SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
WORLD FINANCIAL NETWORK NATIONAL BANK on behalf of
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
(Issuer in respect of the 6.70% Class A Asset Backed
Certificates, Series 1996-A, 7.00% Class B Asset Backed
Certificates, Series 1996-A, 6.95% Class A Asset Backed
Certificates, Series 1996-B, 7.20% Class B Asset Backed
Certificates, Series 1996-B)
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
United States 34-1610866
(State of incorporation or (I.R.S. Employer
organization) Identification No.)
4590 East Broad Street
Columbus, Ohio 43213
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange on which
to be so registered: each class is to be
Not Applicable registered
-------------- Not Applicable
--------------
If this Form relates to the If this Form relates to the
registration of a class of registration of a class of
debt securities and is debt securities and is to
effective upon filing pursuant become effective
to General Instruction simultaneously with the
A(c)(1), please check the effectiveness of a concurrent
following box. [ ] registration statement under
the Securities Act of 1933
pursuant to General
Instruction A(c)(2), please
check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
6.70% Class A Asset Backed Certificates, Series 1996-A;
7.00% Class B Asset Backed Certificates, Series 1996-A;
6.95% Class A Asset Backed Certificates, Series 1996-B; and
7.20% Class B Asset Backed Certificates, Series 1996-B;
Item 1. Description of Registrant's Securities to be Registered.
This Registration Statement relates to (in addition to the
items set forth in the immediately succeeding paragraph):
(i) the 6.70% Class A Asset Backed Certificates, Series
1996-A; the 7.00% Class B Asset Backed Certificates,
Series 1996-A (collectively, the "Series 1996-A
Certificates"). A description of the Series 1996-A
Certificates, including provisions concerning
distributions with respect thereto and other matters, is
contained under the caption "Description of the
Certificates" in the Prospectus Supplement relating to the
Series 1996-A, dated April 30, 1996, included in the
Registrant's Registration Statement on Form S-3 (File No.
333-998). Such description is hereby incorporated by
reference.
This Registration Statement relates to (in addition to the
items set forth in the immediately preceding paragraph):
(i) the 6.95% Class A Asset Backed Certificates, Series
1996-B; the 7.20% Class B Asset Backed Certificates,
Series 1996-B (collectively, the "Series 1996-B
Certificates"). A description of the Series 1996-B
Certificates, including provisions concerning
distributions with respect thereto and other matters, is
contained under the caption "Description of the
Certificates" in the Prospectus Supplement relating to the
Series 1996-B, dated April 30, 1996, included in the
Registrant's Registration Statement on Form S-3 (File No.
333-998). Such description is hereby incorporated by
reference.
Item 2. Exhibits
4.1 Specimen Class A Certificate, Series 1996-A (Filed
herewith)
4.2 Specimen Class B Certificate, Series 1996-A (Filed
herewith)
4.3 Specimen Class A Certificate, Series 1996-B (Filed
herewith)
4.4 Specimen Class B Certificate, Series 1996-B (Filed
herewith)
4.5 Pooling and Servicing Agreement between World Financial
Network National Bank ("WFN") and The Bank of New York
(the "Trustee"), dated January 17, 1996 (Exhibit 4.1 to
Registration Statement No. 333-998, incorporated herein by
reference)
4.6 Series 1996-A Supplement to said Pooling and Servicing
Agreement between WFN and the Trustee, dated May 9, 1996
(Exhibit 4.2 to Registration Statement No. 333-998,
incorporated herein by reference)
4.7 Series 1996-A Supplement to said Pooling and Servicing
Agreement between WFN and the Trustee, dated May 9, 1996
(Exhibit 4.2 to Registration Statement No. 333-998,
incorporated herein by reference)
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized.
WORLD FINANCIAL NETWORK CREDIT CARD
MASTER TRUST
By: WORLD FINANCIAL NETWORK
NATIONAL BANK
By: /S/ Dan T. Groomes
Date: June 3, 1996 Name: Dan T. Groomes
Title: Vice President - Finance
EXHIBIT 1
FORM OF CERTIFICATE
-------------------
CLASS A
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $___________
CUSIP No.___________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.70% CLASS A
ASSET-BACKED CERTIFICATE, SERIES 1996-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class A Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-A Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-A Certificates are issued in two classes, the Class A
Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-A
Certificates with the intention that the Series 1996-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-A
Holder (or Series 1996-A Certificate Owner) by acceptance of its Series
1996-A Certificate (or in the case of a Series 1996-A Certificate Owner, by
virtue of such Series 1996-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-A Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-A Holder agrees that it will cause any Series
1996-A Certificate Owner acquiring an interest in a Series 1996-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class A
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class A Holder by virtue of the acceptance hereof assents and by
which the Class A Holder is bound.
This Class A Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class A Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-A Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-A Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class A
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class A Certificate to be duly executed under its official
seal.
By:___________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
DATED:____________________
This is one of the 6.70% Class A Asset-Backed Certificates,
Series 1996-A referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:_____________________________
Authorized Signatory
EXHIBIT 2
FORM OF CERTIFICATE
-------------------
CLASS B
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $__________
CUSIP No.__________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.00% CLASS B
ASSET-BACKED CERTIFICATE, SERIES 1996-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class B Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-A Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-A Certificates are issued in two classes, the Class A
Certificates and the Class B Certificates (of which this certificate is
one), which are subordinated to the Class A Certificates in certain rights
of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-A
Certificates with the intention that the Series 1996-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-A
Holder (or Series 1996-A Certificate Owner) by acceptance of its Series
1996-A Certificate (or in the case of a Series 1996-A Certificate Owner, by
virtue of such Series 1996-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-A Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-A Holder agrees that it will cause any Series
1996-A Certificate Owner acquiring an interest in a Series 1996-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class B
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class B Holder by virtue of the acceptance hereof assents and by
which the Class B Holder is bound.
This Class B Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class B Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-A Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-A Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class B
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class B Certificate to be duly executed under its official
seal.
By:_________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
DATED:______________________
This is one of the 7.00% Class B Asset-Backed Certificates, Series
1996-A referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:__________________________
Authorized Signatory
EXHIBIT 3
FORM OF CERTIFICATE
-------------------
CLASS A
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $_________
CUSIP No._________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.95% CLASS A
ASSET-BACKED CERTIFICATE, SERIES 1996-B
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class A Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-B Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-B Certificates are issued in two classes, the Class A
Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-B
Certificates with the intention that the Series 1996-B Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-B
Holder (or Series 1996-B Certificate Owner) by acceptance of its Series
1996-B Certificate (or in the case of a Series 1996-B Certificate Owner, by
virtue of such Series 1996-B Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-B Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-B Holder agrees that it will cause any Series
1996-B Certificate Owner acquiring an interest in a Series 1996-B
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-B Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class A
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class A Holder by virtue of the acceptance hereof assents and by
which the Class A Holder is bound.
This Class A Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class A Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-B Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-B Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class A
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class A Certificate to be duly executed under its official
seal.
By:_________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
DATED:____________________
This is one of the 6.95% Class A Asset-Backed Certificates,
Series 1996-B referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:________________________
Authorized Signatory
EXHIBIT 4
FORM OF CERTIFICATE
-------------------
CLASS B
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $___________
CUSIP No.___________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.20% CLASS B
ASSET-BACKED CERTIFICATE, SERIES 1996-B
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class B Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-B Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-B Certificates are issued in two classes, the Class A
Certificates and the Class B Certificates (of which this certificate is
one), which are subordinated to the Class A Certificates in certain rights
of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-B
Certificates with the intention that the Series 1996-B Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-B
Holder (or Series 1996-B Certificate Owner) by acceptance of its Series
1996-B Certificate (or in the case of a Series 1996-B Certificate Owner, by
virtue of such Series 1996-B Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-B Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-B Holder agrees that it will cause any Series
1996-B Certificate Owner acquiring an interest in a Series 1996-B
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-B Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class B
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class B Holder by virtue of the acceptance hereof assents and by
which the Class B Holder is bound.
This Class B Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class B Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-B Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-B Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class B
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class B Certificate to be duly executed under its official
seal.
By:_______________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
DATED:______________________
This is one of the 7.20% Class B Asset-Backed Certificates, Series
1996-B referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:____________________________
Authorized Signatory
WORLD FINANCIAL NETWORK NATIONAL BANK,
Transferor and Servicer
and
THE BANK OF NEW YORK,
Trustee
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................ 1
SECTION 1.1 Definitions................................... 1
SECTION 1.2 Other Interpretive Provisions................. 21
ARTICLE II CONVEYANCE OF RECEIVABLES............................. 22
SECTION 2.1 Conveyance of Receivables..................... 22
SECTION 2.2 Acceptance by Trustee......................... 24
SECTION 2.3. Representations and Warranties of Transferor
Relating to Transferor....................... 24
SECTION 2.4 Representations and Warranties of Transferor
Relating to Transaction Documents and
Receivables Receivables...................... 26
SECTION 2.5. Reassignment of Ineligible Receivables........ 28
SECTION 2.6. Reassignment of Receivables in Trust
Portfolio.................................... 30
SECTION 2.7. Covenants of Transferor....................... 31
SECTION 2.8. Addition of Accounts.......................... 33
SECTION 2.9. Removal of Accounts........................... 36
SECTION 2.10. Discount Option............................... 38
SECTION 2.11. Additional Transferor......................... 38
SECTION 2.12. Additional Credit Card Originators............ 38
ARTICLE III ADMINISTRATION AND SERVICING......................... 39
SECTION 3.1. Acceptance of Appointment and Other Matters
Relating to Servicer......................... 39
SECTION 3.2. Servicing Compensation........................ 40
SECTION 3.3. Representations, Warranties and Covenants
of Servicer.................................. 40
SECTION 3.4. Reports to Trustee............................ 44
SECTION 3.5. Annual Certificate of Servicer................ 45
SECTION 3.6. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available..... 45
SECTION 3.7. Tax Treatment................................. 46
SECTION 3.8. Notices to WFN................................ 46
SECTION 3.9. Adjustments................................... 46
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS........................... 48
SECTION 4.1. Rights of Holders................................ 48
SECTION 4.2. Establishment of Collection Account and Excess
Funding Account................................ 48
SECTION 4.3. Collections and Allocations...................... 50
SECTION 4.4. Shared Principal Collections..................... 51
SECTION 4.5. Excess Finance Charge Collections................ 52
ARTICLE V DISTRIBUTIONS AND REPORTS................................. 52
ARTICLE VI THE CERTIFICATES.......................................... 52
SECTION 6.1. The Certificates................................. 52
SECTION 6.2. Authentication of Certificates................... 53
SECTION 6.3. New Issuances.................................... 53
SECTION 6.4. Registration of Transfer and Exchange of
Certificates.................................... 56
SECTION 6.5. Mutilated, Destroyed, Lost or Stolen Certificates 60
SECTION 6.6. Persons Deemed Owners............................ 61
SECTION 6.7. Appointment of Paying Agent...................... 61
SECTION 6.8. Access to List of Registered Holders' Names and
Addresses....................................... 62
SECTION 6.9. Authenticating Agent............................. 62
SECTION 6.10. Book-Entry Certificates.......................... 64
SECTION 6.11. Notices to Clearing Agency....................... 65
SECTION 6.12. Definitive Certificates.......................... 65
SECTION 6.13. Global Certificate............................... 65
SECTION 6.14. Uncertificated Classes........................... 66
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR.................... 66
SECTION 7.1. Liability of Transferor.......................... 66
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor..................... 66
SECTION 7.3. Limitations on Liability of Transferor........... 67
SECTION 7.4. Liabilities...................................... 68
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER..................... 68
SECTION 8.1. Liability of Servicer............................ 68
SECTION 8.2. Merger or Consolidation of, or Assumption of the
Obligation of, Servicer......................... 68
SECTION 8.3. Limitation on Liability of Servicer and Others 69
SECTION 8.4. Servicer Indemnification of the Trust and Trustee 70
SECTION 8.5. Servicer Not to Resign........................... 71
SECTION 8.6. Access to Certain Documentation and
Information Regarding the Receivables........... 71
SECTION 8.7. Delegation of Duties............................. 71
ARTICLE IX EARLY AMORTIZATION EVENTS................................ 72
SECTION 9.1. Early Amortization Events........................ 72
SECTION 9.2. Additional Rights upon Certain Events............ 72
ARTICLE X SERVICER DEFAULTS......................................... 73
SECTION 10.1. Servicer Defaults................................ 73
SECTION 10.2. Trustee to Act; Appointment of Successor......... 77
SECTION 10.3. Notification to Holders.......................... 78
SECTION 10.4. Waiver of Past Defaults.......................... 78
ARTICLE XI TRUSTEE.................................................. 79
SECTION 11.1. Duties of Trustee................................ 79
SECTION 11.2. Certain Matters Affecting Trustee................ 81
SECTION 11.3. Trustee Not Liable for Recitals in Certificates.. 82
SECTION 11.4. Trustee Not to Own Certificates.................. 82
SECTION 11.5. Servicer to Pay Trustee's Fees and Expenses...... 82
SECTION 11.6. Eligibility Requirements for Trustee............. 83
SECTION 11.7. Resignation or Removal of Trustee................ 83
SECTION 11.8. Successor Trustee................................ 84
SECTION 11.9. Merger or Consolidation of Trustee............... 84
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.... 85
SECTION 11.11. Tax Return....................................... 86
SECTION 11.12. Trustee May Enforce Claims Without Possession of
Certificates.................................... 86
SECTION 11.13. Suits for Enforcement............................ 87
SECTION 11.14. Rights of Holders to Direct Trustee.............. 87
SECTION 11.15. Representations and Warranties of Trustee........ 87
SECTION 11.16. Maintenance of Office or Agency.................. 88
SECTION 11.17. Confidentiality.................................. 88
ARTICLE XII TERMINATION............................................. 89
SECTION 12.1. Termination of Trust............................. 89
SECTION 12.2. Final Distribution............................... 89
SECTION 12.3. Transferor's Termination Rights.................. 90
ARTICLE XIII MISCELLANEOUS PROVISIONS............................... 91
SECTION 13.1. Amendment; Waiver of Past Defaults............... 91
SECTION 13.2. Protection of Right, Title and Interest to Trust. 93
SECTION 13.3. Limitation on Rights of Holders.................. 94
SECTION 13.4. GOVERNING LAW.................................... 95
SECTION 13.5. Notices, Payments................................ 95
SECTION 13.6. Rule 144A Information............................ 96
SECTION 13.7. Severability of Provisions....................... 96
SECTION 13.8. Certificates Nonassessable and Fully Paid........ 96
SECTION 13.9. Further Assurances............................... 96
SECTION 13.10. Nonpetition Covenant............................. 96
SECTION 13.11. No Waiver; Cumulative Remedies................... 97
SECTION 13.12. Counterparts..................................... 97
SECTION 13.13. Third-Party Beneficiaries........................ 97
SECTION 13.14. Actions by Holders............................... 97
SECTION 13.15. Merger and Integration........................... 98
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in
Supplemental Accounts
Exhibit C Form of Reassignment of Receivables in
Removed Accounts
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Form of Undertaking Letter
Exhibit E-3 ERISA Legend
Exhibit F-1 Form of Opinion of Counsel with respect
to Amendments
Exhibit F-2 Form of Opinion of Counsel with respect
to Addition of Supplemental Accounts
POOLING AND SERVICING AGREEMENT, dated as of January 17, 1996 between
WORLD FINANCIAL NETWORK NATIONAL BANK, a national banking association
("WFN"), as Transferor and as Servicer, and THE BANK OF NEW YORK, a New
York banking corporation, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Holders and any
Enhancement Provider to the extent provided herein and in any Supplement:
ARTICLE I DEFINITIONS
SECTION 1.1. Definitions. When used in this Agreement, the following
words and phrases have the following meanings. The definitions of such
terms are applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of
such terms.
"Account" means each Initial Account, each Automatic Additional Account
and each Supplemental Account, but excludes any Account all the Receivables
in which are either reassigned or assigned to Transferor or its designee or
Servicer in accordance with this Agreement and any inactive Accounts which
in accordance with the Credit Card Guidelines have been removed from the
computer records of the Credit Card Originator. The term "Account" includes
each account into which an Account is transferred (a "Transferred Account")
so long as (a) such transfer is made in accordance with the Credit Card
Guidelines and (b) such Transferred Account can be traced or identified, by
reference to or by way of the Account Schedule delivered to Trustee
pursuant to Section 2.1 or 2.8(d), as an account into which an Account has
been transferred. The term "Account" includes an Automatic Additional
Account or a Supplemental Account only from and after its Addition Date and
includes any Removed Account only prior to its Removal Date.
"Account Schedule" means a computer file or microfiche list containing a
true and complete list of Accounts, identified by account number and
setting forth the Receivable balance as of (a) the Trust Cut Off Date (for
the Account Schedule delivered on the Initial Closing Date), (b) the end of
the related Monthly Period (for any Account Schedule relating to Automatic
Additional Accounts) or (c) the related Addition Cut Off Date (for any
Account Schedule delivered in connection with any designation of
Supplemental Accounts).
"Addition" means the designation of additional Eligible Accounts to be
included as Accounts pursuant to Section 2.8(a), (b) or (c) or of
Participation Interests to be included as Trust Assets pursuant to Section
2.8(b) or (c), as applicable.
"Addition Cut Off Date" means the date as of which any Supplemental
Accounts or Participation Interests are designated for inclusion in the
Trust, as specified in the related Assignment.
"Addition Date" means (a) as to Supplemental Accounts, the date on which
the Receivables in such Supplemental Accounts are conveyed to the Trust
pursuant to Section 2.8(b) or (c), as applicable, (b) as to Automatic
Additional Accounts, the date on which such accounts are created or
otherwise become Automatic Additional Accounts and (c) as to Participation
Interests, the date from and after which such Participation Interests are
to be included as Trust Assets pursuant to Section 2.8(b) or (c).
"Additional Account" means an Automatic Additional Account or a
Supplemental Account.
"Adjusted Invested Amount" is defined, as to any Series, in the related
Supplement.
"Affiliate" means, as to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For this purpose, "control" means the power to direct the
management and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
"controlling" and "controlled" have correlative meanings.
"Agreement" means this Pooling and Servicing Agreement and, for purposes
of any Series, the related Supplement.
"Amortization Period" means, as to any Series or any Class within a
Series, any period specified in the related Supplement during which a share
of principal collections is set aside to repay the principal investment in
that Series (excluding repayments of a Variable Interest during its
revolving period).
"Applicants" is defined in Section 6.8.
"Appointment Date" is defined in Section 9.2(a).
"Approved Portfolio" means any Identified Portfolio and any additional
portfolio that is designated as an Approved Portfolio pursuant to Section
2.8(e).
"Assignment" is defined in Section 2.8(d)(ii).
"Authorized Newspaper" means any newspaper or newspapers of general
circulation in the Borough of Manhattan, The City of New York printed in
the English language (and, with respect to any Series or Class, if and so
long as the Investor Certificates of such Series or Class are listed on the
Luxembourg Stock Exchange and such exchange shall so require, in
Luxembourg, printed in any language satisfying the requirements of such
exchange) and customarily published on each business day at such place,
whether or not published on Saturdays, Sundays or holidays.
"Automatic Addition Suspension Date" is defined in Section 2.8(a).
"Automatic Addition Termination Date" is defined in Section 2.8(a).
"Automatic Additional Account" means each open end credit card account
in any Approved Portfolio that is established pursuant to a Credit Card
Agreement coming into existence after (a) the Trust Cut Off Date (in the
case of an account in the Identified Portfolio) or (b) the Addition Cut Off
Date relating to the first Addition Date on which receivables from accounts
in the applicable portfolio are transferred to the Trust (in the case of an
account in any other Approved Portfolio) and, in either case, prior to the
Automatic Addition Termination Date or an Automatic Addition Suspension
Date, or subsequent to a Restart Date. In addition, accounts in an Approved
Portfolio that were in existence, but were not Eligible Accounts, on (x)
the Trust Cut Off Date (in the case of an account in the Identified
Portfolio) or (y) the Addition Cut Off Date relating to the first Addition
Date on which receivables from accounts in the applicable portfolio are
transferred to the Trust (in the case of an account in any other Approved
Portfolio) but which, in either case, become Eligible Accounts prior to the
Automatic Addition Termination Date or an Automatic Addition Suspension
Date, or subsequent to a Restart Date, shall also be "Automatic Additional
Accounts" and shall be deemed, for purposes of the definition of "Eligible
Account" and Section 2.8(a), to have been created on the first day after
the Trust Cut Off Date or applicable Addition Cut Off Date on which they
are Eligible Accounts.
"Base Rate" is defined, as to any Series, in the related Supplement.
"Bearer Certificate" is defined in Section 6.1.
"Benefit Plan" is defined in Section 6.4(c).
"Book-Entry Certificates" means beneficial interests in the Investor
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 6.10.
"Business Day" means any day other than (a) a Saturday or Sunday, (b)
any other day on which national banking associations or state banking
institutions in New York, New York or Columbus, Ohio are authorized or
obligated by law, executive order or governmental decree to be closed or
(c) for purposes of any particular Series, any other day specified in the
related Supplement.
"Certificate" means an Investor Certificate, a Supplemental Certificate
or the Transferor Certificate.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant,
in accordance with the rules of such Clearing Agency).
"Certificate Register" is defined in Section 6.4.
"Class" means any class of Investor Certificates of any Series.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means, as to any Series, the date on which that Series is
issued.
"Collection Account" is defined in Section 4.2.
"Collections" means all payments (including Recoveries of Principal
Receivables or Finance Charge Receivables and Insurance Proceeds, whether
or not treated as Recoveries) received by Servicer with respect to the
Receivables, including In-Store Payments, in the form of cash, checks (to
the extent collected), wire transfers or other form of payment in
accordance with the Credit Card Agreement in effect from time to time on
any Receivables. If so specified in any Supplement, Collections shall also
include any payments received by Servicer with respect to Participation
Interests.
"Commission" means the Securities and Exchange Commission.
"Corporate Trust Office" is defined in Section 11.16.
"Coupon" is defined in Section 6.1.
"Credit Card Agreement" means, as to any Account, the agreements between
the Credit Card Originator that owns the Account and the related Obligor
that govern the Account, as amended or otherwise modified from time to
time.
"Credit Card Guidelines" means the written policies and procedures of
the Credit Card Originator relating to the operation of its consumer
revolving lending business, including written policies and procedures for
determining the creditworthiness of credit card customers, the extension of
credit to credit card customers and the maintenance of credit card accounts
and collection of related receivables, as amended or otherwise modified
from time to time.
"Credit Card Originator" means (i) WFN and/or any transferee of the
Accounts from WFN or (ii) any other originator of Accounts which is
designated from time to time pursuant to Section 2.12 and, directly or
indirectly, enters into a receivables purchase agreement with Transferor.
"Credit Card Processing Agreement" means one or more agreements between
the Credit Card Originator and a Merchant pursuant to which the Credit Card
Originator agrees to extend open end credit card accounts to customers of
the Merchant and the Merchant agrees to allow purchases to be made at its
retail establishments, or in its catalogue sales business, under such
accounts.
"Daily Report" is defined in Section 3.4(a).
"Date of Processing" means, as to any transaction, the Business Day on
which the transaction is first recorded on Servicer's computer file of
consumer revolving accounts (without regard to the effective date of such
recordation).
"Debtor Relief Laws" means Title 11 of the United States Code and all
other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of
payments, readjustment of debt, marshalling of assets or similar debtor
relief laws of the United States, any state or any foreign country from
time to time in effect, affecting the rights of creditors generally.
"Defaulted Receivable" means, as to any date of determination, all
Principal Receivables in any Account which are charged off as uncollectible
on that date in accordance with the Credit Card Guidelines and Servicer's
customary and usual servicing procedures for servicing open end credit card
account receivables comparable to the Receivables. A Principal Receivable
in any Account shall become a Defaulted Receivable on the day on which such
Principal Receivable is recorded as charged off in accordance with the
Credit Card Guidelines.
"Definitive Certificates" is defined in Section 6.10.
"Definitive Euro-Certificates" is defined in Section 6.13.
"Depository Agreement" means, as to any Series or Class, any agreement
among Transferor, Trustee and any applicable Clearing Agency.
"Determination Date" means, unless otherwise specified in any Supplement
with respect to the related Series, the second Business Day preceding each
Distribution Date.
"Discount Option Receivables" means, on any Date of Processing on and
after the date on which Transferor's exercise of its discount option
pursuant to Section 2.10 takes effect, the sum of (a) the aggregate
Discount Option Receivables at the end of the prior day (which amount,
prior to the date on which Transferor's exercise of its discount option
takes effect and with respect to Receivables generated prior to such date,
shall be zero), plus (b) any New Discount Option Receivables created on
such day, minus (c) any Discount Option Receivables Collections received on
such Date of Processing.
"Discount Option Receivables Collections" means on any Date of
Processing on and after the date on which Transferor's exercise of its
discount option pursuant to Section 2.10 takes effect, the product of (a) a
fraction the numerator of which is the amount of the Discount Option
Receivables and the denominator of which is the sum of the Principal
Receivables plus the amount of Discount Option Receivables in each case
(for both numerator and denominator) at the end of the prior Monthly Period
and (b) Collections of Principal Receivables, prior to any reduction for
Finance Charge Receivables which are Discount Option Receivables, received
on such Date of Processing.
"Discount Percentage" is defined in Section 2.10.
"Distribution Date" means, with respect to any Series, the date
specified in the related Supplement.
"Document Delivery Date" means the Initial Closing Date in the case of
Initial Accounts, the Addition Date in the case of Supplemental Accounts
and the Removal Date in the case of Removed Accounts.
"Early Amortization Event" means, as to any Series, each event specified
in Section 9.1 and each additional event, if any, specified in the relevant
Supplement as an Early Amortization Event for that Series.
"Eligible Account" means an open end credit card account in an Approved
Portfolio owned by the Credit Card Originator that, as of the Trust Cut Off
Date (in the case of an Initial Account), the date of creation thereof (in
the case of an Automatic Additional Account) or the related Addition Cut
Off Date (in the case of a Supplemental Account):
(a) is in existence and is serviced by the Credit Card
Originator or any Affiliate of the Credit Card Originator;
(b) is payable in United States dollars;
(c) except as provided below, has not been identified
as an account (i) the credit cards for which have been reported to the
Credit Card Originator as lost or stolen or (ii) the Obligor of which is
the subject of a bankruptcy proceeding;
(d) none of the Receivables in which have been, sold,
pledged, assigned or otherwise conveyed to any Person (except pursuant
to this Agreement), unless any such pledge or assignment is released on
or before the Initial Closing Date or the Addition Date, as applicable;
(e) except as provided below, none of the Receivables
in which are Defaulted Receivables or have been identified by the Credit
Card Originator, or by the relevant Obligor to the Credit Card
Originator, as having been incurred as a result of fraudulent use of a
credit card; and
(f) has an Obligor who has provided as his or her most
recent billing address, an address located in the United States or a
United States military address, provided that an account shall not fail
to be an "Eligible Account" solely due to the Obligor having provided a
billing address not satisfying the foregoing if as of the Trust Cut Off
Date (in the case of an Initial Account), the end of the most recently
ended Monthly Period (in the case of an Automatic Additional Account) or
the related Addition Cut Off Date (in the case of a Supplemental
Account) the aggregate Principal Receivables in Accounts the most recent
billing address for which does not satisfy the foregoing made up less
than 2% (or any higher percentage as to which the Rating Agency
Condition has been satisfied) of the aggregate Principal Receivables.
Notwithstanding the foregoing, Eligible Accounts may include accounts, the
receivables in which have been written off, or as to which the Credit Card
Originator believes the related Obligor is bankrupt and certain receivables
that have been identified by the Obligor as having been incurred as a
result of fraudulent use of credit cards or any credit cards have been
reported to the Credit Card Originator as lost or stolen, so long as (1)
the balance of all receivables included in such accounts is reflected on
the books and records of the Credit Card Originator (and is treated for
purposes of this Agreement) as "zero" and (2) charging privileges with
respect to all such accounts have been canceled and are not reinstated.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of
the United States or any one of the states thereof, including the District
of Columbia (or any domestic branch of a foreign bank), and acting as a
trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from
each of Moody's, S&P and, if rated by Fitch, Fitch in one of its generic
credit rating categories that signifies investment grade.
"Eligible Institution" means (a) a depository institution (which may be
Trustee or an affiliate) organized under the laws of the United States or
any one of the states thereof (i) that has either (A) a long-term unsecured
debt rating of "A2" or better by Moody's or (B) a certificate of deposit
rating of "P-1" by Moody's, (ii) that has either (A) a long-term unsecured
debt rating of "AAA" by S&P or (B) a certificate of deposit rating of at
least "A-1" by S&P, (iii) that, if rated by Fitch, has either (A) a
long-term unsecured debt rating of "AAA" by Fitch or (B) a certificate of
deposit rating of at least "A-1" by Fitch and (iv) the deposits of which
are insured by the FDIC or (b) any other institution that is acceptable to
each Rating Agency, Servicer and Trustee.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which evidence:
(a) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest by, the United
States of America;
(b) demand deposits, time deposits or certificates of
deposit (having original maturities of no more than 365 days) of
depository institutions or trust companies incorporated under the laws
of the United States of America or any state thereof (or domestic
branches of foreign banks) and subject to supervision and examination by
federal or state banking or depository institution authorities; provided
that at the time of the Trust's investment or contractual commitment to
invest therein, the short-term debt rating of such depository
institution or trust company shall be in the highest investment category
of each of Moody's, S&P and, if rated by Fitch, Fitch;
(c) commercial paper or other short-term obligations
having, at the time of the Trust's investment or contractual commitment
to invest therein, a rating from each of Moody's, S&P and, if rated by
Fitch, Fitch in its highest investment category;
(d) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC, with a Person the
commercial paper of which has a credit rating from each of Moody's, S&P
and, if rated by Fitch, Fitch in its highest investment category;
(e) notes or bankers acceptances (having original
maturities of no more than 365 days) issued by any depository
institution or trust company referred to in clause (b);
(f) investments in money market funds (including funds
of Trustee or its affiliates as well as funds for which Trustee and its
affiliates may receive compensation) rated in the highest investment
category by each of Moody's, S&P and, if rated by Fitch, Fitch or
otherwise approved in writing by each Rating Agency;
(g) time deposits, other than as referred to in clause
(d), with a Person the commercial paper of which has a credit rating
from each of Moody's, S&P and, if rated by Fitch, Fitch in its highest
investment category; or
(h) any other investments approved in writing by each
Rating Agency, provided that making such investments shall not cause the
Trust to be required to register as an investment company within the
meaning of the Investment Company Act.
"Eligible Receivable" means a Receivable:
(a) that has arisen under an Eligible Account;
(b) that was created in compliance with the Credit Card
Guidelines and all Requirements of Law applicable to the Credit Card
Originator, the failure to comply with which would have a material
adverse effect on Investor Holders, and pursuant to a Credit Card
Agreement that complies with all Requirements of Law applicable to the
Credit Card Originator, the failure to comply with which would have a
material adverse effect on Investor Holders;
(c) with respect to which all consents, licenses,
approvals or authorizations of, or registrations with, any Governmental
Authority required to be obtained or made by the Credit Card Originator
in connection with the creation of such Receivable or the execution,
delivery and performance by the Credit Card Originator of the related
Credit Card Agreement, have been duly obtained or made and are in full
force and effect as of the date of creation of such Receivable, but
failure to comply with this clause (c) shall not cause a Receivable not
to be an Eligible Receivable if, and to the extent that, the failure to
so obtain or make any such consent, license, approval, authorization or
registration would not have a material adverse effect on the Investor
Holders;
(d) as to which, at the time of its transfer to the
Trust, Transferor or the Trust will have good and marketable title free
and clear of all Liens (other than any Lien permitted by Section
2.7(b));
(e) that is the subject of a valid transfer and
assignment (or the grant of a security interest) from Transferor to the
Trust of all Transferor's right, title and interest therein;
(f) that at and after the time of transfer to the Trust
is the legal, valid and binding payment obligation of the Obligor
thereof, legally enforceable against such Obligor in accordance with its
terms, except as enforceability may be limited by applicable Debtor
Relief Laws, and by general principles of equity (whether considered in
a suit at law or in equity);
(g) that constitutes an account, a general intangible
or chattel paper;
(h) as to which, at the time of its transfer to the
Trust, Transferor has not taken any action which, or failed to take any
action the omission of which, would, at the time of transfer to the
Trust, impair the rights therein of the Trust or the Holders;
(i) that, at the time of its transfer to the Trust,
has not been waived or modified except as permitted in accordance with
Section 3.3(h);
(j) that, at the time of its transfer to the Trust, is
not subject to any right of rescission, setoff, counterclaim or any
other defense of the Obligor (including the defense of usury), other
than defenses arising out of Debtor Relief Laws and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or equity) or as to which Servicer makes an
adjustment pursuant to Section 3.9; and
(k) as to which, at the time of its transfer to the Trust, the
Transferor has satisfied all obligations to be fulfilled at
the time it is transferred to the Trust.
"Eligible Servicer" means Trustee, a wholly owned subsidiary of Trustee
or an entity that, at the time of its appointment as Servicer: (a) is
servicing a portfolio of consumer open end credit card accounts or other
consumer open end credit accounts; (b) is legally qualified and has the
capacity to service the Accounts; (c) is qualified (or licensed) to use the
software that is then being used to service the Accounts or obtains the
right to use, or has its own, software which is adequate to perform its
duties under this Agreement; (d) has, in the reasonable judgment of
Trustee, the ability to professionally and competently service a portfolio
of similar accounts; and (e) has a net worth of at least $50,000,000 as of
the end of its most recent fiscal quarter.
"Enhancement" means the rights and benefits provided to the Investor
Holders of any Series or Class pursuant to any letter of credit, surety
bond, cash collateral account, guaranty collateral invested amount, spread
account, guaranteed rate agreement, maturity guaranty facility, tax
protection agreement, interest rate swap agreement, interest rate cap
agreement or other similar arrangement. The subordination of any Class to
another Class, or a cross support feature which requires collections on
Receivables allocated to one Series to be paid as principal and/or interest
with respect to another Series shall be deemed to be an Enhancement for the
Class or Series benefitting from the subordination or cross support
feature.
"Enhancement Agreement" means any agreement, instrument or document
governing any Enhancement or pursuant to which any Enhancement is issued or
outstanding.
"Enhancement Provider" means the Person or Persons providing any
Enhancement, other than the Investor Holders of any Class which is
subordinated to another Class.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Excess Finance Charge Collections" means all amounts that any
Supplement designates as "Excess Finance Charge Collections."
"Excess Funding Account" is defined in Section 4.2.
"Exchange Act" means the Securities Exchange Act of 1934.
"FDIC" means the Federal Deposit Insurance Corporation.
"Finance Charge Receivables" means, with respect to any Monthly Period,
the sum of (a) all amounts billed to the Obligors on any Account at the
beginning of such Monthly Period in respect of Periodic Finance Charges,
(b) Late Fees, return check fees and any other fees that may after the
Trust Cut Off Date be charged with respect to any Account, to the extent
that Servicer designates such fees to be treated as Finance Charge
Receivables in an Officer's Certificate delivered to Trustee and (c)
Discount Option Receivables. Except as otherwise specified in any
Supplement as to the related Series, Recoveries shall be treated as
Collections of Finance Charge Receivables .
"Finance Charge Shortfalls" is defined, as to any Series, in the related
Supplement.
"Fitch" means Fitch Investors Service, L.P.
"Global Certificate" is defined in Section 6.13.
"Governmental Authority" means the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" means, with respect to any Series, the group of Series, if any,
in which the related Supplement specifies such Series is to be included.
"Holding" means WFN Holdings, Inc., a Delaware corporation.
"Holder" means an Investor Holder or a Person in whose name the
Transferor Certificate is registered.
"Identified Portfolio" means any Accounts owned from time to time by WFN
and included in the private label credit card programs of Bath & Body
Works, Inc., Brylane, L.P., Cacique, Inc., Lane Bryant, Inc., Lerner New
York, Inc., Express, Inc., Structure, Inc., Victoria's Secret Stores, Inc.,
Victoria's Secret Catalogue, Inc., The Limited Stores, Inc., Limited Too,
Inc., Abercrombie & Fitch, Inc., and Henri Bendel, Inc.
"Ineligible Receivables" is defined in Section 2.5(a).
"Initial Account" means each open end credit card account in the
Identified Portfolio existing on the Trust Cut Off Date and identified in
the Account Schedule delivered on the Initial Closing Date.
"Initial Closing Date" means January 17, 1996.
"Insolvency Event" is defined in Section 9.1(a).
"Insolvency Proceeds" is defined in Section 9.2(b).
"Insurance Proceeds" means any amounts recovered by Servicer pursuant to
any credit insurance policies covering any Obligor with respect to
Receivables under such Obligor's Account.
"Internal Revenue Code" means the Internal Revenue Code of 1986.
"Invested Amount" is defined, as to any Series, in the related
Supplement.
"Investment Company Act" means the Investment Company Act of 1940.
"Investor Certificate" means any one of the certificates (including the
Bearer Certificates, the Registered Certificates or any Global Certificate)
executed by Transferor and authenticated by or on behalf of Trustee,
substantially in the form attached to the related Supplement, other than
the Transferor Certificate and the Supplemental Certificates, if any.
"Investor Holder" means the Person in whose name a Registered
Certificate is registered in the Certificate Register or the holder of any
Bearer Certificate (or the Global Certificate, as the case may be) or
Coupon.
"Investor Interest" is defined in Section 4.1.
"Investor Percentage" is defined, as to any Series, in the related
Supplement.
"Investor Servicing Fee" is defined, as to any Series, in the related
Supplement.
"In-Store Payments" is defined in Section 2.1.
"Late Fees" means the fees specified in the Credit Card Agreement
applicable to each Account for late fees with respect to such Account.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever, including any conditional sale or other title retention
agreement, excluding any lien or filing pursuant to this Agreement;
provided that any assignment or transfer pursuant to Section 6.3(c) or (d)
or Section 7.2 shall not constitute a Lien.
"Majority Holders" means the Holders of Investor Certificates evidencing
more than 50% of the aggregate unpaid principal amount of all outstanding
Investor Certificates.
"Merchant" means each of (a) Bath & Body Works, Inc., Brylane, L.P.,
Cacique, Inc., Lane Bryant, Inc., Lerner New York, Inc., Express, Inc.,
Structure, Inc., Victoria's Secret Stores, Inc., Victoria's Secret
Catalogue, Inc., The Limited Stores, Inc., Limited Too, Inc., Abercrombie &
Fitch, Inc., and Henri Bendel, Inc. and (b) any other Person that operates
retail establishments at which, or a catalogue sales business in which,
goods or services may be purchased under an Account.
"Merchant Adjustment Payments" is defined in Section 3.9(a).
"Minimum Transferor Amount" means, as of any date of determination, the
sum of (a) the product of (i) the sum of (A) the aggregate Principal
Receivables and (B) the amounts on deposit in the Excess Funding Account
and (ii) the Required Retained Transferor Percentage plus (b) any
additional amounts specified in the Supplement for any outstanding Series.
"Monthly Period" means as to each Distribution Date, the immediately
preceding calendar month, unless otherwise defined in any Supplement.
"Moody's" means Moody's Investors Service, Inc.
"New Discount Option Receivables" means, as of any date of
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting Finance Charge Receivables which
are Discount Option Receivables) arising on such date of determination.
"Notice Date" is defined in Section 2.8(d)(i).
"Notices" is defined in Section 13.5(a).
"Obligor" means, as to any Account, the Person or Persons obligated to
make payments on such Account, including any guarantor.
"Officer's Certificate" means a certificate delivered to Trustee signed
by the Chairman of the Board, President, any Vice President or the
Treasurer or any Assistant Treasurer of Transferor or Servicer, as the case
may be.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Person providing the opinion and which
counsel shall be reasonably acceptable to Trustee.
"Participation Interests" is defined in Section 2.8(b).
"Paying Agent" means any paying agent and co-paying agent appointed
pursuant to Section 6.7.
"Periodic Finance Charges" means any finance charges (due to periodic
rate) applicable to any Account.
"Person" means any legal person, including any individual, corporation,
partnership, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental
entity or other entity of similar nature.
"Portfolio Yield" is defined, as to any Series, in the related
Supplement.
"Principal Receivable" means all Receivables other than Finance Charge
Receivables. In calculating the aggregate amount of Principal Receivables
on any day, the amount of Principal Receivables shall not include Defaulted
Receivables and shall be reduced by the aggregate amount of credit balances
in the Accounts on such day.
"Principal Sharing Series" means a Series that, pursuant to the
Supplement therefor, is entitled to receive Shared Principal Collections.
"Principal Shortfalls" is defined, as to any Series, in the related
Supplement.
"Principal Terms" means, with respect to any Series: (a) its name or
designation; (b) its initial principal amount (or method for calculating
such amount) and its invested amount in the Trust; (c) its interest rate
(or method for the determination thereof); (d) the payment date or dates
and the date or dates from which interest shall accrue; (e) the method for
allocating Collections to Holders of such Series; (f) the designation of
any Series Accounts and the terms governing the operation of any such
Series Accounts; (g) the percentage used to calculate the servicing fee
with respect thereto; (h) the provider, if any, and the terms of any form
of Enhancement with respect thereto; (i) the terms on which the Investor
Certificates of such Series may be repurchased by Transferor or any
Affiliate of Transferor or remarketed to other investors; (j) the Series
Termination Date; (k) the number of Classes of Investor Certificates of
such Series and, if such Series consists of more than one Class, the rights
and priorities of each such Class; (l) the extent to which the Investor
Certificates of such Series will be issuable in temporary or permanent
global form (and, in such case, the depositary for such Global Certificate
or Certificates, the conditions, if any, upon which such Global
Certificates may be exchanged, in whole or in part, for Definitive
Certificates, and the manner in which any interest payable on a Global
Certificate will be paid); (m) whether the Investor Certificates of such
Series may be issued as Bearer Certificates and any limitation imposed
thereon; (n) the priority of such Series with respect to any other Series;
(o) the Group, if any, to which such Series belongs; and (p) any other
terms of such Series.
"Rating Agency" means, as to each Series, the rating agency or agencies,
if any, specified in the related Supplement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency, if any, shall have notified Transferor, Servicer and Trustee
in writing that such action will not result in a reduction or withdrawal of
the rating, if any, of any outstanding Series or Class with respect to
which it is a Rating Agency.
"Reassignment" is defined in Section 2.9.
"Receivable" means any amount owing from time to time by an Obligor
under an Account, including amounts owing for purchases of goods and
services, and amounts payable as Finance Charge Receivables. A Receivable
shall be deemed to have been created at the end of the day on the Date of
Processing of such Receivable. Receivables which become Defaulted
Receivables shall not be shown on Servicer's records as amounts payable
(and shall cease to be included as Receivables) on the day on which they
become Defaulted Receivables.
"Record Date" means, as to any Distribution Date, the date specified in
the related Supplement.
"Recoveries" means (a) all amounts received by Servicer with respect to
Principal Receivables that have previously become Defaulted Receivables and
with respect to Finance Charge Receivables that have been charged off as
uncollectible (including Insurance Proceeds) and (b) proceeds of any
collateral securing any Receivable, in each case less related collection
expenses.
"Registered Certificates" is defined in Section 6.1.
"Registered Holder" means the Holder of a Registered Certificate.
"Removal Date" is defined in Section 2.9(a).
"Removal Notice Date" is defined in Section 2.9(a).
"Removed Accounts" is defined in Section 2.9.
"Required Principal Balance" means, as of any date of determination, the
sum of the numerators used at such date to calculate the Investor
Percentage with respect to Principal Receivables for all Series outstanding
on such date, less the amount on deposit in the Excess Funding Account as
of the date of determination.
"Required Retained Transferor Percentage" means, as of any date of
determination, 7% or, if less, the highest of the Required Retained
Transferor Percentages specified in the Supplements for all outstanding
Series.
"Requirements of Law" means, as to any Person, the certificate of
incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to
which such Person is subject, whether Federal, state or local.
"Responsible Officer" means any officer within the Corporate Trust
Department (or any successor group of Trustee), including any vice
president, assistant vice president, assistant secretary or any other
officer or assistant officer of Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
at Trustee's Corporate Trust Office because of such officer's knowledge of
and familiarity with the particular subject.
"Restart Date" is defined in Section 2.8(a).
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time.
"S&P" means Standard & Poor's Ratings Service, a division of the McGraw
Hill Companies, Inc.
"Securities Act" means the Securities Act of 1933.
"Series" means any series of Investor Certificates established pursuant
to a Supplement.
"Series Account" means any deposit, trust, escrow or similar account
maintained for the benefit of the Investor Holders of any Series or Class,
as specified in any Supplement.
"Series Servicing Fee Percentage" is defined, as to any Series, in the
related Supplement.
"Series Termination Date" is defined, as to any Series, in the related
Supplement.
"Service Transfer" is defined in Section 10.1.
"Servicer" means WFN, in its capacity as Servicer pursuant to this
Agreement, and, after any Service Transfer, the Successor Servicer.
"Servicer Default" is defined in Section 10.1.
"Servicing Fee" means, as to any Series, the servicing fee specified in
Section 3.2.
"Servicing Officer" means any officer of Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to Trustee by
Servicer on the Initial Closing Date, as such list may from time to time be
amended.
"Shared Principal Collections" means all amounts that any Supplement
designates as "Shared Principal Collections."
"Specified Transferor Amount" means, as of any date of determination, 0
or, if more, the highest amount identified as the "Specified Transferor
Amount" in the Supplement for any outstanding Series.
"Subject Certificate" is defined in Section 6.4(d).
"Successor Servicer" is defined in Section 10.2(a).
"Supplement" means, as to any Series, a supplement to this Agreement,
executed and delivered in connection with the original issuance of the
Investor Certificates of such Series pursuant to Section 6.3, and all
amendments thereof and supplements thereto.
"Supplemental Account" is defined in Section 2.8(b).
"Supplemental Certificate" is defined in Section 6.3(c).
"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income tax purposes, (a) such action will
not adversely affect the tax characterization as debt of Investor
Certificates of any outstanding Series or Class with respect to which an
Opinion of Counsel was delivered at the time of their issuance that such
Investor Certificates would be characterized as debt, (b) such actions will
not cause the Trust to be classified, for federal income tax purposes, as
an association (or publicly traded partnership) taxable as a corporation
and (c) such action will not cause or constitute an event in which gain or
loss would be recognized by any Investor Holder.
"Termination Notice" is defined in Section 10.1.
"The Limited" means The Limited, Inc., a Delaware corporation.
"Transaction Documents" means, at any time, this Agreement, the
Supplement for each outstanding Series, any document pursuant to which any
outstanding purchased interest is sold as permitted by Section 6.3(b) and
any other document designated as a Transaction Document in any Supplement
or any document pursuant to which any outstanding purchased interest is
sold as permitted by Section 6.3(b).
"Transfer Agent and Registrar" is defined in Section 6.4.
"Transfer Date" means the Business Day immediately preceding each
Distribution Date.
"Transferor" means WFN and additional transferors, if any, designated in
accordance with Section 2.11 or 6.3(d).
"Transferor Amount" means, on any date of determination, the excess, if
any, of (a) the aggregate amount of Principal Receivables on such day, plus
the principal amount on deposit in the Excess Funding Account on such day
over (b) the sum of the Invested Amounts (or, as to any Series that has an
Adjusted Invested Amount, the Adjusted Invested Amount) with respect to all
Series then outstanding, plus the outstanding principal amount of all
Supplemental Certificates (and of any purchased interest sold pursuant to
Section 6.3(b)).
"Transferor Certificate" means the certificate executed by Transferor
and authenticated by or on behalf of Trustee, substantially in the form of
Exhibit A.
"Transferor Retained Certificate" means any Certificate in any Class of
Investor Certificates that is designated as a "Transferor Retained Class"
in any Supplement.
"Transferor Interest" is defined in Section 4.1.
"Transferor Percentage" means as to Finance Charge Receivables,
Defaulted Receivables and Principal Receivables, 100% less the sum of the
applicable Investor Percentages for all outstanding Series.
"Transferred Account" is defined in the definition of "Account."
"Trust" means the Trust created by this Agreement, which shall be known
as the World Financial Network Credit Card Master Trust.
"Trust Assets" is defined in Section 2.1.
"Trust Cut Off Date" means January 12, 1996.
"Trustee" means The Bank of New York, a New York banking corporation, in
its capacity as trustee of the Trust, or any successor trustee appointed as
herein provided.
"UCC" means the Uniform Commercial Code, as in effect in the State of
Ohio and in any other State where the filing of a financing statement is
required to perfect Transferor's or the Trust's interest in the Receivables
and the proceeds thereof or in any other specified jurisdiction.
"United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"Variable Interest" means either of (a) any Investor Certificate that is
designated as a variable funding certificate in the related Supplement and
(b) any purchased interest sold as permitted by Section 6.3(b).
"WFN" is defined in the preamble.
SECTION 1.2. Other Interpretive Provisions. With respect to any Series,
all terms used and not defined herein are used as defined in the related
Supplement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document delivered pursuant
hereto unless otherwise defined therein. For purposes of this Agreement and
all such certificates and other documents, unless the context otherwise
requires: (a) accounting terms not otherwise defined in this Agreement, and
accounting terms partly defined in this Agreement to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles; (b) terms defined in Article 9 of the UCC
and not otherwise defined in this Agreement are used as defined in that
Article; (c) any reference to each Rating Agency shall only apply to any
specific rating agency if such rating agency is then rating any outstanding
Series; (d) references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on such day; (e)
the words "hereof," "herein" and "hereunder" and words of similar import
refer to this Agreement (or the certificate or other document in which they
are used) as a whole and not to any particular provision of this Agreement
(or such certificate or document); (f) references to any Section, Schedule
or Exhibit are references to Sections, Schedules and Exhibits in or to this
Agreement (or the certificate or other document in which the reference is
made), and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (g)
the term "including" means "including without limitation"; (h) references
to any law or regulation refer to that law or regulation as amended from
time to time and include any successor law or regulation; (i) references to
any agreement refer to that agreement as amended from time to time; (j)
references to any Person include that Person's permitted successors and
assigns; and (k) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof. The
agreements, representations and warranties of WFN in this Agreement, in its
respective capacities as Transferor and Servicer, shall be deemed to be the
separate agreements, representations and warranties of WFN only so long as
it remains a party to this Agreement in such capacity (but the foregoing
shall not impair rights arising during or with respect to the time that
such Person was a party to this Agreement in such capacity).
ARTICLE II CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. (a) By execution of this
Agreement, Transferor transfers, assigns, sets over and otherwise conveys
to the Trust, for the benefit of the Holders, all of its right, title and
interest in, to and under (i) the Receivables existing at the close of
business on the Trust Cut Off Date and thereafter arising from time to time
in the Initial Accounts and the Receivables existing on each applicable
Addition Date and thereafter arising from time to time in the Automatic
Additional Accounts, all Recoveries allocable to the Trust as provided
herein, all moneys due or to become due and all amounts received with
respect to, and proceeds of, any of the foregoing, and (ii) without
limiting the generality of the foregoing or the following, all of
Transferor's rights to receive 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 moneys on deposit in the
Collection Account, the Excess Funding Account, the Series Accounts, any
Enhancement and the security interest granted pursuant to Section 3.9(a)
shall constitute the assets of the Trust (the "Trust Assets"). The
foregoing does not constitute and is not intended to result in the creation
or assumption by the Trust, Trustee, any Investor Holders or any
Enhancement Provider of any obligation of the Credit Card Originator,
Servicer, Transferor or any other Person in connection with the Accounts or
the Receivables or under any agreement or instrument relating thereto,
including any obligation to obligors, merchant banks, merchants clearance
systems or insurers. If the foregoing transfer, assignment, setover and
conveyance is not deemed to be an absolute assignment of the subject
property to the Trustee, for the benefit of the Holders, then it shall be
deemed to constitute a grant of a security interest in such property to the
Trustee, for the benefit of the Investor Holders, and the Transferor
Interest shall be deemed to represent Transferor's equity in the collateral
granted.
(b) Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to
the Receivables now existing and hereafter created in Accounts owned by the
Credit Card Originator and other Trust Assets meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect, and maintain the perfection of, the assignment of
such Receivables to the Trust, and to deliver a file stamped copy of each
such financing statement or other evidence of such filing (which may, for
purposes of this Section 2.1 consist of telephone confirmation of such
filing promptly followed by delivery to Trustee of a file-stamped copy) to
Trustee on or prior to the Initial Closing Date, in the case of such
Receivables arising in the Initial Accounts and Automatic Additional
Accounts included in the Identified Portfolio, and (if any additional
filing is so necessary) the applicable Addition Date, in the case of such
Receivables arising in Supplemental Accounts and any related Automatic
Additional Accounts. Trustee shall be under no obligation whatsoever to
file such financing or continuation statements or to make any other filing
under the UCC in connection with such assignment.
(c) Transferor further agrees, at its own expense, (i) on or prior to
(A) the Automatic Addition Termination Date or any Automatic Addition
Suspension Date, or subsequent to a Restart Date, in the case of the
Initial Accounts and any Additional Accounts designated pursuant hereto
prior to such date, (B) the applicable Addition Date, in the case of
Supplemental Accounts and (C) the applicable Removal Date, in the case of
Removed Accounts, to indicate in the appropriate computer files that
Receivables created in connection with the Accounts owned by the Credit
Card Originator (other than Removed Accounts) have been conveyed to the
Trust pursuant to this Agreement for the benefit of the Holders (or
conveyed to Transferor or its designee in accordance with Section 2.9, in
the case of Removed Accounts) by including in such computer files the code
identifying each such Account (or, in the case of Removed Accounts, either
including such a code identifying the Removed Accounts only if the removal
occurs prior to the Automatic Addition Termination Date or an Automatic
Addition Suspension Date, or subsequent to a Restart Date, or deleting such
code thereafter) and (ii) on or prior to the date referred to in clauses
(i)(A), (B) or (C), as applicable, to deliver to Trustee an Account
Schedule (provided that such Account Schedule shall be provided in respect
of Automatic Additional Accounts on or prior to the Determination Date
relating to the Monthly Period during which their respective Addition Dates
occur), specifying for each such Account, as of the Automatic Addition
Termination Date or Automatic Addition Suspension Date, in the case of
clause (i)(B), the applicable Addition Cut Off Date, in the case of
Supplemental Accounts, and the Removal Date, in the case of Removed
Accounts, its account number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables outstanding in
such Account. Such Account Schedule shall be supplemented from time to time
to reflect Supplemental Accounts and Removed Accounts. Once the code
referenced in clause (i) of this paragraph has been included with respect
to any Account, Transferor further agrees not to alter such code during the
remaining term of this Agreement unless and until (x) such Account becomes
a Removed Account, (y) a Restart Date has occurred on which the Transferor
starts including Automatic Additional Accounts as Accounts or (z)
Transferor shall have delivered to Trustee at least 30 days' prior written
notice of its intention to do so and has taken such action as is necessary
or advisable to cause the interest of Trustee in the Receivables and other
Trust Assets to continue to be perfected with the priority required by this
Agreement.
SECTION 2.2. Acceptance by Trustee. (a) Trustee accepts on behalf of the
Trust all right, title and interest to the property, now existing and
hereafter created, conveyed to the Trust pursuant to Section 2.1 and
declares that it shall maintain such right, title and interest, upon the
trust herein set forth, for the benefit of all Holders.
(b) Trustee shall have no power to create, assume or incur indebtedness
or other liabilities in the name of the Trust other than as contemplated in
this Agreement or any Supplement.
SECTION 2.3. Representations and Warranties of Transferor Relating to
Transferor. Transferor represents and warrants to the Trust as of each
Closing Date as follows:
(a) Organization and Good Standing. Transferor is a
national banking association validly existing in good standing under the
laws of the United States, and has full corporate power, authority and
legal right to own its properties and conduct its business as presently
owned and conducted, to execute, deliver and perform its obligations
under each Transaction Document and to execute and deliver to Trustee
the Certificates. Transferor's deposits are insured by the FDIC.
(b) Due Qualification. Transferor is duly qualified to
do business and is in good standing as a foreign corporation (or is
exempt from such requirements), and has obtained all necessary licenses
and approvals in each jurisdiction in which failure to so qualify or to
obtain such licenses and approvals would render any Credit Card
Agreement or any Receivable transferred to the Trust by Transferor
unenforceable by the Credit Card Originator, Transferor, Servicer or
Trustee and would have a material adverse effect on the interests of the
Holders hereunder or under any Supplement.
(c) Due Authorization. The execution, delivery and
performance of this Agreement and each Supplement by Transferor, the
execution and delivery to Trustee of the Certificates by Transferor and
the consummation by Transferor of the transactions provided for in each
Transaction Document have been duly authorized by Transferor by all
necessary corporate action on the part of Transferor.
(d) No Conflict. The execution and delivery by
Transferor of each Transaction Document and the Certificates, the
performance by Transferor of the transactions contemplated by each
Transaction Document and the fulfillment by Transferor of the terms
hereof and thereof will not conflict with, result in any breach of any
of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which Transferor is a party or by which it or any of its
properties are bound.
(e) No Violation. The execution and delivery by
Transferor of each Transaction Document and the Certificates, the
performance by Transferor of the transactions contemplated by this
Agreement and each Supplement and the fulfillment by Transferor of the
terms hereof and thereof will not conflict with or violate any
Requirements of Law applicable to Transferor.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of Transferor,
threatened against Transferor, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality
(i) asserting the invalidity of any Transaction Document or the
Certificates, (ii) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by any
Transaction Document or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of Transferor,
would materially and adversely affect the performance by Transferor of
its obligations under any Transaction Document, (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of any Transaction Document or the
Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust under the Federal or applicable state income or
franchise tax systems.
(g) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by
Transferor of each Transaction Document and the Certificates, the
performance by Transferor of the transactions contemplated by each
Transaction Document and the fulfillment by Transferor of the terms
hereof and thereof, have been obtained.
(h) Insolvency. No Insolvency Event with respect to Transferor has
occurred. Transferor did not (i) execute the Transaction Documents,
(ii) grant to the Trustee the security interests described in Sections
2.1 and 3.9, (iii) cause, permit, or suffer the perfection or attachment
of such a security interest, (iv) otherwise effectuate or consummate any
transfer to Trustee pursuant to any Transaction Document or (v) acquire
its interest in the Trust, in each case:
(A) in contemplation of insolvency;
(B) with a view to preferring one creditor over another or
to preventing the application of its assets in the manner required
by applicable law or regulations;
(C) after committing an act of insolvency; or
(D) with any intent to hinder, delay, or defraud itself or
its creditors.
(i) Trustee. Trustee is not an insider or Affiliate of Transferor.
The representations and warranties of Transferor set forth in this
Section 2.3 shall survive the transfer and assignment by Transferor of the
respective Receivables to the Trust. Upon discovery by Transferor, Servicer
or Trustee of a breach of any of the representations and warranties by
Transferor set forth in this Section 2.3, the party discovering such breach
shall give prompt written notice to the others and to each Enhancement
Provider, if any, entitled thereto pursuant to the relevant Supplement.
Transferor agrees to cooperate with Servicer and Trustee in attempting to
cure any such breach. For purposes of the representations and warranties
set forth in this Section 2.3, each reference to a Supplement shall be
deemed to refer only to those Supplements in effect as of the relevant
Closing Date.
SECTION 2.4. Representations and Warranties of Transferor Relating to
Transaction Documents and the Receivables. (a) Representations and
Warranties. Transferor represents and warrants to the Trust as of the date
of this Agreement, each Closing Date and, with respect to Additional
Accounts, the related Addition Date that:
(i) each Transaction Document and, in the case of
Supplemental Accounts, the related Assignment, each constitutes a legal,
valid and binding obligation of Transferor, enforceable against
Transferor in accordance with its terms, except as such enforceability
may be limited by applicable Debtor Relief Laws now or hereafter in
effect and by general principles of equity (whether considered in a suit
at law or in equity);
(ii) as of the Automatic Addition Termination Date or
any Automatic Addition Suspension Date and as of each subsequent
Addition Date with respect to Supplemental Accounts, and as of the
applicable Removal Date with respect to the Removed Accounts, the
Account Schedule delivered pursuant to this Agreement, as supplemented
to such date, is an accurate and complete listing in all material
respects of all the Accounts as of such Automatic Addition Termination
Date, such Automatic Addition Suspension Date, the related Addition Cut
Off Date or such Removal Date, as the case may be, and the information
contained therein with respect to the identity of such Accounts and the
Receivables existing in such Accounts is true and correct in all
material respects as of such specified date;
(iii) Transferor is the legal and beneficial owner of
all right, title and interest in each Receivable and Transferor has the
full right to transfer such Receivables to the Trust, and each
Receivable conveyed to the Trust by Transferor has been conveyed to the
Trust free and clear of any Lien of any Person claiming through or under
Transferor or any of its Affiliates (other than Liens permitted under
Section 2.7(b)) and in compliance, in all material respects, with all
Requirements of Law applicable to Transferor;
(iv) all authorizations, consents, orders or approvals
of or registrations or declarations with any Governmental Authority
required to be obtained, effected or given by Transferor in connection
with the conveyance by Transferor of Receivables to the Trust have been
duly obtained, effected or given and are in full force and effect;
(v) this Agreement or, in the case of Supplemental
Accounts, the related Assignment constitutes either a valid transfer and
assignment to the Trust of all right, title and interest of Transferor
in the Receivables and other Trust Assets conveyed to the Trust by
Transferor and all monies due or to become due with respect thereto and
the proceeds thereof or a grant of a security interest in such property
to the Trustee, for the benefit of the Investor Holders, which, in the
case of existing Receivables and the proceeds thereof, is enforceable
upon execution and delivery of this Agreement, or, with respect to then
existing Receivables in Additional Accounts, as of the applicable
Addition Date, and which will be enforceable with respect to such
Receivables hereafter and thereafter created and the proceeds thereof
upon such creation, in each case except as such enforceability may be
limited by applicable Debtor Relief Laws, now or hereafter in effect,
and by general principles of equity (whether considered in a suit at law
or in equity). Upon the filing of the financing statements pursuant to
Section 2.1 and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trust shall have a
first priority security interest in such property and proceeds except
for Liens permitted under Section 2.7(b);
(vi) except as otherwise expressly provided in this
Agreement or any Supplement, neither Transferor nor any Person claiming
through or under Transferor has any claim to or interest in the
Collection Account, the Excess Funding Account, any Series Account or
any Enhancement;
(vii) on the Trust Cut Off Date, with respect to each
Initial Account, on the date of its creation or the date it otherwise
becomes an Automatic Additional Account, with respect to each Automatic
Additional Account and, on the applicable Addition Cut Off Date, with
respect to each related Supplemental Account, each such Account is an
Eligible Account;
(viii) on the Trust Cut Off Date, each Receivable then
existing is an Eligible Receivable, on the date of creation of each
Automatic Additional Account or the date the related account otherwise
becomes an Automatic Additional Account, each Receivable contained in
such Automatic Additional Account is an Eligible Receivable and, on the
applicable Addition Cut Off Date, each Receivable contained in any
related Supplemental Account is an Eligible Receivable; and
(ix) as of the date of the creation of any new
Receivable, such Receivable is an Eligible Receivable.
(b) Notice of Breach. The representations and warranties of Transferor
set forth in this Section 2.4 shall survive the transfer and assignment by
Transferor of Receivables to the Trust. Upon discovery by Transferor,
Servicer or Trustee of a breach of any of the representations and
warranties by Transferor set forth in this Section 2.4, the party
discovering such breach shall give prompt written notice to the others and
to each Enhancement Provider, if any, entitled thereto pursuant to the
relevant Supplement. Transferor agrees to cooperate with Servicer and
Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this Section 2.4, each
reference to a Supplement shall be deemed to refer only to those
Supplements in effect as of the date of the relevant representations or
warranties.
SECTION 2.5. Reassignment of Ineligible Receivables. (a) Reassignment of
Receivables. If (i) any representation or warranty of Transferor contained
in Section 2.4(a)(ii), (iii), (iv), (vii), (viii) or (ix) is not true and
correct in any material respect as of the date specified therein with
respect to any Receivable transferred to the Trust by Transferor or any
Account and as a result of such breach any Receivables in the related
Account become Defaulted Receivables or the Trust's rights in, to or under
such Receivables or the proceeds of such Receivables are impaired or such
proceeds are not available for any reason to the Trust free and clear of
any Lien, unless cured within 60 days (or such longer period, not in excess
of 150 days, as may be agreed to by Trustee) after the earlier to occur of
the discovery thereof by Transferor or receipt by Transferor or a designee
of Transferor of notice thereof given by Trustee, or (ii) it is so provided
in Section 2.7(a) with respect to any Receivables transferred to the Trust
by Transferor, then such Receivable shall be designated an "Ineligible
Receivable" and shall be assigned a principal balance of zero for the
purpose of determining the aggregate amount of Principal Receivables on any
day; provided that such Receivables will not be deemed to be Ineligible
Receivables but will be deemed Eligible Receivables and such Principal
Receivables shall be included in determining the aggregate Principal
Receivables in the Trust if, on any day prior to the end of such 60-day or
longer period, (x) either (A) in the case of an event described in clause
(i), the relevant representation and warranty shall be true and correct in
all material respects as if made on such day or (B) in the case of an event
described in clause (ii), the circumstances causing such Receivable to
become an Ineligible Receivable shall no longer exist and (y) Transferor
shall have delivered an Officer's Certificate describing the nature of such
breach and the manner in which the relevant representation and warranty
became true and correct.
(b) Price of Reassignment. On and after the date of its designation as
an Ineligible Receivable, each Ineligible Receivable shall not be given
credit in determining the aggregate amount of Principal Receivables used to
calculate the Transferor Amount or the Investor Percentages applicable to
any Series. If, following the exclusion of such Principal Receivables from
the calculation of the Transferor Amount, the Transferor Amount would be
less than the Specified Transferor Amount, Transferor shall make a deposit
into the Excess Funding Account in immediately available funds prior to the
next succeeding Business Day in an amount equal to the amount by which the
Transferor Amount would be less than the Specified Transferor Amount (up to
the amount of such Principal Receivables). The payment of such deposit
amount in immediately available funds shall otherwise be considered payment
in full of all of the Ineligible Receivables.
The obligation of Transferor to make the deposits, if any, required to
be made to the Excess Funding Account as provided in this Section, shall
constitute the sole remedy respecting the event giving rise to such
obligation available to Holders (or Trustee on behalf of the Holders) or
any Enhancement Provider.
SECTION 2.6. Reassignment of Receivables in Trust Portfolio. If any
representation or warranty of Transferor set forth in Section 2.3(a), (b)
or (c) or Section 2.4(a)(i), (v) or (vi) is not true and correct in any
material respect and such breach has a material adverse effect on the
Investor Interest in the Receivables transferred to the Trust by
Transferor, then either Trustee or the Majority Holders, by notice then
given to Transferor and Servicer (and to Trustee if given by the Investor
Holders), may direct Transferor to accept a reassignment of the Receivables
transferred to the Trust by Transferor if such breach and any material
adverse effect caused by such breach is not cured within 60 days of such
notice (or within such longer period, not in excess of 150 days, as may be
specified in such notice), and upon those conditions Transferor shall be
obligated to accept such reassignment on the terms set forth below;
provided that such Receivables will not be reassigned to Transferor if, on
any day prior to the end of such 60-day or longer period (i) the relevant
representation and warranty shall be true and correct in all material
respects as if made on such day and (ii) Transferor shall have delivered an
Officer's Certificate describing the nature of such breach and the manner
in which the relevant representation and warranty became true and correct.
Transferor shall deposit in the Collection Account in immediately
available funds not later than 12:00 noon, New York City time, on the first
Distribution Date following the Monthly Period in which such reassignment
obligation arises, in payment for such reassignment, an amount equal to the
sum of the amounts specified therefor with respect to each outstanding
Series in the related Supplement. Notwithstanding anything to the contrary
in this Agreement, such amounts shall be distributed on such Distribution
Date in accordance with Article IV and each Supplement. The payment of such
deposit amount in immediately available funds shall otherwise be considered
payment in full of all of the Receivables.
Upon the deposit, if any, required to be made to the Collection Account
as provided in this Section or Section 2.5, Trustee, on behalf of the
Trust, shall automatically and without further action be deemed to
transfer, assign, set over and otherwise convey to Transferor or its
designee, without recourse, representation or warranty (except for the
warranty that since the date of transfer by Transferor, Trustee has not
sold, transferred or encumbered any such Receivables or interest therein),
all the right, title and interest of the Trust in and to the applicable
Receivables, all moneys due or to become due and all amounts received with
respect thereto and all proceeds thereof. Trustee shall execute such
documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by Transferor to effect the
conveyance of such Receivables pursuant to this Section. The obligation of
Transferor to accept reassignment of any Receivables, and to make the
deposits, if any, required to be made to the Collection Account as provided
in this Section, shall constitute the sole remedy respecting the event
giving rise to such obligation available to Holders (or Trustee on behalf
of the Holders).
SECTION 2.7. Covenants of Transferor. Transferor covenants as follows:
(a) Receivables to be Accounts, General Intangibles or
Chattel Paper. Except in connection with the enforcement or collection
of an Account, Transferor will take no action to cause any Receivable
transferred by it to the Trust to be evidenced by any instrument and, if
any such Receivable is so evidenced (whether or not in connection with
the enforcement or collection of an Account), it shall be deemed to be
an Ineligible Receivable in accordance with Section 2.5(a) and shall be
reassigned to Transferor in accordance with Section 2.5(b).
(b) Security Interests. Except for the conveyances hereunder,
Transferor will not sell, pledge, assign or transfer or otherwise
convey to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any Receivable, whether now existing or
hereafter created, or any interest therein; Transferor will immediately
notify Trustee of the existence of any Lien on any Receivable of which
Transferor has knowledge; and Transferor shall defend the right, title
and interest of the Trust in, to and under the Receivables, whether now
existing or hereafter created, against all claims of third parties
claiming through or under Transferor; provided that nothing in this
Section 2.7(b) shall prevent or be deemed to prohibit Transferor from
suffering to exist upon any of the Receivables any Liens for taxes if
such taxes shall not at the time be due and payable or if Transferor
shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto. Notwithstanding the foregoing, nothing in
this Section 2.7(b) shall be construed to prevent or be deemed to
prohibit the transfer of the Transferor Certificate and certain other
rights of Transferor in accordance with this Agreement and any related
Supplement.
(c) Transferor Interest. Except as otherwise permitted
herein, including in Sections 2.11, 6.3 and 7.2, Transferor agrees not
to transfer, assign, exchange or otherwise convey or pledge, hypothecate
or otherwise grant a security interest in the Transferor Interest (or
any interest therein) represented by the Transferor Certificate (or any
interest therein) or any Supplemental Certificate (or any interest
therein) and any such attempted transfer, assignment, exchange,
conveyance, pledge, hypothecation or grant shall be void.
(d) Delivery of Collections or Recoveries. If Transferor is not
Servicer, and Transferor receives Collections or Recoveries, then
Transferor agrees to pay Servicer all such Collections and Recoveries
as soon as practicable after receipt thereof but in no event later than
two Business Days after the Date of Processing by Transferor.
(e) Notice of Liens. Transferor shall notify Trustee and each
Enhancement Provider, if any, entitled to such notice pursuant
to the relevant Supplement promptly after becoming aware of any Lien on
any Receivable other than the conveyances hereunder or Liens permitted
under Section 2.7(b).
(f) Continuous Perfection. Transferor shall not change its name,
identity or structure in any manner that might cause any financing or
continuation statement filed pursuant to this Agreement to be misleading
within the meaning of Section 9-402(7) of the UCC (or any other then
applicable provision of the UCC) unless Transferor shall have
delivered to Trustee at least 30 days prior written notice thereof and,
no later than 30 days after making such change, shall have taken all
action necessary or advisable to amend such financing statement or
continuation statement so that it is not misleading. Transferor shall
not change its chief executive office or change the location of its
principal records concerning the Receivables, the Trust Assets or the
Collections unless it has delivered to Trustee at least 30 days prior
written notice of its intention to do so and has taken such action as is
necessary or advisable to cause the interest of Trustee in the
Receivables and other Trust Assets to continue to be perfected with the
priority required by this Agreement.
(g) Credit Card Agreement and Guidelines. Transferor shall 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 change the terms and
provisions of the Credit Card Agreements or the Credit Card Guidelines
in any respect (including the reduction of the required minimum monthly
payment, the calculation of the amount, or the timing, of charge offs
and Periodic Finance Charges and other fees assessed thereon), but only
if such change is made applicable to any comparable segment of the
revolving credit card accounts owned and serviced by Transferor which
have characteristics the same as, or substantially similar to, the
Accounts that are the subject of such change, except as otherwise
restricted by an endorsement, sponsorship or other agreement between
Transferor and an unrelated third party or by the terms of the
Credit Card Agreements.
(h) Official Records. The resolutions of Transferor's
Board of Directors approving each of the Transaction Documents and all
documents relating thereto are and shall be continuously reflected in
the minutes of Transferor's Board of Directors. Each of the Transaction
Documents and all documents relating thereto are and shall, continuously
from the time of their respective execution by Transferor, be official
records of Transferor.
SECTION 2.8. Addition of Accounts. (a) Automatic Additional
Accounts. Subject to any limitations specified in any Supplement, Automatic
Additional Accounts shall be included as Accounts from and after the date
upon which they are created, and all Receivables in Automatic Additional
Accounts, whether such Receivables are then existing or thereafter created,
shall be transferred automatically to the Trust upon their creation. For
all purposes of this Agreement, all receivables relating to Automatic
Additional Accounts shall be treated as Receivables upon their creation and
shall be subject to the eligibility criteria specified in the definitions
of "Eligible Receivable" and "Eligible Account." Transferor may elect at
any time to terminate the inclusion in Accounts of new accounts which would
otherwise be Automatic Additional Accounts as of any Business Day (the
"Automatic Addition Termination Date"), or suspend any such inclusion as of
any Business Day (an "Automatic Addition Suspension Date") until a date
(the "Restart Date") to be notified in writing by Transferor to Trustee by
delivering to Trustee, Servicer and each Rating Agency ten days prior
written notice of such election at least 10 days prior to such Automatic
Addition Termination Date, Automatic Addition Suspension Date or Restart
Date, as the case may be. Promptly after each of an Automatic Addition
Termination Date, an Automatic Addition Suspension Date and a Restart Date,
Transferor and Trustee agree to execute, and Transferor agrees to record
and file at its own expense, an amendment to the financing statements
referred to in Section 2.1 to specify the accounts then subject to this
Agreement (which specification may incorporate a list of accounts by
reference) and, except in connection with any such filing made after a
Restart Date, to release any security interest in any accounts created
after the Automatic Addition Termination Date or Automatic Addition
Suspension Date.
(b) Required Additions of Supplemental Accounts. If during any period
of thirty consecutive days, the Transferor Amount averaged over that period
is less than the Minimum Transferor Amount for that period, Transferor
shall designate additional Eligible Accounts ("Supplemental Accounts") to
be included as Accounts in a sufficient amount such that the average of the
Transferor Amount as a percentage of the average amount of Principal
Receivables for such 30-day period, computed by assuming that the amount of
the Principal Receivables of such Supplemental Accounts shall be deemed to
be outstanding in the Trust during each day of such 30-day period, is at
least equal to the Minimum Transferor Amount. In addition, if on any Record
Date the aggregate amount of Principal Receivables plus amounts on deposit
in the Excess Funding Account is less than the Required Principal Balance,
Transferor shall designate Supplemental Accounts from any Approved
Portfolio to be included as Accounts in a sufficient amount such that the
aggregate amount of Principal Receivables plus amounts on deposit in the
Excess Funding Account will be equal to or greater than the Required
Principal Balance. Receivables from all such Supplemental Accounts shall be
transferred to the Trust on or before the tenth Business Day following such
thirty-day period or Record Date, as the case may be. In lieu of, or in
addition to, designating Supplemental Accounts as required above,
Transferor may convey to the Trust participations or trust certificates
representing undivided legal or beneficial interests in a pool of assets
primarily consisting of receivables arising under revolving credit card
accounts or other revolving credit accounts owned by Transferor or any of
its Affiliates and collections thereon ("Participation Interests"). Any
addition of Participation Interests to the Trust (whether pursuant to this
paragraph (b) or paragraph (c) below) shall be effected by an amendment
hereto, dated the applicable Addition Date, pursuant to subsection 13.1(a).
(c) Permitted Additions. In addition to its obligation under
paragraph (b), Transferor may, but shall not be obligated to, from time to
time designate Supplemental Accounts or Participation Interests to be
included as Trust Assets, in either case as of the applicable Addition
Date.
(d) Certain Conditions for Additions of Supplemental Accounts and
Participation Interests. Transferor agrees that any transfer of Receivables
from Supplemental Accounts or Participation Interests under paragraphs (b)
or (c) shall occur only upon satisfaction of the following conditions (to
the extent applicable):
(i) on or before the tenth Business Day prior to the Addition
Date (the "Notice Date"), Transferor shall give Trustee, each Rating
Agency and Servicer written notice that such Supplemental Accounts or
Participation Interests will be included, which notice shall specify
the approximate aggregate amount of the Receivables or Participation
Interests to be transferred; and, in the case of any transfer
pursuant to paragraph (c), the Rating Agency Condition shall have
been satisfied;
(ii) on or before the Addition Date, Transferor shall have
delivered to Trustee a written assignment (including an acceptance by
Trustee on behalf of the Trust for the benefit of the Investor
Holders) in substantially the form of Exhibit B (the "Assignment")
and Transferor shall have indicated in its computer files that the
Receivables created in connection with the Supplemental Accounts have
been transferred to the Trust and, within five Business Days
thereafter, Transferor shall have delivered to Trustee an Account
Schedule listing such Supplemental Accounts, which as of the date of
such Assignment, shall be deemed incorporated into and made a part of
such Assignment and this Agreement;
(iii) Transferor shall represent and warrant that (x) each
Supplemental Account is, as of the Addition Date, an Eligible
Account, and each Receivable in such Supplemental Account is, as of
the Addition Date, an Eligible Receivable, (y) no selection
procedures believed by Transferor to be materially adverse to the
interests of the Investor Holders were utilized in selecting the
Additional Accounts from the available Eligible Accounts in an
Approved Portfolio, and (z) as of the Addition Date, Transferor is
not insolvent;
(iv) Transferor shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either (x) a valid transfer
and assignment to the Trust of all right, title and interest of
Transferor in and to the Receivables then existing and thereafter
created in the Supplemental Accounts, and all proceeds of such
Receivables and Insurance Proceeds relating thereto and such
Receivables and all proceeds thereof and Insurance Proceeds and
Recoveries relating thereto will be held by the Trust free and clear
of any Lien of any Person claiming through or under Transferor or any
of its Affiliates, except for (i) Liens permitted under Section
2.7(b), (ii) the interest of Transferor as Holder of the Transferor
Certificate and (iii) Transferor's right to receive interest accruing
on, and investment earnings in respect of, the Excess Funding
Account, or any Series Account as provided in this Agreement and any
related Supplement or (y) a grant of a security interest in such
property to the Trustee, for the benefit of the Investor Holders,
which is enforceable with respect to then existing Receivables in the
Supplemental Accounts, the proceeds thereof and Insurance Proceeds
and Recoveries relating thereto upon the conveyance of such
Receivables to the Trust, and which will be enforceable with respect
to the Receivables thereafter created in respect of Supplemental
Accounts conveyed on such Addition Date, the proceeds thereof and
Insurance Proceeds and Recoveries relating thereto upon such
creation; and (z) if the Assignment constitutes the grant of a
security interest to the Trustee in such property, upon the filing of
a financing statement as described in Section 2.1 with respect to
such Supplemental Accounts and in the case of the Receivables
thereafter created in such Supplemental Accounts and the proceeds
thereof, and Insurance Proceeds and Recoveries relating thereto, upon
such creation, the Trust shall have a first priority perfected
security interest in such property (subject to Section 9-306 of the
UCC), except for Liens permitted under Section 2.7(b);
(v) Transferor shall deliver an Officer's Certificate to Trustee
confirming the items set forth in clause (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with respect
to the Receivables in the Supplemental Accounts to Trustee (with a
copy to each Rating Agency) substantially in the form of Exhibit F-2.
(e) Additional Approved Portfolios. The Transferor may from time to
time designate additional portfolios of accounts as "Approved Portfolios"
if all conditions, if any, in each Supplement for the designation of an
Approved Portfolio are satisfied.
SECTION 2.9. Removal of Accounts. On any day of any Monthly Period
Transferor shall have the right to require the reassignment to it or its
designee of all the Trust's right, title and interest in, to and under the
Receivables then existing and thereafter created, all moneys due or to
become due and all amounts received with respect thereto and all proceeds
thereof in or with respect to the Accounts then owned by the Credit Card
Originator and designated by Transferor (the "Removed Accounts") or
Participation Interests (unless otherwise set forth in the applicable
Supplement), upon satisfaction of the following conditions:
(a) on or before the tenth Business Day immediately preceding
the Removal Date (the "Removal Notice Date") Transferor shall have
given Trustee, Servicer, each Rating Agency and any Enhancement
Provider entitled thereto pursuant to the relevant Supplement written
notice of such removal and specifying the date for removal of the
Removed Accounts and Participation Interests (the "Removal Date");
(b) with respect to Removed Accounts, on or prior to the date
that is 10 Business Days after the Removal Date, Transferor shall
have delivered to Trustee an Account Schedule listing the Removed
Accounts and specifying for each such Account, as of the Removal
Notice Date, its account number, the aggregate amount outstanding,
and the aggregate amount of Principal Receivables outstanding in such
Account;
(c) 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 (b), as of the
Removal Date, is true and complete in all material respects;
(d) the Rating Agency Condition shall have been satisfied with
respect to such removal;
(e) Transferor shall have delivered to Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant
Supplement an Officer's Certificate, dated as of the Removal Date, to
the effect that Transferor reasonably believes that (i) such removal
will not, based on the facts known to such officer at the time of
such certification, then or thereafter cause an Early Amortization
Event to occur with respect to any Series and (ii) no selection
procedure believed by Transferor to be materially adverse to the
interests of the Investor Holders has been used in removing Removed
Accounts from among any pool of Accounts or Participation Interests
of a similar type;
(f) Transferor shall not use a selection procedure intended to
include a disproportionately higher level of Defaulted Receivables in
the Removed Accounts than exist in the Accounts and shall not remove
such Accounts for the intended purpose of mitigating losses to the
Trust;
(g) the aggregate Principal Receivables in the Removed Accounts
shall not exceed the excess of the Transferor Amount over the Minimum
Transferor Amount, all measured as of the end of the most recently
ended Monthly Period; and
(h) such removal shall not cause a decrease in the sum of the
Invested Amounts for all outstanding Series.
Upon satisfaction of the above conditions, Trustee shall execute and
deliver to Transferor or its designee a written reassignment in
substantially the form of Exhibit C (the "Reassignment") and shall, without
further action, be deemed to transfer, assign, set over and otherwise
convey to Transferor or its designee, effective as of the Removal Date,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to the Receivables arising in the Removed
Accounts or the Participation Interests, all moneys due and to become due
and all amounts received with respect thereto and all proceeds thereof. In
addition, Trustee shall execute such other documents and instruments of
transfer or assignment and take such other actions as shall reasonably be
requested by Transferor to effect the conveyance of Receivables pursuant to
this Section.
SECTION 2.10. Discount Option. (a) Transferor shall have the option
to designate at any time a fixed or floating percentage (the "Discount
Percentage"), of the amount of Receivables arising in the Accounts on or
after the date such designation becomes effective that would otherwise
constitute Principal Receivables (prior to subtracting from Principal
Receivables, Finance Charge Receivables that are Discount Option
Receivables) to be treated as Finance Charge Receivables. Transferor may
from time to time increase (subject to the limitations described below),
reduce or eliminate the Discount Percentage for Discount Option Receivables
arising in the Accounts on and after the date of such change. Transferor
must provide 30 days' prior written notice to Servicer, Trustee and each
Rating Agency of any such increase, reduction or elimination, and such
increase, reduction or elimination shall become effective on the date
specified therein only if (i) Transferor has delivered to Trustee an
Officer's Certificate to the effect that, based on the facts known to such
officer at the time, Transferor reasonably believes that such increase,
reduction or elimination will not at the time of its occurrence cause an
Early Amortization Event, or an event which with notice or the lapse of
time would constitute an Early Amortization Event, to occur with respect to
any Series and (ii) in the case of any increase, the Discount Percentage
shall not exceed 3% after giving effect to that increase.
(b) On each Date of Processing after the date on which the
Transferor's exercise of its discount option takes effect, the Transferor
shall treat Discount Option Receivables Collections as Collections of
Finance Charge Receivables.
SECTION 2.11. Additional Transferors. Transferor may designate
additional or substitute Persons to be included as Transferors under this
Agreement by an amendment to this Agreement (which amendment shall be
subject to Section 13.1 and to any applicable restrictions in the
Supplement for any outstanding Series) and, in connection with such
designation, the initial Transferor shall surrender the Transferor
Certificate to Trustee in exchange for a newly issued Transferor
Certificate reflecting such additional Transferor's interest in the
Transferor Interest; provided that prior to any such designation and
issuance the conditions set forth in Section 6.3(c) shall have been
satisfied.
SECTION 2.12. Additional Credit Card Originators. Transferor may
designate additional Persons as Credit Card Originators under this
Agreement by an amendment to this Agreement (which amendment shall be
subject to Section 13.1 and to any applicable restrictions in the
Supplement for any outstanding Series).
ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1. Acceptance of Appointment and Other Matters Relating to
Servicer. (a) WFN is appointed, and agrees to act, as Servicer.
(b) Servicer shall service and administer the Receivables, shall
collect payments due under the Receivables and shall charge off as
uncollectible Receivables, all in accordance with its customary and usual
servicing procedures for servicing credit card and other consumer open end
credit receivables comparable to the Receivables and in accordance with the
Credit Card Guidelines. Servicer shall have full power and authority,
acting alone or through any party properly designated by it hereunder, to
do any and all things in connection with such servicing and administration
which it may deem necessary or desirable. Without limiting the generality
of the foregoing, subject to Section 10.1 and provided WFN is Servicer,
Servicer or its designee (rather than Trustee) is hereby authorized and
empowered (i) to make withdrawals and payments or to instruct Trustee to
make withdrawals and payments from the Collection Account and any Series
Account, as set forth in this Agreement or any Supplement, and (ii) to take
any action required or permitted under any Enhancement, as set forth in
this Agreement or any Supplement. Without limiting the generality of the
foregoing and subject to Section 10.1, Servicer or its designee is
authorized and empowered to make any filings, reports, notices,
applications and registrations with, and to seek any consents or
authorizations from, the Commission and any state securities authority on
behalf of the Trust as may be necessary or advisable to comply with any
Federal or state securities laws or reporting requirements. Trustee shall
furnish Servicer with any powers of attorney or other documents necessary
or appropriate to enable Servicer to carry out its servicing and
administrative duties hereunder.
(c) Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables
from the procedures, offices, employees and accounts used by Servicer in
connection with servicing other credit card receivables.
(d) Servicer shall comply with and perform its servicing obligations
with respect to the Accounts and Receivables in accordance with the Credit
Card Agreements relating to the Accounts and the Credit Card Guidelines
except insofar as any failure to so comply or perform would not materially
and adversely affect the Trust or the Investor Holders.
(e) Servicer shall be liable for the payment, without reimbursement,
of all expenses incurred in connection with the Trust and the servicing
activities hereunder including expenses related to enforcement of the
Receivables, fees and disbursements of Trustee, any Paying Agent and any
Transfer Agent and Registrar (including the reasonable fees and expenses of
its counsel) in accordance with Section 11.5, fees and disbursements of
independent accountants and all other fees and expenses, including the
costs of filing UCC continuation statements and the costs and expenses
relating to obtaining and maintaining the listing of any Investor
Certificates on any stock exchange, that are not expressly stated in this
Agreement to be payable by the Trust, the Investor Holders of a Series or
Transferor (other than Federal, state, local and foreign income, franchise
and other taxes, if any, or any interest or penalties with respect thereto,
assessed on the Trust).
SECTION 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, payable monthly on the related Distribution Date, in an amount
equal to one-twelfth of the product of (a) the weighted average of the
Series Servicing Fee Percentages with respect to each outstanding Series
(based upon the Series Servicing Fee Percentage for each Series and the
Invested Amount (or such other amount as specified in the related
Supplement) of such Series, in each case as of the last day of the prior
Monthly Period) and (b) the amount of Principal Receivables on the last day
of the prior Monthly Period. The share of the Servicing Fee allocable to
the Investor Interest of each Series with respect to any Monthly Period
(the "Investor Servicing Fee") will be determined in accordance with the
relevant Supplement. The portion of the Servicing Fee with respect to any
Monthly Period not so allocated to the Investor Interest of a particular
Series, or otherwise allocated in any Supplement, shall be paid from
Finance Charge Collections allocable to Transferor on the related
Distribution Date. In no event shall the Trust, Trustee, the Investor
Holders of any Series or any Enhancement Provider be liable for the share
of the Servicing Fee with respect to any Monthly Period to be paid by
Transferor.
SECTION 3.3. Representations, Warranties and Covenants of Servicer.
WFN, in its capacity as initial Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make, on each Closing Date (and
on the date of any such appointment), the following representations,
warranties and covenants to the Trust:
(a) Organization and Good Standing. Servicer is a national
banking association (or with respect to such Successor Servicer, such
other corporate entity as may be applicable) duly organized, validly
existing and in good standing under the laws of the United States,
and has full corporate power, authority and legal right to execute,
deliver and perform its obligations under this Agreement and each
Supplement and, in all material respects, to own its properties and
conduct its business as such properties are presently owned and as
such business is presently conducted.
(b) Due Qualification. Servicer is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from
such requirements), and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to so qualify or to
obtain such licenses and approvals would have a material adverse
effect on the interests of the Investor Holders hereunder or under
any Supplement.
(c) Due Authorization. The execution, delivery, and performance
of this Agreement and each Supplement have been duly authorized by
Servicer by all necessary corporate action on the part of Servicer.
(d) Binding Obligation. This Agreement and each Supplement
constitutes a legal, valid and binding obligation of Servicer,
enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereinafter in effect,
affecting the enforcement of creditors' rights in general (or with
respect to such Successor Servicer, such other corporate entity as
may be applicable) and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law
or in equity).
(e) No Violation. The execution and delivery of this Agreement
and each Supplement by Servicer, the performance of the transactions
contemplated by this Agreement and each Supplement and the
fulfillment of the terms hereof and thereof applicable to Servicer,
will not conflict with, violate, result in any breach of any of the
material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any
Requirement of Law applicable to Servicer or any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which
Servicer is a party or by which it or any of its properties are
bound.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Servicer, threatened against
Servicer before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement or any Supplement,
seeking any determination or ruling that, in the reasonable judgment
of Servicer, would materially and adversely affect the performance by
Servicer of its obligations under this Agreement or any Supplement,
or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement or
any Supplement.
(g) Compliance with Requirements of Law. Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables and the related Accounts, will
maintain in effect all qualifications required under Requirements of
Law in order to properly service the Receivables and the related
Accounts and will comply in all material respects with all other
Requirements of Law in connection with servicing the Receivables and
the related Accounts, the failure to comply with which would have a
material adverse effect on the interests of the Investor Holders.
(h) No Rescission or Cancellation. Servicer shall not permit any
rescission or cancellation of a Receivable except as ordered by a
court of competent jurisdiction or other Governmental Authority or in
the ordinary course of its business and in accordance with the Credit
Card Guidelines. Servicer shall reflect any such rescission or
cancellation in its computer file of revolving credit card accounts.
In addition, Servicer may waive the accrual and/or payment of certain
Finance Charge Receivables in respect of certain past due Accounts,
the Obligors of which have enrolled with a consumer credit counseling
service, and the Receivables in such Accounts shall not fail to be
Eligible Receivables solely as a result of such waiver.
(i) Protection of Holders' Rights. Servicer shall take no action
which, nor omit to take any action the omission of which, would
materially impair the rights of Holders in any Receivable or Account,
nor shall it, except in the ordinary course of its business and in
accordance with the Credit Card Guidelines, reschedule, revise or
defer Collections due on the Receivables.
(j) Receivables Not to Be Evidenced by Promissory Notes. Except
in connection with its enforcement or collection of an Account,
Servicer will take no action to cause any Receivable to be evidenced
by any instrument, other than an instrument that, taken together with
one or more other writings, constitutes chattel paper and, if any
Receivable is so evidenced (whether or not in connection with the
enforcement or collection of an Account), it shall be reassigned or
assigned to Servicer as provided in this Section.
(k) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any
governmental body or official required in connection with the
execution and delivery by Servicer of this Agreement and each
Supplement, the performance by Servicer of the transactions
contemplated by this Agreement and each Supplement and the
fulfillment by Servicer of the terms hereof and thereof, have been
obtained; provided that Servicer makes no representation or warranty
as to state securities or "blue sky" laws.
(l) Maintenance of Records and Books of Account. Servicer shall
maintain and implement administrative and operating procedures
(including the ability to recreate records evidencing the Receivables
in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, computer records and other
information, reasonably necessary or advisable for the collection of
all the Receivables. Such documents, books and computer records shall
reflect all facts giving rise to the Receivables, all payments and
credits with respect thereto, and, to the extent required pursuant to
Section 2.1, such documents, books and computer records shall
indicate the interests of the Trust in the Receivables.
For purposes of the representations and warranties set forth in this
Section 3.3, each reference to a Supplement shall be deemed to refer only
to those Supplements in effect as of the relevant Closing Date or the date
of appointment of a Successor Servicer, as applicable.
If any of the representations, warranties or covenants of Servicer
contained in paragraph (g), (h), (i) or (j) with respect to any Receivable
or the related Account is breached, and as a result of such breach the
Trust's rights in, to or under any Receivables in the related Account or
the proceeds of such Receivables are materially impaired or such proceeds
are not available for any reason to the Trust free and clear of any Lien,
then no later than the expiration of 60 days (or such longer period, not in
excess of 150 days, as may be agreed to by Trustee) from the earlier to
occur of the discovery of such event by Servicer, or receipt by Servicer of
notice of such event given by Trustee, all Receivables in the Account or
Accounts to which such event relates shall be reassigned or assigned to
Servicer as set forth below; provided that such Receivables will not be
reassigned or assigned to Servicer if, on any day prior to the end of such
60-day or longer period, (i) the relevant representation and warranty shall
be true and correct, or the relevant covenant shall have been complied
with, in all material respects and (ii) Servicer shall have delivered an
Officer's Certificate describing the nature of such breach and the manner
in which such breach was cured.
Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds prior to the next
succeeding Business Day in an amount equal to the amount of such
Receivables, which deposit shall be considered a Collection with respect to
such Receivables and shall be applied in accordance with Article IV and
each Supplement.
Upon each such assignment to Servicer, Trustee, on behalf of the
Trust, shall automatically and without further action be deemed to
transfer, assign, set over and otherwise convey to Servicer, without
recourse, representation or warranty (except for the warranty that since
the date of transfer by Transferor, Trustee has not sold, transferred or
encumbered any such Receivables or interest therein), all right, title and
interest of the Trust in and to such Receivables, all moneys due or to
become due and all amounts received with respect thereto and all proceeds
thereof. Trustee shall execute such documents and instruments of transfer
or assignment and take such other actions as shall be reasonably requested
by Servicer to effect the conveyance of any such Receivables pursuant to
this Section. The obligation of Servicer to accept assignment of such
Receivables, and to make the deposits, if any, required to be made to the
Excess Funding Account or the Collection Account as provided in the
preceding paragraph, shall constitute the sole remedy respecting the event
giving rise to such obligation available to Holders (or Trustee on behalf
of Holders) or any Enhancement Provider.
SECTION 3.4. Reports to Trustee.
(a) Daily Reports. On the second Business Day immediately following
each Date of Processing, Servicer shall prepare and make available at the
office of Servicer for inspection by Trustee a report (the "Daily Report")
that shall set forth (i) the aggregate amounts of Collections, Collections
with respect to Principal Receivables and Collections with respect to
Finance Charge Receivables processed by Servicer on such Date of
Processing, (ii) the aggregate amount of Defaulted Receivables for such
Date of Processing, and (iii) the aggregate amount of Principal Receivables
in the Trust as of such Date of Processing.
(b) Monthly Servicer's Certificate. Unless otherwise stated in any
Supplement as to the related Series, on each Determination Date, Servicer
shall forward to Trustee, the Paying Agent, each Rating Agency and each
Enhancement Provider, if any, a certificate of a Servicing Officer setting
forth (i) the aggregate amounts for the preceding Monthly Period with
respect to each of the items specified in clause (i) of Section 3.4(a),
(ii) the aggregate Defaulted Receivables and Recoveries for the preceding
Monthly Period, (iii) a calculation of the Portfolio Yield and Base Rate
for each Series then outstanding, (iv) the aggregate amount of Receivables
and the balance on deposit in the Collection Account (or any subaccount
thereof) or any Series Account applicable to any Series then outstanding
with respect to Collections processed as of the end of the last day of the
preceding Monthly Period, (v) the aggregate amount of adjustments from the
preceding Monthly Period, (vi) the aggregate amount, if any, of
withdrawals, drawings or payments under any Enhancement with respect to
each Series required to be made with respect to the previous Monthly
Period, (vii) the sum of all amounts payable to the Investor Holders on the
succeeding Distribution Date in respect of interest and principal payable
with respect to the Investor Certificates and (viii) such other amounts,
calculations, and/or information as may be required by any relevant
Supplement.
(c) Transferred Accounts. Servicer covenants and agrees hereby to
deliver to Trustee, on or prior to the Automatic Addition Termination Date
or any Automatic Addition Suspension Date (but in the latter case, prior to
a Restart Date) within a reasonable time period after any Transferred
Account is created, but in any event not later than 15 days after the end
of the month within which the Transferred Account is created, a notice
specifying the new account number for any Transferred Account and the
replaced account number.
SECTION 3.5. Annual Certificate of Servicer. Servicer shall deliver
to Trustee, each Rating Agency and each Enhancement Provider, if any,
entitled thereto pursuant to the relevant Supplement, on or before the 90th
day following calendar year 1996 and each subsequent calendar year, an
Officer's Certificate (with appropriate insertions) substantially in the
form of Exhibit D.
SECTION 3.6. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available. (a) On or before the 90th day
following the end of calendar year 1996 and each subsequent calendar year,
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to Servicer or Transferor)
to furnish a report (addressed to Trustee) to Trustee, Servicer and each
Rating Agency to the effect that they have applied certain procedures with
Servicer and such firm has examined certain documents and records relating
to the servicing of Accounts under this Agreement and each Supplement,
compared the information contained in Servicer's certificates delivered
pursuant to this Agreement during the period covered by such report with
such documents and records and that, on the basis of such agreed upon
procedures (and assuming the accuracy of any reports generated by
Servicer's third party agents), such servicing was conducted in compliance
with this Agreement during the period covered by such report (which shall
be the prior calendar year, or the portion thereof falling after the
Initial Closing Date), except for such exceptions, errors or irregularities
as such firm shall believe to be immaterial and such other exceptions,
errors or irregularities as shall be set forth in such report. Such report
shall set forth the agreed upon procedures performed. A copy of such report
shall be delivered to each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Supplement.
(b) On or before the 90th day following the end of calendar year 1996
and each subsequent calendar year, Servicer shall cause a firm of
nationally recognized independent public accountants (who may also render
other services to Servicer or Transferor) to furnish a report to Trustee,
Servicer and each Rating Agency to the effect that they have applied
certain procedures agreed upon with Servicer to compare the mathematical
calculations of certain amounts set forth in Servicer's Certificates
delivered pursuant to Section 3.4(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 agreed upon procedures and
comparison, such amounts are in agreement, except for such exceptions as
they believe to be immaterial and such other exceptions as shall be set
forth in such statement. A copy of such report shall be delivered to each
Enhancement Provider, if any, entitled thereto pursuant to the relevant
Supplement.
(c) A copy of each certificate and report provided pursuant to
Section 3.4(c), 3.5 or 3.6 may be obtained by any Investor Holder or
Certificate Owner by a request to Trustee addressed to the Corporate Trust
Office.
SECTION 3.7. Tax Treatment. Transferor has entered into this
Agreement, and the Certificates will be issued, with the intention that for
Federal, state and local income and franchise tax purposes, the Investor
Certificates (except Transferor Retained Certificates which are held by
Transferor) of each Series will qualify as debt secured by the Receivables.
Transferor, by entering into this Agreement, each Holder, by the acceptance
of its Certificate (and each Certificate Owner, by its acceptance of an
interest in the applicable Certificate), agree to treat such Investor
Certificates for Federal, state and local income and franchise tax purposes
as debt. Each Holder of such Investor Certificate agrees that it will cause
any Certificate owner acquiring an interest in a Certificate through it to
comply with this Agreement as to treatment as debt under applicable tax
law, as described in this Section 3.7. Furthermore, subject to Section
11.11, or unless Transferor shall determine that the filing of returns is
appropriate, Trustee shall treat the Trust as a security device only and
shall not file tax returns or obtain an employer identification number on
behalf of the Trust.
SECTION 3.8. Notices to WFN. If WFN is no longer acting as Servicer,
any Successor Servicer shall deliver to WFN each certificate and report
required to be provided thereafter pursuant to Section 3.4(c), 3.5 or 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 Interest or the Investor
Percentages applicable to any Series will be reduced by the amount of the
adjustment. Similarly, the amount of Principal Receivables used to
calculate the Transferor Amount and the Investor Percentages applicable to
any Series will be reduced by the amount of any Principal Receivable which
was discovered as having been created through a fraudulent or counterfeit
charge or with respect to which the covenant of Transferor contained in
Section 2.7(b) has been breached. Any adjustment required pursuant to
either of the two preceding sentences shall be made on or prior to the end
of the Monthly Period in which such adjustment obligation arises. If,
following the exclusion of such Principal Receivables from the calculation
of the Transferor Amount, the Transferor Amount would be less than the
Specified Transferor Amount, not later than 12:00 noon, New York City time,
on the Distribution Date following the Monthly Period in which such
adjustment obligation arises, Transferor shall make a deposit into the
Excess Funding Account in immediately available funds in an amount equal to
the amount by which the Transferor Amount would be less than the Specified
Transferor Amount (up to the amount of such Principal Receivables). Any
amount deposited into the Excess Funding Account pursuant to the preceding
sentence shall be considered Collections of Principal Receivables and shall
be applied in accordance with Article IV and each Supplement.
To secure its obligations to make deposits required by this Section
3.9(a), Transferor hereby grants to Trustee, for the benefit of the
Investor Holders, a security interest in (i) its rights to receive payments
from any Merchant under any Credit Card Processing Agreement on account of
rebates, refunds, unauthorized charges, refused or returned merchandise or
any other event or circumstance that causes Servicer to adjust downward the
amount of any Receivable without receiving Collections therefor or charging
off such amount as uncollectible ("Merchant Adjustment Payments"), (ii) any
collateral security granted to, or guaranty for the benefit of, WFN with
respect to Merchant Adjustment Payments, (iii) all amounts received from
any Merchant or guarantor on account of Merchant Adjustment Payments and
(iv) all proceeds of such rights and such amounts. Except as otherwise
required by any Supplement, Transferor may permit or require Merchant
Adjustment Payments owed by any Merchant to be netted against amounts owed
by Transferor to that Merchant.
(b) If (i) Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received by
Servicer in the form of a check which is not honored for any reason or (ii)
Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any Receivable in respect of which a dishonored check is received
shall be deemed not to have been paid. Notwithstanding the first two
sentences of this paragraph, any adjustments made pursuant to this
paragraph will be reflected in a current report but will not change any
amount of Collections previously reported pursuant to Section 3.4(c).
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.1. Rights of Holders. The Investor Certificates shall
represent fractional undivided interests in the Trust, which, with respect
to each Series, shall consist of the right to receive, to the extent
necessary to make the required payments with respect to the Investor
Certificates of such Series at the times and in the amounts specified in
the related Supplement, the portion of Collections allocable to Investor
Holders of such Series pursuant to this Agreement and such Supplement,
funds on deposit in the Collection Account allocable to Holders of such
Series pursuant to this Agreement and such Supplement, funds on deposit in
any related Series Account and funds available pursuant to any related
Enhancement (the "Investor Interest"), it being understood that, unless
otherwise specified in the Supplements with respect to each affected
Series, the Investor Certificates of any Series or Class shall not
represent any interest in any Series Account or Enhancement for the benefit
of any other Series or Class. The Transferor Certificate shall represent
the ownership interest in the remainder of the Trust Assets not allocated
pursuant to this Agreement or any Supplement to the Investor Interest,
including the right to receive Collections with respect to the Receivables
and other amounts at the times and in the amounts specified in this
Agreement or any Supplement to be paid to Transferor or on behalf of the
Holder of the Transferor Certificate (the "Transferor Interest"); provided
that (x) the Transferor Certificate shall not represent any interest in the
Collection Account, any Series Account or any Enhancement, except as
specifically provided in this Agreement or any Supplement and (y) if this
Agreement or, in the case of Supplemental Accounts, the related Assignment
is deemed to constitute a grant to the Trustee, for the benefit of the
Investor Holders, of a security interest in the Receivables and other Trust
Assets, then the Transferor Certificate shall be deemed to represent
Transferor's equity in the collateral granted.
SECTION 4.2. Establishment of Collection Account and Excess Funding
Account. Servicer, for the benefit of the Holders, shall establish and
maintain in the name of Trustee, on behalf of the Trust, two Eligible
Deposit Accounts (the "Collection Account" and the "Excess Funding
Account"), each bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Holders. The Collection
Account and the Excess Funding Account shall initially be established with
Trustee. Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Collection Account and the Excess
Funding Account and in all proceeds thereof for the benefit of the Holders.
The Collection Account and the Excess Funding Account shall be under the
sole dominion and control of Trustee for the benefit of the Holders. Except
as expressly provided in this Agreement, Trustee agrees that it shall have
no right of set-off or banker's lien against, and no right to otherwise
deduct from, any funds held in the Collection Account or the Excess Funding
Account for any amount owed to it by the Trust, any Holder or any
Enhancement Provider. If at any time the Collection Account or the Excess
Funding Account ceases to be an Eligible Deposit Account, Trustee (or
Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which the Rating Agency
Condition is satisfied) establish a new Eligible Deposit Account meeting
the conditions specified above and transfer any cash or any investments
from the affected account to such new account, and from the date such new
account is established, it shall be the "Collection Account" or the "Excess
Funding Account," as the case may be.
Funds on deposit in the Collection Account and the Excess Funding
Account shall, at the direction of Servicer, be invested by Trustee in
Eligible Investments selected by Servicer, except that funds on deposit in
either such account on any Transfer Date need not be invested through the
immediately following Distribution Date. All such Eligible Investments
shall be held by Trustee for the benefit of the Holders. Trustee shall
maintain for the benefit of the Holders possession of the negotiable
instruments or securities, if any, evidencing such Eligible Investments.
Investments of funds representing Collections collected during any Monthly
Period shall be invested in Eligible Investments that will mature so that
all funds will be available at the close of business on the Transfer Date
following such Monthly Period. No Eligible Investment shall be disposed of
prior to its maturity unless Servicer so directs and either (i) such
disposal will not result in a loss of all or part of the principal portion
of such Eligible Investment or (ii) prior to the maturity of such Eligible
Investment, a default occurs in the payment of principal, interest or any
other amount with respect to such Eligible Investment. On each Distribution
Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account and the
Excess Funding Account shall be treated as Collections of Finance Charge
Receivables with respect to the last day of the related Monthly Period,
except as otherwise specified in any Supplement. For purposes of
determining the availability of funds or the balances in the Collection
Account or the Excess Funding Account for any reason under this Agreement,
all investment earnings net of investment expenses and losses on such funds
shall be deemed not to be available or on deposit.
Unless otherwise directed by Servicer, funds on deposit in the Excess
Funding Account will be withdrawn and paid to Transferor on any day to the
extent that the Transferor Amount exceeds the Specified Transferor Amount
on such day. On any Transfer Date on which one or more Series is in an
Amortization Period, Servicer shall determine the aggregate amounts of
Principal Shortfalls, if any, with respect to each such Series that is a
Principal Sharing Series (after giving effect to the allocation and payment
provisions in the Supplement with respect to each such Series), and
Servicer shall instruct Trustee to withdraw such amount from the Excess
Funding Account (up to an amount equal to the lesser of (x) the amount on
deposit in the Excess Funding Account after application of the preceding
sentence on that day and (y) the amount, if any, by which the Transferor
Amount would be less than zero if there were no funds on deposit in the
Excess Funding Account on that day) on such Transfer Date and allocate such
amount among each such Series as specified in each related Supplement.
SECTION 4.3. Collections and Allocations. (a) Servicer shall apply,
or instruct Trustee to apply, all funds on deposit in the Collection
Account as described in this Article IV and in each Supplement. Except as
otherwise provided below and in each Supplement, Servicer shall deposit
Collections into the Collection Account no later than the second Business
Day following the Date of Processing of such Collections. Except as
otherwise required by any Supplement, Transferor may permit or require
payments owed by any Merchant with respect to In-Store Payments to be
netted against amounts owed by Transferor to that Merchant, and Transferor
shall deposit into the Collection Account on each Business Day an amount
equal to the aggregate amount of In-Store Payments netted against amounts
owed by Transferor to the various Merchants on that Business Day.
Subject to the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, if WFN remains Servicer
and (x) for so long as WFN maintains a short term debt rating of A-1 or
better by S&P, P-1 or better by Moody's and, if rated by any other Rating
Agency, the equivalent rating by that Rating Agency (or such other rating
below A-1, P-1 or such equivalent rating, as the case may be, which is
satisfactory to each Rating Agency, if any), (y) with respect to
Collections allocable to any Series, any other conditions specified in the
related Supplement are satisfied or (z) WFN has provided to Trustee a
letter of credit covering collection risk of Servicer acceptable to each
Rating Agency (as evidenced by a letter from each Rating Agency to the
effect that the Rating Agency Condition has been satisfied), if any,
Servicer need not make the daily deposits of Collections into the
Collection Account as provided in the preceding paragraph, but may make a
single deposit in the Collection Account in immediately available funds not
later than 12:00 noon, New York City time, on the related Transfer Date.
(b) On each Date of Processing, Collections of Finance Charge
Receivables and of Principal Receivables shall be allocated to the Investor
Interest of each Series in accordance with the related Supplement. On each
Determination Date, Defaulted Receivables will be allocated to the Investor
Interest of each Series in accordance with the related Supplement.
(c) Throughout the existence of the Trust, unless otherwise stated in
any Supplement, on each Date of Processing Servicer shall allocate to
Transferor an amount equal to the product of (A) the Transferor Percentage
and (B) the aggregate amount of Collections allocated to Principal
Receivables and Finance Charge Receivables, respectively, on that Date of
Processing; provided that, if the Transferor Amount (determined after
giving effect to any transfer of Principal Receivables to the Trust on such
date), is less than or equal to the Specified Transferor Amount, Servicer
shall not allocate to Transferor any such amounts that otherwise would be
allocated to Transferor, but shall instead deposit such funds in the Excess
Funding Account. Unless otherwise stated in any Supplement, neither
Servicer nor Transferor need deposit any amounts allocated to the
Transferor pursuant to the foregoing into the Collection Account and shall
pay, or be deemed to pay, such amounts as collected to Transferor.
The payments to be made to Transferor, pursuant to this Section
4.3(c) do not apply to deposits to the Collection Account or other amounts
that do not represent Collections, including payment of the purchase price
for Receivables pursuant to Section 2.6 or 10.1, proceeds from the sale,
disposition or liquidation of Receivables pursuant to Section 9.2 or 12.2
or payment of the purchase price for the Investor Interest of a specific
Series pursuant to the related Supplement.
SECTION 4.4. Shared Principal Collections. On each Business Day,
Shared Principal Collections may, at the option of Transferor, be applied
(or held in the Collection Account for later application) as principal with
respect to any Variable Interest or, so long as either no Series is in an
Amortization Period or no Series that is in an Amortization Period will
have a Principal Shortfall on the related Transfer Date (assuming no Early
Amortization Event occurs), withdrawn from the Collection Account and paid
to Transferor; and on each Distribution Date, (a) Servicer shall allocate
Shared Principal Collections not previously so applied or paid to each
applicable Principal Sharing Series, pro rata, in proportion to the
Principal Shortfalls, if any, with respect to each such Series, and any
remainder may, at the option of Transferor, be applied as principal with
respect to any Variable Interest and (b) Servicer shall withdraw from the
Collection Account and pay to Transferor any amounts representing Shared
Principal Collections remaining after the allocations and applications
referred to in clause (a); provided that, if, on any day the Transferor
Amount (determined after giving effect to any transfer of Principal
Receivables to the Trust on such day), is less than or equal to the
Specified Transferor Amount, Servicer shall not distribute to Transferor
any Shared Principal Collections that otherwise would be distributed to
Transferor, but shall deposit such funds in the Excess Funding Account to
the extent required so that the Transferor Amount equals the Specified
Transferor Amount.
SECTION 4.5. Excess Finance Charge Collections. On each Distribution
Date, (a) for each Group, Servicer shall apply the aggregate amount for all
outstanding Series in such Group of the amounts which the related
Supplements specify are to be treated as "Excess Finance Charge
Collections" for such Distribution Date to each Series in such Group, pro
rata, in proportion to the Finance Charge Shortfalls, if any, with respect
to each such Series, and (b) Servicer shall withdraw (or shall instruct
Trustee to withdraw) from the Collection Account and pay to Transferor an
amount equal to the excess, if any, of (x) the aggregate amount for all
outstanding Series in a Group of the amounts which the related Supplements
specify are to be treated as "Excess Finance Charge Collections" for such
Distribution Date over (y) the aggregate amount for all outstanding Series
in such Group which the related Supplements specify are "Finance Charge
Shortfalls", for such Distribution Date.
THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES
ARTICLE V DISTRIBUTIONS AND REPORTS
DISTRIBUTIONS SHALL BE MADE TO, AND REPORTS SHALL BE PROVIDED TO,
HOLDERS AS SET FORTH IN THE APPLICABLE SUPPLEMENT.
ARTICLE VI THE CERTIFICATES
SECTION 6.1. The Certificates. The Investor Certificates of any
Series or Class may be issued in bearer form ("Bearer Certificates") with
attached interest coupons and any other applicable coupon (collectively,
the "Coupons") or in fully registered form ("Registered Certificates") and
shall be substantially in the form of the exhibits with respect thereto
attached to the applicable Supplement. The Transferor Certificate will be
issued in registered form and shall upon issue, be executed and delivered
by Transferor to Trustee for authentication and redelivery as provided in
Section 6.2. Except as otherwise provided in Section 6.3 or in any
Supplement, Bearer Certificates shall be issued in minimum denominations of
$5,000 and Registered Certificates shall be issued in minimum denominations
of $1,000 and in integral multiples of $1,000 in excess thereof. If
specified in any Supplement, the Investor Certificates of any Series or
Class shall be issued upon initial issuance as a single certificate
evidencing the aggregate original principal amount of such Series or Class
as described in Section 6.13. The Transferor Certificate shall initially be
a single certificate and shall initially represent the entire Transferor
Interest. Each Certificate shall be executed by manual or facsimile
signature on behalf of Transferor by its President or any Vice President.
Certificates bearing the manual or facsimile signature of an individual who
was, at the time when such signature was affixed, authorized to sign on
behalf of Transferor shall not be rendered invalid, notwithstanding that
such individual ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of
such Certificates. No Certificates shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form
provided for herein executed by or on behalf of Trustee by the manual or
facsimile signature of a duly authorized signatory, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered hereunder. Bearer Certificates shall be dated the applicable
Closing Date. All Registered Certificates and the Transferor Certificate
shall be dated the date of their authentication.
SECTION 6.2. Authentication of Certificates. Trustee shall
authenticate and deliver the Investor Certificates of each Series and Class
that are issued upon original issuance to or upon the order of Transferor
against payment to Transferor of the purchase price therefor. Trustee shall
authenticate and deliver the Transferor Certificate to Transferor
simultaneously with its delivery of the Investor Certificates of the first
Series to be issued hereunder. If specified in the related Supplement for
any Series or Class, Trustee shall authenticate and deliver outside the
United States the Global Certificate that is issued upon original issuance
thereof.
SECTION 6.3. New Issuances. (a) Transferor may from time to time
direct Trustee, on behalf of the Trust, to authenticate one or more new
Series of Investor Certificates. The Investor Certificates of all
outstanding Series shall be equally and ratably entitled as provided herein
to the benefits of this Agreement without preference, priority or
distinction, all in accordance with the terms and provisions of this
Agreement and the applicable Supplement except, with respect to any Series
or Class, as provided in the related Supplement.
(b) On or before the Closing Date for any new Series, the parties
hereto will execute and deliver a Supplement specifying the Principal Terms
of the new Series. Such Supplement may modify or amend the terms of this
Agreement solely as applied to the new Series and may grant the Holders of
the Investor Certificates in that Series, or an agent or other
representative of such Holders, notice and consultation rights with respect
to any rights or actions of Trustee. Trustee's obligation to authenticate
the Investor Certificates of a new Series and to execute and deliver the
related Supplement is subject to the satisfaction of the following
conditions (except that the conditions set forth in clauses (i), (iii),
(iv) and (v) shall not be applicable to the issuance of the first Series):
(i) on or before the fifth Business Day immediately preceding
the Closing Date, Transferor shall have given Trustee, Servicer, each
Rating Agency and any Enhancement Provider entitled thereto pursuant
to the relevant Supplement notice of such issuance and the Closing
Date;
(ii) Transferor shall have delivered to Trustee the related
Supplement, executed by each party hereto other than Trustee;
(iii) Transferor shall have delivered to Trustee any related
Enhancement Agreement executed by each of the parties thereto, other
than Trustee;
(iv) the Rating Agency Condition shall have been satisfied with
respect to such issuance;
(v) Transferor shall have delivered to Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant
Supplement an Officer's Certificate, dated the applicable Closing
Date, to the effect that Transferor reasonably believes that such
issuance will not, based on the facts known to such officer at the
time of such certification, then or thereafter cause an Early
Amortization Event to occur with respect to any Series;
(vi) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the Closing Date, with respect to such
issuance; and
(vii) Transferor shall have delivered to Trustee an Officer's
Certificate stating that the Transferor Amount shall not be less than
the Minimum Transferor Amount as of the Closing Date and after giving
effect to such issuance.
Upon satisfaction of the above conditions, Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by Transferor. Upon satisfaction of the above conditions
(mutatis mutandis), Transferor may also cause Trustee to enter into one or
more agreements pursuant to which Trustee shall sell purchased interests in
the Receivables and other Trust Assets to one or more purchasers. Such
agreement(s) shall specify terms similar to Principal Terms for any such
purchased interests and may grant the purchaser(s) of such interests, or an
agent or other representative of such purchaser(s), notice and consultation
rights with respect to any rights or actions of Trustee. Any such purchased
interests shall be treated as a Series of Investor Certificates for
purposes of all voting and allocation provisions, and calculations of the
Transferor Amount and Transferor Percentage, under this Agreement.
(c) Transferor may surrender the Transferor Certificate to Trustee in
exchange for a newly issued Transferor Certificate and one or more
additional certificates (each a "Supplemental Certificate"), the terms of
which shall be defined in a Supplement (which Supplement shall be subject
to Section 13.1(a) to the extent that it amends any of the terms of this
Agreement), to be delivered to or upon the order of Transferor (or the
Holder of a Supplemental Certificate, in the case of the transfer or
exchange thereof, as provided below), upon satisfaction of the following
conditions:
(i) Transferor shall have delivered to Trustee an Officer's
Certificate stating that the Transferor Amount shall not be less than
the Minimum Transferor Amount, as of the date of, and after giving
effect to, such exchange;
(ii) the Rating Agency Condition shall have been satisfied with
respect to such exchange (or transfer, exchange or pledge as provided
below); and
(iii) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the date of such exchange (or transfer,
exchange or pledge as provided below), with respect thereto.
Any Supplemental Certificate may be transferred or exchanged, and the
Transferor Certificate may be pledged, only upon satisfaction of the
conditions set forth in clauses (ii) and (iii).
(d) The Transferor Certificate (or any interest therein) may be
transferred to a Person which is a member of the "affiliated group" as
defined in Internal Revenue Code Section 1504(a) of which WFN is a member
without the consent or approval of the Holders of the Investor
Certificates, provided that (i) the Rating Agency Condition shall have been
satisfied with respect to such transfer, (ii) Transferor shall have
delivered to Trustee and each Rating Agency a Tax Opinion, dated the date
of such transfer, with respect thereto and (iii) Transferor shall have
delivered to Trustee an Officer's Certificate stating that the Transferor
Amount shall not be less than the Minimum Transferor Amount. In connection
with any such transfer, the Person to whom the Transferor Certificate is
transferred will, by its acquisition and holding of an interest in the
Transferor Certificate, assume all of the rights and obligations of
Transferor as described in this Agreement and in any Supplement or
amendment thereto (including the right under this paragraph (d) with
respect to subsequent transfers of an interest in the Transferor
Certificate).
SECTION 6.4. Registration of Transfer and Exchange of Certificates.
(a) Trustee shall cause to be kept at the office or agency to be maintained
in accordance with the provisions of Section 11.16 a register (the
"Certificate Register") in which, subject to such reasonable regulations as
it may prescribe, a transfer agent and registrar (which may be Trustee)
(the "Transfer Agent and Registrar") shall provide for the registration of
the Registered Certificates and of transfers and exchanges of the
Registered Certificates as herein provided. The Transfer Agent and
Registrar shall initially be The Bank of New York and any co-transfer agent
and co-registrar chosen by Transferor and acceptable to Trustee, including,
if and so long as any Series or Class is listed on the Luxembourg Stock
Exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg. So long as any Investor Certificates are
outstanding, Transferor shall maintain a co-transfer agent and co-registrar
in New York City. Any reference in this Agreement to the Transfer Agent and
Registrar shall include any co-transfer agent and co-registrar unless the
context requires otherwise.
Trustee may revoke such appointment and remove any Transfer Agent and
Registrar if Trustee determines in its sole discretion that such Transfer
Agent and Registrar failed to perform its obligations under this Agreement
in any material respect. Any Transfer Agent and Registrar shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' notice to
Transferor, Trustee and Servicer; provided that such resignation shall not
be effective and such Transfer Agent and Registrar shall continue to
perform its duties as Transfer Agent and Registrar until Trustee has
appointed a successor Transfer Agent and Registrar reasonably acceptable to
Transferor.
Subject to paragraph (c), upon surrender for registration of transfer
of any Registered Certificate at any office or agency of the Transfer Agent
and Registrar maintained for such purpose, one or more new Registered
Certificates (of the same Series and Class) in authorized denominations of
like aggregate fractional undivided interests in the Investor Interest
shall be executed, authenticated and delivered, in the name of the
designated transferee or transferees.
At the option of a Registered Holder, Registered Certificates (of the
same Series and Class) may be exchanged for other Registered Certificates
of authorized denominations of like aggregate fractional undivided
interests in the Investor Interest, upon surrender of the Registered
Certificates to be exchanged at any such office or agency; Registered
Certificates, including Registered Certificates received in exchange for
Bearer Certificates, may not be exchanged for Bearer Certificates. At the
option of the Holder of a Bearer Certificate, subject to applicable laws
and regulations, Bearer Certificates may be exchanged for other Bearer
Certificates or Registered Certificates (of the same Series and Class) of
authorized denominations of like aggregate fractional undivided interests
in the Investor Interest, upon surrender of the Bearer Certificates to be
exchanged at an office or agency of the Transfer Agent and Registrar
located outside the United States. Each Bearer Certificate surrendered
pursuant to this Section shall have attached thereto all unmatured Coupons;
provided that any Bearer Certificate, so surrendered after the close of
business on the Record Date preceding the relevant payment date or
distribution date after the expected final payment date need not have
attached the Coupon relating to such payment date or distribution date (in
each case, as specified in the applicable Supplement).
Whenever any Investor Certificates are so surrendered for exchange,
Transferor shall execute, Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver (in the case of Bearer Certificates, outside
the United States) the Investor Certificates which the Investor Holder
making the exchange is entitled to receive. Every Investor Certificate
presented or surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in a form satisfactory to
Trustee or the Transfer Agent and Registrar duly executed by the Investor
Holder or the attorney-in-fact thereof duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to Trustee. Trustee shall cancel and
destroy any Global Certificate upon its exchange in full for Definitive
Euro-Certificates and shall deliver a certificate of destruction to
Transferor. Such certificate shall also state that a certificate or
certificates of a foreign Clearing Agency to the effect required by the
applicable Supplement was received with respect to each portion of the
Global Certificate exchanged for Definitive Euro-Certificates.
Transferor shall execute and deliver to Trustee Bearer Certificates
and Registered Certificates in such amounts and at such times as are
necessary to enable Trustee to fulfill its responsibilities under this
Agreement, each Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its expense in
the City of New York and, if and so long as any Series or Class is listed
on the Luxembourg Stock Exchange, Luxembourg, an office or agency where
Investor Certificates may be surrendered for registration of transfer or
exchange (except that Bearer Certificates may not be surrendered for
exchange at any such office or agency in the United States).
(c)(i) Registration of transfer of Investor Certificates containing
(x) a legend substantially to the effect set forth on Exhibit E-1 shall be
effected only if such transfer is made pursuant to an effective
registration statement under the Securities Act or is exempt from the
registration requirements under the Securities Act and (y) a legend
substantially to the effect set forth on Exhibit E-3 shall be effected only
if such transfer is made to a Person that is not (1) an employee benefit
plan or other plan, trust or account (including an individual retirement
account) that is subject to ERISA or Section 4975 of the Internal Revenue
Code or (2) any collective investment fund, insurance company separate or
general account or other entity (except an entity registered under the
Investment Company Act) whose underlying assets include "plan assets" under
ERISA by reason of a plan's investment in such entity (a "Benefit Plan").
If registration of a transfer is to be made in reliance upon an exemption
from the registration requirements under the Securities Act, the transferor
or the transferee shall deliver, at its expense, to Transferor, Servicer
and Trustee, an investment letter from the transferee, substantially in the
form of the investment representation letter attached hereto as Exhibit
E-2, and no registration of transfer shall be made until such letter is so
delivered.
Investor Certificates issued upon registration or transfer of, or
Investor Certificates issued in exchange for, Investor Certificates bearing
a legend referred to above shall also bear such legend unless Transferor,
Servicer, Trustee and the Transfer Agent and Registrar receive an Opinion
of Counsel, satisfactory to each of them, to the effect that such legend
may be removed.
Whenever an Investor Certificate containing a legend referred to
above is presented to the Transfer Agent and Registrar for registration of
transfer, the Transfer Agent and Registrar shall promptly seek instructions
from Servicer regarding such transfer and shall be entitled to receive
instructions signed by a Servicing Officer prior to registering any such
transfer. Transferor hereby agrees to indemnify the Transfer Agent and
Registrar and Trustee and to hold each of them harmless against any loss,
liability or expense incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by them in
relation to any such instructions furnished pursuant to this paragraph.
(ii) Registration of transfer of Investor Certificates containing a
legend to the effect set forth on Exhibit E-3 shall be effected only if
such transfer is made to a Person which is not a Benefit Plan. By accepting
and holding any such Investor Certificate, an Investor Holder shall be
deemed to have represented and warranted that it is not a Benefit Plan. By
acquiring any interest in a Book-Entry Certificate which contains such
legend, a Certificate Owner shall be deemed to have represented and
warranted that it is not a Benefit Plan.
(iii) If so requested by Transferor, Trustee will make available to
any prospective purchaser of Investor Certificates who so requests, a copy
of a letter provided to Trustee by or on behalf of Transferor relating to
the transferability of any Series or Class to a Benefit Plan.
(d) Notwithstanding any other provision of this Agreement, any
Certificate for which an Opinion of Counsel has not been issued opining on
the treatment of such Certificates as debt for Federal income tax purposes
(each, a "Subject Certificate") shall be subject to the following. No
transfer (or purported transfer) of all or any part of a Subject
Certificate (or any economic interest therein), whether to another
Certificateholder or to a person who is not a Certificateholder, shall be
effective, and any such transfer (or purported transfer) shall be void ab
initio, and no Person shall otherwise become a Holder of a Subject
Certificate if (i) at the time of such transfer (or purported transfer) any
Subject Certificates are traded on an established securities market or
readily tradeable on a secondary market or the substantial equivalent
thereof or (ii) after such transfer (or purported transfer) the Trust would
have more than 100 Holders of Subject Certificates and the Subject
Certificates have been issued in a transaction or transactions that were
not required to be registered under the Securities Act, and to the extent
such offerings or sales were not required to be registered under the
Securities Act by reason of Regulation S (17 CFR 230.901 through 230.904 or
any successor thereto) such offerings or sales would not have been required
to be registered under the Securities Act if the interests so offered or
sold had been offered and sold within the United States. For purposes of
clause (i) of the preceding sentence, an established securities market is a
national securities exchange that is either registered under Section 6 of
the Exchange Act or exempt from registration because of the limited volume
of transactions, a foreign securities exchange that, under the law of the
jurisdiction where it is organized, satisfies regulatory requirements that
are analogous to the regulatory requirements of the Exchange Act, a
regional or local exchange, or an interdealer quotation system that
regularly disseminates firm buy or sell quotations by identified brokers or
dealers by electronic means or otherwise. For purposes of such clause (i),
Subject Certificates are readily tradeable on a secondary market or the
substantial equivalent thereof if (1) Subject Certificates (or interests
therein) are regularly quoted by any person, such as a broker or dealer,
making a market in the interests; (2) any person regularly makes available
to the public (including customers or subscribers) bid or offer quotes with
respect to Subject Certificates (or interests therein) and stands ready to
effect buy or sell transactions at the quoted prices for itself or on
behalf of others; (3) the holders of Subject Certificates have a readily
available, regular, and ongoing opportunity to sell or exchange the Subject
Certificates (or interests therein) through a public means of obtaining or
providing information of offers to buy, sell, or exchange such interests;
or (4) prospective buyers and sellers otherwise have the opportunity to
buy, sell, or exchange Subject Certificates (or interests therein) in a
time frame and with the regularity and continuity that is comparable to
that described in clauses (1), (2) and (3) of this sentence. For purposes
of determining whether the Trust will have more than 100 Holders of Subject
Certificates, each Person indirectly owning an interest in the Trust
through a partnership (including any entity treated as a partnership for
federal income tax purposes), a grantor trust or an S corporation (each
such entity a "flow-through entity") shall be treated as a Holder of a
Subject Certificate unless Servicer determines in its sole discretion,
after consulting with qualified tax counsel, that less than substantially
all of the value of the beneficial owner's interest in the flow-through
entity is attributable to the flow-through entity's interest (direct or
indirect) in the Trust.
SECTION 6.5. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate (together, in the case of Bearer
Certificates, with all unmatured Coupons (if any) appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Transfer Agent
and Registrar and Trustee such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to
Trustee that such Certificate has been acquired by a bona fide purchaser,
Transferor shall execute, Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver (in the case of Bearer Certificates, outside
the United States), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
aggregate fractional undivided interest. In connection with the issuance of
any new Certificate under this Section, Trustee or the Transfer Agent and
Registrar may require the payment by the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of Trustee
and Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at
any time.
SECTION 6.6. Persons Deemed Owners. Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of these may (a) prior to
due presentation of a Registered Certificate for registration of transfer,
treat the Person in whose name any Registered Certificate is registered as
the owner of such Registered Certificate for the purpose of receiving
distributions pursuant to the applicable Supplement and for all other
purposes whatsoever, and (b) treat the bearer of a Bearer Certificate or
Coupon as the owner of such Bearer Certificate or Coupon for the purpose of
receiving distributions pursuant to the applicable Supplement and for all
other purposes whatsoever; and, in any such case, neither Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of
these shall be affected by any notice to the contrary. Notwithstanding the
foregoing, in determining whether the Holders of the requisite Investor
Certificates have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Certificates owned by Transferor,
Servicer, any other Holder of the Transferor Certificate, Trustee or any
Affiliate thereof, shall be disregarded and deemed not to be outstanding,
except that, in determining whether Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates which Trustee actually knows to be so owned shall
be so disregarded. Certificates so owned which have been pledged in good
faith shall not be disregarded and may be regarded as outstanding if the
pledgee establishes to the satisfaction of Trustee the pledgee's right so
to act with respect to such Certificates and that the pledgee is not
Transferor, Servicer, any other Holder of the Transferor Certificate or any
Affiliate thereof.
SECTION 6.7. Appointment of Paying Agent. The Paying Agent shall make
distributions to Investor Holders from the Collection Account or any
applicable Series Account pursuant to the provisions of the applicable
Supplement and shall report the amounts of such distributions to Trustee.
Any Paying Agent shall have the revocable power to withdraw funds from the
Collection Account or any applicable Series Account for the purpose of
making the distributions referred to above. Trustee may revoke such power
and remove the Paying Agent if Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under
this Agreement or any Supplement in any material respect. The Paying Agent
shall initially be Trustee Bank, and any co-paying agent chosen by
Transferor and acceptable to Trustee, including, if and so long as any
Series or Class is listed on the Luxembourg Stock Exchange and such
exchange so requires, a co-paying agent in Luxembourg or another western
European city. Any Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' notice to Trustee. If any Paying Agent shall resign,
Trustee shall appoint a successor to act as Paying Agent. Trustee shall
cause each successor or additional Paying Agent to execute and deliver to
Trustee an instrument in which such successor or additional Paying Agent
shall agree with Trustee that it will hold all sums, if any, held by it for
payment to the Investor Holders in trust for the benefit of the Investor
Holders entitled thereto until such sums shall be paid to such Investor
Holders. The Paying Agent shall return all unclaimed funds to Trustee and
upon removal shall also return all funds in its possession to Trustee. The
provisions of Sections 11.1, 11.2, 11.3 and 11.5 shall apply to Trustee
also in its role as Paying Agent, for so long as Trustee shall act as
Paying Agent. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
SECTION 6.8. Access to List of Registered Holders' Names and
Addresses. Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to Servicer or the Paying Agent, within five Business
Days after receipt by Trustee of a request therefor, a list in such form as
Servicer or the Paying Agent may reasonably require, of the names and
addresses of the Registered Holders. If any Holder or group of Holders of
Investor Certificates of any Series or all outstanding Series, as the case
may be, evidencing not less than 10% of the aggregate unpaid principal
amount of such Series or all outstanding Series, as applicable (the
"Applicants"), apply to Trustee, and such application states that the
Applicants desire to communicate with other Investor Holders with respect
to their rights under this Agreement or any Supplement or under the
Investor Certificates and is accompanied by a copy of the communication
which such Applicants propose to transmit, then Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses shall
afford or shall cause the Transfer agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Registered Holders of such Series or all outstanding Series, as applicable,
held by Trustee, within five Business Days after the receipt of such
application. Such list shall be as of a date no more than 45 days prior to
the date of receipt of such Applicants' request.
Every Registered Holder, by receiving and holding a Registered
Certificate, agrees with Trustee that neither Trustee, the Transfer Agent
and Registrar, nor any of their respective agents, shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Registered Holders hereunder, regardless of the
sources from which such information was derived.
SECTION 6.9. Authenticating Agent. (a) Trustee may appoint one or
more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of Trustee in authenticating the Certificates
in connection with the issuance, delivery, registration of transfer,
exchange or repayment of the Certificates. Whenever reference is made in
this Agreement to the authentication of Certificates by Trustee or
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of Trustee by an authenticating agent and
certificate of authentication executed on behalf of Trustee by an
authenticating agent. Each authenticating agent must be acceptable to
Transferor and Servicer.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without
the execution or filing of any power or any further act on the part of
Trustee or such authenticating agent. An authenticating agent may at any
time resign by giving notice of resignation to Trustee and to Transferor.
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to
Transferor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to
be acceptable to Trustee or Transferor, Trustee promptly may appoint a
successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an authenticating agent. No successor authenticating
agent shall be appointed unless acceptable to Trustee and Transferor.
Transferor agrees to pay to each authenticating agent from time to time
reasonable compensation for its services under this Section. The provisions
of Sections 11.1, 11.2 and 11.3 shall be applicable to any authenticating
agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of Trustee's certificate of
authentication, an alternate certificate of authentication in substantially
the following form:
This is one of the Certificates described in the Pooling and
Servicing Agreement.
________________________
________________________
as Authenticating Agent
for Trustee,
By: ________________________
Authorized Officer
SECTION 6.10. Book-Entry Certificates. Unless otherwise specified in
the related Supplement for any Series or Class, the Investor Certificates,
upon original issuance, shall be issued in the form of one or more
typewritten Investor Certificates representing the Book-Entry Certificates,
to be delivered to the Clearing Agency, by, or on behalf of, Transferor.
The Investor Certificates shall initially be registered on the Certificate
Register in the name of the Clearing Agency or its nominee, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Investor Certificates, except as
provided in Section 6.12. Unless and until definitive, fully registered
Investor Certificates ("Definitive Certificates") have been issued to the
applicable Certificate Owners pursuant to Section 6.12 or as otherwise
specified in any such Supplement:
(a) the provisions of this Section shall be in full force and
effect;
(b) Transferor, Servicer and Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes
(including the making of distributions) as the authorized
representatives of the respective Certificate Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control; and
(d) the rights of the respective Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency
Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency or
the Clearing Agency Participants. Pursuant to the Depository
Agreement, unless and until Definitive Certificates are issued
pursuant to Section 6.12, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the related
Investor Certificates to such Clearing Agency Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Investor
Holders evidencing a specified percentage of the aggregate unpaid principal
amount of Investor Certificates, such direction or consent may be given by
Certificate Owners (acting through the Clearing Agency and the Clearing
Agency Participants) owning Investor Certificates evidencing the requisite
percentage of principal amount of Investor Certificates.
SECTION 6.11. Notices to Clearing Agency. Whenever any notice or
other communication is required to be given to Investor Holders of any
Series or Class with respect to which Book-Entry Certificates have been
issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, Trustee shall give all such notices and
communications to the applicable Clearing Agency.
SECTION 6.12. Definitive Certificates. If Book-Entry Certificates
have been issued with respect to any Series or Class and (a) Transferor
advises Trustee that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Series or Class and Trustee or Transferor is unable to
engage a qualified successor, (b) Transferor, at its option, advises
Trustee that it elects to terminate the book-entry system with respect to
such Series or Class through the Clearing Agency or (c) after the
occurrence of a Servicer Default, Certificate Owners of such Series or
Class evidencing not less than 50% of the aggregate unpaid principal amount
of such Series or Class advise Trustee and the Clearing Agency through the
Clearing Agency Participants that the continuation of a book-entry system
with respect to the Investor Certificates of such Series or Class through
the Clearing Agency is no longer in the best interests of the Certificate
Owners with respect to such Certificates, then Trustee shall notify all
Certificate Owners of such Certificates, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to
Trustee of any such Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration,
Transferor shall execute and Trustee shall authenticate and deliver such
Definitive Certificates. Neither Transferor nor Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance
of such Definitive Certificates all references herein to obligations
imposed upon or to be performed by the Clearing Agency shall be deemed to
be imposed upon and performed by Trustee, to the extent applicable with
respect to such Definitive Certificates and Trustee shall recognize the
Holders of such Definitive Certificates as Investor Holders hereunder.
SECTION 6.13. Global Certificate. If specified in the related
Supplement for any Series, or Class, the Investor Certificates for such
Series or Class will initially be issued in the form of a single temporary
global Certificate (the "Global Certificate") in bearer form, without
interest coupons, in the denomination of the aggregate principal amount of
such Series or Class and substantially in the form set forth in the exhibit
with respect thereto attached to the related Supplement. The Global
Certificate will be executed by Transferor and authenticated by Trustee
upon the same conditions, in substantially the same manner and with the
same effect as the Definitive Certificates. The Global Certificate may be
exchanged for Bearer or Registered Certificates in definitive form (the
"Definitive Euro-Certificates") pursuant to any applicable Supplement.
SECTION 6.14. Uncertificated Classes. Unless otherwise specified in
any Supplement, the provisions of this Article VI and Article XII relating
to the registration, form, execution, authentication, delivery,
presentation, cancellation and surrender of Certificates shall not apply to
any uncertificated Certificates.
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR
SECTION 7.1. Liability of Transferor. Transferor shall be liable for
its obligations, covenants, representations and warranties under this
Agreement and any Supplement, but only to the extent of the obligations
specifically undertaken by it in its capacity as Transferor.
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor. (a) Transferor shall not consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of Transferor substantially as an
entirety shall be, if Transferor is not the surviving entity, a
corporation organized and existing under the laws of the United
States of America or any State or the District of Columbia, and, if
Transferor is not the surviving entity, such corporation shall
expressly assume, by an agreement supplemental hereto, executed and
delivered to Trustee, in form reasonably satisfactory to Trustee, the
performance of every covenant and obligation of Transferor hereunder,
including its obligations under Section 7.4;
(ii) Transferor has delivered to Trustee (A) an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section and
that all conditions precedent herein provided for relating to such
transaction have been complied with, and (B) an Opinion of Counsel to
the effect that such supplemental agreement is a valid and binding
obligation of such surviving entity enforceable against such
surviving entity in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity);
(iii) Transferor shall have delivered to Trustee and each Rating
Agency a Tax Opinion, dated the date of such consolidation, merger,
conveyance or transfer, with respect thereto;
(iv) in connection with any merger or consolidation, or any
conveyance or transfer referred to above, the business entity into
which Transferor shall merge or consolidate, or to which such
conveyance or transfer is made, shall be (x) a business entity that
may not become a debtor in any case, action or other proceeding under
Title 11 of the United States Code or (y) a special-purpose
corporation, the powers and activities of which shall be limited to
the performance of Transferor's obligations under this Agreement and
any Supplement; and
(v) if Transferor is not the surviving entity, the surviving
entity shall file new UCC-1 financing statements with respect to the
interest of the Trust in the Receivables.
(b) This Section 7.2 shall not be construed to prohibit or in any way
limit Transferor's ability to effectuate any consolidation or merger
pursuant to which Transferor would be the surviving entity.
(c) Transferor shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this
Section 7.2;
(d) The obligations of Transferor hereunder shall not be assignable
nor shall any Person succeed to the obligations of Transferor hereunder
except in each case in accordance with (i) the provisions of the foregoing
paragraphs, (ii) Sections 2.11 or 6.3(d), or (iii) conveyances, mergers,
consolidations, assumptions, sales or transfers to other entities (1) for
which Transferor delivers an Officer's Certificate to Trustee indicating
that Transferor reasonably believes that such action will not adversely
affect in any material respect the interests of any Investor Holder, (2)
which meet the requirements of clause (ii) of paragraph (a) and (3) for
which such purchaser, transferee, pledgee or entity shall expressly assume,
in an agreement supplemental hereto, executed and delivered to Trustee in
writing in form satisfactory to Trustee, the performance of every covenant
and obligation of Transferor thereby conveyed.
SECTION 7.3. Limitations on Liability of Transferor. Subject to
Sections 7.1 and 7.4, neither Transferor, any Holder of the Transferor
Certificate nor any of their directors, officers, employees or agents of
Transferor acting in such capacities shall be under any liability to the
Trust, Trustee, the Holders, any Enhancement Provider or any other Person
for any action taken or for refraining from the taking of any action in
good faith in their capacities as Transferor pursuant to this Agreement;
provided that this provision shall not protect Transferor, any Holder of
the Transferor Certificate or any such Person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. Transferor and any director,
officer, employee or agent of Transferor may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
Person (other than Transferor) respecting any matters arising hereunder.
SECTION 7.4. Liabilities. Notwithstanding Sections 7.3, 8.3 and 8.4,
Transferor by entering into this Agreement, and any Holder of any interest
in the Transferor Certificate by its acceptance thereof, agree to be
liable, directly to the injured party, for the entire amount of any losses,
claims, damages or liabilities (other than those that would be incurred by
an Investor Holder if the Investor Certificates were notes secured by the
Receivables, for example, as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure to make payment
under any Enhancement or other similar market or investment risks
associated with ownership of the Investor Certificates) arising out of or
based on the arrangement created by this Agreement or the actions of
Servicer taken pursuant hereto (to the extent Trust Assets remaining after
the Investor Holders and Enhancement Providers, if any, have been paid in
full are insufficient to pay any such losses, claims, damages or
liabilities) as though this Agreement created a partnership under the
Delaware Revised Uniform Partnership Act in which Transferor and such
Holder of the Transferor Certificate were general partners.
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER
SECTION 8.1. Liability of Servicer. Servicer shall be liable under
this Agreement only to the extent of the obligations specifically
undertaken by Servicer in its capacity as Servicer.
SECTION 8.2. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. (a) Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which
Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of Servicer substantially as an
entirety shall be, if Servicer is not the surviving entity, a
corporation organized and existing under the laws of the United
States of America or any State or the District of Columbia, and, if
Servicer is not the surviving entity, such corporation shall
expressly assume, by an agreement supplemental hereto, executed and
delivered to Trustee, in form reasonably satisfactory to Trustee, the
performance of every covenant and obligation of Servicer hereunder;
(ii) Servicer has delivered to Trustee (A) an Officer's
Certificate stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section and
that all conditions precedent herein provided for relating to such
transaction have been complied with, and (B) an Opinion of Counsel to
the effect that such supplemental agreement is a valid and binding
obligation of such surviving entity enforceable against such
surviving entity in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity); and
(iii) either (x) the corporation formed by such consolidation or
into which Servicer is merged or the Person which acquired by
conveyance or transfer the properties and assets of Servicer
substantially as an entirety shall be an Eligible Servicer (taking
into account, in making such determination, the experience and
operations of the predecessor Servicer) or (y) upon the effectiveness
of such consolidation, merger, conveyance or transfer, a Successor
Servicer shall have assumed the obligations of Servicer in accordance
with this Agreement.
(b) This Section 8.2 shall not be construed to prohibit or in any way
limit Servicer's ability to effectuate any consolidation or merger pursuant
to which Servicer would be the surviving entity.
(c) Servicer shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this
Section 8.2.
SECTION 8.3. Limitation on Liability of Servicer and Others. Except
as provided in Sections 8.4 and 11.5, neither Servicer nor any of the
directors, officers, employees or agents of Servicer in its capacity as
Servicer shall be under any liability to the Trust, Trustee, the Holders,
any Enhancement Providers or any other person for any action taken or for
refraining from the taking of any action in good faith in its capacity as
Servicer pursuant to this Agreement; provided that this 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 8.4. Servicer Indemnification of the Trust and Trustee.
Servicer shall indemnify and hold harmless the Trust and Trustee and its
officers, directors, employees and agents, from and against any loss,
liability, expense, damage or injury suffered or sustained by reason of any
acts or omissions of Servicer with respect to the Trust pursuant to this
Agreement, including any judgment, award, settlement, reasonable attorneys'
fees and other costs or expenses incurred in connection with the defense of
any action, proceeding or claim; provided that (a) Servicer shall not
indemnify Trustee if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful misconduct by
Trustee, (b) Servicer shall not indemnify the Trust, the Investor Holders
or the Certificate Owners for any liabilities, costs or expenses of the
Trust with respect to any action taken by Trustee at the request of the
Investor Holders, (c) Servicer shall not indemnify the Trust, the Investor
Holders or the Certificate Owners as to any losses, claims or damages
incurred by any of them in their capacities as investors, including losses
with respect to market or investment risks associated with ownership of the
Investor Certificates or losses incurred as a result of Defaulted
Receivables and (d) Servicer shall not indemnify the Trust, the Investor
Holders or the Certificate Owners for any liabilities, costs or expenses of
the Trust, the Investor Holders or the Certificate Owners arising under any
tax law, including any Federal, state, local or foreign income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor Holders or the
Certificate Owners in connection herewith to any taxing authority.
Indemnification pursuant to this Section shall not be payable from the
Trust Assets. The provisions of this indemnity shall run directly to and be
enforceable by an indemnitee subject to the limitations hereof.
SECTION 8.5. 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 8.2. Any determination permitting the resignation of Servicer
pursuant to clause (x) above shall be evidenced by an Opinion of Counsel to
such effect delivered to Trustee. No resignation shall become effective
until Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of Servicer in accordance with Section
10.2. If within 120 days of the date of the determination that Servicer may
no longer act as Servicer, and if Trustee is unable to appoint a Successor
Servicer, Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, Trustee shall, if it is legally unable so to act, petition a
court of competent jurisdiction to appoint any established institution
having a net worth of not less than $50,000,000 and whose regular business
includes the servicing of credit card accounts as the Successor Servicer
hereunder. Trustee shall give prompt notice to each Rating Agency and each
Enhancement Provider, if any, entitled thereto under the applicable
Supplement upon the appointment of a Successor Servicer.
SECTION 8.6. Access to Certain Documentation and Information
Regarding the Receivables. Servicer shall provide to Trustee access to the
documentation regarding the Accounts and the Receivables in such cases
where Trustee is required in connection with the enforcement of the rights
of Holders or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to
Servicer's normal security and confidentiality procedures and (d) at
reasonably accessible offices in the continental United States designated
by Servicer. Nothing in this Section shall derogate from the obligation of
each Credit Card Originator, Transferor, Trustee and Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of
this Section.
SECTION 8.7. Delegation of Duties. In the ordinary course of
business, Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement. Any such delegations shall not relieve
Servicer of its liability and responsibility with respect to such duties,
and shall not constitute a resignation within the meaning of Section 8.5,
and Servicer shall remain jointly and severally liable with such Person for
any amounts which would otherwise be payable pursuant to this Article VIII
as if Servicer had performed such duty; provided that in the case of any
significant delegation to a Person other than an Affiliate of WFN, at least
30 days' prior written notice shall be given to Trustee, each Rating Agency
and each Enhancement Provider, if any, entitled thereto pursuant to the
relevant Supplement, of such delegation to any entity that is not an
Affiliate of Servicer.
ARTICLE IX EARLY AMORTIZATION EVENTS
SECTION 9.1. Early Amortization Events. Each of the following shall
constitute an "Early Amortization Event" with respect to each Series:
(a) Transferor shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to all or substantially all of its property, or a decree or
order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against Transferor; or Transferor shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations (each
such event an "Insolvency Event");
(b) the Trust shall become an "investment company" within the
meaning of the Investment Company Act; or
(c) Transferor shall become unable for any reason to transfer
Receivables to the Trust pursuant to this Agreement.
SECTION 9.2. Additional Rights upon Certain Events. (a) If an
Insolvency Event occurs with respect to Transferor or any Holder of the
Transferor Certificate (excluding any Supplemental Certificate), Transferor
shall on the day any such event occurs (the "Appointment Date"),
immediately cease to transfer Principal Receivables, or interests in
Principal Receivables represented by any Participation Interests to the
Trust and shall promptly give notice to Trustee thereof. Notwithstanding
any cessation of the transfer to the Trust of additional Principal
Receivables or any Participation Interests, Principal Receivables or any
Participation Interests transferred to the Trust 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 a part of the Trust. Upon the Appointment Date, this
Agreement and the Trust shall be deemed to have terminated, subject to the
liquidation, winding up and dissolution procedures described below. Within
15 days of the Appointment Date, Trustee shall (i) publish a notice in an
Authorized Newspaper that an Insolvency Event has occurred, that the Trust
has terminated, and that Trustee intends to sell, dispose of or otherwise
liquidate the Receivables and any Participation Interests on commercially
reasonable terms and in a commercially reasonable manner and (ii) give
notice to Investor Holders and each Enhancement Provider, if any, or other
Person entitled thereto pursuant to the relevant Supplement describing the
provisions of this Section. Trustee shall then promptly sell, dispose of or
otherwise liquidate the Receivables and any Participation Interests in a
commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids. Trustee may obtain a
prior determination from any conservator, receiver or liquidator that the
terms and manner of any proposed sale, disposition or liquidation are
commercially reasonable. The provisions of Sections 9.1 and 9.2 shall not
be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables and any Participation Interests pursuant to paragraph (a)
("Insolvency Proceeds") shall be immediately deposited in the Collection
Account. Insolvency Proceeds shall be allocated to Finance Charge
Receivables and Principal Receivables in the same proportion such
Receivables bore to one another on the prior Determination Date, although
Trustee shall determine conclusively the amount of the Insolvency Proceeds
which are deemed to be Finance Charge Receivables and Principal
Receivables. The Insolvency Proceeds shall be allocated and distributed to
Investor Holders in accordance with Article IV and each such Supplement.
ARTICLE X SERVICER DEFAULTS
SECTION 10.1. Servicer Defaults. If any one of the following events
(a "Servicer Default") shall occur and be continuing:
(a) any failure by Servicer to make any payment, transfer or
deposit or to give instructions or notice to Trustee pursuant to this
Agreement or any Supplement on or before the date occurring five
Business Days after the date such payment, transfer or deposit or
such instruction or notice is required to be made or given, as the
case may be, under this Agreement or any Supplement;
(b) failure on the part of Servicer to duly observe or perform
in any material respect any other covenants or agreements of Servicer
set forth in this Agreement or any Supplement which has a material
adverse effect on the interests hereunder of the Investor Holders 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 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 Trustee, or to
Servicer and Trustee by Holders of Investor Certificates evidencing
not less than 25% of the aggregate unpaid principal amount of all
Investor Certificates (or, with respect to any such failure that does
not relate to all Series, 25% of the aggregate unpaid principal
amount of all Series to which such failure relates); or Servicer
shall delegate its duties under this Agreement, except as permitted
by Sections 8.2 and 8.7, a Responsible Officer of 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
Trustee, or to Servicer and Trustee by Holders of Investor
Certificates evidencing not less than 25% of the aggregate unpaid
principal amount of all Investor Certificates;
(c) any representation, warranty or certification made by
Servicer in this Agreement or any Supplement or in any certificate
delivered pursuant to this Agreement or any Supplement shall prove to
have been incorrect when made, which has a material adverse effect on
the rights of the Investor Holders 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 Trustee, or to
Servicer and Trustee by the Holders of Investor Certificates
evidencing not less than 25% of the aggregate unpaid principal amount
of all Investor Certificates (or, with respect to any such
representation, warranty or certification that does not relate to all
Series, 25% of the aggregate unpaid principal amount of all Series to
which such representation, warranty or certification relates); or
(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;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either Trustee or the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal
amount of all Investor Certificates, by notice given to Servicer (and to
Trustee and any Enhancement Provider entitled thereto pursuant to the
relevant Supplement if given by the Investor Holders) (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; provided that if within 60 days
of receipt of a Termination Notice Trustee is unable to obtain any bids
from Eligible Servicers in accordance with Section 10.2(c) to act as a
Successor Servicer and receives an Officer's Certificate of Servicer to the
effect that Servicer cannot in good faith cure the Servicer Default which
gave rise to the Termination Notice, Trustee shall offer Transferor the
right at its option to purchase the Investor Interest on the Distribution
Date occurring in the next calendar month. The purchase price for the
Investor Interest shall be equal to the sum of the amounts specified
therefor with respect to each outstanding Series in the related Supplement.
Transferor shall notify Trustee prior to the Record Date for the related
Distribution Date of the purchase if it is exercising such option. If it
exercises such option, Transferor shall (x) deliver to Trustee an Opinion
of Counsel (which must be an independent outside counsel) to the effect
that, in reliance on certain certificates to the effect that the
Receivables constitute fair value for consideration paid therefor and as to
the solvency of Transferor, the purchase would not be considered a
fraudulent conveyance and (y) deposit the purchase price into the
Collection Account not later than 12:00 noon, New York City time, on such
Distribution Date in immediately available funds. The purchase price shall
be allocated and distributed to Investor Holders in accordance with Article
IV and each Supplement.
After receipt by Servicer of such Termination Notice, and on the date
that a Successor Servicer shall have been appointed by Trustee pursuant to
Section 10.2, 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, 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 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 10.1
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 10.1(a) for a period of five Business Days or under Section
10.1(b) or (c) for a period of 60 days (in addition to any period provided
in Section 10.1(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 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 any Supplement and Servicer shall
provide Trustee, each Rating Agency, any Enhancement Provider entitled
thereto pursuant to the relevant Supplement, Transferor and the Investor
Holders 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 10.2. Trustee to Act; Appointment of Successor. (a) On and
after the receipt by Servicer of a Termination Notice pursuant to Section
10.1, Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Termination Notice or otherwise
specified by Trustee or until a date mutually agreed upon by Servicer and
Trustee. 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 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, Trustee
without further action shall automatically be appointed the Successor
Servicer. Trustee may delegate any of its servicing obligations to an
Affiliate of Trustee or agent in accordance with Section 3.1(b) and 8.7.
Notwithstanding the foregoing, Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
institution having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of credit card receivables as the
Successor Servicer hereunder. Trustee shall give prompt notice to each
Rating Agency and each Enhancement Provider, if any, entitled thereto
pursuant to the applicable 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, 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
Certificate shall be responsible for payment of the portion of such
aggregate Servicing Fees allocable to the Holder of the Transferor
Certificate and that no such monthly compensation paid out of Collections
shall be in excess of such aggregate Servicing Fees. Each Holder of the
Transferor Certificate 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 Supplement shall be reduced by an amount
sufficient to pay Transferor's share (determined by reference to the
Supplements with respect to any outstanding Series) of the compensation of
the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of
the Trust pursuant to Section 12.1 and shall pass to and be vested in
Transferor and, without limitation, 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 10.2 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 appropriate to protect its interests.
SECTION 10.3. Notification to Holders. Within two Business Days after
Servicer becomes aware of any Servicer Default, Servicer shall give notice
thereof to Trustee, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement and Trustee shall give
notice to the Investor Holders. Upon any termination or appointment of a
Successor Servicer pursuant to this Article, Trustee shall give prompt
notice thereof to the Investor Holders.
SECTION 10.4. Waiver of Past Defaults. The Holders of Investor
Certificates evidencing undivided interests in the Trust aggregating more
than 66-2/3% of the Invested Amount of each Series then outstanding
affected by any default by Servicer may, on behalf of all Holders of
Certificates of such affected Series, waive any default by Servicer in the
performance of its obligations hereunder and its consequences, except a
default in the failure to make any required deposits or payments of
interest or principal with respect to any Series of Certificates. Upon any
such waiver of a past default, such default shall cease to exist, and any
default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI TRUSTEE
SECTION 11.1. Duties of Trustee. (a) Trustee, prior to the occurrence
of a Servicer Default and after the curing of all Servicer Defaults which
may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Servicer Default has
occurred (which has not been cured or waived) Trustee shall exercise such
of the rights and powers vested in it by this Agreement, and use the same
degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this Agreement.
Trustee shall give prompt written notice to the Holders of any material
lack of conformity of any such instrument to the applicable requirements of
this Agreement discovered by Trustee which would entitle a specified
percentage of the Holders to take any action pursuant to this Agreement.
(c) Subject to Section 11.1(a), no provision of this Agreement shall
be construed to relieve Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided
that:
(i) Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of Trustee, unless it shall be proved that Trustee was
negligent in ascertaining the pertinent facts;
(ii) Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
relating to the time, method and place of conducting any proceeding
for any remedy available to Trustee, or exercising any trust or power
conferred upon Trustee, under this Agreement; provided that, such
direction is delivered by the Holder of Investor Certificates
evidencing the percentage of the aggregate unpaid principal amount of
Investor Certificates of all Series to which such action relates
required for such action by this Agreement; and
(iii) Trustee shall not be charged with knowledge of (x) any
failure by Servicer referred to in Section 10.1 or (y) any Early
Amortization Event unless a Responsible Officer of Trustee obtains
actual knowledge of such failure or Early Amortization Event or
Trustee receives written notice of such failure or Early Amortization
Event from Servicer, any Holders of Investor Certificates evidencing
not less than 25% of the aggregate unpaid principal amount of all
Investor Certificates (or, with respect to any such failure that does
not relate to all Series, 25% of the aggregate unpaid principal
amount of all Investor Certificates of all Series to which such
failure relates, or the Enhancement Providers, if any, for all Series
to which such failure relates).
(d) Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers hereunder or
thereunder, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of Servicer under
this Agreement except during such time, if any, as Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges
of, Servicer in accordance with this Agreement.
(e) Trustee shall have no power to vary the corpus of the Trust,
except as expressly provided in this Agreement.
(f) If the Paying Agent or the Transfer Agent and Registrar shall
fail to perform any obligation, duty or agreement in the manner or on the
day required to be performed by the Paying Agent or the Transfer Agent and
Registrar, as the case may be, under this Agreement, Trustee shall be
obligated promptly upon knowledge of a Responsible Officer thereof and
receipt of appropriate records, if any, to perform such obligation, duty or
agreement in the manner so required.
(g) If Transferor has agreed to transfer any of its receivables
(other than the Receivables) to another Person, upon the written request of
Transferor, Trustee will enter into such intercreditor agreements with the
transferee of such receivables as are customary and necessary to separately
identify the rights of the Trust and such other Person in Transferor's
receivables; provided that Trustee shall not be required to enter into any
intercreditor agreement which could adversely affect the interests of the
Holders and, upon the request of Trustee, Transferor will deliver an
Opinion of Counsel on any matters relating to such intercreditor agreement,
reasonably requested by Trustee.
SECTION 11.2. Certain Matters Affecting Trustee. Except as otherwise
provided in Section 11.1:
(a) Trustee may rely on and shall be protected in acting on, or
in refraining from acting in accord with, any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably believed
by it to be genuine and to have been signed or presented to it
pursuant to this Agreement by the proper party or parties;
(b) Trustee may consult with counsel selected by it, and any
advice of such counsel, or Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement
Agreement, or to institute, conduct or defend any litigation
hereunder or thereunder or in relation to this Agreement or any
Enhancement Agreement, at the request, order or direction of any of
the Holders, pursuant to the provisions of this Agreement or any
Enhancement Agreement, unless such Holders shall have offered to
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve Trustee of the obligations,
upon the occurrence of any Servicer Default (which has not been
cured) to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(d) Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(e) Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing to do so by Holders of Investor Certificates evidencing more
than 25% of the aggregate unpaid principal amount of all Investor
Certificates (or, with respect to any such matters that do not relate
to all Series, 25% of the aggregate unpaid principal amount of the
Investor Certificates of all Series to which such matters relate);
(f) Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
or attorneys or a custodian, and Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent, attorney
or custodian appointed with due care by it hereunder; and
(g) except as may be required by Section 11.1(a), Trustee shall
not be required to make any initial or periodic examination of any
documents or records related to the Receivables or the Accounts for
the purpose of establishing the presence or absence of defects, the
compliance by Transferor with its representations and warranties or
for any other purpose.
SECTION 11.3. Trustee Not Liable for Recitals in Certificates.
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.15,
Trustee makes no representations as to the validity or sufficiency of this
Agreement or any Supplement or of the Certificates (other than the
certificate of authentication on the Certificates) or of any Receivable or
related document. Trustee shall not be accountable for the use or
application by Transferor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to
Transferor or the Holder of the Transferor Certificate in respect of the
Receivables or deposited in or withdrawn from the Collection Account, any
Series Accounts or any other accounts hereafter established to effectuate
the transactions contemplated by this Agreement and in accordance with this
Agreement.
SECTION 11.4. Trustee Not to Own Certificates. Trustee shall not in
its individual capacity, but may in a fiduciary capacity, become the owner
or pledgee of Investor Certificates. If Trustee becomes the owner or
pledgee of Investor Certificates in a fiduciary capacity it shall have the
same rights as it would have if it were not Trustee.
SECTION 11.5. Servicer to Pay Trustee's Fees and Expenses. Servicer
covenants and agrees to pay to Trustee from time to time, and Trustee shall
be entitled to receive, reasonable compensation (which shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the
trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of Trustee, and Servicer will pay or reimburse
Trustee (without reimbursement from the Collection Account or otherwise)
upon its request for all reasonable expenses or disbursements incurred or
made by Trustee in accordance with any of the provisions of this Agreement
or any Enhancement Agreement (including the reasonable fees and expenses of
its agents, any co-trustee and counsel) except any such expense,
disbursement or advance as may arise from its own negligence, willful
misconduct or bad faith and except as provided in the following sentence.
If Trustee is appointed Successor Servicer pursuant to Section 10.2, the
provisions of this Section 11.5 shall not apply to expenses, disbursements
and advances made or incurred by Trustee in its capacity as Successor
Servicer.
The obligations of Servicer under Section 8.4 and this Section 11.5
shall survive the termination of the Trust and the resignation or removal
of Trustee.
SECTION 11.6. Eligibility Requirements for Trustee. Trustee shall at
all times be a bank, trust company or a corporation organized and doing
business under the laws of the United States of America or any state
thereof authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by Federal or state authority and maintain
any credit or deposit rating required by any Rating Agency (as of the date
hereof Baa3 for Moody's). If such bank or corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 11.6, the combined capital and surplus of such bank or corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. In case at any time Trustee
shall cease to be eligible in accordance with the provisions of this
Section 11.6, Trustee shall resign immediately in the manner and with the
effect specified in Section 11.7.
SECTION 11.7. Resignation or Removal of Trustee. (a) Trustee may at
any time resign and be discharged from the trust hereby created by giving
written notice thereof to Servicer. Upon receiving such notice of
resignation, Transferor shall promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee.
If no successor trustee shall have been so appointed and have accepted
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time Trustee shall cease to be eligible in accordance
with the provisions of Section 11.6 and shall fail to resign after written
request therefor by Servicer or Transferor, or if at any time Trustee shall
be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of Trustee or of its property shall be appointed, or any public
officer shall take charge or control of Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, in
which event Servicer shall remove Trustee and promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to Trustee so removed and one copy to the successor
trustee.
(c) Any resignation or removal of Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 11.8 and any liability of Trustee arising
hereunder shall survive such appointment of a successor trustee.
SECTION 11.8. Successor Trustee. (a) Any successor trustee appointed
as provided in Section 11.7 shall execute, acknowledge and deliver to
Transferor, to Servicer and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with the like effect as if originally named as
Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and Transferor
and the predecessor Trustee shall execute and deliver such instruments and
do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee
shall be eligible under Section 11.6.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, such successor trustee shall provide notice of such
succession hereunder to all Investor Holders and Servicer shall provide
such notice to each Rating Agency and any Enhancement Provider entitled
thereto pursuant to the relevant Supplement.
SECTION 11.9. Merger or Consolidation of Trustee. Any Person into
which Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which Trustee shall be a party, or any Person succeeding
to the corporate trust business of Trustee, shall be the successor of
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.6, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
SECTION 11.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, Trustee shall have
the power and may execute and deliver all instruments to appoint one or
more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the Holders,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 11.10, such powers, duties, obligations, rights
and trusts as Trustee may consider necessary or desirable; provided, that
Trustee shall exercise due care in the appointment of any co-trustee. No
co-trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 11.6 and no
notice to Holders of the appointment of any co-trustee or separate trustee
shall be required under Section 11.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon Trustee shall be conferred or imposed upon and exercised
or performed by Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without Trustee joining in such
act) except to the extent that under any laws of any jurisdiction in
which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to Servicer hereunder) Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including
the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of
Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article XI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment,
either jointly with Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including
every provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, Trustee. Every such instrument
shall be filed with Trustee and a copy thereof given to Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and
be exercised by Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 11.11. Tax Return. If the Trust is required to file tax
returns, Servicer shall prepare or shall cause to be prepared any tax
returns required to be filed by the Trust and shall remit such returns to
Trustee for signature at least five days before such returns are due to be
filed; Trustee shall promptly sign such returns and deliver such returns
after signature to Servicer and such returns shall be filed by Servicer.
Servicer in accordance with each Supplement shall also prepare or shall
cause to be prepared all tax information required by law to be distributed
to Investor Holders. Trustee upon request, will furnish Servicer with all
such information known to Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust. In no
event shall Trustee or Servicer (except as provided in Sections 7.4 or 8.4)
be liable for any liabilities, costs or expenses of the Trust or the
Investor Holders arising under any tax law, including Federal, state, local
or foreign income or excise taxes or any other tax imposed or measured by
income (or any interest or penalty with respect thereto or arising from a
failure to comply therewith).
SECTION 11.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by Trustee
shall be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of Trustee, its agents and counsel, be
for the ratable benefit of the Holders in respect of which such judgment
has been obtained.
SECTION 11.13. Suits for Enforcement. If a Servicer Default shall
occur and be continuing, Trustee, in its discretion may, subject to the
provisions of Sections 10.1 and 11.14, proceed to protect and enforce its
rights and the rights of the Holders under this Agreement by a suit, action
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in
aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable or other remedy as Trustee, being
advised by counsel, shall deem most effectual to protect and enforce any of
the rights of Trustee or the Holders.
SECTION 11.14. Rights of Holders to Direct Trustee. Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any
remedy, trust or power that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all
Series to which such remedy, trust or power relates) shall have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to Trustee, or exercising any trust or power conferred on
Trustee relating to such proceeding; provided that, subject to Section
11.1, Trustee shall have the right to decline to follow any such direction
if Trustee being advised by counsel determines that the action so directed
may not lawfully be taken, or if Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of Trustee, determine that the
proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of Holders not parties to
such direction; and provided further that nothing in this Agreement shall
impair the right of Trustee to take any action deemed proper by Trustee and
which is not inconsistent with such direction.
SECTION 11.15. Representations and Warranties of Trustee. Trustee
represents and warrants as of each Closing Date that:
(a) Trustee is a New York banking corporation organized,
existing and in good standing under the laws of the State of New
York;
(b) Trustee has full power, authority and right to execute,
deliver and perform this Agreement and has taken all necessary action
to authorize the execution, delivery and performance by it of this
Agreement; and
(c) this Agreement has been duly executed and delivered by
Trustee and is a binding obligation of Trustee enforceable against
Trustee in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
SECTION 11.16. Maintenance of Office or Agency. Trustee will maintain
at its expense an office or agency (the "Corporate Trust Office") where
notices and demands to or upon Trustee in respect of the Certificates and
this Agreement may be served (a) in the City of New York, in the case of
Registered Certificates and Holders thereof, and (b) in London or
Luxembourg, in the case of Bearer Certificates and Holders thereof, if and
for so long as any Bearer Certificates are outstanding. The Corporate Trust
Office shall initially be located at 101 Barclay Street, New York, New York
10286. Trustee will give prompt notice to Servicer and to Investor Holders
of any change in the location of the Certificate Register or any such
office or agency.
SECTION 11.17. Confidentiality. Information provided by the Credit
Card Originator or Transferor to Trustee related to the transaction
effected hereunder, including all information related to the Obligors with
respect to the Receivables, and any computer software provided to Trustee
in connection with the transaction effected hereunder or under any
Supplement, in each case whether in the form of documents, reports, lists,
tapes, discs or any other form, shall be "Confidential Information."
Trustee and its agents, representatives or employees shall at all times
maintain the confidentiality of all Confidential Information and shall not,
without the prior written consent of the Credit Card Originator or
Transferor, as applicable, disclose to third parties (including Holders) or
use such information to compete or assist any other Person in competing
with the Credit Card Originator or Transferor or in any manner whatsoever,
in whole or in part, except as expressly permitted under this Agreement or
under any Supplement or as required to fulfill an obligation of Trustee
under this Agreement or under any Supplement, in which case such
Confidential Information shall be revealed only to the extent expressly
permitted or only to Trustee's agents, representatives and employees who
need to know such Confidential Information to the extent required for the
purpose of fulfilling an obligation of Trustee under this Agreement or
under any Supplement. Notwithstanding the above, Confidential Information
may be disclosed to the extent required by law or legal process, provided
that Trustee gives prompt written notice to the Credit Card Originator or
Transferor, as applicable, of the nature and scope of such disclosure.
ARTICLE XII TERMINATION
SECTION 12.1. Termination of Trust. The Trust and the respective
obligations and responsibilities of Transferor, Servicer and Trustee
created hereby (other than the obligation of Trustee to make payments to
Investor Holders as hereinafter set forth) shall terminate, except with
respect to the duties described in Sections 7.4, 8.4, 9.2 and 12.2(b), upon
the earlier of (i) January 1, 2020, (ii) the day following the Distribution
Date on which the Invested Amount for each Series is zero (provided that
Transferor has delivered a written notice to Trustee electing to terminate
the Trust) and (iii) the date provided in Section 9.2.
SECTION 12.2. Final Distribution. (a) Servicer shall give Trustee at
least 30 days prior notice of the Distribution Date on which the Investor
Holders of any Series or Class may surrender their Investor Certificates
for payment of the final distribution on and cancellation of such Investor
Certificates (or, in the event of a final distribution resulting from the
application of Section 2.6, 9.2 or 10.1, notice of such Distribution Date
promptly after Servicer has determined that a final distribution will
occur, if such determination is made less than 30 days prior to such
Distribution Date). Such notice shall be accompanied by an Officer's
Certificate setting forth the information specified in Section 3.5 covering
the period during the then current calendar year through the date of such
notice. Not later than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable to Investor
Holders, Trustee shall provide notice to Investor Holders of such Series or
Class specifying (i) the date upon which final payment of such Series or
Class will be made upon presentation and surrender of Investor Certificates
of such Series or Class at the office or offices therein designated, (ii)
the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such payment date is not applicable, payments being
made only upon presentation and surrender of such Investor Certificates at
the office or offices therein specified (which, in the case of Bearer
Certificates, shall be outside the United States). Trustee shall give such
notice to the Transfer Agent and Registrar and the Paying Agent at the time
such notice is given to Investor Holders.
(b) Notwithstanding a final distribution to the Investor Holders of
any Series or Class (or the termination of the Trust), except as otherwise
provided in this paragraph, all funds then on deposit in the Collection
Account, the Excess Funding Account and any Series Account allocated to
such Investor Holders shall continue to be held in trust for the benefit of
such Investor Holders and the Paying Agent or Trustee shall pay such funds
to such Investor Holders upon surrender of their Investor Certificates (and
any excess shall be paid in accordance with any relevant Enhancement
Agreement). If all such Investor Holders shall not surrender their Investor
Certificates for cancellation within six months after the date specified in
the notice from Trustee described in paragraph (a), Trustee shall give a
second notice to the remaining such Investor Holders to surrender their
Investor Certificates for cancellation and receive the final distribution
with respect thereto (which surrender and payment, in the case of Bearer
Certificates, shall be outside the United States). If within one year after
the second notice all such Investor Certificates shall not have been
surrendered for cancellation, Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining such
Investor Holders concerning surrender of their Investor Certificates, and
the cost thereof shall be paid out of the funds in the Collection Account
or any Series Account held for the benefit of such Investor Holders.
Trustee and the Paying Agent shall pay to Transferor any moneys held by
them for the payment of principal or interest that remains unclaimed for
two years. After payment to Transferor, Investor Holders entitled to the
money must look to Transferor for payment as general creditors unless an
applicable abandoned property law designates another Person.
(c) If the Invested Amount with respect to any Series is greater than
zero on its Series Termination Date or such earlier date as is specified in
the related Supplement (after giving effect to deposits and distributions
otherwise to be made on such date), Trustee will sell or cause to be sold
on such Series Termination Date, in accordance with the procedures and
subject to the conditions described in such Supplement, Principal
Receivables and the related Finance Charge Receivables (or, if a Tax
Opinion is obtained, interests therein) in an amount up to 110% of the
Invested Amount with respect to such Series on such date (after giving
effect to such deposits and distributions; provided that in no event shall
such amount exceed an amount of Principal Receivables (and all associated
Finance Charge Receivables) equal to the sum of (i) the product of (A)
Transferor Percentage, (B) the aggregate outstanding Principal Receivables,
and (C) a fraction the numerator of which is the related Investor
Percentage of Collections of Finance Charge Receivables and the denominator
of which is the sum of all Investor Percentages with respect to Collections
of Finance Charge Receivables of all Series outstanding and (ii) the
Invested Amount of such Series). The proceeds from any such sale shall be
allocated and distributed in accordance with the applicable Supplement.
SECTION 12.3. Transferor's Termination Rights. Upon the termination
of the Trust pursuant to Section 12.1 and the surrender of the Transferor
Certificate and any Supplemental Certificate, Trustee shall assign and
convey to Transferor or its designee, without recourse, representation or
warranty, all right, title and interest of the Trust in the Receivables,
whether then existing or thereafter created, all moneys due or to become
due and all amounts received with respect thereto and all proceeds thereof,
except for amounts held by Trustee pursuant to Section 12.2(b). Trustee
shall execute and deliver such instruments of transfer and assignment, in
each case without recourse, as shall be reasonably requested by Transferor
to vest in Transferor or its designee all right, title and interest which
the Trust had in the Receivables and such other related assets.
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1. Amendment; Waiver of Past Defaults. (a) This Agreement
or any Supplement may be amended from time to time (including in connection
with (i) adding covenants, restrictions or conditions of Transferor, such
further covenants, restrictions or conditions as its Board of Directors and
Trustee shall consider to be for the benefit or protection of the Investor
Holders, and to make the occurrence, or the occurrence and continuance, of
a default in any of such additional covenants, restrictions or conditions a
default or Early Amortization Event permitting the enforcement of all or
any of the several remedies provided in this Agreement as herein set forth;
provided, however, that in respect of any such additional covenant,
restriction or condition such amendment may provide for a particular period
of grace after default or may provide for an immediate enforcement upon
such default or may limit the remedies available to Trustee upon such
default, (ii) curing any ambiguity or correcting or supplementing any
provision contained herein or in any Supplement which may be defective or
inconsistent with any other provision contained herein or in any Supplement
or to surrender any right or power conferred upon Transferor, (iii) the
issuance of a Supplemental Certificate, (iv) the addition of a
Participation Interest or receivables arising in VISA, MasterCard or any
other type of open end revolving credit card account to the Trust, (v) the
assumption by another entity, in accordance with the provisions of this
Agreement, of Transferor's obligations hereunder, or (vi) the provision of
additional Enhancement for the benefit of Holders of any Series) by
Servicer, Transferor and Trustee without the consent of such Holders as
provided for in the applicable Supplement, provided that (x) Transferor
shall have delivered to Trustee an Officer's Certificate to the effect that
Transferor reasonably believes that such action shall not adversely affect
in any material respect the interests of any Investor Holder, (y) the
Rating Agency Condition shall have been satisfied with respect to any such
amendment and (z) a Tax Opinion is delivered in connection with any such
amendment. The designation of additional or substitute Transferors or
additional Credit Card Originators pursuant to Section 2.11 or 2.12 shall
be subject to this Section 13.1 only to the extent that the supplement to
this Agreement providing for such designation amends any of the terms of
this Agreement.
(b) This Agreement or any Supplement may also be amended from time to
time by Servicer, Transferor and Trustee, with the consent of the Holders
of Investor Certificates (acting for themselves or through any designated
agents, as provided for in any applicable Supplement) evidencing not less
than 66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of all adversely affected Series, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or any Supplement or of modifying in any
manner the rights of the Holders; provided, however, that no such amendment
shall (i) reduce in any manner the amount of or delay the timing of any
distributions to be made to Investor Holders or deposits of amounts to be
so distributed or the amount available under any Enhancement without the
consent of each affected Holder (provided that any amendment of the terms
of an Early Amortization Event shall not be deemed to be within the scope
of this clause (i)), (ii) change the definition of or the manner of
calculating the interest of any Investor Holder without the consent of each
affected Investor Holder (acting for themselves or through any designated
agents, as provided for in any applicable Supplement) or (iii) reduce the
aforesaid percentage required to consent to any such amendment without the
consent of each Investor Holder (acting for themselves or through any
designated agents, as provided for in any applicable Supplement). Any
amendment to be effected pursuant to this paragraph shall be deemed to
adversely affect all outstanding Series, other than any Series with respect
to which such action shall not, as evidenced by an Opinion of Counsel for
Transferor, addressed and delivered to Trustee, adversely affect in any
material respect the interests of any Investor Holder of such Series.
Trustee may, but shall not be obligated to, enter into any such amendment
which affects Trustee's rights, duties or immunities under this Agreement
or otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), Trustee shall furnish
notification of the substance of such amendment to each Investor Holder;
and Servicer shall furnish prior notification of the substance of such
amendment to (i) each Rating Agency and (ii) each Enhancement Provider, if
any, entitled thereto pursuant to the relevant Supplement.
(d) It shall not be necessary for the consent of Investor Holders
under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Holders shall be
subject to such reasonable requirements as Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions of
Section 6.3 shall not be considered an amendment to this Agreement for the
purposes of this Section.
(f) The Holders of Investor Certificates evidencing more than 66-2/3%
of the aggregate unpaid principal amount of the Investor Certificates of
each Series, or, with respect to any Series with two or more Classes, of
each Class (or, with respect to any default that does not relate to all
Series, 66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of each Series to which such default relates or, with respect
to any such Series with two or more Classes, of each Class) may, on behalf
of all Holders, waive any default by Transferor or Servicer in the
performance of their obligations hereunder and its consequences, except the
failure to make any distributions required to be made to Investor Holders
or to make any required deposits of any amounts to be so distributed. Upon
any such waiver of a past default, such default shall cease to exist, and
any default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
SECTION 13.2. Protection of Right, Title and Interest to Trust. (a)
Transferor shall cause this Agreement, all amendments and supplements
hereto and all financing statements and continuation statements and any
other necessary documents covering the Holders, and Trustee's right, title
and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Holders and Trustee hereunder
to all property comprising the Trust Assets. Transferor shall deliver to
Trustee file-stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing.
(b) Within 30 days after Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) seriously
misleading within the meaning of Section 9-402(7) (or any comparable
provision) of the UCC, Transferor shall give Trustee notice of any such
change and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in
the Receivables and the proceeds thereof.
(c) Transferor and Servicer will give Trustee prompt notice of any
relocation of any office from which it services Receivables or keeps
records concerning the Receivables or of its principal executive office and
whether, as a result of such relocation, the applicable provisions of the
UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and
shall file such financing statements or amendments as may be necessary to
perfect or to continue the perfection of the Trust's security interest in
the Receivables and the proceeds thereof. Transferor and Servicer will at
all times maintain each office from which it services Receivables and its
principal executive offices within the United States.
(d) Transferor will deliver to Trustee and any Enhancement Provider
entitled thereto pursuant to the relevant Supplement: (i) upon the
execution and delivery of each amendment of this Agreement or any
Supplement, an Opinion of Counsel to the effect specified in Exhibit F-1;
(ii) on each Addition Date on which any Supplemental Accounts are to be
designated as Accounts pursuant to Section 2.8(a) or (b), an Opinion of
Counsel to the effect specified in Exhibit F-2, and on each Addition Date
on which any Participation Interests are to be included in the Trust
pursuant to Section 2.8(a) or (b), an Opinion of Counsel covering the same
substantive legal issues addressed by Exhibit F-2 but conformed to the
extent appropriate to relate to Participation Interests; and (iii) on or
before March 31 of each year, beginning with March 31, 1996, an Opinion of
Counsel to the effect specified in Exhibit F-2.
SECTION 13.3. Limitation on Rights of Holders. (a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or
the Trust, nor shall such death or incapacity entitle such Holders' legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Investor Holder shall have any right to vote (except as
expressly provided in this Agreement) or in any manner otherwise control
the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to constitute the Investor
Holders from time to time as partners or members of an association, nor
shall any Investor Holder be under any liability to any third person by
reason of any action by the parties to this Agreement pursuant to any
provision hereof.
(c) No Investor Holder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless
such Investor Holder previously shall have made, and unless the Holders of
Investor Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any such
action, suit or proceeding that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of all
Series which such action, suit or proceeding relates) shall have made
written request to Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and Trustee, for 60 days
after its receipt of such request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Investor Holder with every other Investor Holder and Trustee, that no one
or more Investor Holders shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of Holders of any
other of the Investor Certificates, or to obtain or seek to obtain priority
over or preference to any other Investor Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Investor Holders except as
otherwise expressly provided in this Agreement. For the protection and
enforcement of the provisions of this Section, each and every Investor
Holder and Trustee shall be entitled to such relief as can be given either
at law or in equity.
SECTION 13.4. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.5. Notices, Payments. (a) All demands notices,
instructions, directions and communications (collectively, "Notices") under
this Agreement shall be in writing and shall be deemed to have been duly
given if personally delivered at, mailed by registered mail, return receipt
requested, or sent by facsimile transmission (i) in the case of Transferor
or Servicer, to WFN, 4590 East Broad Street, Columbus, Ohio 43213,
Attention: Dan Groomes (facsimile no. 614/755-3418), (ii) in the case of
Trustee, The Bank of New York, 101 Barclay Street, 12th Floor East, New
York, New York 10286 Attention: Asset Backed Unit (facsimile no.
212/815-5999), (iii) in the case of the Paying Agent or the Transfer Agent
and Registrar, to Trustee at the address above and (iv) to any other Person
as specified in any Supplement; or, as to each party, at such other address
or facsimile number as shall be designated by such party in a written
notice to each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Certificate
Register. No Notice shall be required to be mailed to a Holder of Bearer
Certificates or Coupons but shall be given as provided below. Any Notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Investor Holder
receives such Notice. In addition, (i) if and so long as any Series or
Class is listed on the Luxembourg Stock Exchange and such Exchange shall so
require, any Notice to Investor Holders shall be published in an Authorized
Newspaper of general circulation in Luxembourg within the time period
prescribed in this Agreement and (ii) in the case of any Series or Class
with respect to which any Bearer Certificates are outstanding, any Notice
required or permitted to be given to Investor Holders of such Series or
Class shall be published in an Authorized Newspaper within the time period
prescribed in this Agreement.
SECTION 13.6. Rule 144A Information. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of
Transferor, Trustee, Servicer and any Enhancement Provider agree to
cooperate with each other to provide to any Investor Holders of such Series
or Class and to any prospective purchaser of Certificates designated by
such Investor Holder, upon the request of such Investor Holder or
prospective purchaser, any information required to be provided to such
holder or prospective purchaser to satisfy the condition set forth in Rule
144A(d)(4) under the Securities Act.
SECTION 13.7. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no
way affect the validity or enforceability of the remaining provisions or of
the Certificates or the rights of the Holders.
SECTION 13.8. Certificates Nonassessable and Fully Paid. It is the
intention of the parties to this Agreement that the Holders shall not be
personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses
or expenses of the Trust or for any reason whatsoever and that Certificates
upon authentication thereof by Trustee pursuant to Section 6.2 are and
shall be deemed fully paid.
SECTION 13.9. Further Assurances. Transferor and Servicer agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by Trustee more fully
to effect the purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the Receivables
for filing under the provisions of the UCC of any applicable jurisdiction.
SECTION 13.10. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, Servicer, Trustee, Transferor, each Holder
and each Enhancement Provider, if any, and each Holder of a Supplemental
Certificate shall not, prior to the date which is one year and one day
after the last day on which any Investor Certificates shall have been
outstanding, with respect to the Trust, petition or otherwise invoke or
cause the Trust to invoke the process of any Governmental Authority for the
purpose of commencing or sustaining a case against the Trust under any
Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Trust.
SECTION 13.11. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of Trustee or the Holders, any
right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges provided under
this Agreement are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
SECTION 13.12. Counterparts. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute
one and the same instrument.
SECTION 13.13. Third-Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Holders, any
Enhancement Provider (to the extent provided in this Agreement and the
related Supplement) and their respective successors and permitted assigns.
Except as otherwise expressly provided in this Agreement (including Section
7.4), no other Person will have any right or obligation hereunder.
SECTION 13.14. Actions by Holders. (a) Wherever in this Agreement a
provision is made that an action may be taken or a Notice given by Holders,
such action or Notice may be taken or given by any Holder, unless such
provision requires a specific percentage of Holders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Certificate shall bind such Holder and every
subsequent Holder of such Certificate and of any Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done or omitted to be done by Trustee or
Servicer in reliance thereon, whether or not notation of such action is
made upon such Certificate.
SECTION 13.15. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Agreement to be duly executed by their respective officers as of the day
and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK, as Transferor
and Servicer,
By___________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee,
By___________________________
Name:
Title:
EXHIBIT A
FORM OF TRANSFEROR CERTIFICATE
THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM SUCH REGISTRATION PROVISIONS.
THIS TRANSFEROR CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE
WITH THE TERMS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R-1 One Unit
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF THE
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
(Not an interest in or obligation of Transferor
or any affiliate thereof)
This certifies that WORLD FINANCIAL NETWORK NATIONAL BANK is the
registered owner of a fractional interest in the assets of a trust (the
"Trust") not allocated to the Investor Interest or the interest of any
Holder of a Supplemental Certificate pursuant to the Pooling and Servicing
Agreement dated as of January 17, 1996 (as amended and supplemented, the
"Agreement"), between World Financial Network National Bank, a national
banking association, as Transferor ("Transferor") and as Servicer, and The
Bank of New York, a New York banking corporation, as trustee ("Trustee").
To the extent not defined herein, the capitalized terms used herein have
the meanings ascribed to them in the Agreement.
This Certificate is the Transferor Certificate issued under, and is
subject to, the Agreement. By accepting this Certificate, its Holder
assents to, and is bound by, the Agreement.
Transferor has entered into the Agreement, and this Certificate is
issued, with the intention that, for Federal, state and local income and
franchise tax purposes only, the Investor Certificates (except Transferor
Retained Certificates which are held by Transferor) will qualify as debt
secured by the Receivables. Transferor, by entering into the Agreement and
the Holder of the Transferor Certificate by acceptance of this Transferor
Certificate, agree to treat such Investor Certificates for Federal, state
and local income and franchise tax purposes as debt under applicable tax
law.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for
any purpose.
IN WITNESS WHEREOF, the Holder of the Transferor Certificate has
caused this Certificate to be duly executed.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor,
BY __________________________________
Name:
Title:
Dated: [ ]
DATED:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate described in the within-mentioned
Pooling and Servicing Agreement dated as of January 17, 1996 between World
Financial Network National Bank as Transferor and Servicer and The Bank of
New York, as Trustee.
THE BANK OF NEW YORK
as Trustee,
By_____________________
Authorized Signatory
or
By_____________________
as Authenticating Agent
for Trustee,
By_____________________
Authorized Signatory
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
(As required by Section 2.8 of
the Pooling and Servicing Agreement)
ASSIGNMENT No. _______ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS dated
as of _____________, ___ 1/<F1> by and among WORLD FINANCIAL NETWORK NATIONAL
BANK, a national banking association, as Transferor ("Transferor") and as
Servicer ("Servicer"), and THE BANK OF NEW YORK, a New York banking
corporation ("Trustee"), pursuant to the Pooling and Servicing Agreement
referred to below.
<F1>
_______________________
1/ To be dated as of the applicable Addition Date.</F1>
WITNESSETH
WHEREAS Transferor, Servicer and Trustee are parties to the Pooling
and Servicing Agreement dated as of January 17, 1996 (as may be amended and
supplemented from time to time, the "Agreement");
WHEREAS, pursuant to the Agreement, Transferor wishes to designate
Supplemental Accounts owned by the Credit Card Originator to be included as
Accounts and to convey the Receivables of such Supplemental Accounts,
whether now existing or hereafter created, to the Trust as part of the
corpus of the Trust (as each such term is defined in the Agreement); and
WHEREAS Trustee is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as
follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise defined herein.
"Addition Date" means, with respect to the Supplemental Accounts
designated hereby, ________, ____.
"Addition Cut Off Date" means, with respect to the Supplemental
Accounts designated hereby, ________, ____.
2. Designation of Supplemental Accounts. On or before the Document
Delivery Date, Transferor will deliver to Trustee an Account Schedule
containing a true and complete schedule identifying all such Supplemental
Accounts specifying for each such Account, as of the Addition Cut Off Date,
its account number, the aggregate amount outstanding in such Account and
the aggregate amount of Principal Receivables outstanding in such Account,
which Account Schedule shall supplement any other Account Schedule
previously delivered to Trustee pursuant to the Agreement.
3. Conveyance of Receivables. Transferor does hereby transfer,
assign, set over and otherwise convey to the Trust, for the benefit of the
Holders, all its right, title and interest in, to and under the Receivables
of such Supplemental Accounts existing at the close of business on the
Addition Date and thereafter created from time to time until the
termination of the Trust, all monies due or to become due and all amounts
received with respect thereto and all proceeds thereof. The foregoing does
not constitute and is not intended to result in the creation or assumption
by the Trust, Trustee, any Investor Holder or any Enhancement Provider of
any obligation of Servicer, Transferor, the Credit Card Originator or any
other Person in connection with the Accounts, the Receivables or under any
agreement or instrument relating thereto, including any obligation to
Obligors, merchant banks, merchants clearance systems or insurers.
Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to
the Receivables now in Supplemental Accounts, meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect, and maintain perfection of, the assignment of such
Receivables to the Trust, and to deliver a file-stamped copy of each such
financing statement or other evidence of such filing to Trustee on or prior
to the Addition Date. Trustee shall be under no obligation whatsoever to
file such financing or continuation statements or to make any other filing
under the UCC in connection with such assignment.
In connection with such assignment, Transferor further agrees, at its
own expense, on or prior to the date of this Assignment, to cause the
Credit Card Originator to indicate in the appropriate computer files that
Receivables created in connection with the Supplemental Accounts and
designated hereby have been conveyed to the Trust pursuant to the Agreement
and this Assignment for the benefit of the Holders.
Transferor does hereby grant to Trustee a security interest in all of
its right, title and interest in and to the Receivables now existing and
hereafter created in the Supplemental Accounts, all monies due or to become
due and all amounts received with respect thereto and all proceeds thereof.
This Assignment constitutes a security agreement under the UCC.
4. Acceptance by Trustee. Trustee hereby acknowledges its acceptance
on behalf of the Trust of all right, title and interest to the property,
now existing and hereafter created, conveyed to the Trust pursuant to
Section 3(a) of this Assignment, and declares that it shall maintain such
right, title and interest, upon the trust set forth in the Agreement for
the benefit of all Holders. Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Assignment,
Transferor delivered to Trustee the Account Schedule described in Section 2
of this Assignment.
5. Representations and Warranties of Transferor. Transferor hereby
represents and warrants to Trustee, on behalf of the Trust, as of the date
of this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment
constitutes a legal, valid and binding obligation of Transferor
enforceable against Transferor in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity);
(b) Eligibility of Accounts. Each Supplemental Account
designated hereby is an Eligible Account;
(c) Insolvency. As of each of the Addition Cut Off Date and the
Addition Date, no Insolvency Event with respect to the Credit Card
Originator or Transferor has occurred and the transfer by Transferor
of Receivables arising in the Supplemental Accounts to the Trust has
not been made in contemplation of the occurrence thereof;
(d) Early Amortization Event. Transferor reasonably believes
that (A) the addition of the Receivables arising in the Supplemental
Accounts will not, based on the facts known to Transferor, then or
thereafter cause an Early Amortization Event to occur with respect to
any Series and (B) no selection procedure was utilized by Transferor
which would result in the selection of Supplemental Accounts (from
among the available Eligible Accounts owned by the Credit Card
Originator) that would be materially less favorable to the interests
of the Investor Holders of any Series as of the Addition Date than a
random selection;
(e) Security Interest. Either this Assignment constitutes a
valid transfer and assignment to the Trust of all right, title and
interest of Transferor in the Receivables and other Trust Assets
conveyed to the Trust by Transferor and all monies due or to become
due and all amounts received with respect thereto and the proceeds
thereof, or this Assignment constitutes a grant of a security
interest in such property to the Trustee, for the benefit of the
Investor Holders, which, in the case of existing Receivables and the
proceeds thereof, is enforceable upon execution and delivery of this
Assignment, and which will be enforceable with respect to such
Receivables hereafter created and the proceeds thereof upon such
creation. Upon the filing of the financing statements described in
Section 3 of this Assignment and, in the case of the Receivables
hereafter created and the proceeds thereof, upon the creation
thereof, the Trust shall have a first priority security interest in
such property except for Liens permitted under Section 2.7(b) of the
Agreement;
(f) No Conflict. The execution and delivery by Transferor of
this Assignment, the performance of the transactions contemplated by
this Assignment and the fulfillment of the terms hereof applicable to
Transferor, will not conflict with or violate any Requirements of Law
applicable to Transferor or conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under,
any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which Transferor is a party or by which it or its
properties are bound;
(g) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against
Transferor before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this
Assignment, (iii) seeking any determination or ruling that, in the
reasonable judgment of Transferor, would materially and adversely
affect the performance by Transferor of its obligations under this
Assignment, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of
this Assignment or (v) seeking to affect adversely the income tax
attributes of the Trust under the Federal, or applicable state income
or franchise tax systems; and
(h) All Consents. All authorizations, consents, orders or
approvals or other actions of any Person or of any court or other
governmental authority required to be obtained by Transferor in
connection with the execution and delivery of this Assignment by
Transferor and the performance of the transactions contemplated by
this Assignment by Transferor, have been obtained.
6. Ratification of Agreement. As supplemented by this Assignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Assignment shall be read, taken and construed as one
and the same instrument.
7. Counterparts. This Assignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Assignment to be duly executed by their respective officers as of the day
and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor and Servicer,
By __________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee,
By __________________________________
Name:
Title:
EXHIBIT C
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Section 2.9 of
the Pooling and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________, ____ 1/<F2>
by and among WORLD FINANCIAL NETWORK NATIONAL BANK, a national banking
association, as Transferor ("Transferor") and as Servicer ("Servicer") and
THE BANK OF NEW YORK, a New York banking corporation ("Trustee"), pursuant
to the Pooling and Servicing Agreement referred to below.
<F2>
____________________
1/ To be dated as of the Removal Date.</F2>
WITNESSETH:
WHEREAS Transferor, Servicer and Trustee are parties to the Pooling
and Servicing Agreement dated as of January 17, 1996 (as may be amended and
supplemented from time to time, the "Agreement");
WHEREAS pursuant to the Agreement, Transferor wishes to remove from
the Trust all Receivables in certain designated Accounts owned by the
Credit Card Originator (the "Removed Accounts") and to cause Trustee to
reconvey the Receivables of such Removed Accounts, whether now existing or
hereafter created, from the Trust to Transferor; and
WHEREAS Trustee is willing to accept such designation and to reconvey
the Receivables in the Removed Accounts subject to the terms and conditions
hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"Removal Date" means, with respect to the Removed Accounts designated
hereby, ____________, _____.
"Removal Notice Date" means, with respect to the Removed Accounts,
___________, ___.
2. Designation of Removed Accounts. On or before the date that is 10
Business Days after the Removal Date, Transferor will deliver to Trustee an
Account Schedule identifying all Accounts the Receivables of which are
being removed from the Trust, specifying for each such Account, as of the
Removal Notice Date, its account number, the aggregate amount outstanding
in such Account and the aggregate amount of Principal Receivables in such
Account, which Account Schedule shall supplement any Account Schedule
previously delivered to Trustee pursuant to the Agreement.
3. Conveyance of Receivables. (a) Trustee does hereby transfer,
assign, set over and otherwise convey to Transferor, without recourse, on
and after the Removal Date, all right, title and interest of the Trust in,
to and under the Receivables existing at the close of business on the
Removal Date and thereafter created from time to time in the Removed
Accounts designated hereby, all monies due or to become due and all amounts
received with respect thereto and all proceeds thereof.
(b) In connection with such transfer, Trustee agrees to execute and
deliver to Transferor on or prior to the date this Reassignment is
delivered, applicable termination statements with respect to the
Receivables existing at the close of business on the Removal Date and
thereafter created from time to time in the Removed Accounts reassigned
hereby and the proceeds thereof evidencing the release by the Trust of its
interest in the Receivables in the Removed Accounts, and meeting the
requirements of applicable state law, in such manner and such jurisdictions
as are necessary to terminate such interest.
4. Representations and Warranties of Transferor. Transferor hereby
represents and warrants to Trustee, on behalf of the Trust, as of the
Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment
constitutes a legal, valid and binding obligation of Transferor enforceable
against Transferor, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors, rights in general and except as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(b) Early Amortization Event. Transferor reasonably believes that
(A) the removal of the Receivables existing in the Removed Accounts will
not, based on the facts known to Transferor, then or thereafter cause an
Early Amortization Event to occur with respect to any Series and (B) no
selection procedure was utilized by Transferor which would result in a
selection of Removed Accounts from among any pools of Accounts of a similar
type that would be materially adverse to the interests of the Investor
Holders of any Series as of the Removal Date; and
(c) List of Removed Accounts. The list of Removed Accounts delivered
pursuant to Section 2.9(c) of the Agreement, as of the Removal Date, is
true and complete in all material respects.
(d) Defaulted Receivables. No selection procedure was utilized by
Transferor with the intent to include a disproportionately higher level of
Defaulted Receivables in the Removed Accounts than exist in the Accounts or
to remove Accounts for the intended purpose of mitigating losses to the
Trust.
5. Ratification of Agreement. As supplemented by this Reassignment,
the Agreement is in all respects ratified and confirmed and the Agreement
as so supplemented by this Reassignment shall be read, taken and construed
as one and the same instrument.
6. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the
same instrument.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Reassignment to be duly executed by their respective officers as of the day
and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
as Transferor and Servicer,
By_______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee,
By_______________________________
Name:
Title:
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before the
90th day following the end of the fiscal year
of Transferor beginning with December 31, 1996,
pursuant to Section 3.5 of the Pooling and
Servicing Agreement referred to below)
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of World Financial
Network National Bank, as Servicer ("WFN"), pursuant to the Pooling and
Servicing Agreement dated as of January 17, 1996 (as may be amended and
supplemented from time to time, the "Agreement"), among WFN, as Transferor
and as Servicer, and The Bank of New York, as Trustee, does hereby certify
that:
1. WFN is, as of the date hereof, Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective meanings
as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to
Trustee.
3. A review of the activities of Servicer during the fiscal year
ended __________, ____, and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, Servicer has, to the best of my knowledge,
performed in all material respects its obligations under the Agreement
throughout such year and no default in the performance of such obligations
has occurred or is continuing except as set forth in paragraph 5.
5. The following is a description of each default in the performance
of Servicer's obligations under the provisions of the Agreement known to me
to have been made by Servicer during the fiscal year ended ___________,
_____, which sets forth in detail (i) the nature of each such default, (ii)
the action taken by Servicer, if any, to remedy each such default and (iii)
the current status of each such default: [if applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ______ day of ____________, 19___.
WORLD FINANCIAL NETWORK NATIONAL BANK,
as Servicer,
By ________________________
Name:
Title:
EXHIBIT E-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT
AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
EXHIBIT E-2
FORM OF UNDERTAKING LETTER
[Date]
Trustee Bank
Attention: [ ]
World Financial Network
National Bank
4590 East Broad Street
Columbus, Ohio 43213
Attention: [ ]
Re: Purchase of $___________ 1/<F3> principal amount
of World Financial Network Credit Card Master
Trust, [Class __], [__%] [Floating Rate] Asset
Backed Certificates, Series [ ]
<F3>
__________________________
1/ Not less than $250,000 minimum principal amount.</F3>
Dear Sirs:
In connection with our purchase of the above-referenced Asset Backed
Certificates (the "Certificates") we confirm that:
(i) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and are being sold to us in a transaction that is
exempt from the registration requirements of the Securities Act;
(ii) any information we desire concerning the Certificates or
any other matter relevant to our decision to purchase the
certificates is or has been made available to us;
(iii) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of an investment in the Certificates, and we (and any account for
which we are purchasing under paragraph (iv)) are able to bear the
economic risk of an investment in the Certificates; we (and any
account for which we are purchasing under paragraph (iv)) are an
"accredited investor" (as such term is defined in Rule 501(a)(1), (2)
or (3) of Regulation D under the Securities Act); and we are not, and
none of such accounts is, a Benefit Plan;
(iv) we are acquiring the Certificates for our own account or
for accounts as to which we exercise sole investment discretion and
not with a view to any distribution of the Certificates, subject,
nevertheless, to the understanding that the disposition of our
property shall at all times be and remain within our control;
(v) we agree that the Certificates must be held indefinitely by
us unless subsequently registered under the Securities Act or an
exemption from any registration requirements of that Act and any
applicable state securities laws available;
(vi) we agree that if at some future time we wish to dispose of
or exchange any of the Certificates (such disposition or exchange not
being currently foreseen or contemplated), we will not transfer or
exchange any of the Certificates unless
(A)(1) the sale is of at least U.S. $250,000 principal
amount of Certificates to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as
paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this letter
is executed promptly by the purchaser and (3) all offers or
solicitations in connection with the sale, whether directly or
through any agent acting on our behalf, are limited only to
Eligible Purchasers and are not made by means of any form of
general solicitation or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to Rule 144
under the Securities Act by us after we have held them for more
than three years; or
(C) the Certificates are sold in any other transaction
that does not require registration under the Securities Act and,
if Transferor, Servicer, Trustee or the Transfer Agent and
Registrar so requests, we theretofore have furnished to such
party an Opinion of Counsel satisfactory to such party, in form
and substance satisfactory to such party, to such effect; or
(D) the Certificates are transferred pursuant to an
exception from the registration requirements of the Securities
Act under Rule 144A under the Securities Act; and
(vii) we understand that the Certificates will bear a legend to
substantially the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT
AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN."
["THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW)."][
This bracketed text should be included only if the Certificate(s) to be
purchased include the legend specified on Exhibit E-3.
]
The first paragraph of this legend may be removed if Transferor, Servicer,
Trustee and the Transfer Agent and Registrar have received an Opinion of
Counsel satisfactory to them, in form and substance satisfactory to them,
to the effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a
corporation, partnership or other entity which we have reasonable grounds
to believe and do believe can make representations with respect to itself
to substantially the same effect as the representations set forth herein.
"Eligible Dealer" means any corporation or other entity the principal
business of which is acting as a broker and/or dealer in securities.
["Benefit Plan" means (a) any employee benefit plan or other plan, trust or
account (including an individual retirement account) that is subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended, or (b) any
collective investment fund, insurance company separate or general account
or other entity (except an entity registered under the Investment Company
Act of 1940, as amended) whose underlying assets include "plan assets"
under ERISA by reason of a plan's investment in such entity.]** <F8>
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Pooling and Servicing Agreement, dated as of
January 17, 1996, between World Financial Network National Bank and The
Bank of New York.
Very truly yours,
____________________________
(Name of Purchaser)
By:_________________________
(Authorized Officer)
<F8>
_______________________
** This bracketed text should be included only if the Certificate(s)
to be purchased include the legend specified on Exhibit E-1-B. </F8>
EXHIBIT E-3
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE
ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).1/<F4>
<F4>
_____________________
1/ The following text should be included in any Certificate in
which the above legend appears:
The [Certificates] may not be acquired by or for the account of
(a) any employee benefit plan or other plan, trust or account
(including an individual retirement account) that is subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or Section 4975 of the Internal Revenue Code of 1986, as amended, or
(b) any collective investment fund, insurance company separate or
general account or other entity (except an entity registered under the
Investment Company Act of 1940, as amended) whose underlying assets
include "plan assets" under ERISA by reason of any such plan's
investment in such entity (a "Benefit Plan"). By accepting and
holding this Certificate, the Holder hereof shall be deemed to have
represented and warranted that it is not, and is not acting on behalf
of, a Benefit Plan. By acquiring any interest in this Certificate,
each applicable Certificate Owner shall be deemed to have represented
and warranted that it is not, and is not acting on behalf of, a
Benefit Plan.</F4>
EXHIBIT F-1
FORM OF OPINION OF COUNSEL WITH RESPECT
TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to Section 13.2(d)(i)
The opinions set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in
the Opinions Of Counsel delivered on any applicable Closing Date.
(i) The amendment to the (Pooling and Servicing Agreement],
[Supplement], attached hereto as Schedule 1 (the "Amendment"), has
been duly authorized, executed and delivered by Transferor and
Servicer and constitutes the legal, valid and binding agreement of
Transferor and Servicer, respectively, enforceable in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws from
time to time in effect affecting creditors' rights generally or the
rights of creditors of national banking associations. The
enforceability of the respective obligations of Transferor and
Servicer is also subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law)
(ii) The Amendment has been entered into in accordance with
the terms and provisions of Section 13.1 of the Pooling and Servicing
Agreement.
EXHIBIT F-2
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF SUPPLEMENTAL ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
Section 13.2(d)(ii) or (iii)
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions. Paragraphs 1-4 are
not required if the opinion is being delivered solely under Section
13.2(d)(iii).
1. The Receivables arising in such Supplemental Accounts constitute
either general intangibles, accounts or chattel paper.
2. The Pooling and Servicing Agreement creates in favor of the Trust
either a security interest or an ownership interest in Transferor's rights
in the Receivables in such Supplemental Accounts and the proceeds thereof
(the "Specified Assets").
3. If the transfer of the Specified Assets from Transferor to Trustee
pursuant to the provisions of the Pooling and Servicing Agreement
constitutes a sale of the Specified Assets to Trustee by Transferor, such
transfer, to the extent Ohio law is applied, transfers all right, title and
interest of Transferor in and to the Specified Assets to Trustee.
4. If the transfer of the Specified Assets from Transferor to Trustee
does not constitute a sale, the security interest in the Specified Assets
created by the Pooling and Servicing Agreement will be perfected by the
filing of the Financing Statements [as described and defined in such
opinion]. Based solely upon our review of the UCC Searches [as described
and defined in such opinion], we hereby confirm to you that no Person other
than Trustee has filed any financing statement with the Filing Offices [as
described and defined in such opinion] that covers the Specified Assets and
that would have priority over the security interest, if any, of the Trustee
by virtue of such filing.
5. No further filings or actions are required under the UCC or other
Ohio law prior to March 31, ____ , in order to maintain the perfection and
priority of the security interest created by the Pooling and Servicing
Agreement in favor of the Trust in Transferor's rights in the Receivables
and the proceeds thereof.
EXECUTION COPY
___________________________________________
WORLD FINANCIAL NETWORK NATIONAL BANK
Transferor and Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Investor Holders
_____________________________________________
SERIES 1996-A SUPPLEMENT
Dated as of May 9, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996
________________________________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
$445,500,000 6.70% Class A Asset-Backed
Certificates, Series 1996-A
$46,750,000 7.00% Class B Asset-Backed
Certificates, Series 1996-A
_______________________________________________
TABLE OF CONTENTS
Page
SECTION 1. Designation............................................. 1
SECTION 2. Definitions............................................. 2
SECTION 3. Servicing Fee........................................... 18
SECTION 4. Optional Repurchase; Reassignment and Termination
Provisions............................................ 18
SECTION 5. Delivery and Payment for the Investor Certificates...... 19
SECTION 6. Depository; Form of Delivery of Investor Certificates... 19
SECTION 7. Article IV of Agreement................................. 20
SECTION 4.6 Rights of Holders and the Collateral Interest
Holder......................................... 20
SECTION 4.7 Allocations...................................... 20
SECTION 4.8 Determination of Monthly Interest................ 25
SECTION 4.9 Determination of Monthly Principal............... 26
SECTION 4.10 Coverage of Required Amount...................... 27
SECTION 4.11 Monthly Payments................................. 28
SECTION 4.12 Investor Charge-Offs............................. 31
SECTION 4.13 Excess Spread.................................... 33
SECTION 4.14 Reallocated Principal Collections................ 35
SECTION 4.15 Shared Principal Collections; Amounts
Transferred from the Excess Funding
Account to the Principal Account............... 36
SECTION 4.16 Finance Charge Account, Principal Account and
Distribution Account........................... 37
SECTION 4.17 Cash Collateral Account.......................... 38
SECTION 4.18 Determination of LIBOR........................... 40
SECTION 4.19 Transferor's or Servicer's Failure to Make a
Deposit or Payment............................... 40
SECTION 8. Article V of the Agreement.............................. 40
SECTION 5.1 Distributions.................................... 40
SECTION 5.2 Reports.......................................... 41
SECTION 9. Series 1996-A Early Amortization Events................. 42
SECTION 10. Series 1996-A Termination............................... 44
SECTION 11. Periodic Finance Charges and Other Fees................. 44
SECTION 12. Limitations on Addition of Approved Portfolios.......... 44
SECTION 13. Counterparts............................................ 44
SECTION 14. Governing Law........................................... 45
SECTION 15. Additional Provisions................................... 45
SECTION 16. No Petition............................................. 47
SECTION 17. Amendments.............................................. 47
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
and Notification to Trustee
EXHIBIT C Form of Monthly Series 1996-A
Holders' Statement
SERIES 1996-A SUPPLEMENT, dated as of May 9, 1996 (this "Series
Supplement"), between WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association, as Transferor ("Transferor") and Servicer
("Servicer"), and THE BANK OF NEW YORK, as Trustee ("Trustee"), under the
Pooling and Servicing Agreement dated as of January 17, 1996 between the
same parties (the "Agreement").
Section 6.3 of the Agreement provides, among other things, that
Transferor and Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the delivery by
Trustee to Transferor for the execution and redelivery to Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, Transferor and the Trust shall
create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. Designation. (a) There is hereby created a Series of
Investor Certificates to be issued in two classes pursuant to the Agreement
and this Series Supplement and to be known together as the "Series 1996-A
Certificates." The two classes shall be designated the 6.70% Class A
Asset-Backed Certificates, Series 1996-A (the "Class A Certificates") and
the 7.00% Class B Asset-Backed Certificates, Series 1996-A (the "Class B
Certificates"). The Class A Certificates and the Class B Certificates shall
be substantially in the form of Exhibits A-1 and A-2, respectively. In
addition, there is hereby created a third Class which constitutes an
uncertificated interest in the Trust, shall be deemed to be an "Investor
Certificate" for all purposes under the Agreement and this Series
Supplement, except as expressly provided in Section 1(c) of this Series
Supplement, and shall be known as the Collateral Interest, Series 1996-A
and have the rights assigned to the Collateral Interest in this Series
Supplement. The Collateral Interest Holder shall be deemed to be an
"Investor Holder" for all purposes under the Agreement and this Series
Supplement, except as expressly provided in Section 1(c) of this Series
Supplement.
(b) Series 1996-A shall be included in Group One (as defined below).
Series 1996-A shall not be subordinated to any other Series.
(c) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Collateral
Interest Holder of amounts owing on the Closing Date pursuant to the Loan
Agreement. Notwithstanding the foregoing, except as expressly provided
herein, the provisions of Article VI and Article XII of the Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates shall not be
applicable to the Collateral Interest.
SECTION 2. Definitions. If any term or provision contained herein
shall conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
References to any Article or Section are references to Articles or Sections
of the Agreement, except as otherwise expressly provided. All capitalized
terms not otherwise defined herein are defined in the Agreement, and the
interpretive provisions set out in Section 1.2 of the Agreement apply to
this Series Supplement. Each capitalized term defined herein relates only
to the Investor Certificates and no other Series of Certificates issued by
the Trust.
"Additional Minimum Transferor Amount" means (a) as of any date of
determination falling in November, December and January of each calendar
year, the product of (i) 2% and (ii) the sum of (A) the aggregate Principal
Receivables and (B) amounts on deposit in the Excess Funding Account and
(b) as of any date of determination falling in any other month, zero;
provided that the amount specified in clause (a) shall be without
duplication with the amount specified as the "Additional Minimum Transferor
Amount" in the Supplement relating to the Series 1996-B Certificates issued
by the Trust (or in any future Supplement that specifies such an amount and
indicates that such amount is without duplication of the amount specified
in clause (a)). The Additional Minimum Transferor Amount is specified
pursuant to Section 15(c) of this Series Supplement as an additional amount
to be considered part of the Minimum Transferor Amount.
"Aggregate Investor Default Amount" means, as to any Monthly Period,
the sum of the Investor Default Amounts in respect of such Monthly Period.
"Automatic Addition Limitation Event" is defined in Section 15(b) of
this Series Supplement.
"Available Cash Collateral Amount" means with respect to any Transfer
Date, the lesser of (a) the amount on deposit in the Cash Collateral
Account on such date (before giving effect to any deposit to, or withdrawal
from the Cash Collateral Account to be made with respect to such date) and
(b) the Required Enhancement Amount as of the prior Transfer Date.
"Available Investor Principal Collections" means, as to any Monthly
Period, an amount equal to (a) the Investor Principal Collections for such
Monthly Period, minus (b) the amount of Reallocated Principal Collections
with respect to such Monthly Period which pursuant to Section 4.14 are
required to fund the Class A Required Amount and the Class B Required
Amount (other than any portions thereof that are applied pursuant to (x)
Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such portions
pursuant to Section 4.13(c) are available to pay the Class B Investor
Default Amount or the Class B Uncovered Dilution Amount), which shall,
without duplication, be included as Available Investor Principal
Collections), plus (c) the amount of Shared Principal Collections with
respect to Group One that are allocated to Series 1996-A in accordance with
Section 4.15(b).
"Base Rate" means, as to any Monthly Period, the annualized percentage
equivalent of a fraction, the numerator of which is equal to the sum of the
Class A Monthly Interest, the Class B Monthly Interest and the Collateral
Monthly Interest, each for the related Distribution Period, and the
Servicing Fee with respect to such Monthly Period and the denominator of
which is the Invested Amount as of the close of business on the last day of
such Monthly Period.
"Cash Collateral Account" is defined in Section 4.17(a).
"Class A Additional Interest" is defined in Section 4.8(a).
"Class A Available Funds" means, as to any Monthly Period, an amount
equal to the Class A Floating Allocation Percentage of the sum of (a) the
Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date with respect to the preceding Monthly Period pursuant
to Section 4.7(d), before giving effect to any netting or to the proviso to
such Section) and (b) the interest and earnings on the Cash Collateral
Account to be treated as Collections of Finance Charge Receivables pursuant
to Section 4.17(b) on the related Transfer Date.
"Class A Certificate Rate" means a per annum rate equal to 6.70%.
"Class A Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class A Deficiency Amount" is defined in Section 4.8(a).
"Class A Final Scheduled Payment Date" means the July 2001
Distribution Date.
"Class A Fixed Allocation Percentage" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100% or be less than zero) of a fraction, the numerator
of which is the Class A Invested Amount as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the numerator used in determining the related Fixed Allocation Percentage;
provided that if Series 1996-A is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Amortization Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Class A Invested Amount (less the
balance on deposit in the Principal Account that is not subject to being
treated as Reallocated Principal Collections or Shared Principal
Collections) as of the last day of the revolving period for such Paired
Series).
"Class A Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class A Invested Amount
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Invested Amount as of the
close of business on such last day; provided that, with respect to the
first Monthly Period, the Class A Floating Allocation Percentage means the
percentage equivalent of a fraction, the numerator of which is the Class A
Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class A Holder" means the Person in whose name a Class A Certificate
is registered in the Certificate Register.
"Class A Initial Invested Amount" means the aggregate initial
principal amount of the Class A Certificates, which is $445,500,000.
"Class A Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class A Holders prior to
such date and minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge-Offs pursuant to Section 4.12(a) over Class A
Investor Charge-Offs reimbursed pursuant to Section 4.13(b) prior to such
date of determination, minus (d) the amount of any reduction in the Class A
Invested Amount as a result of the purchase by Transferor and subsequent
cancellation of the Class A Certificates pursuant to Section 4(d) of this
Series Supplement; provided that the Class A Invested Amount may not be
reduced below zero.
"Class A Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class A Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Amortization Period
or Early Amortization Period, the Class A Fixed Allocation Percentage.
"Class A Investor Charge-Off" is defined in Section 4.12(a).
"Class A Investor Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Aggregate Investor Default Amount
for the related Monthly Period and (b) the Class A Floating Allocation
Percentage applicable for the related Monthly Period.
"Class A Monthly Interest" is defined in Section 4.8(a).
"Class A Monthly Principal" is defined in Section 4.9(a).
"Class A Reduction Amount" is defined in Section 4.12(a).
"Class A Required Amount" is defined in Section 4.10(a).
"Class A Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class A Uncovered Dilution Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Uncovered Dilution Amount for the
related Monthly Period and (b) the Class A Investor Allocation Percentage
applicable for the related Monthly Period.
"Class B Additional Interest" is defined in Section 4.8(b).
"Class B Available Funds" means, as to any Monthly Period, an amount
equal to the Class B Floating Allocation Percentage of the sum of (a) the
Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date with respect to the preceding Monthly Period pursuant
to Section 4.7(d), before giving effect to any netting or to the proviso to
such Section) and (b) interest and earnings on the Cash Collateral Account
to be treated as Collections of Finance Charge Receivables pursuant to
Section 4.17(b) on the related Transfer Date.
"Class B Certificate Rate" means a per annum rate equal to 7.00%.
"Class B Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class B Deficiency Amount" is defined in Section 4.8(b).
"Class B Fixed Allocation Percentage" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100% or be less than zero) of a fraction, the numerator
of which is the Class B Invested Amount as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the numerator used in determining the related Fixed Allocation Percentage;
provided that if Series 1996-A is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Amortization Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Class B Invested Amount (less, if the
Class A Fixed Allocation Percentage is zero, the balance on deposit in the
Principal Account that is not subject to being treated as Reallocated
Principal Collections or Shared Principal Collections, to the extent not
subtracted in reducing the Class A Fixed Allocation Percentage to zero) as
of the last day of the revolving period for such Paired Series).
"Class B Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class B Invested Amount
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Invested Amount as of the
close of business on such last day; provided that, with respect to the
first Monthly Period, the Class B Floating Allocation Percentage means the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class B Holder" means the Person in whose name a Class B Certificate
is registered in the Certificate Register.
"Class B Initial Invested Amount" means the aggregate initial
principal amount of the Class B Certificates, which is $46,750,000.
"Class B Invested Amount" means, on any date of determination, an
amount equal to (a) the Class B Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class B Holders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates pursuant to Section 4.12(b), minus (d) the
amount of the Reallocated Class B Principal Collections allocated pursuant
to Section 4.14(a) on all prior Transfer Dates for which the Collateral
Interest has not been reduced, minus (e) an amount equal to the amount by
which the Class B Invested Amount has been reduced on all prior Transfer
Dates pursuant to Section 4.12(a) and plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant
to Section 4.13(d), for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e), minus (g) the amount of
any reduction in the Class B Invested Amount as a result of the purchase by
Transferor and subsequent cancellation of Class B Certificates pursuant to
Section 4(d) of this Series Supplement; provided that the Class B Invested
Amount may not be reduced below zero.
"Class B Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class B Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Amortization Period
or Early Amortization Period, the Class B Fixed Allocation Percentage.
"Class B Investor Charge-Off" is defined in Section 4.12(b).
"Class B Investor Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Aggregate Investor Default Amount
for the related Monthly Period and (b) the Class B Floating Allocation
Percentage applicable for the related Monthly Period.
"Class B Monthly Interest" is defined in Section 4.8(b).
"Class B Monthly Principal" is defined in Section 4.9(b).
"Class B Reduction Amount" is defined in Section 4.12(b).
"Class B Required Amount" is defined in Section 4.10(b).
"Class B Scheduled Payment Date" means the August 2001 Distribution
Date.
"Class B Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class B Uncovered Dilution Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Uncovered Dilution Amount for the
related Monthly Period and (b) the Class B Investor Allocation Percentage
applicable for the related Monthly Period.
"Closing Date" means May 9, 1996.
"Collateral Available Funds" means, as to any Monthly Period, an
amount equal to the Collateral Floating Allocation Percentage of the sum of
(a) the Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date with respect to the preceding Monthly Period pursuant
to Section 4.7(d), before giving effect to any netting or to the proviso to
such Section) and (b) interest and earnings on the Cash Collateral Account
to be treated as Collections of Finance Charge Receivables pursuant to
Section 4.17(b) on the related Transfer Date.
"Collateral Charge-Off" is defined in Section 4.12(c).
"Collateral Default Amount" means, as to any Transfer Date, an amount
equal to the product of (a) the Aggregate Investor Default Amount for the
related Monthly Period and (b) the Collateral Floating Allocation
Percentage applicable for the related Monthly Period.
"Collateral Fixed Allocation Percentage" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100% or be less than zero) of a fraction, the numerator
of which is the Collateral Interest as of the close of business on the last
day of the Revolving Period and the denominator of which is equal to the
numerator used in determining the related Fixed Allocation Percentage;
provided that if Series 1996-A is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Amortization Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Collateral Interest (less, if the Class
A Fixed Allocation Percentage and the Class B Fixed Allocation Percentage
are zero, the balance on deposit in the Principal Account that is not
subject to being treated as Reallocated Principal Collections or Shared
Principal Collections, to the extent not subtracted in reducing the Class A
Fixed Allocation Percentage and/or the Class B Fixed Allocation Percentage
to zero) as of the last day of the revolving period for such Paired
Series).
"Collateral Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Collateral Interest as
of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Invested Amount as of the
close of business on such last day; provided that, with respect to the
first Monthly Period, the Collateral Floating Allocation Percentage means
the percentage equivalent of a fraction, the numerator of which is the
Collateral Initial Interest and the denominator of which is the Initial
Invested Amount.
"Collateral Initial Interest" means $57,750,000.
"Collateral Interest" means, on any date of determination, a
fractional undivided interest in the Trust which shall consist of the right
to receive, to the extent necessary to make the required payments to the
Collateral Interest Holder under this Series Supplement, the portion of
Collections allocable thereto under the Agreement and this Series
Supplement, funds on deposit in the Collection Account allocable thereto
pursuant to the Agreement and this Series Supplement and other amounts to
be paid in respect thereof as provided in the Agreement and this Series
Supplement. On any date, for purposes of all calculations in the Agreement
and this Series Supplement, the amount of the Collateral Interest shall be
an amount equal to (a) the Collateral Initial Interest, minus (b) the
aggregate amount of principal payments made to the Collateral Interest
Holder prior to such date, minus (c) the aggregate amount of Collateral
Charge-Offs for all prior Transfer Dates pursuant to Section 4.12(c), minus
(d) the amount of Reallocated Principal Collections allocated pursuant to
Sections 4.14(a) and (b) on all prior Transfer Dates, minus (e) an amount
equal to the amount by which the Collateral Interest has been reduced on
all prior Transfer Dates pursuant to Sections 4.12(a) and (b), and plus (f)
the aggregate amount of Excess Spread allocated and available on all prior
Transfer Dates pursuant to Section 4.13(h), for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e);
provided that the Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" means the entity so designated in the
Loan Agreement.
"Collateral Interest Servicing Fee" is defined in Section 3(a) of this
Series Supplement.
"Collateral Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Collateral Floating Allocation Percentage, and (b)
with respect to Principal Receivables during the Controlled Amortization
Period or Early Amortization Period, the Collateral Fixed Allocation
Percentage.
"Collateral Monthly Interest" is defined in Section 4.8(c).
"Collateral Monthly Principal" is defined in Section 4.9(c).
"Collateral Rate" means, for any Distribution Period, the rate
specified in the Loan Agreement; provided that the Collateral Rate shall
not exceed a per annum rate of 1.1% in excess of LIBOR for such
Distribution Period for purposes of this Supplement and the Agreement.
"Collateral Reduction Amount" is defined in Section 4.12(c).
"Collateral Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution Amount
for the related Monthly Period and (b) the Collateral Investor Allocation
Percentage applicable for the related Monthly Period.
"Controlled Amortization Amount" means $89,100,000.
"Controlled Amortization Period" means, unless an Early Amortization
Event shall have occurred prior thereto, the period commencing at the
beginning of business on February 1, 2001 and ending on the first to occur
of (a) the Early Amortization Commencement Date and (b) the Series 1996-A
Termination Date.
"Controlled Amortization Shortfall" initially means zero and, with
respect to any Monthly Period during the Controlled Amortization Period,
means the excess, if any of the Controlled Payment Amount for the previous
Monthly Period over the amounts distributed pursuant to Section 4.11(e)(i)
with respect to the Class A Certificates for the previous Monthly Period.
"Controlled Payment Amount" means, with respect to any Transfer Date,
the sum of (a) the Controlled Amortization Amount for such Transfer Date
and (b) any existing Controlled Amortization Shortfall.
"Cumulative Principal Shortfall" means the sum of the Principal
Shortfalls (as such term is defined in each of the related Supplements) for
each Series in Group One.
"Default Amount" means, as to any Defaulted Account, the amount of
Principal Receivables (other than Ineligible Receivables, unless there is
an Insolvency Event with respect to Transferor) in such Defaulted Account
on the day it became a Defaulted Account.
"Defaulted Account" means an Account in which there are Defaulted
Receivables.
"Deficiency Amount" means, at any time of determination, the sum of
the Class A Deficiency Amount and the Class B Deficiency Amount.
"Dilution" means any downward adjustment made by Servicer in the
amount of any Receivable (a) because of a rebate, refund, unauthorized
charge, fraudulent or counterfeit charge or billing error to an
accountholder, (b) because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder or (c) for
any other reason other than receiving Collections therefor or charging off
such amount as uncollectible.
"Distribution Account" is defined in Section 4.16(a).
"Distribution Date" means June 17, 1996 and the fifteenth day of each
calendar month thereafter, or if such fifteenth day is not a Business Day,
the next succeeding Business Day.
"Distribution Period" means, with respect to any Distribution Date,
the period from and including the previous Distribution Date through the
day preceding such Distribution Date, except the initial Distribution
Period will be the period from and including the Closing Date through the
day preceding the initial Distribution Date.
"Early Amortization Commencement Date" means the date on which an
Early Amortization Event is deemed to occur pursuant to Section 9.1 of the
Agreement or a Series 1996-A Early Amortization Event is deemed to occur
pursuant to Section 9 of this Series Supplement.
"Early Amortization Period" means the period commencing on the Early
Amortization Commencement Date and ending on the Series 1996-A Termination
Date.
"Enhancement" means, with respect to the Class A Certificates, the
subordination of the Class B Certificates and the Collateral Interest and
the Cash Collateral Account, and with respect to the Class B Certificates,
the subordination of the Collateral Interest and the Cash Collateral
Account.
"Enhancement Agreement" means the Loan Agreement.
"Enhancement Provider" means the Collateral Interest Holder.
"Enhancement Surplus" means, with respect to any Transfer Date, the
excess, if any, of (a) the amount on deposit in the Cash Collateral
Account, plus the Collateral Interest (in each case after giving effect to
any withdrawals, increases or reductions made with respect to such date
other than as the result of the existence of an Enhancement Surplus) over
(b) the Required Enhancement Amount.
"Excess Spread" means, with respect to any Transfer Date and subject
to Section 4.7(d), the sum of (a) the sum of the amounts, if any, with
respect to such Transfer Date specified pursuant to Sections 4.11(a)(iv),
4.11(b)(iii) and 4.11(c)(ii), plus (b) the Excess Finance Charge
Collections, if any, allocated to Series 1996-A pursuant to Section 4.5 for
the related Distribution Date.
"Finance Charge Account" is defined in Section 4.16(a).
"Finance Charge Shortfall" means, with respect to any Transfer Date,
an amount equal to the excess, if any, of (a) the sum of the amounts
specified in clauses (a) through (j) of Section 4.13 for that Transfer Date
over (b) the sum of the amounts, if any, with respect to such Transfer Date
specified pursuant to Sections 4.11(a)(iv), 4.11(b)(iii) and 4.11(c)(ii).
"Fitch" means Fitch Investors Service, L.P. or its successors.
"Fixed Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Invested Amount as of the close of business on the last day of the
Revolving Period and the denominator of which is the greater of (a) the
aggregate amount of Principal Receivables in the Trust determined as of the
close of business on the last day of the prior Monthly Period and (b) the
sum of the numerators used to calculate the Investor Percentages (as such
term is defined in the Agreement) for allocations with respect to Principal
Receivables for all outstanding Series on such date of determination;
provided that if Series 1996-A is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Amortization Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Invested Amount (less the balance on
deposit in the Principal Account that is not subject to being treated as
Reallocated Principal Collections or Shared Principal Collections) as of
the last day of the revolving period for such Paired Series); provided
further that if one or more Reset Dates occur in a Monthly Period, the
Fixed Allocation Percentage for the portion of the Monthly Period falling
on and after each such Reset Date (the "subject Reset Date") and prior to
any subsequent Reset Date will be determined using a denominator equal to
the greater of the amounts specified in clauses (a) and (b) above
determined as of the close of business on the subject Reset Date.
"Floating Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Invested Amount as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period, the
Initial Invested Amount) and the denominator of which is the greater of (a)
the aggregate amount of Principal Receivables as of the close of business
on the last day of the preceding Monthly Period (or with respect to the
first Monthly Period, the aggregate amount of Principal Receivables in the
Trust as of the close of business on the day immediately preceding the
Closing Date), and (b) the sum of the numerators used to calculate the
Investor Percentages (as such term is defined in the Agreement) for
allocations with respect to Finance Charge Receivables, Default Amounts,
Uncovered Dilution Amounts or Principal Receivables, as applicable, for all
outstanding Series on such date of determination; provided that if one or
more Reset Dates occur in a Monthly Period, the Floating Allocation
Percentage for the portion of the Monthly Period falling on and after each
such Reset Date (the "subject Reset Date") and prior to any subsequent
Reset Date will be determined using a denominator equal to the greater of
the amounts specified in clauses (a) and (b) above determined as of the
close of business on the subject Reset Date.
"Group One" means Series 1996-A and each other Series specified in the
related Supplement to be included in Group One.
"Initial Invested Amount" means $550,000,000.
"Invested Amount" means, on any date of determination, an amount equal
to the sum of (a) the Class A Invested Amount, (b) the Class B Invested
Amount and (c) the Collateral Interest, each as of such date.
"Investor Certificates" means the Class A Certificates, the Class B
Certificates and the Collateral Interest.
"Investor Default Amount" means, with respect to any Receivable in a
Defaulted Account, an amount equal to the product of (a) the Default Amount
and (b) the Floating Allocation Percentage on the day such Account became a
Defaulted Account.
"Investor Holder" means, for all purposes of the Agreement and this
Series Supplement, (a) with respect to the Class A Certificates, the holder
of record of a Class A Certificate, (b) with respect to the Class B
Certificates, the holder of record of a Class B Certificate and (c) with
respect to the Collateral Interest, the Collateral Interest Holder.
"Investor Percentage" means, for any Monthly Period, (a) with respect
to Finance Charge Receivables and Default Amounts at any time and Principal
Receivables during the Revolving Period, the Floating Allocation Percentage
and (b) with respect to Principal Receivables during the Controlled
Amortization Period or the Early Amortization Period, the Fixed Allocation
Percentage.
"Investor Principal Collections" means, with respect to any Monthly
Period, the sum of (a) the aggregate amount deposited (or required to be
deposited on the related Transfer Date pursuant to Section 4.7(d), before
giving effect to any netting or to the proviso to such Section) into the
Principal Account for such Monthly Period pursuant to Sections 4.7(a)(ii)
and (iii), 4.7(b)(ii), (iii) and (iv), or 4.7(c)(ii), (iii) and (iv), in
each case, as applicable to such Monthly Period, (b) the aggregate amount
to be treated as Investor Principal Collections pursuant to Sections
4.11(a)(iii), and 4.13(a), (b), (c), (d), (g) and (h) for such Monthly
Period (other than such amount paid from Reallocated Principal
Collections), and (c) the aggregate amount transferred or required to be
transferred on the related Transfer Date (before giving effect to any
permitted netting pursuant to Section 4.7(d)) from the Excess Funding
Account into the Principal Account pursuant to Section 4.15(d).
"LIBOR" means, for each Distribution Period, the London interbank
offered rate for one-month United States dollar deposits, as determined by
Trustee in accordance with the Loan Agreement.
"Loan Agreement" means the agreement among Transferor, Servicer,
Trustee, and the Collateral Interest Holder, dated as of May 9, 1996, as
amended, supplemented or modified from time to time.
"Paired Series" means a Series that has been paired with Series 1996-A
(which Series may be prefunded or partially prefunded or may be a Variable
Interest) such that a reduction of the Invested Amount results in (or
permits) an increase of the invested amount of the paired Series.
"Portfolio Yield" means, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is
an amount equal to the sum of (a) the amount of Collections of Finance
Charge Receivables deposited (or required to be deposited on the related
Transfer Date (before giving effect to any permitted netting), into the
Finance Charge Account and allocable to the Investor Certificates for such
Monthly Period and (b) interest and earnings on the Cash Collateral Account
to be treated as Collections of Finance Charge Receivables allocable to the
Investor Certificates on the Transfer Date related to such Monthly Period,
as described in Section 4.17(b), after subtracting the Aggregate Investor
Default Amount for such Monthly Period, and the denominator of which is the
Invested Amount as of the close of business on the last day of such Monthly
Period.
"Principal Account" is defined in Section 4.16(a).
"Principal Shortfall" means, with respect to any Transfer Date, the
excess, if any, of (a) (i) with respect to any Transfer Date relating to
the Controlled Amortization Period, the sum of (A) the Controlled Payment
Amount for such Transfer Date, (B) on any Transfer Date after the
Distribution Date on which the Class A Invested Amount is reduced to zero,
the Class B Invested Amount and (C) the lesser of the Enhancement Surplus
(if any) and the Collateral Interest for such Transfer Date, (ii) with
respect to any Transfer Date during the Early Amortization Period, the
Invested Amount and (iii) with respect to any Transfer Date relating to the
Revolving Period, the amount specified in clause (a)(i)(C) above over (b)
the Investor Principal Collections minus the Reallocated Principal
Collections (other than any portions thereof that are applied pursuant to
(x) Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such
portions pursuant to Section 4.13(c) are available to pay the Class B
Investor Default Amount or the Class B Uncovered Dilution Amount)) for such
Transfer Date.
"Rating Agency" means Moody's, S&P and Fitch.
"Rating Agency Condition" means the notification in writing by each
Rating Agency to Transferor, Servicer and Trustee that an action will not
result in any Rating Agency reducing or withdrawing its then existing
rating of the Class A Certificates, the Class B Certificates or, to the
extent specified in the Loan Agreement (and with respect to Fitch only),
the Collateral Interest.
"Reallocated Class B Principal Collections" is defined in Section
4.14.
"Reallocated Collateral Principal Collections" is defined in Section
4.14.
"Reallocated Principal Collections" is defined in Section 4.14.
"Record Date" means, with respect to any Distribution Date, the last
Business Day of the calendar month preceding such Distribution Date.
"Required Cash Collateral Amount" means, with respect to any date of
determination, the Required Enhancement Amount less the Collateral
Interest.
"Required Draw Amount" is defined in Section 4.17(c).
"Required Enhancement Amount" means, with respect to each Transfer
Date, the greater of (a) an amount equal to 13% of the Invested Amount on
such Transfer Date, after taking into account any payments (including
payments on the Collateral Interest) to be made on the related Distribution
Date and (b) $16,500,000; provided that (x) if, on or prior to such
Transfer Date, there has been any Required Draw Amount pursuant to Section
4.17(c) or any reductions in the Collateral Interest pursuant to clauses
(c), (d) or (e) of the definition of such term, or an Early Amortization
Event has occurred with respect to Series 1996-A, then the Required
Enhancement Amount for such Transfer Date shall, subject to clauses (y) and
(z), equal the Required Enhancement Amount on the Transfer Date immediately
preceding such reduction, Required Draw Amount or Early Amortization Event,
(y) in no event shall the Required Enhancement Amount exceed the sum of the
outstanding principal amounts of (i) the Class A Certificates and (ii) the
Class B Certificates, each as of the last day of the Monthly Period
preceding such Transfer Date after taking into account the payments to be
made on the related Distribution Date and (z) the Required Enhancement
Amount may be reduced or increased at Transferor's option at any time if
Transferor, Servicer, the Collateral Interest Holder and Trustee have been
provided evidence that the Rating Agency Condition has been satisfied.
"Required Retained Transferor Percentage" means, for purposes of
Series 1996-A, 7%.
"Reset Date" means each of (a) an Addition Date on which Receivables
from Supplemental Accounts are added to the Trust, (b) a Removal Date on
which, if any Series has been paid in full, Principal Receivables in an
aggregate amount approximately equal to the initial investor interest of
such Series are removed from the Trust, (c) a date on which there is an
increase in the Invested Amount of any Variable Interest issued by the
Trust and (d) any date on which a new Series is issued.
"Revolving Period" means the period from and including the Closing
Date to, but not including, the earlier of (a) the beginning of business on
February 1, 2001 and (b) the Early Amortization Commencement Date.
"Series Account" means, as to Series 1996-A, the Distribution Account,
the Finance Charge Account, the Principal Account and the Cash Collateral
Account.
"Series Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the numerator used in determining the Floating Allocation Percentage for
that Monthly Period and the denominator of which is the sum of the
numerators used to calculate the Investor Percentages (as such term is
defined in the Agreement) for allocations with respect to Finance Charge
Receivables for all outstanding Series on such date of determination;
provided that if one or more Reset Dates occur in a Monthly Period, the
Series Allocation Percentage for the portion of the Monthly Period falling
on and after each such Reset Date (the "subject Reset Date") and prior to
any subsequent Reset Date will be determined using a denominator which is
equal to the sum of the numerators used to calculate the Investor
Percentages for allocations with respect to Finance Charge Receivables for
all outstanding Series as of the close of business on the subject Reset
Date.
"Series 1996-A" means the Series of the World Financial Network Credit
Card Master Trust represented by the Investor Certificates.
"Series 1996-A Certificates" means the Class A Certificates and the
Class B Certificates.
"Series 1996-A Holder" means the holder of record of a Series 1996-A
Certificate.
"Series 1996-A Termination Date" means the earliest to occur of (a)
the Distribution Date on which the Invested Amount is paid in full, (b) the
termination of the Trust pursuant to the Agreement and (c) the February
2004 Distribution Date.
"Series Servicing Fee Percentage" means 2.0%.
"Servicing Fee" is defined in Section 3(a) of this Series Supplement.
"Shared Principal Collections" means, as the context requires, either
(a) the amount allocated to the Investor Certificates which are treated as
Shared Principal Collections pursuant to Sections 4.7(a), 4.7(b)(iv)(B),
4.7(c)(iv)(B), 4.11(d)(ii) and 4.11(e)(iv) and which may be applied to the
principal shortfall with respect to other outstanding Series in Group One
or (b) the amounts allocated to the investor certificates of other Series
in Group One which the applicable Supplements for such Series specify are
to be treated as "Shared Principal Collections" and which may be applied to
cover the Principal Shortfall with respect to the Investor Certificates.
"Specified Transferor Amount" means, at any time, the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) at that time.
"Target Amount" is defined in Section 4.7(d).
"Uncovered Dilution Amount" means an amount equal to the product of
(x) the Series Allocation Percentage for the related Monthly Period
(determined on a weighted average basis, if a Reset Date occurs during that
Monthly Period), times (y) the aggregate Dilutions occurring during that
Monthly Period as to which any deposit is required to made to the Excess
Funding Account pursuant to Section 3.9(a) but has not been made; provided
that, if the Transferor Amount is greater than zero at the time the deposit
referred to in clause (y) is required to be made, the Uncovered Dilution
Amount for such amount to be deposited shall be deemed to be zero.
SECTION 3. Servicing Fee. The share of the Servicing Fee allocable to
Series 1996-A with respect to any Transfer Date (the "Servicing Fee") shall
be equal to one-twelfth of the product of (i) the Series Servicing Fee
Percentage and (ii) the Invested Amount as of the last day of the Monthly
Period preceding such Transfer Date; provided that with respect to the
first Transfer Date, the Servicing Fee shall equal $672,222.22. The share
of the Servicing Fee allocable to the Class A Invested Amount (the "Class A
Servicing Fee"), the Class B Invested Amount (the "Class B Servicing Fee")
and the Collateral Interest (the "Collateral Interest Servicing Fee") with
respect to any Transfer Date shall equal the Class A Floating Allocation
Percentage, Class B Floating Allocation Percentage and Collateral Floating
Allocation Percentage, respectively, of such Servicing Fee. Except as
specifically provided above, the Servicing Fee shall be paid by the cash
flows from the Trust allocated to Transferor or the certificateholders of
other Series (as provided in the related Supplements) and in no event shall
the Trust, Trustee or the Investor Holders be liable therefor. The Class A
Servicing Fee shall be payable to Servicer solely to the extent amounts are
available for distribution in respect thereof pursuant to Sections
4.11(a)(ii) and 4.13(a). The Class B Servicing Fee shall be payable solely
to the extent amounts are available for distribution in respect thereof
pursuant to Sections 4.11(b)(ii) and 4.13(c). The Collateral Interest
Servicing Fee shall be payable solely to the extent amounts are available
for distribution in respect thereof pursuant to Section 4.13(f) or if
applicable Section 4.11(c)(i).
SECTION 4. Optional Repurchase; Reassignment and Termination
Provisions. (a) The Investor Certificates shall be subject to retransfer
to Transferor at its option on any Distribution Date, on or after the
Distribution Date on which the Invested Amount is reduced to an amount less
than or equal to 5% of the Initial Invested Amount by deposit into the
Collection Account for application in accordance with Section 12.2 of an
amount equal to the sum of (i) the Invested Amount, plus (ii) accrued and
unpaid interest on the Investor Certificates through the day preceding the
Distribution Date on which the repurchase occurs. Upon the tender of the
outstanding Series 1996-A Certificates by the Holders (and without tender
in the case of the Collateral Interest), Trustee shall distribute such
amount, together with all funds on deposit in the Principal Account to the
Investor Holders on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest owing to the Investor
Holders. Following any redemption, the Investor Holders shall have no
further rights with respect to the Receivables. If Transferor fails for any
reason to deposit in the Collection Account the aggregate purchase price
for the Investor Certificates, payments shall continue to be made to the
Investor Holders in accordance with the terms of the Agreement and this
Series Supplement.
(b) The amount required to be deposited by Transferor with respect to
the Investor Certificates in connection with any reassignment of
Receivables pursuant to Section 2.6 shall equal the sum of (i) the Invested
Amount (less any amounts then on deposit in the Principal Account), plus
(ii) accrued and unpaid interest on the Investor Certificates through the
day preceding the Distribution Date on which the repurchase occurs. The
amount so deposited together with the amount then on deposit in the
Principal Account shall be distributed to the Holders of the Investor
Certificates in final payment of the Invested Amount and all such other
amounts on the Distribution Date on which it is deposited.
(c) Proceeds available from the sale of Receivables in accordance with
Section 12.2(c) on the Series 1996-A Termination Date shall be treated, to
the extent of the Invested Amount, as Collections of Principal Receivables
that have been allocated to the Investor Certificates and any excess shall
be treated as Collections of Finance Charge Receivables that have been
allocated to the Investor Certificates, in each case with respect to the
prior Monthly Period.
(d) Transferor may from time to time, purchase Class A and Class B
Certificates on the secondary market and request Trustee to cancel such
Class A and Class B Certificates held by Transferor and reduce the Class A
or Class B Invested Amount, as applicable, by a corresponding amount;
provided that Transferor may make such purchases and requests for
cancellation of Class B Certificates resulting in a reduction of Class B
Invested Amount only to the extent that it has made (or will make
contemporaneously with any such purchase and request for cancellation of
Class B Certificates) purchases and requests for cancellations of Class A
Certificates that result in at least a pro rata reduction of the Class A
Invested Amount.
SECTION 5. Delivery and Payment for the Investor Certificates.
Transferor shall execute and deliver the Series 1996-A Certificates to
Trustee (in definitive, fully registered form) for authentication in
accordance with Section 6.1. Trustee shall deliver such Certificates when
authenticated in accordance with Section 6.2. The Collateral Interest
shall be issued as provided in this Series Supplement and the Loan
Agreement.
SECTION 6. Depository; Form of Delivery of Investor Certificates.
(a)The Class A Certificates and the Class B Certificates shall be delivered
as Book-Entry Certificates as provided in Sections 6.1 and 6.10.
(b) The depository for Series 1996-A shall be The Depository Trust
Company, and the Class A Certificates and Class B Certificates shall be
initially registered in the name of Cede & Co., its nominee.
SECTION 7. Article IV of Agreement. Sections 4.1 through 4.5 shall
read in their entirety as provided in the Agreement. Article IV (except for
Sections 4.1 through 4.5 thereof) shall be read in its entirety as follows
and shall be applicable only to the Investor Certificates:
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.6 Rights of Holders and the Collateral Interest Holder. The
Investor Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Investor Certificates at the times
and in the amounts specified in this Agreement, (a) the applicable Investor
Percentage of Collections received with respect to the Receivables and (b)
funds on deposit in the Collection Account, the Finance Charge Account, the
Principal Account, the Cash Collateral Account and the Distribution
Account. The Collateral Interest shall be subordinate to the Class A
Certificates and the Class B Certificates to the extent described herein.
The Class B Certificates shall be subordinate to the Class A Certificates
to the extent described herein. Transferor shall not have any interest in
the Collection Account, the Finance Charge Account, the Principal Account,
the Cash Collateral Account and the Distribution Account, except as
specifically provided in this Article IV.
SECTION 4.7 Allocations. (a) Allocations During the Revolving
Period. During the Revolving Period, Servicer shall allocate Collections to
the Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of
such Collections and (B) the aggregate amount of Collections processed
in respect of Finance Charge Receivables on such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage on the
Date of Processing of such Collections, (B) the Investor Percentage on
the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal Receivables on
such Date of Processing; and
(iii) allocate to the Investor Holders an amount equal to the
product of (A) the Class B Investor Allocation Percentage on the Date
of Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such Date
of Processing.
In addition, an amount equal to the product of (1) the Class A
Investor Allocation Percentage on the Date of Processing of such
Collections, (2) the Investor Percentage on the Date of Processing of such
Collections and (3) the aggregate amount of Collections processed in
respect of Principal Receivables on each Date of Processing shall be
treated as Shared Principal Collections.
(b) Allocations During the Controlled Amortization Period. During the
Controlled Amortization Period, Servicer shall allocate Collections to the
Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of
such Collections and (B) the aggregate amount of Collections processed
in respect of Finance Charge Receivables on such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage on the
Date of Processing of such Collections, (B) the Investor Percentage on
the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal Receivables on
such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to the
product of (A) the Class B Investor Allocation Percentage on the Date
of Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such Date
of Processing; and
(iv) (A) allocate to the Investor Holders an amount equal to
the product of (1) the Class A Investor Allocation Percentage on the
Date of Processing of such Collections, (2) the Investor Percentage on
the Date of Processing of such Collections and (3) the aggregate
amount of Collections processed in respect of Principal Receivables on
such Date of Processing; provided that the amount allocated pursuant
to this Section 4.7(b)(iv)(A) during any Monthly Period shall not
exceed the Controlled Payment Amount for the related Transfer Date
(after taking into account any payments to be made on the immediately
preceding Distribution Date) and (B) treat as Shared Principal
Collections any amount not allocated as a result of the proviso to
clause (A).
(c) Allocations During the Early Amortization Period. During the
Early Amortization Period, Servicer shall allocate Collections to the
Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of
such Collections and (B) the aggregate amount of Collections processed
in respect of Finance Charge Receivables on such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage on the
Date of Processing of such Collections and (B) the Investor Percentage
on the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal Receivables on
such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to the
product of (A) the Class B Investor Allocation Percentage on the Date
of Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on such Date
of Processing; and
(iv) (A) allocate to the Investor Holders an amount equal to
the product of (1) the Class A Investor Allocation Percentage on the
Date of Processing of such Collections and (2) the Investor Percentage
on the Date of Processing of such Collections and (3) the aggregate
amount of Collections processed in respect of Principal Receivables on
such Date of Processing; provided that the aggregate amount allocated
pursuant to this Section 4.7(c)(iv)(A) during any Monthly Period shall
not exceed the Invested Amount as of the close of business on the last
day of the prior Monthly Period (after taking into account any
payments to be made on the Distribution Date relating to such prior
Monthly Period and deposits and any adjustments to be made to the
Invested Amount to be made on the Transfer Date relating to such
Monthly Period) and (B) treat as Shared Principal Collections any
amount not allocated as a result of the proviso to clause (A).
(d) During any period when Servicer is permitted by Section 4.3 to
make a single monthly deposit to the Collection Account, amounts allocated
to the Investor Holders pursuant to Sections 4.7(a), (b) and (c) with
respect to any Monthly Period need not be deposited into the Collection
Account or any Series Account prior to the related Transfer Date, and, when
so deposited, (x) may be deposited net of any amounts required to be
distributed to Transferor and, if WFN is Servicer, Servicer and (y) shall
be deposited into the Finance Charge Account (in the case of Collections of
Finance Charge Receivables) and the Principal Account (in the case of
Collections of Principal Receivables (not including any Shared Principal
Collections allocated to Series 1996-A pursuant to Section 4.15)), subject
in either case to the proviso to the next sentence. At any other time,
amounts so allocated on each Date of Processing shall be deposited on that
Date of Processing into the Finance Charge Account (in the case of
Collections of Finance Charge Receivables) and the Principal Account (in
the case of Collections of Principal Receivables (not including any Shared
Principal Collections allocated to Series 1996-A pursuant to Section
4.15)), provided that:
(i) with respect to each Monthly Period falling in the Revolving
Period (and with respect to that portion of each Monthly Period in the
Controlled Amortization Period falling on or after the day on which
Collections of Principal Receivables equal to the related Controlled
Payment Amount have been allocated pursuant to Section 4.7(b)(iv) and
deposited pursuant to Section 4.7(d)), Collections of Finance Charge
Receivables shall be deposited into the Finance Charge Account only
until such time as the aggregate amount so deposited equals the sum
(the "Target Amount") of (A) the amounts of Class A Monthly Interest,
Class B Monthly Interest, Class A Deficiency Amount and Class A
Additional Interest (if any), Class B Deficiency Amount and Class B
Additional Interest (if any), (B) if WFN is not Servicer, the
Servicing Fee, each due on the related Distribution Date, (C) any
Collateral Monthly Interest due on the related Transfer Date and any
other amounts that Transferor or Servicer knows will be owed under the
Loan Agreement on the related Transfer Date to the extent such amounts
are payable under the Loan Agreement from Available Non-Principal
Funds (as defined in the Loan Agreement) and (D) any Finance Charge
Shortfalls for any other Series in Group One (as defined in the
related Supplement); and
(ii) with respect to each Monthly Period falling in the
Revolving Period, Collections of Principal Receivables allocated to
the Investor Holders pursuant to Section 4.7(a)(ii) and (iii) shall
(after an amount equal to any Collateral Monthly Principal for that
Monthly Period has been deposited into the Principal Account) be paid
to Transferor (or, if the Transferor Amount is less than the Specified
Transferor Amount, deposited into the Excess Funding Account), but
Transferor shall make an amount equal to the Reallocated Principal
Collections for the related Transfer Date available on that Transfer
Date for application in accordance with Section 4.14.
With respect to any Monthly Period when deposits of Collections of Finance
Charge Receivables into the Finance Charge Account are limited in
accordance with clause (i) of the preceding proviso, notwithstanding such
limitation: (1) "Excess Spread" for the related Transfer Date shall be
calculated as if the full amount of Finance Charge Collections allocated to
the Investor Certificates during that Monthly Period had been deposited in
the Finance Charge Account and applied on such Transfer Date in accordance
with Sections 4.11(a), 4.11(b) and 4.11(c); (2) Collections of Finance
Charge Receivables released to Transferor pursuant to such clause (i) shall
be deemed, for purposes of all calculations under this Supplement and the
Loan Agreement, to have been distributed on account of or otherwise applied
to the items specified in Sections 4.11(a), 4.11(b), 4.11(c) and 4.13 to
which such amounts would have been applied (and in the priority in which
they would have been applied) had such amounts been available in the
Finance Charge Account on such Transfer Date; and (3) for purposes of the
Loan Agreement, "Available Principal Funds" and "Available Non-Principal
Funds" for the related Transfer Date shall be calculated as if the proviso
set forth in Section 4.7(d)(i) and (ii) had not applied and the full amount
of Collections allocated to the Investor Certificates during that Monthly
Period had been deposited in the Finance Charge Account and the Principal
Account and applied on such Transfer Date in accordance with Article IV. If
the amount actually available for application as Available Non-Principal
Funds under the Loan Agreement is insufficient to make all payments,
distributions and deposits required to be made under the Loan Agreement on
such Transfer Date, Transferor shall deposit, on such Transfer Date, an
amount equal to the difference between the Available Non-Principal Funds,
as so calculated, and the amount actually available. If the amount actually
available for application as Available Principal Funds under the Loan
Agreement is insufficient to make all payments, distributions and deposits
required to be made under the Loan Agreement on such Transfer Date,
Transferor shall deposit, on such Transfer Date, an amount equal to the
difference between the Available Principal Funds, as so calculated, and the
amount actually available. In addition, the proviso set forth in Section
4.7(d)(i) and (ii) shall not apply at any time when the most recently
determined Available Cash Collateral Amount is less than the Required Cash
Collateral Amount. To avoid doubt, the calculations referred to in the
preceding clause (2) include the calculations required by clause (c) of the
definition of Class A Invested Amount, clause (f) of the definition of
Class B Invested Amount, clause (f) of the definition of Collateral
Interest and Section 4.10.
Notwithstanding clause (i) above, if on any Business Day Servicer
determines that the Target Amount for a Monthly Period exceeds the Target
Amount for that Monthly Period as previously calculated by Servicer, then
(x) Servicer shall (on the same Business Day) inform Transferor of such
determination, and (y) within two Business Days of receiving such notice
Transferor shall deposit into the Finance Charge Account funds in an amount
equal to the amount of Collections of Finance Charge Receivables allocated
to the Investor Certificates for that Monthly Period but not deposited into
the Finance Charge Account due to the operation of clause (i) (but not in
excess of the amount required so that the aggregate amount deposited for
the subject Monthly Period equals the Target Amount). In addition, if on
any Transfer Date the Transferor Amount will be less than the Specified
Transferor Amount after giving effect to all transfers and deposits on that
Transfer Date, Transferor shall, on that Transfer Date, deposit into the
Principal Account funds in an amount equal to the amounts of Class A
Available Funds and Excess Spread that are required to be treated as
Investor Principal Collections pursuant to Sections 4.11(a)(iii) and 4.13
but are not available from funds in the Finance Charge Account as a result
of the operation of clause (i).
(e) On any date, Servicer may withdraw from the Collection Account or
any Series Account any amounts inadvertently deposited in such account that
should have not been so deposited.
SECTION 4.8 Determination of Monthly Interest. (a) The amount of
monthly interest distributable to the Class A Certificates shall equal the
product of (i) one-twelfth, times (ii) the Class A Certificate Rate, times
(iii) the outstanding principal balance of the Class A Certificates
determined as of the Record Date preceding the related Transfer Date (the
"Class A Monthly Interest"); provided that (x) Class A Monthly Interest for
the first Distribution Period will be $2,984,850 and (y) in addition to
Class A Monthly Interest an amount equal to the amount of any unpaid Class
A Deficiency Amounts, plus an amount equal to the product of (A) (1)
one-twelfth, times (2) the sum of the Class A Certificate Rate, plus 2% per
annum, and (B) any Class A Deficiency Amount from the prior Transfer Date
(or the portion thereof which has not theretofore been paid to Class A
Holders) (the "Class A Additional Interest"), shall also be distributable
to the Class A Certificates, and on such Transfer Date Trustee shall
deposit such funds, to the extent available, into the Distribution Account.
The "Class A Deficiency Amount" for any Transfer Date shall equal the
excess, if any, of the aggregate amount accrued pursuant to this Section
4.8(a) as of the prior Distribution Period over the amount actually
transferred from the Distribution Account for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal the product of (i) one-twelfth, times (ii) the
Class B Certificate Rate, times (iii) the outstanding principal balance of
the Class B Certificates determined as of the Record Date preceding the
related Transfer Date (the "Class B Monthly Interest"); provided that (x)
Class B Monthly Interest for the first Distribution Period will be $327,250
and (y) in addition to the Class B Monthly Interest an amount equal to the
amount of any unpaid Class B Deficiency Amounts, plus an amount equal to
the product of (A) (1) one-twelfth, times (2) the sum of the Class B
Certificate Rate, plus 2% per annum, and (B) any Class B Deficiency Amount
from the prior Transfer Date (or the portion thereof which has not
theretofore been paid to Class B Holders) (the "Class B Additional
Interest"), shall also be distributable to the Class B Certificates, and on
such Transfer Date Trustee shall deposit such funds, to the extent
available, into the Distribution Account. The "Class B Deficiency Amount"
for any Transfer Date shall equal the excess, if any, of the aggregate
amount accrued pursuant to this Section 4.8(b) as of the prior Distribution
Period over the amount actually transferred from the Distribution Account
for payment of such amount.
(c) The amount of monthly interest distributable to the Collateral
Interest (the "Collateral Monthly Interest") shall equal the product of (i)
(A) a fraction, the numerator of which is the actual number of days in the
related Distribution Period and the denominator of which is 360, times (B)
the Collateral Rate in effect with respect to the related Distribution
Period, times (ii) the Collateral Interest determined as of the Record Date
preceding such Transfer Date.
SECTION 4.9 Determination of Monthly Principal. (a) The amount of
monthly principal distributable from the Principal Account with respect to
the Class A Certificates on each Transfer Date ("Class A Monthly
Principal"), beginning with the Transfer Date in the month following the
month in which the Controlled Amortization Period or, if earlier, the Early
Amortization Period, begins, shall be equal to the least of (i) the
Available Investor Principal Collections on deposit in the Principal
Account with respect to such Transfer Date, (ii) for each Transfer Date
with respect to the Controlled Amortization Period prior to the Class A
Final Scheduled Payment Date, the Controlled Payment Amount for such
Transfer Date and (iii) the Class A Invested Amount on such Transfer Date
prior to any distributions thereon on such day.
(b) The amount of monthly principal distributable from the Principal
Account with respect to the Class B Certificates on each Transfer Date (the
"Class B Monthly Principal") for the Controlled Amortization Period,
beginning with the Transfer Date after the one on which the Class A
Invested Amount is reduced to zero, and for the Early Amortization Period
beginning with the Transfer Date on which the Class A Invested Amount is
reduced to zero (in either case after giving effect to payments to be made
on the related Distribution Date), shall be an amount equal to the lesser
of (i) the excess, if any, of (A) the Available Investor Principal
Collections on such Transfer Date over (B) any Class A Monthly Principal on
such Transfer Date and (ii) the Class B Invested Amount (after taking into
account any adjustments to be made on such Transfer Date pursuant to
Sections 4.12 and 4.14) on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (i) during the Revolving
Period following any reduction of the Required Enhancement Amount, an
amount equal to the lesser of (A) the Enhancement Surplus on such Transfer
Date and (B) the Available Investor Principal Collections on such Transfer
Date or (ii) during the Controlled Amortization Period or Early
Amortization Period an amount equal to the least of (A) the Enhancement
Surplus on such Transfer Date, (B) the excess, if any, of (1) the Available
Investor Principal Collections on such Transfer Date over (2) the sum of
the Class A Monthly Principal and the Class B Monthly Principal for such
Transfer Date and (C) the Collateral Interest on such Transfer Date (after
taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.14).
SECTION 4.10 Coverage of Required Amount. (a) On or before each
Transfer Date, Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A Monthly Interest for
such Transfer Date, plus (ii) the Class A Deficiency Amount, if any, for
such Transfer Date, plus (iii) the Class A Additional Interest, if any, for
such Transfer Date, plus (iv) the Class A Servicing Fee for the prior
Monthly Period plus (v) the Class A Servicing Fee, if any, due but not paid
on any prior Transfer Date, plus (vi) the Class A Investor Default Amount,
if any, for such Transfer Date, plus (vii) the Class A Uncovered Dilution
Amount for the related Monthly Period, exceeds the Class A Available Funds
for the related Monthly Period.
(b) On or before each Transfer Date, Servicer shall also determine
the amount (the "Class B Required Amount"), if any, equal to the sum of (i)
the amount, if any, by which the sum of (A) the Class B Monthly Interest
for such Transfer Date, plus (B) the Class B Deficiency Amount, if any, for
such Transfer Date plus (C) the Class B Additional Interest, if any, for
such Transfer Date, plus (D) the Class B Servicing Fee for the prior
Monthly Period plus (E) the Class B Servicing Fee, if any, due but not paid
on any prior Transfer Date, exceeds the Class B Available Funds for the
related Monthly Period plus (ii) the sum of (A) the Class B Investor
Default Amount, if any, for such Transfer Date and (B) the Class B
Uncovered Dilution Amount for the related Monthly Period.
(c) If the sum of the Class A Required Amount and the Class B
Required Amount for such Transfer Date is greater than zero, Servicer shall
give written notice to Trustee of such positive Class A Required Amount or
Class B Required Amount on or before such Transfer Date. In addition:
(i) If the Class A Required Amount for such Transfer Date is
greater than zero, all or a portion of the Excess Spread (and any
Required Draw Amount) with respect to such Transfer Date in an amount
equal to the Class A Required Amount, to the extent available, for
such Transfer Date shall be distributed (or, in the case of Excess
Spread, deemed, in accordance with Section 4.7(d), to be distributed)
from the Finance Charge Account (and the Cash Collateral Account) on
such Transfer Date pursuant to Section 4.13(a). If the Class A
Required Amount for such Transfer Date exceeds the amount of Excess
Spread (and any Required Draw Amount) with respect to such Transfer
Date, the Collections of Principal Receivables allocable to the
Collateral Interest and the Class B Certificates with respect to the
prior Monthly Period shall be applied as specified in Section 4.14.
(ii) If the Class B Required Amount for such Transfer Date is
greater than zero, all or a portion of the Excess Spread (and any
Required Draw Amount) with respect to such Transfer Date in an amount
equal to the Class B Required Amount, to the extent available, for
such Transfer Date shall be distributed (or, in the case of Excess
Spread, deemed, in accordance with Section 4.7(d), to be distributed)
from the Finance Charge Account (and the Cash Collateral Account) on
such Transfer Date pursuant to Section 4.13(c). If the Class B
Required Amount for such Transfer Date exceeds the amount of Excess
Spread (and any Required Draw Amount) available to fund the Class B
Required Amount pursuant to Section 4.13(c), the Collections of
Principal Receivables allocable to the Collateral Interest (after
application to the Class A Required Amount) shall be applied as
specified in Section 4.14;
provided that the sum of any payments pursuant to this paragraph shall not
exceed the sum of the Class A Required Amount and the Class B Required
Amount.
SECTION 4.11 Monthly Payments. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to withdraw, and Trustee, acting in
accordance with such instructions, shall withdraw on such Transfer Date or
the related Distribution Date, as applicable, to the extent of available
funds, the amounts required to be withdrawn from the Finance Charge
Account, the Principal Account and the Distribution Account as follows:
(a) An amount equal to the Class A Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to Class A Monthly Interest, plus any Class
A Deficiency Amount, plus any Class A Additional Interest (in each
case for such Transfer Date) shall be deposited by Servicer or Trustee
into the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date plus any Class A Servicing Fee due but not paid to
Servicer on any prior Transfer Date (less, if WFN is Servicer, amounts
previously retained towards payment of such fees) shall be distributed
to Servicer;
(iii) an amount equal to the sum of the Class A Investor
Default Amount and the Class A Uncovered Dilution Amount, if any, for
the preceding Monthly Period shall be treated (or deemed, in
accordance with Section 4.7(d), to be treated) as a portion of
Investor Principal Collections and, during the Controlled Amortization
Period or the Early Amortization Period, deposited into the Principal
Account on such Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(b) An amount equal to the Class B Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to the Class B Monthly Interest, plus any
Class B Deficiency Amount, plus any Class B Additional Interest (in
each case for such Transfer Date) shall be deposited by Servicer or
Trustee into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus any Class B Servicing Fee due but not paid to
Servicer on any prior Transfer Date for such Transfer Date (less, if
WFN is Servicer, amounts previously retained towards payment of such
fees) shall be distributed to Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(c) An amount equal to the Collateral Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) if neither Transferor nor any of its Affiliates is
Servicer, an amount equal to the Collateral Interest Servicing Fee for
such Transfer Date, plus any Collateral Interest Servicing Fee due but
not paid to Servicer on any prior Transfer Date shall be distributed
to Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections for the related Monthly Period will be
distributed on each Transfer Date, to the extent available, in the
following priority:
(i) an amount equal to the Collateral Monthly Principal for
such Transfer Date shall be distributed to the Collateral Interest
Holder in accordance with the Loan Agreement; and
(ii) an amount equal to the Available Investor Principal
Collections remaining after the application specified in Section
4.11(d)(i) shall be treated as Shared Principal Collections.
(e) On each Transfer Date commencing with the Transfer Date falling
in the calendar month following the one in which the Controlled
Amortization Period or the Early Amortization Period (whichever is earlier)
commences, an amount equal to the Available Investor Principal Collections
for the related Monthly Period will be distributed on such Transfer Date,
to the extent available, in the following priority:
(i) an amount equal to the Class A Monthly Principal for such
Transfer Date, shall be deposited into the Distribution Account;
(ii) after giving effect to the distribution referred to in
clause (i), an amount equal to the Class B Monthly Principal, shall be
deposited into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer Date
immediately preceding the Series 1996-A Termination Date, in which
case on the Series 1996-A Termination Date) after giving effect to the
distribution referred to in clauses(i) and (ii) above, an amount equal
to Collateral Monthly Principal shall be distributed to the Collateral
Interest Holder in accordance with the Loan Agreement; and
(iv) an amount equal to the Available Investor Principal
Collections remaining after the applications specified in clauses (i),
(ii) and (iii) above shall be treated as Shared Principal Collections.
(f) On each Distribution Date, Trustee shall pay in accordance with
Section 5.1(a) to the Class A Holders from the Distribution Account, the
amount deposited into the Distribution Account pursuant to Section
4.11(a)(i) on the preceding Transfer Date and to the Class B Holders from
the Distribution Account, the amount deposited into the Distribution
Account pursuant to Section 4.11(b)(i) on the preceding Transfer Date.
(g) On the first Distribution Date with respect to the earlier to
occur of the Controlled Amortization Period and the Early Amortization
Period and on each Distribution Date thereafter, Trustee, acting in
accordance with instructions from Servicer, shall pay in accordance with
Section 5.1 from the Distribution Account the amount so deposited into the
Distribution Account pursuant to Sections 4.11(e) on the related Transfer
Date in the following priority:
(i) an amount equal to the lesser of such amount on deposit in
the Distribution Account and the Class A Invested Amount shall be paid
to the Class A Holders; and
(ii) for each Distribution Date with respect to the Early
Amortization Period and on or after the Class B Scheduled Payment
Date, after giving effect to the distributions referred to in clause
(i) above, an amount equal to the lesser of such amount on deposit in
the Distribution Account and the Class B Invested Amount shall be paid
to the Class B Holders.
SECTION 4.12 Investor Charge-Offs. (a) On or before each Transfer
Date, Servicer shall calculate the sum of the Class A Investor Default
Amount and the Class A Uncovered Dilution Amount (such sum being the "Class
A Reduction Amount"). If on any Transfer Date, the Class A Reduction Amount
for the prior Monthly Period exceeds the sum of the amount allocated with
respect thereto pursuant to Section 4.11(a)(iii), Section 4.13(a)
(including amounts withdrawn from the Cash Collateral Account for such
allocation) and Section 4.14 with respect to such Monthly Period, the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer
Date) will be reduced by the amount of such excess, but not by more than
the lesser of the Class A Reduction Amount and the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date) for such Transfer
Date. If such reduction would cause the Collateral Interest to be a
negative number, the Collateral Interest will be reduced to zero, and the
Class B Invested Amount (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections on
such Transfer Date) will be reduced by the amount by which the Collateral
Interest would have been reduced below zero. If such reduction would cause
the Class B Invested Amount to be a negative number, the Class B Invested
Amount will be reduced to zero, and the Class A Invested Amount will be
reduced by the amount by which the Class B Invested Amount would have been
reduced below zero, but not by more than the Class A Reduction Amount for
such Transfer Date (a "Class A Investor Charge-Off"). If the Class A
Invested Amount has been reduced by the amount of any Class A Investor
Charge-Offs, it will be reimbursed on any Transfer Date (but not by an
amount in excess of the aggregate Class A Investor Charge-Offs) by the
amount of Excess Spread allocated and available for such purpose pursuant
to Section 4.13(b).
(b) On or before each Transfer Date, Servicer shall calculate the sum
of the Class B Investor Default Amount and the Class B Uncovered Dilution
Amount (such sum being the "Class B Reduction Amount"). If on any Transfer
Date, the Class B Reduction Amount for the prior Monthly Period exceeds the
amount of Excess Spread and Reallocated Collateral Principal Collections
which are allocated and available to fund such amount pursuant to Section
4.13(c) (including amounts withdrawn from the Cash Collateral Account for
such allocation) and Section 4.14, the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in Section 4.12(a)) will be reduced by the
amount of such excess but not by more than the lesser of the Class B
Reduction Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date and any adjustments with respect thereto
as described in Section 4.12(a)) for such Transfer Date. If such reduction
would cause the Collateral Interest to be a negative number, the Collateral
Interest shall be reduced to zero and the Class B Invested Amount shall be
reduced by the amount by which the Collateral Interest would have been
reduced below zero, but not by more than the Class B Reduction Amount for
such Transfer Date (a "Class B Investor Charge-Off"). The Class B Invested
Amount will also be reduced by the amount of Reallocated Class B Principal
Collections in excess of the Collateral Interest pursuant to Section 4.14
and the amount of any portion of the Class B Invested Amount allocated to
the Class A Certificates to avoid a reduction in the Class A Invested
Amount pursuant to Section 4.12(a). The Class B Invested Amount will
thereafter be reimbursed (but not to an amount in excess of the unpaid
principal balance of the Class B Certificates) on any Transfer Date by the
amount of Excess Spread allocated and available for that purpose as
described under Section 4.13(d).
(c) On or before each Transfer Date, Servicer shall calculate the sum
of the Collateral Default Amount and the Collateral Uncovered Dilution
Amount (such sum being the "Collateral Reduction Amount"). If on any
Transfer Date, the Collateral Reduction Amount for the prior Monthly Period
exceeds the amount of Excess Spread which is allocated and available to
fund such amount pursuant to Section 4.13(g), the Collateral Interest will
be reduced by the amount of such excess but not by more than the lesser of
the Collateral Reduction Amount and the Collateral Interest for such
Transfer Date (a "Collateral Charge-Off"). The Collateral Interest will
also be reduced by the amount of Reallocated Principal Collections pursuant
to Section 4.14 and the amount of any portion of the Collateral Interest
allocated to the Class A Certificates or the Class B Certificates to avoid
a reduction in the Class A Invested Amount, pursuant to Section 4.12(a), or
the Class B Invested Amount, pursuant to Section 4.12(b), respectively. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by
the amount of the Excess Spread allocated and available for that purpose as
described under Section 4.13(h).
SECTION 4.13 Excess Spread. On or before each Transfer Date, Servicer
shall instruct Trustee in writing (which writing shall be substantially in
the form of Exhibit B) to apply, and Trustee, acting in accordance with
such instructions shall apply (or be deemed, in accordance with Section
4.7(d), to apply), Excess Spread with respect to the related Monthly
Period, to make the following distributions on each Transfer Date in the
following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class A Required
Amount and be applied in accordance with, and in the priority set forth in,
Section 4.11(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed will be treated as a
portion of Investor Principal Collections and, during the Controlled
Amortization Period or the Early Amortization Period, deposited into the
Principal Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class B Required
Amount and be applied first in accordance with, and in the priority set
forth in, Section 4.11(b) and then any remaining amount available to pay
the Class B Reduction Amount shall be treated as a portion of Investor
Principal Collections and, during the Controlled Amortization Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced below the initial Class B Invested Amount
for reasons other than the payment of principal to the Class B Holders (but
not in excess of the aggregate amount of such reductions which have not
been previously reimbursed) will be treated as a portion of Investor
Principal Collections and, during the Controlled Amortization Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the
amount of any past due Collateral Monthly Interest for such Transfer Date
will be paid to the Collateral Interest Holder in accordance with the Loan
Agreement;
(f) if Transferor or any of its Affiliates is Servicer, an amount
equal to the aggregate amount of accrued but unpaid Collateral Interest
Servicing Fees (less, if WFN is Servicer, amounts previously retained
towards payment of such fee) will be paid to Servicer;
(g) an amount equal to the Collateral Reduction Amount, if any, for
the related Monthly Period will be treated as a portion of Investor
Principal Collections and, during the Controlled Amortization Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced for reasons other than the payment of principal
to the Collateral Interest Holder (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) will
be treated as a portion of Investor Principal Collections and, during the
Controlled Amortization Period or the Early Amortization Period, deposited
into the Principal Account on such Transfer Date;
(i) an amount up to the excess, if any, of the Required Cash
Collateral Amount (determined after all deposits, withdrawals, reductions,
payments and adjustments to be made with respect to such date) over the
Available Cash Collateral Amount (without giving effect to any deposit made
on such date hereunder) shall be deposited in the Cash Collateral Account;
(j) an amount equal to all other amounts due under the Loan Agreement
shall be distributed in accordance with the Loan Agreement; and
(k) the balance, if any, after giving effect to the payments made
pursuant to clauses (a) through (j) shall constitute "Excess Finance Charge
Collections" to be applied with respect to other Series in accordance with
Section 4.5 of the Agreement.
SECTION 4.14 Reallocated Principal Collections. On or before each
Transfer Date, Servicer shall instruct Trustee in writing (which writing
shall be substantially in the form of Exhibit B) to, and Trustee in
accordance with such instructions shall, withdraw from the Principal
Account and apply Collections of Principal Receivables with respect to such
Transfer Date, to make the following distributions on each Transfer Date in
the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii)
the sum of (x) the amount of Excess Spread with respect to the related
Monthly Period and (y) the Available Cash Collateral Amount with
respect to such Transfer Date, shall be applied pursuant to Sections
4.11(a)(i), (ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Transfer Date over (ii)
the sum of (x) the amount of Excess Spread allocated and available to
the Class B Certificates pursuant to Section 4.13(c) on such Transfer
Date and (y) the amount withdrawn from the Cash Collateral Account
pursuant to Section 4.17(c) which is remaining after application
pursuant to Section 4.13(c) with respect to such Transfer Date shall
be applied first pursuant to Sections 4.11(b)(i) and (ii) and then
pursuant to Section 4.13(c);
provided, that:
(1) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clauses (a) and (b) (the
"Reallocated Principal Collections") shall not exceed the lesser of
(A) the product of (x) the sum of the Collateral Investor Allocation
Percentage and the Class B Investor Allocation Percentage for the
Monthly Period relating to such Transfer Date and (y) the Investor
Percentage for the Monthly Period relating to such Transfer Date and
(z) the amount of Collections of Principal Receivables for the Monthly
Period relating to such Transfer Date and (B) the sum of the
Collateral Interest and the Class B Invested Amount after giving
effect to any Collateral Charge-Offs and Class B Investor Charge-Offs
for such Transfer Date; and
(2) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clause (b) shall not exceed the
lesser of (A) the product of (x) the Collateral Investor Allocation
Percentage for the Monthly Period relating to such Transfer Date and
(y) the Investor Percentage for the Monthly Period relating to such
Transfer Date and (z) the amount of Collections of Principal
Receivables for the Monthly Period relating to such Transfer Date and
(B) the Collateral Interest after giving effect to any Collateral
Charge-Offs for such Transfer Date.
With respect to any Transfer Date, any Reallocated Principal
Collections up to and including the amount specified in clause (2)(A) above
shall constitute "Reallocated Collateral Principal Collections," and any
Reallocated Principal Collections in excess of such amount shall constitute
"Reallocated Class B Principal Collections."
On each Transfer Date, the Collateral Interest shall be reduced by the
amount of Reallocated Collateral Principal Collections and by the amount of
Reallocated Class B Principal Collections for such Transfer Date. If such
reduction would cause the Collateral Interest (after giving effect to any
Collateral Charge-Offs for such Transfer Date) to be a negative number, the
Collateral Interest (after giving effect to any Collateral Charge-Offs for
such Transfer Date) shall be reduced to zero and the Class B Invested
Amount shall be reduced by the amount by which the Collateral Interest
would have been reduced below zero. If the reallocation of Reallocated
Principal Collections would cause the Class B Invested Amount (after giving
effect to any Class B Investor Charge-Offs for such Transfer Date) to be a
negative number on any Transfer Date, Reallocated Principal Collections
shall be reallocated on such Transfer Date in an aggregate amount not to
exceed the amount which would cause the Class B Invested Amount (after
giving effect to any Class B Investor Charge-Offs for such Transfer Date)
to be reduced to zero.
SECTION 4.15 Shared Principal Collections; Amounts Transferred from
the Excess Funding Account to the Principal Account. (a) The Shared
Principal Collections allocable to Series 1996-A on any Transfer Date
pursuant to Section 4.15(b) shall be applied as Available Investor
Principal Collections pursuant to Section 4.11 and pursuant to such Section
4.11 shall be deposited in the Distribution Account or distributed in
accordance with the Loan Agreement.
(b) Shared Principal Collections allocable to Series 1996-A with
respect to any Transfer Date means an amount equal to the Principal
Shortfall, if any, with respect to Series 1996-A for such Transfer Date;
provided that if the aggregate amount of Shared Principal Collections for
all Series in Group One for such Transfer Date is less than the Cumulative
Principal Shortfall for such Transfer Date, then Shared Principal
Collections allocable to Series 1996-A on such Transfer Date shall equal
the product of (i) Shared Principal Collections for all Series in Group One
for such Transfer Date and (ii) a fraction, the numerator of which is the
Principal Shortfall with respect to Series 1996-A for such Transfer Date
and the denominator of which is the aggregate amount of Cumulative
Principal Shortfall for all Series in Group One for such Transfer Date. On
each Transfer Date, Trustee (in accordance with instructions from Servicer)
shall withdraw Shared Principal Collections allocable to Series 1996-A from
the Collection Account and deposit the same into the Principal Account.
(c) Solely for the purpose of determining the amount of Available
Investor Principal Collections to be treated as Shared Principal
Collections on any Transfer Date allocable to other Series in Group One, on
each Determination Date, Servicer shall determine the Class A Required
Amount, Class B Required Amount, Excess Spread and Reallocated Principal
Collections as of such Determination Date for the following Transfer Date.
(d) The aggregate amount allocable to Series 1996-A and required to be
transferred from the Excess Funding Account into the Principal Account with
respect to any Transfer Date for purposes of the definition of "Investor
Principal Collections" means an amount equal to the Principal Shortfall, if
any, with respect to Series 1996-A for such Transfer Date minus the amount
of Shared Principal Collections allocated to Series 1996-A from other
Series in Group One on that Transfer Date; provided that if the aggregate
amount required to be withdrawn from the Excess Funding Account pursuant to
Section 4.2 for all Series (whether or not included in Group One) for such
Transfer Date is less than the cumulative Principal Shortfall minus
available Shared Principal Collections for all Series (whether or not
included in Group One) for such Transfer Date, then the aggregate amount
allocable to Series 1996-A and required to be transferred on such Transfer
Date shall equal the product of (i) the aggregate amount required to be
withdrawn from the Excess Funding Account pursuant to Section 4.2 for all
Series for such Transfer Date and (ii) a fraction, (A) the numerator of
which is (A) the Principal Shortfall with respect to Series 1996-A for such
Transfer Date minus the amount of Shared Principal Collections allocated to
Series 1996-A from other Series in Group One on that Transfer Date and (B)
the denominator of which is the cumulative Principal Shortfall for all
Series minus available Shared Principal Collections for all Series (whether
or not included in Group One) for such Transfer Date.
SECTION 4.16 Finance Charge Account, Principal Account and
Distribution Account. (a) Trustee shall establish and maintain with an
Eligible Institution, which may be Trustee, in the name of the Trust, on
behalf of the Trust, for the benefit of the Investor Holders, three
segregated trust accounts (the "Finance Charge Account", the "Principal
Account", and the "Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Investor Holders. Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Finance Charge Account, the
Principal Account and the Distribution Account and in all proceeds thereof.
The Finance Charge Account, the Principal Account and the Distribution
Account shall be under the sole dominion and control of Trustee for the
benefit of the Investor Holders. If at any time the institution holding the
Finance Charge Account, the Principal Account and the Distribution Account
ceases to be an Eligible Institution, Transferor shall notify Trustee, and
Trustee upon being notified (or Servicer on its behalf) shall, within 10
Business Days, establish a new Finance Charge Account, a new Principal
Account and a new Distribution Account meeting the conditions specified
above, and shall transfer any cash or any investments to such new Finance
Charge Account, Principal Account, and Distribution Account. Trustee, at
the direction of Servicer, shall make withdrawals from the Finance Charge
Account, the Principal Account and the Distribution Account from time to
time, in the amounts and for the purposes set forth in this Series
Supplement and the Agreement. Trustee at all times shall maintain accurate
records reflecting each transaction in the Finance Charge Account, the
Principal Account and the Distribution Account and that the funds held
therein shall at all times be held in trust for the benefit of the Investor
Holders.
(b) Funds on deposit in the Finance Charge Account and the Principal
Account from time to time shall be invested and reinvested at the direction
of Servicer by Trustee in Eligible Investments that will mature so that
such funds will be available for withdrawal on the following Transfer Date.
Trustee shall maintain for the benefit of the Investor Holders possession
of the negotiable instruments or securities, if any, evidencing such
Eligible Investments. No Eligible Investment shall be disposed of prior to
its maturity unless Servicer so directs and either (i) such disposal will
not result in a loss of all or part of the principal portion of such
Eligible Investment or (ii) prior to the maturity of such Eligible
Investment, a default occurs in the payment of principal, interest or any
other amount with respect to such Eligible Investment. On each Distribution
Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Finance Charge Account and
the Principal Account shall be treated as Collections of Finance Charge
Receivables allocated to the Invested Amount for purposes of this Series
Supplement.
SECTION 4.17 Cash Collateral Account. (a) Servicer shall establish
and maintain with an Eligible Institution, which may be Trustee, in the
name of Trustee, on behalf of the Trust, a segregated trust account (the
"Cash Collateral Account") bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Investor
Holders. Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Cash Collateral Account and in all
proceeds thereof. The Cash Collateral Account shall be under the sole
dominion and control of Trustee for the benefit of the Investor Holders.
If at any time an Eligible Institution holding the Cash Collateral Account
ceases to be an Eligible Institution, Transferor shall notify Trustee, and
Trustee upon being notified (or Servicer on its behalf) shall within 10
Business Days establish a new Cash Collateral Account meeting the
conditions specified above, and shall transfer any cash or any investments
to such new Cash Collateral Account. Trustee, at the direction of
Servicer, shall make deposits to and withdrawals from the Cash Collateral
Account in the amounts and at the times set forth in this Series Supplement
and the Loan Agreement. All withdrawals from the Cash Collateral Account
shall be made in the priority set forth below.
(b) On the Closing Date, Transferor shall deposit $13,750,000 in
immediately available funds into the Cash Collateral Account. Funds on
deposit in the Cash Collateral Account from time to time shall be invested
and/or reinvested at the direction of Servicer by Trustee in Eligible
Investments that will mature so that such funds will be available for
withdrawal on the following Transfer Date. No Eligible Investment shall be
disposed of prior to its maturity unless Servicer so directs and either (i)
such disposal will not result in a loss of all or part of the principal
portion of such Eligible Investment or (ii) prior to the maturity of such
Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. Trustee
shall maintain for the benefit of the Investor Holders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. On each Transfer Date, all interest and earnings (net of
losses and investment expenses) accrued since the preceding Transfer Date
on funds on deposit in the Cash Collateral Account shall be treated as
Collections of Finance Charge Receivables allocated to the Invested Amount
and shall be part of Class A Available Funds, Class B Available Funds and
Collateral Available Funds for such Transfer Date. For purposes of
determining the availability of funds or the balances in the Cash
Collateral Account for any reason under this Series Supplement, all
investment earnings on such funds shall be deemed not to be available or on
deposit.
(c) On each Determination Date, Servicer shall calculate the amount
(the "Required Draw Amount") by which the sum of the amounts specified in
clauses (a) through (d) of Section 4.13 with respect to the related
Transfer Date exceeds the amount of Excess Spread allocated with respect to
the related Monthly Period. In the event that for any Transfer Date the
Required Draw Amount is greater than zero, Servicer shall give written
notice to Trustee and the Collateral Interest Holder of such positive
Required Draw Amount on the related Determination Date. On the related
Transfer Date, the Required Draw Amount, if any, up to the Available Cash
Collateral Amount, shall be withdrawn from the Cash Collateral Account and
distributed to fund any deficiency pursuant to Section 4.13(a) through (d)
(in the order of priority set forth in Section 4.13).
(d) If, after giving effect to all deposits to and withdrawals from
the Cash Collateral Account and adjustments to the Collateral Interest with
respect to any Transfer Date, the Collateral Interest has been reduced to
zero and there is an Enhancement Surplus (after giving effect to such
reduction), Trustee, acting in accordance with the instructions of
Servicer, shall withdraw an amount equal to such Enhancement Surplus from
the Cash Collateral Account, and apply it in accordance with the Loan
Agreement.
SECTION 4.18 Determination of LIBOR. As needed for the determination
of Collateral Rate, Trustee will determine LIBOR pursuant to the terms of
the Loan Agreement.
SECTION 4.19 Transferor's or Servicer's Failure to Make a Deposit or
Payment. If Servicer or Transferor fails to make, or give instructions to
make, any payment or deposit (other than as required by Sections 2.5, 2.6
or 12.2) required to be made or given by Servicer or Transferor,
respectively, at the time specified in the Agreement (including applicable
grace periods), Trustee shall make such payment or deposit from the Finance
Charge Account, the Principal Account, the Cash Collateral Account and/or
the Distribution Account, as applicable, without instruction from Servicer
or Transferor. Trustee shall be required to make any such payment, deposit
or withdrawal hereunder only to the extent that Trustee has sufficient
information to allow it to determine the amount thereof; provided that
Trustee shall in all cases be deemed to have sufficient information to
determine the amount of interest payable to the Investor Holders on each
Distribution Date. Servicer shall, upon request of Trustee, promptly
provide Trustee with all information necessary to allow Trustee to make
such payment, deposit or withdrawal. Such funds or the proceeds of such
withdrawal shall be applied by Trustee in the manner in which such payment
or deposit should have been made by Transferor or Servicer, as the case may
be.
SECTION 8. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Holders:
ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTOR HOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, Trustee
shall distribute (in accordance with the certificate delivered on or before
the related Transfer Date by Servicer to Trustee pursuant to Section
3.4(b)) to each Class A Holder of record on the immediately preceding
Record Date (other than as provided in Section 2.6 or Section 12.2
respecting a final distribution) such Holder's pro rata share (based on the
share of the aggregate outstanding principal balance of all Class A
Certificates represented by the Class A Certificates held by such Holder)
of amounts on deposit in the Distribution Account as are payable to the
Class A Holders pursuant to Section 4.11 by check mailed to each Class A
Holder (at such Holder's address as it appears in the Certificate
Register), except that with respect to Class A Certificates registered in
the name of the nominee of a Clearing Agency, such distribution shall be
made by wire transfer in immediately available funds.
(b) On each Distribution Date, Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer
Date by Servicer to Trustee pursuant to Section 3.4(b)) to each Class B
Holder of record on the immediately preceding Record Date (other than as
provided in Section 2.6 or Section 12.2 respecting a final distribution)
such Holder's pro rata share (based on the share of the aggregate
outstanding principal balance of all Class B Certificates represented by
the Class B Certificates held by such Holder) of amounts on deposit in the
Distribution Account as are payable to the Class B Holders pursuant to
Section 4.11 by check mailed to each Class B Holder (at such Holder's
address as it appears in the Certificate Register), except that with
respect to Class B Certificates registered in the name of the nominee of a
Clearing Agency, such distribution shall be made by wire transfer in
immediately available funds.
SECTION 5.2 Reports. (a) Monthly Series 1996-A Servicer's
Certificate. On or before each Distribution Date, Trustee shall forward to
each Investor Holder and each Rating Agency a statement substantially in
the form of Exhibit C prepared by Servicer and delivered to Trustee.
(b) Annual Holders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 1997, Trustee shall distribute
to each Person who at any time during the preceding calendar year was an
Investor Holder, a statement prepared by Servicer containing the following
information:
(i) the amount of the current distribution allocable to Class A
Monthly Principal, Class B Monthly Principal and Collateral Monthly
Principal, respectively; and
(ii) the amount of the current distribution allocable to Class A
Monthly Interest, Class A Deficiency Amounts, Class A Additional
Interest, Class B Monthly Interest, Class B Deficiency Amounts, Class
B Additional Interest and Collateral Monthly Interest, and any accrued
and unpaid Collateral Monthly Interest, respectively.
Such information shall be aggregated for such calendar year or the
applicable portion thereof during which such Person was an Investor Holder,
together with such other customary information (consistent with the
treatment of the Certificates as debt) as Trustee or Servicer deems
necessary or desirable to enable the Investor Holders to prepare their tax
returns. Such obligations of Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided
by Trustee pursuant to any requirements of the Internal Revenue Code.
SECTION 9. Series 1996-A Early Amortization Events. If any one of the
following events shall occur with respect to the Investor Certificates:
(a) failure on the part of Transferor (i) to make any payment or
deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five days after the date such
payment or deposit is required to be made herein or (ii) duly to observe or
perform in any material respect any covenants or agreements of Transferor
set forth in the Agreement or this Series Supplement (including the
covenant of Transferor contained in Section 11 of this Series Supplement),
which failure has a material adverse effect on the Series 1996-A Holders
(which determination shall be made without reference to whether any funds
are available under the Collateral Interest or the Cash Collateral Account)
and which continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to Transferor by Trustee, or to Transferor and
Trustee by Investor Holders representing more than 50% of the Invested
Amount of this Series 1996-A, and continues to affect materially and
adversely the interests of the Series 1996-A Holders (which determination
shall be made without reference to whether any funds are available under
the Collateral Interest or the Cash Collateral Account) for such period;
(b) any representation or warranty made by Transferor in the
Agreement or this Series Supplement, or any information contained in an
Account Schedule required to be delivered by Transferor pursuant to Section
2.1 or 2.8, (i) shall prove to have been incorrect in any material respect
when made or when delivered, 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 Transferor by Trustee, or to Transferor and Trustee by Investor
Holders representing more than 50% of the Invested Amount of this Series
1996-A, and (ii) as a result of which the interests of the Series 1996-A
Holders are materially and adversely affected (which determination shall be
made without reference to whether any funds are available under the
Collateral Interest or the Cash Collateral Account) and continue to be
materially and adversely affected for such period; provided that a Series
1996-A Early Amortization Event pursuant to this Section 9(b) shall not be
deemed to have occurred hereunder if Transferor has accepted reassignment
of the related Receivable, or all of such Receivables, if applicable,
during such period in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for
such period;
(d) Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by
Section 2.8(b); provided that such failure shall not give rise to an Early
Amortization Event if, prior to the date on which such conveyance was
required to be completed, Transferor causes a reduction in the invested
amount of any Variable Interest to occur, so that, after giving effect to
that reduction (i) the Transferor Amount is not less than the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) and (ii) the sum of the aggregate amount of Principal Receivables plus
amounts on deposit in the Excess Funding Account is not less than the
Required Principal Balance;
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1996-A Holders (which determination shall be
made without reference to whether any funds are available under the
Collateral Interest or the Cash Collateral Account);
(f) the Class A Invested Amount shall not be paid in full on or prior
to the Class A Final Scheduled Payment Date or the Class B Invested Amount
shall not be paid in full on or prior to the Class B Scheduled Payment
Date; or
(g) The Limited 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 The Limited 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 The Limited or for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and 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 The Limited of a voluntary
case under any Debtor Relief Law, or The Limited'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 The Limited or for any substantial part of its
property, or any general assignment for the benefit of creditors; or The
Limited shall have taken any corporate action in furtherance of any of the
foregoing actions;
then, in the case of any event described in Section 9(a), (b) or (e)
hereof, after the applicable grace period set forth in such Sections,
either Trustee or Investor Holders representing more than 50% of the
Invested Amount of this Series 1996-A by notice then given in writing to
Transferor and Servicer (and to Trustee if given by the Holders) may
declare that an early amortization event (a "Series 1996-A Early
Amortization Event") has occurred as of the date of such notice, and in the
case of any event described in Section 9(c), (d), (f) or (g) hereof, a
Series 1996-A Early Amortization Event shall occur without any notice or
other action on the part of Trustee or the Investor Holders immediately
upon the occurrence of such event.
SECTION 10. Series 1996-A Termination. The right of the Investor
Holders to receive payments from the Trust will terminate on the first
Business Day following the Series 1996-A Termination Date.
SECTION 11. Periodic Finance Charges and Other Fees. Transferor
hereby agrees that, except as otherwise required by any Requirement of Law,
or as is deemed by Transferor to be necessary in order for Transferor to
maintain its credit card business, based upon a good faith assessment by
Transferor, in its sole discretion, of the nature of the competition in the
credit card business, it shall not at any time 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 as of such date would be less than the then Base Rate.
SECTION 12. Limitations on Addition of Approved Portfolios.
Transferor may designate additional Approved Portfolios if (a) the Rating
Agency Condition is satisfied with respect to that designation and (b)
Transferor delivers to Trustee an Opinion of Counsel that all UCC financing
statements or amendments required to perfect the interest of the Trust in
Receivables arising in accounts included in each such Additional Portfolio
have been made.
SECTION 13. Counterparts. This Series Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all of such counterparts shall together constitute but one
and the same instrument.
SECTION 14. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 15. Additional Provisions. (a) Notwithstanding the provisions
of Section 2.10(a), the Discount Percentage may exceed 3%, so long as the
Rating Agency Condition is satisfied.
(b) Notwithstanding the provisions of Section 2.8, no new accounts
that would otherwise be Automatic Additional Accounts shall be treated as
such on any Addition Date if both of the following statements are true:
(i) an Automatic Addition Limitation Event has occurred, and
the Rating Agency Condition has not been satisfied as to the
resumption of treating new accounts as Automatic Additional Accounts;
and
(ii) the number of such Automatic Additional Accounts would
exceed an amount equal to the excess (if any) of (A) 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 (B)
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.
An "Automatic Addition Limitation Event" will be deemed to occur on
any Determination Date if:
(1) the average of the default ratio for that Determination Date
and the preceding two Determination Dates is greater than 1.5%, where
the "default ratio" for any Determination Date equals the percentage
equivalent of a fraction (A) the numerator of which is the aggregate
of the Default Amounts for all Accounts that became Defaulted Accounts
during the related Monthly Period and (B) the denominator of which is
the total Receivables as of the end of the sixth preceding Monthly
Period; or
(2) the average of the payment rate for that Determination Date
and the preceding two Determination Dates is less than 10%, where the
"payment rate" for any Determination Date equals the percentage
equivalent of a fraction (A) the numerator of which is the aggregate
Collections received during the related Monthly Period and (B) the
denominator of which is equal to the total Receivables held by the
Trust at the close of business for the Monthly Period immediately
prior to such related Monthly Period.
(c) The Additional Minimum Transferor Amount is hereby specified as an
additional amount to be considered part of the Minimum Transferor Amount
pursuant to clause (b) of the definition of Minimum Transferor Amount.
(d) Notwithstanding the provisions of Section 3.9(a), so long as any
of the Investor Certificates remain outstanding, Transferor shall make
deposits of the type referred to in that Section as if the antepenultimate
and penultimate sentences of the first grammatical paragraph of that
Section read as follows:
"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 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 Transferor Amount (up to the amount of such Principal
Receivables).".
Amounts deposited in the Excess Funding Account pursuant to this Section
15(d) shall be deemed for all purposes of the Agreement to have been
deposited pursuant to such penultimate sentence.
(e) Notwithstanding the definition of "Identified Portfolio" appearing
in Section 1.1, for purposes of Series 1996-A, the definition of
"Identified Portfolio" shall be as follows:
""Identified Portfolio" means any Accounts owned from time to
time by WFN and included in the private label credit card programs of
Bath & Body Works, Inc., Cacique, Inc., Lane Bryant, Inc., Lerner New
York, Inc., Express, Inc., Structure, Inc., Victoria's Secret Stores,
Inc., Victoria's Secret Catalogue, Inc., The Limited Stores, Inc.,
Limited Too, Inc., Abercrombie & Fitch, Inc., Henri Bendel, Inc. and
Brylane, L.P. (but limited, in the case of Brylane, L.P., to accounts
related to the Lane Bryant, Lerner New York and Roamans catalogues).
To avoid doubt, the foregoing programs include all cards issued under
the insignia of "Limited Fashion Group."".
(f) Notwithstanding Section 3.6, Servicer shall, in lieu of delivering
any annual report by a firm of nationally recognized independent public
accountants required to be delivered pursuant to such Section on or before
the 90th day following the end of 1996 and each subsequent calendar year,
deliver any such annual report on or before the 90th day following the end
of its 1996 fiscal year and each of its subsequent fiscal years.
(g) Notwithstanding Section 4.4: (i) during the Controlled
Amortization Period and the Early Amortization Period, Transferor may not
apply Shared Principal Collections as principal with respect to any
Variable Interest, unless such application of principal is made on any
Transfer Date or related Distribution Date after the application of Shared
Principal Collections pursuant to Section 4.15 and (ii) Shared Principal
Collections allocable to Series 1996-A pursuant to Section 4.4 shall be
withdrawn on each Transfer Date, rather than each Distribution Date.
Notwithstanding Section 4.5, Excess Finance Charge Collections allocable to
Series 1996-A pursuant to Section 4.5 shall be withdrawn on each Transfer
Date, rather than each Distribution Date.
SECTION 16. No Petition. Transferor, Servicer and Trustee, by
entering into this Series Supplement and each Holder, by accepting a Series
1996-A Certificate hereby covenant and agree that they will not at any time
institute against the Trust, or join in any institution against the Trust
of, any bankruptcy proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to
the Investor Holders, the Agreement or this Series Supplement.
SECTION 17. Amendments. This Series Supplement may be amended
pursuant to Section 13.1 of the Agreement. This Series Supplement may also
be amended by Transferor without the consent of Servicer, Trustee or any
Investor Holder if Transferor provides Trustee with: (i) an Opinion of
Counsel to the effect that such amendment or modification would (A) reduce
the risk that the Trust would be treated as taxable as a publicly traded
partnership pursuant to Internal Revenue Code section 7704 or (B) permit
the Trust or a relevant portion thereof to be treated as a "financial asset
securitization investment trust" and (C) in either case, (1) would not
cause the Trust to be classified, for Federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation and
(2) would not cause or constitute an event in which gain or loss would be
recognized by any Investor Holder; and (ii) a certificate that such
amendment or modification would not materially and adversely affect any
Investor Holder; provided that no such amendment shall be deemed effective
without Trustee's consent, if Trustee's rights, duties and obligations
hereunder are thereby modified. Prior to the execution of any such
amendment (other than an amendment pursuant to Section 13.1(a) of the
Agreement), Trustee shall furnish notification of the substance of such
amendment to each Rating Agency.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Series 1996-A Supplement to be duly executed by their respective officers
as of the day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
Transferor and Servicer
By:_________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee
By:_________________________
Name:
Title:
EXHIBIT A-1
FORM OF CERTIFICATE
-------------------
CLASS A
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $__________
CUSIP No.__________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.70% CLASS A
ASSET-BACKED CERTIFICATE, SERIES 1996-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class A Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-A Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-A Certificates are issued in two classes, the Class A
Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-A
Certificates with the intention that the Series 1996-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-A
Holder (or Series 1996-A Certificate Owner) by acceptance of its Series
1996-A Certificate (or in the case of a Series 1996-A Certificate Owner, by
virtue of such Series 1996-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-A Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-A Holder agrees that it will cause any Series
1996-A Certificate Owner acquiring an interest in a Series 1996-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class A
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class A Holder by virtue of the acceptance hereof assents and by
which the Class A Holder is bound.
This Class A Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class A Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-A Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-A Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class A
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class A Certificate to be duly executed under its official
seal.
By:____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
DATED:____________________
This is one of the 6.70% Class A Asset-Backed Certificates,
Series 1996-A referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:______________________
Authorized Signatory
EXHIBIT A-2
FORM OF CERTIFICATE
-------------------
CLASS B
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $_____________
CUSIP No._____________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.00% CLASS B
ASSET-BACKED CERTIFICATE, SERIES 1996-A
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class B Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-A Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-A Certificates are issued in two classes, the Class A
Certificates and the Class B Certificates (of which this certificate is
one), which are subordinated to the Class A Certificates in certain rights
of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-A
Certificates with the intention that the Series 1996-A Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-A
Holder (or Series 1996-A Certificate Owner) by acceptance of its Series
1996-A Certificate (or in the case of a Series 1996-A Certificate Owner, by
virtue of such Series 1996-A Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-A Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-A Holder agrees that it will cause any Series
1996-A Certificate Owner acquiring an interest in a Series 1996-A
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-A Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class B
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class B Holder by virtue of the acceptance hereof assents and by
which the Class B Holder is bound.
This Class B Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class B Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-A Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-A Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class B
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class B Certificate to be duly executed under its official
seal.
By:_________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
DATED:______________________
This is one of the 7.00% Class B Asset-Backed Certificates, Series
1996-A referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:__________________________
Authorized Signatory
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO TRUSTEE
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
SERIES 1996-A
MONTHLY PERIOD ENDING ______________, ____
EXHIBIT C
FORM OF MONTHLY SERIES 1996-A
-----------------------------
HOLDERS' STATEMENT
------------------
SERIES 1996-A
WORLD FINANCIAL NETWORK NATIONAL BANK
________________________________________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
________________________________________
EXECUTION COPY
____________________________________
WORLD FINANCIAL NETWORK NATIONAL BANK
Transferor and Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Investor Holders
____________________________________
SERIES 1996-B SUPPLEMENT
Dated as of May 9, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of January 17, 1996
______________________________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
$283,500,000 6.95% Class A Asset-Backed
Certificates, Series 1996-B
$29,750,000 7.20% Class B Asset-Backed
Certificates, Series 1996-B
________________________________________________
TABLE OF CONTENTS
Page
SECTION 1. Designation............................................ 1
SECTION 2. Definitions............................................ 2
SECTION 3. Servicing Fee.......................................... 20
SECTION 4. Optional Repurchase; Reassignment and
Termination Provisions................................. 21
SECTION 5. Delivery and Payment for the Investor
Certificates........................................... 22
SECTION 6. Depository; Form of Delivery of Investor
Certificates........................................... 22
SECTION 7. Article IV of Agreement................................ 22
SECTION 4.6 Rights of Holders and the Collateral
Interest Holder.................................. 22
SECTION 4.7 Allocations...................................... 23
SECTION 4.8 Determination of Monthly Interest................ 27
SECTION 4.9 Determination of Monthly Principal............... 28
SECTION 4.10 Coverage of Required Amount...................... 29
SECTION 4.11 Monthly Payments................................. 31
SECTION 4.12 Investor Charge-Offs............................. 35
SECTION 4.13 Excess Spread.................................... 36
SECTION 4.14 Reallocated Principal Collections................ 38
SECTION 4.15 Shared Principal Collections; Amounts
Transferred from the Excess Funding
Account to the Principal Account................. 40
SECTION 4.16 Finance Charge Account,
Principal Account, Principal Funding
Account and Distribution Account................. 41
SECTION 4.17 Reserve Account.................................. 43
SECTION 4.18 Cash Collateral Account.......................... 44
SECTION 4.19 Determination of LIBOR........................... 46
SECTION 4.20 Transferor's or Servicer's Failure to
Make a Deposit or Payment........................ 46
SECTION 8. Article V of the Agreement............................. 46
SECTION 5.1 Distributions.................................... 47
SECTION 5.2 Reports.......................................... 47
SECTION 9. Series 1996-B Early Amortization Events................ 48
SECTION 10. Series 1996-B Termination.............................. 50
SECTION 11. Periodic Finance Charges and Other Fees................ 50
SECTION 12. Limitations on Addition of Approved Portfolios......... 50
SECTION 13. Counterparts........................................... 51
SECTION 14. Governing Law.......................................... 51
SECTION 15. Additional Provisions.................................. 51
SECTION 16. No Petition............................................ 53
SECTION 17. Amendments............................................. 53
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
and Notification to Trustee
EXHIBIT C Form of Monthly Series 1996-B
Holders' Statement
SERIES 1996-B SUPPLEMENT, dated as of May 9, 1996 (this "Series
Supplement"), between WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association, as Transferor ("Transferor") and Servicer
("Servicer"), and THE BANK OF NEW YORK, as Trustee ("Trustee"), under the
Pooling and Servicing Agreement dated as of January 17, 1996 between the
same parties (the "Agreement").
Section 6.3 of the Agreement provides, among other things, that
Transferor and Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the delivery by
Trustee to Transferor for the execution and redelivery to Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, Transferor and the Trust shall
create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. Designation. (a) There is hereby created a Series of
Investor Certificates to be issued in two classes pursuant to the Agreement
and this Series Supplement and to be known together as the "Series 1996-B
Certificates." The two classes shall be designated the 6.95% Class A
Asset-Backed Certificates, Series 1996-B (the "Class A Certificates") and
the 7.20% Class B Asset-Backed Certificates, Series 1996-B (the "Class B
Certificates"). The Class A Certificates and the Class B Certificates shall
be substantially in the form of Exhibits A-1 and A-2, respectively. In
addition, there is hereby created a third Class which constitutes an
uncertificated interest in the Trust, shall be deemed to be an "Investor
Certificate" for all purposes under the Agreement and this Series
Supplement, except as expressly provided in Section 1(c) of this Series
Supplement, and shall be known as the Collateral Interest, Series 1996-B
and have the rights assigned to the Collateral Interest in this Series
Supplement. The Collateral Interest Holder shall be deemed to be an
"Investor Holder" for all purposes under the Agreement and this Series
Supplement, except as expressly provided in Section 1(c) of this Series
Supplement.
(b) Series 1996-B shall be included in Group One (as defined below).
Series 1996-B shall not be subordinated to any other Series.
(c) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Collateral
Interest Holder of amounts owing on the Closing Date pursuant to the Loan
Agreement. Notwithstanding the foregoing, except as expressly provided
herein, the provisions of Article VI and Article XII of the Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates shall not be
applicable to the Collateral Interest.
SECTION 2. Definitions. If any term or provision contained herein
shall conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
References to any Article or Section are references to Articles or Sections
of the Agreement, except as otherwise expressly provided. All capitalized
terms not otherwise defined herein are defined in the Agreement, and the
interpretive provisions set out in Section 1.2 of the Agreement apply to
this Series Supplement. Each capitalized term defined herein relates only
to the Investor Certificates and no other Series of Certificates issued by
the Trust.
"Accumulation Shortfall" initially means zero and thereafter means,
with respect to any Monthly Period during the Controlled Accumulation
Period, the excess, if any, of the Controlled Deposit Amount for the
previous Monthly Period over the amount deposited into the Principal
Funding Account pursuant to Section 4.11(e)(i) with respect to the Class A
Certificates for the previous Monthly Period.
"Additional Minimum Transferor Amount" means (a) as of any date of
determination falling in November, December and January of each calendar
year, the product of (i) 2% and (ii) the sum of (A) the aggregate Principal
Receivables and (B) amounts on deposit in the Excess Funding Account and
(b) as of any date of determination falling in any other month, zero;
provided that the amount specified in clause (a) shall be without
duplication with the amount specified as the "Additional Minimum Transferor
Amount" in the Supplement relating to the Series 1996-A Certificates issued
by the Trust (or in any future Supplement that specifies such an amount and
indicates that such amount is without duplication of the amount specified
in clause (a)). The Additional Minimum Transferor Amount is specified
pursuant to Section 15(c) of this Series supplement as an additional amount
to be considered part of the Minimum Transferor Amount.
"Adjusted Invested Amount" means, on any date of determination, an
amount equal to the sum of (a) the Class A Adjusted Invested Amount and (b)
the Class B Invested Amount and (c) the Collateral Interest.
"Aggregate Investor Default Amount" means, as to any Monthly Period,
the sum of the Investor Default Amounts in respect of such Monthly Period.
"Automatic Addition Limitation Event" is defined in Section 15(b) of
this Series Supplement.
"Available Cash Collateral Amount" means with respect to any Transfer
Date, the lesser of (a) the amount on deposit in the Cash Collateral
Account on such date (before giving effect to any deposit to, or withdrawal
from the Cash Collateral Account to be made with respect to such date) and
(b) the Required Enhancement Amount as of the prior Transfer Date.
"Available Investor Principal Collections" means, as to any Monthly
Period, an amount equal to (a) the Investor Principal Collections for such
Monthly Period, minus (b) the amount of Reallocated Principal Collections
with respect to such Monthly Period which pursuant to Section 4.14 are
required to fund the Class A Required Amount and the Class B Required
Amount (other than any portions thereof that are applied pursuant to (x)
Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such portions
pursuant to Section 4.13(c) are available to pay the Class B Investor
Default Amount or the Class B Uncovered Dilution Amount), which shall,
without duplication, be included as Available Investor Principal
Collections), plus (c) the amount of Shared Principal Collections with
respect to Group One that are allocated to Series 1996-B in accordance with
Section 4.15(b).
"Available Reserve Account Amount" means, as to any Transfer Date,
the lesser of (a) the amount on deposit in the Reserve Account on such date
(after taking into account any interest and earnings retained in the
Reserve Account pursuant to Section 4.17(b) on such date, but before giving
effect to any deposit made or to be made pursuant to Section 4.13(i) to the
Reserve Account on such date) and (b) the Required Reserve Account Amount.
"Base Rate" means, as to any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is equal to the
sum of the Class A Monthly Interest, the Class B Monthly Interest and the
Collateral Monthly Interest, each for the related Distribution Period, and
the Servicing Fee with respect to such Monthly Period and the denominator
of which is the Invested Amount as of the close of business on the last day
of such Monthly Period.
"Cash Collateral Account" is defined in Section 4.18(a).
"Class A Additional Interest" is defined in Section 4.8(a).
"Class A Adjusted Invested Amount" means, on any date of
determination, an amount equal to the Class A Invested Amount minus the
Principal Funding Account Balance on such date of determination.
"Class A Available Funds" means, as to any Monthly Period, an amount
equal to the sum of (a) the Class A Floating Allocation Percentage of the
sum of (i) the Collections of Finance Charge Receivables allocated to the
Investor Certificates and deposited in the Finance Charge Account for such
Monthly Period (or required to be deposited in the Finance Charge Account
on the related Transfer Date (before giving effect to any netting) with
respect to the preceding Monthly Period pursuant to Section 4.7(d)) and
(ii) the interest and earnings on the Cash Collateral Account to be treated
as Collections of Finance Charge Receivables pursuant to Section 4.18(b) on
the related Transfer Date, (b) with respect to any Monthly Period during
the Controlled Accumulation Period prior to the payment in full of the
Class A Invested Amount, the Principal Funding Investment Proceeds arising
pursuant to Section 4.16(b), if any, with respect to the related Transfer
Date and (c) amounts, if any, to be withdrawn from the Reserve Account
which will be deposited into the Finance Charge Account on the related
Transfer Date pursuant to Sections 4.17(b) and 4.17(d).
"Class A Certificate Rate" means a per annum rate equal to 6.95%.
"Class A Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class A Deficiency Amount" is defined in Section 4.8(a).
"Class A Fixed Allocation Percentage" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100% or be less than zero) of a fraction, the numerator
of which is the Class A Invested Amount as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the numerator used in determining the related Fixed Allocation Percentage;
provided that if Series 1996-B is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Accumulation Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Class A Adjusted Invested Amount (less
the balance on deposit in the Principal Account that is not subject to
being treated as Reallocated Principal Collections or Shared Principal
Collections) as of the last day of the revolving period for such Paired
Series).
"Class A Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class A Adjusted
Invested Amount as of the close of business on the last day of the
preceding Monthly Period and the denominator of which is equal to the
Adjusted Invested Amount as of the close of business on such last day;
provided that, with respect to the first Monthly Period, the Class A
Floating Allocation Percentage means the percentage equivalent of a
fraction, the numerator of which is the Class A Initial Invested Amount and
the denominator of which is the Initial Invested Amount.
"Class A Holder" means the Person in whose name a Class A Certificate
is registered in the Certificate Register.
"Class A Initial Invested Amount" means the aggregate initial
principal amount of the Class A Certificates, which is $283,500,000.
"Class A Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class A Holders prior to
such date and minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge-Offs pursuant to Section 4.12(a) over Class A
Investor Charge-Offs reimbursed pursuant to Section 4.13(b) prior to such
date of determination, minus (d) the amount of any reduction in the Class A
Invested Amount as a result of the purchase by Transferor and subsequent
cancellation of the Class A Certificates pursuant to Section 4(d) of this
Series Supplement; provided that the Class A Invested Amount may not be
reduced below zero.
"Class A Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class A Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Accumulation Period
or Early Amortization Period, the Class A Fixed Allocation Percentage.
"Class A Investor Charge-Off" is defined in Section 4.12(a).
"Class A Investor Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Aggregate Investor Default Amount
for the related Monthly Period and (b) the Class A Floating Allocation
Percentage applicable for the related Monthly Period.
"Class A Monthly Interest" is defined in Section 4.8(a).
"Class A Monthly Principal" is defined in Section 4.9(a).
"Class A Reduction Amount" is defined in Section 4.12(a).
"Class A Required Amount" is defined in Section 4.10(a).
"Class A Scheduled Payment Date" means the May 2003 Distribution
Date.
"Class A Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class A Uncovered Dilution Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Uncovered Dilution Amount for the
related Monthly Period and (b) the Class A Investor Allocation Percentage
applicable for the related Monthly Period.
"Class B Additional Interest" is defined in Section 4.8(b).
"Class B Available Funds" means, as to any Monthly Period, an amount
equal to the Class B Floating Allocation Percentage of the sum of (a) the
Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date (before giving effect to any netting) with respect to
the preceding Monthly Period pursuant to Section 4.7(d)) and (b) interest
and earnings on the Cash Collateral Account to be treated as Collections of
Finance Charge Receivables pursuant to Section 4.18(b) on the related
Transfer Date.
"Class B Certificate Rate" means a per annum rate equal to 7.20%.
"Class B Certificates" is defined in Section 1(a) of this Series
Supplement.
"Class B Deficiency Amount" is defined in Section 4.8(b).
"Class B Fixed Allocation Percentage" means, for any Monthly Period
following the Revolving Period, the percentage equivalent (which percentage
shall never exceed 100% or be less than zero) of a fraction, the numerator
of which is the Class B Invested Amount as of the close of business on the
last day of the Revolving Period and the denominator of which is equal to
the numerator used in determining the related Fixed Allocation Percentage;
provided that if Series 1996-B is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Accumulation Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Class B Invested Amount (less, if the
Class A Fixed Allocation Percentage is zero, the balance on deposit in the
Principal Account (that is not subject to being treated as Reallocated
Principal Collections or Shared Principal Collections) and on deposit in
the Principal Funding Account, in each case to the extent not subtracted in
reducing the Class A Fixed Allocation Percentage to zero) as of the last
day of the revolving period for such Paired Series).
"Class B Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class B Invested Amount
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Adjusted Invested Amount as of
the close of business on such last day; provided that, with respect to the
first Monthly Period, the Class B Floating Allocation Percentage means the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Invested Amount and the denominator of which is the Initial
Invested Amount.
"Class B Holder" means the Person in whose name a Class B Certificate
is registered in the Certificate Register.
"Class B Initial Invested Amount" means the aggregate initial
principal amount of the Class B Certificates, which is $29,750,000.
"Class B Invested Amount" means, on any date of determination, an
amount equal to (a) the Class B Initial Invested Amount, minus (b) the
aggregate amount of principal payments made to Class B Holders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates pursuant to Section 4.12(b), minus (d) the
amount of the Reallocated Class B Principal Collections allocated pursuant
to Section 4.14(a) on all prior Transfer Dates for which the Collateral
Interest has not been reduced, minus (e) an amount equal to the amount by
which the Class B Invested Amount has been reduced on all prior Transfer
Dates pursuant to Section 4.12(a) and plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant
to Section 4.13(d), for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e), minus (g) the amount of
any reduction in the Class B Invested Amount as a result of the purchase by
Transferor and subsequent cancellation of Class B Certificates pursuant to
Section 4(d) of this Series Supplement; provided that the Class B Invested
Amount may not be reduced below zero.
"Class B Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Class B Floating Allocation Percentage, and (b) with
respect to Principal Receivables during the Controlled Accumulation Period
or Early Amortization Period, the Class B Fixed Allocation Percentage.
"Class B Investor Charge-Off" is defined in Section 4.12(b).
"Class B Investor Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Aggregate Investor Default Amount
for the related Monthly Period and (b) the Class B Floating Allocation
Percentage applicable for the related Monthly Period.
"Class B Monthly Interest" is defined in Section 4.8(b).
"Class B Monthly Principal" is defined in Section 4.9(b).
"Class B Reduction Amount" is defined in Section 4.12(b).
"Class B Required Amount" is defined in Section 4.10(b).
"Class B Scheduled Payment Date" means the June 2003 Distribution
Date.
"Class B Servicing Fee" is defined in Section 3(a) of this Series
Supplement.
"Class B Uncovered Dilution Amount" means, as to each Transfer Date,
an amount equal to the product of (a) the Uncovered Dilution Amount for the
related Monthly Period and (b) the Class B Investor Allocation Percentage
applicable for the related Monthly Period.
"Closing Date" means May 9, 1996.
"Collateral Available Funds" means, as to any Monthly Period, an
amount equal to the Collateral Floating Allocation Percentage of the sum of
(a) the Collections of Finance Charge Receivables allocated to the Investor
Certificates and deposited in the Finance Charge Account for such Monthly
Period (or required to be deposited in the Finance Charge Account on the
related Transfer Date (before giving effect to any permitted netting) with
respect to the preceding Monthly Period pursuant to Section 4.7(d)) and (b)
interest and earnings on the Cash Collateral Account to be treated as
Collections of Finance Charge Receivables pursuant to Section 4.18(b) on
the related Transfer Date.
"Collateral Charge-Off" is defined in Section 4.12(c).
"Collateral Default Amount" means, as to any Transfer Date, an amount
equal to the product of (a) the Aggregate Investor Default Amount for the
related Monthly Period and (b) the Collateral Floating Allocation
Percentage applicable for the related Monthly Period.
"Collateral Fixed Allocation Percentage" means, for any Monthly
Period following the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100% or be less than zero) of a fraction, the
numerator of which is the Collateral Interest as of the close of business
on the last day of the Revolving Period and the denominator of which is
equal to the numerator used in determining the related Fixed Allocation
Percentage; provided that if Series 1996-B is paired with a Paired Series
and an Early Amortization Event occurs with respect to such Paired Series
during the Controlled Accumulation Period, Transferor may, by written
notice delivered to Trustee and Servicer, designate a different numerator
(provided that such numerator is not less than the Collateral Interest
(less, if the Class A Fixed Allocation Percentage and the Class B Fixed
Allocation Percentage are zero, the balance on deposit in the Principal
Account that is not subject to being treated as Reallocated Principal
Collections or Shared Principal Collections, to the extent not subtracted
in reducing the Class A Fixed Allocation Percentage and/or the Class B
Fixed Allocation Percentage to zero) as of the last day of the revolving
period for such Paired Series).
"Collateral Floating Allocation Percentage" means, for any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Collateral Interest as
of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Adjusted Invested Amount as of
the close of business on such last day; provided that, with respect to the
first Monthly Period, the Collateral Floating Allocation Percentage means
the percentage equivalent of a fraction, the numerator of which is the
Collateral Initial Interest and the denominator of which is the Initial
Invested Amount.
"Collateral Initial Interest" means $36,750,000.
"Collateral Interest" means, on any date of determination, a
fractional undivided interest in the Trust which shall consist of the right
to receive, to the extent necessary to make the required payments to the
Collateral Interest Holder under this Series Supplement, the portion of
Collections allocable thereto under the Agreement and this Series
Supplement, funds on deposit in the Collection Account allocable thereto
pursuant to the Agreement and this Series Supplement and other amounts to
be paid in respect thereof as provided in the Agreement and this Series
Supplement. On any date, for purposes of all calculations in the Agreement
and this Series Supplement, the amount of the Collateral Interest shall be
an amount equal to (a) the Collateral Initial Interest, minus (b) the
aggregate amount of principal payments made to the Collateral Interest
Holder prior to such date, minus (c) the aggregate amount of Collateral
Charge-Offs for all prior Transfer Dates pursuant to Section 4.12(c), minus
(d) the amount of Reallocated Principal Collections allocated pursuant to
Sections 4.14(a) and (b) on all prior Transfer Dates, minus (e) an amount
equal to the amount by which the Collateral Interest has been reduced on
all prior Transfer Dates pursuant to Sections 4.12(a) and (b), and plus (f)
the aggregate amount of Excess Spread allocated and available on all prior
Transfer Dates pursuant to Section 4.13(h), for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e);
provided that the Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" means the entity so designated in the
Loan Agreement.
"Collateral Interest Servicing Fee" is defined in Section 3(a) of
this Series Supplement.
"Collateral Investor Allocation Percentage" means, for any Monthly
Period, (a) with respect to Default Amounts, Uncovered Dilution Amounts and
Finance Charge Receivables at any time and Principal Receivables during the
Revolving Period, the Collateral Floating Allocation Percentage, and (b)
with respect to Principal Receivables during the Controlled Accumulation
Period or Early Amortization Period, the Collateral Fixed Allocation
Percentage.
"Collateral Monthly Interest" is defined in Section 4.8(c).
"Collateral Monthly Principal" is defined in Section 4.9(c).
"Collateral Rate" means, for any Distribution Period, the rate
specified in the Loan Agreement; provided that the Collateral Rate shall
not exceed a per annum rate of 1.1% in excess of LIBOR for such
Distribution Period for purposes of this Supplement and the Agreement.
"Collateral Reduction Amount" is defined in Section 4.12(c).
"Collateral Uncovered Dilution Amount" means, as to each Transfer
Date, an amount equal to the product of (a) the Uncovered Dilution Amount
for the related Monthly Period and (b) the Collateral Investor Allocation
Percentage applicable for the related Monthly Period.
"Controlled Accumulation Amount" means (a) for any Transfer Date with
respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Invested Amount, $23,625,000; provided that if the
Controlled Accumulation Period Length is modified pursuant to Section
4.11(i), (i) the Controlled Accumulation Amount for each Transfer Date with
respect to the Controlled Accumulation Period shall mean the amount
determined in accordance with Section 4.11(i) on the date on which the
Controlled Accumulation Period has most recently been modified and (ii) the
sum of the Controlled Accumulation Amounts for all Transfer Dates with
respect to the modified Controlled Accumulation Period shall not be less
than the Class A Invested Amount.
"Controlled Accumulation Date" means May 1, 2002.
"Controlled Accumulation Period" means, unless an Early Amortization
Event shall have occurred prior thereto, the period commencing at the
beginning of business on the Controlled Accumulation Date or such later
date as is determined in accordance with Section 4.11(i) and ending on the
first to occur of (a) the Early Amortization Commencement Date and (b) the
Series 1996-B Termination Date.
"Controlled Accumulation Period Length" is defined in Section
4.11(i).
"Controlled Deposit Amount" means, with respect to any Transfer Date,
the sum of (a) the Controlled Accumulation Amount for such Transfer Date
and (b) any existing Accumulation Shortfall.
"Covered Amount" means an amount determined as of each Transfer Date
with respect to any Distribution Period as the product of (a) (i)
one-twelfth, times (ii) the Class A Certificate Rate, and (b) the Principal
Funding Account Balance as of the Record Date preceding such Transfer Date.
"Cumulative Principal Shortfall" means the sum of the Principal
Shortfalls (as such term is defined in each of the related Supplements) for
each Series in Group One.
"Default Amount" means, as to any Defaulted Account, the amount of
Principal Receivables (other than Ineligible Receivables, unless there is
an Insolvency Event with respect to Transferor) in such Defaulted Account
on the day it became a Defaulted Account.
"Defaulted Account" means an Account in which there are Defaulted
Receivables.
"Deficiency Amount" means, at any time of determination, the sum of
the Class A Deficiency Amount and the Class B Deficiency Amount.
"Dilution" means any downward adjustment made by Servicer in the
amount of any Receivable (a) because of a rebate, refund, unauthorized
charge, fraudulent or counterfeit charge or billing error to an
accountholder, (b) because such Receivable was created in respect of
merchandise which was refused or returned by an accountholder or (c) for
any other reason other than receiving Collections therefor or charging off
such amount as uncollectible.
"Distribution Account" is defined in Section 4.16(a).
"Distribution Date" means June 17, 1996 and the fifteenth day of each
calendar month thereafter, or if such fifteenth day is not a Business Day,
the next succeeding Business Day.
"Distribution Period" means, with respect to any Distribution Date,
the period from and including the previous Distribution Date through the
day preceding such Distribution Date, except the initial Distribution
Period will be the period from and including the Closing Date through the
day preceding the initial Distribution Date.
"Early Amortization Commencement Date" means the date on which an
Early Amortization Event is deemed to occur pursuant to Section 9.1 of the
Agreement or a Series 1996-B Early Amortization Event is deemed to occur
pursuant to Section 9 of this Series Supplement.
"Early Amortization Period" means the period commencing on the Early
Amortization Commencement Date and ending on the Series 1996-B Termination
Date.
"Enhancement" means, with respect to the Class A Certificates, the
subordination of the Class B Certificates and the Collateral Interest and
the Cash Collateral Account, and with respect to the Class B Certificates,
the subordination of the Collateral Interest and the Cash Collateral
Account.
"Enhancement Agreement" means the Loan Agreement.
"Enhancement Provider" means the Collateral Interest Holder.
"Enhancement Surplus" means, with respect to any Transfer Date, the
excess, if any, of (a) the amount on deposit in the Cash Collateral
Account, plus the Collateral Interest (in each case after giving effect to
any withdrawals, increases or reductions made with respect to such date
other than as the result of the existence of an Enhancement Surplus) over
(b) the Required Enhancement Amount.
"Excess Principal Funding Investment Proceeds" means, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" means, with respect to any Transfer Date and subject
to Section 4.7(d), the sum of (a) the sum of the amounts, if any, with
respect to such Transfer Date specified pursuant to Sections 4.11(a)(iv),
4.11(b)(iii) and 4.11(c)(ii), plus (b) the Excess Finance Charge
Collections, if any, allocated to Series 1996-B pursuant to Section 4.5 for
that Transfer Date.
"Finance Charge Account" is defined in Section 4.16(a).
"Finance Charge Shortfall" means, with respect to any Transfer Date,
an amount equal to the excess, if any, of (a) the sum of the amounts
specified in clauses (a) through (k) of Section 4.13 for that Transfer Date
over (b) the sum of the amounts, if any, with respect to such Transfer Date
specified pursuant to Sections 4.11(a)(iv), 4.11(b)(iii) and 4.11(c)(ii).
"Fitch" means Fitch Investors Service, L.P. or its successors.
"Fixed Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Invested Amount as of the close of business on the last day of the
Revolving Period and the denominator of which is the greater of (a) the
aggregate amount of Principal Receivables in the Trust determined as of the
close of business on the last day of the prior Monthly Period and (b) the
sum of the numerators used to calculate the Investor Percentages (as such
term is defined in the Agreement) for allocations with respect to Principal
Receivables for all outstanding Series on such date of determination;
provided that if Series 1996-B is paired with a Paired Series and an Early
Amortization Event occurs with respect to such Paired Series during the
Controlled Accumulation Period, Transferor may, by written notice delivered
to Trustee and Servicer, designate a different numerator (provided that
such numerator is not less than the Adjusted Invested Amount (less the
balance on deposit in the Principal Account that is not subject to being
treated as Reallocated Principal Collections or Shared Principal
Collections) as of the last day of the revolving period for such Paired
Series); provided further that if one or more Reset Dates occur in a
Monthly Period, the Fixed Allocation Percentage for the portion of the
Monthly Period falling on and after each such Reset Date (the "subject
Reset Date") and prior to any subsequent Reset Date will be determined
using a denominator equal to the greater of the amounts specified in
clauses (a) and (b) above determined as of the close of business on the
subject Reset Date.
"Floating Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the Adjusted Invested Amount as of the close of business on the last day of
the preceding Monthly Period (or with respect to the first Monthly Period,
the Initial Invested Amount) and the denominator of which is the greater of
(a) the aggregate amount of Principal Receivables as of the close of
business on the last day of the preceding Monthly Period (or with respect
to the first Monthly Period, the aggregate amount of Principal Receivables
in the Trust as of the close of business on the day immediately preceding
the Closing Date), and (b) the sum of the numerators used to calculate the
Investor Percentages (as such term is defined in the Agreement) for
allocations with respect to Finance Charge Receivables, Default Amounts,
Uncovered Dilution Amounts or Principal Receivables, as applicable, for all
outstanding Series on such date of determination; provided that if one or
more Reset Dates occur in a Monthly Period, the Floating Allocation
Percentage for the portion of the Monthly Period falling on and after each
such Reset Date (the "subject Reset Date") and prior to any subsequent
Reset Date will be determined using a denominator equal to the greater of
the amounts specified in clauses (a) and (b) above determined as of the
close of business on the subject Reset Date.
"Group One" means Series 1996-B and each other Series specified in
the related Supplement to be included in Group One.
"Initial Invested Amount" means $350,000,000.
"Invested Amount" means, on any date of determination, an amount
equal to the sum of (a) the Class A Invested Amount, (b) the Class B
Invested Amount and (c) the Collateral Interest, each as of such date.
"Investor Certificates" means the Class A Certificates, the Class B
Certificates and the Collateral Interest.
"Investor Default Amount" means, with respect to any Receivable in a
Defaulted Account, an amount equal to the product of (a) the Default Amount
and (b) the Floating Allocation Percentage on the day such Account became a
Defaulted Account.
"Investor Holder" means, for all purposes of the Agreement and this
Series Supplement, (a) with respect to the Class A Certificates, the holder
of record of a Class A Certificate, (b) with respect to the Class B
Certificates, the holder of record of a Class B Certificate and (c) with
respect to the Collateral Interest, the Collateral Interest Holder.
"Investor Percentage" means, for any Monthly Period, (a) with respect
to Finance Charge Receivables and Default Amounts at any time and Principal
Receivables during the Revolving Period, the Floating Allocation Percentage
and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or the Early Amortization Period, the Fixed Allocation
Percentage.
"Investor Principal Collections" means, with respect to any Monthly
Period, the sum of (a) the aggregate amount deposited (or required to be
deposited on the related Transfer Date (before giving effect to any
permitted netting) pursuant to Section 4.7(d)) into the Principal Account
for such Monthly Period pursuant to Sections 4.7(a)(ii) and (iii),
4.7(b)(ii), (iii) and (iv), or 4.7(c)(ii), (iii) and (iv), in each case, as
applicable to such Monthly Period, (b) the aggregate amount to be treated
as Investor Principal Collections pursuant to Sections 4.11(a)(iii), and
4.13(a), (b), (c), (d), (g) and (h) for such Monthly Period (other than
such amount paid from Reallocated Principal Collections), and (c) the
aggregate amount transferred or required to be transferred on the related
Transfer Date (before giving effect to any permitted netting pursuant to
Section 4.7(d)) from the Excess Funding Account into the Principal Account
pursuant to Section 4.15(d).
"LIBOR" means, for each Distribution Period, the London interbank
offered rate for one-month United States dollar deposits (reserve adjusted
as provided for therein), as determined by Trustee in accordance with the
Loan Agreement.
"Loan Agreement" means the agreement among Transferor, Servicer,
Trustee, and the Collateral Interest Holder, dated as of May 9, 1996, as
amended, supplemented or modified from time to time.
"Paired Series" means a Series that has been paired with Series
1996-B (which Series may be prefunded or partially prefunded or may be a
Variable Interest) such that a reduction of the Adjusted Invested Amount
results in (or permits) an increase of the invested amount of the paired
Series.
"Portfolio Adjusted Yield" means, with respect to any Transfer Date,
the average of the percentages obtained for each of the three preceding
Monthly Periods by subtracting the Base Rate from the Portfolio Yield for
such Monthly Period and deducting 0.50% from the result for each Monthly
Period.
"Portfolio Yield" means, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is
an amount equal to the sum of (a) the amount of Collections of Finance
Charge Receivables deposited (or required to be deposited on the related
Transfer Date (before giving effect to any permitted netting), into the
Finance Charge Account and allocable to the Investor Certificates for such
Monthly Period and (b) the Principal Funding Investment Proceeds deposited
or required to be deposited into the Finance Charge Account on the Transfer
Date (before giving effect to any permitted netting) related to such
Monthly Period, (c) the amount of the Reserve Draw Amount (up to the
Available Reserve Account Amount) plus any amounts of interest and earnings
described in Section 4.17, and (d) interest and earnings on the Cash
Collateral Account to be treated as Collections of Finance Charge
Receivables allocable to the Investor Certificates on the Transfer Date
related to such Monthly Period, as described in Section 4.18(b), each
deposited or required to be deposited into the Finance Charge Account on
the Transfer Date (before giving effect to any permitted netting) relating
to such Monthly Period, such sum to be calculated on a cash basis after
subtracting the Aggregate Investor Default Amount for such Monthly Period,
and the denominator of which is the Invested Amount as of the close of
business on the last day of such Monthly Period.
"Principal Account" is defined in Section 4.16(a).
"Principal Funding Account" is defined in Section 4.16(a).
"Principal Funding Account Balance" means, with respect to any date
of determination, the principal amount, if any, on deposit in the Principal
Funding Account on such date of determination.
"Principal Funding Investment Proceeds" means, with respect to each
Transfer Date, the investment earnings on funds in the Principal Funding
Account (net of investment expenses and losses) for the period from and
including the immediately preceding Transfer Date to but excluding such
Transfer Date.
"Principal Funding Investment Shortfall" means, with respect to each
Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such
Transfer Date are less than the Covered Amount determined as of such
Transfer Date.
"Principal Shortfall" means, with respect to any Transfer Date, the
excess, if any, of (a) (i) with respect to any Transfer Date relating to
the Controlled Accumulation Period, the sum of (A) the Controlled Deposit
Amount for such Transfer Date, (B) on any Transfer Date after the Transfer
Date on which the Class A Adjusted Invested Amount is reduced to zero, the
Class B Invested Amount and (C) the lesser of the Enhancement Surplus (if
any) and the Collateral Interest for such Transfer Date, (ii) with respect
to any Transfer Date during the Early Amortization Period, the Adjusted
Invested Amount and (iii) with respect to any Transfer Date relating to the
Revolving Period, the amount specified in clause (a)(i)(C) above over (b)
the Investor Principal Collections minus the Reallocated Principal
Collections (other than any portions thereof that are applied pursuant to
(x) Section 4.11(a)(iii) and (y) Section 4.13(c) (to the extent such
portions pursuant to Section 4.13(c) are available to pay the Class B
Investor Default Amount or the Class B Uncovered Dilution Amount)) for such
Transfer Date.
"Rating Agency" means Moody's, S&P and Fitch.
"Rating Agency Condition" means the notification in writing by each
Rating Agency to Transferor, Servicer and Trustee that an action will not
result in any Rating Agency reducing or withdrawing its then existing
rating of the Class A Certificates or the Class B Certificates.
"Reallocated Class B Principal Collections" is defined in Section
4.14.
"Reallocated Collateral Principal Collections" is defined in Section
4.14.
"Reallocated Principal Collections" is defined in Section 4.14.
"Record Date" means, with respect to any Distribution Date, the last
Business Day of the calendar month preceding such Distribution Date.
"Required Cash Collateral Amount" means, with respect to any date of
determination, the Required Enhancement Amount less the Collateral
Interest.
"Required Draw Amount" is defined in Section 4.18(c).
"Required Enhancement Amount" means, with respect to each Transfer
Date, the greater of (a) an amount equal to 13% of the Adjusted Invested
Amount on such Transfer Date, after taking into account deposits into the
Principal Funding Account on such Transfer Date and payments (including
payments on the Collateral Interest) to be made on the related Distribution
Date and (b) $10,500,000; provided that (x) if, on or prior to such
Transfer Date, there has been any Required Draw Amount pursuant to Section
4.18(c) or any reductions in the Collateral Interest pursuant to clauses
(c), (d) or (e) of the definition of such term, or an Early Amortization
Event has occurred with respect to Series 1996-B, then the Required
Enhancement Amount for such Transfer Date shall, subject to clauses (y) and
(z), equal the Required Enhancement Amount on the Transfer Date immediately
preceding such reduction, Required Draw Amount or Early Amortization Event,
(y) in no event shall the Required Enhancement Amount exceed the sum of the
outstanding principal amounts of (i) the Class A Certificates and (ii) the
Class B Certificates, each as of the last day of the Monthly Period
preceding such Transfer Date after taking into account the payments to be
made on the related Distribution Date and (z) the Required Enhancement
Amount may be reduced or increased at Transferor's option at any time if
Transferor, Servicer, the Collateral Interest Holder and Trustee have been
provided evidence that the Rating Agency Condition has been satisfied.
"Required Reserve Account Amount" means, with respect to any Transfer
Date on or after the Reserve Account Funding Date, an amount equal to (a)
1% of the outstanding principal balance of the Class A Certificates or (b)
any other amount designated by Transferor; provided that if such
designation is of a lesser amount, Transferor shall (i) provide Servicer,
the Collateral Interest Holder and Trustee with evidence that the Rating
Agency Condition has been satisfied and (ii) deliver to Trustee a
certificate of an authorized officer to the effect that, based on the facts
known to such officer at such time, in the reasonable belief of Transferor,
such designation will not cause an Early Amortization Event or an event
that, after the giving of notice or the lapse of time, would cause an Early
Amortization Event to occur with respect to Series 1996-B.
"Required Retained Transferor Percentage" means, for purposes of
Series 1996-B, 7%.
"Reserve Account" is defined in Section 4.17(a).
"Reserve Account Funding Date" means the Transfer Date which occurs
not later than the earliest of: (a) the Transfer Date with respect to the
Monthly Period which commences no later than 3 months prior to May 1, 2002;
(b) the first Transfer Date for which the Portfolio Adjusted Yield is less
than 2.00%, but in such event the Reserve Account Funding Date shall not be
required to occur earlier than the Transfer Date with respect to the
Monthly Period which commences 12 months prior to the anticipated
commencement of the Controlled Accumulation Period; (c) the first Transfer
Date for which the Portfolio Adjusted Yield is less than 3.00%, but in such
event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period which
commences 6 months prior to the anticipated commencement of the Controlled
Accumulation Period; and (d) the first Transfer Date for which the
Portfolio Adjusted Yield is less than 4.00%, but in such event the Reserve
Account Funding Date shall not be required to occur earlier than the
Transfer Date with respect to the Monthly Period which commences 4 months
prior to the anticipated commencement of the Controlled Accumulation
Period.
"Reserve Account Surplus" means, as of any Transfer Date following
the Reserve Account Funding Date, the amount, if any, by which the amount
on deposit in the Reserve Account exceeds the Required Reserve Account
Amount.
"Reserve Draw Amount" is defined in Section 4.17(c).
"Reset Date" means each of (a) an Addition Date on which Receivables
from Supplemental Accounts are added to the Trust, (b) a Removal Date on
which, if any Series has been paid in full, Principal Receivables in an
aggregate amount approximately equal to the initial investor interest of
such Series are removed from the Trust, (c) a date on which there is an
increase in the Invested Amount of any Variable Interest issued by the
Trust and (d) any date on which a new Series is issued.
"Revolving Period" means the period from and including the Closing
Date to, but not including, the earlier of (a) the Controlled Accumulation
Date and (b) the Early Amortization Commencement Date.
"Series Account" means, as to Series 1996-B, the Distribution
Account, the Finance Charge Account, the Principal Account, the Principal
Funding Account, the Cash Collateral Account and the Reserve Account.
"Series Allocation Percentage" means, with respect to any Monthly
Period, the percentage equivalent of a fraction, the numerator of which is
the numerator used in determining the Floating Allocation Percentage for
that Monthly Period and the denominator of which is the sum of the
numerators used to calculate the Investor Percentages (as such term is
defined in the Agreement) for allocations with respect to Finance Charge
Receivables for all outstanding Series on such date of determination;
provided that if one or more Reset Dates occur in a Monthly Period, the
Series Allocation Percentage for the portion of the Monthly Period falling
on and after each such Reset Date (the "subject Reset Date") and prior to
any subsequent Reset Date will be determined using a denominator which is
equal to the sum of the numerators used to calculate the Investor
Percentages for allocations with respect to Finance Charge Receivables for
all outstanding Series as of the close of business on the subject Reset
Date.
"Series 1996-B" means the Series of the World Financial Network
Credit Card Master Trust represented by the Investor Certificates.
"Series 1996-B Certificates" means the Class A Certificates and the
Class B Certificates.
"Series 1996-B Holder" means the holder of record of a Series 1996-B
Certificate.
"Series 1996-B Termination Date" means the earliest to occur of (a)
the Distribution Date on which the Invested Amount is paid in full, (b) the
termination of the Trust pursuant to the Agreement and (c) the April 2006
Distribution Date.
"Series Servicing Fee Percentage" means 2.0%.
"Servicing Fee" is defined in Section 3(a) of this Series Supplement.
"Shared Principal Collections" means, as the context requires, either
(a) the amount allocated to the Investor Certificates which are treated as
Shared Principal Collections pursuant to Sections 4.7(a), 4.7(b)(iv)(B),
4.7(c)(iv)(B), 4.11(d)(ii) and 4.11(e)(iv) and which may be applied to the
principal shortfall with respect to other outstanding Series in Group One
or (b) the amounts allocated to the investor certificates of other Series
in Group One which the applicable Supplements for such Series specify are
to be treated as "Shared Principal Collections" and which may be applied to
cover the Principal Shortfall with respect to the Investor Certificates.
"Specified Transferor Amount" means, at any time, the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) at that time.
"Target Amount" is defined in Section 4.7(d).
"Uncovered Dilution Amount" means an amount equal to the product of
(x) the Series Allocation Percentage for the related Monthly Period
(determined on a weighted average basis, if a Reset Date occurs during that
Monthly Period), times (y) the aggregate Dilutions occurring during that
Monthly Period as to which any deposit is required to made to the Excess
Funding Account pursuant to Section 3.9(a) but has not been made; provided
that, if the Transferor Amount is greater than zero at the time the deposit
referred to in clause (y) is required to be made, the Uncovered Dilution
Amount for such amount to be deposited shall be deemed to be zero.
SECTION 3. Servicing Fee. The share of the Servicing Fee allocable
to Series 1996-B with respect to any Transfer Date (the "Servicing Fee")
shall be equal to one-twelfth of the product of (i) the Series Servicing
Fee Percentage and (ii) the Adjusted Invested Amount as of the last day of
the Monthly Period preceding such Transfer Date; provided that with respect
to the first Transfer Date, the Servicing Fee shall equal $427,777.78. The
share of the Servicing Fee allocable to the Class A Invested Amount (the
"Class A Servicing Fee"), the Class B Invested Amount (the "Class B
Servicing Fee") and the Collateral Interest (the "Collateral Interest
Servicing Fee") with respect to any Transfer Date shall equal the Class A
Floating Allocation Percentage, Class B Floating Allocation Percentage and
Collateral Floating Allocation Percentage, respectively, of such Servicing
Fee. Except as specifically provided above, the Servicing Fee shall be paid
by the cash flows from the Trust allocated to Transferor or the
certificateholders of other Series (as provided in the related Supplements)
and in no event shall the Trust, Trustee or the Investor Holders be liable
therefor. The Class A Servicing Fee shall be payable to Servicer solely to
the extent amounts are available for distribution in respect thereof
pursuant to Sections 4.11(a)(ii) and 4.13(a). The Class B Servicing Fee
shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to Sections 4.11(b)(ii) and
4.13(c). The Collateral Interest Servicing Fee shall be payable solely to
the extent amounts are available for distribution in respect thereof
pursuant to Section 4.13(f) or if applicable Section 4.11(c)(i).
SECTION 4. Optional Repurchase; Reassignment and Termination
Provisions. (a) The Investor Certificates shall be subject to retransfer
to Transferor at its option on any Distribution Date, on or after the
Distribution Date on which the Invested Amount is reduced to an amount less
than or equal to 5% of the Initial Invested Amount by deposit into the
Collection Account for application in accordance with Section 12.2 of an
amount equal to the sum of (i) the Adjusted Invested Amount (less any
amounts then on deposit in the Principal Account), plus (ii) accrued and
unpaid interest on the Investor Certificates through the day preceding the
Distribution Date on which the repurchase occurs. Upon the tender of the
outstanding Series 1996-B Certificates by the Holders (and without tender
in the case of the Collateral Interest), Trustee shall distribute such
amount, together with all funds on deposit in the Principal Account and
Principal Funding Account to the Investor Holders on the next Distribution
Date in repayment of the principal amount and accrued and unpaid interest
owing to the Investor Holders. Following any redemption, the Investor
Holders shall have no further rights with respect to the Receivables. If
Transferor fails for any reason to deposit in the Collection Account the
aggregate purchase price for the Investor Certificates, payments shall
continue to be made to the Investor Holders in accordance with the terms of
the Agreement and this Series Supplement.
(b) The amount required to be deposited by Transferor with respect to
the Investor Certificates in connection with any reassignment of
Receivables pursuant to Section 2.6 shall equal the sum of (i) the Adjusted
Invested Amount (less any amounts then on deposit in the Principal
Account), plus (ii) accrued and unpaid interest on the Investor
Certificates through the day preceding the Distribution Date on which the
repurchase occurs. The amount so deposited together with the amount then on
deposit in the Principal Account and the Principal Funding Account shall be
distributed to the Holders of the Investor Certificates in final payment of
the Invested Amount and all such other amounts on the Distribution Date on
which it is deposited.
(c) Proceeds available from the sale of Receivables in accordance
with Section 12.2(c) on the Series 1996-B Termination Date shall be
treated, to the extent of the Invested Amount, as Collections of Principal
Receivables that have been allocated to the Investor Certificates and any
excess shall be treated as Collections of Finance Charge Receivables that
have been allocated to the Investor Certificates, in each case with respect
to the prior Monthly Period.
(d) Transferor may from time to time, purchase Class A and Class B
Certificates on the secondary market and request Trustee to cancel such
Class A and Class B Certificates held by Transferor and reduce the Class A
or Class B Invested Amount, as applicable, by a corresponding amount;
provided that Transferor may make such purchases and requests for
cancellation of Class B Certificates resulting in a reduction of the Class
B Invested Amount only to the extent that it has made (or will make
contemporaneously with any such purchase and request for cancellation of
Class B Certificates) purchases and requests for cancellations of Class A
Certificates that result in at least a pro rata reduction of the Class A
Invested Amount.
SECTION 5. Delivery and Payment for the Investor Certificates.
Transferor shall execute and deliver the Series 1996-B Certificates to
Trustee (in definitive, fully registered form) for authentication in
accordance with Section 6.1. Trustee shall deliver such Certificates when
authenticated in accordance with Section 6.2. The Collateral Interest
shall be issued as provided in this Series Supplement and the Loan
Agreement.
SECTION 6. Depository; Form of Delivery of Investor Certificates.
(a) The Class A Certificates and the Class B Certificates shall be
delivered as Book-Entry Certificates as provided in Sections 6.1 and 6.10.
(b) The depository for Series 1996-B shall be The Depository Trust
Company, and the Class A Certificates and Class B Certificates shall be
initially registered in the name of Cede & Co., its nominee.
SECTION 7. Article IV of Agreement. Sections 4.1 through 4.5 shall
read in their entirety as provided in the Agreement. Article IV (except for
Sections 4.1 through 4.5 thereof) shall be read in its entirety as follows
and shall be applicable only to the Investor Certificates:
ARTICLE IV RIGHTS OF HOLDERS; ALLOCATIONS
SECTION 4.6 Rights of Holders and the Collateral Interest Holder.
The Investor Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Investor Certificates at the times
and in the amounts specified in this Agreement, (a) the applicable Investor
Percentage of Collections received with respect to the Receivables and (b)
funds on deposit in the Collection Account, the Finance Charge Account, the
Principal Account, the Principal Funding Account, the Cash Collateral
Account, the Reserve Account and the Distribution Account. The Collateral
Interest shall be subordinate to the Class A Certificates and the Class B
Certificates to the extent described herein. The Class B Certificates shall
be subordinate to the Class A Certificates to the extent described herein.
Transferor shall not have any interest in the Collection Account, the
Finance Charge Account, the Principal Account, the Principal Funding
Account, the Cash Collateral Account, the Reserve Account and the
Distribution Account, except as specifically provided in this Article IV.
SECTION 4.7 Allocations. (a) Allocations During the Revolving
Period. During the Revolving Period, Servicer shall allocate Collections to
the Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of
such Collections and (B) the aggregate amount of Collections
processed in respect of Finance Charge Receivables on such Date of
Processing;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage on the
Date of Processing of such Collections, (B) the Investor Percentage
on the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal Receivables
on such Date of Processing; and
(iii) allocate to the Investor Holders an amount equal to the
product of (A) the Class B Investor Allocation Percentage on the Date
of Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate amount
of Collections processed in respect of Principal Receivables on such
Date of Processing.
In addition, an amount equal to the product of (1) the Class A
Investor Allocation Percentage on the Date of Processing of such
Collections, (2) the Investor Percentage on the Date of Processing of such
Collections and (3) the aggregate amount of Collections processed in
respect of Principal Receivables on each Date of Processing shall be
treated as Shared Principal Collections.
(b) Allocations During the Controlled Accumulation Period. During
the Controlled Accumulation Period, Servicer shall allocate Collections to
the Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of
such Collections and (B) the aggregate amount of Collections
processed in respect of Finance Charge Receivables on such Date of
Processing;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage on the
Date of Processing of such Collections, (B) the Investor Percentage
on the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal Receivables
on such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to the
product of (A) the Class B Investor Allocation Percentage on the Date
of Processing of such Collections, (B) the Investor Percentage on the
Date of Processing of such Collections and (C) the aggregate amount
of Collections processed in respect of Principal Receivables on such
Date of Processing; and
(iv) (A) allocate to the Investor Holders an amount equal to
the product of (1) the Class A Investor Allocation Percentage on the
Date of Processing of such Collections, (2) the Investor Percentage
on the Date of Processing of such Collections and (3) the aggregate
amount of Collections processed in respect of Principal Receivables
on such Date of Processing; provided that the amount allocated
pursuant to this Section 4.7(b)(iv)(A) during any Monthly Period
shall not exceed the Controlled Deposit Amount for the related
Transfer Date (after taking into account any payments to be made on
the immediately preceding Distribution Date) and (B) treat as Shared
Principal Collections any amount not allocated as a result of the
proviso to clause (A).
(c) Allocations During the Early Amortization Period. During the
Early Amortization Period, Servicer shall allocate Collections to the
Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to the
product of (A) the Investor Percentage on the Date of Processing of
such Collections and (B) the aggregate amount of Collections
processed in respect of Finance Charge Receivables on such Date of
Processing;
(ii) allocate to the Investor Holders an amount equal to the
product of (A) the Collateral Investor Allocation Percentage on the
Date of Processing of such Collections and (B) the Investor
Percentage on the Date of Processing of such Collections and (C) the
aggregate amount of Collections processed in respect of Principal
Receivables on such Date of Processing;
(iii) allocate to the Investor Holders an amount equal to
the product of (A) the Class B Investor Allocation Percentage on the
Date of Processing of such Collections, (B) the Investor Percentage
on the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal Receivables
on such Date of Processing; and
(iv) (A) allocate to the Investor Holders an amount equal to
the product of (1) the Class A Investor Allocation Percentage on the
Date of Processing of such Collections and (2) the Investor
Percentage on the Date of Processing of such Collections and (3) the
aggregate amount of Collections processed in respect of Principal
Receivables on such Date of Processing; provided that the aggregate
amount allocated pursuant to this Section 4.7(c)(iv)(A) during any
Monthly Period shall not exceed the Invested Amount as of the close
of business on the last day of the prior Monthly Period (after taking
into account any payments to be made on the Distribution Date
relating to such prior Monthly Period and deposits and any
adjustments to be made to the Invested Amount to be made on the
Transfer Date relating to such Monthly Period) and (B) treat as
Shared Principal Collections any amount not allocated as a result of
the proviso to clause (A).
(d) During any period when Servicer is permitted by Section 4.3 to
make a single monthly deposit to the Collection Account, amounts allocated
to the Investor Holders pursuant to Sections 4.7(a), (b) and (c) with
respect to any Monthly Period need not be deposited into the Collection
Account or any Series Account prior to the related Transfer Date, and, when
so deposited, (x) may be deposited net of any amounts required to be
distributed to Transferor and, if WFN is Servicer, Servicer and (y) shall
be deposited into the Finance Charge Account (in the case of Collections of
Finance Charge Receivables) and the Principal Account (in the case of
Collections of Principal Receivables (not including any Shared Principal
Collections allocated to Series 1996-B pursuant to Section 4.15)), subject
in either case to the proviso to the next sentence. At any other time,
amounts so allocated on each Date of Processing shall be deposited on that
Date of Processing into the Finance Charge Account (in the case of
Collections of Finance Charge Receivables) and the Principal Account (in
the case of Collections of Principal Receivables (not including any Shared
Principal Collections allocated to Series 1996-B pursuant to Section
4.15)), provided that:
(i) with respect to each Monthly Period falling in the Revolving
Period (and with respect to that portion of each Monthly Period in
the Controlled Accumulation Period falling on or after the day on
which Collections of Principal Receivables equal to the related
Controlled Deposit Amount have been allocated pursuant to Section
4.7(b)(iv) and deposited pursuant to Section 4.7(d)), Collections of
Finance Charge Receivables shall be deposited into the Finance Charge
Account only until such time as the aggregate amount so deposited
equals the sum (the "Target Amount") of (A) the amounts of Class A
Monthly Interest, Class B Monthly Interest, Class A Deficiency Amount
and Class A Additional Interest (if any), Class B Deficiency Amount
and Class B Additional Interest (if any), (B) if WFN is not Servicer,
the Servicing Fee, each due on the related Distribution Date, (C) any
Collateral Monthly Interest due on the related Transfer Date and any
other amounts that the Transferor or Servicer knows will be owed
under the Loan Agreement on the related Transfer Date to the extent
such amounts are payable under the Loan Agreement from Available
Non-Principal Funds (as defined in the Loan Agreement), (D) any
amount required to be deposited in the Reserve Account on the related
Transfer Date and (E) any Finance Charge Shortfalls for any other
Series in Group One (as defined in the related Supplement); and
(ii) with respect to each Monthly Period falling in the
Revolving Period, Collections of Principal Receivables allocated to
the Investor Holders pursuant to Section 4.7(a)(ii) and (iii) shall
(after an amount equal to any Collateral Monthly Principal for that
Monthly Period has been deposited into the Principal Account) be paid
to Transferor (or, if the Transferor Amount is less than the
Specified Transferor Amount, deposited into the Excess Funding
Account), but Transferor shall make an amount equal to the
Reallocated Principal Collections for the related Transfer Date
available on that Transfer Date for application in accordance with
Section 4.14.
With respect to any Monthly Period when deposits of Collections of Finance
Charge Receivables into the Finance Charge Account are limited in
accordance with clause (i) of the preceding proviso, notwithstanding such
limitation: (1) "Excess Spread" for the related Transfer Date shall be
calculated as if the full amount of Finance Charge Collections allocated to
the Investor Certificates during that Monthly Period had been deposited in
the Finance Charge Account and applied on such Transfer Date in accordance
with Sections 4.11(a), 4.11(b) and 4.11(c); and (2) Collections of Finance
Charge Receivables released to Transferor pursuant to such clause (i) shall
be deemed, for purposes of all calculations under this Supplement and the
Loan Agreement, to have been applied to the items specified in Sections
4.11(a), 4.11(b), 4.11(c) and 4.13 to which such amounts would have been
applied (and in the priority in which they would have been applied) had
such amounts been available in the Finance Charge Account on such Transfer
Date. To avoid doubt, the calculations referred to in the preceding clause
(2) include the calculations required by clause (c) of the definition of
Class A Invested Amount, clause (f) of the definition of Class B Invested
Amount, clause (f) of the definition of Collateral Interest and Section
4.10.
Notwithstanding clause (i) above, if on any Business Day Servicer
determines that the Target Amount for a Monthly Period exceeds the Target
Amount for that Monthly Period as previously calculated by Servicer, then
(x) Servicer shall (on the same Business Day) inform Transferor of such
determination, and (y) within two Business Days of receiving such notice
Transferor shall deposit into the Finance Charge Account funds in an amount
equal to the amount of Collections of Finance Charge Receivables allocated
to the Investor Certificates for that Monthly Period but not deposited into
the Finance Charge Account due to the operation of clause (i) (but not in
excess of the amount required so that the aggregate amount deposited for
the subject Monthly Period equals the Target Amount). In addition, if on
any Transfer Date the Transferor Amount will be less than the Specified
Transferor Amount after giving effect to all transfers and deposits on that
Transfer Date, Transferor shall, on that Transfer Date, deposit into the
Principal Account funds in an amount equal to the amounts of Class A
Available Funds and Excess Spread that are required to be treated as
Investor Principal Collections pursuant to Sections 4.11(a)(iii) and 4.13
but are not available from funds in the Finance Charge Account as a result
of the operation of clause (i).
(e) On any date, Servicer may withdraw from the Collection Account
or any Series Account any amounts inadvertently deposited in such account
that should have not been so deposited.
SECTION 4.8 Determination of Monthly Interest. (a) The amount of
monthly interest distributable to the Class A Certificates shall equal the
product of (i) one-twelfth, times (ii) the Class A Certificate Rate, times
(iii) the outstanding principal balance of the Class A Certificates
determined as of the Record Date preceding the related Transfer Date (the
"Class A Monthly Interest"); provided that (x) Class A Monthly Interest for
the first Distribution Period will be $1,970,325 and (y) in addition to
Class A Monthly Interest an amount equal to the amount of any unpaid Class
A Deficiency Amounts, plus an amount equal to the product of (A) (1)
one-twelfth, times (2) the sum of the Class A Certificate Rate, plus 2% per
annum, and (B) any Class A Deficiency Amount from the prior Transfer Date
(or the portion thereof which has not theretofore been paid to Class A
Holders) (the "Class A Additional Interest"), shall also be distributable
to the Class A Certificates, and on such Transfer Date Trustee shall
deposit such funds, to the extent available, into the Distribution Account.
The "Class A Deficiency Amount" for any Transfer Date shall equal the
excess, if any, of the aggregate amount accrued pursuant to this Section
4.8(a) as of the prior Distribution Period over the amount actually
transferred from the Distribution Account for payment of such amount.
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal the product of (i) one-twelfth, times (ii) the
Class B Certificate Rate, times (iii) the outstanding principal balance of
the Class B Certificates determined as of the Record Date preceding the
related Transfer Date (the "Class B Monthly Interest"); provided that (x)
Class B Monthly Interest for the first Distribution Period will be $214,200
and (y) in addition to the Class B Monthly Interest an amount equal to the
amount of any unpaid Class B Deficiency Amounts, plus an amount equal to
the product of (A) (1) one-twelfth, times (2) the sum of the Class B
Certificate Rate, plus 2% per annum, and (B) any Class B Deficiency Amount
from the prior Transfer Date (or the portion thereof which has not
theretofore been paid to Class B Holders) (the "Class B Additional
Interest"), shall also be distributable to the Class B Certificates, and on
such Transfer Date Trustee shall deposit such funds, to the extent
available, into the Distribution Account. The "Class B Deficiency Amount"
for any Transfer Date shall equal the excess, if any, of the aggregate
amount accrued pursuant to this Section 4.8(b) as of the prior Distribution
Period over the amount actually transferred from the Distribution Account
for payment of such amount.
(c) The amount of monthly interest distributable to the Collateral
Interest (the "Collateral Monthly Interest") shall equal the product of (i)
(A) a fraction, the numerator of which is the actual number of days in the
related Distribution Period and the denominator of which is 360, times (B)
the Collateral Rate in effect with respect to the related Distribution
Period, times (ii) the Collateral Interest determined as of the Record Date
preceding such Transfer Date.
SECTION 4.9 Determination of Monthly Principal. (a) The amount of
monthly principal distributable from the Principal Account with respect to
the Class A Certificates on each Transfer Date ("Class A Monthly
Principal"), beginning with the Transfer Date in the month following the
month in which the Controlled Accumulation Period or, if earlier, the Early
Amortization Period, begins, shall be equal to the least of (i) the
Available Investor Principal Collections on deposit in the Principal
Account with respect to such Transfer Date, (ii) for each Transfer Date
with respect to the Controlled Accumulation Period prior to the Class A
Scheduled Payment Date, the Controlled Deposit Amount for such Transfer
Date and (iii) the Class A Adjusted Invested Amount on such Transfer Date
prior to any deposit into the Principal Funding Account to be made on such
day.
(b) The amount of monthly principal distributable from the Principal
Account with respect to the Class B Certificates on each Transfer Date (the
"Class B Monthly Principal") for the Controlled Accumulation Period,
beginning with the Transfer Date after the one on which the Class A
Adjusted Invested Amount is reduced to zero, and for the Early Amortization
Period beginning with the Transfer Date on which the Class A Invested
Amount is reduced to zero (in either case after giving effect to payments
to be made on the related Distribution Date), shall be an amount equal to
the lesser of (i) the excess, if any, of (A) the Available Investor
Principal Collections on such Transfer Date over (B) any Class A Monthly
Principal on such Transfer Date and (ii) the Class B Invested Amount (after
taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.14) on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (i) during the Revolving
Period following any reduction of the Required Enhancement Amount, an
amount equal to the lesser of (A) the Enhancement Surplus on such Transfer
Date and (B) the Available Investor Principal Collections on such Transfer
Date or (ii) during the Controlled Accumulation Period or Early
Amortization Period an amount equal to the lesser of (A) the Enhancement
Surplus on such Transfer Date, (B) the excess, if any, of (1) the Available
Investor Principal Collections on such Transfer Date over (2) the sum of
the Class A Monthly Principal and the Class B Monthly Principal for such
Transfer Date and (C) the Collateral Interest on such Transfer Date (after
taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.14).
SECTION 4.10 Coverage of Required Amount. (a) On or before each
Transfer Date, Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A Monthly Interest for
such Transfer Date, plus (ii) the Class A Deficiency Amount, if any, for
such Transfer Date, plus (iii) the Class A Additional Interest, if any, for
such Transfer Date, plus (iv) the Class A Servicing Fee for the prior
Monthly Period plus (v) the Class A Servicing Fee, if any, due but not paid
on any prior Transfer Date, plus (vi) the Class A Investor Default Amount,
if any, for such Transfer Date, plus (vii) the Class A Uncovered Dilution
Amount for the related Monthly Period, exceeds the Class A Available Funds
for the related Monthly Period.
(b) On or before each Transfer Date, Servicer shall also determine
the amount (the "Class B Required Amount"), if any, equal to the sum of (i)
the amount, if any, by which the sum of (A) the Class B Monthly Interest
for such Transfer Date, plus (B) the Class B Deficiency Amount, if any, for
such Transfer Date plus (C) the Class B Additional Interest, if any, for
such Transfer Date, plus (D) the Class B Servicing Fee for the prior
Monthly Period plus (E) the Class B Servicing Fee, if any, due but not paid
on any prior Transfer Date, exceeds the Class B Available Funds for the
related Monthly Period plus (ii) the sum of (A) the Class B Investor
Default Amount, if any, for such Transfer Date and (B) the Class B
Uncovered Dilution Amount for the related Monthly Period.
(c) If the sum of the Class A Required Amount and the Class B
Required Amount for such Transfer Date is greater than zero, Servicer shall
give written notice to Trustee of such positive Class A Required Amount or
Class B Required Amount on or before such Transfer Date. In addition:
(i) If the Class A Required Amount for such Transfer Date is
greater than zero, all or a portion of the Excess Spread (and any
Required Draw Amount) with respect to such Transfer Date in an amount
equal to the Class A Required Amount, to the extent available, for
such Transfer Date shall be distributed (or, in the case of Excess
Spread, deemed, in accordance with Section 4.7(d), to be distributed)
from the Finance Charge Account (and the Cash Collateral Account) on
such Transfer Date pursuant to Section 4.13(a). If the Class A
Required Amount for such Transfer Date exceeds the amount of Excess
Spread (and any Required Draw Amount) with respect to such Transfer
Date, the Collections of Principal Receivables allocable to the
Collateral Interest and the Class B Certificates with respect to the
prior Monthly Period shall be applied as specified in Section 4.14.
(ii) If the Class B Required Amount for such Transfer Date is
greater than zero, all or a portion of the Excess Spread (and any
Required Draw Amount) with respect to such Transfer Date in an amount
equal to the Class B Required Amount, to the extent available, for
such Transfer Date shall be distributed (or, in the case of Excess
Spread, deemed, in accordance with Section 4.7(d), to be distributed)
from the Finance Charge Account (and the Cash Collateral Account) on
such Transfer Date pursuant to Section 4.13(c). If the Class B
Required Amount for such Transfer Date exceeds the amount of Excess
Spread (and any Required Draw Amount) available to fund the Class B
Required Amount pursuant to Section 4.13(c), the Collections of
Principal Receivables allocable to the Collateral Interest (after
application to the Class A Required Amount) shall be applied as
specified in Section 4.14;
provided that the sum of any payments pursuant to this paragraph shall not
exceed the sum of the Class A Required Amount and the Class B Required
Amount.
SECTION 4.11 Monthly Payments. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to withdraw, and Trustee, acting in
accordance with such instructions, shall withdraw on such Transfer Date or
the related Distribution Date, as applicable, to the extent of available
funds, the amounts required to be withdrawn from the Finance Charge
Account, the Principal Account, the Principal Funding Account and the
Distribution Account as follows:
(a) An amount equal to the Class A Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to Class A Monthly Interest, plus any Class
A Deficiency Amount, plus any Class A Additional Interest (in each
case for such Transfer Date) shall be deposited by Servicer or
Trustee into the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date plus any Class A Servicing Fee due but not paid to
Servicer on any prior Transfer Date (less, if WFN is Servicer,
amounts previously retained toward payment of such fees) shall be
distributed to Servicer;
(iii) an amount equal to the sum of the Class A Investor
Default Amount and the Class A Uncovered Dilution Amount, if any, for
the preceding Monthly Period shall be treated (or deemed, in
accordance with Section 4.7(d), to be treated) as a portion of
Investor Principal Collections and, during the Controlled
Accumulation Period or the Early Amortization Period, deposited into
the Principal Account on such Transfer Date; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(b) An amount equal to the Class B Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to the Class B Monthly Interest, plus any
Class B Deficiency Amount, plus any Class B Additional Interest (in
each case for such Transfer Date) shall be deposited by Servicer or
Trustee into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus any Class B Servicing Fee due but not paid to
Servicer on any prior Transfer Date for such Transfer Date (less, if
WFN is Servicer, amounts previously retained toward payment of such
fees) shall be distributed to Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(c) An amount equal to the Collateral Available Funds for the
related Monthly Period will be distributed on each Transfer Date, to the
extent available, in the following priority:
(i) if neither Transferor nor any of its Affiliates is
Servicer, an amount equal to the Collateral Interest Servicing Fee
for such Transfer Date, plus any Collateral Interest Servicing Fee
due but not paid to Servicer on any prior Transfer Date shall be
distributed to Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.13.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections for the related Monthly Period will be
distributed on each Transfer Date, to the extent available, in the
following priority:
(i) an amount equal to the Collateral Monthly Principal for
such Transfer Date shall be distributed to the Collateral Interest
Holder in accordance with the Loan Agreement; and
(ii) an amount equal to the Available Investor Principal
Collections remaining after the application specified in Section
4.11(d)(i) shall be treated as Shared Principal Collections.
(e) On each Transfer Date commencing with the Transfer Date falling
in the calendar month following the one in which the Controlled
Accumulation Period or the Early Amortization Period (whichever is earlier)
commences, an amount equal to the Available Investor Principal Collections
for the related Monthly Period will be distributed on such Transfer Date,
to the extent available, in the following priority:
(i) an amount equal to the Class A Monthly Principal for such
Transfer Date, shall be (A) with respect to the Controlled
Accumulation Period, deposited into the Principal Funding Account,
and (B) during the Early Amortization Period, deposited into the
Distribution Account;
(ii) after giving effect to the distribution referred to in
clause (i), an amount equal to the Class B Monthly Principal, shall
be deposited into the Distribution Account;
(iii) for each Transfer Date (other than the Transfer Date
immediately preceding the Series 1996-B Termination Date, in which
case on the Series 1996-B Termination Date) after giving effect to
the distribution referred to in clauses(i) and (ii) above, an amount
equal to Collateral Monthly Principal shall be distributed to the
Collateral Interest Holder in accordance with the Loan Agreement; and
(iv) an amount equal to the Available Investor Principal
Collections remaining after the applications specified in clauses
(i), (ii) and (iii) above shall be treated as Shared Principal
Collections.
(f) On the earlier to occur of (i) the first Transfer Date with
respect to the Early Amortization Period and (ii) the Transfer Date
immediately preceding the Class A Scheduled Payment Date, Trustee, acting
in accordance with instructions from Servicer, shall withdraw from the
Principal Funding Account and deposit in the Distribution Account the
amount on deposit in the Principal Funding Account.
(g) On each Distribution Date, Trustee shall pay in accordance with
Section 5.1(a) to the Class A Holders from the Distribution Account, the
amount deposited into the Distribution Account pursuant to Section
4.11(a)(i) on the preceding Transfer Date and to the Class B Holders from
the Distribution Account, the amount deposited into the Distribution
Account pursuant to Section 4.11(b)(i) on the preceding Transfer Date.
(h) On the earlier to occur of (i) the first Distribution Date with
respect to the Early Amortization Period and (ii) the Class A Scheduled
Payment Date and on each Distribution Date thereafter, Trustee, acting in
accordance with instructions from Servicer, shall pay in accordance with
Section 5.1 from the Distribution Account the amount so deposited into the
Distribution Account pursuant to Sections 4.11(e) and (f) on the related
Transfer Date in the following priority:
(i) an amount equal to the lesser of such amount on deposit in
the Distribution Account and the Class A Invested Amount shall be
paid to the Class A Holders; and
(ii) for each Distribution Date with respect to the Early
Amortization Period and on or after the Class B Scheduled Payment
Date, after giving effect to the distributions referred to in clause
(i) above, an amount equal to the lesser of such amount on deposit in
the Distribution Account and the Class B Invested Amount shall be
paid to the Class B Holders.
(i) The Controlled Accumulation Period is scheduled to commence at
the beginning of business on the Controlled Accumulation Date; provided
that if the Controlled Accumulation Period Length (determined as described
below) on any Determination Date on or after the April 2002 Determination
Date is less than 12 months, upon written notice to Trustee, Transferor
and, each Rating Agency, Servicer, at its option, may elect to modify the
date on which the Controlled Accumulation Period actually commences to the
first day of the month that is a number of months prior to the month in
which the Class A Scheduled Payment Date occurs at least equal to the
Controlled Accumulation Period Length (so that, as a result of such
election, the number of Monthly Periods in the Controlled Accumulation
Period will at least equal the Controlled Accumulation Period Length);
provided that (i) the length of the Controlled Accumulation Period will not
be less than one month, (ii) such determination of the Controlled
Accumulation Period Length shall be made on each Determination Date on and
after the April 2002 Determination Date but prior to the commencement of
the Controlled Accumulation Period, and any election to shorten the
Controlled Accumulation Period shall be subject to the subsequent
lengthening of the Controlled Accumulation Period to the Controlled
Accumulation Period Length determined on any subsequent Determination Date,
but the Controlled Accumulation Period shall in no event commence prior to
the Controlled Accumulation Date, and (iii) notwithstanding any other
provision of this Series Supplement to the contrary, no election to
postpone the commencement of the Controlled Accumulation Period shall be
made after an Early Amortization Event shall have occurred and be
continuing with respect to any other Series. The "Controlled Accumulation
Period Length" will mean a number of whole months such that the amount
available for distribution of principal on the Class A Certificates on the
Class A Scheduled Payment Date is expected to equal or exceed the Class A
Invested Amount, assuming for this purpose that (1) the payment rate with
respect to Collections of Principal Receivables remains constant at the
lowest level of such payment rate during the twelve preceding Monthly
Periods (or such lower payment rate as Servicer may select), (2) the total
amount of Principal Receivables in the Trust (and the principal amount on
deposit in the Excess Funding Account, if any) remains constant at the
level on such date of determination, (3) no Early Amortization Event with
respect to any Series will subsequently occur and (4) no additional Series
(other than any Series being issued on such date of determination) will be
subsequently issued. Any notice by Servicer electing to modify the
commencement of the Controlled Accumulation Period pursuant to this Section
4.11(i) shall specify (i) the Controlled Accumulation Period Length, (ii)
the commencement date of the Controlled Accumulation Period and (iii) the
Controlled Accumulation Amount with respect to each Monthly Period during
the Controlled Accumulation Period.
SECTION 4.12 Investor Charge-Offs. (a) On or before each Transfer
Date, Servicer shall calculate the sum of the Class A Investor Default
Amount and the Class A Uncovered Dilution Amount (such sum being the "Class
A Reduction Amount"). If on any Transfer Date, the Class A Reduction Amount
for the prior Monthly Period exceeds the sum of the amount allocated with
respect thereto pursuant to Section 4.11(a)(iii), Section 4.13(a)
(including amounts withdrawn from the Cash Collateral Account for such
allocation) and Section 4.14 with respect to such Monthly Period, the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and any Reallocated Principal Collections on such Transfer
Date) will be reduced by the amount of such excess, but not by more than
the lesser of the Class A Reduction Amount and the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date) for such Transfer
Date. If such reduction would cause the Collateral Interest to be a
negative number, the Collateral Interest will be reduced to zero, and the
Class B Invested Amount (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections on
such Transfer Date) will be reduced by the amount by which the Collateral
Interest would have been reduced below zero. If such reduction would cause
the Class B Invested Amount to be a negative number, the Class B Invested
Amount will be reduced to zero, and the Class A Invested Amount will be
reduced by the amount by which the Class B Invested Amount would have been
reduced below zero, but not by more than the Class A Reduction Amount for
such Transfer Date (a "Class A Investor Charge-Off"). If the Class A
Invested Amount has been reduced by the amount of any Class A Investor
Charge-Offs, it will be reimbursed on any Transfer Date (but not by an
amount in excess of the aggregate Class A Investor Charge-Offs) by the
amount of Excess Spread allocated and available for such purpose pursuant
to Section 4.13(b).
(b) On or before each Transfer Date, Servicer shall calculate the
sum of the Class B Investor Default Amount and the Class B Uncovered
Dilution Amount (such sum being the "Class B Reduction Amount"). If on any
Transfer Date, the Class B Reduction Amount for the prior Monthly Period
exceeds the amount of Excess Spread and Reallocated Collateral Principal
Collections which are allocated and available to fund such amount pursuant
to Section 4.13(c) (including amounts withdrawn from the Cash Collateral
Account for such allocation) and Section 4.14, the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments
with respect thereto as described in Section 4.12(a)) will be reduced by
the amount of such excess but not by more than the lesser of the Class B
Reduction Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date and any adjustments with respect thereto
as described in Section 4.12(a)) for such Transfer Date. If such reduction
would cause the Collateral Interest to be a negative number, the Collateral
Interest shall be reduced to zero and the Class B Invested Amount shall be
reduced by the amount by which the Collateral Interest would have been
reduced below zero, but not by more than the Class B Reduction Amount for
such Transfer Date (a "Class B Investor Charge-Off"). The Class B Invested
Amount will also be reduced by the amount of Reallocated Class B Principal
Collections in excess of the Collateral Interest pursuant to Section 4.14
and the amount of any portion of the Class B Invested Amount allocated to
the Class A Certificates to avoid a reduction in the Class A Invested
Amount pursuant to Section 4.12(a). The Class B Invested Amount will
thereafter be reimbursed (but not to an amount in excess of the unpaid
principal balance of the Class B Certificates) on any Transfer Date by the
amount of Excess Spread allocated and available for that purpose as
described under Section 4.13(d).
(c) On or before each Transfer Date, Servicer shall calculate the
sum of the Collateral Default Amount and the Collateral Uncovered Dilution
Amount (such sum being the "Collateral Reduction Amount"). If on any
Transfer Date, the Collateral Reduction Amount for the prior Monthly Period
exceeds the amount of Excess Spread which is allocated and available to
fund such amount pursuant to Section 4.13(g), the Collateral Interest will
be reduced by the amount of such excess but not by more than the lesser of
the Collateral Reduction Amount and the Collateral Interest for such
Transfer Date (a "Collateral Charge-Off"). The Collateral Interest will
also be reduced by the amount of Reallocated Principal Collections pursuant
to Section 4.14 and the amount of any portion of the Collateral Interest
allocated to the Class A Certificates or the Class B Certificates to avoid
a reduction in the Class A Invested Amount, pursuant to Section 4.12(a), or
the Class B Invested Amount, pursuant to Section 4.12(b), respectively. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by
the amount of the Excess Spread allocated and available for that purpose as
described under Section 4.13(h).
SECTION 4.13 Excess Spread. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B) to apply, and Trustee, acting in
accordance with such instructions shall apply (or be deemed, in accordance
with Section 4.7(d), to apply), Excess Spread with respect to the related
Monthly Period, to make the following distributions on each Transfer Date
in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class A Required
Amount and be applied in accordance with, and in the priority set forth in,
Section 4.11(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed will be treated as a
portion of Investor Principal Collections and, during the Controlled
Accumulation Period or the Early Amortization Period, deposited into the
Principal Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class B Required
Amount and be applied first in accordance with, and in the priority set
forth in, Section 4.11(b) and then any remaining amount available to pay
the Class B Reduction Amount shall be treated as a portion of Investor
Principal Collections and, during the Controlled Accumulation Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(d) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced below the initial Class B Invested Amount
for reasons other than the payment of principal to the Class B Holders (but
not in excess of the aggregate amount of such reductions which have not
been previously reimbursed) will be treated as a portion of Investor
Principal Collections and, during the Controlled Accumulation Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the
amount of any past due Collateral Monthly Interest for such Transfer Date
will be paid to the Collateral Interest Holder in accordance with the Loan
Agreement;
(f) if Transferor or any of its Affiliates is Servicer, an amount
equal to the aggregate amount of accrued but unpaid Collateral Interest
Servicing Fees (less, if WFN is Servicer, amounts previously retained
towards payment of such fee) will be paid to Servicer;
(g) an amount equal to the Collateral Reduction Amount, if any, for
the related Monthly Period will be treated as a portion of Investor
Principal Collections and, during the Controlled Accumulation Period or the
Early Amortization Period, deposited into the Principal Account on such
Transfer Date;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced for reasons other than the payment of principal
to the Collateral Interest Holder (but not in excess of the aggregate
amount of such reductions which have not been previously reimbursed) will
be treated as a portion of Investor Principal Collections and, during the
Controlled Accumulation Period or the Early Amortization Period, deposited
into the Principal Account on such Transfer Date;
(i) an amount up to the excess, if any, of the Required Cash
Collateral Amount (determined after all deposits, withdrawals, reductions,
payments and adjustments to be made with respect to such date) over the
Available Cash Collateral Amount (without giving effect to any deposit made
on such date hereunder) shall be deposited in the Cash Collateral Account;
(j) on each Transfer Date from and after the Reserve Account Funding
Date, but prior to the date on which the Reserve Account terminates as
described in Section 4.17(f), an amount up to the excess, if any, of the
Required Reserve Account Amount over the Available Reserve Account Amount
shall be deposited into the Reserve Account;
(k) an amount equal to all other amounts due under the Loan Agreement
shall be distributed in accordance with the Loan Agreement; and
(l) the balance, if any, after giving effect to the payments made
pursuant to clauses (a) through (k) shall constitute "Excess Finance Charge
Collections" to be applied with respect to other Series in accordance with
Section 4.5 of the Agreement.
SECTION 4.14 Reallocated Principal Collections. On or before each
Transfer Date, Servicer shall instruct Trustee in writing (which writing
shall be substantially in the form of Exhibit B) to, and Trustee in
accordance with such instructions shall, withdraw from the Principal
Account and apply Collections of Principal Receivables with respect to such
Transfer Date, to make the following distributions on each Transfer Date in
the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii)
the sum of (x) the amount of Excess Spread with respect to the
related Monthly Period and (y) the Available Cash Collateral Amount
with respect to such Transfer Date, shall be applied pursuant to
Sections 4.11(a)(i), (ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Transfer Date over (ii)
the sum of (x) the amount of Excess Spread allocated and available to
the Class B Certificates pursuant to Section 4.13(c) on such Transfer
Date and (y) the amount withdrawn from the Cash Collateral Account
pursuant to Section 4.18(c) which is remaining after application
pursuant to Section 4.13(c) with respect to such Transfer Date shall
be applied first pursuant to Sections 4.11(b)(i) and (ii) and then
pursuant to Section 4.13(c);
provided, that:
(1) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clauses (a) and (b) (the
"Reallocated Principal Collections") shall not exceed the lesser of
(A) the product of (x) the sum of the Collateral Investor Allocation
Percentage and the Class B Investor Allocation Percentage for the
Monthly Period relating to such Transfer Date and (y) the Investor
Percentage for the Monthly Period relating to such Transfer Date and
(z) the amount of Collections of Principal Receivables for the
Monthly Period relating to such Transfer Date and (B) the sum of the
Collateral Interest and the Class B Invested Amount after giving
effect to any Collateral Charge-Offs and Class B Investor Charge-Offs
for such Transfer Date; and
(2) the aggregate amount of Collections of Principal
Receivables distributed pursuant to clause (b) shall not exceed the
lesser of (A) the product of (x) the Collateral Investor Allocation
Percentage for the Monthly Period relating to such Transfer Date and
(y) the Investor Percentage for the Monthly Period relating to such
Transfer Date and (z) the amount of Collections of Principal
Receivables for the Monthly Period relating to such Transfer Date and
(B) the Collateral Interest after giving effect to any Collateral
Charge-Offs for such Transfer Date.
With respect to any Transfer Date, any Reallocated Principal
Collections up to and including the amount specified in clause (2)(A) above
shall constitute "Reallocated Collateral Principal Collections," and any
Reallocated Principal Collections in excess of such amount shall constitute
"Reallocated Class B Principal Collections."
On each Transfer Date, the Collateral Interest shall be reduced by
the amount of Reallocated Collateral Principal Collections and by the
amount of Reallocated Class B Principal Collections for such Transfer Date.
If such reduction would cause the Collateral Interest (after giving effect
to any Collateral Charge-Offs for such Transfer Date) to be a negative
number, the Collateral Interest (after giving effect to any Collateral
Charge-Offs for such Transfer Date) shall be reduced to zero and the Class
B Invested Amount shall be reduced by the amount by which the Collateral
Interest would have been reduced below zero. If the reallocation of
Reallocated Principal Collections would cause the Class B Invested Amount
(after giving effect to any Class B Investor Charge-Offs for such Transfer
Date) to be a negative number on any Transfer Date, Reallocated Principal
Collections shall be reallocated on such Transfer Date in an aggregate
amount not to exceed the amount which would cause the Class B Invested
Amount (after giving effect to any Class B Investor Charge-Offs for such
Transfer Date) to be reduced to zero.
SECTION 4.15 Shared Principal Collections; Amounts Transferred from
the Excess Funding Account to the Principal Account. (a) The Shared
Principal Collections allocable to Series 1996-B on any Transfer Date
pursuant to Section 4.15(b) shall be applied as Available Investor
Principal Collections pursuant to Section 4.11 and pursuant to such Section
4.11 shall be deposited in the Distribution Account or distributed in
accordance with the Loan Agreement.
(b) Shared Principal Collections allocable to Series 1996-B with
respect to any Transfer Date means an amount equal to the Principal
Shortfall, if any, with respect to Series 1996-B for such Transfer Date;
provided that if the aggregate amount of Shared Principal Collections for
all Series in Group One for such Transfer Date is less than the Cumulative
Principal Shortfall for such Transfer Date, then Shared Principal
Collections allocable to Series 1996-B on such Transfer Date shall equal
the product of (i) Shared Principal Collections for all Series in Group One
for such Transfer Date and (ii) a fraction, the numerator of which is the
Principal Shortfall with respect to Series 1996-B for such Transfer Date
and the denominator of which is the aggregate amount of Cumulative
Principal Shortfall for all Series in Group One for such Transfer Date. On
each Transfer Date, Trustee (in accordance with instructions from Servicer)
shall withdraw Shared Principal Collections allocable to Series 1996-B from
the Collection Account and deposit the same into the Principal Account.
(c) Solely for the purpose of determining the amount of Available
Investor Principal Collections to be treated as Shared Principal
Collections on any Transfer Date allocable to other Series in Group One, on
each Determination Date, Servicer shall determine the Class A Required
Amount, Class B Required Amount, Excess Spread and Reallocated Principal
Collections as of such Determination Date for the following Transfer Date.
(d) The aggregate amount allocable to Series 1996-B and required to
be transferred from the Excess Funding Account into the Principal Account
with respect to any Transfer Date means an amount equal to the Principal
Shortfall, if any, with respect to Series 1996-B for such Transfer Date
minus the amount of Shared Principal Collections allocated to Series 1996-B
from other Series in Group One on that Transfer Date; provided that if the
aggregate amount required to be withdrawn from the Excess Funding Account
pursuant to Section 4.2 for all Series (whether or not included in Group
One) for such Transfer Date is less than the cumulative Principal Shortfall
minus available Shared Principal Collections for all Series (whether or not
included in Group One) for such Transfer Date, then the aggregate amount
allocable to Series 1996-B and required to be transferred on such Transfer
Date shall equal the product of (i) the aggregate amount required to be
withdrawn from the Excess Funding Account pursuant to Section 4.2 for all
Series for such Transfer Date and (ii) a fraction, (A) the numerator of
which is the Principal Shortfall with respect to Series 1996-B for such
Transfer Date minus the amount of Shared Principal Collections allocated to
Series 1996-B from other Series in Group One on that Transfer Date and (B)
the denominator of which is the cumulative Principal Shortfall for all
Series (whether or not included in Group One) minus available Shared
Principal Collections for all Series (whether or not included in Group One)
for such Transfer Date.
SECTION 4.16 Finance Charge Account, Principal Account, Principal
Funding Account and Distribution Account. (a) Trustee shall establish and
maintain with an Eligible Institution, which may be Trustee, in the name of
the Trust, on behalf of the Trust, for the benefit of the Investor Holders,
four segregated trust accounts (the "Finance Charge Account", the
"Principal Account", the "Principal Funding Account" and the "Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Investor Holders. Trustee
shall possess all right, title and interest in all funds on deposit from
time to time in the Finance Charge Account, the Principal Account, the
Principal Funding Account and the Distribution Account and in all proceeds
thereof. The Finance Charge Account, the Principal Account, the Principal
Funding Account and the Distribution Account shall be under the sole
dominion and control of Trustee for the benefit of the Investor Holders. If
at any time the institution holding the Finance Charge Account, the
Principal Account, the Principal Funding Account and the Distribution
Account ceases to be an Eligible Institution, Transferor shall notify
Trustee, and Trustee upon being notified (or Servicer on its behalf) shall,
within 10 Business Days, establish a new Finance Charge Account, a new
Principal Account, a new Principal Funding Account and a new Distribution
Account meeting the conditions specified above, and shall transfer any cash
or any investments to such new Finance Charge Account, Principal Account,
Principal Funding Account and Distribution Account. Trustee, at the
direction of Servicer, shall (i) make withdrawals from the Finance Charge
Account, the Principal Account, the Principal Funding Account and the
Distribution Account from time to time, in the amounts and for the purposes
set forth in this Series Supplement and the Agreement, and (ii) on each
Transfer Date (from and after the commencement of the Controlled
Accumulation Period) prior to termination of the Principal Funding Account
make a deposit into the Principal Funding Account in the amount specified
in, and otherwise in accordance with, Section 4.11(e). Trustee at all times
shall maintain accurate records reflecting each transaction in the Finance
Charge Account, the Principal Account, the Principal Funding Account and
the Distribution Account and that the funds held therein shall at all times
be held in trust for the benefit of the Investor Holders.
(b) Funds on deposit in the Finance Charge Account, the Principal
Account and the Principal Funding Account from time to time shall be
invested and reinvested at the direction of Servicer by Trustee in Eligible
Investments that will mature so that such funds will be available for
withdrawal on the following Transfer Date. Trustee shall maintain for the
benefit of the Investor Holders possession of the negotiable instruments or
securities, if any, evidencing such Eligible Investments. No Eligible
Investment shall be disposed of prior to its maturity unless Servicer so
directs and either (i) such disposal will not result in a loss of all or
part of the principal portion of such Eligible Investment or (ii) prior to
the maturity of such Eligible Investment, a default occurs in the payment
of principal, interest or any other amount with respect to such Eligible
Investment. On each Distribution Date, all interest and other investment
earnings (net of losses and investment expenses) on funds (x) on deposit in
the Finance Charge Account and the Principal Account shall be treated as
Collections of Finance Charge Receivables allocated to the Invested Amount
for purposes of this Series Supplement and (y) on deposit in the Principal
Funding Account shall be treated as Collections of Finance Charge
Receivables allocated to the Invested Amount for purposes of this Series
Supplement and shall be applied in accordance with Section 4.16(c).
(c) On the Transfer Date occurring in the month following the
commencement of the Controlled Accumulation Period and on each Transfer
Date thereafter with respect to the Controlled Accumulation Period,
Trustee, acting at Servicer's direction given on or before such Transfer
Date, shall transfer from the Principal Funding Account to the Finance
Charge Account the Principal Funding Investment Proceeds on deposit in the
Principal Funding Account, but not in excess of the Covered Amount, for
application as Class A Available Funds applied pursuant to Section
4.11(a)(i).
(d) Any Excess Principal Funding Investment Proceeds shall be paid
to Transferor on each Transfer Date. An amount equal to any Principal
Funding Investment Shortfall will be deposited in the Finance Charge
Account on each Transfer Date from the Reserve Account to the extent funds
are available pursuant to Section 4.17(d). Principal Funding Investment
Proceeds (including reinvested interest) shall not be considered part of
the amounts on deposit in the Principal Funding Account for purposes of
this Series Supplement.
SECTION 4.17 Reserve Account. (a) Trustee shall establish and
maintain with an Eligible Institution, which may be Trustee, in the name of
the Trust, on behalf of the Trust, for the benefit of the Investor Holders,
a segregated trust account (the "Reserve Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Holders. Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Reserve Account
and in all proceeds thereof. The Reserve Account shall be under the sole
dominion and control of Trustee for the benefit of the Investor Holders. If
at any time an Eligible Institution holding the Reserve Account ceases to
be a Eligible Institution, Transferor shall notify Trustee, and Trustee
upon being notified (or Servicer on its behalf) shall, within 10 Business
Days, establish a new Reserve Account meeting the conditions specified
above, and shall transfer any cash or any investments to such new Reserve
Account. Trustee, at the direction of Servicer, shall (i) make withdrawals
from the Reserve Account from time to time in an amount up to the Available
Reserve Account Amount at such time, for the purposes set forth in this
Series Supplement, and (ii) on each Transfer Date (from and after the
Reserve Account Funding Date) prior to termination of the Reserve Account
make a deposit into the Reserve Account in the amount specified in, and
otherwise in accordance with, Section 4.13(j).
(b) Funds on deposit in the Reserve Account shall be invested by
Trustee in Eligible Investments pursuant to the written direction of
Servicer. Funds on deposit in the Reserve Account on any Transfer Date,
after giving effect to any withdrawals from the Reserve Account on such
Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the
following Transfer Date. Trustee shall maintain for the benefit of the
Investor Holders possession of the negotiable instruments or securities, if
any, evidencing such Eligible Investments. No Eligible Investment shall be
disposed of prior to its maturity unless Servicer so directs and either (i)
such disposal will not result in a loss of all or part of the principal
portion of such Eligible Investment or (ii) prior to the maturity of such
Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. On each
Transfer Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Transfer Date on funds on deposit in
the Reserve Account shall be retained in the Reserve Account (to the extent
that the Available Reserve Account Amount is less than the Required Reserve
Account Amount) and the balance, if any, shall be deposited into the
Finance Charge Account and included in Class A Available Funds for such
Transfer Date. For purposes of determining the availability of funds or the
balance in the Reserve Account for any reason under this Series Supplement,
except as otherwise provided in the preceding sentence, investment earnings
on such funds shall be deemed not to be available or on deposit.
(c) On or before each Transfer Date with respect to the Controlled
Accumulation Period prior to the payment in full of the Class A Invested
Amount and on or before the first Transfer Date with respect to the Early
Amortization Period, Servicer shall calculate the "Reserve Draw Amount"
which shall be equal to the Principal Funding Investment Shortfall with
respect to each Transfer Date with respect to the Controlled Accumulation
Period or the first Transfer Date with respect to the Early Amortization
Period less, in each case, the amount of funds deposited into the Finance
Charge Account on such Transfer Date pursuant to Section 4.17(b).
(d) If the Reserve Draw Amount for any Transfer Date is greater than
zero, the Reserve Draw Amount, up to the Available Reserve Account Amount,
shall be withdrawn from the Reserve Account on such Transfer Date by
Trustee (acting in accordance with the instructions of Servicer), deposited
into the Finance Charge Account and included in Class A Available Funds for
such Transfer Date.
(e) If the Reserve Account Surplus on any Transfer Date, after
giving effect to all deposits to and withdrawals from the Reserve Account
with respect to such Transfer Date, is greater than zero, Trustee, acting
in accordance with the instructions of Servicer, shall withdraw from the
Reserve Account, and pay in accordance with the Loan Agreement, an amount
equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII, (ii) the first Transfer Date relating to the Early
Amortization Period and (iii) the Transfer Date immediately preceding the
Class A Scheduled Payment Date, Trustee, acting in accordance with the
instructions of Servicer, after the prior payment of all amounts owing to
the Series 1996-B Holders that are payable from the Reserve Account as
provided herein, shall withdraw from the Reserve Account and pay in
accordance with the Loan Agreement, all amounts, if any, on deposit in the
Reserve Account and the Reserve Account shall be deemed to have terminated
for purposes of this Series Supplement.
SECTION 4.18 Cash Collateral Account. (a) Servicer shall establish
and maintain with an Eligible Institution, which may be Trustee, in the
name of Trustee, on behalf of the Trust, a segregated trust account (the
"Cash Collateral Account") bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Investor
Holders. Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Cash Collateral Account and in all
proceeds thereof. The Cash Collateral Account shall be under the sole
dominion and control of Trustee for the benefit of the Investor Holders.
If at any time an Eligible Institution holding the Cash Collateral Account
ceases to be an Eligible Institution, Transferor shall notify Trustee, and
Trustee upon being notified (or Servicer on its behalf) shall within 10
Business Days establish a new Cash Collateral Account meeting the
conditions specified above, and shall transfer any cash or any investments
to such new Cash Collateral Account. Trustee, at the direction of
Servicer, shall make deposits to and withdrawals from the Cash Collateral
Account in the amounts and at the times set forth in this Series Supplement
and the Loan Agreement. All withdrawals from the Cash Collateral Account
shall be made in the priority set forth below.
(b) On the Closing Date, Transferor shall deposit $8,750,000 in
immediately available funds into the Cash Collateral Account. Funds on
deposit in the Cash Collateral Account from time to time shall be invested
and/or reinvested at the direction of Servicer by Trustee in Eligible
Investments that will mature so that such funds will be available for
withdrawal on the following Transfer Date. No Eligible Investment shall be
disposed of prior to its maturity unless Servicer so directs and either (i)
such disposal will not result in a loss of all or part of the principal
portion of such Eligible Investment or (ii) prior to the maturity of such
Eligible Investment, a default occurs in the payment of principal, interest
or any other amount with respect to such Eligible Investment. Trustee
shall maintain for the benefit of the Investor Holders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. On each Transfer Date, all interest and earnings (net of
losses and investment expenses) accrued since the preceding Transfer Date
on funds on deposit in the Cash Collateral Account shall be treated as
Collections of Finance Charge Receivables allocated to the Invested Amount
and shall be part of Class A Available Funds, Class B Available Funds and
Collateral Available Funds for such Transfer Date. For purposes of
determining the availability of funds or the balances in the Cash
Collateral Account for any reason under this Series Supplement, all
investment earnings on such funds shall be deemed not to be available or on
deposit.
(c) On each Determination Date, Servicer shall calculate the amount
(the "Required Draw Amount") by which the sum of the amounts specified in
clauses (a) through (d) of Section 4.13 with respect to the related
Transfer Date exceeds the amount of Excess Spread allocated with respect to
the related Monthly Period. In the event that for any Transfer Date the
Required Draw Amount is greater than zero, Servicer shall give written
notice to Trustee and the Collateral Interest Holder of such positive
Required Draw Amount on the related Determination Date. On the related
Transfer Date, the Required Draw Amount, if any, up to the Available Cash
Collateral Amount, shall be withdrawn from the Cash Collateral Account and
distributed to fund any deficiency pursuant to Section 4.13(a) through (d)
(in the order of priority set forth in Section 4.13).
(d) If, after giving effect to all deposits to and withdrawals from
the Cash Collateral Account and adjustments to the Collateral Interest with
respect to any Transfer Date, the Collateral Interest has been reduced to
zero and there is an Enhancement Surplus (after giving effect to such
reduction), Trustee, acting in accordance with the instructions of
Servicer, shall withdraw an amount equal to such Enhancement Surplus from
the Cash Collateral Account, and apply in accordance with the Loan
Agreement.
SECTION 4.19 Determination of LIBOR. As needed for the determination
of Collateral Rate, Trustee will determine LIBOR pursuant to the terms of
the Loan Agreement.
SECTION 4.20 Transferor's or Servicer's Failure to Make a Deposit or
Payment. If Servicer or Transferor fails to make, or give instructions to
make, any payment or deposit (other than as required by Sections 2.5, 2.6
or 12.2) required to be made or given by Servicer or Transferor,
respectively, at the time specified in the Agreement (including applicable
grace periods), Trustee shall make such payment or deposit from the Finance
Charge Account, the Principal Account, the Principal Funding Account, the
Cash Collateral Account, the Distribution Account and/or the Reserve
Account, as applicable, without instruction from Servicer or Transferor.
Trustee shall be required to make any such payment, deposit or withdrawal
hereunder only to the extent that Trustee has sufficient information to
allow it to determine the amount thereof; provided that Trustee shall in
all cases be deemed to have sufficient information to determine the amount
of interest payable to the Investor Holders on each Distribution Date.
Servicer shall, upon request of Trustee, promptly provide Trustee with all
information necessary to allow Trustee to make such payment, deposit or
withdrawal. Such funds or the proceeds of such withdrawal shall be applied
by Trustee in the manner in which such payment or deposit should have been
made by Transferor or Servicer, as the case may be.
SECTION 8. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Holders:
ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTOR HOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, Trustee
shall distribute (in accordance with the certificate delivered on or before
the related Transfer Date by Servicer to Trustee pursuant to Section
3.4(b)) to each Class A Holder of record on the immediately preceding
Record Date (other than as provided in Section 2.6 or Section 12.2
respecting a final distribution) such Holder's pro rata share (based on the
share of the aggregate outstanding principal balance of all Class A
Certificates represented by the Class A Certificates held by such Holder)
of amounts on deposit in the Distribution Account as are payable to the
Class A Holders pursuant to Section 4.11 by check mailed to each Class A
Holder (at such Holder's address as it appears in the Certificate
Register), except that with respect to Class A Certificates registered in
the name of the nominee of a Clearing Agency, such distribution shall be
made by wire transfer in immediately available funds.
(b) On each Distribution Date, Trustee shall distribute (in
accordance with the certificate delivered on or before the related Transfer
Date by Servicer to Trustee pursuant to Section 3.4(b)) to each Class B
Holder of record on the immediately preceding Record Date (other than as
provided in Section 2.6 or Section 12.2 respecting a final distribution)
such Holder's pro rata share (based on the share of the aggregate
outstanding principal balance of all Class B Certificates represented by
the Class B Certificates held by such Holder) of amounts on deposit in the
Distribution Account as are payable to the Class B Holders pursuant to
Section 4.11 by check mailed to each Class B Holder (at such Holder's
address as it appears in the Certificate Register), except that with
respect to Class B Certificates registered in the name of the nominee of a
Clearing Agency, such distribution shall be made by wire transfer in
immediately available funds.
SECTION 5.2 Reports. (a) Monthly Series 1996-B Servicer's
Certificate. On or before each Distribution Date, Trustee shall forward to
each Investor Holder and each Rating Agency a statement substantially in
the form of Exhibit C prepared by Servicer and delivered to Trustee.
(b) Annual Holders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 1997, Trustee shall distribute
to each Person who at any time during the preceding calendar year was an
Investor Holder, a statement prepared by Servicer containing the following
information:
(i) the amount of the current distribution allocable to Class A
Monthly Principal, Class B Monthly Principal and Collateral Monthly
Principal, respectively; and
(ii) the amount of the current distribution allocable to Class A
Monthly Interest, Class A Deficiency Amounts, Class A Additional
Interest, Class B Monthly Interest, Class B Deficiency Amounts, Class
B Additional Interest and Collateral Monthly Interest, and any
accrued and unpaid Collateral Monthly Interest, respectively.
Such information shall be aggregated for such calendar year or the
applicable portion thereof during which such Person was an Investor Holder,
together with such other customary information (consistent with the
treatment of the Certificates as debt) as Trustee or Servicer deems
necessary or desirable to enable the Investor Holders to prepare their tax
returns. Such obligations of Trustee shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided
by Trustee pursuant to any requirements of the Internal Revenue Code.
SECTION 9. Series 1996-B Early Amortization Events. If any one of
the following events shall occur with respect to the Investor Certificates:
(a) failure on the part of Transferor (i) to make any payment or
deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five days after the date such
payment or deposit is required to be made herein or (ii) duly to observe or
perform in any material respect any covenants or agreements of Transferor
set forth in the Agreement or this Series Supplement (including the
covenant of Transferor contained in Section 11 of this Series Supplement),
which failure has a material adverse effect on the Series 1996-B Holders
(which determination shall be made without reference to whether any funds
are available under the Collateral Interest or the Cash Collateral Account)
and which continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to Transferor by Trustee, or to Transferor and
Trustee by Investor Holders representing more than 50% of the Invested
Amount of this Series 1996-B, and continues to affect materially and
adversely the interests of the Series 1996-B Holders (which determination
shall be made without reference to whether any funds are available under
the Collateral Interest or the Cash Collateral Account) for such period;
(b) any representation or warranty made by Transferor in the
Agreement or this Series Supplement, or any information contained in an
Account Schedule required to be delivered by Transferor pursuant to Section
2.1 or 2.8, (i) shall prove to have been incorrect in any material respect
when made or when delivered, 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 Transferor by Trustee, or to Transferor and Trustee by Investor
Holders representing more than 50% of the Invested Amount of this Series
1996-B, and (ii) as a result of which the interests of the Series 1996-B
Holders are materially and adversely affected (which determination shall be
made without reference to whether any funds are available under the
Collateral Interest or the Cash Collateral Account) and continue to be
materially and adversely affected for such period; provided that a Series
1996-B Early Amortization Event pursuant to this Section 9(b) shall not be
deemed to have occurred hereunder if Transferor has accepted reassignment
of the related Receivable, or all of such Receivables, if applicable,
during such period in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for
such period;
(d) Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by
Section 2.8(b); provided that such failure shall not give rise to an Early
Amortization Event if, prior to the date on which such conveyance was
required to be completed, Transferor causes a reduction in the invested
amount of any Variable Interest to occur, so that, after giving effect to
that reduction (i) the Transferor Amount is not less than the Minimum
Transferor Amount (including the Additional Minimum Transferor Amount, if
any) and (ii) the sum of the aggregate amount of Principal Receivables plus
amounts on deposit in the Excess Funding Account is not less than the
Required Principal Balance;
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1996-B Holders (which determination shall be
made without refrence to whether any funds are available under the
Collateral Interest or the Cash Collateral Account);
(f) the Class A Invested Amount shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Invested Amount shall not be
paid in full on the Class B Scheduled Payment Date; or
(g) The Limited 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 The Limited 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 The Limited or for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and 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 The Limited of a voluntary
case under any Debtor Relief Law, or The Limited'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 The Limited or for any substantial part of its
property, or any general assignment for the benefit of creditors; or The
Limited shall have taken any corporate action in furtherance of any of the
foregoing actions;
then, in the case of any event described in Section 9(a), (b) or (e)
hereof, after the applicable grace period set forth in such Sections,
either Trustee or Investor Holders representing more than 50% of the
Invested Amount of this Series 1996-B by notice then given in writing to
Transferor and Servicer (and to Trustee if given by the Holders) may
declare that an early amortization event (a "Series 1996-B Early
Amortization Event") has occurred as of the date of such notice, and in the
case of any event described in Section 9(c), (d), (f) or (g) hereof, a
Series 1996-B Early Amortization Event shall occur without any notice or
other action on the part of Trustee or the Investor Holders immediately
upon the occurrence of such event.
SECTION 10. Series 1996-B Termination. The right of the Investor
Holders to receive payments from the Trust will terminate on the first
Business Day following the Series 1996-B Termination Date.
SECTION 11. Periodic Finance Charges and Other Fees. Transferor
hereby agrees that, except as otherwise required by any Requirement of Law,
or as is deemed by Transferor to be necessary in order for Transferor to
maintain its credit card business, based upon a good faith assessment by
Transferor, in its sole discretion, of the nature of the competition in the
credit card business, it shall not at any time 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 as of such date would be less than the then Base Rate.
SECTION 12. Limitations on Addition of Approved Portfolios.
Transferor may designate additional Approved Portfolios if (a) the Rating
Agency Condition is satisfied with respect to that designation and (b)
Transferor delivers to Trustee an Opinion of Counsel that all UCC financing
statements or amendments required to perfect the interest of the Trust in
Receivables arising in accounts included in each such Additional Portfolio
have been made.
SECTION 13. Counterparts. This Series Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all of such counterparts shall together constitute but one
and the same instrument.
SECTION 14. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 15. Additional Provisions. (a) Notwithstanding the
provisions of Section 2.10(a), the Discount Percentage may exceed 3%, so
long as the Rating Agency Condition is satisfied.
(b) Notwithstanding the provisions of Section 2.8, no new accounts
that would otherwise be Automatic Additional Accounts shall be treated as
such on any Addition Date if both of the following statements are true:
(i) an Automatic Addition Limitation Event has occurred, and
the Rating Agency Condition has not been satisfied as to the
resumption of treating new accounts as Automatic Additional Accounts;
and
(ii) the number of such Automatic Additional Accounts would
exceed an amount equal to the excess (if any) of (A) 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 (B)
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.
An "Automatic Addition Limitation Event" will be deemed to occur on
any Determination Date if:
(1) the average of the default ratio for that Determination Date
and the preceding two Determination Dates is greater than 1.5%, where
the "default ratio" for any Determination Date equals the percentage
equivalent of a fraction (A) the numerator of which is the aggregate
of the Default Amounts for all Accounts that became Defaulted
Accounts during the related Monthly Period and (B) the denominator of
which is the total Receivables as of the end of the sixth preceding
Monthly Period; or
(2) the average of the payment rate for that Determination Date
and the preceding two Determination Dates is less than 10%, where the
"payment rate" for any Determination Date equals the percentage
equivalent of a fraction (A) the numerator of which is the aggregate
Collections received during the related Monthly Period and (B) the
denominator of which is equal to the total Receivables held by the
Trust at the close of business for the Monthly Period immediately
prior to such related Monthly Period.
(c) The Additional Minimum Transferor Amount is hereby specified as
an additional amount to be considered part of the Minimum Transferor Amount
pursuant to clause (b) of the definition of Minimum Transferor Amount.
(d) Notwithstanding the provisions of Section 3.9(a), so long as any
of the Investor Certificates remain outstanding, Transferor shall make
deposits of the type referred to in that Section as if the antepenultimate
and penultimate sentences of the first grammatical paragraph of that
Section read as follows:
"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 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 Transferor Amount (up to the amount
of such Principal Receivables).".
Amounts deposited in the Excess Funding Account pursuant to this Section
15(d) shall be deemed for all purposes of the Agreement to have been
deposited pursuant to such penultimate sentence.
(e) Notwithstanding the definition of "Identified Portfolio"
appearing in Section 1.1, for purposes of Series 1996-B, the definition of
"Identified Portfolio" shall be as follows:
""Identified Portfolio" means any Accounts owned from time to
time by WFN and included in the private label credit card programs of
Lane Bryant, Inc., Lerner New York, Inc., Express, Inc., Structure,
Inc., Victoria's Secret Stores, Inc., Victoria's Secret Catalogue,
Inc., The Limited Stores, Inc., Abercrombie & Fitch, Inc., Henri
Bendel, Inc. and Brylane, L.P. (but limited, in the case of Brylane,
L.P., to accounts related to the Lane Bryant, Lerner New York and
Roamans catalogues). To avoid doubt, the foregoing programs include
all cards issued under the insignia of "Limited Fashion Group."".
(f) Notwithstanding Section 3.6, Servicer shall, in lieu of
delivering any annual report by a firm of nationally recognized independent
accountants required to be delivered pursuant to such Section on or before
the 90th day following 1996 and each subsequent calendar year, deliver any
such annual report on or before the 90th day following the end of its 1996
fiscal year and each of its subsequent fiscal years.
(g) Notwithstanding Section 4.4: (i) during the Controlled
Accumulation Period and the Early Amortization Period Transferor may not
apply Shared Principal Collections as principal with respect to any
Variable Interest, unless such application of principal is made on any
Transfer Date or related Distribution Date after the application of Shared
Principal Collections pursuant to Section 4.15 and (ii) Shared Principal
Collections allocable to Series 1996-B pursuant to Section 4.4 shall be
withdrawn on each Transfer Date, rather than each Distribution Date.
Notwithstanding Section 4.5, Excess Finance Charge Collections allocable to
Series 1996-B pursuant to Section 4.5 shall be withdrawn on each Transfer
Date, rather than each Distribution Date.
SECTION 16. No Petition. Transferor, Servicer and Trustee, by
entering into this Series Supplement and each Holder, by accepting a Series
1996-B Certificate hereby covenant and agree that they will not at any time
institute against the Trust, or join in any institution against the Trust
of, any bankruptcy proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to
the Investor Holders, the Agreement or this Series Supplement.
SECTION 17. Amendments. This Series Supplement may be amended
pursuant to Section 13.1 of the Agreement. This Series Supplement may also
be amended by Transferor without the consent of Servicer, Trustee or any
Investor Holder if Transferor provides Trustee with: (i) an Opinion of
Counsel to the effect that such amendment or modification would (A) reduce
the risk that the Trust would be treated as taxable as a publicly traded
partnership pursuant to Internal Revenue Code section 7704 or (B) permit
the Trust or a relevant portion thereof to be treated as a "financial asset
securitization investment trust" and (C) in either case, (1) would not
cause the Trust to be classified, for Federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation and
(2) would not cause or constitute an event in which gain or loss would be
recognized by any Investor Holder; and (ii) a certificate that such
amendment or modification would not materially and adversely affect any
Investor Holder; provided that no such amendment shall be deemed effective
without Trustee's consent, if Trustee's rights, duties and obligations
hereunder are thereby modified. Prior to the execution of any such
amendment (other than an amendment pursuant to Section 13.1(a) of the
Agreement), Trustee shall furnish notification of the substance of such
amendment to each Rating Agency.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused this
Series 1996-B Supplement to be duly executed by their respective officers
as of the day and year first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK,
Transferor and Servicer
By:_______________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee
By:_______________________________
Name:
Title:
EXHIBIT A-1
FORM OF CERTIFICATE
-------------------
CLASS A
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $__________
CUSIP No.__________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
6.95% CLASS A
ASSET-BACKED CERTIFICATE, SERIES 1996-B
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class A Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-B Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-B Certificates are issued in two classes, the Class A
Certificates (of which this certificate is one) and the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-B
Certificates with the intention that the Series 1996-B Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-B
Holder (or Series 1996-B Certificate Owner) by acceptance of its Series
1996-B Certificate (or in the case of a Series 1996-B Certificate Owner, by
virtue of such Series 1996-B Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-B Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-B Holder agrees that it will cause any Series
1996-B Certificate Owner acquiring an interest in a Series 1996-B
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-B Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class A
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class A Holder by virtue of the acceptance hereof assents and by
which the Class A Holder is bound.
This Class A Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class A Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-B Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-B Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class A
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class A Certificate to be duly executed under its official
seal.
By:___________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
DATED:____________________
This is one of the 6.95% Class A Asset-Backed Certificates,
Series 1996-B referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:________________________
Authorized Signatory
EXHIBIT A-2
FORM OF CERTIFICATE
CLASS B
Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to World
Financial Network National Bank or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
No. ___ $_________
CUSIP No._________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
7.20% CLASS B
ASSET-BACKED CERTIFICATE, SERIES 1996-B
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of credit card receivables generated or acquired by World
Financial Network National Bank and other assets and interests constituting
the Trust under the Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
World Financial Network National Bank
or any Affiliate thereof.)
This certifies that Cede & Co. (the "Class B Holder") is the
registered owner of a fractional undivided interest in a trust (the
"Trust"), the corpus of which consists of (i) a portfolio of all
receivables (the "Receivables") existing in the open-end credit card
accounts identified under the Agreement from time to time (the "Accounts"),
(ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account, Excess Funding Account and in the Series
Accounts, (v) the benefits of any Enhancements, if any, with respect to one
or more Series of Investor Certificates, (vi) the benefits of the
Collateral Interest and (vii) the other assets and interests constituting
the Trust pursuant to a Pooling and Servicing Agreement dated as of January
17, 1996 as supplemented by the Series 1996-B Supplement dated as of May 9,
1996 (collectively, the "Agreement"), between World Financial Network
National Bank, as Transferor ("Transferor") and Servicer ("Servicer"), and
The Bank of New York, as Trustee ("Trustee").
The Series 1996-B Certificates are issued in two classes, the Class A
Certificates and the Class B Certificates (of which this certificate is
one), which are subordinated to the Class A Certificates in certain rights
of payment as described in the Agreement.
Transferor has structured the Agreement and the Series 1996-B
Certificates with the intention that the Series 1996-B Certificates will
qualify under applicable tax law as indebtedness, and each of Transferor,
the Holder of the Transferor Certificate, Servicer and each Series 1996-B
Holder (or Series 1996-B Certificate Owner) by acceptance of its Series
1996-B Certificate (or in the case of a Series 1996-B Certificate Owner, by
virtue of such Series 1996-B Certificate Owner's acquisition of a
beneficial interest therein), agrees to treat and to take no action
inconsistent with the treatment of the Series 1996-B Certificates (or any
beneficial interest therein) as indebtedness for purposes of federal,
state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income, value of intangible property or net
worth. Each Series 1996-B Holder agrees that it will cause any Series
1996-B Certificate Owner acquiring an interest in a Series 1996-B
Certificate through it to comply with the Agreement as to treatment of the
Series 1996-B Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Agreement. This Class B
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement, as amended from time to
time, the Class B Holder by virtue of the acceptance hereof assents and by
which the Class B Holder is bound.
This Class B Certificate represents an interest in only World
Financial Network Credit Card Master Trust. This Class B Certificate does
not represent an obligation of, or an interest in, Transferor or Servicer,
and the Series 1996-B Certificates, the Collateral Interest and the
Accounts or Receivables are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency. This Series
1996-B Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth hereinabove
and in the Agreement.
Unless the certificate of authentication hereon has been executed by
or on behalf of Trustee, by manual or facsimile signature, this Class B
Certificate shall not be entitled to any benefit under the Agreement, or be
valid for any purpose.
IN WITNESS WHEREOF, World Financial Network National Bank has
caused this Class B Certificate to be duly executed under its official
seal.
By:________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
DATED:______________________
This is one of the 7.20% Class B Asset-Backed Certificates, Series
1996-B referred to in the within-mentioned Agreement.
THE BANK OF NEW YORK,
Trustee
By:________________________
Authorized Signatory
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO TRUSTEE
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
SERIES 1996-B
MONTHLY PERIOD ENDING ______________, ____
EXHIBIT C
FORM OF MONTHLY Series 1996-B
HOLDERS' STATEMENT
SERIES 1996-B
WORLD FINANCIAL NETWORK NATIONAL BANK
________________________________________
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
________________________________________
