EXHIBIT 4.3
TRANSFER AND SERVICING AGREEMENT
between
WFN CREDIT COMPANY, LLC,
Transferor,
WORLD FINANCIAL NETWORK NATIONAL BANK,
Servicer,
and
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST,
Issuer,
Dated as of [______], 2001
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................................1
Section 1.1 Definitions..............................................................1
Section 1.2 Other Definitional Provisions............................................1
ARTICLE II CONVEYANCE OF RECEIVABLES.........................................................2
Section 2.1 Conveyance of Receivables................................................2
Section 2.2 Acceptance by Issuer.....................................................4
Section 2.3 Representations and Warranties of Transferor Relating to Transferor......4
Section 2.4 Representations and Warranties of Transferor Relating to Transaction
Documents and the Receivables............................................6
Section 2.5 Covenants of Transferor.................................................11
Section 2.6 Addition of Accounts....................................................17
Section 2.7 Removal of Accounts.....................................................22
Section 2.8 Discount Option.........................................................24
Section 2.9 Additional Transferors..................................................25
Section 2.10 Additional Credit Card Originators......................................25
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES......................................25
Section 3.1 Acceptance of Appointment and Other Matters Relating to Servicer........26
Section 3.2 Servicing Compensation..................................................27
Section 3.3 Representations, Warranties and Covenants of Servicer...................27
Section 3.4 Reports and Records for Indenture Trustee...............................31
Section 3.5 Annual Servicer's Certificate...........................................32
Section 3.6 Annual Independent Public Accountants' Servicing Report.................32
Section 3.7 Tax Treatment...........................................................33
Section 3.8 Notices to Transferor...................................................33
Section 3.9 Adjustments.............................................................33
Section 3.10 Reports to the Commission...............................................34
ARTICLE IV OTHER MATTERS RELATING TO TRANSFEROR.............................................34
Section 4.1 Liability of Transferor.................................................34
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Section 4.2 Merger or Consolidation of, or Assumption of the Obligations of,
Transferor etc..........................................................35
Section 4.3 Limitation on Liability of Transferor...................................36
ARTICLE V OTHER MATTERS RELATING TO SERVICER...............................................36
Section 5.1 Liability of Servicer...................................................36
Section 5.2 Merger or Consolidation of, or Assumption of the Obligations of,
Servicer................................................................37
Section 5.3 Limitation on Liability of Servicer and Others..........................38
Section 5.4 Indemnification of Issuer and Owner Trustee.............................38
Section 5.5 Servicer Not to Resign..................................................39
Section 5.6 Access to Certain Documentation and Information Regarding the
Receivables.............................................................39
Section 5.7 Delegation of Duties....................................................40
ARTICLE VI INSOLVENCY EVENTS................................................................40
Section 6.1 Rights upon the Occurrence of an Insolvency Event.......................40
ARTICLE VII SERVICER DEFAULTS................................................................40
Section 7.1 Servicer Defaults.......................................................40
Section 7.2 Indenture Trustee to Act; Appointment of Successor......................43
Section 7.3 Notification to Noteholders.............................................44
ARTICLE VIII TERMINATION......................................................................44
Section 8.1 Termination of Agreement................................................44
ARTICLE IX MISCELLANEOUS PROVISIONS.........................................................45
Section 9.1 Amendment; Waiver of Past Defaults......................................45
Section 9.2 Protection of Right, Title and Interest to Issuer.......................47
Section 9.3 GOVERNING LAW...........................................................48
Section 9.4 Notices; Payments.......................................................48
Section 9.5 Severability of Provisions..............................................48
Section 9.6 Further Assurances......................................................48
Section 9.7 No Waiver; Cumulative Remedies..........................................49
Section 9.8 Counterparts............................................................49
Section 9.9 Third-Party Beneficiaries...............................................49
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Section 9.10 Actions by Noteholders..................................................49
Section 9.11 Rule 144A Information...................................................49
Section 9.12 Merger and Integration..................................................50
Section 9.13 No Bankruptcy Petition..................................................50
Section 9.14 Rights of Indenture Trustee.............................................50
Section 9.15 Rights of Owner Trustee.................................................50
EXHIBITS
EXHIBIT A Form of Assignment of Receivables in Additional Accounts ...........................A-1
EXHIBIT B Form of Reassignment of Receivables in Removed Accounts ............................B-1
EXHIBIT C Form of Annual Servicer's Certificate...............................................C-1
EXHIBIT D-1 Form of Opinion of Counsel with Respect to Amendments.............................D-1-1
EXHIBIT D-2 Form of Opinion of Counsel with Respect to Addition of
Supplemental Accounts.............................................................D-2-1
EXHIBIT D-3 Provisions to be Included in Annual Opinion of Counsel............................D-3-1
SCHEDULES
SCHEDULE 1 List of Accounts 1-1
iii
TRANSFER AND SERVICING AGREEMENT, dated as of [_______], 2001 (this
"AGREEMENT"), among WFN CREDIT COMPANY, LLC, a Delaware limited liability
company, as Transferor, WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association, as Servicer, and WORLD FINANCIAL NETWORK CREDIT CARD
MASTER NOTE TRUST, a business trust organized under the laws of the State of
Delaware, as Issuer.
In consideration of the mutual agreements herein contained, each
party agrees as follows for the benefit of the other parties, the Noteholders
and any Enhancement Provider to the extent provided herein, in the Indenture
and in any Indenture Supplement:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein are defined in ANNEX A to the Master Indenture,
dated as of the date hereof, between World Financial Network Credit Card
Master Note Trust and BNY Midwest Trust Company.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. All terms defined
directly or by reference in this Agreement shall have the defined meanings
when used in any certificate or other document delivered pursuant hereto
unless otherwise defined therein. For purposes of this Agreement and all such
certificates and other documents, unless the context otherwise requires: (a)
accounting terms not otherwise defined in this Agreement, and accounting
terms partly defined in this Agreement to the extent not defined, shall have
the respective meanings given to them under GAAP; (b) terms defined in
Article 9 of the UCC as in effect in the State of Delaware and not otherwise
defined in this Agreement are used as defined in that Article; (c) any
reference to each Rating Agency shall only apply to any specific rating
agency if such rating agency is then rating any outstanding Series; (d)
references to any amount as on deposit or outstanding on any particular date
means such amount at the close of business on such day; (e) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Agreement (or the certificate or other document in which they are used) as a
whole and not to any particular provision of this Agreement (or such
certificate or document); (f) references to any Section, Schedule or Exhibit
are references to Sections, Schedules and Exhibits in or to this Agreement
(or the certificate or other document in which the reference is made), and
references to any paragraph, Section, clause or other subdivision within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (g) the term "including" means
"including without limitation"; (h) references to any law or regulation refer
to that law or regulation as amended from time to time and include any
successor law or regulation; (i) references to any Person include that
Person's successors and assigns; and (j) headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
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ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.1 CONVEYANCE OF RECEIVABLES. (a) By execution of this
Agreement, Transferor does hereby transfer, assign, set over and otherwise
convey to Issuer, without recourse except as provided herein, all its right,
title and interest in, to and under (a) the Collateral Certificate, and (b)
effective on the Certificate Trust Termination Date, (i) the Receivables
existing at the opening of business on the Certificate Trust Termination
Date, and thereafter created from time to time until the termination of
Issuer, all Collections and Recoveries allocable to Issuer as provided herein
and the right to any Enhancement with respect to any Series, in each case
together with all monies due or to become due and all amounts received or
receivable with respect thereto and all proceeds thereof and Insurance
Proceeds relating thereto and (ii) without limiting the generality of the
foregoing or the following, all of Transferor's rights pursuant to the
Receivables Purchase Agreement to receive from the RPA Seller 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. Such property, together with all
monies and other property credited to the Collection Account, the Series
Accounts and the Excess Funding Account (including any subaccounts of any
such account) and the rights of Issuer under this Agreement and the Trust
Agreement shall constitute the assets of Issuer (the "TRUST ASSETS"). The
foregoing does not constitute and is not intended to result in the creation
or assumption by Issuer, Owner Trustee, Indenture Trustee or any Noteholder
of any obligation of any Credit Card Originator, Servicer, Transferor or any
other Person in connection with the Accounts or the Receivables or under any
agreement or instrument relating thereto, including any obligation to
Obligors, merchant banks, merchants, clearance systems or insurers. Effective
on the Certificate Trust Termination Date, Transferor does hereby further
transfer, assign, set over and otherwise convey to Issuer all of its right,
title and interest in and under the Receivables Purchase Agreement.
(b) On or prior to the Initial Closing Date, Transferor shall
deliver to Owner Trustee a registered certificate representing the Collateral
Certificate. On or prior to the Certificate Trust Termination Date,
Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to the
Receivables conveyed by Transferor existing on the Certificate Trust
Termination Date and thereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect, and maintain the perfection of, the transfer and
assignment of its interest in such Receivables to Issuer, and to deliver a
file stamped copy of each such financing statement or other evidence of such
filing (which may, for purposes of this SECTION 2.1 consist of telephone
confirmation of such filing promptly followed by delivery to Owner Trustee of
a file-stamped copy) to Owner Trustee as soon as practicable after the
Certificate Trust Termination Date, and (if any additional filing is so
necessary) as soon as practicable after the applicable Addition Date,
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in the case of Receivables arising in Supplemental Accounts and any related
Automatic Additional Accounts. Owner Trustee shall be under no obligation
whatsoever to file such financing or continuation statements or to make any
other filing under the UCC in connection with such transfer and assignment.
(c) Transferor further agrees, at its own expense, (i) on or prior
to (w) the Certificate Trust Termination Date, (x) the Automatic Addition
Termination Date or any Automatic Addition Suspension Date, or subsequent
Restart Date, in the case of the Accounts designated pursuant hereto prior to
such date, (y) the applicable Addition Date, in the case of Supplemental
Accounts and (z) the applicable Removal Date, in the case of Removed
Accounts, to indicate in the appropriate computer files that Receivables
created (or reassigned, in the case of Removed Accounts) in connection with
the Accounts owned by the Credit Card Originator have been conveyed to Issuer
pursuant to this Agreement (or conveyed to Transferor or its designee in
accordance with SECTION 2.7, 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)(w), (x), (y) or (z), as applicable, to
deliver to Owner 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 Certificate Trust Termination Date, in the case of clause (i)(w), as
of the Automatic Addition Termination Date, the Automatic Addition Suspension
Date or Restart Date, in the case of clause (i)(x), 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 and, the aggregate amount
outstanding in such Account and the aggregate amount of Principal Receivables
outstanding in such Account. Such Account Schedule, as supplemented from time
to time to reflect Additional Accounts and Removed Accounts shall be marked
as SCHEDULE 1 to this Agreement and is hereby incorporated into and made a
part of this Agreement. Once the code referenced in CLAUSE (i) of this
paragraph has been included with respect to any Account, Transferor further
agrees not to alter such code during the remaining term of this Agreement
unless and until (x) such Account becomes a Removed Account, (y) a Restart
Date has occurred on which Transferor starts including Automatic Additional
Accounts as Accounts or (z) Transferor shall have delivered to Owner 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
Issuer in the Receivables and the other Trust Assets to continue to be
perfected with the priority required by this Agreement.
(d) If the arrangements with respect to the Receivables hereunder
shall constitute a loan and not a purchase and sale of such Receivables, it
is the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable
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law, and that Transferor shall be deemed to have granted to Issuer a first
priority perfected security interest in all of Seller's right, title and
interest, whether owned on the Certificate Trust Termination Date or
thereafter acquired, in, to and under the Receivables and the other Trust
Assets conveyed by Transferor, and all money, accounts, general intangibles,
chattel paper, instruments, documents, goods, investment property, deposit
accounts, certificates of deposit, letters of credit, and advices of credit
consisting of, arising from or related to the Trust Assets, to secure its
obligations hereunder.
Section 2.2 ACCEPTANCE BY ISSUER.
(a) Issuer hereby acknowledges its acceptance of all right, title
and interest to the property, now existing and hereafter created, conveyed to
Issuer pursuant to SECTION 2.1. Owner Trustee shall maintain a copy of
SCHEDULE 1, as delivered from time to time, at its Corporate Trust Office.
(b) Owner Trustee hereby agrees not to disclose to any Person any of
the account numbers or other information contained in the Account Schedule
marked as SCHEDULE 1 and delivered to Owner Trustee or Issuer, from time to
time, except (i) to a Successor Servicer or as required by a Requirement of
Law applicable to Owner Trustee, (ii) in connection with the performance of
Owner Trustee's or Issuer's duties hereunder, (iii) to Indenture Trustee in
connection with its duties in enforcing the rights of Noteholders or (iv) to
bona fide creditors or potential creditors of Servicer or Transferor for the
limited purpose of enabling any such creditor to identify Receivables or
Accounts subject to this Agreement or the Receivables Purchase Agreement.
Owner Trustee agrees to take such measures as shall be reasonably requested
by Transferor to protect and maintain the security and confidentiality of
such information and, in connection therewith, shall allow Transferor or its
duly authorized representatives to inspect Owner Trustee's security and
confidentiality arrangements as they specifically relate to the
administration of Issuer from time to time during normal business hours upon
prior written notice. Owner Trustee shall provide Transferor with notice five
(5) Business Days prior to disclosure of any information of the type
described in this SECTION 2.2(b).
Section 2.3 REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSFEROR. Transferor hereby represents and warrants to Issuer as of each
Closing Date that:
(a) ORGANIZATION AND GOOD STANDING. Transferor is a limited
liability company validly existing in good standing under the laws of the
State of Delaware, and has full power, authority and legal right to own its
properties and conduct its business as presently owned and conducted, to
execute, deliver and perform its obligations under each Transaction Document.
(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
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qualify or to obtain such licenses and approvals would render any Credit Card
Agreement or any Receivable transferred to Issuer by Transferor unenforceable
by the Credit Card Originator, Transferor, Servicer, Issuer or Indenture
Trustee and would have a material adverse effect on the interests of the
Holders.
(c) DUE AUTHORIZATION. The execution, delivery and performance by
Transferor of this Agreement and each other Transaction Document to which it
is a party, the execution and delivery of the Notes by Transferor and the
consummation by Transferor of the transactions provided for in each
Transaction Document to which it is a party have been duly authorized by
Transferor by all necessary limited liability company action on the part of
Transferor.
(d) NO CONFLICT. The execution and delivery by Transferor of each
Transaction Document to which it is a party and the Notes, the performance by
Transferor of the transactions contemplated by each Transaction Document to
which it is a party 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 to which it is a party and the Notes, the performance by
Transferor of the transactions contemplated by the Transaction Documents and
the fulfillment by Transferor of the terms 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 Documents or the Notes, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by any Transaction Documents or the Notes, (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 Documents or the Notes or (v) seeking to
affect adversely the income tax attributes of Issuer 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 Notes, the performance by Transferor of the
transactions contemplated by each
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Transaction Document, and the fulfillment of or 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 Issuer the security interests described in SECTION 2.1, (iii) cause,
permit, or suffer the perfection or attachment of such a security interest,
(iv) otherwise effectuate or consummate any transfer to Issuer pursuant to
any Transaction Document or (v) acquire its interest in Issuer, in each case:
(A) in contemplation of insolvency;
(B) with a view to preferring one creditor over
another or to preventing the application of its assets in the
manner required by applicable law or regulations;
(C) after committing an act of insolvency; or
(D) with any intent to hinder, delay, or defraud
itself or its creditors.
The representations and warranties set forth in this SECTION 2.3 shall
survive the transfer and assignment by Transferor of the respective
Receivables and other Trust Assets to Issuer and the pledge thereof to
Indenture Trustee pursuant to the Indenture. Upon discovery by Transferor,
Servicer or Owner Trustee of a breach of any of the representations and
warranties set forth in this SECTION 2.3, the party discovering such breach
shall give prompt written notice to the others and each Enhancement Provider,
if any, entitled thereto pursuant to the relevant Indenture Supplement.
Transferor agrees to cooperate with Servicer and Owner Trustee in attempting
to cure any such breach. For purposes of the representations and warranties
set forth in this SECTION 2.3, each reference to an Indenture Supplement
shall be deemed to refer only to those Indenture Supplements in effect as of
the relevant Closing Date.
Section 2.4 REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSACTION DOCUMENTS AND THE RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. Transferor represents and
warrants to Issuer as of the date of the Initial Closing Date, each Closing
Date, the Certificate Trust Termination Date and, with respect to Additional
Accounts, the related Addition Date that:
(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
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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 Issuer, and each Receivable
conveyed to Issuer by Transferor has been conveyed to Issuer 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 2.5(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 the Collateral Certificate and Receivables
to Issuer have been duly obtained, effected or given and are in full
force and effect;
(v) the transfer and assignment of the Collateral Certificate
herein contemplated constitutes either (i) a sale of the Collateral
Certificate, (ii) a grant of a perfected security interest therein from
Transferor to Issuer or (iii) a grant of a perfected security interest
therein from Transferor to Indenture Trustee. The Collateral
Certificate has not been sold, transferred, assigned or pledged by
Transferor to any Person other than pursuant to this Agreement.
Immediately prior to the transfer and assignment herein contemplated,
Transferor had good and marketable title to the Collateral Certificate,
free and clear of all Liens and rights of others and, immediately upon
the transfer thereof, Issuer shall have good and marketable title to
the Collateral Certificate, free and clear of all Liens and rights of
others or a first priority perfected security interest therein; and the
transfer has been perfected, by the filing of appropriate financing
statements pursuant to the UCC, under the UCC. Transferor has no
knowledge of any current statutory or other non-consensual liens to
which the Collateral Certificate is subject.
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(vi) all actions necessary under the applicable UCC in any
jurisdiction to be taken (A) to give Issuer a first priority perfected
security interest or ownership interest in the Collateral Certificate,
and (B) to give Indenture Trustee a first priority perfected security
interest in the Collateral (including, without limitation, UCC filings
with the Delaware Secretary of State), in each case subject to any
statutory or other non-consensual liens with respect to the Collateral
Certificate, have been taken. Transferor has no knowledge of any
current statutory or other non-consensual liens to which the Collateral
Certificate is subject.
(vii) this Agreement or, in the case of Supplemental Accounts,
the related Assignment constitutes either a valid sale, transfer and
assignment to Issuer of all right, title and interest of Transferor in
the Receivables and other Trust Assets conveyed to Issuer 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
Issuer, which, (A) with respect to Receivables existing on the
Certificate Trust Termination Date and the proceeds thereof, is
enforceable upon the Certificate Trust Termination Date, or (B) with
respect to the then existing Receivables in Additional Accounts, as of
the applicable Addition Date, and which will be enforceable with
respect to such Receivables thereafter created and the proceeds thereof
upon such creation, in each case except as such enforceability may be
limited by applicable Debtor Relief Laws, now or hereafter in effect,
and by general principles of equity (whether considered in a suit at
law or in equity). Upon the filing of the financing statements pursuant
to SECTION 2.1 and, in the case of Receivables hereafter created and
the proceeds thereof, upon the creation thereof, Issuer shall have a
first priority perfected security interest in such property and
proceeds except for Liens permitted under SECTION 2.5(b);
(viii) except as otherwise expressly provided in this
Agreement, the Indenture or any Indenture 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;
(ix) 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;
(x) 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
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(xi) as of the date of the creation of any new Receivable,
such Receivable is an Eligible Receivable.
(b) As of the Certificate Trust Termination Date, Transferor agrees
that (i) all representations and warranties made by it in its capacity as
Transferor under the Pooling and Servicing Agreement with respect to any
Account or Receivable pursuant to SECTION 2.4(a) of the Pooling and Servicing
Agreement and (ii) all of the covenants made by it under SECTION 2.7 of the
Pooling and Servicing Agreement, in each case, shall be deemed for all
purposes (including the reassignment obligations under SECTION 2.4(d)) to
have been made by Transferor to Issuer pursuant to this Agreement as of the
day when each was made or deemed made, as if this Agreement had been in
effect on that day.
(c) NOTICE OF BREACH. The representations and warranties of
Transferor set forth in this SECTION 2.4 shall survive the transfer and
assignment by Transferor of the Collateral Certificate and Receivables to
Issuer and the pledge thereof to Indenture Trustee pursuant to the Indenture.
Upon discovery by Transferor, Servicer or Owner 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 Indenture Supplement. Transferor agrees to cooperate
with Servicer and Owner Trustee in attempting to cure any such breach. For
purposes of the representations and warranties set forth in this SECTION 2.4,
each reference to an Indenture Supplement shall be deemed to refer only to
those Indenture Supplements in effect as of the date of the relevant
representations or warranties.
(d) REASSIGNMENT OF INELIGIBLE RECEIVABLES. If (i) any
representation or warranty of Transferor contained in SECTION 2.4(a)(ii),
(iii), (iv), (ix), (x) or (xi) or any representation or warranty of
Transferor (as defined in the Pooling and Servicing Agreement) contained in
SECTION 2.4(a)(ii), (iii), (iv), (vii), (viii) or (ix) of the Pooling and
Servicing Agreement and deemed made under this Agreement pursuant to SECTION
2.4(b) of this Agreement is not true and correct in any material respect as
of the date specified therein with respect to any Receivable transferred to
Issuer by Transferor or any Account and as a result of such breach any
Receivables in the related Account become Defaulted Receivables or Issuer'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 Issuer 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 Indenture Trustee) after
the earlier to occur of the discovery thereof by Transferor or receipt by
Transferor or a designee of Transferor of notice thereof given by Indenture
Trustee, or (ii) it is so provided in SECTION 2.5(a) with respect to any
Receivables transferred to Issuer 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
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Receivables shall be included in determining the aggregate Principal
Receivables in Issuer 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.
(e) 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 Allocation 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 the 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 Issuer, Owner Trustee, the Holders (or Indenture
Trustee on behalf of the Noteholders) or any Enhancement Provider.
(f) REASSIGNMENT OF RECEIVABLES IN TRUST PORTFOLIO. If any
representation or warranty of Transferor contained in SECTION 2.3(a), (b) or
(c) or SECTION 2.4(a)(i), (vii) or (viii) of this Agreement, or any
representation or warranty of Transferor (as defined in the Pooling and
Servicing Agreement) contained in Section 2.4(a)(i), (v) or (vi) of the
Pooling and Servicing Agreement and deemed made under this Agreement pursuant
to SECTION 2.4(b) of this Agreement, is not true and correct in any material
respect and such breach has a material adverse effect on the Receivables
transferred to Issuer by Transferor or the availability of the proceeds
thereof to Issuer, then any of Owner Trustee, Indenture Trustee or the
Majority Holders, by notice then given to Transferor and Servicer (and to
Indenture Trustee if given by the Noteholders), may direct Transferor to
accept a reassignment of the Receivables transferred to Issuer 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
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longer period (i) the relevant representation and warranty shall be true and
correct in all material respects as if made on such day and (ii) 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 Indenture Supplement. Notwithstanding anything to the contrary
in this Agreement, such amounts shall be distributed on such Distribution
Date in accordance with the Indenture and each Indenture 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 2.4(f), Issuer 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, all the right, title and interest of Issuer in and to the
applicable Receivables, all moneys due or to become due and all amounts
received with respect thereto and all proceeds thereof. Issuer 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 Issuer, Owner Trustee, the Holders (or
Indenture Trustee on behalf of the Noteholders).
Section 2.5 COVENANTS OF TRANSFEROR. Transferor hereby covenants that:
(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 2.4(d) and shall be reassigned to Transferor in accordance with
SECTION 2.4(e).
(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 Owner Trustee and Indenture
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
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Trust and Indenture Trustee in, to and under the Receivables, whether now
existing or hereafter created, against all claims of third parties claiming
through or under Transferor or RPA Seller; PROVIDED that nothing in this
SECTION 2.5(b) shall prevent or be deemed to prohibit Transferor from
suffering to exist upon any of the Receivables any Liens for taxes if such
taxes shall not at the time be due and payable or if Transferor or RPA
Seller, as applicable, 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. Notwithstanding the foregoing,
nothing in this SECTION 2.5(b) shall be construed to prevent or be deemed to
prohibit the transfer of the Transferor Interest in accordance with this
Agreement and the Trust Agreement.
(c) THE TRANSFEROR INTEREST. Except as otherwise permitted herein
and in the Trust Agreement, including in SECTIONS 2.9 and 4.2 of this
Agreement and in Section 3.4 of the Trust Agreement, 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) 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 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 Owner Trustee,
Indenture Trustee and each Enhancement Provider, if any, entitled to such
notice pursuant to the relevant Indenture Supplement promptly after becoming
aware of any Lien on any Receivable other than the conveyances hereunder or
Liens permitted under SECTION 2.5(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
Owner 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 the jurisdiction under
whose laws it is organized, its chief executive office or the location of its
principal records concerning the Receivables, the Trust Assets or the
Collections unless it has delivered to Owner 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 Issuer in the Receivables and
other Trust Assets to continue to be perfected with the priority required by
this Agreement.
(g) CREDIT CARD AGREEMENT AND GUIDELINES. Transferor shall enforce
the covenant in the Receivables Purchase Agreement requiring the Credit Card
Originator to
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comply with and perform its obligations under the Credit Card Agreements
relating to the Accounts and the Credit Card Guidelines 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 permit the Credit Card Originator to 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 the Credit Card Originator 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 the Credit Card
Originator and an unrelated third party or by the terms of the Credit Card
Agreements.
(h) RECEIVABLES PURCHASE AGREEMENT. Transferor, in its capacity as
Purchaser of Receivables from the RPA Seller under the Receivables Purchase
Agreement, shall enforce the covenants and agreements of the RPA Seller set
forth in such Receivables Purchase Agreement, where a failure of the RPA
Seller to comply would have an Adverse Effect.
(i) ACCOUNT ALLOCATIONS. If Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including by reason of the application of the provisions of
SECTION 6.1 or an order by any Federal governmental agency having regulatory
authority over Transferor or any court of competent jurisdiction that
Transferor not transfer any additional Principal Receivables to the Trust)
then, in any such event: (A) Transferor agrees to allocate and pay to the
Trust, after the date of such inability, all Collections with respect to
Principal Receivables, all Discount Option Receivables Collections, and all
amounts which would have constituted Collections with respect to Principal
Receivables and all Discount Option Receivables Collections but for
Transferor's inability to transfer such Receivables (up to an aggregate
amount equal to the amount of Principal Receivables and the Discount Option
Receivables Amount in the Trust on such date); (B) Transferor agrees to have
such amounts applied as Collections in accordance with Article VIII of the
Indenture; and (C) for only so long as all Collections and all amounts which
would have constituted Collections are allocated and applied in accordance
with CLAUSES (A) and (B), Principal Receivables and Discount Option
Receivables (and all amounts which would have constituted Principal
Receivables or Discount Option Receivables, as the case may be, but for
Transferor's inability to transfer Receivables to the Trust) that are charged
off as uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with Article VIII of the Indenture, and all amounts
that would have constituted Principal Receivables or Discount Option
Receivables, as the case may be, but for Transferor's inability to transfer
Receivables to the Trust shall be deemed to be Principal Receivables or
Discount Option Receivables, as the case may be, for the
13
purpose of calculating the applicable Allocation Percentage with respect to
any Series. If Transferor is unable pursuant to any Requirement of Law to
allocate Collections as described above, Transferor agrees that it shall in
any such event allocate, after the occurrence of such event, payments on each
Account with respect to the principal balance of such Account first to the
oldest principal balance of such Account and to have such payments applied as
Collections in accordance with Article VIII of the Indenture. The parties
hereto agree that Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables that have been conveyed to the Trust, or
that would have been conveyed to the Trust but for the above described
inability to transfer such Receivables, shall continue to be a part of the
Trust notwithstanding any cessation of the transfer of additional Principal
Receivables and Discount Option Receivables to the Trust, and Collections
with respect thereto shall continue to be allocated and paid in accordance
with Article VIII of the Indenture.
(j) PERIODIC FINANCE CHARGES AND OTHER FEES. Transferor hereby
agrees that, except as otherwise required by any Requirement of Law, or as is
deemed by the Credit Card Originator to be necessary in order for it to
maintain its credit card business, based upon the Credit Card Originator's
good faith assessment, in its sole discretion, of the nature of the
competition in the credit card business, it shall not at any time permit the
Credit Card Originator to reduce the Periodic Finance Charges assessed on any
Receivable or other fees on any Account if, as a result of such reduction,
Transferor's reasonable expectation of the Portfolio Yield for any Series as
of such date would be less than the then Base Rate for that Series.
(k) NOTICES OF CERTAIN EVENTS. Transferor shall promptly notify each
Rating Agency after Transferor obtains knowledge that: (i) the Welsh, Carson,
Xxxxxxxx & Xxxxx Partnerships and The Limited and its Affiliates (in the
aggregate) fail to own a majority of the outstanding common stock of Holding
(PROVIDED that common stock owned by employees, either individually or
through employee stock ownership or other stock based benefit plans, shall
not be included in the calculation of ownership interests for this purpose);
(ii) any Merchant whose program gives rise to more than 10% of the Principal
Receivables (measured as of the end of the most recent Monthly Period)
terminates its private label credit card program with WFN; (iii) Indenture
Trustee gives a resignation notice pursuant to Section 6.8 of the Indenture;
or (iv) an Additional Limitation Event or an Automatic Addition Limitation
Event occurs.
(l) SALE TREATMENT. Transferor agrees to treat the conveyance
hereunder of the Collateral Certificate and the proceeds thereof and the
Receivables and the proceeds thereof as a sale for accounting purposes.
(m) AMENDMENT OF THE ORGANIZATIONAL DOCUMENTS. Transferor shall not
amend in any material respect its certificate of formation or its limited
liability company agreement without providing the Rating Agencies with notice
no later than the fifth
14
Business Day prior to such amendment (unless the right to such notice is
waived by the Rating Agency) and satisfying the Rating Agency Condition.
(n) OTHER INDEBTEDNESS. Transferor shall not incur any additional
debt, unless (i) such debt is contemplated by the Transaction Documents or
(ii) the Rating Agencies are provided with notice no later than the fifth
Business Day prior to the incurrence of such additional debt (unless the
right to such notice is waived by the Rating Agency) and the Rating Agency
Condition is satisfied with respect to the incurrence of such debt.
(o) SEPARATE CORPORATE EXISTENCE. Transferor shall:
(i) Maintain in full effect its existence, rights and
franchises as a limited liability company under the laws of the state
of its organization and will obtain and preserve its qualification to
do business in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement and the Receivables Purchase Agreement and each other
instrument or agreement necessary or appropriate to proper
administration hereof and permit and effectuate the transactions
contemplated hereby.
(ii) Except as provided herein, maintain its own deposit,
securities and other account or accounts, separate from those of any
Affiliate of Transferor, with financial institutions. The funds of
Transferor shall not be diverted to any other Person or for other than
the corporate use of Transferor, and, except as may be expressly
permitted by this Agreement or the Receivables Purchase Agreement, the
funds of Transferor shall not be commingled with those of any other
person or entity.
(iii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or Affiliates,
the salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary
and benefit costs associated with all such common officers and
employees.
(iv) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with
vendors or service providers or to share overhead expenses, the
costs incurred in so doing shall be allocated fairly among entities,
and each such entity shall bear its fair share of such costs. To the
extent that Transferor contracts or does business with vendors or
service providers where the goods and services provided are
partially for the benefit of any other Person, the costs incurred in
so doing shall be fairly allocated to or among such entities for
whose benefit the goods and services are provided, and each such
entity shall bear its fair share of such costs. All material
transactions between Transferor and any of its Affiliates shall be
only on an arm's-length basis and shall receive the approval of
Transferor's Board of Directors including at least one Independent
Director (defined below).
15
(v) Maintain a principal executive and administrative
office through which its business is conducted and a telephone
number separate from those of its stockholders and Affiliates. To
the extent that Transferor and any of its members or Affiliates have
offices in contiguous space, there shall be fair and appropriate
allocation of overhead costs (including rent) among them, and each
such entity shall bear its fair share of such expenses.
(vi) Conduct its affairs strictly in accordance with its
certificate of formation and observe all necessary, appropriate and
customary corporate formalities including, but not limited to, holding
all regular and special directors' meetings appropriate to authorize
all limited liability company action, keeping separate and accurate
minutes of such meetings, passing all resolutions or consents necessary
to authorize actions taken or to be taken, and maintaining accurate and
separate books, records and accounts, including, but not limited to,
intercompany transaction accounts. Regular directors' meetings shall be
held at least annually.
(vii) Ensure that its board of directors shall at all times
include at least two Independent Directors (for purposes hereof,
"INDEPENDENT DIRECTOR" shall mean any member of the board of directors
of such Transferor that is not and has not at any time been (x) an
officer, agent, advisor, consultant, attorney, accountant, employee or
shareholder of any Affiliate which is not a special purpose entity of
such Transferor, (y) a director of any Affiliate of such Transferor
other than an independent director of any Affiliate which is a special
purpose entity or (z) a member of the immediate family of any of the
foregoing.
(viii) Ensure that decisions with respect to its business and
daily operations shall be independently made by Transferor (although
the officer making any particular decision may also be an officer or
director of an Affiliate of Transferor) and shall not be dictated by
any Affiliate of Transferor.
(ix) Act solely in its own legal name and through its own
authorized officers and agents, and no Affiliate of Transferor shall be
appointed to act as agent of Transferor. Transferor shall at all times
use its own stationery and business forms and describe itself as a
separate legal entity.
(x) Ensure that none of its Affiliates shall advance
funds to it, and no Affiliate of Transferor will otherwise guaranty
its debts.
(xi) Other than organizational expenses and as expressly
provided herein, pay all expenses, indebtedness and other obligations
incurred by it using its own funds.
16
(xii) Not enter into any guaranty, or otherwise become
liable, with respect to or hold its assets or creditworthiness out
as being available for the payment of any obligation of any of its
Affiliates.
(xiii) Ensure that any financial reports required of
Transferor shall comply with GAAP and shall be issued separately from,
but may be consolidated with, any reports prepared for any of its
Affiliates so long as such consolidated reports contain footnotes
identifying Transferor as a separate entity and describing the effect
of the transactions between Transferor and such Affiliate.
(xiv) Ensure that at all times it is adequately
capitalized to engage in the transactions contemplated in its
certificate of formation and limited liability company agreement.
Section 2.6 ADDITION OF ACCOUNTS.
(a) AUTOMATIC ADDITIONAL ACCOUNTS. Subject to the limitations
specified below in this SECTION 2.6(a) and to any further limitations
specified in any Indenture 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 purchased by Transferor
pursuant to the Receivables Purchase Agreement, 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 Issuer by delivering to Owner Trustee, Indenture 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 Issuer 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 Date, to release any security interest
in any accounts created after the Automatic Addition Termination Date or
Automatic Addition Suspension Date. Notwithstanding the foregoing, during any
period after an Automatic Addition Limitation Event has occurred and before
the Rating Agency Condition has been satisfied as to the resumption of
treating new accounts as Automatic Additional Accounts, no new accounts
17
that would otherwise be Automatic Additional Accounts shall be treated as
such on any Addition Date if the number of such Automatic Additional Accounts
would exceed an amount equal to the greater of:
(i) the excess (if any) of (1) 20% of the aggregate number
of Accounts determined as of the first day of the fiscal year of
Transferor in which the Addition Date occurs OVER (2) the aggregate
amount of Automatic Additional Accounts and Supplemental Accounts the
Addition Date for which has occurred since the first day of such fiscal
year (including, with respect to the fiscal year in which the
Certificate Trust Termination Date occurs, the amount of "Automatic
Additional Accounts" and "Supplemental Accounts" under (and as defined
in the Pooling and Servicing Agreement), the Addition Date (as defined
in the Pooling and Servicing Agreement) for which has occurred since
the first day of such fiscal year); and
(ii) the excess (if any) of (1) 15% of the aggregate number of
Accounts determined as of the first day of the fiscal quarter of
Transferor in which the Addition Date occurs OVER (2) the aggregate
amount of Automatic Additional Accounts and Supplemental Accounts the
Addition Date for which has occurred since the first day of such fiscal
quarter (including, with respect to the fiscal year in which the
Certificate Trust Termination Date occurs, the amount of "Automatic
Additional Accounts" and "Supplemental Account" under (and as defined
in) the Pooling and Servicing Agreement, the Addition Date (as defined
in the Pooling and Servicing Agreement) for which has occurred since
the first day of such fiscal quarter).
In addition, during any period after an Additional Limitation Event
has occurred and before the Rating Agency Condition has been satisfied as to
the resumption of treating new accounts as Automatic Additional Accounts, no
new accounts that would otherwise be Automatic Additional Accounts shall be
treated as such on any Addition Date if:
(i) the aggregate balance of Receivables in Automatic
Additional Accounts and Supplemental Accounts designated during a
twelve month (or shorter) period beginning on the Additional Limitation
Event (or any anniversary thereof) would exceed an amount equal to the
excess (if any) of 20% of the aggregate balance of Receivables
determined as of the first day after the Additional Limitation Event
(or such anniversary); or
(ii) the aggregate balance of Receivables in Automatic
Additional Accounts and Supplemental Accounts designated during a three
month (or shorter) period beginning on the Additional Limitation Event
(or the first day of the third month commencing thereafter or of any
ensuing third month) would exceed 15% of the aggregate balance of
Receivables determined as of the first day
18
after the occurrence of the Additional Limitation Event (or the
first day of such third month or ensuing third month).
(b) REQUIRED ADDITIONS OF SUPPLEMENTAL ACCOUNTS. On or after the
Certificate Trust Termination Date, 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 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. For purposes of the
preceding sentence, the terms "Transferor Amount" and "Minimum Transferor
Amount" shall have the meanings ascribed to such terms as set forth in the
Pooling and Servicing Agreement with respect to any day falling in the period
prior to the Certificate Trust Termination Date. In addition, if on any
Record Date on or after the Certificate Trust Termination Date, the Aggregate
Principal Balance 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 Principal
Balance 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 9.1(a).
(c) PERMITTED ADDITIONS. In addition to its obligation under
PARAGRAPH (b), on or after the Certificate Trust Termination Date 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, so long as after giving effect to
such addition no more than 20% of the Receivables, by outstanding balance,
will be 30 or more days delinquent.
(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):
19
(i) on or before the tenth Business Day prior to the
Addition Date (the "NOTICE DATE"), Transferor shall give Owner
Trustee, Indenture 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;
(ii) on or before the Addition Date, Transferor shall have
delivered to Owner Trustee a written assignment (including an
acceptance by Owner Trustee on behalf of Issuer) in substantially the
form of EXHIBIT A (the "ASSIGNMENT") and the Credit Card Originator
shall have indicated in its computer files that the Receivables created
in connection with the Supplemental Accounts have been transferred to
Issuer and, within five Business Days thereafter, Transferor shall have
delivered to Owner 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
Cut Off Date, an Eligible Receivable, (y) no selection procedures
believed by Transferor to be materially adverse to the interests of the
Noteholders were utilized in selecting the Additional Accounts from the
available Eligible Accounts 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 2.5(b),
(ii) the interest of the Holders of the Transferor Interest 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, the Indenture and any Indenture
Supplement or (y) a grant of a security interest in such property to
Issuer, 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
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relating thereto upon such creation; and (z) if the Assignment
constitutes the grant of a security interest to Issuer 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 2.5(b);
(v) Transferor shall deliver an Officer's Certificate to
Indenture Trustee confirming the items set forth in CLAUSE (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Supplemental Accounts to Indenture
Trustee (with a copy to each Rating Agency) substantially in the form
of EXHIBIT D-2.
(e) ADDITIONAL APPROVED PORTFOLIOS. On and after the Certificate
Trust Termination Date, Transferor may from time to time designate additional
portfolios of accounts as "Approved Portfolios" if the Rating Agency
Condition is satisfied with respect to that designation (except as to any
Series or Class that expressly waives this requirement in the applicable
Indenture Supplement). Transferor agrees that prior to any transfer of
Receivables from Automatic Additional Accounts arising in a portfolio that is
designated as an Approved Portfolio pursuant to the immediately preceding
sentence Transferor shall satisfy the following requirements:
(i) on or before the tenth Business Day prior to the
Addition Date, Transferor shall give Owner Trustee, Indenture
Trustee, each Rating Agency and Servicer written notice that such
Automatic Additional Accounts will be included;
(ii) on or before the Addition Date, Transferor shall have
delivered to Owner Trustee a written Assignment (including an
acceptance by Owner Trustee on behalf of Issuer) substantially in the
form of EXHIBIT A (with appropriate modifications) and the Credit Card
Originator shall have indicated in its computer files that the
Receivables created in connection with the Automatic Additional
Accounts have been transferred to the Trust;
(iii) Transferor shall represent and warrant that (x) each
Automatic Additional Account is, as of the Addition Date, an
Eligible Account, and each Receivable in such Automatic Additional
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 Noteholders were utilized in selecting the
new Approved Portfolio, and (z) as of the Addition Date, Transferor
is not insolvent;
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(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 Automatic Additional 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 2.5(b),
(ii) the interest of the Holders of the Transferor Interest 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, the Indenture and any Indenture
Supplement or (y) a grant of a security interest in such property to
Issuer, which is enforceable with respect to then existing Receivables
in the Automatic Additional 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 Automatic
Additional 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 Issuer in such property, upon the filing of a
financing statement as described in SECTION 2.1 with respect to such
Automatic Additional Accounts and in the case of the Receivables
thereafter created in such Automatic Additional 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 2.5(b);
(v) Transferor shall deliver an Officer's Certificate to
Indenture Trustee confirming the items set forth in CLAUSE (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Automatic Additional Accounts to
Indenture Trustee (with a copy to each Rating Agency) substantially in
the form of EXHIBIT D-2 (with appropriate modifications).
Section 2.7 REMOVAL OF ACCOUNTS.
(a) On any day of any Monthly Period after the Certificate Trust
Termination Date, 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
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Participation Interests (unless otherwise set forth in the applicable
Indenture Supplement), upon satisfaction of the following conditions:
(i) on or before the tenth Business Day immediately
preceding the Removal Date (the "REMOVAL NOTICE DATE") Transferor
shall have given Owner Trustee, Servicer, each Rating Agency and any
Enhancement Provider entitled thereto pursuant to the relevant
Indenture Supplement written notice of such removal and specifying
the date for removal of the Removed Accounts and Participation
Interests (the "REMOVAL DATE"); Transferor shall provide each Rating
Agency with such additional information relating to such removal as
the Rating Agency shall reasonably request;
(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 Owner 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) with respect to any removal pursuant to SECTION 2.7(b)
that is being made as a result of the applicable Merchant exercising a
purchase right as to which Transferor has no reasonable control (an
"INVOLUNTARY REMOVAL"), Transferor shall use reasonable efforts to
satisfy the Rating Agency Condition; and as to any other removal, the
Rating Agency Condition shall have been satisfied;
(v) Transferor shall have delivered to Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant
Indenture Supplement an Officer's Certificate, dated as of the Removal
Date, to the effect that Transferor reasonably believes that (A) in the
case of any removal other than an Involuntary Removal, 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, (B) in the case of any Involuntary
Removal, Transferor has used reasonable efforts to avoid having such
removal result in an Early Amortization Event and (C) in either case,
(i) no selection procedure believed by Transferor to be materially
adverse to the interests of the Noteholders has been used in removing
Removed Accounts from among any pool of Accounts or Participation
Interests of a similar type (it being understood that Transferor will
not be deemed to have used such an adverse selection procedure in
connection with any Involuntary Removal); and (ii) Accounts (or
administratively convenient
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groups of Accounts, such as billing cycles) were chosen for removal
on a random basis or another basis that Transferor believes is
consistent which achieving derecognition of the Receivables under
GAAP;
(vi) in the case of any removal pursuant to SECTION
2.7(a), the aggregate Principal Receivables in the Removed Accounts
shall not exceed the lesser of (A) the excess of the Transferor
Amount over the Minimum Transferor Amount or (B) the excess of the
Aggregate Principal Balance over the Required Principal Balance, all
measured as of the end of the most recently ended Monthly Period;
(vii) in the case of any removal pursuant to SECTION
2.7(b), the removal shall not cause the Transferor Amount to be less
than the Minimum Transferor Amount or cause the Aggregate Principal
Balance to be less than the Required Principal Balance; and
(viii) such removal shall not cause a decrease in the sum
of the Collateral Amounts for all outstanding Series.
Upon satisfaction of the above conditions, Owner Trustee shall
execute and deliver to Transferor or its designee a written reassignment in
substantially the form of EXHIBIT B (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) After the Certificate Trust Termination Date, Transferor may
from time to time designate as Removed Accounts any Accounts designated for
purchase 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 2.7(b) shall be effected in the manner
and at a price determined in accordance with SECTION 2.4(e), 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 VIII of the Indenture and each Indenture Supplement.
Section 2.8 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
24
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, Issuer, Indenture 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 Indenture 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, unless the Rating Agency
Condition has been satisfied with respect to the increase.
(b) On each Date of Processing after the date on which Transferor's
exercise of its discount option takes effect, Transferor shall treat Discount
Option Receivables Collections as Collections of Finance Charge Receivables.
Section 2.9 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 9.1 and to any applicable restrictions in the Indenture Supplement
for any outstanding Series) and in connection with such designation, the
initial Transferor shall transfer a portion of the Transferor Interest to
such additional Transferor 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 3.4(b) of Trust Agreement shall
have been satisfied with respect to a transfer of Transferor's Interest.
Section 2.10 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 9.1
and to any applicable restrictions in the Indenture Supplement for any
outstanding Series).
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Prior to the Certificate Trust Termination Date, the Receivables
shall be serviced as provided in the Pooling and Servicing Agreement, and
this ARTICLE III will have no effect. On and after the Certificate Trust
Termination Date:
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Section 3.1 ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
SERVICER.
(a) WFN agrees to act as Servicer under this Agreement. The
Noteholders by their acceptance of the Notes consent to WFN acting as
Servicer.
(b) Subject to the provisions of this Agreement, 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 7.1, and
provided WFN is Servicer, Servicer or its designee (rather than Indenture
Trustee or Owner Trustee) is hereby authorized and empowered (i) to make
withdrawals from the Collection Account and any Series Account, as set forth
in this Agreement, the Indenture or any Indenture Supplement, (ii) to
instruct Indenture Trustee to make withdrawals and payments from the
Collection Account and any Series Accounts in accordance with such
instructions as set forth in this Agreement, the Indenture or any Indenture
Supplement, (iii) to instruct Indenture Trustee in writing as provided
herein, (iv) to take any action required or permitted under any Enhancement,
as set forth in this Agreement, the Indenture or any Indenture Supplement and
(v) to execute and deliver, on behalf of Issuer for the benefit of the
Noteholders, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments,
with respect to the Receivables and, after the delinquency of any Receivable
and to the extent permitted under and in compliance with applicable law and
regulations, to commence enforcement proceedings with respect to such
Receivables. Without limiting the generality of the foregoing and subject to
SECTION 7.1, 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. Owner Trustee shall furnish Servicer with
any powers of attorney and 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.
26
(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 Noteholders.
(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 Owner Trustee, Indenture Trustee, the
Administrator, any Paying Agent and any Transfer Agent and Registrar
(including the reasonable fees and expenses of its counsel), 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 Notes on
any stock exchange, that are not expressly stated in this Agreement to be
payable by the Trust, the Noteholders 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).
(f) Servicer shall maintain fidelity bond or other appropriate
insurance coverage insuring against losses through wrongdoing of its officers
and employees who are involved in the servicing of credit card receivables
covering such actions and in such amounts as Servicer believes to be
reasonable from time to time.
Section 3.2 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 after
the Certificate Trust Termination Date, 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 Collateral Amount (or such other amount as specified in
the related Indenture 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 each Series with respect to any Monthly Period (the "NOTEHOLDER
SERVICING FEE") will be determined in accordance with the relevant Indenture
Supplement. The portion of the Servicing Fee with respect to any Monthly
Period not so allocated to a particular Series, or otherwise allocated in any
Indenture Supplement, shall be paid from Finance Charge Collections allocable
to Transferor on the related Distribution Date. In no event shall Issuer,
Indenture Trustee, the Noteholders of any Series or any Enhancement Provider
be liable for the share of the Servicing Fee with respect to any Monthly
Period allocable to the Transferor Amount.
Section 3.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SERVICER.
WFN, as initial Servicer, hereby makes, and any successor Servicer by its
appointment hereunder
27
shall make, on each Closing Date (and on the date of any such appointment)
the following representations and warranties and covenants to Issuer on which
Owner Trustee has relied in accepting the Receivables in trust, Owner Trustee
has relied in executing the Notes and Indenture Trustee has relied in
authenticating Notes:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a national banking
association (or with respect to such Successor Servicer, such other corporate
entity as may be applicable) duly organized, validly existing and in good
standing under the laws of the United States, and has full corporate power,
authority and legal right to execute, deliver and perform its obligations
under this Agreement 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
Noteholders.
(c) DUE AUTHORIZATION. The execution, delivery, and performance of
this Agreement have been duly authorized by Servicer by all necessary
corporate action on the part of Servicer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of Servicer, enforceable against Servicer in
accordance with its terms, except as enforceability may be limited by
applicable Debtor Relief Laws now or hereafter in effect (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 by
Servicer, the performance of the transactions contemplated by this Agreement
and the other Transaction Documents 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, 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 Notes or
the consummation of any of the transactions contemplated by this Agreement
and the other Transaction Documents, seeking any determination or ruling
that, in the reasonable judgment of Servicer, would materially and
28
adversely affect the performance by Servicer of its obligations under this
Agreement and the other Transaction Documents, or seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Agreement and the other Transaction Documents.
(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
Noteholders.
(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 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, the performance by Servicer of the transactions contemplated by
this Agreement and the other Transaction Documents and the fulfillment by
Servicer of the terms hereof and thereof have been obtained; PROVIDED that
Servicer makes no representation or warranty as to state securities or "blue
sky" laws.
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(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 Issuer in the Receivables.
As of the Certificate Trust Termination Date, Servicer agrees that
all representations and warranties made by it in its capacity as Servicer
under the Pooling and Servicing Agreement with respect to any Account or
Receivable pursuant to Section 3.3 of the Pooling and Servicing Agreement
shall be deemed for all purposes to have been made by Servicer to Issuer
pursuant to this Agreement as of the day when each was made or deemed made,
as if this Agreement had been in effect on that day.
After the Certificate Trust Termination Date, if any of the
representations, warranties or covenants of Servicer contained in PARAGRAPH
(g), (h), (i) or (j) of this SECTION 3.3 or PARAGRAPHS (g) (h), (i) or (j) of
Section 3.3 of the Pooling and Servicing Agreement with respect to any
Receivable or the related Account is breached, and as a result of such breach
Issuer's rights in, to or under any Receivables in the related Account or the
proceeds of such Receivables are materially impaired or such proceeds are not
available for any reason to Issuer free and clear of any Lien, then no later
than the expiration of 60 days (or such longer period, not in excess of 150
days, as may be agreed to by Trustee) from the earlier to occur of the
discovery of such event by Servicer, or receipt by Servicer of notice of such
event given by Indenture Trustee, all Receivables in the Account or Accounts
to which such event relates shall be reassigned or assigned to Servicer as
set forth below; PROVIDED that such Receivables will not be reassigned or
assigned to Servicer if, on any day prior to the end of such 60-day or longer
period, (i) the relevant representation and warranty shall be true and
correct, or the relevant covenant shall have been complied with, in all
material respects and (ii) Servicer shall have delivered 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 amount of such Receivables,
which deposit shall be considered a Collection with respect to such
Receivables and shall be applied in accordance with Article VIII of the
Indenture and each Indenture Supplement.
Upon each such assignment to Servicer, Issuer shall automatically
and without further action be deemed to transfer, assign, set over and
otherwise convey to Servicer, without recourse, representation or warranty
all right, title and interest of Issuer in and to
30
such Receivables, all moneys due or to become due and all amounts received
with respect thereto and all proceeds thereof. Issuer and Owner Trustee shall
execute such documents and instruments of transfer or assignment and take
such other actions as shall be reasonably requested by Servicer to effect the
conveyance of any such Receivables pursuant to this Section. The obligation
of Servicer to accept assignment of such Receivables, and to make the
deposits, if any, required to be made to the Collection Account as provided
in the preceding paragraph, shall constitute the sole remedy respecting the
event giving rise to such obligation available to Issuer, Owner Trustee,
Holders (or Indenture Trustee on behalf of the Noteholders) or any
Enhancement Provider.
Section 3.4 REPORTS AND RECORDS FOR INDENTURE 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 Indenture 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
Receivables Trust as of such Date of Processing.
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in any
Indenture Supplement as to the related Series, on each Determination Date,
Servicer shall forward to Indenture 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 Noteholders on the succeeding
Distribution Date in respect of interest and principal payable with respect
to the Notes and (viii) such other amounts, calculations, and/or information
as may be required by any relevant Indenture Supplement.
(c) TRANSFERRED ACCOUNTS. Servicer covenants and agrees hereby to
deliver to Indenture 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)
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within a reasonable time period after any Transferred Account is created, but
in any event not later than 15 days after the end of the month within which
the Transferred Account is created, a notice specifying the new account
number for any Transferred Account and the replaced account number.
Section 3.5 ANNUAL SERVICER'S CERTIFICATE. Unless Servicer has been
relieved of all of its obligations under this Agreement because the final
Series has been repaid during the prior calendar year, Servicer shall deliver
to Indenture Trustee, any Enhancement Provider and any Rating Agency on or
before the 90th day following the end of Servicer's fiscal year in which the
Certificate Trust Termination Date occurs and each subsequent fiscal year, an
Officer's Certificate substantially in the form of EXHIBIT C.
Section 3.6 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) On or before the 90th day following the end of Servicer's fiscal
year in which the Certificate Trust Termination Date occurs and each
subsequent fiscal year, Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to
Servicer, the Credit Card Originator or Transferor) to furnish a report
(addressed to Indenture Trustee) to Indenture 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, 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 Certificate Trust Termination 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
Indenture Supplement.
(b) On or before the 90th day following the end of Servicer's fiscal
year in which the Certificate Trust Termination Date occurs and each
subsequent fiscal year, Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to
Servicer, Credit Card Originator or Transferor) to furnish a report to
Indenture 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(c) 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
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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 Indenture Supplement.
(c) A copy of each certificate and report provided pursuant to
SECTION 3.4(b), 3.5 or 3.6 or the corresponding section of the Pooling and
Servicing Agreement may be obtained by any Noteholder or Note Owner by a
request to Indenture Trustee addressed to the Corporate Trust Office.
(d) In the event such firm rendering a report under this SECTION 3.6
requires Indenture Trustee to agree to the procedures performed by such firm,
Servicer shall direct Indenture Trustee in writing to so agree; it being
understood and agreed that Indenture Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of Servicer, and
Indenture Trustee makes no independent inquiry or investigation as to, and
shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
Section 3.7 TAX TREATMENT. Transferor has structured this Agreement
and the Notes to facilitate a secured, credit-enhanced financing on favorable
terms with the intention that the Notes will constitute indebtedness of
Transferor for federal income and state and local income and franchise tax
purposes; and Transferor and each Noteholder by acceptance of its Note (and
each Note Owner, by its acceptance of an interest in the applicable Note)
agrees to recognize and report the Notes as indebtedness of Transferor for
purposes of federal, state and local income and franchise taxes and any other
tax imposed on or measured by gross or net income, and to report all receipts
and payments relating thereto in a manner that is consistent with such
characterization.
Section 3.8 NOTICES TO TRANSFEROR. If WFN is no longer acting as
Servicer, any Successor Servicer appointed pursuant to SECTION 7.2 shall
deliver or make available to Transferor each certificate and report required
to be prepared, forwarded or delivered thereafter pursuant to SECTIONS
3.4(b), 3.5 and 3.6.
Section 3.9 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 Amount or the Allocation 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
Allocation Percentages applicable to any Series will be reduced by the amount
of any Principal Receivable which was discovered as
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having been created through a fraudulent or counterfeit charge or with
respect to which the covenant of Transferor contained in SECTION 2.5(b) has
been breached. Any adjustment required pursuant to either of the two
preceding sentences shall be made on the first Business Day after the Date of
Processing for the event giving rise to such adjustment. If, following the
exclusion of such Principal Receivables from the calculation of the
Transferor Amount, the Transferor Amount would be less than the Specified the
Transferor Amount, not later than the close of business on such first
Business Day, 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 the 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 VIII of the Indenture and each Indenture Supplement.
(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).
Section 3.10 REPORTS TO THE COMMISSION. Servicer shall, on behalf of
Issuer, cause to be filed with the Commission any periodic reports required
to be filed under the provisions of the Securities Exchange Act of 1934, and
the rules and regulations of the Commission thereunder. Transferor shall, at
its own expense, cooperate in any reasonable request of Servicer in
connection with such filings. Issuer agrees to cooperate with Servicer in
connection with such filings.
ARTICLE IV
OTHER MATTERS RELATING TO TRANSFEROR
Section 4.1 LIABILITY OF TRANSFEROR. Transferor shall be liable in
accordance herewith to the extent, and only to the extent, of the obligations
specifically undertaken by it in its capacity as Transferor hereunder.
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Section 4.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, TRANSFEROR ETC.
(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:
(i) the Person 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, an entity
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 entity shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Owner, in form
reasonably satisfactory to Owner Trustee, the performance of every
covenant and obligation of Transferor hereunder;
(ii) Transferor has delivered to Indenture 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 Indenture 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 the other Transaction
Documents; and
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(v) if Transferor is not the surviving entity, the
surviving entity shall file new UCC-1 financing statements with
respect to the interest of Issuer in the Receivables and the
Collateral Certificate, if any.
(b) This SECTION 4.2 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 4.2;
(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 provisions of the foregoing
paragraphs, (ii) SECTION 2.9 of this Agreement or Section 3.4 of the Trust
Agreement or (iii) conveyances, mergers, consolidations, assumptions, sales
or transfers to other entities (1) for which Transferor delivers an Officer's
Certificate to Indenture Trustee indicating that Transferor reasonably
believes that such action will not adversely affect in any material respect
the interests of any Noteholder, (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 Owner Trustee and Indenture Trustee in writing in
form satisfactory to Owner Trustee and Indenture Trustee, the performance of
every covenant and obligation of Transferor thereby conveyed.
Section 4.3 LIMITATION ON LIABILITY OF TRANSFEROR. Subject to
SECTION 4.1, neither Transferor, any Holder of the Transferor Interest nor
any of their directors, officers, employees or agents of Transferor acting in
such capacities shall be under any liability to Issuer, Owner Trustee, the
Holders, any Enhancement Provider or any other Person for any action taken or
for refraining from the taking of any action in good faith in their
capacities as Transferor pursuant to this Agreement; PROVIDED that this
provision shall not protect Transferor, any Holder of the Transferor Interest
or any such Person against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Transferor and any director, officer, employee or agent of
Transferor may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person (other than Transferor)
respecting any matters arising hereunder.
ARTICLE V
OTHER MATTERS RELATING TO SERVICER
Section 5.1 LIABILITY OF SERVICER. Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Servicer in such capacity herein.
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Section 5.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER.
(a) Servicer shall not consolidate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of Servicer substantially as an
entirety shall be a corporation or a banking association 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,
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to Owner Trustee in form satisfactory to Owner Trustee,
the performance of every covenant and obligation of Servicer hereunder;
(ii) Servicer has delivered to Indenture 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 entity formed by such consolidation or
into which Servicer is merged or the Person which acquired by
conveyance or transfer the properties and assets of Servicer
substantially as an entirety shall be an Eligible Servicer (taking into
account, in making such determination, the experience and operations of
the predecessor Servicer) or (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 5.2 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 5.2.
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Section 5.3 LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Except
as provided in SECTION 5.4 with respect to Issuer and Owner Trustee and
SECTION 6.7 of the Indenture with respect to Indenture Trustee, neither
Servicer nor any of the directors, officers, employees or agents of Servicer
in its capacity as Servicer shall be under any liability to Issuer, Owner
Trustee, Indenture Trustee, the Holders, any Enhancement Providers or any
other person for any action taken or for refraining from the taking of any
action in good faith in its capacity as Servicer pursuant to this Agreement;
PROVIDED that this provision shall not protect Servicer or any such Person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Servicer
and any director, officer, employee or agent of Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person (other than Servicer) respecting any matters arising hereunder.
Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties as Servicer in
accordance with this Agreement and which in its reasonable judgment may
involve it in any 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 5.4 INDEMNIFICATION OF ISSUER AND OWNER TRUSTEE. Servicer
shall indemnify and hold harmless Issuer and Owner Trustee and their
respective officers, directors, employees and agents, from and against any
loss, liability, expense, damage or injury (i) suffered or sustained by
reason of any acts or omissions of Servicer with respect to Issuer pursuant
to this Agreement, and (ii) arising from or incurred in connection with Owner
Trustee's administration of Issuer and the performance of its duties
hereunder or under the Indenture or Indenture Supplements or any transaction
or document contemplated in connection herewith or therewith including any
judgment, award, settlement, reasonable attorneys' fees and expenses and
other costs or expenses incurred in connection with the defense of any
action, proceeding or claim; PROVIDED that (a) Servicer shall not indemnify
Owner Trustee if such acts, omissions or alleged acts or omissions constitute
or are caused by fraud, negligence, or willful misconduct by Owner Trustee,
(b) Servicer shall not indemnify Issuer, the Noteholders or the Note Owners
for any liabilities, costs or expenses of Issuer with respect to any action
taken by Owner Trustee at the request of the Noteholders, (c) Servicer shall
not indemnify Issuer, the Noteholders or the Note 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 Notes or losses incurred as a result of Defaulted
Receivables and (d) Servicer shall not indemnify Issuer, the Noteholders or
the Note Owners for any liabilities, costs or expenses of Issuer, the
Noteholders or the Note 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
Issuer, the Noteholders or the Note Owners in connection herewith to any
taxing
38
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. This
SECTION 5.4 shall survive the termination of this Agreement and the earlier
removal or resignation of Owner Trustee.
Servicer shall indemnify Indenture Trustee as provided in Section
6.7 of the Indenture.
Section 5.5 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 connection with Servicer's
consolidation with, or merger into any other corporation or Servicer's
conveyance or transfer of its properties and assets substantially as an
entirety to any person in each case, in accordance with SECTION 5.2. 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
Indenture Trustee. No resignation shall become effective until Indenture
Trustee or a Successor Servicer shall have assumed the responsibilities and
obligations of Servicer in accordance with SECTION 7.2. If within 120 days of
the date of the determination that Servicer may no longer act as Servicer,
and if Indenture Trustee is unable to appoint a Successor Servicer, Indenture
Trustee shall serve as Successor Servicer. Notwithstanding the foregoing,
Indenture 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.
Indenture Trustee shall give prompt notice to each Rating Agency and each
Enhancement Provider, if any, entitled thereto under the applicable Indenture
Supplement upon the appointment of a Successor Servicer.
Section 5.6 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE RECEIVABLES. Servicer shall provide to Indenture Trustee access
to the documentation regarding the Accounts and the Receivables in such cases
where Indenture Trustee is required in connection with the enforcement of the
rights of the Noteholders, or by applicable statutes or regulations to review
such documentation, such access being afforded without charge but only (i)
upon reasonable request, (ii) during normal business hours, (iii) subject to
Servicer's normal security and confidentiality procedures and (iv) at offices
designated by Servicer. Nothing in this SECTION 5.6 shall derogate from the
obligation of each Credit Card Originator, Transferor, Indenture Trustee and
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of Servicer to provide access as
provided in this SECTION 5.6 as a result of such obligation shall not
constitute a breach of this SECTION 5.6.
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Section 5.7 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 5.5, and
Servicer shall remain jointly and severally liable with such Person for any
amounts which would otherwise be payable pursuant to this ARTICLE V 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 Indenture Trustee, each
Rating Agency and each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Indenture Supplement, of such delegation to any
entity that is not an Affiliate of Servicer.
ARTICLE VI
INSOLVENCY EVENTS
Section 6.1 RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT. If an
Insolvency Event occurs with respect to Transferor or any Holder of the
Transferor Interest (excluding any Supplemental Interest), Transferor shall
on the day any such event occurs, immediately cease to transfer Principal
Receivables, or interests in Principal Receivables represented by any
Participation Interests to Issuer and shall promptly give notice to Indenture
Trustee, Owner Trustee and the Rating Agencies thereof. Notwithstanding any
cessation of the transfer to Issuer of additional Principal Receivables or
any Participation Interests, Principal Receivables or any Participation
Interests transferred to Issuer prior to the occurrence of such Insolvency
Event and Collections in respect of such Principal Receivables and
Participation Interests, and Finance Charge Receivables whenever created
accrued in respect of such Principal Receivables, shall continue to be
property of Issuer.
ARTICLE VII
SERVICER DEFAULTS
Section 7.1 SERVICER DEFAULTS. If any one of the following events (a
"SERVICER DEFAULT") shall occur and be continuing after the Certificate Trust
Termination Date:
(a) any failure by Servicer to make any payment, transfer or deposit
or to give instructions or notice to Indenture Trustee on or before the date
occurring five Business Days after the date such payment, transfer, deposit,
or such instruction or notice is required to be made or given by Servicer, as
the case may be, under the terms of this Agreement, the Indenture or any
Indenture Supplement; or
(b) failure on the part of Servicer duly to observe or perform in any
material respect any other covenants or agreements of Servicer set forth in this
Agreement which
40
has a material adverse effect on the Noteholders of any Series or Class
(which determination shall be made without regard to whether funds are then
available pursuant to any Enhancement), which continues unremedied for a
period of 60 days after the date on which written notice of such failure
requiring the same to be remedied shall have been given to Servicer by
Indenture Trustee, or to Servicer and Indenture Trustee by the Noteholders
holding not less than 25% of the Outstanding Amount (or, with respect to any
failure that does not relate to all Series, 25% of the aggregate outstanding
principal amount of all Series to which such failure relates); or Servicer
shall delegate its duties under this Agreement except as permitted by SECTION
5.2 or 5.7, a Responsible Officer of Indenture Trustee has actual knowledge
of such delegation and such delegation continues unremedied for 15 days after
the date on which written notice thereof, requiring the same to be remedied,
shall have been given to Servicer by Indenture Trustee, or to Servicer and
Indenture Trustee by Noteholders holding not less than 25% of the Outstanding
Amount; or
(c) any representation, warranty or certification made by Servicer
in this Agreement or in any certificate delivered pursuant to this Agreement
shall prove to have been incorrect when made, which has a material adverse
effect on the rights of the Noteholders of any Series or Class (which
determination shall be made without regard to whether funds are then
available pursuant to any Enhancement) and which continues to be incorrect in
any material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been
given to Servicer by Indenture Trustee, or to Servicer and Indenture Trustee
by the Noteholders holding not less than 25% of the Outstanding Amount (or,
with respect to any such representation, warranty or certification that does
not relate to all Series, 25% of the aggregate outstanding principal amount
of all Series to which such representation, warranty or certification
relates);
(d) Servicer shall fail generally to, or admit in writing its
inability to, pay its debts as they become due; or a proceeding shall have
been instituted in a court having jurisdiction in the premises seeking a
decree or order for relief in respect of Servicer in an involuntary case
under any Debtor Relief Law, or for the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or for any substantial part of its property,
or for the winding-up or liquidation of its affairs and, if instituted
against Servicer, any such proceeding shall continue undismissed or unstayed
and in effect, for a period of 60 consecutive days, or any of the actions
sought in such proceeding shall occur; or the commencement by Servicer, of a
voluntary case under any Debtor Relief Law, or such Person's consent to the
entry of an order for relief in an involuntary case under any Debtor Relief
Law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or for any substantial part of its property,
or any general assignment for the benefit of creditors; or such Person or any
Subsidiary of such Person shall have taken any corporate action in
furtherance of any of the foregoing actions; or
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(e) with respect to any Series, any other event specified in the
Indenture Supplement for such Series,
then, in the event of any Servicer Default, so long as Servicer Default shall
not have been remedied, either Indenture Trustee or Noteholders holding more
than 50% of the Outstanding Amount, by notice given to Servicer (and to
Indenture Trustee and any Enhancement Provider entitled thereto pursuant to
the relevant Indenture Supplement if given by the Noteholders) (a
"TERMINATION NOTICE"), may terminate all but not less than all the rights and
obligations of Servicer, as Servicer, under this Agreement and in and to the
Receivables and the proceeds thereof.
After receipt by Servicer of such Termination Notice, and on the
date that a Successor Servicer shall have been appointed by Indenture Trustee
pursuant to SECTION 7.2, all authority and power of Servicer under this
Agreement shall pass to and be vested in the Successor Servicer (a "SERVICE
TRANSFER"); and, without limitation, Indenture Trustee is hereby authorized
and empowered (upon the failure of Servicer to cooperate) to execute and
deliver, on behalf of Servicer, as attorney-in-fact or otherwise, all
documents and other instruments upon the failure of Servicer to execute or
deliver such documents or instruments, and to do and accomplish all other
acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. Servicer agrees to cooperate with Indenture
Trustee and the Successor Servicer in effecting the termination of the
responsibilities and rights of Servicer to conduct servicing hereunder
including the transfer to the Successor Servicer of all authority of Servicer
to service the Receivables provided for under this Agreement, including all
authority over all Collections which shall on the date of transfer be held by
Servicer for deposit, or which have been deposited by Servicer, in the
Collection Account, or which shall thereafter be received with respect to the
Receivables, and in assisting the Successor Servicer and in enforcing all
rights to Insurance Proceeds. Servicer shall promptly transfer its electronic
records relating to the Receivables to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably request.
To the extent that compliance with this SECTION 7.1 shall require Servicer to
disclose to the Successor Servicer information of any kind which Servicer
reasonably deems to be confidential, the Successor Servicer shall be required
to enter into such customary licensing and confidentiality agreements as
Servicer shall deem appropriate to protect its interests.
Notwithstanding the foregoing, any delay in or failure of
performance under SECTION 7.1(a) for a period of five Business Days or under
SECTION 7.1(b) or (c) for a period of 60 days (in addition to any period
provided in SECTION 7.1(a), (b) or (c)) shall not constitute a Servicer
Default until the expiration of such additional five Business Days or 60
days, respectively, if such delay or failure could not be prevented by the
exercise of reasonable diligence by Servicer and such delay or failure was
caused by an
42
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence
shall not relieve Servicer from the obligation to use its best efforts to
perform its obligations in a timely manner in accordance with this Agreement
and Servicer shall provide Indenture Trustee, each Rating Agency, any
Enhancement Provider entitled thereto pursuant to the relevant Indenture
Supplement and Transferor with an Officer's Certificate giving immediate
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations.
Section 7.2 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a)
On and after the receipt by Servicer of a Termination Notice pursuant to
SECTION 7.1, Servicer shall continue to perform all servicing functions under
this Agreement until the date specified in the Termination Notice or
otherwise specified by Indenture Trustee or until a date mutually agreed upon
by Servicer and Indenture Trustee. Indenture Trustee shall, as promptly as
possible after the giving of a Termination Notice, appoint an Eligible
Servicer as a successor servicer (the "SUCCESSOR SERVICER"), and such
Successor Servicer shall accept its appointment by a written assumption in a
form acceptable to Indenture Trustee. If a Successor Servicer has not been
appointed or has not accepted its appointment at the time when Servicer
ceases to act as Servicer, Indenture Trustee without further action shall
automatically be appointed the Successor Servicer. Indenture Trustee may
delegate any of its servicing obligations to an Affiliate of Indenture
Trustee or agent in accordance with SECTION 3.1(b) and 5.7. Notwithstanding
the foregoing, Indenture 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 receivables as the Successor
Servicer hereunder. Indenture Trustee shall give prompt notice to each Rating
Agency and each Enhancement Provider, if any, entitled thereto pursuant to
the applicable Indenture Supplement upon the appointment of a Successor
Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities (except for liabilities arising during the period of time
when the prior Servicer was performing and acting as Servicer) relating
thereto placed on Servicer by the terms and provisions hereof, and all
references in this Agreement to Servicer shall be deemed to refer to the
Successor Servicer.
(c) In connection with any Termination Notice, Indenture Trustee
will review any bids which it obtains from Eligible Servicers and shall be
permitted to appoint any Eligible Servicer submitting such a bid as a
Successor Servicer for servicing compensation not in excess of the aggregate
Servicing Fees for all Series; PROVIDED, HOWEVER, that the Holder of the
Transferor Interest shall be responsible for payment of the portion of such
aggregate Servicing Fees allocable to the Holder of the Transferor Interest
and that no such monthly compensation paid out of Collections shall be in
excess
43
of such aggregate Servicing Fees. Each Holder of the Transferor Interest
agrees that, if WFN (or any Successor Servicer) is terminated as Servicer
hereunder, the portion of the Collections in respect of Finance Charge
Receivables that Transferor is entitled to receive pursuant to this Agreement
or any Indenture Supplement shall be reduced by an amount sufficient to pay
Transferor's share (determined by reference to the Indenture Supplements with
respect to any outstanding Series) of the compensation of the Successor
Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of
Issuer pursuant to the Trust Agreement and shall pass to and be vested in
Transferor and, Transferor is hereby authorized and empowered to execute and
deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
Transferor in effecting the termination of the responsibilities and rights of
the Successor Servicer to conduct servicing on the Receivables. The Successor
Servicer shall transfer its electronic records relating to the Receivables to
Transferor in such electronic form as Transferor may reasonably request and
shall transfer all other records, correspondence and documents to Transferor
in the manner and at such times as Transferor shall reasonably request. To
the extent that compliance with this SECTION 7.2 shall require the Successor
Servicer to disclose to Transferor information of any kind which the
Successor Servicer deems to be confidential, Transferor shall be required to
enter into such customary licensing and confidentiality agreements as the
Successor Servicer shall deem necessary to protect its interests.
Section 7.3 NOTIFICATION TO NOTEHOLDERS. Within two Business Days
after Servicer becomes aware of any Servicer Default, Servicer shall give
notice thereof to Indenture Trustee, each Rating Agency and any Enhancement
Provider entitled thereto pursuant to the relevant Indenture Supplement and
Indenture Trustee shall give notice to the Noteholders at their respective
addresses appearing in the Note Register. Upon any termination or appointment
of a Successor Servicer pursuant to this ARTICLE VII, Indenture Trustee shall
give prompt written notice thereof to Noteholders at their respective
addresses appearing in the Note Register.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION OF AGREEMENT. This Agreement and the
respective obligations and responsibilities of Issuer, Transferor and
Servicer under this Agreement shall terminate, except with respect to the
duties described in SECTION 5.4, on the Trust Termination Date.
44
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 AMENDMENT; WAIVER OF PAST DEFAULTS.
(a) This Agreement may be amended from time to time by Servicer,
Transferor and Issuer, without the consent of any of Indenture Trustee or any
Noteholder to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein or to add
any other provisions with respect to matters or questions raised under this
Agreement which shall not be inconsistent with the provisions of this
Agreement; PROVIDED, HOWEVER, that such action shall not adversely affect in
any material respect the interests of any of the Noteholders. Additionally,
this Agreement may be amended from time to time by Servicer, Transferor and
Issuer by a written instrument signed by each of them, without the consent of
Indenture Trustee or any of the Noteholders; PROVIDED that (i) Transferor
shall have delivered to Indenture Trustee and Owner Trustee an Officer's
Certificate, dated the date of any such Amendment, stating that Transferor
reasonably believes that such amendment will not have an Adverse Effect and
(ii) the Rating Agency Condition shall have been satisfied with respect to
any such amendment. Additionally, notwithstanding the preceding sentence,
this Agreement will be amended by Servicer and Issuer at the direction of
Transferor without the consent of Indenture Trustee or any of the Noteholders
or Enhancement Providers to add, modify or eliminate such provisions as may
be necessary or advisable in order to enable all or a portion of Issuer (1)
to qualify as, and to permit an election to be made to cause Issuer to be
treated as, a "financial asset securitization investment trust" as described
in the provisions of Section 860L of the Code, and (2) to avoid the
imposition of state or local income or franchise taxes imposed on Issuer's
property or its income; PROVIDED, HOWEVER, that (A) Transferor delivers to
Indenture Trustee and Owner Trustee an Officer's Certificate to the effect
that the proposed amendments meet the requirements set forth in this Section,
(B) the Rating Agency Condition has been satisfied, and (C) such amendment
does not affect the rights, duties or obligations of Indenture Trustee or
Owner Trustee hereunder. The amendments which Transferor may make without the
consent of Noteholders or Enhancement Providers pursuant to the preceding
sentence may include the addition of a Transferor.
(b) This Agreement may also be amended from time to time by
Servicer, Transferor and Issuer, with the consent of the Noteholders holding
more than 66 2/3% of the Outstanding principal amount of the Notes of each
Series affected thereby for which Transferor has not delivered an Officer's
Certificate stating that there is no Adverse Effect, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders; PROVIDED, HOWEVER, that no such amendment shall (i) reduce in
any manner the amount of or delay the timing of any distributions (changes in
Pay Out Events or Events of Default that decrease the likelihood of the
occurrence thereof shall
45
not be considered delays in the timing of distributions for purposes of this
clause) to be made to Noteholders or deposits of amounts to be so distributed
or the amount available under any Enhancement without the consent of each
affected Noteholder, (ii) change the definition of or the manner of
calculating the interest of any Noteholder without the consent of each
affected Noteholder or (iii) reduce the aforesaid percentage required to
consent to any such amendment without the consent of each Noteholder or (iv)
adversely affect the rating of any Series or Class by any Rating Agency
without the consent of the Noteholders of such Series or Class holding more
than 66 2/3% of the Outstanding principal amount of the Notes of such Series
or Class affected thereby.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), Issuer shall furnish
notification of the substance of such amendment to Indenture Trustee and each
Noteholder, and Servicer shall furnish notification of the substance of such
amendment to each Rating Agency and each Enhancement Provider.
(d) It shall not be necessary for the consent of Noteholders under
this SECTION 9.1 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Noteholders shall be subject to
such reasonable requirements as Indenture Trustee may prescribe.
(e) Notwithstanding anything in this SECTION 9.1 to the contrary, no
amendment may be made to this Agreement which would adversely affect in any
material respect the interests of any Enhancement Provider without the
consent of such Enhancement Provider.
(f) Any Indenture Supplement executed in accordance with the
provisions of ARTICLE X of the Indenture shall not be considered an amendment
of this Agreement for the purposes of this SECTION 9.1.
(g) The Noteholders holding 66 2/3% or more of the Outstanding
principal amount of the Notes of each Series or, with respect to any Series
with two (2) or more Classes, of each Class (or, with respect to any default
that does not relate to all Series, 66 2/3% or more of the principal amount
of the Outstanding Notes 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 Noteholders, 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 Noteholders 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.
46
(h) Owner Trustee may, but shall not be obligated to, enter into any
such amendment which affects Owner Trustee's rights, duties or immunities
under this Agreement or otherwise. In connection with the execution of any
amendment hereunder, Owner Trustee shall be entitled to receive the Opinion
of Counsel described in SECTION 9.2(d).
Section 9.2 PROTECTION OF RIGHT, TITLE AND INTEREST TO ISSUER.
(a) Transferor shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation statements
and any other necessary documents covering Indenture Trustee's and Issuer's
right, title and interest to Issuer to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in
such manner and in such places as may be required by law fully to preserve
and protect the right, title and interest of Indenture Trustee, Noteholders
and Issuer hereunder to all property comprising the Trust Assets. Transferor
shall deliver to Indenture Trustee file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. Transferor shall
cooperate fully with Servicer in connection with the obligations set forth
above and will execute any and all documents reasonably required to fulfill
the intent of this paragraph.
(b) Within thirty (30) days after Transferor makes any change in its
name, identity or 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 Indenture Trustee
notice of any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of Issuer's
security interest or ownership interest in the Receivables and the proceeds
thereof.
(c) Each of Transferor and Servicer shall give Indenture Trustee
prompt notice of any relocation of its chief principal executive office or
any change in the jurisdiction under whose laws it is organized and whether,
as a result of such relocation or change, the applicable provisions of the
UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and
shall file such financing statements or amendments as may be necessary to
perfect or to continue the perfection of Issuer's security interest in the
Receivables and the proceeds thereof. Each of Transferor and Servicer shall
at all times maintain its chief principal executive offices within the United
States and shall at all times be organized under the laws of a jurisdiction
located within the United States.
(d) Transferor shall deliver to Indenture Trustee, Owner Trustee and
any Enhancement Provider entitled thereto pursuant to the relevant Indenture
Supplement (i) upon the execution and delivery of each amendment of this
Agreement, an Opinion of Counsel to the effect specified in EXHIBIT D-1; (ii)
on each Addition Date on which any Supplemental Accounts are to be designated
as Accounts pursuant to SECTION 2.8(a) or
47
(b), an Opinion of Counsel substantially in the form of EXHIBIT D-2; and on
each Addition Date on which any Participation Interests are to be designated
to Issuer pursuant to SECTION 2.8(a) or (b), an Opinion of Counsel covering
the same substantive legal issues addressed by EXHIBIT D-2 but conformed to
the extent appropriate to relate to Participation Interests; and (iii) on or
before March 31 of each year following the year in which the Certificate
Trust Termination Date occurs, an Opinion of Counsel substantially in the
form of EXHIBIT D-3.
Section 9.3 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 OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.4 NOTICES; PAYMENTS.
(a) All demands, notices, instructions, directions and
communications (collectively, "NOTICES") under this Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered
at, mailed by registered mail, return receipt requested, or sent by facsimile
transmission (i) in the case of Transferor and Servicer, to World Financial
Network National Bank, 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxx 00000, (ii) in the
case of Issuer or Owner Trustee, to the Corporate Trust Office, Attn:
Corporate Trust & Agency Services, with a copy to the Administrator, (iii) in
the case of the Rating Agency for a particular Series, the address, if any,
specified in the Indenture Supplement relating to such Series, and (iv) to
any other Person as specified in the Indenture or any Indenture Supplement;
or, as to each party, at such other address or facsimile number as shall be
designated by such party in a written notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Notes shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Note Register. Any Notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed
to have been duly given, whether or not the Noteholder receives such Notice.
In addition, in the case of any Series or Class with respect to which any
Notes are outstanding, any Notice required or permitted to be given to
Noteholders of such Series or Class shall be published in an Authorized
Newspaper within the time period prescribed in this Agreement.
Section 9.5 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
Notes or the rights of the Noteholders.
Section 9.6 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
48
required or reasonably requested by Owner Trustee and Indenture Trustee more
fully to effect the purposes of this Agreement, including the execution of
any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 9.7 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of Owner Trustee, Indenture Trustee
or the Noteholders, any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges provided under this Agreement are cumulative and not exhaustive of
any rights, remedies, powers and privileges provided by law.
Section 9.8 COUNTERPARTS. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
Section 9.9 THIRD-PARTY BENEFICIARIES. This Agreement will inure to
the benefit of and be binding upon the parties hereto, Indenture Trustee, the
Noteholders, and any Enhancement Provider. Except as otherwise expressly
provided in this Agreement, no other Person will have any right or obligation
hereunder.
Section 9.10 ACTIONS BY NOTEHOLDERS.
(a) Wherever in this Agreement a provision is made that an action
may be taken or a Notice given by Noteholders, such action or Notice may be
taken or given by any Noteholder, unless such provision requires a specific
percentage of Noteholders.
(b) Any Notice, request, authorization, direction, consent, waiver
or other act by the Noteholder shall bind such Holder and every subsequent
Holder of such Note and of any Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything
done or omitted to be done by Owner Trustee, Transferor or Servicer in
reliance thereon, whether or not notation of such action is made upon such
Note.
Section 9.11 RULE 144A INFORMATION. For so long as any of the Notes
of any Series or Class are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, each of Transferor, Owner Trustee,
Indenture Trustee, Servicer and any Enhancement Provider agree to cooperate
with each other to provide to any Noteholders of such Series or Class and to
any prospective purchaser of Notes designated by such Noteholder, upon the
request of such Noteholder or prospective purchaser, any information required
to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.
49
Section 9.12 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 9.13 NO BANKRUPTCY PETITION. Each of Issuer (with respect to
Transferor only), Servicer, each Enhancement Provider, if any, and each
Holder of a Supplemental Interest and Transferor (with respect to Issuer
only) severally and not jointly, hereby covenants and agrees that it will not
at any time institute against, solicit or join or cooperate with or encourage
any institution against Issuer or Transferor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under any United States federal or state bankruptcy or
similar law. Nothing in this SECTION 9.13 shall preclude, or be deemed to
estop, any of the foregoing Persons from taking (to the extent such action is
otherwise permitted to be taken by such Person hereunder) or omitting to take
any action prior to such date in (i) any case or proceeding with respect to
Issuer or Transferor voluntarily filed or commenced by or on behalf of Issuer
or Transferor, respectively, under or pursuant to any such law or (ii) any
involuntary case or proceeding pertaining to Issuer or Transferor, as
applicable under or pursuant to any such law.
Section 9.14 RIGHTS OF INDENTURE TRUSTEE. Indenture Trustee shall
have herein the same rights, protections, indemnities and immunities as
specified in the Indenture.
Section 9.15 RIGHTS OF OWNER TRUSTEE. Each of the parties hereto
acknowledges and agrees that this Agreement is being executed and delivered
by [_________] not individually but solely and exclusively in its capacity as
Owner Trustee on behalf of World Financial Network Credit Card Master Note
Trust for the purpose and with the intention of binding World Financial
Network Credit Card Master Note Trust. No obligations or liabilities
hereunder shall run against [_____________] in its individual capacity or
against its properties or assets.
50
IN WITNESS WHEREOF, Transferor, Servicer and Issuer have caused this
Transfer and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
WFN CREDIT COMPANY, LLC, as Transferor
By:________________________________
Name:
Title:
WORLD FINANCIAL NETWORK NATIONAL BANK,
as Servicer
By:________________________________
Name:
Title:
WORLD FINANCIAL NETWORK CREDIT CARD MASTER
NOTE TRUST, Issuer
By: [________________], not in its
individual capacity but solely as Owner
Trustee on behalf of Issuer
By:________________________________
Name:
Title:
S-1
TRANSFER AND SERVICING AGREEMENT
SIGNATURE PAGE
Acknowledged and Accepted:
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By:____________________________
Name:
Title:
S-2
TRANSFER AND SERVICING AGREEMENT
SIGNATURE PAGE
EXHIBIT A
to
TRANSFER AND SERVICING AGREEMENT
FORM OF ASSIGNMENT OF RECEIVABLES
IN SUPPLEMENTAL ACCOUNTS
(As required by SECTION 2.6 of the Transfer and Servicing Agreement)
ASSIGNMENT No. __ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS dated as
of _____________, by and among WFN Credit Company, LLC, a Delaware limited
liability company, as Transferor (the "TRANSFEROR"), WORLD FINANCIAL NETWORK
NATIONAL BANK, a national banking association, as Servicer (the "SERVICER")
and WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST (the "ISSUER"),
pursuant to the Transfer and Servicing Agreement referred to below.
WITNESSETH
WHEREAS, Transferor, Servicer and Issuer are parties to the Transfer
and Servicing Agreement, dated as of [________], 2001 (as it 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 Issuer (as each such term is defined in
the Agreement); and
WHEREAS, Issuer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Issuer hereby agree as
follows:
1. DEFINED TERMS. All 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, ____________, _____.
2. DESIGNATION OF SUPPLEMENTAL ACCOUNTS. On or before the Document
Delivery Date, Transferor will deliver to Owner Trustee an Account Schedule
containing a true and complete schedule identifying all such Supplemental
Accounts specifying for
Exhibit A-1
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 Owner
Trustee pursuant to the Agreement.
3. CONVEYANCE OF RECEIVABLES. (a) Transferor does hereby transfer,
assign, set over and otherwise convey, without recourse except as set forth
in the Transfer and Servicing Agreement, to Issuer, 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 Cut Off Date and thereafter
created from time to time until the termination of Issuer, all Recoveries
related thereto, all monies due or to become due and all amounts received or
receivable with respect thereto and all proceeds thereof. The foregoing does
not constitute and is not intended to result in the creation or assumption by
Issuer, Owner Trustee, Indenture Trustee, any Noteholders or any Enhancement
Provider of any obligation of Servicer, Transferor, the Credit Card
Originator or any other Person in connection with the Accounts, the
Receivables or under any agreement or instrument relating thereto, including
any obligation to Obligors, merchant banks, merchants clearance systems or
insurers.
(b) Transferor agrees to record and file, at its own
expense, financing statements (and continuation statements when applicable)
with respect to the Receivables in Supplemental Accounts existing on the
Addition Cut Off Date and thereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect, and maintain perfection of, the sale and assignment of
its interest in such Receivables to Issuer, and to deliver a file-stamped
copy of each such financing statement or other evidence of such filing to
Owner Trustee on or prior to the Addition Date. Owner Trustee shall be under
no obligation whatsoever to file such financing or continuation statements or
to make any other filing under the UCC in connection with such sale and
assignment.
(c) 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 Issuer pursuant to the Agreement
and this Assignment.
(d) Transferor does hereby grant to Issuer a security
interest in all of its right, title and interest, whether now owned or
hereafter acquired, in and to the Receivables in the Supplemental Accounts
existing on the Addition Cut Off Date and thereafter created, all Recoveries
related thereto, and all proceeds thereof. This Assignment constitutes a
security agreement under the UCC.
4. ACCEPTANCE BY ISSUER. Issuer hereby acknowledges its acceptance
of all right, title and interest to the property, existing on the Addition
Cut Off Date and thereafter created, conveyed to Issuer pursuant to SECTION
3(a) of this Assignment. Issuer
Exhibit A-2
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Assignment, Transferor delivered to Owner Trustee the
Account Schedule described in SECTION 2 of this Assignment.
5. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Issuer as of the date of this Assignment and as of
the Addition Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Assignment
constitutes a legal, valid and binding obligation of Transferor
enforceable against Transferor in accordance with its terms, except as
such enforceability may be limited by applicable receivership or
conservatorship, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and the rights of creditors of national
banking associations and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or
in equity);
(b) ELIGIBILITY OF ACCOUNTS AND RECEIVABLES. Each Supplemental
Account designated hereby is an Eligible Account and each Receivable in
such Accounts is, as of the Addition Cut Off Date, an Eligible
Receivable;
(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 Issuer 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 Noteholders 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 Issuer of all right, title and
interest of Transferor in the Receivables and other Trust Assets
conveyed to Issuer 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 Issuer, 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
Exhibit A-3
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, Issuer shall have a first priority
security interest in such property except for Liens permitted under
SECTION 2.7(b) of the Agreement;
(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 Issuer 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.
7. AMENDMENT OF THE TRANSFER AND SERVICING AGREEMENT. The Transfer and
Servicing Agreement is hereby amended to provide that all references therein to
the "Transfer and Servicing Agreement", to "this Agreement" and "herein" shall
be deemed from and after the Addition Date to be a dual reference to the
Transfer and Servicing Agreement as supplemented by this Assignment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Transfer and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and effect
in accordance with its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with or a consent
to noncompliance with any term or provision of the Transfer and Servicing
Agreement.
Exhibit A-4
8. COUNTERPARTS. This Assignment may be executed in two or
more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
9. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto
acknowledges and agrees that this Agreement is being executed and
delivered by [_____________] not individually but solely and
exclusively in its capacity as Owner Trustee on behalf of World
Financial Network Credit Card Master Note Trust for the purpose and
with the intention of binding World Financial Network Credit Card
Master Note Trust. No obligations or liabilities hereunder shall
run against [_______________] in its individual capacity or against
its properties or assets.
10. 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 A-5
IN WITNESS WHEREOF, the undersigned have caused this
Assignment of Receivables in Additional Accounts to be duly
executed and delivered by their respective duly authorized officers
on the day and year first above written.
WFN CREDIT COMPANY, LLC, Transferor
By:_________________________________
Name:
Title:
WORLD FINANCIAL NETWORK NATIONAL BANK,
Servicer
By:_________________________________
Name:
Title:
WORLD FINANCIAL NETWORK CREDIT CARD MASTER
NOTE TRUST,
Issuer
By: [_____________________________],
not in its individual capacity but solely
on behalf of Issuer
By:_________________________________
Name:
Title:
Exhibit A-6
Schedule 1
to Assignment of Receivables
in Additional Accounts
ADDITIONAL ACCOUNTS
Exhibit A-7
EXHIBIT B
to
TRANSFER AND SERVICING AGREEMENT
FORM OF REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
(As required by SECTION 2.7 of the Transfer and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________, by
and among WFN CREDIT COMPANY, LLC, a Delaware limited liability company, as
Transferor (the "TRANSFEROR"), WORLD FINANCIAL NETWORK NATIONAL BANK, a
national banking association, as Servicer (the "SERVICER"), and WORLD
FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST (the "ISSUER"), pursuant to
the Transfer and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS Transferor, Servicer and Issuer are parties to the Transfer and
Servicing Agreement, dated as of [________], 2001 (as it may be amended and
supplemented from time to time the "AGREEMENT");
WHEREAS pursuant to the Agreement, Transferor wishes to remove from
Issuer all Receivables owned by Issuer in certain designated Accounts and to
cause Issuer to reconvey the Receivables of such Removed Accounts, whether
now existing or hereafter created, from Issuer to Transferor; and
WHEREAS Issuer is willing to accept such designation and to reconvey
the Receivables in the Removed Accounts subject to the terms and conditions
hereof;
NOW, THEREFORE, Transferor, Servicer and Issuer hereby agree as
follows:
1. DEFINED TERMS. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"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
ten (10) Business Days after the Removal Date, Transferor will deliver to
Owner Trustee an Account Schedule identifying all Accounts the Receivables of
which are being removed from Issuer, specifying for each such Account, as of
the Removal Notice Date, its
Exhibit B-1
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 Owner
Trustee pursuant to the Agreement.
3. CONVEYANCE OF RECEIVABLES. (a) Issuer does hereby transfer,
assign, set over and otherwise convey to Transferor, without representation,
warranty or recourse, on and after the Removal Date, all right, title and
interest of Issuer in, to and under the Receivables existing at the close of
business on the Removal Date and thereafter created from time to time in the
Removed Accounts designated hereby, all Recoveries related thereto, all
monies due or to become due and all amounts received or receivable with
respect thereto and all proceeds thereof.
(b) In connection with such transfer, Issuer agrees to execute and
deliver to the Seller on or prior to the date this Reassignment is delivered,
applicable termination statements prepared by Transferor with respect to the
Receivables existing at the close of business on the Removal Date and
thereafter created from time to time in the Removed Accounts reassigned
hereby and the proceeds thereof evidencing the release by Issuer of its
interest in the Receivables in the Removed Accounts, and meeting the
requirements of applicable state law, in such manner and such jurisdictions
as are necessary to terminate such interest.
4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Issuer as of the Removal Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Reassignment Agreement
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) 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, (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 Noteholders of any Series
as of the Removal Date and (C) Accounts (or administratively convenient
groups of Accounts, such as billing cycles) were chosen for removal on a
random basis or another basis that Transferor believes is consistent with
achieving derecognition of the Receivables under GAAP;
Exhibit B-2
(c) LIST OF REMOVED ACCOUNTS. The list of Removed Accounts delivered
pursuant to Section 2.7(a)(ii) of the Agreement, as of the Removal Date, is
true and complete in all material respects;
(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;
(e) RECEIVABLES TESTS. The aggregate Principal Receivables in the
Removed Accounts did not exceed the lesser of (i) the excess of the
Transferor Amount over the Minimum Transferor Amount or (ii) the excess of
the Aggregate Principal Balance over the Required Principal Balance, all
measured as of the end of the most recently ended Monthly Period; and
(f) COLLATERAL AMOUNTS. Such removal shall not cause a decrease in
the sum of the Collateral Amounts for all outstanding Series.
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.
8. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto acknowledges
and agrees that this Agreement is being executed and delivered by
[____________] not individually but solely and exclusively in its capacity as
Owner Trustee on behalf of World Financial Network Credit Card Master Note
Trust for the purpose and with the intention of binding World Financial
Network Credit Card Master Note Trust. No obligations or liabilities
hereunder shall run against [_________________] in its individual capacity or
against its properties or assets.
Exhibit B-3
IN WITNESS WHEREOF, the undersigned have caused this Reassignment
Agreement to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
WFN CREDIT COMPANY, LLC, Transferor
By:_______________________________
Name:
Title:
WORLD FINANCIAL NETWORK NATIONAL BANK,
Servicer
By:_______________________________
Name:
Title:
WORLD FINANCIAL NETWORK CREDIT CARD MASTER
NOTE TRUST, Issuer
By: [____________________________],
not in its individual capacity but solely
on behalf of Issuer
By:_______________________________
Name:
Title:
Exhibit B-4
Schedule 1
to Reassignment Agreement
REMOVED ACCOUNTS
Exhibit B-5
EXHIBIT C
to
TRANSFER AND SERVICING AGREEMENT
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before the
90th day following the end of the fiscal year
of Transferor pursuant to SECTION 3.5 of the Transfer and
Servicing Agreement referred to below)
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
The undersigned, a duly authorized representative of World Financial
Network National Bank, as Servicer ("WFN"), pursuant to the Transfer and
Servicing Agreement dated as of [_______________], 2001 (as may be amended
and supplemented from time to time, the "AGREEMENT"), among WFN Credit
Company, LLC, as Transferor, WFN, as Servicer, and World Financial Network
Credit Card Master Note Trust, as Issuer, 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
Indenture 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."
Exhibit C-1
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ______ day of ____________, 20___.
WORLD FINANCIAL NETWORK NATIONAL BANK,
Sevicer
By:_______________________________
Name:
Title:
Exhibit C-2
EXHIBIT D-1
to
TRANSFER AND SERVICING AGREEMENT
FORM OF OPINION OF COUNSEL WITH RESPECT
TO AMENDMENTS
(Provisions to be included in
Opinion of Counsel to be delivered pursuant
to SECTION 9.2(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 Transfer and Servicing Agreement
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 9.1 of the Transfer and Servicing
Agreement.
Exhibit X-0-0
XXXXXXX X-0
to
TRANSFER AND SERVICING AGREEMENT
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 9.2(d)(ii))
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions.
1. The Receivables arising in such Supplemental Accounts constitute
either general intangibles, accounts or chattel paper.
2. The Transfer 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 the
Trust pursuant to the provisions of the Pooling and Servicing Agreement
constitutes a sale of the Specified Assets to the Trust 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 the Trust.
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
the Trust has filed any financing statement with the Filing Offices as
described and defined in such opinion that covers the Specified Assets and
that would have priority over the security interest, if any, of the Trust by
virtue of such filing.
5. The Receivables Purchase Agreement creates in favor of Transferor
either a security interest or an ownership interest in the RPA Seller's
rights in the Specified Assets.
6. If the transfer of the Specified Assets from the RPA Seller to
Transferor pursuant to the Receivables Purchase Agreement constitutes a sale of
the Specified
Exhibit D-2-1
Assets to Transferor, such transfer, to the extent Ohio law is applied,
transfers all right, title and interest of the RPA Seller in and to the
Specified Assets to Transferor.
7. If the transfer of the Specified Assets from the RPA Seller to
Transferor does not constitute a sale, the security interest in the Specified
Assets created by the Receivables Purchase Agreement will be perfected by the
filing of the Financing Statements as described and defined in such opinion.
Based solely upon our review of the UCC Searches as described and defined in
such opinion, we hereby confirm to you that no Person other than Transferor
has filed any financing statement with the Filing Offices as described and
defined in such opinion that covers the Specified Assets and that would have
priority over the security interest, if any, of Transferor by virtue of such
filing.
Exhibit D-2-2
EXHIBIT D-3
PROVISIONS TO BE INCLUDED IN
ANNUAL OPINION OF COUNSEL
The opinions set forth below may be subject to certain
qualifications, assumptions, limitations and exceptions taken or made in the
opinion of counsel to Transferor with respect to similar matters delivered on
the Initial Closing Date. Unless otherwise indicated, all capitalized terms
used herein shall have the meanings ascribed to them in the Transfer and
Servicing Agreement.
1. No filing or other action, other than such filing or other action
described in this opinion letter, is necessary from the date of this opinion
letter through March 31 of the following year to continue the perfected
status of the security interest of the Trust in the Receivables described in
the financing statements referenced in this opinion letter.
2. No filing or other action, other than such filing or other action
described in this opinion letter, is necessary from the date of this opinion
letter through March 31 of the following year to continue the perfected
status of the security interest of Indenture Trustee in the Receivables
described in the financing statements referenced in this opinion letter.
Exhibit D-3-1
SCHEDULE 1
LIST OF ACCOUNTS
[Original list delivered to Owner Trustee]
-1-
