-THROUGH ENTITY" is defined in SECTION 6.4(d).
"GLOBAL CERTIFICATE" is defined in SECTION 6.13.
"GOVERNMENTAL AUTHORITY" means the United States of America, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROUP" means, with respect to any Series, the group of Series, if any,
in which the related Supplement specifies such Series is to be included.
"HOLDER" means an Investor Holder or a Person in whose name the
Transferor Certificate is registered.
"IDENTIFIED PORTFOLIO" means any Accounts owned from time to time by WFN
and included in the private label credit card program of Service Merchandise or
issued under a Co-Branding Agreement.
"INELIGIBLE RECEIVABLES" is defined in SECTION 2.5(a).
"INITIAL ACCOUNT" means each open end credit card account in the
Identified Portfolio existing on the Trust Cut Off Date and identified in the
Account Schedule delivered on the Initial Closing Date.
"INITIAL CLOSING DATE" means January 30, 1998.
"INSOLVENCY EVENT" is defined in SECTION 9.1(a).
"INSOLVENCY PROCEEDS" is defined in SECTION 9.2(b).
"INSURANCE PROCEEDS" means any amounts recovered by Servicer pursuant to
any credit insurance policies covering any Obligor with respect to Receivables
under such Obligor's Account.
12
"INTERCHANGE" means interchange fees payable to Transferor or an Other
Originator, in its capacity as credit card issuer, through VISA U.S.A., Inc.
and Mastercard International Inc. in connection with cardholder charges for
goods and services, and cash advances, as calculated pursuant to the related
Series Supplement for any Series.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986.
"INVESTED AMOUNT" is defined, as to any Series, in the related
Supplement.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940.
"INVESTOR CERTIFICATE" means any one of the certificates (including
the Bearer Certificates, the Registered Certificates or any Global
Certificate) executed by Transferor and authenticated by or on behalf of
Trustee, substantially in the form attached to the related Supplement, other
than the Transferor Certificate and the Supplemental Certificates, if any.
"INVESTOR HOLDER" means the Person in whose name a Registered
Certificate is registered in the Certificate Register or the holder of any
Bearer Certificate (or the Global Certificate, as the case may be) or Coupon.
"INVESTOR INTEREST" is defined in SECTION 4.1.
"INVESTOR PERCENTAGE" is defined, as to any Series, in the related
Supplement.
"INVESTOR SERVICING FEE" is defined, as to any Series, in the related
Supplement.
"IN-STORE PAYMENTS" is defined in SECTION 2.1(a).
"LATE FEES" means the fees specified in the Credit Card Agreement
applicable to each Account for late fees with respect to such Account.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever, including any conditional sale or other title retention
agreement, excluding any lien or filing pursuant to this Agreement; PROVIDED
that any assignment or transfer pursuant to SECTION 6.3(c) or (d) or SECTION
7.2 shall not constitute a Lien.
"MAJORITY HOLDERS" means the Holders of Investor Certificates
evidencing more than 50% of the aggregate unpaid principal amount of all
outstanding Investor Certificates.
13
"MERCHANT" means (a) Service Merchandise and (b) any other Person that
operates retail establishments at which, or a catalogue sales business in
which, goods or services may be purchased under an Account.
"MERCHANT ADJUSTMENT PAYMENTS" is defined in SECTION 3.9(a).
"MINIMUM TRANSFEROR AMOUNT" means, as of any date of determination,
the sum of (a) the product of (i) the sum of (A) the aggregate Principal
Receivables and (B) the amounts on deposit in the Excess Funding Account and
(ii) the Required Retained Transferor Percentage plus (b) any additional
amounts specified in the Supplement for any outstanding Series.
"MONTHLY PERIOD" means as to each Distribution Date, the immediately
preceding calendar month, unless otherwise defined in any Supplement.
"XXXXX'X" means Xxxxx'x Investors Service, Inc.
"NEW DISCOUNT OPTION RECEIVABLES" means, as of any date of
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting Finance Charge Receivables which
are Discount Option Receivables) arising on such date of determination.
"NOTICE DATE" is defined in SECTION 2.8(d)(i).
"NOTICES" is defined in SECTION 13.5(a).
"OBLIGOR" means, as to any Account, the Person or Persons obligated to
make payments on such Account, including any guarantor.
"OFFICER'S CERTIFICATE" means a certificate delivered to Trustee
signed by the Chairman of the Board, President, any Vice President or the
Treasurer or any Assistant Treasurer of Transferor or Servicer, as the case
may be.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for, or an employee of, the Person providing the opinion and which
counsel shall be reasonably acceptable to Trustee.
"OTHER ORIGINATOR" means Banc One and any other Person designated as
an Other Originator in a Supplement.
"PARTICIPATION INTERESTS" is defined in SECTION 2.8(b).
"PAYING AGENT" means any paying agent and co-paying agent appointed
pursuant to SECTION 6.7.
14
"PERIODIC FINANCE CHARGES" means any finance charges (due to periodic
rate) applicable to any Account.
"PERSON" means any legal person, including any individual,
corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
"PORTFOLIO YIELD" is defined, as to any Series, in the related
Supplement.
"PRINCIPAL RECEIVABLE" means all Receivables other than Finance Charge
Receivables. In calculating the aggregate amount of Principal Receivables on
any day, the amount of Principal Receivables shall not include Defaulted
Receivables and shall be reduced by the aggregate amount of credit balances
in the Accounts on such day.
"PRINCIPAL SHARING SERIES" means a Series that, pursuant to the
Supplement therefor, is entitled to receive Shared Principal Collections.
"PRINCIPAL SHORTFALLS" is defined, as to any Series, in the related
Supplement.
"PRINCIPAL TERMS" means, with respect to any Series: (a) its name or
designation; (b) its initial principal amount (or method for calculating such
amount) and its invested amount in the Trust; (c) its interest rate (or
method for the determination thereof); (d) the payment date or dates and the
date or dates from which interest shall accrue; (e) the method for allocating
Collections to Holders of such Series; (f) the designation of any Series
Accounts and the terms governing the operation of any such Series Accounts;
(g) the percentage used to calculate the servicing fee with respect thereto;
(h) the provider, if any, and the terms of any form of Enhancement with
respect thereto; (i) the terms on which the Investor Certificates of such
Series may be repurchased by Transferor or any Affiliate of Transferor or
remarketed to other investors; (j) the Series Termination Date; (k) the
number of Classes of Investor Certificates of such Series and, if such Series
consists of more than one Class, the rights and priorities of each such
Class; (l) the extent to which the Investor Certificates of such Series will
be issuable in temporary or permanent global form (and, in such case, the
depositary for such Global Certificate or Certificates, the conditions, if
any, upon which such Global Certificates may be exchanged, in whole or in
part, for Definitive Certificates, and the manner in which any interest
payable on a Global Certificate will be paid); (m) whether the Investor
Certificates of such Series may be issued as Bearer Certificates and any
limitation imposed thereon; (n) the priority of such Series with respect to
any other Series; (o) the Group, if any, to which such Series belongs; (p)
whether Interchange or other fees will be included in the funds available to
be paid for such Series; and (q) any other terms of such Series.
"RATING AGENCY" means, as to each Series, the rating agency or
agencies, if any, specified in the related Supplement.
15
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency, if any, shall have notified Transferor, Servicer and Trustee
in writing that such action will not result in a reduction or withdrawal of
the rating, if any, of any outstanding Series or Class with respect to which
it is a Rating Agency.
"REASSIGNMENT" is defined in SECTION 2.9(a).
"RECEIVABLE" means any amount owing from time to time by an Obligor
under an Account, including amounts owing for purchases of goods and
services, and amounts payable as Finance Charge Receivables. A Receivable
shall be deemed to have been created at the end of the day on the Date of
Processing of such Receivable. Receivables which become Defaulted Receivables
shall not be shown on Servicer's records as amounts payable (and shall cease
to be included as Receivables) on the day on which they become Defaulted
Receivables.
"RECORD DATE" means, as to any Distribution Date, the date specified
in the related Supplement.
"RECOVERIES" means (a) all amounts received by Servicer with respect
to Principal Receivables that have previously become Defaulted Receivables
and with respect to Finance Charge Receivables that have been charged off as
uncollectible (including Insurance Proceeds) and (b) proceeds of any
collateral securing any Receivable, in each case less related collection
expenses.
"REGISTERED CERTIFICATES" is defined in SECTION 6.1.
"REGISTERED HOLDER" means the Holder of a Registered Certificate.
"REMOVAL DATE" is defined in SECTION 2.9(a)(i).
"REMOVAL NOTICE DATE" is defined in SECTION 2.9(a)(i).
"REMOVED ACCOUNTS" is defined in SECTION 2.9(a).
"REQUIRED PRINCIPAL BALANCE" means, as of any date of determination,
the sum of the numerators used at such date to calculate the Investor
Percentage with respect to Principal Receivables for all Series outstanding
on such date, less the amount on deposit in the Excess Funding Account as of
the date of determination.
"REQUIRED RETAINED TRANSFEROR PERCENTAGE" means, as of any date of
determination, 7% or, if less, the highest of the Required Retained
Transferor Percentages specified in the Supplements for all outstanding
Series.
16
"REQUIREMENTS OF LAW" means, as to any Person, 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.
"RESPONSIBLE OFFICER" means any officer (a) within the Corporate Trust
Department (or any successor group of Trustee), including any vice president,
assistant vice president, assistant secretary or any other officer or
assistant officer of Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred at Trustee's
Corporate Trust Office because of such officer's knowledge of and familiarity
with the particular subject and (b) who shall have direct responsibility for
this Agreement.
"RESTART DATE" is defined in SECTION 2.8(a).
"RULE 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time.
"S&P" means Standard & Poor's Ratings Service, a division of the
McGraw Hill Companies, Inc.
"SECURITIES ACT" means the Securities Act of 1933.
"SERIES" means any series of Investor Certificates established
pursuant to a Supplement.
"SERIES ACCOUNT" means any deposit, trust, escrow or similar account
maintained for the benefit of the Investor Holders of any Series or Class, as
specified in any Supplement.
"SERIES SERVICING FEE PERCENTAGE" is defined, as to any Series, in the
related Supplement.
"SERIES TERMINATION DATE" is defined, as to any Series, in the related
Supplement.
"SERVICE MERCHANDISE" means Service Merchandise Company, Inc., a
Tennessee corporation.
"SERVICE TRANSFER" is defined in SECTION 10.1.
"SERVICER" means WFN, in its capacity as Servicer pursuant to this
Agreement, and, after any Service Transfer, the Successor Servicer.
"SERVICER DEFAULT" is defined in SECTION 10.1.
17
"SERVICING FEE" means, as to any Series, the servicing fee specified
in SECTION 3.2.
"SERVICING OFFICER" means any officer of Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to Trustee by Servicer
on the Initial Closing Date, as such list may from time to time be amended.
"SHARED PRINCIPAL COLLECTIONS" means all amounts that any Supplement
designates as "Shared Principal Collections."
"SPECIFIED TRANSFEROR AMOUNT" means, as of any date of determination,
0 or, if more, the highest amount identified as the "Specified Transferor
Amount" in the Supplement for any outstanding Series.
"SUBJECT CERTIFICATE" is defined in SECTION 6.4(d).
"SUCCESSOR SERVICER" is defined in SECTION 10.2(a).
"SUPPLEMENT" means, as to any Series, a supplement to this Agreement,
executed and delivered in connection with the original issuance of the
Investor Certificates of such Series pursuant to SECTION 6.3, and all
amendments thereof and supplements thereto.
"SUPPLEMENTAL ACCOUNT" is defined in SECTION 2.8(b).
"SUPPLEMENTAL CERTIFICATE" is defined in SECTION 6.3(c).
"TAX OPINION" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income tax purposes, (a) such action will not
adversely affect the tax characterization as debt of Investor Certificates of
any outstanding Series or Class with respect to which an Opinion of Counsel
was delivered at the time of their issuance that such Investor Certificates
would be characterized as debt, (b) such actions will not cause the Trust to
be classified, for federal income tax purposes, as an association (or
publicly traded partnership) taxable as a corporation and (c) such action
will not cause or constitute an event in which gain or loss would be
recognized by any Investor Holder.
"TERMINATION NOTICE" is defined in SECTION 10.1.
"TRANSACTION DOCUMENTS" means, at any time, this Agreement, the
Supplement for each outstanding Series, any document pursuant to which any
outstanding purchased interest is sold as permitted by SECTION 6.3(b) and any
other document designated as a Transaction Document in any Supplement or any
document pursuant to which any outstanding purchased interest is sold as
permitted by SECTION 6.3(b).
18
"TRANSFER AGENT AND REGISTRAR" is defined in SECTION 6.4.
"TRANSFER DATE" means the Business Day immediately preceding each
Distribution Date.
"TRANSFEROR" means WFN and additional transferors, if any, designated
in accordance with SECTION 2.11 or 6.3(d).
"TRANSFEROR AMOUNT" means, on any date of determination, the excess,
if any, of (a) the aggregate amount of Principal Receivables on such day,
plus the principal amount on deposit in the Excess Funding Account on such
day over (b) the sum of the Invested Amounts (or, as to any Series that has
an Adjusted Invested Amount, the Adjusted Invested Amount) with respect to
all Series then outstanding, plus the outstanding principal amount of all
Supplemental Certificates (and of any purchased interest sold pursuant to
SECTION 6.3(b)).
"TRANSFEROR CERTIFICATE" means the certificate executed by Transferor
and authenticated by or on behalf of Trustee, substantially in the form of
EXHIBIT A.
"TRANSFEROR RETAINED CERTIFICATE" means any Certificate in any Class
of Investor Certificates that is designated as a "Transferor Retained Class"
in any Supplement.
"TRANSFEROR INTEREST" is defined in SECTION 4.1.
"TRANSFEROR PERCENTAGE" means as to Finance Charge Receivables,
Defaulted Receivables and Principal Receivables, 100% less the sum of the
applicable Investor Percentages for all outstanding Series.
"TRANSFERRED ACCOUNT" is defined in the definition of "Account."
"TRUST" means the Trust created by this Agreement, which shall be
known as the World Financial Network Credit Card Master Trust III.
"TRUST ASSETS" is defined in SECTION 2.1.
"TRUST CUT OFF DATE" means January 30, 1998.
"TRUSTEE" means The Bank of New York, a New York banking corporation,
in its capacity as trustee of the Trust, or any successor trustee appointed
as herein provided.
"UCC" means the Uniform Commercial Code, as in effect in the State of
Ohio and in any other State where the filing of a financing statement is
required to perfect Transferor's or the Trust's interest in the Receivables
and the proceeds thereof or in any other specified jurisdiction.
19
"UNITED STATES" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"VARIABLE INTEREST" means either of (a) any Investor Certificate that
is designated as a variable funding certificate in the related Supplement and
(b) any purchased interest sold as permitted by SECTION 6.3(b).
"WFN" is defined in the PREAMBLE.
SECTION I.2. OTHER INTERPRETIVE PROVISIONS. With respect to any
Series, all terms used and not defined herein are used as defined in the
related Supplement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document delivered
pursuant hereto unless otherwise defined therein. For purposes of this
Agreement and all such certificates and other documents, unless the context
otherwise requires: (a) accounting terms not otherwise defined in this
Agreement, and accounting terms partly defined in this Agreement to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles; (b) terms defined in Article 9 of
the UCC and not otherwise defined in this Agreement are used as defined in
that Article; (c) any reference to each Rating Agency shall only apply to any
specific rating agency if such rating agency is then rating any outstanding
Series; (d) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day; (e)
the words "hereof," "herein" and "hereunder" and words of similar import
refer to this Agreement (or the certificate or other document in which they
are used) as a whole and not to any particular provision of this Agreement
(or such certificate or document); (f) references to any Section, Schedule or
Exhibit are references to Sections, Schedules and Exhibits in or to this
Agreement (or the certificate or other document in which the reference is
made), and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (g)
the term "including" means "including without limitation"; (h) references to
any law or regulation refer to that law or regulation as amended from time to
time and include any successor law or regulation; (i) references to any
agreement refer to that agreement as amended from time to time; (j)
references to any Person includethat Person's permitted successors and
assigns; and (k) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof. The
agreements, representations and warranties of WFN in this Agreement, in its
respective capacities as Transferor and Servicer, shall be deemed to be the
separate agreements, representations and warranties of WFN only so long as it
remains a party to this Agreement in such capacity (but the foregoing shall
not impair rights arising during or with respect to the time that such Person
was a party to this Agreement in such capacity).
ARTICLE II CONVEYANCE OF RECEIVABLES
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SECTION II.1. CONVEYANCE OF RECEIVABLES. (a) By execution of this
Agreement, Transferor transfers, assigns, sets over and otherwise conveys to
the Trust, for the benefit of the Holders, all of its right, title and
interest in, to and under (i) the Receivables existing at the close of
business on the Trust Cut Off Date and thereafter arising from time to time
in the Initial Accounts and the Receivables existing on each applicable
Addition Date and thereafter arising from time to time in the Automatic
Additional Accounts, all Recoveries allocable to the Trust as provided
herein, all moneys due or to become due and all amounts received with respect
to, and proceeds of, any of the foregoing, (ii) without limiting the
generality of the foregoing or the following, all of Transferor's rights to
receive Deferred Payment Receivables and payments made by any Merchant under
any Credit Card Processing Agreement on account of amounts received by such
Merchant in payment of Receivables ("IN-STORE PAYMENTS") and all proceeds of
such rights, and (iii) the right to receive certain amounts paid or payable
as Interchange (if provided for in any Supplement). Such property, together
with all moneys on deposit in the Collection Account, the Excess Funding
Account, the Series Accounts, any Enhancement and the security interest
granted pursuant to SECTION 3.9(a) shall constitute the assets of the Trust
(the "TRUST ASSETS"). The foregoing does not constitute and is not intended
to result in the creation or assumption by the Trust, Trustee, any Investor
Holders or any Enhancement Provider of any obligation of the Credit Card
Originator, Servicer, Transferor or any other Person in connection with the
Accounts or the Receivables or under any agreement or instrument relating
thereto, including any obligation to obligors, merchant banks, merchants
clearance systems or insurers. If the foregoing transfer, assignment, setover
and conveyance is not deemed to be an absolute assignment of the subject
property to the Trustee, for the benefit of the Holders, then it shall be
deemed to constitute a grant of a security interest in such property to the
Trustee, for the benefit of the Investor Holders, and the Transferor Interest
shall be deemed to represent Transferor's equity in the collateral granted.
(b) Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with
respect to the Receivables now existing and hereafter created in Accounts
owned by the Credit Card Originator and other Trust Assets meeting the
requirements of applicable state law in such manner and in such jurisdictions
as are necessary to perfect, and maintain the perfection of, the assignment
of such Receivables to the Trust, and to deliver a file stamped copy of each
such financing statement or other evidence of such filing (which may, for
purposes of this SECTION 2.1 consist of telephone confirmation of such filing
promptly followed by delivery to Trustee of a file-stamped copy) to Trustee
on or prior to the Initial Closing Date, in the case of such Receivables
arising in the Initial Accounts and Automatic Additional Accounts included in
the Identified Portfolio, and (if any additional filing is so necessary) the
applicable Addition Date, in the case of such Receivables arising in
Supplemental Accounts and any related Automatic Additional Accounts. Trustee
shall be under no obligation whatsoever to file such financing or
continuation statements or to make any other filing under the UCC in
connection with such assignment.
(c) Transferor further agrees, at its own expense, (i) on or prior to
(A) the Automatic Addition Termination Date or any Automatic Addition
Suspension Date, or subsequent to a Restart
21
Date, in the case of the Initial Accounts and any Additional Accounts
designated pursuant hereto prior to such date, (B) the applicable Addition
Date, in the case of Supplemental Accounts and (C) the applicable Removal
Date, in the case of Removed Accounts, to indicate in the appropriate
computer files that Receivables created in connection with the Accounts owned
by the Credit Card Originator (other than Removed Accounts) have been
conveyed to the Trust pursuant to this Agreement for the benefit of the
Holders (or conveyed to Transferor or its designee in accordance with SECTION
2.9, in the case of Removed Accounts) by including in such computer files the
code identifying each such Account (or, in the case of Removed Accounts,
either including such a code identifying the Removed Accounts only if the
removal occurs prior to the Automatic Addition Termination Date or an
Automatic Addition Suspension Date, or subsequent to a Restart Date, or
deleting such code thereafter) and (ii) on or prior to the date referred to
in CLAUSES (i)(A), (B) or (C), as applicable, to deliver to Trustee an
Account Schedule (PROVIDED that such Account Schedule shall be provided in
respect of Automatic Additional Accounts on or prior to the Determination
Date relating to the Monthly Period during which their respective Addition
Dates occur), specifying for each such Account, as of the Automatic Addition
Termination Date or Automatic Addition Suspension Date, in the case of CLAUSE
(i)(B), the applicable Addition Cut Off Date, in the case of Supplemental
Accounts, and the Removal Date, in the case of Removed Accounts, its account
number, the aggregate amount outstanding in such Account and the aggregate
amount of Principal Receivables outstanding in such Account. Such Account
Schedule shall be supplemented from time to time to reflect Supplemental
Accounts and Removed Accounts. Once the code referenced in CLAUSE (i) of this
paragraph has been included with respect to any Account, Transferor further
agrees not to alter such code during the remaining term of this Agreement
unless and until (x) such Account becomes a Removed Account, (y) a Restart
Date has occurred on which the Transferor starts including Automatic
Additional Accounts as Accounts or (z) Transferor shall have delivered to
Trustee at least 30 days' prior written notice of its intention to do so and
has taken such action as is necessary or advisable to cause the interest of
Trustee in the Receivables and other Trust Assets to continue to be perfected
with the priority required by this Agreement.
SECTION II.2. ACCEPTANCE BY TRUSTEE. (a) Trustee accepts on behalf of
the Trust all right, title and interest to the property, now existing and
hereafter created, conveyed to the Trust pursuant to SECTION 2.1 and declares
that it shall maintain such right, title and interest, upon the trust herein
set forth, for the benefit of all Holders.
(b) Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement or any Supplement.
SECTION II.3. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSFEROR. Transferor represents and warrants to the Trust as of each
Closing Date as follows:
(a) ORGANIZATION AND GOOD STANDING. Transferor is a national
banking association validly existing in good standing under the laws of
the United States, and has full corporate power, authority and legal
right to own its properties and conduct its business as presently
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owned and conducted, to execute, deliver and perform its obligations
under each Transaction Document and to execute and deliver to Trustee
the Certificates. Transferor's deposits are insured by the FDIC.
(b) DUE QUALIFICATION. Transferor is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals in
each jurisdiction in which failure to so qualify or to obtain such
licenses and approvals would render any Credit Card Agreement or any
Receivable transferred to the Trust by Transferor unenforceable by the
Credit Card Originator, Transferor, Servicer or Trustee and would have a
material adverse effect on the interests of the Holders hereunder or
under any Supplement.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and each Supplement by Transferor, the execution and
delivery to Trustee of the Certificates by Transferor and the
consummation by Transferor of the transactions provided for in each
Transaction Document have been duly authorized by Transferor by all
necessary corporate action on the part of Transferor.
(d) NO CONFLICT. The execution and delivery by Transferor of each
Transaction Document and the Certificates, the performance by Transferor
of the transactions contemplated by each Transaction Document and the
fulfillment by Transferor of the terms hereof and thereof will not
conflict with, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a material default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which Transferor is a
party or by which it or any of its properties are bound.
(e) NO VIOLATION. The execution and delivery by Transferor of each
Transaction Document and the Certificates, the performance by Transferor
of the transactions contemplated by this Agreement and each Supplement
and the fulfillment by Transferor of the terms hereof and thereof will
not conflict with or violate any Requirements of Law applicable to
Transferor.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against
Transferor, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the
invalidity of any Transaction Document or the Certificates, (ii) seeking
to prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by any Transaction Document or the
Certificates, (iii) seeking any determination or ruling that, in the
reasonable judgment of Transferor, would materially and adversely affect
the performance by Transferor of its obligations under any Transaction
Document, (iv) seeking any determination or ruling that would materially
and adversely affect the validity or enforceability of any Transaction
Document or the Certificates or (v) seeking to affect
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adversely the income tax attributes of the Trust under the Federal or
applicable state income or franchise tax systems.
(g) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
by Transferor of each Transaction Document and the Certificates, the
performance by Transferor of the transactions contemplated by each
Transaction Document and the fulfillment by Transferor of the terms
hereof and thereof, have been obtained.
(h) INSOLVENCY. No Insolvency Event with respect to Transferor has
occurred. Transferor did not (i) execute the Transaction Documents,
(ii) grant to the Trustee the security interests described in SECTIONS
2.1 and 3.9, (iii) cause, permit, or suffer the perfection or attachment
of such a security interest, (iv) otherwise effectuate or consummate any
transfer to Trustee pursuant to any Transaction Document or (v) acquire
its interest in the Trust, in each case:
(A) in contemplation of insolvency;
(B) with a view to preferring one creditor over another or
to preventing the application of its assets in the manner required
by applicable law or regulations;
(C) after committing an act of insolvency; or
(D) with any intent to hinder, delay, or defraud itself or
its creditors.
(i) TRUSTEE. Trustee is not an insider or Affiliate of Transferor.
The representations and warranties of Transferor set forth in this
SECTION 2.3 shall survive the transfer and assignment by Transferor of the
respective Receivables to the Trust. Upon discovery by Transferor, Servicer or
Trustee of a breach of any of the representations and warranties by Transferor
set forth in this SECTION 2.3, the party discovering such breach shall give
prompt written notice to the others and to each Enhancement Provider, if any,
entitled thereto pursuant to the relevant Supplement. Transferor agrees to
cooperate with Servicer and Trustee in attempting to cure any such breach. For
purposes of the representations and warranties set forth in this SECTION 2.3,
each reference to a Supplement shall be deemed to refer only to those
Supplements in effect as of the relevant Closing Date.
SECTION II.4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSACTION DOCUMENTS AND THE RECEIVABLES. (a) REPRESENTATIONS AND WARRANTIES.
Transferor represents and warrants to the Trust as of the date of this
Agreement, each Closing Date and, with respect to Additional Accounts, the
related Addition Date that:
24
(i) each Transaction Document and, in the case of Supplemental
Accounts, the related Assignment, each constitutes a legal, valid and
binding obligation of Transferor, enforceable against Transferor in
accordance with its terms, except as such enforceability may be limited
by applicable Debtor Relief Laws now or hereafter in effect and by
general principles of equity (whether considered in a suit at law or in
equity);
(ii) as of the Automatic Addition Termination Date or any
Automatic Addition Suspension Date and as of each subsequent Addition
Date with respect to Supplemental Accounts, and as of the applicable
Removal Date with respect to the Removed Accounts, the Account Schedule
delivered pursuant to this Agreement, as supplemented to such date, is an
accurate and complete listing in all material respects of all the
Accounts as of such Automatic Addition Termination Date, such Automatic
Addition Suspension Date, the related Addition Cut Off Date or such
Removal Date, as the case may be, and the information contained therein
with respect to the identity of such Accounts and the Receivables
existing in such Accounts is true and correct in all material respects as
of such specified date;
(iii) Transferor is the legal and beneficial owner of all right,
title and interest in each Receivable and Transferor has the full right
to transfer such Receivables to the Trust, and each Receivable conveyed
to the Trust by Transferor has been conveyed to the Trust free and clear
of any Lien of any Person claiming through or under Transferor or any of
its Affiliates (other than Liens permitted under SECTION 2.7(b)) and in
compliance, in all material respects, with all Requirements of Law
applicable to Transferor;
(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to
be obtained, effected or given by Transferor in connection with the
conveyance by Transferor of Receivables to the Trust have been duly
obtained, effected or given and are in full force and effect;
(v) this Agreement or, in the case of Supplemental Accounts, the
related Assignment constitutes either a valid transfer and assignment to
the Trust of all right, title and interest of Transferor in the
Receivables and other Trust Assets conveyed to the Trust by Transferor
and all monies due or to become due with respect thereto and the proceeds
thereof or a grant of a security interest in such property to the
Trustee, for the benefit of the Investor Holders, which, in the case of
existing Receivables and the proceeds thereof, is enforceable upon
execution and delivery of this Agreement, or, with respect to then
existing Receivables in Additional Accounts, as of the applicable
Addition Date, and which will be enforceable with respect to such
Receivables hereafter and thereafter created and the proceeds thereof
upon such creation, in each case except as such enforceability may be
limited by applicable Debtor Relief Laws, now or hereafter in effect, and
by general principles of equity (whether considered in a suit at law or
in equity). Upon the filing of the financing statements pursuant
25
to SECTION 2.1 and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trust shall have a first
priority security interest in such property and proceeds except for Liens
permitted under SECTION 2.7(b);
(vi) except as otherwise expressly provided in this Agreement or
any Supplement, neither Transferor nor any Person claiming through or
under Transferor has any claim to or interest in the Collection Account,
the Excess Funding Account, any Series Account or any Enhancement;
(vii) on the Trust Cut Off Date, with respect to each Initial
Account, on the date of its creation or the date it otherwise becomes an
Automatic Additional Account, with respect to each Automatic Additional
Account and, on the applicable Addition Cut Off Date, with respect to
each related Supplemental Account, each such Account is an Eligible
Account;
(viii) on the Trust Cut Off Date, each Receivable then existing is
an Eligible Receivable, on the date of creation of each Automatic
Additional Account or the date the related account otherwise becomes an
Automatic Additional Account, each Receivable contained in such Automatic
Additional Account is an Eligible Receivable and, on the applicable
Addition Cut Off Date, each Receivable contained in any related
Supplemental Account is an Eligible Receivable; and
(ix) as of the date of the creation of any new Receivable, such
Receivable is an Eligible Receivable.
(b) NOTICE OF BREACH. The representations and warranties of Transferor
set forth in this SECTION 2.4 shall survive the transfer and assignment by
Transferor of Receivables to the Trust. Upon discovery by Transferor, Servicer
or Trustee of a breach of any of the representations and warranties by
Transferor set forth in this SECTION 2.4, the party discovering such breach
shall give prompt written notice to the others and to each Enhancement Provider,
if any, entitled thereto pursuant to the relevant Supplement. Transferor agrees
to cooperate with Servicer and Trustee in attempting to cure any such breach.
For purposes of the representations and warranties set forth in this SECTION
2.4, each reference to a Supplement shall be deemed to refer only to those
Supplements in effect as of the date of the relevant representations or
warranties.
SECTION II.5. REASSIGNMENT OF INELIGIBLE RECEIVABLES. (a) REASSIGNMENT OF
RECEIVABLES. If (i) any representation or warranty of Transferor contained in
SECTION 2.4(a)(ii), (iii), (iv), (vii), (viii) or (ix) is not true and correct
in any material respect as of the date specified therein with respect to any
Receivable transferred to the Trust by Transferor or any Account and as a result
of such breach any Receivables in the related Account become Defaulted
Receivables or the Trust's rights in, to or under such Receivables or the
proceeds of such Receivables are impaired or such proceeds are not available for
any reason to the Trust free and clear of any Lien, unless cured within 60 days
(or such longer period, not in excess of 150 days, as may be agreed to by
Trustee) after the earlier to occur
26
of the discovery thereof by Transferor or receipt by Transferor or a designee
of Transferor of notice thereof given by Trustee, or (ii) it is so provided
in SECTION 2.7(a) with respect to any Receivables transferred to the Trust by
Transferor, then such Receivable shall be designated an "INELIGIBLE
RECEIVABLE" and shall be assigned a principal balance of zero for the purpose
of determining the aggregate amount of Principal Receivables on any day;
PROVIDED that such Receivables will not be deemed to be Ineligible
Receivables but will be deemed Eligible Receivables and such Principal
Receivables shall be included in determining the aggregate Principal
Receivables in the Trust if, on any day prior to the end of such 60-day or
longer period, (x) either (A) in the case of an event described in CLAUSE
(i), the relevant representation and warranty shall be true and correct in
all material respects as if made on such day or (B) in the case of an event
described in CLAUSE (ii), the circumstances causing such Receivable to become
an Ineligible Receivable shall no longer exist and (y) Transferor shall have
delivered an Officer's Certificate describing the nature of such breach and
the manner in which the relevant representation and warranty became true and
correct.
(b) PRICE OF REASSIGNMENT. On and after the date of its designation as an
Ineligible Receivable, each Ineligible Receivable shall not be given credit in
determining the aggregate amount of Principal Receivables used to calculate the
Transferor Amount or the Investor Percentages applicable to any Series. If,
following the exclusion of such Principal Receivables from the calculation of
the Transferor Amount, the Transferor Amount would be less than the Specified
Transferor Amount, Transferor shall make a deposit into the Excess Funding
Account in immediately available funds prior to the next succeeding Business Day
in an amount equal to the amount by which the Transferor Amount would be less
than the Specified Transferor Amount (up to the amount of such Principal
Receivables). The payment of such deposit amount in immediately available funds
shall otherwise be considered payment in full of all of the Ineligible
Receivables.
The obligation of Transferor to make the deposits, if any, required to be
made to the Excess Funding Account as provided in this Section, shall constitute
the sole remedy respecting the event giving rise to such obligation available to
Holders (or Trustee on behalf of the Holders) or any Enhancement Provider.
SECTION II.6. REASSIGNMENT OF RECEIVABLES IN TRUST PORTFOLIO. If any
representation or warranty of Transferor set forth in SECTION 2.3(a), (b) or (c)
or SECTION 2.4(a)(i), (v) or (vi) is not true and correct in any material
respect and such breach has a material adverse effect on the Investor Interest
in the Receivables transferred to the Trust by Transferor, then either Trustee
or the Majority Holders, by notice then given to Transferor and Servicer (and to
Trustee if given by the Investor Holders), may direct Transferor to accept a
reassignment of the Receivables transferred to the Trust by Transferor if such
breach and any material adverse effect caused by such breach is not cured within
60 days of such notice (or within such longer period, not in excess of 150 days,
as may be specified in such notice), and upon those conditions Transferor shall
be obligated to accept such reassignment on the terms set forth below; PROVIDED
that such Receivables will not be reassigned to Transferor if, on any day prior
to the end of such 60-day or longer period (i) the relevant representation and
warranty shall be true and correct in all material respects as if made on such
day
27
and (ii) Transferor shall have delivered an Officer's Certificate describing
the nature of such breach and the manner in which the relevant representation
and warranty became true and correct.
Transferor shall deposit in the Collection Account in immediately
available funds not later than 12:00 noon, New York City time, on the first
Distribution Date following the Monthly Period in which such reassignment
obligation arises, in payment for such reassignment, an amount equal to the sum
of the amounts specified therefor with respect to each outstanding Series in the
related Supplement. Notwithstanding anything to the contrary in this Agreement,
such amounts shall be distributed on such Distribution Date in accordance with
ARTICLE IV and each Supplement. The payment of such deposit amount in
immediately available funds shall otherwise be considered payment in full of all
of the Receivables.
Upon the deposit, if any, required to be made to the Collection Account
as provided in this Section or SECTION 2.5, Trustee, on behalf of the Trust,
shall automatically and without further action be deemed to transfer, assign,
set over and otherwise convey to Transferor or its designee, without recourse,
representation or warranty (except for the warranty that since the date of
transfer by Transferor, Trustee has not sold, transferred or encumbered any such
Receivables or interest therein), all the right, title and interest of the Trust
in and to the applicable Receivables, all moneys due or to become due and all
amounts received with respect thereto and all proceeds thereof. Trustee shall
execute such documents and instruments of transfer or assignment and take such
other actions as shall reasonably be requested by Transferor to effect the
conveyance of such Receivables pursuant to this Section. The obligation of
Transferor to accept reassignment of any Receivables, and to make the deposits,
if any, required to be made to the Collection Account as provided in this
Section, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Holders (or Trustee on behalf of the Holders).
SECTION II.7. COVENANTS OF TRANSFEROR. Transferor covenants as follows:
(a) RECEIVABLES TO BE ACCOUNTS, GENERAL INTANGIBLES OR CHATTEL
PAPER. Except in connection with the enforcement or collection of an
Account, Transferor will take no action to cause any Receivable
transferred by it to the Trust to be evidenced by any instrument and, if
any such Receivable is so evidenced (whether or not in connection with
the enforcement or collection of an Account), it shall be deemed to be an
Ineligible Receivable in accordance with SECTION 2.5(a) and shall be
reassigned to Transferor in accordance with SECTION 2.5(b).
(b) SECURITY INTERESTS. Except for the conveyances hereunder,
Transferor will not sell, pledge, assign or transfer or otherwise convey
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; Transferor will immediately notify Trustee of the
existence of any Lien on any Receivable of which Transferor has
knowledge; and Transferor shall 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
28
Transferor; PROVIDED that nothing in this SECTION 2.7(b) shall prevent
or be deemed to prohibit Transferor from suffering to exist upon any
of the Receivables (i) any Liens for taxes if such taxes shall not at
the time be due and payable or if Transferor shall currently be
contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves
with respect thereto, or (ii) at any time when accounts subject to any
Co-Branding Agreement are included in the Identified Portfolio, rights
of the counterparty to such Co-Branding Agreement in respect of such
accounts and related receivables, which rights arise pursuant to the
terms of such Co-Branding Agreement and do not constitute a Lien on
any Receivables transferred to the Trust hereunder. Notwithstanding
the foregoing, nothing in this SECTION 2.7(b) shall be construed to
prevent or be deemed to prohibit the transfer of the Transferor
Certificate and certain other rights of Transferor in accordance with
this Agreement and any related Supplement.
(c) TRANSFEROR INTEREST. Except as otherwise permitted herein,
including in SECTIONS 2.11, 6.3 and 7.2, Transferor agrees not to
transfer, assign, exchange or otherwise convey or pledge, hypothecate or
otherwise grant a security interest in the Transferor Interest (or any
interest therein) represented by the Transferor Certificate (or any
interest therein) or any Supplemental Certificate (or any interest
therein) and any such attempted transfer, assignment, exchange,
conveyance, pledge, hypothecation or grant shall be void.
(d) DELIVERY OF COLLECTIONS OR RECOVERIES. If Transferor is not
Servicer, and Transferor receives Collections or Recoveries, then
Transferor agrees to pay Servicer all such Collections and Recoveries as
soon as practicable after receipt thereof but in no event later than two
Business Days after the Date of Processing by Transferor.
(e) NOTICE OF LIENS. Transferor shall notify Trustee and each
Enhancement Provider, if any, entitled to such notice pursuant to the
relevant Supplement promptly after becoming aware of any Lien on any
Receivable other than the conveyances hereunder or Liens permitted under
SECTION 2.7(b).
(f) CONTINUOUS PERFECTION. Transferor shall not change its name,
identity or structure in any manner that might cause any financing or
continuation statement filed pursuant to this Agreement to be misleading
within the meaning of Section 9-402(7) of the UCC (or any other then
applicable provision of the UCC) unless Transferor shall have delivered
to Trustee at least 30 days prior written notice thereof and, no later
than 30 days after making such change, shall have taken all action
necessary or advisable to amend such financing statement or continuation
statement so that it is not misleading. Transferor shall not change its
chief executive office or change the location of its principal records
concerning the Receivables, the Trust Assets or the Collections unless it
has delivered to Trustee at least 30 days prior written notice of its
intention to do so and has taken such action as is necessary or advisable
to cause the interest of Trustee in the Receivables and other Trust
Assets to continue to be perfected with the priority required by this
Agreement.
29
(g) CREDIT CARD AGREEMENT AND GUIDELINES. Transferor shall comply
with and perform its obligations under the Credit Card Agreements
relating to the Accounts, the Credit Card Guidelines and with respect to
Accounts arising under any Co-Branding Agreement, all applicable rules
and regulations of VISA U.S.A., Inc. and MasterCard International Inc.,
except insofar as any failure to comply or perform would not materially
or adversely affect the rights of the Trust or the Holders under any
Transaction Document or the Certificates. Transferor may change the terms
and provisions of the Credit Card Agreements or the Credit Card
Guidelines in any respect (including the reduction of the required
minimum monthly payment, the calculation of the amount, or the timing, of
charge offs and Periodic Finance Charges and other fees assessed
thereon), but only if such change is made applicable to any comparable
segment of the revolving credit card accounts owned and serviced by
Transferor which have characteristics the same as, or substantially
similar to, the Accounts that are the subject of such change, except as
otherwise restricted by an endorsement, sponsorship or other agreement
between Transferor and an unrelated third party or by the terms of the
Credit Card Agreements.
(h) OFFICIAL RECORDS. The resolutions of Transferor's Board of
Directors approving each of the Transaction Documents and all documents
relating thereto are and shall be continuously reflected in the minutes
of Transferor's Board of Directors. Each of the Transaction Documents and
all documents relating thereto are and shall, continuously from the time
of their respective execution by Transferor, be official records of
Transferor.
SECTION II.8. ADDITION OF ACCOUNTS. (a) AUTOMATIC ADDITIONAL ACCOUNTS.
Subject to any limitations specified in any Supplement, Automatic Additional
Accounts shall be included as Accounts from and after the date upon which they
are created, and all Receivables in Automatic Additional Accounts, whether such
Receivables are then existing or thereafter created, shall be transferred
automatically to the Trust upon their creation. For all purposes of this
Agreement, all receivables relating to Automatic Additional Accounts shall be
treated as Receivables upon their creation and shall be subject to the
eligibility criteria specified in the definitions of "Eligible Receivable" and
"Eligible Account." Transferor may elect at any time to terminate the inclusion
in Accounts of new accounts which would otherwise be Automatic Additional
Accounts as of any Business Day (the "AUTOMATIC ADDITION TERMINATION DATE"), or
suspend any such inclusion as of any Business Day (an "AUTOMATIC ADDITION
SUSPENSION DATE") until a date (the "RESTART DATE") to be notified in writing by
Transferor to Trustee by delivering to Trustee, Servicer and each Rating Agency
ten days prior written notice of such election at least 10 days prior to such
Automatic Addition Termination Date, Automatic Addition Suspension Date or
Restart Date, as the case may be. Promptly after each of an Automatic Addition
Termination Date, an Automatic Addition Suspension Date and a Restart Date,
Transferor and Trustee agree to execute, and Transferor agrees to record and
file at its own expense, an amendment to the financing statements referred to in
SECTION 2.1 to specify the accounts then subject to this Agreement (which
specification may incorporate a list of accounts by reference) and, except in
connection with any such filing made after a Restart
30
Date, to release any security interest in any accounts created after the
Automatic Addition Termination Date or Automatic Addition Suspension Date.
(b) REQUIRED ADDITIONS OF SUPPLEMENTAL ACCOUNTS. If during any period of
thirty consecutive days, the Transferor Amount averaged over that period is less
than the Minimum Transferor Amount for that period, Transferor shall designate
additional Eligible Accounts ("SUPPLEMENTAL ACCOUNTS") to be included as
Accounts in a sufficient amount such that the average of the Transferor Amount
as a percentage of the average amount of Principal Receivables for such 30-day
period, computed by assuming that the amount of the Principal Receivables of
such Supplemental Accounts shall be deemed to be outstanding in the Trust during
each day of such 30-day period, is at least equal to the Minimum Transferor
Amount. In addition, if on any Record Date the aggregate amount of Principal
Receivables plus amounts on deposit in the Excess Funding Account is less than
the Required Principal Balance, Transferor shall designate Supplemental Accounts
from any Approved Portfolio to be included as Accounts in a sufficient amount
such that the aggregate amount of Principal Receivables plus amounts on deposit
in the Excess Funding Account will be equal to or greater than the Required
Principal Balance. Receivables from all such Supplemental Accounts shall be
transferred to the Trust on or before the tenth Business Day following such
thirty-day period or Record Date, as the case may be. In lieu of, or in addition
to, designating Supplemental Accounts as required above, Transferor may convey
to the Trust participations or trust certificates representing undivided legal
or beneficial interests in a pool of assets primarily consisting of receivables
arising under revolving credit card accounts or other revolving credit accounts
owned by Transferor or any of its Affiliates and collections thereon
("PARTICIPATION INTERESTS"). Any addition of Participation Interests to the
Trust (whether pursuant to this PARAGRAPH (b) or PARAGRAPH (c) below) shall be
effected by an amendment hereto, dated the applicable Addition Date, pursuant to
SUBSECTION 13.1(a).
(c) PERMITTED ADDITIONS. In addition to its obligation under PARAGRAPH
(b), Transferor may, but shall not be obligated to, from time to time designate
Supplemental Accounts or Participation Interests to be included as Trust Assets,
in either case as of the applicable Addition Date.
(d) CERTAIN CONDITIONS FOR ADDITIONS OF SUPPLEMENTAL ACCOUNTS AND
PARTICIPATION INTERESTS. Transferor agrees that any transfer of Receivables from
Supplemental Accounts or Participation Interests under PARAGRAPHS (b) or (c)
shall occur only upon satisfaction of the following conditions (to the extent
applicable):
(i) on or before the tenth Business Day prior to the Addition Date
(the "NOTICE DATE"), Transferor shall give Trustee, each Rating Agency
and Servicer written notice that such Supplemental Accounts or
Participation Interests will be included, which notice shall specify the
approximate aggregate amount of the Receivables or Participation
Interests to be transferred; and, in the case of any transfer pursuant to
PARAGRAPH (c), the Rating Agency Condition shall have been satisfied;
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(ii) on or before the Addition Date, Transferor shall have
delivered to Trustee a written assignment (including an acceptance by
Trustee on behalf of the Trust for the benefit of the Investor Holders)
in substantially the form of EXHIBIT B (the "ASSIGNMENT") and Transferor
shall have indicated in its computer files that the Receivables created
in connection with the Supplemental Accounts have been transferred to the
Trust and, within five Business Days thereafter, Transferor shall have
delivered to Trustee an Account Schedule listing such Supplemental
Accounts, which as of the date of such Assignment, shall be deemed
incorporated into and made a part of such Assignment and this Agreement;
(iii) Transferor shall represent and warrant that (x) each
Supplemental Account is, as of the Addition Date, an Eligible Account,
and each Receivable in such Supplemental Account is, as of the Addition
Date, an Eligible Receivable, (y) no selection procedures believed by
Transferor to be materially adverse to the interests of the Investor
Holders were utilized in selecting the Additional Accounts from the
available Eligible Accounts in an Approved Portfolio, and (z) as of the
Addition Date, Transferor is not insolvent;
(iv) Transferor shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either (x) a valid transfer and
assignment to the Trust of all right, title and interest of Transferor in
and to the Receivables then existing and thereafter created in the
Supplemental Accounts, and all proceeds of such Receivables and Insurance
Proceeds relating thereto and such Receivables and all proceeds thereof
and Insurance Proceeds and Recoveries relating thereto will be held by
the Trust free and clear of any Lien of any Person claiming through or
under Transferor or any of its Affiliates, except for (i) Liens permitted
under SECTION 2.7(b), (ii) the interest of Transferor as Holder of the
Transferor Certificate and (iii) Transferor's right to receive interest
accruing on, and investment earnings in respect of, the Excess Funding
Account, or any Series Account as provided in this Agreement and any
related Supplement or (y) a grant of a security interest in such property
to the Trustee, for the benefit of the Investor Holders, which is
enforceable with respect to then existing Receivables in the Supplemental
Accounts, the proceeds thereof and Insurance Proceeds and Recoveries
relating thereto upon the conveyance of such Receivables to the Trust,
and which will be enforceable with respect to the Receivables thereafter
created in respect of Supplemental Accounts conveyed on such Addition
Date, the proceeds thereof and Insurance Proceeds and Recoveries relating
thereto upon such creation; and (z) if the Assignment constitutes the
grant of a security interest to the Trustee in such property, upon the
filing of a financing statement as described in SECTION 2.1 with respect
to such Supplemental Accounts and in the case of the Receivables
thereafter created in such Supplemental Accounts and the proceeds
thereof, and Insurance Proceeds and Recoveries relating thereto, upon
such creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC), except
for Liens permitted under SECTION 2.7(b);
(v) Transferor shall deliver an Officer's Certificate to Trustee
confirming the items set forth in CLAUSE (ii); and
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(vi) Transferor shall deliver an Opinion of Counsel with respect
to the Receivables in the Supplemental Accounts to Trustee (with a copy
to each Rating Agency) substantially in the form of EXHIBIT F-2.
(e) ADDITIONAL APPROVED PORTFOLIOS. The Transferor may from time to time
designate additional portfolios of accounts as "Approved Portfolios" if all
conditions, if any, in each Supplement for the designation of an Approved
Portfolio are satisfied.
SECTION II.9. REMOVAL OF ACCOUNTS. (a) On any day of any Monthly Period
Transferor shall have the right to require the reassignment to it or its
designee of all the Trust's right, title and interest in, to and under the
Receivables then existing and thereafter created, all moneys due or to become
due and all amounts received with respect thereto and all proceeds thereof in or
with respect to the Accounts then owned by the Credit Card Originator and
designated by Transferor (the "REMOVED ACCOUNTS") or Participation Interests
(unless otherwise set forth in the applicable Supplement), upon satisfaction of
the following conditions (PROVIDED that the conditions listed in CLAUSES (iv)
through (viii) below need not be satisfied if the Removed Accounts relate to a
repurchase pursuant to SECTION 2.9(b)):
(i) on or before the tenth Business Day immediately preceding
the Removal Date (the "REMOVAL NOTICE DATE") Transferor shall have given
Trustee, Servicer, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement written notice of
such removal and specifying the date for removal of the Removed Accounts
and Participation Interests (the "REMOVAL DATE");
(ii) with respect to Removed Accounts, on or prior to the date
that is 10 Business Days after the Removal Date, Transferor shall have
delivered to Trustee an Account Schedule listing the Removed Accounts and
specifying for each such Account, as of the Removal Notice Date, its
account number, the aggregate amount outstanding, and the aggregate
amount of Principal Receivables outstanding in such Account;
(iii) with respect to Removed Accounts, Transferor shall have
represented and warranted as of the Removal Date that the list of Removed
Accounts delivered pursuant to PARAGRAPH (ii), as of the Removal Date, is
true and complete in all material respects;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such removal;
(v) Transferor shall have delivered to Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant Supplement
an Officer's Certificate, dated as of the Removal Date, to the effect
that Transferor reasonably believes that (i) such removal will not, based
on the facts known to such officer at the time of such certification,
then or thereafter cause an Early Amortization Event to occur with
respect to any Series and (ii) no
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selection procedure believed by Transferor to be materially adverse to
the interests of the Investor Holders has been used in removing Removed
Accounts from among any pool of Accounts or Participation Interests of a
similar type;
(vi) Transferor shall not use a selection procedure intended to
include a disproportionately higher level of Defaulted Receivables in the
Removed Accounts than exist in the Accounts and shall not remove such
Accounts for the intended purpose of mitigating losses to the Trust;
(vii) the aggregate Principal Receivables in the Removed Accounts
shall not exceed the excess of the Transferor Amount over the Minimum
Transferor Amount, all measured as of the end of the most recently ended
Monthly Period; and
(viii) such removal shall not cause a decrease in the sum of the
Invested Amounts for all outstanding Series.
Upon satisfaction of the above conditions, Trustee shall execute and
deliver to Transferor or its designee a written reassignment in substantially
the form of EXHIBIT C (the "REASSIGNMENT") and shall, without further action, be
deemed to transfer, assign, set over and otherwise convey to Transferor or its
designee, effective as of the Removal Date, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to the
Receivables arising in the Removed Accounts or the Participation Interests, all
moneys due and to become due and all amounts received with respect thereto and
all proceeds thereof. In addition, Trustee shall execute such other documents
and instruments of transfer or assignment and take such other actions as shall
reasonably be requested by Transferor to effect the conveyance of Receivables
pursuant to this Section.
(b) Transferor may from time to time designate as Removed Accounts any
Accounts designated for repurchase by a Merchant pursuant to the terms of the
related Credit Card Processing Agreement. Any repurchase of the Receivables in
Removed Accounts designated pursuant to this SECTION 2.9(b) shall be effected in
the manner and at a price determined in accordance with SECTION 2.5(b), as if
the Receivables being repurchased were Ineligible Receivables. Amounts
deposited in the Collection Account in connection therewith shall be deemed to
be Collections of Principal Receivables and shall be applied in accordance with
the terms of ARTICLE IV and each Supplement.
SECTION II.10. DISCOUNT OPTION. (a) Transferor shall have the
option, to designate at any time a fixed or floating percentage (the
"DISCOUNT PERCENTAGE"), of the amount of Receivables arising in the Accounts
on or after the date such designation becomes effective that would otherwise
constitute Principal Receivables (prior to subtracting from Principal
Receivables, Finance Charge Receivables that are Discount Option Receivables)
to be treated as Finance Charge Receivables. Transferor may from time to time
increase (subject to the limitations described below), reduce or eliminate
the Discount Percentage for Discount Option Receivables arising in the
Accounts on and after the date of such change. Transferor must provide 30 days'
prior written notice to Servicer,
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Trustee and each Rating Agency of any such increase, reduction or elimination,
and such increase, reduction or elimination shall become effective on the date
specified therein only if (i) Transferor has delivered to Trustee an Officer's
Certificate to the effect that, based on the facts known to such officer at the
time, Transferor reasonably believes that such increase, reduction or
elimination will not at the time of its occurrence cause an Early Amortization
Event, or an event which with notice or the lapse of time would constitute an
Early Amortization Event, to occur with respect to any Series and (ii) in the
case of any increase, the Discount Percentage shall not exceed 3% after giving
effect to that increase.
(b) On each Date of Processing after the date on which the Transferor's
exercise of its discount option takes effect, the Transferor shall treat
Discount Option Receivables Collections as Collections of Finance Charge
Receivables.
SECTION II.11. ADDITIONAL TRANSFERORS. Transferor may designate
additional or substitute Persons to be included as Transferors under this
Agreement by an amendment to this Agreement (which amendment shall be subject to
SECTION 13.1 and to any applicable restrictions in the Supplement for any
outstanding Series) and, in connection with such designation, the initial
Transferor shall surrender the Transferor Certificate to Trustee in exchange for
a newly issued Transferor Certificate reflecting such additional Transferor's
interest in the Transferor Interest; PROVIDED THAT prior to any such designation
and issuance the conditions set forth in SECTION 6.3(c) shall have been
satisfied.
SECTION II.12. ADDITIONAL CREDIT CARD ORIGINATORS. Transferor may
designate additional Persons as Credit Card Originators under this Agreement by
an amendment to this Agreement (which amendment shall be subject to SECTION 13.1
and to any applicable restrictions in the Supplement for any outstanding
Series).
ARTICLE III ADMINISTRATION AND SERVICING
SECTION III.1. ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
SERVICER. (a) WFN is appointed, and agrees to act, as Servicer.
(b) Servicer shall service and administer the Receivables, shall collect
payments due under the Receivables and shall charge off as uncollectible
Receivables, all in accordance with its customary and usual servicing procedures
for servicing credit card and other consumer open end credit receivables
comparable to the Receivables and in accordance with the Credit Card Guidelines.
Servicer shall have full power and authority, acting alone or through any party
properly designated by it hereunder, to do any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, subject to SECTION 10.1 and
provided WFN is Servicer, Servicer or its designee (rather than Trustee) is
hereby authorized and empowered (i) to make withdrawals and payments or to
instruct Trustee to make withdrawals and payments from the Collection Account
and any Series Account, as set forth in this
35
Agreement or any Supplement, and (ii) to take any action required or
permitted under any Enhancement, as set forth in this Agreement or any
Supplement. Without limiting the generality of the foregoing and subject to
SECTION 10.1, Servicer or its designee is authorized and empowered to make
any filings, reports, notices, applications and registrations with, and to
seek any consents or authorizations from, the Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable
to comply with any Federal or state securities laws or reporting requirements.
Trustee shall furnish Servicer with any powers of attorney or other documents
necessary or appropriate to enable Servicer to carry out its servicing and
administrative duties hereunder.
(c) Servicer shall not be obligated to use separate servicing procedures,
offices, employees or accounts for servicing the Receivables from the
procedures, offices, employees and accounts used by Servicer in connection with
servicing other credit card receivables.
(d) Servicer shall comply with and perform its servicing obligations with
respect to the Accounts and Receivables in accordance with the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines except
insofar as any failure to so comply or perform would not materially and
adversely affect the Trust or the Investor Holders.
(e) Servicer shall be liable for the payment, without reimbursement, of
all expenses incurred in connection with the Trust and the servicing activities
hereunder including expenses related to enforcement of the Receivables, fees and
disbursements of Trustee, any Paying Agent and any Transfer Agent and Registrar
(including the reasonable fees and expenses of its counsel) in accordance with
SECTION 11.5, fees and disbursements of independent accountants and all other
fees and expenses, including the costs of filing UCC continuation statements and
the costs and expenses relating to obtaining and maintaining the listing of any
Investor Certificates on any stock exchange, that are not expressly stated in
this Agreement to be payable by the Trust, the Investor Holders of a Series or
Transferor (other than Federal, state, local and foreign income, franchise and
other taxes, if any, or any interest or penalties with respect thereto, assessed
on the Trust).
SECTION III.2. SERVICING COMPENSATION. As full compensation for its
servicing activities hereunder and as reimbursement for any expense incurred by
it in connection therewith, Servicer shall be entitled to receive a servicing
fee (the "SERVICING FEE") with respect to each Monthly Period, payable monthly
on the related Distribution Date, in an amount equal to one-twelfth of the
product of (a) the weighted average of the Series Servicing Fee Percentages with
respect to each outstanding Series (based upon the Series Servicing Fee
Percentage for each Series and the Invested Amount (or such other amount as
specified in the related Supplement) of such Series, in each case as of the last
day of the prior Monthly Period) and (b) the amount of Principal Receivables on
the last day of the prior Monthly Period. The share of the Servicing Fee
allocable to the Investor Interest of each Series with respect to any Monthly
Period (the "INVESTOR SERVICING FEE") will be determined in accordance with the
relevant Supplement. The portion of the Servicing Fee with respect to any
Monthly Period not so allocated to the Investor Interest of a particular Series,
or otherwise allocated in any
36
Supplement, shall be paid from Finance Charge Collections allocable to
Transferor on the related Distribution Date. In no event shall the Trust,
Trustee, the Investor Holders of any Series or any Enhancement Provider be
liable for the share of the Servicing Fee with respect to any Monthly Period
to be paid by Transferor.
SECTION III.3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SERVICER.
WFN, in its capacity as initial Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make, on each Closing Date (and on
the date of any such appointment), the following representations, warranties and
covenants to the Trust:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a national
banking association (or with respect to such Successor Servicer, such
other corporate entity as may be applicable) duly organized, validly
existing and in good standing under the laws of the United States, and
has full corporate power, authority and legal right to execute, deliver
and perform its obligations under this Agreement and each Supplement and,
in all material respects, to own its properties and conduct its business
as such properties are presently owned and as such business is presently
conducted.
(b) DUE QUALIFICATION. Servicer is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals in
each jurisdiction in which failure to so qualify or to obtain such
licenses and approvals would have a material adverse effect on the
interests of the Investor Holders hereunder or under any Supplement.
(c) DUE AUTHORIZATION. The execution, delivery, and performance
of this Agreement and each Supplement have been duly authorized by
Servicer by all necessary corporate action on the part of Servicer.
(d) BINDING OBLIGATION. This Agreement and each Supplement
constitutes a legal, valid and binding obligation of Servicer,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereinafter in effect, affecting the
enforcement of creditors' rights in general (or with respect to such
Successor Servicer, such other corporate entity as may be applicable) and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement
and each Supplement by Servicer, the performance of the transactions
contemplated by this Agreement and each Supplement and the fulfillment of
the terms hereof and thereof applicable to Servicer, will not conflict
with, violate, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a material default under, any Requirement of Law applicable to
Servicer or any indenture, contract, agreement, mortgage,
37
deed of trust or other instrument to which Servicer is a party or by
which it or any of its properties are bound.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Servicer, threatened against
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 Servicer,
would materially and adversely affect the performance by 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. Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables and the related Accounts, will maintain
in effect all qualifications required under Requirements of Law in order
to properly service the Receivables and the related Accounts and will
comply in all material respects with all other Requirements of Law in
connection with servicing the Receivables and the related Accounts, the
failure to comply with which would have a material adverse effect on the
interests of the Investor Holders.
(h) NO RESCISSION OR CANCELLATION. Servicer shall not permit any
rescission or cancellation of a Receivable except as ordered by a court
of competent jurisdiction or other Governmental Authority or in the
ordinary course of its business and in accordance with the Credit Card
Guidelines. Servicer shall reflect any such rescission or cancellation
in its computer file of revolving credit card accounts. In addition,
Servicer may waive the accrual and/or payment of certain Finance Charge
Receivables in respect of certain past due Accounts, the Obligors of
which have enrolled with a consumer credit counseling service, and the
Receivables in such Accounts shall not fail to be Eligible Receivables
solely as a result of such waiver.
(i) PROTECTION OF HOLDERS' RIGHTS. Servicer shall take no action
which, nor omit to take any action the omission of which, would
materially impair the rights of Holders in any Receivable or Account, nor
shall it, except in the ordinary course of its business and in accordance
with the Credit Card Guidelines, reschedule, revise or defer Collections
due on the Receivables.
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Except
in connection with its enforcement or collection of an Account, Servicer
will take no action to cause any Receivable to be evidenced by any
instrument, other than an instrument that, taken together with one or
more other writings, constitutes chattel paper and, if any Receivable is
so
38
evidenced (whether or not in connection with the enforcement or
collection of an Account), it shall be reassigned or assigned to Servicer
as provided in this Section.
(k) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
body or official required in connection with the execution and delivery
by Servicer of this Agreement and each Supplement, the performance by
Servicer of the transactions contemplated by this Agreement and each
Supplement and the fulfillment by Servicer of the terms hereof and
thereof, have been obtained; PROVIDED that Servicer makes no
representation or warranty as to state securities or "blue sky" laws.
(l) MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. Servicer shall
maintain and implement administrative and operating procedures (including
the ability to recreate records evidencing the Receivables in the event
of the destruction of the originals thereof), and keep and maintain all
documents, books, computer records and other information, reasonably
necessary or advisable for the collection of all the Receivables. Such
documents, books and computer records shall reflect all facts giving rise
to the Receivables, all payments and credits with respect thereto, and,
to the extent required pursuant to SECTION 2.1, such documents, books and
computer records shall indicate the interests of the Trust in the
Receivables.
For purposes of the representations and warranties set forth in this
SECTION 3.3, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the relevant Closing Date or the date of
appointment of a Successor Servicer, as applicable.
If any of the representations, warranties or covenants of Servicer
contained in PARAGRAPH (g), (h), (i) or (j) with respect to any Receivable or
the related Account is breached, and as a result of such breach the Trust's
rights in, to or under any Receivables in the related Account or the proceeds of
such Receivables are materially impaired or such proceeds are not available for
any reason to the Trust free and clear of any Lien, then no later than the
expiration of 60 days (or such longer period, not in excess of 150 days, as may
be agreed to by Trustee) from the earlier to occur of the discovery of such
event by Servicer, or receipt by Servicer of notice of such event given by
Trustee, all Receivables in the Account or Accounts to which such event relates
shall be reassigned or assigned to Servicer as set forth below; PROVIDED that
such Receivables will not be reassigned or assigned to Servicer if, on any day
prior to the end of such 60-day or longer period, (i) the relevant
representation and warranty shall be true and correct, or the relevant covenant
shall have been complied with, in all material respects and (ii) Servicer shall
have delivered an Officer's Certificate describing the nature of such breach and
the manner in which such breach was cured.
Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds prior to the next succeeding
Business Day in an amount equal to the
39
amount of such Receivables, which deposit shall be considered a Collection
with respect to such Receivables and shall be applied in accordance with
ARTICLE IV and each Supplement.
Upon each such assignment to Servicer, Trustee, on behalf of the Trust,
shall automatically and without further action be deemed to transfer, assign,
set over and otherwise convey to Servicer, without recourse, representation or
warranty (except for the warranty that since the date of transfer by Transferor,
Trustee has not sold, transferred or encumbered any such Receivables or interest
therein), all right, title and interest of the Trust in and to such Receivables,
all moneys due or to become due and all amounts received with respect thereto
and all proceeds thereof. Trustee shall execute such documents and instruments
of transfer or assignment and take such other actions as shall be reasonably
requested by Servicer to effect the conveyance of any such Receivables pursuant
to this Section. The obligation of Servicer to accept assignment of such
Receivables, and to make the deposits, if any, required to be made to the Excess
Funding Account or the Collection Account as provided in the preceding
paragraph, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Holders (or Trustee on behalf of Holders) or any
Enhancement Provider.
SECTION III.4. REPORTS TO TRUSTEE.
(a) DAILY REPORTS. On the second Business Day immediately following
each Date of Processing, Servicer shall prepare and make available at the
office of Servicer for inspection by Trustee a report (the "DAILY REPORT")
that shall set forth (i) the aggregate amounts of Collections, Collections
with respect to Principal Receivables and Collections with respect to Finance
Charge Receivables processed by Servicer on such Date of Processing, (ii) the
aggregate amount of Defaulted Receivables for such Date of Processing, and
(iii) the aggregate amount of Principal Receivables in the Trust as of such
Date of Processing.
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in any
Supplement as to the related Series, on each Determination Date, Servicer shall
forward to Trustee, the Paying Agent, each Rating Agency and each Enhancement
Provider, if any, a certificate of a Servicing Officer setting forth (i) the
aggregate amounts for the preceding Monthly Period with respect to each of the
items specified in CLAUSE (i) of SECTION 3.4(a), (ii) the aggregate Defaulted
Receivables and Recoveries for the preceding Monthly Period, (iii) a calculation
of the Portfolio Yield and Base Rate for each Series then outstanding, (iv) the
aggregate amount of Receivables and the balance on deposit in the Collection
Account (or any subaccount thereof) or any Series Account applicable to any
Series then outstanding with respect to Collections processed as of the end of
the last day of the preceding Monthly Period, (v) the aggregate amount of
adjustments from the preceding Monthly Period, (vi) the aggregate amount, if
any, of withdrawals, drawings or payments under any Enhancement with respect to
each Series required to be made with respect to the previous Monthly Period,
(vii) the sum of all amounts payable to the Investor Holders on the succeeding
Distribution Date in respect of interest and principal payable with respect to
the Investor Certificates and (viii) such other amounts, calculations, and/or
information as may be required by any relevant Supplement.
40
(c) TRANSFERRED ACCOUNTS. Servicer covenants and agrees hereby to
deliver to Trustee, on or prior to the Automatic Addition Termination Date or
any Automatic Addition Suspension Date (but in the latter case, prior to a
Restart Date) within a reasonable time period after any Transferred Account
is created, but in any event not later than 15 days after the end of the
month within which the Transferred Account is created, a notice specifying
the new account number for any Transferred Account and the replaced account
number.
SECTION III.5. ANNUAL CERTIFICATE OF SERVICER. Servicer shall deliver
to Trustee, each Rating Agency and each Enhancement Provider, if any, entitled
thereto pursuant to the relevant Supplement, on or before the 90th day following
fiscal year 1998 and each subsequent fiscal year, an Officer's Certificate (with
appropriate insertions) substantially in the form of EXHIBIT D.
SECTION III.6. ANNUAL SERVICING REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS; COPIES OF REPORTS AVAILABLE. (a) On or before the 90th day
following the end of its fiscal year 1998 and each subsequent fiscal year,
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to Servicer or Transferor) to
furnish a report (addressed to Trustee) to Trustee, Servicer and each Rating
Agency to the effect that they have applied certain procedures with Servicer
and such firm has examined certain documents and records relating to the
servicing of Accounts under this Agreement and each Supplement, compared the
information contained in Servicer's certificates delivered pursuant to this
Agreement during the period covered by such report with such documents and
records and that, on the basis of such agreed upon procedures (and assuming
the accuracy of any reports generated by Servicer's third party agents), such
servicing was conducted in compliance with this Agreement during the period
covered by such report (which shall be the prior fiscal year, or the portion
thereof falling after the Initial Closing Date), except for such exceptions,
errors or irregularities as such firm shall believe to be immaterial and such
other exceptions, errors or irregularities as shall be set forth in such
report. Such report shall set forth the agreed upon procedures performed. A
copy of such report shall be delivered to each Enhancement Provider, if any,
entitled thereto pursuant to the relevant Supplement.
(b) On or before the 90th day following the end of fiscal year 1998 and
each subsequent fiscal year, Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other services to
Servicer or Transferor) to furnish a report to Trustee, Servicer and each Rating
Agency to the effect that they have applied certain procedures agreed upon with
Servicer to compare the mathematical calculations of certain amounts set forth
in Servicer's Certificates delivered pursuant to SECTION 3.4(b) during the
period covered by such report with Servicer's computer reports which were the
source of such amounts and that on the basis of such agreed upon procedures and
comparison, 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 shall be delivered to each Enhancement
Provider, if any, entitled thereto pursuant to the relevant Supplement.
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(c) A copy of each certificate and report provided pursuant to SECTION
3.4(b), 3.5 or 3.6 may be obtained by any Investor Holder or Certificate Owner
by a request to Trustee addressed to the Corporate Trust Office.
SECTION III.7. TAX TREATMENT. Transferor has entered into this
Agreement, and the Certificates will be issued, with the intention that for
Federal, state and local income and franchise tax purposes, the Investor
Certificates (except Transferor Retained Certificates which are held by
Transferor) of each Series will qualify as debt secured by the Receivables.
Transferor, by entering into this Agreement, each Holder, by the acceptance
of its Certificate (and each Certificate Owner, by its acceptance of an
interest in the applicable Certificate), agree to treat such Investor
Certificates for Federal, state and local income and franchise tax purposes
as debt. Each Holder of such Investor Certificate agrees that it will cause
any Certificate owner acquiring an interest in a Certificate through it to
comply with this Agreement as to treatment as debt under applicable tax law,
as described in this SECTION 3.7. Furthermore, subject to SECTION 11.11, or
unless Transferor shall determine that the filing of returns is appropriate,
Trustee shall treat the Trust as a security device only and shall not file
tax returns or obtain an employer identification number on behalf of the
Trust.
SECTION III.8. NOTICES TO WFN. If WFN is no longer acting as Servicer,
any Successor Servicer shall deliver to WFN each certificate and report required
to be provided thereafter pursuant to SECTION 3.4(b), 3.5 or 3.6.
SECTION III.9. ADJUSTMENTS. (a) If Servicer adjusts downward the amount
of any Receivable because of a rebate, refund, unauthorized charge or billing
error to an accountholder, or because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder, or if Servicer
otherwise adjusts downward the amount of any Receivable without receiving
Collections therefor or charging off such amount as uncollectible, then, in any
such case, the amount of Principal Receivables used to calculate the Transferor
Interest or the Investor Percentages applicable to any Series will be reduced by
the amount of the adjustment. Similarly, the amount of Principal Receivables
used to calculate the Transferor Amount and the Investor Percentages applicable
to any Series will be reduced by the amount of any Principal Receivable which
was discovered as having been created through a fraudulent or counterfeit charge
or with respect to which the covenant of Transferor contained in SECTION 2.7(b)
has been breached. Any adjustment required pursuant to either of the two
preceding sentences shall be made on or prior to the end of the Monthly Period
in which such adjustment obligation arises. If, following the exclusion of such
Principal Receivables from the calculation of the Transferor Amount, the
Transferor Amount would be less than the Specified Transferor Amount, not later
than 12:00 noon, New York City time, on the Distribution Date following the
Monthly Period in which such adjustment obligation arises, Transferor shall make
a deposit into the Excess Funding Account in immediately available funds in an
amount equal to the amount by which the Transferor Amount would be less than the
Specified Transferor Amount (up to the amount of such Principal Receivables).
Any amount deposited into the Excess Funding Account pursuant to the preceding
sentence shall be considered Collections of Principal Receivables and shall be
applied in accordance with ARTICLE IV and each Supplement.
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To secure its obligations to make deposits required by this SECTION
3.9(a), Transferor hereby grants to Trustee, for the benefit of the Investor
Holders, a security interest in (i) its rights to receive payments from any
Merchant under any Credit Card Processing Agreement on account of rebates,
refunds, unauthorized charges, refused or returned merchandise or any other
event or circumstance that causes Servicer to adjust downward the amount of any
Receivable without receiving Collections therefor or charging off such amount as
uncollectible ("MERCHANT ADJUSTMENT PAYMENTS"), (ii) any collateral security
granted to, or guaranty for the benefit of, WFN with respect to Merchant
Adjustment Payments, (iii) all amounts received from any Merchant or guarantor
on account of Merchant Adjustment Payments and (iv) all proceeds of such rights
and such amounts. Except as otherwise required by any Supplement, Transferor
may permit or require Merchant Adjustment Payments owed by any Merchant to be
netted against amounts owed by Transferor to that Merchant.
(b) If (i) Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received by
Servicer in the form of a check which is not honored for any reason or (ii)
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, Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any Receivable in respect of which a dishonored check is received shall
be deemed not to have been paid. Notwithstanding the first two sentences of this
paragraph, any adjustments made pursuant to this paragraph will be reflected in
a current report but will not change any amount of Collections previously
reported pursuant to SECTION 3.4(b).
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION IV.1. RIGHTS OF HOLDERS. The Investor Certificates shall
represent fractional undivided interests in the Trust, which, with respect to
each Series, shall consist of the right to receive, to the extent necessary to
make the required payments with respect to the Investor Certificates of such
Series at the times and in the amounts specified in the related Supplement, the
portion of Collections allocable to Investor Holders of such Series pursuant to
this Agreement and such Supplement, funds on deposit in the Collection Account
allocable to Holders of such Series pursuant to this Agreement and such
Supplement, funds on deposit in any related Series Account and funds available
pursuant to any related Enhancement (the "INVESTOR INTEREST"), it being
understood that, unless otherwise specified in the Supplements with respect to
each affected Series, the Investor Certificates of any Series or Class shall not
represent any interest in any Series Account or Enhancement for the benefit of
any other Series or Class. The Transferor Certificate shall represent the
ownership interest in the remainder of the Trust Assets not allocated pursuant
to this Agreement or any Supplement to the Investor Interest, including the
right to receive Collections with respect to the Receivables and other amounts
at the times and in the amounts specified in this Agreement or any Supplement to
be paid to Transferor or on behalf of the Holder of the Transferor Certificate
(the "TRANSFEROR INTEREST"); PROVIDED that (x) the Transferor Certificate shall
not represent any interest in the Collection Account, any Series Account or any
Enhancement, except as
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specifically provided in this Agreement or any Supplement and (y) if this
Agreement or, in the case of Supplemental Accounts, the related Assignment is
deemed to constitute a grant to the Trustee, for the benefit of the Investor
Holders, of a security interest in the Receivables and other Trust Assets,
then the Transferor Certificate shall be deemed to represent Transferor's
equity in the collateral granted.
SECTION IV.2. ESTABLISHMENT OF COLLECTION ACCOUNT AND EXCESS FUNDING
ACCOUNT. Servicer, for the benefit of the Holders, shall establish and maintain
in the name of Trustee, on behalf of the Trust, two Eligible Deposit Accounts
(the "COLLECTION ACCOUNT" and the "EXCESS FUNDING ACCOUNT"), each bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Holders. The Collection Account and the Excess Funding Account
shall initially be established with Trustee. Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Collection
Account and the Excess Funding Account and in all proceeds thereof for the
benefit of the Holders. The Collection Account and the Excess Funding Account
shall be under the sole dominion and control of Trustee for the benefit of the
Holders. Except as expressly provided in this Agreement, Trustee agrees that it
shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from, any funds held in the Collection Account or the Excess
Funding Account for any amount owed to it by the Trust, any Holder or any
Enhancement Provider. If at any time the Collection Account or the Excess
Funding Account ceases to be an Eligible Deposit Account, Trustee (or Servicer
on its behalf) shall within 10 Business Days (or such longer period, not to
exceed 30 calendar days, as to which the Rating Agency Condition is satisfied)
establish a new Eligible Deposit Account meeting the conditions specified above
and transfer any cash or any investments from the affected account to such new
account, and from the date such new account is established, it shall be the
"Collection Account" or the "Excess Funding Account," as the case may be.
Funds on deposit in the Collection Account and the Excess Funding Account
shall, at the direction of Servicer, be invested by Trustee in Eligible
Investments selected by Servicer, except that funds on deposit in either such
account on any Transfer Date need not be invested through the immediately
following Distribution Date. All such Eligible Investments shall be held by
Trustee for the benefit of the Holders. Trustee shall maintain for the benefit
of the Holders possession of the negotiable instruments or securities, if any,
evidencing such Eligible Investments. Investments of funds representing
Collections collected during any Monthly Period shall be invested in Eligible
Investments that will mature so that all funds will be available at the close of
business on the Transfer Date following such Monthly Period. No Eligible
Investment shall be disposed of prior to its maturity unless Servicer so directs
and either (i) such disposal will not result in a loss of all or part of the
principal portion of such Eligible Investment or (ii) prior to the maturity of
such Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account and the
Excess Funding Account shall be treated as Collections of Finance Charge
Receivables with respect to the last day of the related Monthly Period, except
as otherwise specified in any Supplement. For
44
purposes of determining the availability of funds or the balances in the
Collection Account or the Excess Funding Account for any reason under this
Agreement, all investment earnings net of investment expenses and losses on
such funds shall be deemed not to be available or on deposit.
Unless otherwise directed by Servicer, funds on deposit in the Excess
Funding Account will be withdrawn and paid to Transferor on any day to the
extent that the Transferor Amount exceeds the Specified Transferor Amount on
such day. On any Transfer Date on which one or more Series is in an Amortization
Period, Servicer shall determine the aggregate amounts of Principal Shortfalls,
if any, with respect to each such Series that is a Principal Sharing Series
(after giving effect to the allocation and payment provisions in the Supplement
with respect to each such Series), and Servicer shall instruct Trustee to
withdraw such amount from the Excess Funding Account (up to an amount equal to
the lesser of (x) the amount on deposit in the Excess Funding Account after
application of the preceding sentence on that day and (y) the amount, if any, by
which the Transferor Amount would be less than zero if there were no funds on
deposit in the Excess Funding Account on that day) on such Transfer Date and
allocate such amount among each such Series as specified in each related
Supplement.
SECTION IV.3. COLLECTIONS AND ALLOCATIONS. (a) Servicer shall apply, or
instruct Trustee to apply, all funds on deposit in the Collection Account as
described in this ARTICLE IV and in each Supplement. Except as otherwise
provided below and in each Supplement, Servicer shall deposit Collections into
the Collection Account no later than the second Business Day following the Date
of Processing of such Collections. Except as otherwise required by any
Supplement, Transferor may permit or require payments owed by any Merchant with
respect to In-Store Payments to be netted against amounts owed by Transferor to
that Merchant, and Transferor shall deposit into the Collection Account on each
Business Day an amount equal to the aggregate amount of In-Store Payments netted
against amounts owed by Transferor to the various Merchants on that Business
Day.
Subject to the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, if WFN remains Servicer and (x)
for so long as WFN maintains a short term debt rating of A-1 or better by S&P,
P-1 or better by Xxxxx'x and, if rated by any other Rating Agency, the
equivalent rating by that Rating Agency (or such other rating below A-1, P-1 or
such equivalent rating, as the case may be, which is satisfactory to each Rating
Agency, if any), (y) with respect to Collections allocable to any Series, any
other conditions specified in the related Supplement are satisfied or (z) WFN
has provided to Trustee a letter of credit covering collection risk of Servicer
acceptable to each Rating Agency (as evidenced by a letter from each Rating
Agency to the effect that the Rating Agency Condition has been satisfied), if
any, Servicer need not make the daily deposits of Collections into the
Collection Account as provided in the preceding paragraph, but may make a single
deposit in the Collection Account in immediately available funds not later than
12:00 noon, New York City time, on the related Transfer Date.
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(b) On each Date of Processing, Collections of Finance Charge Receivables
and of Principal Receivables shall be allocated to the Investor Interest of each
Series in accordance with the related Supplement. On each Determination Date,
Defaulted Receivables will be allocated to the Investor Interest of each Series
in accordance with the related Supplement.
(c) Throughout the existence of the Trust, unless otherwise stated in any
Supplement, on each Date of Processing Servicer shall allocate to Transferor an
amount equal to the product of (A) the Transferor Percentage and (B) the
aggregate amount of Collections allocated to Principal Receivables and Finance
Charge Receivables, respectively, on that Date of Processing; PROVIDED that, if
the Transferor Amount (determined after giving effect to any transfer of
Principal Receivables to the Trust on such date), is less than or equal to the
Specified Transferor Amount, Servicer shall not allocate to Transferor any such
amounts that otherwise would be allocated to Transferor, but shall instead
deposit such funds in the Excess Funding Account. Unless otherwise stated in any
Supplement, neither Servicer nor Transferor need deposit any amounts allocated
to the Transferor pursuant to the foregoing into the Collection Account and
shall pay, or be deemed to pay, such amounts as collected to Transferor.
The payments to be made to Transferor, pursuant to this SECTION 4.3(c) do
not apply to deposits to the Collection Account or other amounts that do not
represent Collections, including payment of the purchase price for Receivables
pursuant to SECTION 2.6 or 10.1, proceeds from the sale, disposition or
liquidation of Receivables pursuant to SECTION 9.2 or 12.2 or payment of the
purchase price for the Investor Interest of a specific Series pursuant to the
related Supplement.
SECTION IV.4. SHARED PRINCIPAL COLLECTIONS. On each Business Day, Shared
Principal Collections may, at the option of Transferor, be applied (or held in
the Collection Account for later application) as principal with respect to any
Variable Interest or, so long as either no Series is in an Amortization Period
or no Series that is in an Amortization Period will have a Principal Shortfall
on the related Transfer Date (assuming no Early Amortization Event occurs),
withdrawn from the Collection Account and paid to Transferor; and on each
Transfer Date, (a) Servicer shall allocate Shared Principal Collections not
previously so applied or paid to each applicable Principal Sharing Series, pro
rata, in proportion to the Principal Shortfalls, if any, with respect to each
such Series, and any remainder may, at the option of Transferor, be applied as
principal with respect to any Variable Interest and (b) Servicer shall withdraw
from the Collection Account and pay to Transferor any amounts representing
Shared Principal Collections remaining after the allocations and applications
referred to in CLAUSE (a); PROVIDED that, if, on any day the Transferor Amount
(determined after giving effect to any transfer of Principal Receivables to the
Trust on such day), is less than or equal to the Specified Transferor Amount,
Servicer shall not distribute to Transferor any Shared Principal Collections
that otherwise would be distributed to Transferor, but shall deposit such funds
in the Excess Funding Account to the extent required so that the Transferor
Amount equals the Specified Transferor Amount.
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SECTION IV.5. EXCESS FINANCE CHARGE COLLECTIONS. On each Transfer Date,
(a) for each Group, Servicer shall allocate the aggregate amount for all
outstanding Series in such Group of the amounts which the related Supplements
specify are to be treated as "Excess Finance Charge Collections" for such
Transfer Date to each Series in such Group, pro rata, in proportion to the
Finance Charge Shortfalls, if any, with respect to each such Series, and (b)
Servicer shall on the related Distribution Date withdraw (or shall instruct
Trustee in writing to withdraw) from the Collection Account and pay to
Transferor an amount equal to the excess, if any, of (x) the aggregate amount
for all outstanding Series in a Group of the amounts which the related
Supplements specify are to be treated as "Excess Finance Charge Collections" for
such Distribution Date over (y) the aggregate amount for all outstanding Series
in such Group which the related Supplements specify are "Finance Charge
Shortfalls", for such Distribution Date.
THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES
ARTICLE V DISTRIBUTIONS AND REPORTS
DISTRIBUTIONS SHALL BE MADE TO, AND REPORTS SHALL BE PROVIDED TO, HOLDERS
AS SET FORTH IN THE APPLICABLE SUPPLEMENT.
ARTICLE VI THE CERTIFICATES
SECTION VI.1. THE CERTIFICATES. The Investor Certificates of any Series
or Class may be issued in bearer form ("BEARER CERTIFICATES") with attached
interest coupons and any other applicable coupon (collectively, the "COUPONS")
or in fully registered form ("REGISTERED CERTIFICATES") and shall be
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement. The Transferor Certificate will be issued in registered
form and shall upon issue, be executed and delivered by Transferor to Trustee
for authentication and redelivery as provided in SECTION 6.2. Except as
otherwise provided in SECTION 6.3 or in any Supplement, Bearer Certificates
shall be issued in minimum denominations of $5,000 and Registered Certificates
shall be issued in minimum denominations of $1,000 and in integral multiples of
$1,000 in excess thereof. If specified in any Supplement, the Investor
Certificates of any Series or Class shall be issued upon initial issuance as a
single certificate evidencing the aggregate original principal amount of such
Series or Class as described in SECTION 6.13. The Transferor Certificate shall
initially be a single certificate and shall initially represent the entire
Transferor Interest. Each Certificate shall be executed by manual or facsimile
signature on behalf of Transferor by its President, Treasurer or any Vice
President. Certificates bearing the manual or facsimile signature of an
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of Transferor shall not be rendered invalid, notwithstanding that
such individual ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of such
Certificates. No Certificates shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the
47
form provided for herein executed by or on behalf of Trustee by the manual or
facsimile signature of a duly authorized signatory, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered hereunder. Bearer Certificates shall be dated the applicable
Closing Date. All Registered Certificates and the Transferor Certificate
shall be dated the date of their authentication.
SECTION VI.2. AUTHENTICATION OF CERTIFICATES. Trustee shall authenticate
and deliver the Investor Certificates of each Series and Class that are issued
upon original issuance to or upon the order of Transferor against payment to
Transferor of the purchase price therefor. Trustee shall authenticate and
deliver the Transferor Certificate to Transferor simultaneously with its
delivery of the Investor Certificates of the first Series to be issued
hereunder. If specified in the related Supplement for any Series or Class,
Trustee shall authenticate and deliver outside the United States the Global
Certificate that is issued upon original issuance thereof.
SECTION VI.3. NEW ISSUANCES. (a) Transferor may from time to time direct
Trustee, on behalf of the Trust, to authenticate one or more new Series of
Investor Certificates. The Investor Certificates of all outstanding Series shall
be equally and ratably entitled as provided herein to the benefits of this
Agreement without preference, priority or distinction, all in accordance with
the terms and provisions of this Agreement and the applicable Supplement except,
with respect to any Series or Class, as provided in the related Supplement.
(b) On or before the Closing Date for any new Series, the parties hereto
will execute and deliver a Supplement specifying the Principal Terms of the new
Series. Such Supplement may modify or amend the terms of this Agreement solely
as applied to the new Series and may grant the Holders of the Investor
Certificates in that Series, or an agent or other representative of such
Holders, notice and consultation rights with respect to any rights or actions of
Trustee. Trustee's obligation to authenticate the Investor Certificates of a new
Series and to execute and deliver the related Supplement is subject to the
satisfaction of the following conditions (except that the conditions set forth
in CLAUSES (i), (iii), (iv) and (v) shall not be applicable to the issuance of
the first Series):
(i) on or before the fifth Business Day immediately preceding the
Closing Date, Transferor shall have given Trustee, Servicer, each Rating
Agency and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement notice of such issuance and the Closing Date;
(ii) Transferor shall have delivered to Trustee the related
Supplement, executed by each party hereto other than Trustee;
(iii) Transferor shall have delivered to Trustee any related
Enhancement Agreement executed by each of the parties thereto, other than
Trustee;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
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(v) Transferor shall have delivered to Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant
Supplement an Officer's Certificate, dated the applicable Closing
Date, to the effect that Transferor reasonably believes that such
issuance will not, based on the facts known to such officer at the
time of such certification, then or thereafter cause an Early
Amortization Event to occur with respect to any Series;
(vi) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the Closing Date, with respect to such
issuance; and
(vii) Transferor shall have delivered to Trustee an Officer's
Certificate stating that the Transferor Amount shall not be less than the
Minimum Transferor Amount as of the Closing Date and after giving effect
to such issuance.
Upon satisfaction of the above conditions, Trustee shall execute the Supplement
and authenticate the Investor Certificates of such Series upon execution thereof
by Transferor. Upon satisfaction of the above conditions (MUTATIS MUTANDIS),
Transferor may also cause Trustee to enter into one or more agreements pursuant
to which Trustee shall sell purchased interests in the Receivables and other
Trust Assets to one or more purchasers. Such agreement(s) shall specify terms
similar to Principal Terms for any such purchased interests and may grant the
purchaser(s) of such interests, or an agent or other representative of such
purchaser(s), notice and consultation rights with respect to any rights or
actions of Trustee. Any such purchased interests shall be treated as a Series of
Investor Certificates for purposes of all voting and allocation provisions, and
calculations of the Transferor Amount and Transferor Percentage, under this
Agreement.
(c) Transferor may surrender the Transferor Certificate to Trustee in
exchange for a newly issued Transferor Certificate and one or more additional
certificates (each a "SUPPLEMENTAL CERTIFICATE"), the terms of which shall be
defined in a Supplement (which Supplement shall be subject to SECTION 13.1(a) to
the extent that it amends any of the terms of this Agreement), to be delivered
to or upon the order of Transferor (or the Holder of a Supplemental Certificate,
in the case of the transfer or exchange thereof, as provided below), upon
satisfaction of the following conditions:
(i) Transferor shall have delivered to Trustee an Officer's
Certificate stating that the Transferor Amount shall not be less than the
Minimum Transferor Amount, as of the date of, and after giving effect to,
such exchange;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such exchange (or transfer, exchange or pledge as provided
below); and
(iii) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the date of such exchange (or transfer,
exchange or pledge as provided below), with respect thereto.
49
Any Supplemental Certificate may be transferred or exchanged, and the Transferor
Certificate may be pledged, only upon satisfaction of the conditions set forth
in CLAUSES (ii) and (iii).
(d) The Transferor Certificate (or any interest therein) may be
transferred to a Person which is a member of the "affiliated group" as defined
in Internal Revenue Code Section 1504(a) of which WFN is a member without the
consent or approval of the Holders of the Investor Certificates, provided that
(i) the Rating Agency Condition shall have been satisfied with respect to such
transfer, (ii) Transferor shall have delivered to Trustee and each Rating Agency
a Tax Opinion, dated the date of such transfer, with respect thereto and (iii)
Transferor shall have delivered to Trustee an Officer's Certificate stating that
the Transferor Amount shall not be less than the Minimum Transferor Amount. In
connection with any such transfer, the Person to whom the Transferor Certificate
is transferred will, by its acquisition and holding of an interest in the
Transferor Certificate, assume all of the rights and obligations of Transferor
as described in this Agreement and in any Supplement or amendment thereto
(including the right under this PARAGRAPH (d) with respect to subsequent
transfers of an interest in the Transferor Certificate).
SECTION VI.4. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
Trustee shall cause to be kept at the office or agency to be maintained in
accordance with the provisions of SECTION 11.16 a register (the "CERTIFICATE
REGISTER") in which, subject to such reasonable regulations as it may prescribe,
a transfer agent and registrar (which may be Trustee) (the "TRANSFER AGENT AND
REGISTRAR") shall provide for the registration of the Registered Certificates
and of transfers and exchanges of the Registered Certificates as herein
provided. The Transfer Agent and Registrar shall initially be The Bank of New
York and any co-transfer agent and co-registrar chosen by Transferor and
acceptable to Trustee, including, if and so long as any Series or Class is
listed on the Luxembourg Stock Exchange and such exchange shall so require, a
co-transfer agent and co-registrar in Luxembourg. So long as any Investor
Certificates are outstanding, Transferor shall maintain a co-transfer agent and
co-registrar in New York City. 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.
Trustee may revoke such appointment and remove any Transfer Agent and
Registrar if Trustee determines in its sole discretion that such Transfer Agent
and Registrar failed to perform its obligations under this Agreement in any
material respect. Any Transfer Agent and Registrar shall be permitted to resign
as Transfer Agent and Registrar upon 30 days' notice to Transferor, Trustee and
Servicer; PROVIDED that such resignation shall not be effective and such
Transfer Agent and Registrar shall continue to perform its duties as Transfer
Agent and Registrar until Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to Transferor.
Subject to PARAGRAPH (c), upon surrender for registration of transfer of
any Registered Certificate at any office or agency of the Transfer Agent and
Registrar maintained for such purpose, one or more new Registered Certificates
(of the same Series and Class) in authorized denominations
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of like aggregate fractional undivided interests in the Investor Interest
shall be executed, authenticated and delivered, in the name of the designated
transferee or transferees.
At the option of a Registered Holder, Registered Certificates (of the
same Series and Class) may be exchanged for other Registered Certificates of
authorized denominations of like aggregate fractional undivided interests in the
Investor Interest, upon surrender of the Registered Certificates to be exchanged
at any such office or agency; Registered Certificates, including Registered
Certificates received in exchange for Bearer Certificates, may not be exchanged
for Bearer Certificates. At the option of the Holder of a Bearer Certificate,
subject to applicable laws and regulations, Bearer Certificates may be exchanged
for other Bearer Certificates or Registered Certificates (of the same Series and
Class) of authorized denominations of like aggregate fractional undivided
interests in the Investor Interest, upon surrender of the Bearer Certificates to
be exchanged at an office or agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate surrendered pursuant to this
Section shall have attached thereto all unmatured Coupons; PROVIDED that any
Bearer Certificate, so surrendered after the close of business on the Record
Date preceding the relevant payment date or distribution date after the expected
final payment date need not have attached the Coupon relating to such payment
date or distribution date (in each case, as specified in the applicable
Supplement).
Whenever any Investor Certificates are so surrendered for exchange,
Transferor shall execute, Trustee shall authenticate and the Transfer Agent and
Registrar shall deliver (in the case of Bearer Certificates, outside the United
States) the Investor Certificates which the Investor Holder 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 Trustee or the Transfer Agent
and Registrar duly executed by the Investor Holder or the attorney-in-fact
thereof duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to Trustee. Trustee shall cancel and
destroy any Global Certificate upon its exchange in full for Definitive
Euro-Certificates and shall deliver a certificate of destruction to
Transferor. Such certificate shall also state that a certificate or
certificates of a foreign Clearing Agency to the effect required by the
applicable Supplement was received with respect to each portion of the Global
Certificate exchanged for Definitive Euro-Certificates.
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Transferor shall execute and deliver to Trustee Bearer Certificates and
Registered Certificates in such amounts and at such times as are necessary to
enable Trustee to fulfill its responsibilities under this Agreement, each
Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense in the
City of New York and, if and so long as any Series or Class is listed on the
Luxembourg Stock Exchange, Luxembourg, an office or agency where Investor
Certificates may be surrendered for registration of transfer or exchange (except
that Bearer Certificates may not be surrendered for exchange at any such office
or agency in the United States).
(c)(i) Registration of transfer of Investor Certificates containing
(x) a legend substantially to the effect set forth on EXHIBIT E-1 shall be
effected only if such transfer is made pursuant to an effective registration
statement under the Securities Act or is exempt from the registration
requirements under the Securities Act and (y) a legend substantially to the
effect set forth on EXHIBIT E-3 shall be effected only if such transfer is
made to a Person that is not (1) an employee benefit plan or other plan,
trust or account (including an individual retirement account) that is subject
to ERISA or Section 4975 of the Internal Revenue Code or (2) any collective
investment fund, insurance company separate or general account or other
entity (except an entity registered under the Investment Company Act) whose
underlying assets include "plan assets" under ERISA by reason of a plan's
investment in such entity (a "BENEFIT PLAN"). If registration of a transfer
is to be made in reliance upon an exemption from the registration
requirements under the Securities Act, the transferor or the transferee shall
deliver, at its expense, to Transferor, Servicer and Trustee, an investment
letter from the transferee, substantially in the form of the investment
representation letter attached hereto as EXHIBIT E-2, and no registration of
transfer shall be made until such letter is so delivered.
Investor Certificates issued upon registration or transfer of, or
Investor Certificates issued in exchange for, Investor Certificates bearing a
legend referred to above shall also bear such legend unless Transferor,
Servicer, Trustee and the Transfer Agent and Registrar receive an Opinion of
Counsel, satisfactory to each of them, to the effect that such legend may be
removed.
Whenever an Investor Certificate containing a legend referred to above is
presented to the Transfer Agent and Registrar for registration of transfer, the
Transfer Agent and Registrar shall promptly seek instructions from Servicer
regarding such transfer and shall be entitled to receive instructions signed by
a Servicing Officer prior to registering any such transfer. Transferor hereby
agrees to indemnify the Transfer Agent and Registrar and Trustee and to hold
each of them harmless against any loss, liability or expense incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by them in relation to any such instructions furnished
pursuant to this paragraph.
(ii) Registration of transfer of Investor Certificates containing a
legend to the effect set forth on EXHIBIT E-3 shall be effected only if such
transfer is made to a Person which is not a Benefit Plan. By accepting and
holding any such Investor Certificate, an Investor Holder shall be deemed to
have
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represented and warranted that it is not a Benefit Plan. By acquiring any
interest in a Book-Entry Certificate which contains such legend, a
Certificate Owner shall be deemed to have represented and warranted that it
is not a Benefit Plan.
(iii) If so requested by Transferor, Trustee will make available to any
prospective purchaser of Investor Certificates who so requests, a copy of a
letter provided to Trustee by or on behalf of Transferor relating to the
transferability of any Series or Class to a Benefit Plan.
(d) Notwithstanding any other provision of this Agreement, any
Certificate for which an Opinion of Counsel has not been issued opining on the
treatment of such Certificates as debt for Federal income tax purposes (each, a
"SUBJECT CERTIFICATE") shall be subject to the following. No transfer (or
purported transfer) of all or any part of a Subject Certificate (or any economic
interest therein), whether to another Certificateholder or to a person who is
not a Certificateholder, shall be effective, and any such transfer (or purported
transfer) shall be void AB INITIO, and no Person shall otherwise become a Holder
of a Subject Certificate if (i) at the time of such transfer (or purported
transfer) any Subject Certificates are traded on an established securities
market, (ii) after such transfer (or purported transfer) the Trust would have
more than 100 Holders of Subject Certificates or (iii) the Subject Certificates
have been issued in a transaction or transactions that were required to be
registered under the Securities Act, and to the extent such offerings or sales
were not required to be registered under the Securities Act by reason of
Regulation S (17 CFR 230.901 through 230.904 or any successor thereto) such
offerings or sales would have been required to be registered under the
Securities Act if the interests so offered or sold had been offered and sold
within the United States. For purposes of CLAUSE (i) of the preceding sentence,
an established securities market is a national securities exchange that is
either registered under Section 6 of the Exchange Act or exempt from
registration because of the limited volume of transactions, a foreign securities
exchange that, under the law of the jurisdiction where it is organized,
satisfies regulatory requirements that are analogous to the regulatory
requirements of the Exchange Act, a regional or local exchange, or an
interdealer quotation system that regularly disseminates firm buy or sell
quotations by identified brokers or dealers by electronic means or otherwise.
For purposes of determining whether the Trust will have more than 100 Holders of
Subject Certificates, each Person indirectly owning an interest in the Trust
through a partnership (including any entity treated as a partnership for federal
income tax purposes), a grantor trust or an S corporation (each such entity a
"FLOW-THROUGH ENTITY") shall be treated as a Holder of a Subject Certificate
unless Servicer determines in its sole discretion, after consulting with
qualified tax counsel, that less than substantially all of the value of the
beneficial owner's interest in the flow-through entity is attributable to the
flow-through entity's interest (direct or indirect) in the Trust.
SECTION VI.5. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons (if any) appertaining thereto) is surrendered to
the Transfer Agent and Registrar, or the Transfer Agent and Registrar
receives evidence to its satisfaction of the destruction, loss or theft of
any Certificate and (b) there is delivered to the Transfer Agent and Registrar
and Trustee such security or indemnity as
53
may be required by them to save each of them harmless, then, in the absence
of notice to Trustee that such Certificate has been acquired by a bona fide
purchaser, Transferor shall execute, Trustee shall authenticate and the
Transfer Agent and Registrar shall deliver (in the case of Bearer
Certificates, outside the United States), in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and aggregate fractional undivided interest. In connection with
the issuance of any new Certificate under this Section, Trustee or the
Transfer Agent and Registrar may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of Trustee and Transfer Agent and Registrar) connected therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION VI.6. PERSONS DEEMED OWNERS. Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of these may (a) prior to
due presentation of a Registered Certificate for registration of transfer,
treat the Person in whose name any Registered Certificate is registered as
the owner of such Registered Certificate for the purpose of receiving
distributions pursuant to the applicable Supplement and for all other
purposes whatsoever, and (b) treat the bearer of a Bearer Certificate or
Coupon as the owner of such Bearer Certificate or Coupon for the purpose of
receiving distributions pursuant to the applicable Supplement and for all
other purposes whatsoever; and, in any such case, neither Trustee, the Paying
Agent, the Transfer Agent and Registrar nor any agent of any of these shall
be affected by any notice to the contrary. Notwithstanding the foregoing, in
determining whether the Holders of the requisite Investor Certificates have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Certificates owned by Transferor, Servicer, any other
Holder of the Transferor Certificate, Trustee or any Affiliate thereof, shall
be disregarded and deemed not to be outstanding, except that, in determining
whether Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which
Trustee actually knows to be so owned shall be so disregarded. Certificates
so owned which have been pledged in good faith shall not be disregarded and
may be regarded as outstanding if the pledgee establishes to the satisfaction
of Trustee the pledgee's right so to act with respect to such Certificates
and that the pledgee is not Transferor, Servicer, any other Holder of the
Transferor Certificate or any Affiliate thereof.
SECTION VI.7. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
distributions to Investor Holders from the Collection Account or any applicable
Series Account pursuant to the provisions of the applicable Supplement and shall
report the amounts of such distributions to Trustee. Any Paying Agent shall have
the revocable power to withdraw funds from the Collection Account or any
applicable Series Account for the purpose of making the distributions referred
to above. Trustee may revoke such power and remove the Paying Agent if Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement or any Supplement in any material
respect. The Paying Agent shall initially be Trustee, and any co-paying agent
chosen by Transferor and acceptable to Trustee, including, if and so long
54
as any Series or Class is listed on the Luxembourg Stock Exchange and such
exchange so requires, a co-paying agent in Luxembourg or another western
European city. Any Paying Agent shall be permitted to resign as Paying Agent
upon 30 days' notice to Trustee. If any Paying Agent shall resign, Trustee
shall appoint a successor to act as Paying Agent. Trustee shall cause each
successor or additional Paying Agent to execute and deliver to Trustee an
instrument in which such successor or additional Paying Agent shall agree
with Trustee that it will hold all sums, if any, held by it for payment to
the Investor Holders in trust for the benefit of the Investor Holders
entitled thereto until such sums shall be paid to such Investor Holders. The
Paying Agent shall return all unclaimed funds to Trustee and upon removal
shall also return all funds in its possession to Trustee. The provisions of
SECTIONS 11.1, 11.2, 11.3 and 11.5 shall apply to Trustee also in its role as
Paying Agent, for so long as Trustee shall act as Paying Agent. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise.
SECTION VI.8. ACCESS TO LIST OF REGISTERED HOLDERS' NAMES AND ADDRESSES.
Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to Servicer or the Paying Agent, within five Business Days after
receipt by Trustee of a request therefor, a list in such form as Servicer or the
Paying Agent may reasonably require, of the names and addresses of the
Registered Holders. If any Holder or group of Holders of Investor Certificates
of any Series or all outstanding Series, as the case may be, evidencing not less
than 10% of the aggregate unpaid principal amount of such Series or all
outstanding Series, as applicable (the "APPLICANTS"), apply to Trustee, and such
application states that the Applicants desire to communicate with other Investor
Holders with respect to their rights under this Agreement or any Supplement or
under the Investor Certificates and is accompanied by a copy of the
communication which such Applicants propose to transmit, then Trustee, after
having been adequately indemnified by such Applicants for its costs and expenses
shall afford or shall cause the Transfer agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Registered Holders of such Series or all outstanding Series, as applicable, held
by Trustee, within five Business Days after the receipt of such application.
Such list shall be as of a date no more than 45 days prior to the date of
receipt of such Applicants' request.
Every Registered Holder, by receiving and holding a Registered
Certificate, agrees with Trustee that neither Trustee, the Transfer Agent and
Registrar, nor any of their respective agents, shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Registered Holders hereunder, regardless of the sources from which such
information was derived.
SECTION VI.9. AUTHENTICATING AGENT. (a) Trustee may appoint one or more
authenticating agents with respect to the Certificates which shall be authorized
to act on behalf of 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 Trustee or Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of Trustee by an authenticating agent and
55
certificate of authentication executed on behalf of Trustee by an
authenticating agent. Each authenticating agent must be acceptable to
Transferor and Servicer.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any power or any further act on the part of Trustee or
such authenticating agent. An authenticating agent may at any time resign by
giving notice of resignation to Trustee and to Transferor. Trustee may at any
time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to Transferor. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
authenticating agent shall cease to be acceptable to Trustee or Transferor,
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 Trustee and
Transferor. Transferor agrees to pay to each authenticating agent from time to
time reasonable compensation for its services under this Section. The provisions
of SECTIONS 11.1, 11.2 and 11.3 shall be applicable to any authenticating agent.
(c) Pursuant to an appointment made under this Section, the Certificates
may have endorsed thereon, in lieu of Trustee's certificate of authentication,
an alternate certificate of authentication in substantially the following form:
This is one of the Certificates described in the Pooling and Servicing
Agreement.
------------------------------
------------------------------
as Authenticating Agent
for Trustee,
By:
--------------------------
Authorized Officer
SECTION VI.10. BOOK-ENTRY CERTIFICATES. Unless otherwise specified
in the related Supplement for any Series or Class, the Investor Certificates,
upon original issuance, shall be issued in the form of one or more
typewritten Investor Certificates representing the Book-Entry Certificates,
to be delivered to the Clearing Agency, by, or on behalf of, Transferor. The
Investor Certificates shall initially be registered on the Certificate
Register in the name of the Clearing Agency or its nominee, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Investor Certificates, except as provided
in SECTION 6.12. Unless and until
56
definitive, fully registered Investor Certificates ("DEFINITIVE CERTIFICATES")
have been issued to the applicable Certificate Owners pursuant to SECTION 6.12
or as otherwise specified in any such Supplement:
(a) the provisions of this Section shall be in full force and
effect;
(b) Transferor, Servicer and Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes (including
the making of distributions) as the authorized representatives of the
respective Certificate Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control; and
(d) the rights of the respective Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency
Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency or the
Clearing Agency Participants. Pursuant to the Depository Agreement,
unless and until Definitive Certificates are issued pursuant to SECTION
6.12, the Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distributions of
principal and interest on the related Investor Certificates to such
Clearing Agency Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Investor Holders evidencing
a specified percentage of the aggregate unpaid principal amount of Investor
Certificates, such direction or consent may be given by Certificate Owners
(acting through the Clearing Agency and the Clearing Agency Participants) owning
Investor Certificates evidencing the requisite percentage of principal amount of
Investor Certificates.
SECTION VI.11. NOTICES TO CLEARING AGENCY. Whenever any notice or other
communication is required to be given to Investor Holders of any Series or Class
with respect to which Book-Entry Certificates have been issued, unless and until
Definitive Certificates shall have been issued to the related Certificate
Owners, Trustee shall give all such notices and communications to the applicable
Clearing Agency.
SECTION VI.12. DEFINITIVE CERTIFICATES. If Book-Entry Certificates have
been issued with respect to any Series or Class and (a) Transferor advises
Trustee that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Series or Class and Trustee or Transferor is unable to engage a qualified
successor, (b) Transferor, at its option, advises Trustee that it elects to
terminate the book-entry system with respect to such Series or Class through the
Clearing Agency or (c) after the occurrence of a Servicer Default, Certificate
Owners of such Series or Class evidencing not less than 50% of the aggregate
57
unpaid principal amount of such Series or Class advise Trustee and the
Clearing Agency through the Clearing Agency Participants that the
continuation of a book-entry system with respect to the Investor Certificates
of such Series or Class through the Clearing Agency is no longer in the best
interests of the Certificate Owners with respect to such Certificates, then
Trustee shall notify all Certificate Owners of such Certificates, through the
Clearing Agency, of the occurrence of any such event and of the availability
of Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to Trustee of any such Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, Transferor shall execute and Trustee shall authenticate and
deliver such Definitive Certificates. Neither Transferor nor Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates all references herein to obligations
imposed upon or to be performed by the Clearing Agency shall be deemed to be
imposed upon and performed by Trustee, to the extent applicable with respect
to such Definitive Certificates and Trustee shall recognize the Holders of
such Definitive Certificates as Investor Holders hereunder.
SECTION VI.13. GLOBAL CERTIFICATE. If specified in the related
Supplement for any Series, or Class, the Investor Certificates for such
Series or Class will initially be issued in the form of a single temporary
global Certificate (the "GLOBAL CERTIFICATE") in bearer form, without
interest coupons, in the denomination of the aggregate principal amount of
such Series or Class and substantially in the form set forth in the exhibit
with respect thereto attached to the related Supplement. The Global
Certificate will be executed by Transferor and authenticated by 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 for Bearer or Registered Certificates in definitive form (the
"DEFINITIVE EURO-CERTIFICATES") pursuant to any applicable Supplement.
SECTION VI.14. UNCERTIFICATED CLASSES. Unless otherwise specified in
any Supplement, the provisions of this ARTICLE VI and ARTICLE XII relating to
the registration, form, execution, authentication, delivery, presentation,
cancellation and surrender of Certificates shall not apply to any
uncertificated Certificates.
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR
SECTION VII.1. LIABILITY OF TRANSFEROR. Transferor shall be liable for
its obligations, covenants, representations and warranties under this Agreement
and any Supplement, but only to the extent of the obligations specifically
undertaken by it in its capacity as Transferor.
SECTION VII.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, TRANSFEROR. (a) Transferor 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:
58
(i) the corporation formed by such consolidation or into which
Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of Transferor substantially as an
entirety shall be, if Transferor is not the surviving entity, a
corporation organized and existing under the laws of the United States of
America or any State or the District of Columbia, and, if Transferor is
not the surviving entity, such corporation shall expressly assume, by an
agreement supplemental hereto, executed and delivered to Trustee, in form
reasonably satisfactory to Trustee, the performance of every covenant and
obligation of Transferor hereunder, including its obligations under
SECTION 7.4;
(ii) Transferor has delivered to Trustee (A) an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section and
that all conditions precedent herein provided for relating to such
transaction have been complied with, and (B) an Opinion of Counsel to the
effect that such supplemental agreement is a valid and binding obligation
of such surviving entity enforceable against such surviving entity in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally from time to time in
effect and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity);
(iii) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the date of such consolidation, merger,
conveyance or transfer, with respect thereto;
(iv) in connection with any merger or consolidation, or any
conveyance or transfer referred to above, the business entity into which
Transferor shall merge or consolidate, or to which such conveyance or
transfer is made, shall be (x) a business entity that may not become a
debtor in any case, action or other proceeding under Title 11 of the
United States Code or (y) a special-purpose corporation, the powers and
activities of which shall be limited to the performance of Transferor's
obligations under this Agreement and any Supplement; and
(v) if Transferor is not the surviving entity, the surviving
entity shall file new UCC-1 financing statements with respect to the
interest of the Trust in the Receivables.
(b) This SECTION 7.2 shall not be construed to prohibit or in any way
limit Transferor's ability to effectuate any consolidation or merger pursuant to
which Transferor would be the surviving entity.
(c) Transferor shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this SECTION
7.2;
(d) The obligations of Transferor hereunder shall not be assignable nor
shall any Person succeed to the obligations of Transferor hereunder except in
each case in accordance with (i) the
59
provisions of the foregoing paragraphs, (ii) SECTIONS 2.11 or 6.3(d), or
(iii) conveyances, mergers, consolidations, assumptions, sales or transfers
to other entities (1) for which Transferor delivers an Officer's Certificate
to Trustee indicating that Transferor reasonably believes that such action
will not adversely affect in any material respect the interests of any
Investor Holder, (2) which meet the requirements of CLAUSE (ii) of PARAGRAPH
(a) and (3) for which such purchaser, transferee, pledgee or entity shall
expressly assume, in an agreement supplemental hereto, executed and delivered
to Trustee in writing in form satisfactory to Trustee, the performance of
every covenant and obligation of Transferor thereby conveyed.
SECTION VII.3. LIMITATIONS ON LIABILITY OF TRANSFEROR. Subject to
SECTIONS 7.1 and 7.4, neither Transferor, any Holder of the Transferor
Certificate nor any of their directors, officers, employees or agents of
Transferor acting in such capacities shall be under any liability to the Trust,
Trustee, the Holders, any Enhancement Provider or any other Person for any
action taken or for refraining from the taking of any action in good faith in
their capacities as Transferor pursuant to this Agreement; PROVIDED that this
provision shall not protect Transferor, any Holder of the Transferor Certificate
or any such Person against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of obligations and duties
hereunder. Transferor and any director, officer, employee or agent of Transferor
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person (other than Transferor) respecting any matters
arising hereunder.
SECTION VII.4. LIABILITIES. Notwithstanding SECTIONS 7.3, 8.3 and 8.4,
Transferor by entering into this Agreement, and any Holder of any interest in
the Transferor Certificate by its acceptance thereof, agree to be liable,
directly to the injured party, for the entire amount of any losses, claims,
damages or liabilities (other than those that would be incurred by an Investor
Holder if the Investor Certificates were notes secured by the Receivables, for
example, as a result of the performance of the Receivables, market fluctuations,
a shortfall or failure to make payment under any Enhancement or other similar
market or investment risks associated with ownership of the Investor
Certificates) arising out of or based on the arrangement created by this
Agreement or the actions of Servicer taken pursuant hereto (to the extent Trust
Assets remaining after the Investor Holders and Enhancement Providers, if any,
have been paid in full are insufficient to pay any such losses, claims, damages
or liabilities) as though this Agreement created a partnership under the
Delaware Revised Uniform Partnership Act in which Transferor and such Holder of
the Transferor Certificate were general partners.
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER
SECTION VIII.1. LIABILITY OF SERVICER. Servicer shall be liable under
this Agreement only to the extent of the obligations specifically undertaken by
Servicer in its capacity as Servicer.
60
SECTION VIII.2. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. (a) 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
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of Servicer substantially as an entirety shall
be, if Servicer is not the surviving entity, a corporation organized and
existing under the laws of the United States of America or any State or
the District of Columbia, and, if Servicer is not the surviving entity,
such corporation shall expressly assume, by an agreement supplemental
hereto, executed and delivered to Trustee, in form reasonably
satisfactory to Trustee, the performance of every covenant and obligation
of Servicer hereunder;
(ii) Servicer has delivered to Trustee (A) an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section and
that all conditions precedent herein provided for relating to such
transaction have been complied with, and (B) an Opinion of Counsel to the
effect that such supplemental agreement is a valid and binding obligation
of such surviving entity enforceable against such surviving entity in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally from time to time in
effect and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity);
and
(iii) either (x) the corporation formed by such consolidation or
into which Servicer is merged or the Person which acquired by conveyance
or transfer the properties and assets of Servicer substantially as an
entirety shall be an Eligible Servicer (taking into account, in making
such determination, the experience and operations of the predecessor
Servicer) or (y) upon the effectiveness of such consolidation, merger,
conveyance or transfer, a Successor Servicer shall have assumed the
obligations of Servicer in accordance with this Agreement.
(b) This SECTION 8.2 shall not be construed to prohibit or in any way
limit Servicer's ability to effectuate any consolidation or merger pursuant to
which Servicer would be the surviving entity.
(c) Servicer shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this
SECTION 8.2.
SECTION VIII.3. LIMITATION ON LIABILITY OF SERVICER AND OTHERS.
Except as provided in SECTIONS 8.4 and 11.5, neither Servicer nor any of the
directors, officers, employees or agents of Servicer in its capacity as
Servicer shall be under any liability to the Trust, Trustee, the Holders, any
Enhancement Providers or any other person for any action taken or for
refraining from the taking of any action in good faith in its capacity as
Servicer pursuant to this Agreement; PROVIDED that this
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provision shall not protect Servicer or any such Person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. Servicer and any director,
officer, employee or agent of Servicer may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person (other
than Servicer) respecting any matters arising hereunder. Servicer shall not
be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties as Servicer in accordance with this
Agreement and which in its reasonable judgment may involve it in any expense
or liability. Servicer may, in its sole discretion, undertake any such legal
action which it may deem necessary or desirable for the benefit of the
Holders with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Holders hereunder.
SECTION VIII.4. SERVICER INDEMNIFICATION OF THE TRUST AND TRUSTEE.
Servicer shall indemnify and hold harmless the Trust and Trustee and its
officers, directors, employees and agents, from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any acts or
omissions of Servicer with respect to the Trust pursuant to this Agreement, and
shall also hold harmless Trustee and its officers, directors, employees and
agents, from and against any loss, liability, expense, damage or injury suffered
or sustained by reason of any acts or omissions of Trustee pursuant to this
Agreement, in each case including any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any action, proceeding or claim; PROVIDED that (a) Servicer shall not
indemnify Trustee if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful misconduct by Trustee,
(b) Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners for any liabilities, costs or expenses of the Trust with
respect to any action taken by Trustee at the request of the Investor Holders,
(c) Servicer shall not indemnify the Trust, the Investor Holders or the
Certificate Owners as to any losses, claims or damages incurred by any of them
in their capacities as investors, including losses with respect to market or
investment risks associated with ownership of the Investor Certificates or
losses incurred as a result of Defaulted Receivables and (d) Servicer shall not
indemnify the Trust, the Investor Holders or the Certificate Owners for any
liabilities, costs or expenses of the Trust, the Investor Holders or the
Certificate Owners arising under any tax law, including any Federal, state,
local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by the Trust, the
Investor Holders or the Certificate Owners in connection herewith to any taxing
authority. Indemnification pursuant to this Section shall not be payable from
the Trust Assets. The provisions of this indemnity shall run directly to and be
enforceable by an indemnitee subject to the limitations hereof.
SECTION VIII.5. SERVICER NOT TO RESIGN. Servicer shall not resign from
the obligations and duties hereby imposed on it except (x) upon the
determination that (i) the performance of its duties hereunder is no longer
permissible under Requirements of Law (other than the charter and by-laws of
Servicer) and (ii) there is no reasonable action which Servicer could take to
make the performance of its duties hereunder permissible under such Requirements
of Law or (y) as may be required, in
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connection with Servicer's consolidation with, or merger into any other
corporation or Servicer's conveyance or transfer of its properties and assets
substantially as an entirety to any person in each case, in accordance with
SECTION 8.2. Any determination permitting the resignation of Servicer
pursuant to clause (x) above shall be evidenced by an Opinion of Counsel to
such effect delivered to Trustee. No resignation shall become effective until
Trustee or a Successor Servicer shall have assumed the responsibilities and
obligations of Servicer in accordance with SECTION 10.2. If within 120 days
of the date of the determination that Servicer may no longer act as Servicer,
and if Trustee is unable to appoint a Successor Servicer, Trustee shall serve
as Successor Servicer. Notwithstanding the foregoing, Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to
appoint any established institution having a net worth of not less than
$50,000,000 and whose regular business includes the servicing of credit card
accounts as the Successor Servicer hereunder. Trustee shall give prompt
notice to each Rating Agency and each Enhancement Provider, if any, entitled
thereto under the applicable Supplement upon the appointment of a Successor
Servicer.
SECTION VIII.6. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE RECEIVABLES. Servicer shall provide to Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where
Trustee is required in connection with the enforcement of the rights of
Holders or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to
Servicer's normal security and confidentiality procedures and (d) at
reasonably accessible offices in the continental United States designated by
Servicer. Nothing in this Section shall derogate from the obligation of each
Credit Card Originator, Transferor, Trustee and Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors,
and the failure of Servicer to provide access as provided in this Section as
a result of such obligation shall not constitute a breach of this Section.
SECTION VIII.7. DELEGATION OF DUTIES. In the ordinary course of
business, Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement. Any such delegations shall not relieve
Servicer of its liability and responsibility with respect to such duties, and
shall not constitute a resignation within the meaning of SECTION 8.5, and
Servicer shall remain jointly and severally liable with such Person for any
amounts which would otherwise be payable pursuant to this ARTICLE VIII as if
Servicer had performed such duty; PROVIDED that in the case of any
significant delegation to a Person other than an Affiliate of WFN, at least
30 days' prior written notice shall be given to Trustee, each Rating Agency
and each Enhancement Provider, if any, entitled thereto pursuant to the
relevant Supplement, of such delegation to any entity that is not an
Affiliate of Servicer.
ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION IX.1. EARLY AMORTIZATION EVENTS. Each of the following shall
constitute an "EARLY AMORTIZATION EVENT" with respect to each Series:
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SECTION XI.11. TAX RETURN. If the Trust is required to file tax
returns, Servicer shall prepare or shall cause to be prepared any tax returns
required to be filed by the Trust and shall remit such returns to Trustee for
signature at least five days before such returns are due to be filed; Trustee
shall promptly sign such returns and deliver such returns after signature to
Servicer and such returns shall be filed by Servicer. Servicer in accordance
with each Supplement shall also prepare or shall cause to be prepared all tax
information required by law to be distributed to Investor Holders. Trustee
upon request, will furnish Servicer with all such information known to
Trustee as may be reasonably required in connection with the preparation of
all tax returns of the Trust. In no event shall Trustee or Servicer (except
as provided in SECTIONS 7.4 or 8.4) be liable for any liabilities, costs or
expenses of the Trust or the Investor Holders arising under any tax law,
including Federal, state, local or foreign income or excise taxes or any
other tax imposed or measured by income (or any interest or penalty with
respect thereto or arising from a failure to comply therewith).
SECTION XI.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by Trustee without the possession
of any of the Certificates or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by 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 Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
obtained.
SECTION XI.13. SUITS FOR ENFORCEMENT. If a Servicer Default shall
occur and be continuing, Trustee, in its discretion may, subject to the
provisions of SECTIONS 10.1 and 11.14, proceed to protect and enforce its
rights and the rights of the Holders under this Agreement by a suit, action
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in
aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of
the rights of Trustee or the Holders.
SECTION XI.14. RIGHTS OF HOLDERS TO DIRECT TRUSTEE. Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any
remedy, trust or power that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all Series
to which such remedy, trust or power relates) shall have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to Trustee, or exercising any trust or power conferred on Trustee
relating to such proceeding; PROVIDED that, subject to SECTION 11.1, Trustee
shall have the right to decline to follow any such direction if Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if Trustee in good faith shall, by a Responsible Officer or
Responsible Officers of Trustee, determine that the proceedings so directed
would be illegal or involve it in personal liability or be unduly prejudicial
to the rights of Holders not parties to such
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direction; and PROVIDED FURTHER that nothing in this Agreement shall impair
the right of Trustee to take any action deemed proper by Trustee and which is
not inconsistent with such direction.
SECTION XI.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. Trustee
represents and warrants as of each Closing Date that:
(a) Trustee is a New York banking corporation organized, existing
and in good standing under the laws of the State of New York;
(b) Trustee has full power, authority and right to execute,
deliver and perform this Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Agreement; and
(c) this Agreement has been duly executed and delivered by Trustee
and is a binding obligation of Trustee enforceable against Trustee 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).
SECTION XI.16. MAINTENANCE OF OFFICE OR AGENCY. Trustee will maintain at
its expense an office or agency (the "CORPORATE TRUST OFFICE") where notices and
demands to or upon Trustee in respect of the Certificates and this Agreement may
be served (a) in the City of New York, in the case of Registered Certificates
and Holders thereof, and (b) in London or Luxembourg, in the case of Bearer
Certificates and Holders thereof, if and for so long as any Bearer Certificates
are outstanding. The Corporate Trust Office shall initially be located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Trustee will give prompt notice to
Servicer and to Investor Holders of any change in the location of the
Certificate Register or any such office or agency.
SECTION XI.17. CONFIDENTIALITY. Information provided by the Credit Card
Originator or Transferor to Trustee related to the transaction effected
hereunder, including all information related to the Obligors with respect to the
Receivables, and any computer software provided to Trustee in connection with
the transaction effected hereunder or under any Supplement, in each case whether
in the form of documents, reports, lists, tapes, discs or any other form, shall
be "CONFIDENTIAL INFORMATION." Trustee and its agents, representatives or
employees shall at all times maintain the confidentiality of all Confidential
Information and shall not, without the prior written consent of the Credit Card
Originator or Transferor, as applicable, disclose to third parties (including
Holders) or use such information to compete or assist any other Person in
competing with the Credit Card Originator or Transferor or in any manner
whatsoever, in whole or in part, except as expressly permitted under this
Agreement or under any Supplement or as required to fulfill an obligation of
Trustee under this Agreement or under any Supplement, in which case such
Confidential Information shall be revealed only to the extent expressly
permitted or only to Trustee's agents, representatives
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and employees who need to know such Confidential Information to the extent
required for the purpose of fulfilling an obligation of Trustee under this
Agreement or under any Supplement. Notwithstanding the above, Confidential
Information may be disclosed to the extent required by law or legal process,
provided that Trustee gives prompt written notice to the Credit Card
Originator or Transferor, as applicable, of the nature and scope of such
disclosure.
ARTICLE XII TERMINATION
SECTION XII.1. TERMINATION OF TRUST. The Trust and the respective
obligations and responsibilities of Transferor, Servicer and Trustee created
hereby (other than the obligation of Trustee to make payments to Investor
Holders as hereinafter set forth) shall terminate, except with respect to the
duties described in SECTIONS 7.4, 8.4, 9.2 and 12.2(b), upon the earlier of
(i) January 1, 2021, (ii) the day following the Distribution Date on which
the Invested Amount for each Series is zero (PROVIDED that Transferor has
delivered a written notice to Trustee electing to terminate the Trust) and
(iii) the date provided in SECTION 9.2.
SECTION XII.2. FINAL DISTRIBUTION. (a) Servicer shall give Trustee at
least 30 days prior notice of the Distribution Date on which the Investor
Holders of any Series or Class may surrender their Investor Certificates for
payment of the final distribution on and cancellation of such Investor
Certificates (or, in the event of a final distribution resulting from the
application of SECTION 2.6, 9.2 or 10.1, notice of such Distribution Date
promptly after Servicer has determined that a final distribution will occur,
if such determination is made less than 30 days prior to such Distribution
Date). Such notice shall be accompanied by an Officer's Certificate setting
forth the information specified in SECTION 3.5 covering the period during the
then current fiscal year through the date of such notice. Not later than the
fifth day of the month in which the final distribution in respect of such
Series or Class is payable to Investor Holders, Trustee shall provide notice
to Investor Holders of such Series or Class specifying (i) the date upon
which final payment of such Series or Class will be made upon presentation
and surrender of Investor Certificates of such Series or Class at the office
or offices therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Investor Certificates at the office or offices therein specified (which, in
the case of Bearer Certificates, shall be outside the United States). Trustee
shall give such notice to the Transfer Agent and Registrar and the Paying
Agent at the time such notice is given to Investor Holders.
(b) Notwithstanding a final distribution to the Investor Holders of
any Series or Class (or the termination of the Trust), except as otherwise
provided in this paragraph, all funds then on deposit in the Collection
Account, the Excess Funding Account and any Series Account allocated to such
Investor Holders shall continue to be held in trust for the benefit of such
Investor Holders and the Paying Agent or Trustee shall pay such funds to such
Investor Holders upon surrender of their Investor Certificates (and any
excess shall be paid in accordance with any relevant Enhancement Agreement).
If all such Investor Holders shall not surrender their Investor Certificates
for
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cancellation within six months after the date specified in the notice from
Trustee described in PARAGRAPH (a), Trustee shall give a second notice to the
remaining such Investor Holders to surrender their Investor Certificates for
cancellation and receive the final distribution with respect thereto (which
surrender and payment, in the case of Bearer Certificates, shall be outside
the United States). If within one year after the second notice all such
Investor Certificates shall not have been surrendered for cancellation,
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining such Investor Holders concerning
surrender of their Investor Certificates, and the cost thereof shall be paid
out of the funds in the Collection Account or any Series Account held for the
benefit of such Investor Holders. Trustee and the Paying Agent shall pay to
Transferor any moneys held by them for the payment of principal or interest
that remains unclaimed for two years. After payment to Transferor, Investor
Holders entitled to the money must look to Transferor for payment as general
creditors unless an applicable abandoned property law designates another
Person.
(c) If the Invested Amount with respect to any Series is greater than
zero on its Series Termination Date or such earlier date as is specified in
the related Supplement (after giving effect to deposits and distributions
otherwise to be made on such date), Trustee will sell or cause to be sold on
such Series Termination Date, in accordance with the procedures and subject
to the conditions described in such Supplement, Principal Receivables and the
related Finance Charge Receivables (or, if a Tax Opinion is obtained,
interests therein) in an amount up to 110% of the Invested Amount with
respect to such Series on such date (after giving effect to such deposits and
distributions; PROVIDED that in no event shall such amount exceed an amount
of Principal Receivables (and all associated Finance Charge Receivables)
equal to the sum of (i) the product of (A) Transferor Percentage, (B) the
aggregate outstanding Principal Receivables, and (C) a fraction the numerator
of which is the related Investor Percentage of Collections of Finance Charge
Receivables and the denominator of which is the sum of all Investor
Percentages with respect to Collections of Finance Charge Receivables of all
Series outstanding and (ii) the Invested Amount of such Series). The proceeds
from any such sale shall be allocated and distributed in accordance with the
applicable Supplement.
SECTION XII.3. TRANSFEROR'S TERMINATION RIGHTS. Upon the termination
of the Trust pursuant to SECTION 12.1 and the surrender of the Transferor
Certificate and any Supplemental Certificate, Trustee shall assign and convey
to Transferor or its designee, without recourse, representation or warranty,
all right, title and interest of the Trust in the Receivables, whether then
existing or thereafter created, all moneys due or to become due and all
amounts received with respect thereto and all proceeds thereof, except for
amounts held by Trustee pursuant to SECTION 12.2(b). Trustee shall execute
and deliver such instruments of transfer and assignment, in each case without
recourse, as shall be reasonably requested by Transferor to vest in
Transferor or its designee all right, title and interest which the Trust had
in the Receivables and such other related assets.
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ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION XIII.1. AMENDMENT; WAIVER OF PAST DEFAULTS. (a) This Agreement
or any Supplement may be amended from time to time (including in connection
with (i) adding covenants, restrictions or conditions of Transferor, such
further covenants, restrictions or conditions as its Board of Directors and
Trustee shall consider to be for the benefit or protection of the Investor
Holders, and to make the occurrence, or the occurrence and continuance, of a
default in any of such additional covenants, restrictions or conditions a
default or Early Amortization Event permitting the enforcement of all or any
of the several remedies provided in this Agreement as herein set forth;
PROVIDED, HOWEVER, that in respect of any such additional covenant,
restriction or condition such amendment may provide for a particular period
of grace after default or may provide for an immediate enforcement upon such
default or may limit the remedies available to Trustee upon such default,
(ii) curing any ambiguity or correcting or supplementing any provision
contained herein or in any Supplement which may be defective or inconsistent
with any other provision contained herein or in any Supplement or to
surrender any right or power conferred upon Transferor, (iii) the issuance of
a Supplemental Certificate, (iv) the addition of a Participation Interest or
receivables arising in VISA, MasterCard or any other type of open end
revolving credit card account to the Trust, (v) the assumption by another
entity, in accordance with the provisions of this Agreement, of Transferor's
obligations hereunder, or (vi) the provision of additional Enhancement for
the benefit of Holders of any Series) by Servicer, Transferor and Trustee
without the consent of such Holders as provided for in the applicable
Supplement, PROVIDED that (x) Transferor shall have delivered to Trustee an
Officer's Certificate to the effect that Transferor reasonably believes that
such action shall not adversely affect in any material respect the interests
of any Investor Holder, (y) the Rating Agency Condition shall have been
satisfied with respect to any such amendment and (z) a Tax Opinion is
delivered in connection with any such amendment. The designation of
additional or substitute Transferors or additional Credit Card Originators
pursuant to SECTION 2.11 or 2.12 shall be subject to this SECTION 13.1 only
to the extent that the supplement to this Agreement providing for such
designation amends any of the terms of this Agreement.
(b) This Agreement or any Supplement may also be amended from time to
time by Servicer, Transferor and Trustee, with the consent of the Holders of
Investor Certificates (acting for themselves or through any designated
agents, as provided for in any applicable Supplement) evidencing not less
than 66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of all adversely affected Series, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or any Supplement or of modifying in any manner the rights
of the Holders; PROVIDED, HOWEVER, that no such amendment shall (i) reduce in
any manner the amount of or delay the timing of any distributions to be made
to Investor Holders or deposits of amounts to be so distributed or the amount
available under any Enhancement without the consent of each affected Holder
(provided that any amendment of the terms of an Early Amortization Event
shall not be deemed to be within the scope of this CLAUSE (i)), (ii) change
the definition of or the manner of calculating the interest of any Investor
Holder without
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the consent of each affected Investor Holder (acting for themselves or
through any designated agents, as provided for in any applicable Supplement)
or (iii) reduce the aforesaid percentage required to consent to any such
amendment without the consent of each Investor Holder (acting for themselves
or through any designated agents, as provided for in any applicable
Supplement). Any amendment to be effected pursuant to this paragraph shall be
deemed to adversely affect all outstanding Series, other than any Series with
respect to which such action shall not, as evidenced by an Opinion of Counsel
for Transferor, addressed and delivered to Trustee, adversely affect in any
material respect the interests of any Investor Holder of such Series. Trustee
may, but shall not be obligated to, enter into any such amendment which
affects Trustee's rights, duties or immunities under this Agreement or
otherwise.
(c) Promptly after the execution of any such amendment or consent (other
than an amendment pursuant to PARAGRAPH (a)), Trustee shall furnish notification
of the substance of such amendment to each Investor Holder; and Servicer shall
furnish prior notification of the substance of such amendment to (i) each Rating
Agency and (ii) each Enhancement Provider, if any, entitled thereto pursuant to
the relevant Supplement.
(d) It shall not be necessary for the consent of Investor Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Investor Holders shall be subject to such reasonable
requirements as Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions of SECTION
6.3 shall not be considered an amendment to this Agreement for the purposes of
this Section.
(f) The Holders of Investor Certificates evidencing more than 66-2/3% of
the aggregate unpaid principal amount of the Investor Certificates of each
Series, or, with respect to any Series with two or more Classes, of each Class
(or, with respect to any default that does not relate to all Series, 66-2/3% of
the aggregate unpaid principal amount of the Investor Certificates of each
Series to which such default relates or, with respect to any such Series with
two or more Classes, of each Class) may, on behalf of all Holders, waive any
default by Transferor or Servicer in the performance of their obligations
hereunder and its consequences, except the failure to make any distributions
required to be made to Investor Holders or to make any required deposits of any
amounts to be so distributed. Upon any such waiver of a past default, such
default shall cease to exist, and any default arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
SECTION XIII.2. PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST. (a)
Transferor shall cause this Agreement, all amendments and supplements hereto and
all financing statements and continuation statements and any other necessary
documents covering the Holders, and Trustee's
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right, title and interest to the Trust to be promptly recorded, registered
and filed, and at all times to be kept recorded, registered and filed, all in
such manner and in such places as may be required by law fully to preserve
and protect the right, title and interest of the Holders and Trustee
hereunder to all property comprising the Trust Assets. Transferor shall
deliver to 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.
(b) Within 30 days after Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with PARAGRAPH (a) seriously
misleading within the meaning of Section 9-402(7) (or any comparable provision)
of the UCC, Transferor shall give Trustee notice of any such change and shall
file such financing statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables and the proceeds
thereof.
(c) Transferor and Servicer will give Trustee prompt notice of any
relocation of any office from which it services Receivables or keeps records
concerning the Receivables or of its principal executive office and whether, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall file such financing
statements or amendments as may be necessary to perfect or to continue the
perfection of the Trust's security interest in the Receivables and the proceeds
thereof. Transferor and Servicer will at all times maintain each office from
which it services Receivables and its principal executive offices within the
United States.
(d) Transferor will deliver to Trustee and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement: (i) upon the execution and
delivery of each amendment of this Agreement or any Supplement, an Opinion of
Counsel to the effect specified in EXHIBIT F-1; (ii) on each Addition Date on
which any Supplemental Accounts are to be designated as Accounts pursuant to
SECTION 2.8(a) or (b), an Opinion of Counsel to the effect specified in EXHIBIT
F-2, and on each Addition Date on which any Participation Interests are to be
included in the Trust pursuant to SECTION 2.8(a) or (b), an Opinion of Counsel
covering the same substantive legal issues addressed by EXHIBIT F-2 but
conformed to the extent appropriate to relate to Participation Interests; and
(iii) on or before March 31 of each year, beginning with March 31, 1998, an
Opinion of Counsel to the effect specified in EXHIBIT F-2.
SECTION XIII.3. LIMITATION ON RIGHTS OF HOLDERS. (a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or the
Trust, nor shall such death or incapacity entitle such Holders' legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
(b) No Investor Holder shall have any right to vote (except as
expressly provided in this Agreement) or in any manner otherwise control the
operation and management of the Trust, or the
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obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute
the Investor Holders from time to time as partners or members of an
association, nor shall any Investor Holder be under any liability to any
third person by reason of any action by the parties to this Agreement
pursuant to any provision hereof.
(c) No Investor Holder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Investor Holder previously shall have made, and unless the Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any such
action, suit or proceeding that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all Series
which such action, suit or proceeding relates) shall have made written
request to Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and Trustee, for 60 days after its receipt of
such request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Investor Holder with every
other Investor Holder and Trustee, that no one or more Investor Holders shall
have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or
prejudice the rights of Holders of any other of the Investor Certificates, or
to obtain or seek to obtain priority over or preference to any other Investor
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the equal, ratable and common benefit of all Investor
Holders except as otherwise expressly provided in this Agreement. For the
protection and enforcement of the provisions of this Section, each and every
Investor Holder and Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION XIII.4. 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 XIII.5. NOTICES, PAYMENTS. (a) All demands notices, instructions,
directions and communications (collectively, "NOTICES") under this Agreement
shall be in writing and shall be deemed to have been duly given if personally
delivered at, mailed by registered mail, return receipt requested, or sent by
facsimile transmission (i) in the case of Transferor or Servicer, to WFN, 000
Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxx 00000, Attention: Xxx Xxxxxxx (facsimile no.
614/729-4899), (ii) in the case of Trustee, The Bank of New York, 101 Xxxxxxx
Street, 00xx Xxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset-Backed Unit
(facsimile no. 212-815-5999)), (iii) in the case of the Paying Agent or the
Transfer Agent and Registrar, to Trustee at the address above and (iv) to any
other Person as specified in any Supplement; or, as to each party, at such other
address or facsimile number as shall be designated by such party in a written
notice to each other party.
83
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. No Notice shall
be required to be mailed to a Holder of Bearer Certificates or Coupons but shall
be given as provided below. Any Notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Investor Holder receives such Notice. In addition, (i) if and so long
as any Series or Class is listed on the Luxembourg Stock Exchange and such
Exchange shall so require, any Notice to Investor Holders shall be published in
an Authorized Newspaper of general circulation in Luxembourg within the time
period prescribed in this Agreement and (ii) in the case of any Series or Class
with respect to which any Bearer Certificates are outstanding, any Notice
required or permitted to be given to Investor Holders of such Series or Class
shall be published in an Authorized Newspaper within the time period prescribed
in this Agreement.
SECTION XIII.6. RULE 144A INFORMATION. For so long as any of the Investor
Certificates of any Series or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, each of Transferor, Trustee,
Servicer and any Enhancement Provider agree to cooperate with each other to
provide to any Investor Holders of such Series or Class and to any prospective
purchaser of Certificates designated by such Investor Holder, upon the request
of such Investor Holder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
SECTION XIII.7. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Certificates or the rights of the Holders.
SECTION XIII.8. CERTIFICATES NONASSESSABLE AND FULLY PAID. It is the
intention of the parties to this Agreement that the Holders shall not be
personally liable for obligations of the Trust, that the interests in the Trust
represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by Trustee pursuant to SECTION 6.2 are and shall be
deemed fully paid.
SECTION XIII.9. FURTHER ASSURANCES. Transferor and Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by Trustee more fully to
effect the purposes of this Agreement, including the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.
SECTION XIII.10. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, Servicer, Trustee, Transferor, each Holder and
each Enhancement Provider, if any, and
84
each Holder of a Supplemental Certificate shall not, prior to the date which
is one year and one day after the last day on which any Investor Certificates
shall have been outstanding, with respect to the Trust, petition or otherwise
invoke or cause the Trust to invoke the process of any Governmental Authority
for the purpose of commencing or sustaining a case against the Trust under
any Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Trust.
SECTION XIII.11. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of Trustee or the Holders, any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided under this Agreement are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION XIII.12. COUNTERPARTS. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
SECTION XIII.13. THIRD-PARTY BENEFICIARIES. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Holders, any
Enhancement Provider (to the extent provided in this Agreement and the related
Supplement) and their respective successors and permitted assigns. Except as
otherwise expressly provided in this Agreement (including SECTION 7.4), no other
Person will have any right or obligation hereunder.
SECTION XIII.14. ACTIONS BY HOLDERS. (a) Wherever in this Agreement a
provision is made that an action may be taken or a Notice given by Holders, such
action or Notice may be taken or given by any Holder, unless such provision
requires a specific percentage of Holders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Certificate shall bind such Holder and every
subsequent Holder of such Certificate and of any Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by Trustee or Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
SECTION XIII.15. 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.
85
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK, as Transferor
and Servicer,
By___________________________
Name: Xxxxxx Xxxxxx
Title: Treasurer
THE BANK OF NEW YORK,
as Trustee,
By___________________________
Name:
Title:
EXHIBIT A
FORM OF TRANSFEROR CERTIFICATE
THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM SUCH REGISTRATION PROVISIONS.
THIS TRANSFEROR CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE
WITH THE TERMS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R-1 One Unit
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST III
TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF THE
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST III
(Not an interest in or obligation of Transferor
or any affiliate thereof)
This certifies that WORLD FINANCIAL NETWORK NATIONAL BANK is the
registered owner of a fractional interest in the assets of a trust (the
"TRUST") not allocated to the Investor Interest or the interest of any Holder
of a Supplemental Certificate pursuant to the Pooling and Servicing Agreement
dated as of January 30, 1998 (as amended and supplemented, the "AGREEMENT"),
between World Financial Network National Bank, a national banking
association, as Transferor ("TRANSFEROR") and as Servicer, and The Bank of
New York, a New York banking corporation, as trustee ("TRUSTEE"). To the
extent not defined herein, the capitalized terms used herein have the
meanings ascribed to them in the Agreement.
This Certificate is the Transferor Certificate issued under, and is
subject to, the Agreement. By accepting this Certificate, its Holder assents
to, and is bound by, the Agreement.
Exhibit A, Page 1
Transferor has entered into the Agreement, and this Certificate is
issued, with the intention that, for Federal, state and local income and
franchise tax purposes only, the Investor Certificates (except Transferor
Retained Certificates which are held by Transferor) will qualify as debt
secured by the Receivables. Transferor, by entering into the Agreement and
the Holder of the Transferor Certificate by acceptance of this Transferor
Certificate, agree to treat such Investor Certificates for Federal, state and
local income and franchise tax purposes as debt under applicable tax law.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Holder of the Transferor Certificate has
caused this Certificate to be duly executed.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor,
BY
------------------------------------
Name:
Title:
Dated: January 30, 1998
Exhibit A, Page 2
DATED: JANUARY 30, 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate described in the within-mentioned
Pooling and Servicing Agreement dated as of January 30, 1998 between World
Financial Network National Bank as Transferor and Servicer and The Bank of
New York, as Trustee.
THE BANK OF NEW YORK,
as Trustee
By
----------------------------------
Authorized Signatory
Exhibit A, Page 3
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
(As required by SECTION 2.8 of
the Pooling and Servicing Agreement)
ASSIGNMENT No. _______ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS dated
as of _____________, ___1/ by and among WORLD FINANCIAL NETWORK NATIONAL BANK,
a national banking association, as Transferor ("TRANSFEROR") and as Servicer
("SERVICER"), and THE BANK OF NEW YORK, a New York banking corporation
("TRUSTEE"), pursuant to the Pooling and Servicing Agreement referred to
below.
WITNESSETH
WHEREAS Transferor, Servicer and Trustee are parties to the Pooling and
Servicing Agreement dated as of January 30, 1998 (as may be amended and
supplemented from time to time, the "AGREEMENT");
WHEREAS, pursuant to the Agreement, Transferor wishes to designate
Supplemental Accounts owned by the Credit Card Originator to be included as
Accounts and to convey the Receivables of such Supplemental Accounts, whether
now existing or hereafter created, to the Trust as part of the corpus of the
Trust (as each such term is defined in the Agreement); and
WHEREAS Trustee is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as follows:
1. DEFINED TERMS. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise defined herein.
"Addition Date" means, with respect to the Supplemental Accounts
designated hereby, ________, ____.
"Addition Cut Off Date" means, with respect to the Supplemental Accounts
designated hereby, ________, ____.
-----------------------------
1/ To be dated as of the applicable Addition Date.
Exhibit B, Page 1
2. DESIGNATION OF SUPPLEMENTAL ACCOUNTS. On or before the Document
Delivery Date, Transferor will deliver to Trustee an Account Schedule
containing a true and complete schedule identifying all such Supplemental
Accounts specifying for each such Account, as of the Addition Cut Off Date,
its account number, the aggregate amount outstanding in such Account and the
aggregate amount of Principal Receivables outstanding in such Account, which
Account Schedule shall supplement any other Account Schedule previously
delivered to Trustee pursuant to the Agreement.
3. CONVEYANCE OF RECEIVABLES. Transferor does hereby transfer, assign,
set over and otherwise convey to the Trust, for the benefit of the Holders,
all its right, title and interest in, to and under the Receivables of such
Supplemental Accounts existing at the close of business on the Addition Date
and thereafter created from time to time until the termination of the Trust,
all monies due or to become due and all amounts received with respect thereto
and all proceeds thereof. The foregoing does not constitute and is not
intended to result in the creation or assumption by the Trust, Trustee, any
Investor Holder or any Enhancement Provider of any obligation of Servicer,
Transferor, the Credit Card Originator or any other Person in connection with
the Accounts, the Receivables or under any agreement or instrument relating
thereto, including any obligation to Obligors, merchant banks, merchants
clearance systems or insurers.
Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to the
Receivables now in Supplemental Accounts, meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect, and maintain perfection of, the assignment of such
Receivables to the Trust, and to deliver a file-stamped copy of each such
financing statement or other evidence of such filing to Trustee on or prior
to the Addition Date. Trustee shall be under no obligation whatsoever to file
such financing or continuation statements or to make any other filing under
the UCC in connection with such assignment.
In connection with such assignment, Transferor further agrees, at its
own expense, on or prior to the date of this Assignment, to cause the Credit
Card Originator to indicate in the appropriate computer files that
Receivables created in connection with the Supplemental Accounts and
designated hereby have been conveyed to the Trust pursuant to the Agreement
and this Assignment for the benefit of the Holders.
Transferor does hereby grant to Trustee a security interest in all of
its right, title and interest in and to the Receivables now existing and
hereafter created in the Supplemental Accounts, all monies due or to become
due and all amounts received with respect thereto and all proceeds thereof.
This Assignment constitutes a security agreement under the UCC.
4. ACCEPTANCE BY TRUSTEE. Trustee hereby acknowledges its acceptance on
behalf of the Trust of all right, title and interest to the property, now
existing and hereafter created, conveyed to the Trust pursuant to SECTION
3(A) of this Assignment, and declares that it shall maintain such right, title
Exhibit B, Page 2
and interest, upon the trust set forth in the Agreement for the benefit
of all Holders. Trustee further acknowledges that, prior to or simultaneously
with the execution and delivery of this Assignment, Transferor delivered to
Trustee the Account Schedule described in SECTION 2 of this Assignment.
5. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Trustee, on behalf of the Trust, as of the date of
this Assignment and as of the Addition Date that:
(a) LEGAL, VALID AND BINDING OBLIGATION. This Assignment
constitutes a legal, valid and binding obligation of Transferor
enforceable against Transferor in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity);
(b) ELIGIBILITY OF ACCOUNTS. Each Supplemental Account designated
hereby is an Eligible Account;
(c) INSOLVENCY. As of each of the Addition Cut Off Date and the
Addition Date, no Insolvency Event with respect to the Credit Card
Originator or Transferor has occurred and the transfer by Transferor of
Receivables arising in the Supplemental Accounts to the Trust has not
been made in contemplation of the occurrence thereof;
(d) EARLY AMORTIZATION EVENT. Transferor reasonably believes that
(A) the addition of the Receivables arising in the Supplemental Accounts
will not, based on the facts known to Transferor, then or thereafter
cause an Early Amortization Event to occur with respect to any Series and
(B) no selection procedure was utilized by Transferor which would result
in the selection of Supplemental Accounts (from among the available
Eligible Accounts owned by the Credit Card Originator) that would be
materially less favorable to the interests of the Investor Holders of any
Series as of the Addition Date than a random selection;
(e) SECURITY INTEREST. Either this Assignment constitutes a valid
transfer and assignment to the Trust of all right, title and interest of
Transferor in the Receivables and other Trust Assets conveyed to the
Trust by Transferor and all monies due or to become due and all amounts
received with respect thereto and the proceeds thereof, or this
Assignment constitutes a grant of a security interest in such property to
the Trustee, for the benefit of the Investor Holders, which, in the case
of existing Receivables and the proceeds thereof, is enforceable upon
execution and delivery of this Assignment, and which will be enforceable
with respect to such Receivables hereafter created and the proceeds
thereof upon such creation. Upon the filing of the financing statements
described in SECTION 3 of this Assignment and, in the case of the
Receivables hereafter created and the proceeds thereof, upon the creation
thereof, the Trust shall have a first priority security interest in such
property except for Liens permitted under SECTION 2.7(B) of the
Agreement;
Exhibit B, Page 3
(f) NO CONFLICT. The execution and delivery by Transferor of this
Assignment, the performance of the transactions contemplated by this
Assignment and the fulfillment of the terms hereof applicable to
Transferor, will not conflict with or violate any Requirements of Law
applicable to Transferor or conflict with, result in any breach of any of
the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust or other instrument to which
Transferor is a party or by which it or its properties are bound;
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against
Transferor before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (i) asserting the
invalidity of this Assignment, (ii) seeking to prevent the consummation
of any of the transactions contemplated by this Assignment, (iii) seeking
any determination or ruling that, in the reasonable judgment of
Transferor, would materially and adversely affect the performance by
Transferor of its obligations under this Assignment, (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Assignment or (v) seeking to affect
adversely the income tax attributes of the Trust under the Federal, or
applicable state income or franchise tax systems; and
(h) ALL CONSENTS. All authorizations, consents, orders or
approvals or other actions of any Person or of any court or other
governmental authority required to be obtained by Transferor in
connection with the execution and delivery of this Assignment by
Transferor and the performance of the transactions contemplated by this
Assignment by Transferor, have been obtained.
6. RATIFICATION OF AGREEMENT. As supplemented by this Assignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Assignment shall be read, taken and construed as one and
the same instrument.
7. COUNTERPARTS. This Assignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
8. GOVERNING LAW. THIS ASSIGNMENT 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.
Exhibit B, Page 4
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Assignment to be duly executed by their respective officers as of the day and
year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor and Servicer,
By
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee,
By
---------------------------------------
Name:
Title:
Exhibit B, Page 5
EXHIBIT C
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by SECTION 2.9 of
the Pooling and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________, ____1/by
and among WORLD FINANCIAL NETWORK NATIONAL BANK, a national banking
association, as Transferor ("TRANSFEROR") and as Servicer ("SERVICER") and
THE BANK OF NEW YORK, a New York banking corporation ("TRUSTEE"), pursuant to
the Pooling and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS Transferor, Servicer and Trustee are parties to the Pooling and
Servicing Agreement dated as of January 30, 1998 (as may be amended and
supplemented from time to time, the "AGREEMENT");
WHEREAS pursuant to the Agreement, Transferor wishes to remove from the
Trust all Receivables in certain designated Accounts owned by the Credit Card
Originator (the "REMOVED ACCOUNTS") and to cause Trustee to reconvey the
Receivables of such Removed Accounts, whether now existing or hereafter
created, from the Trust to Transferor; and
WHEREAS Trustee is willing to accept such designation and to reconvey
the Receivables in the Removed Accounts subject to the terms and conditions
hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as follows:
1. DEFINED TERMS. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"REMOVAL DATE" means, with respect to the Removed Accounts designated
hereby, ____________, _____.
"REMOVAL NOTICE DATE" means, with respect to the Removed Accounts,
___________, ___.
2. DESIGNATION OF REMOVED ACCOUNTS. On or before the date that is 10
Business Days after the Removal Date, Transferor will deliver to Trustee an
Account Schedule identifying all Accounts
-------------------------------------
1/ To be dated as of the Removal Date.
Exhibit C, Page 1
the Receivables of which are being removed from the Trust, specifying for
each such Account, as of the Removal Notice Date, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables in such Account, which Account Schedule shall
supplement any Account Schedule previously delivered to Trustee pursuant to
the Agreement.
3. CONVEYANCE OF RECEIVABLES. (a) Trustee does hereby transfer, assign,
set over and otherwise convey to Transferor, without recourse, on and after
the Removal Date, all right, title and interest of the Trust in, to and under
the Receivables existing at the close of business on the Removal Date and
thereafter created from time to time in the Removed Accounts designated
hereby, all monies due or to become due and all amounts received with respect
thereto and all proceeds thereof.
(b) In connection with such transfer, Trustee agrees to execute and
deliver to Transferor on or prior to the date this Reassignment is delivered,
applicable termination statements with respect to the Receivables existing at
the close of business on the Removal Date and thereafter created from time to
time in the Removed Accounts reassigned hereby and the proceeds thereof
evidencing the release by the Trust of its interest in the Receivables in the
Removed Accounts, and meeting the requirements of applicable state law, in
such manner and such jurisdictions as are necessary to terminate such
interest.
4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Trustee, on behalf of the Trust, as of the Removal
Date:
(a) LEGAL, VALID AND BINDING OBLIGATION. This Reassignment constitutes
a legal, valid and binding obligation of Transferor enforceable against
Transferor, in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the enforcement of
creditors, rights in general and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or in
equity);
[only for removals pursuant to SECTION 2.9(A) of the Agreement][(b) EARLY
AMORTIZATION EVENT. Transferor reasonably believes that (A) the removal of
the Receivables existing in the Removed Accounts will not, based on the
facts known to Transferor, then or thereafter cause an Early Amortization
Event to occur with respect to any Series and (B) no selection procedure
was utilized by Transferor which would result in a selection of Removed
Accounts from among any pools of Accounts of a similar type that would be
materially adverse to the interests of the Investor Holders of any Series
as of the Removal Date;] and
[(c)] LIST OF REMOVED ACCOUNTS. The list of Removed Accounts delivered
pursuant to SECTION 2.9(C) of the Agreement, as of the Removal Date, is true and
complete in all material respects.
Exhibit C, Page 2
[only if removals pursuant to SECTION 2.9(A)][(d) DEFAULTED
RECEIVABLES. No selection procedure was utilized by Transferor with the intent
to include a disproportionately higher level of Defaulted Receivables in the
Removed Accounts than exist in the Accounts or to remove Accounts for the
intended purpose of mitigating losses to the Trust.]
5. RATIFICATION OF AGREEMENT. As supplemented by this Reassignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Reassignment shall be read, taken and construed as one
and the same instrument.
6. COUNTERPARTS. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
7. GOVERNING LAW. THIS REASSIGNMENT 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.
Exhibit C, Page 3
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Reassignment to be duly executed by their respective officers as of the day
and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor and Servicer,
By
-----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee,
By
-----------------------------------------
Name:
Title:
Exhibit C, Page 4
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before the
90th day following the end of the fiscal year
of Transferor beginning with December 31, 1998,
pursuant to SECTION 3.5 of the Pooling and
Servicing Agreement referred to below)
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST III
The undersigned, a duly authorized representative of World Financial
Network National Bank, as Servicer ("WFN"), pursuant to the Pooling and
Servicing Agreement dated as of January 30, 1998 (as may be amended and
supplemented from time to time, the "AGREEMENT"), among WFN, as Transferor
and as Servicer, and The Bank of New York, as Trustee, does hereby certify
that:
1. WFN is, as of the date hereof, Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective meanings as
set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to Trustee.
3. A review of the activities of Servicer during the fiscal year ended
__________, ____, and of its performance under the Agreement was conducted
under my supervision.
4. Based on such review, Servicer has, to the best of my knowledge,
performed in all material respects its obligations under the Agreement
throughout such year and no default in the performance of such obligations
has occurred or is continuing except as set forth in PARAGRAPH 5.
5. The following is a description of each default in the performance of
Servicer's obligations under the provisions of the Agreement known to me to
have been made by Servicer during the fiscal year ended ___________, _____,
which sets forth in detail (i) the nature of each such default, (ii) the
action taken by Servicer, if any, to remedy each such default and (iii) the
current status of each such default: [if applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ______ day of ____________, 19___.
WORLD FINANCIAL NETWORK
Exhibit D, Page 1
as Servicer,
By
------------------------------------
Name:
Title:
Exhibit D, Page 2
EXHIBIT E-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF
THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
Exhibit-E-1
EXHIBIT E-2
FORM OF UNDERTAKING LETTER
[Date]
Trustee Bank
Attention: [ ]
World Financial Network
National Bank
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: [ ]
RE: PURCHASE OF $___________1/PRINCIPAL AMOUNT OF World
Financial Network Credit Card Master Trust III,
[Class __], [__%] [Floating Rate] Asset Backed
Certificates, Series [ ]
Dear Sirs:
In connection with our purchase of the above-referenced Asset Backed
Certificates (the "CERTIFICATES") we confirm that:
(i) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and
are being sold to us in a transaction that is exempt from the
registration requirements of the Securities Act;
(ii) any information we desire concerning the Certificates or any
other matter relevant to our decision to purchase the certificates is or
has been made available to us;
(iii) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
an investment in the Certificates, and we (and any account for which we
are purchasing under PARAGRAPH (iv)) are able to bear the economic risk
of an investment in the Certificates; we (and any account for which we
are purchasing under PARAGRAPH (iv)) are an "accredited investor" (as
such term is defined in Rule 501(a)(1),
---------------------
1/ Not less than $250,000 minimum principal amount.
Exhibit E-2, Page 1
(2) or (3) of Regulation D under the Securities Act); and we are not, and
none of such accounts is, a Benefit Plan;
(iv) we are acquiring the Certificates for our own account or for
accounts as to which we exercise sole investment discretion and not with
a view to any distribution of the Certificates, subject, nevertheless, to
the understanding that the disposition of our property shall at all times
be and remain within our control;
(v) we agree that the Certificates must be held indefinitely by
us unless subsequently registered under the Securities Act or an
exemption from any registration requirements of that Act and any
applicable state securities laws available;
(vi) we agree that if at some future time we wish to dispose of
or exchange any of the Certificates (such disposition or exchange not
being currently foreseen or contemplated), we will not transfer or
exchange any of the Certificates unless
(A)(1) the sale is of at least U.S. $250,000 principal
amount of Certificates to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as
paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this letter is
executed promptly by the purchaser and (3) all offers or
solicitations in connection with the sale, whether directly or
through any agent acting on our behalf, are limited only to
Eligible Purchasers and are not made by means of any form of
general solicitation or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to Rule 144
under the Securities Act by us after we have held them for more
than three years; or
(C) the Certificates are sold in any other transaction
that does not require registration under the Securities Act and,
if Transferor, Servicer, Trustee or the Transfer Agent and
Registrar so requests, we theretofore have furnished to such party
an Opinion of Counsel satisfactory to such party, in form and
substance satisfactory to such party, to such effect; or
(D) the Certificates are transferred pursuant to an
exception from the registration requirements of the Securities Act
under Rule 144A under the Securities Act; and
(vii) we understand that the Certificates will bear a legend to
substantially the following effect:
Exhibit E-2, Page 2
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN."
["THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN (AS DEFINED BELOW)."]*/
The first paragraph of this legend may be removed if Transferor, Servicer,
Trustee and the Transfer Agent and Registrar have received an Opinion of Counsel
satisfactory to them, in form and substance satisfactory to them, to the effect
that such paragraph may be removed.
------------------------
* This bracketed text should be included only if the Certificate(s) to be
purchased include the legend specified on EXHIBIT E-3.
Exhibit E-2, Page 3
"ELIGIBLE PURCHASER" means either an Eligible Dealer or a corporation,
partnership or other entity which we have reasonable grounds to believe and do
believe can make representations with respect to itself to substantially the
same effect as the representations set forth herein. "ELIGIBLE DEALER" means any
corporation or other entity the principal business of which is acting as a
broker and/or dealer in securities. ["BENEFIT PLAN" means (a) any employee
benefit plan or other plan, trust or account (including an individual retirement
account) that is subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended, or (b) any collective investment fund, insurance company separate or
general account or other entity (except an entity registered under the
Investment Company Act of 1940, as amended) whose underlying assets include
"plan assets" under ERISA by reason of a plan's investment in such
entity.]**/ Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Pooling and Servicing Agreement, dated as of
January 30, 1998, between World Financial Network National Bank and The Bank of
New York.
Very truly yours,
____________________________
(Name of Purchaser)
By:_________________________
(Authorized Officer)
-----------------------
** This bracketed text should be included only if the Certificate(s) to be
purchased include the legend specified on Exhibit E-1.
Exhibit E-2, Page 4
EXHIBIT E-3
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS
DEFINED BELOW). 1/
---------------------------
1/ The following text should be included in any Certificate in which the above
legend appears:
The [Certificates] may not be acquired by or for the
account of (a) any employee benefit plan or other plan, trust or
account (including an individual retirement account) that is
subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended, or (b) any collective investment fund, insurance
company separate or general account or other entity (except an
entity registered under the Investment Company Act of 1940, as
amended) whose underlying assets include "plan assets" under ERISA
by reason of any such plan's investment in such entity (a "Benefit
Plan"). By accepting and holding this Certificate, the Holder
hereof shall be deemed to have represented and warranted that it
is not, and is not acting on behalf of, a Benefit Plan. By
acquiring any interest in this Certificate, each applicable
Certificate Owner shall be deemed to have represented and
warranted that it is not, and is not acting on behalf of, a
Benefit Plan.
Exhibit E-3, Page 1
EXHIBIT F-1
FORM OF OPINION OF COUNSEL WITH RESPECT
TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to SECTION 13.2(d)(i)
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions Of Counsel
delivered on any applicable Closing Date.
(i) The amendment to the [Pooling and Servicing Agreement],
[Supplement], attached hereto as Schedule 1 (the "AMENDMENT"), has been
duly authorized, executed and delivered by Transferor and Servicer and
constitutes the legal, valid and binding agreement of Transferor and
Servicer, respectively, enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws from time to time in
effect affecting creditors' rights generally or the rights of creditors
of national banking associations. The enforceability of the respective
obligations of Transferor and Servicer is also subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law)
(ii) The Amendment has been entered into in accordance with the
terms and provisions of SECTION 13.1 of the Pooling and Servicing
Agreement.
EXHIBIT F-1
EXHIBIT F-2
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF SUPPLEMENTAL ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
SECTION 13.2(d)(ii) or (iii)
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions. PARAGRAPHS 1-4 are not
required if the opinion is being delivered solely under SECTION 13.2(d)(iii).
1. The Receivables arising in such Supplemental Accounts constitute
either general intangibles, accounts or chattel paper.
2. The Pooling and Servicing Agreement creates in favor of the Trust
either a security interest or an ownership interest in Transferor's rights in
the Receivables in such Supplemental Accounts and the proceeds thereof (the
"SPECIFIED ASSETS").
3. If the transfer of the Specified Assets from Transferor to Trustee
pursuant to the provisions of the Pooling and Servicing Agreement constitutes a
sale of the Specified Assets to Trustee by Transferor, such transfer, to the
extent Ohio law is applied, transfers all right, title and interest of
Transferor in and to the Specified Assets to Trustee.
4. If the transfer of the Specified Assets from Transferor to Trustee
does not constitute a sale, the security interest in the Specified Assets
created by the Pooling and Servicing Agreement will be perfected by the filing
of the Financing Statements [as described and defined in such opinion]. Based
solely upon our review of the UCC Searches [as described and defined in such
opinion], we hereby confirm to you that no Person other than Trustee has filed
any financing statement with the Filing Offices [as described and defined in
such opinion] that covers the Specified Assets and that would have priority over
the security interest, if any, of the Trustee by virtue of such filing.
5. No further filings or actions are required under the UCC or other Ohio
law prior to March 31, ____ , in order to maintain the perfection and priority
of the security interest created by the Pooling and Servicing Agreement in favor
of the Trust in Transferor's rights in the Receivables and the proceeds thereof.
EXHIBIT F-2
