12450092.9 60200 1925C 99544439
J-1
Exhibit 4.13
SRI RECEIVABLES PURCHASE CO., INC.
Transferor
SPECIALTY RETAILERS, INC.
Servicer
and
BANKERS TRUST (DELAWARE)
Trustee
on behalf of Certificateholders
of the SRI Receivables Master Trust
SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1999
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
Section 1.1 Definitions 1
Section 1.2 Other Definitional Provisions 23
ARTICLE II CONVEYANCE OF RECEIVABLES;ISSUANCE OF CERTIFICATES 25
Section 2.1 Conveyance of Receivables 25
Section 2.2 Acceptance by Trustee 28
Section 2.3 Representations and Warranties of the
Transferor 28
Section 2.4 Representations and Warranties of the
Transferor Relating to this Agreement and the
Receivables 30
Section 2.5 Covenants of the Transferor 36
Section 2.6 Addition of Accounts 38
Section 2.7 Removal of Accounts 42
Section 2.8 Discount Option 44
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES 45
Section 3.1 Acceptance of Appointment and Other
Matters Relating to the Servicer 45
Section 3.2 Servicing Compensation 46
Section 3.3 Representations and Warranties of the
Servicer 47
Section 3.4 Reports and Records for the Trustee 49
Section 3.5 Annual Servicer's Certificate 50
Section 3.6 Annual Independent Accountants' Servicing
Report 51
Section 3.7 Tax Treatment 51
Section 3.8 Adjustments 52
Section 3.9 Notices to SRI 52
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS ANDALLOCATION AND
APPLICATION OF COLLECTIONS 53
Section 4.1 Rights of Certificateholders 53
Section 4.2 Establishment of Accounts 53
Section 4.3 Collections and Allocations 55
ARTICLE V [ARTICLE V IS RESERVED AND SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES] 59
ARTICLE VI THE CERTIFICATES 60
Section 6.1 The Certificates 60
Section 6.2 Authentication of Certificates 60
Section 6.3 Registration of Transfer and Exchange of
Certificates 61
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates 63
Section 6.5 Persons Deemed Owners 63
Section 6.6 Appointment of Paying Agent 64
Section 6.7 Access to List of Certificateholders' Names
and Addresses 65
Section 6.8 Authenticating Agent 65
Section 6.9 Tender of Exchangeable Transferor Certificate
66
Section 6.10 Book-Entry Certificates 68
Section 6.11 Notices to Clearing Agency 69
Section 6.12 Definitive Certificates 69
Section 6.13 Global Certificate; Euro-Certificate Exchange
Date 70
ARTICLE VII OTHER MATTERS RELATING TO THE TRANSFEROR 71
Section 7.1 Liability of the Transferor 71
Section 7.2 Merger or Consolidation of, or Assumption of
the Obligations of, the Transferor 71
Section 7.3 Limitation on Liability 72
Section 7.4 Liabilities 72
Section 7.5 Transferor's Records 73
ARTICLE VIII OTHER MATTERS RELATING TO THE SERVICER 74
Section 8.1 Liability of the Servicer 74
Section 8.2 Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer 74
Section 8.3 Limitation on Liability of the Servicer and
Others 74
Section 8.4 Servicer Indemnification of the Transferor,
the Trust and the Trustee 75
Section 8.5 The Servicer Not to Resign 76
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables 76
Section 8.7 Delegation of Duties 76
Section 8.8 Maintenance of Property; Insurance 77
ARTICLE IX PAY OUT EVENTS 78
Section 9.1 Pay Out Events 78
ARTICLE X SERVICER DEFAULTS 79
Section 10.1 Servicer Defaults 79
Section 10.2 Trustee to Act; Appointment of Successor 81
Section 10.3 Notification to Certificateholders 82
Section 10.4 Waiver of Past Defaults 83
ARTICLE XI THE TRUSTEE 84
Section 11.1 Duties of Trustee 84
Section 11.2 Certain Matters Affecting the Trustee 85
Section 11.3 Trustee Not Liable for Recitals in
Certificates 87
Section 11.4 Trustee May Own Certificates 87
Section 11.5 The Servicer to Pay Trustee's Fees and
Expenses 87
Section 11.6 Eligibility Requirements for Trustee 88
Section 11.7 Resignation or Removal of Trustee 88
Section 11.8 Successor Trustee 89
Section 11.9 Merger or Consolidation of Trustee 89
Section 11.10 Appointment of Co-Trustee or Separate Trustee 89
Section 11.11 Tax Returns 90
Section 11.12 Trustee May Enforce Claims Without Possession
of Certificates 91
Section 11.13 Suits for Enforcement 91
Section 11.14 Rights of Certificateholders to Direct
Trustee 91
Section 11.15 Representations and Warranties of Trustee 92
Section 11.16 Maintenance of Office or Agency 92
ARTICLE XII TERMINATION 93
Section 12.1 Termination of Trust 93
Section 12.2 Optional Termination 94
Section 12.3 Final Payment with Respect to any Series 94
Section 12.4 Termination Rights of Holder of Exchangeable
Transferor Certificate 96
ARTICLE XIII MISCELLANEOUS PROVISIONS 97
Section 13.1 Amendment 97
Section 13.2 Protection of Right, Title and Interest to
Trust 98
Section 13.3 Limitation on Rights of Certificateholders 99
Section 13.4 Governing Law 100
Section 13.5 Notices 100
Section 13.6 Severability of Provisions 101
Section 13.7 Assignment 101
Section 13.8 Certificates Non-Assessable and Fully Paid 101
Section 13.9 Further Assurances 101
Section 13.10 No Waiver; Cumulative Remedies 101
Section 13.11 Counterparts 101
Section 13.12 Third-Party Beneficiaries 101
Section 13.13 Actions by Certificateholders 102
Section 13.14 Rule 144A Information 102
Section 13.15 Merger and Integration; Existing Agreement 102
Section 13.16 Headings 103
Section 13.17 No Bankruptcy Petition Against the Transferor
or the Trust 103
EXHIBIT A Form of Exchangeable Transferor Certificate
EXHIBIT B Form of Assignment of Receivables in Supplemental
Accounts
EXHIBIT C Form of Daily Report
EXHIBIT D Form of Settlement Statement
EXHIBIT E Form of Quarterly Servicer's Certificate
EXHIBIT F Form of Opinion of Counsel Regarding Supplemental
Accounts
EXHIBIT G Form of Annual Opinion of Counsel
EXHIBIT H Form of Reassignment of Receivables
EXHIBIT I Form of Reconveyance of Receivables
EXHIBIT J Form of Agreed-Upon Procedures
This SECOND AMENDED AND RESTATED POOLING AND SERVICING
AGREEMENT, dated as of November 1, 1999 (this "Agreement"), is by
and among SRI RECEIVABLES PURCHASE CO., INC., a corporation
organized and existing under the laws of the State of Delaware,
as Transferor (the "Transferor"), SPECIALTY RETAILERS, INC., a
corporation organized and existing under the laws of the State of
Texas, as Servicer (the "Servicer"), and BANKERS TRUST
(DELAWARE), a banking corporation organized and existing under
the laws of the State of Delaware, as Trustee (the "Trustee").
WHEREAS, this Agreement was originally executed and
delivered as of July 30, 1993; and
WHEREAS, this Agreement was amended by the First Amendment
to Pooling and Servicing Agreement dated October 7, 1994, and the
Second Amendment to Pooling and Servicing Agreement dated January
31, 1995, amended and restated as of August 11, 1995, further
amended by a First Amendment to Amended and Restated Pooling and
Servicing Agreement dated May 30, 1996, and the Second Amendment
to Amended and Restated Pooling and Servicing Agreement dated
August 1, 1998, and is being amended and restated pursuant to
Section 13.1(a) hereof on the date hereof (this Agreement as in
effect prior to such amendment and restatement is referred to as
the "Existing Agreement").
In consideration of the mutual agreements herein contained,
each party agrees as follows for the benefit of the other parties
and the Certificateholders:
ARTICLE I
DEFINITIONS
Section I.1 Definitions. Whenever used in this Agreement,
the following words and phrases shall have the following
meanings:
"Account" shall mean (a) each credit card account
established pursuant to a Charge Account Agreement between an
Originator and any Person, the Receivables from which are
designated for sale by an Originator to the Transferor, which is
identified by (i) an account number, (ii) the amount of
Receivables outstanding in such Account as of its Cut-Off Date
and (iii) the amount of Principal Receivables in such Account as
of its Cut-Off Date, in each case in the computer file or
microfiche list delivered to the Trustee or the bailee of the
Trustee by the Transferor pursuant to this Agreement, (b) each
Granite Original Account, (c) each Automatic Additional Account,
and (d) each Supplemental Account identified in each file or list
delivered to the Trustee or the bailee of the Trustee by the
Transferor pursuant to subsection 2.6(e) of this Agreement. The
Definition of Account shall include each Transferred Account but
shall not include any Purged Accounts. The term "Account" shall
be deemed to refer to a Supplemental Account only from and after
the Addition Date with respect thereto, and the term "Account"
shall be deemed to refer to any Removed Account only prior to the
Removal Date with respect thereto.
"Account Owner" shall mean the Bank or any Originator.
"Account Property" shall have the meaning specified in
subsection 2.1(iv).
"Accumulation Account" shall have the meaning for each
Series specified in the related Supplement.
"Active Accounts" shall mean, as of any Business Day,
any Account in which there has been either purchase or
merchandise return activity within the preceding 12 Monthly
Periods.
"Addition Cut-off Date" shall mean each date as of
which Supplemental Accounts shall be selected and specified to be
included as Accounts pursuant to subsection 2.6(c) or (d).
"Addition Date" shall mean each date as of which
Receivables under Supplemental Accounts are included in the Trust
as Accounts pursuant to subsection 2.6(c) or (d).
"Additional Originator" has the meaning it is given in
the Receivables Purchase Agreement.
"Additional Originator Agreement" has the meaning it is
given in the Receivables Purchase Agreement.
"Adjusted Invested Amount" shall mean, with respect to
any Series or any Class, when used with respect to any Business
Day, the Invested Amount of such Series or Class, as applicable,
minus any amounts then on deposit in any Accumulation Account for
such Series or Class, as applicable.
"Adjustment Payment" shall have the meaning specified
in subsection 3.8(a).
"Affiliate" means, with respect to a particular
Person,(a) any Person that, directly or indirectly, is in control
of, is controlled by, or is under common control with, such
Person, or (b) any Person who is a director or officer or general
partner (i) of such Person, (ii) of any subsidiary of such
Person, or (iii) of any Person described in clause (a) above.
For purposes of this definition, control of a Person shall mean
the power, direct or indirect, (i) to vote 5% or more of the
securities having ordinary voting power to elect the directors of
such Person, or (ii) to direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise.
"Aggregate Invested Amount" shall mean, as of any date
of determination, the sum of the Invested Amounts of all Series
of Certificates issued and outstanding on such date of
determination.
"Aggregate Investor Percentage" with respect to
Principal Collections, Finance Charge Collections and Receivables
in Defaulted Accounts, as the case may be, shall mean, as of any
date of determination, the sum of such Investor Percentages of
all Series of Certificates issued and outstanding on such date of
determination; provided, however, that the Aggregate Investor
Percentage shall not exceed 100%.
"Aggregate Principal Receivables" shall mean, for any
day, the aggregate amount of Principal Receivables at the end of
such day.
"Agreement" shall mean this Pooling and Servicing
Agreement and all amendments hereof and supplements hereto,
including any Supplement.
"Amortization Period" shall mean, with respect to any
Series, the period following the related Revolving Period for
such Series, which shall be the Amortization Period, the Early
Amortization Period, or other amortization or accumulation
period, in each case as defined with respect to such Series in
the related Supplement.
"Amortization Period Commencement Date" shall mean with
respect to any Series, the date on which the Amortization Period
with respect thereto commences.
"Applicants" shall have the meaning specified in
Section 6.7.
"Assigned Property" shall have the meaning specified in
subsection 2.1(iii).
"Assignment" shall have the meaning specified in
subsection 2.6(e)(ii).
"Authorized Newspaper" shall mean a newspaper of
general circulation in the Borough of Manhattan, The City of New
York printed in the English language and customarily published on
each Business Day, whether or not published on Saturdays, Sundays
and holidays.
"Automatic Additional Account" shall mean:
(a) a consumer revolving credit card account (or any
successor credit card account designation used by the Transferor)
coming into existence after the applicable Cut-Off Date:
(i) which is originated by the Bank during the
normal operation of the Bank's credit card business and is
not acquired by the Transferor or the Bank from another
credit card issuer;
(ii) which was in existence and owned by the Bank
and the Receivables of which had been transferred to SRI
pursuant to the Receivables Transfer Agreement and then
further transferred to the Transferor pursuant to the
Receivables Purchase Agreement on the date on which
Receivables generated in such account are to be added to the
Trust and is in existence at the close of business on the
date of its designation for inclusion in the Trust;
(iii) which is payable in Dollars; and
(iv) the Receivables in which have not been
charged off prior to the date of their designation for
inclusion in the Trust;
(b) a consumer revolving credit card account (or any
successor credit card account designation used by the Transferor)
coming into existence after the applicable Cut-Off Date:
(i) which is originated by an Originator during
the normal operation of such Originator's credit card
business and is not acquired by the Transferor or such
Originator from another credit card issuer;
(ii) which was in existence and owned by such
Originator and the Receivables of which had been transferred
to the Transferor pursuant to the Receivables Purchase
Agreement on the date on which Receivables generated in such
account are to be added to the Trust and is in existence at
the close of business on the date of its designation for
inclusion in the Trust;
(iii) which is payable in Dollars;
(iv) the Receivables in which have not been
charged off prior to the date of their designation for
inclusion in the Trust; and
(v) the Originator of which is an Originator on
the date hereof or has been designated as an "Originator" by
the Transferor after compliance with the requirements of
paragraph (c);
(c) any other consumer revolving credit card account,
Receivables from which each Rating Agency permits to be added
automatically to the Trust; provided that the Transferor
(x) shall have received written confirmation from each Rating
Agency that the inclusion of such accounts as Automatic
Additional Accounts pursuant to this paragraph (c) will not
result in the reduction or withdrawal of its then existing rating
of any Class of Investor Certificates then issued and outstanding
and (y) shall have delivered such notice to the Trustee.
"Bank" means Granite National Bank, N.A., a national
banking association.
"Bearer Certificates" shall have the meaning specified
in Section 6.1.
"Bearer Rules" shall mean the provisions of the
Internal Revenue Code, in effect from time to time, governing the
treatment of bearer obligations, including sections 163(f), 871,
881, 1441, 1442 and 4701, and any regulations thereunder
including, to the extent applicable to any Series, proposed or
temporary regulations of the Internal Revenue Service.
"Book-Entry Certificates" shall mean certificates
evidencing a beneficial interest 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;
provided, that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer authorized and
Definitive Certificates are to be issued to the Certificate
Owners, such certificates shall no longer be "Book-Entry
Certificates."
"Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in New
York, New York (or, with respect to any Series, any additional
city specified in the related Supplement) are authorized or
obligated by law or executive order to be closed, and such other
days in each year designated by the Servicer in writing to the
Trustee by the first day of December in the preceding year;
provided, however, that the Servicer shall not designate more
than eight days in each year (excluding Saturdays and Sundays) as
non-Business Days of which no more than four (inclusive of
Saturdays and Sundays) shall be consecutive.
"Cash Equivalents" shall mean, unless otherwise
provided in the Supplement with respect to any Series, (a)
negotiable instruments or securities represented by instruments
in bearer or registered form which evidence (i) obligations of or
fully guaranteed by the United States of America; (ii) time
deposits, promissory notes, or certificates of deposit of any
depositary institution or trust company; provided, however, that
at the time of the Trust's investment or contractual commitment
to invest therein, the certificates of deposit or short-term
deposits of such depositary institution or trust company shall
have a Satisfactory Short-Term Credit Rating; (iii) commercial
paper having, at the time of the Trust's investment or
contractual commitment to invest therein, a Satisfactory
Short-Term Credit Rating; (iv) bankers acceptances issued by any
depositary institution or trust company described in
clause (a)(ii) above; and (v) investments in money market funds
having the Highest Long-Term Credit Rating or otherwise approved
in writing by the Rating Agency; (b) time deposits and demand
deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in
clause(a)(ii) above; (c) securities not represented by an
instrument that are registered in the name of the Trustee or its
nominee (which may not be SRI or an Affiliate) upon books
maintained for that purpose by or on behalf of the issuer thereof
and identified on books maintained for that purpose by the
Trustee as held for the benefit of the Trust or the
Certificateholders, and consisting of (x) shares of an open end
diversified investment company which is registered under the
Investment Company Act which (i) invests its assets exclusively
in obligations of or guaranteed by the United States of America
or any instrumentality or agency thereof having in each instance
a final maturity date of less than one year from their date of
purchase or other Permitted Investments, (ii) seeks to maintain a
constant net asset value per share, (iii) has aggregate net
assets of not less than $100,000,000 on the date of purchase of
such shares, and (iv) which the Rating Agency designates in
writing will not result in a withdrawal or downgrading of its
then current rating of any Series rated by it or (y) Eurodollar
time deposits of a depository institution or trust company that
has a Satisfactory Short-Term Credit Rating; and (d) any other
investment if the Rating Agency confirms in writing that such
investment will not adversely affect its then current rating of
the Investor Certificates.
"Cedelbank" shall mean Cedelbank Societe Anonyme.
"Certificate" shall mean any one of the Investor
Certificates of any Series or the Exchangeable Transferor
Certificate.
"Certificateholder" or "Holder" shall mean the Person
in whose name a Certificate is registered in the Certificate
Register and, if applicable, the holder of any Bearer Certificate
or Coupon, as the case may be.
"Certificate Interest" shall mean interest payable in
respect of the Investor
Certificates of any Series pursuant to Article IV of the
Supplement for such Series.
"Certificate Owner" shall mean, with respect to a
Book-Entry Certificate, the Person who is the beneficial owner of
such Book-Entry Certificate, as may be reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing
Agency).
"Certificate Principal" shall mean principal payable in
respect of the Investor Certificates of any Series pursuant to
Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to any
Series of Certificates (or, for any Series with more than one
Class, for each Class of such Series), the percentage (or formula
on the basis of which such rate shall be determined) stated in
the related Supplement; provided, that unless otherwise provided
in a Supplement, such rate shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.
"Certificate Register" shall mean the register
maintained pursuant to Section 6.3, providing for the
registration of the Certificates and transfers and exchanges
thereof.
"Charge Account Agreement" means the agreement pursuant
to which a Person is obligated to pay for purchased merchandise
or services under a credit plan that permits such Person to
purchase merchandise and services on credit, together with any
finance charges and other charges related thereto, as such
agreement may be amended, modified or supplemented from time to
time; provided that only agreements between such Person and
(i) an Account Owner or (ii) the creditor of an account approved
by each Rating Agency as an Automatic Additional Account or
Supplemental Account shall be considered a Charge Account
Agreement hereunder.
"Class" shall mean, with respect to any Series, any one
of the classes of Certificates of that Series as specified in the
related Supplement.
"Clearing Agency" shall mean an organization registered
as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended.
"Clearing Agency Participant" shall mean a broker,
dealer, bank, other financial institution or other Person for
whom from time to time a Clearing Agency or Foreign Clearing
Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series,
the date of issuance of such Series of Certificates, as specified
in the related Supplement.
"Collection Account" shall have the meaning specified
in subsection 4.2(a).
"Collections" shall mean all payments received by the
Servicer in respect of the Receivables, in the form of cash,
checks or any other form of payment in accordance with the Charge
Account Agreement in effect from time to time on any Receivables.
"Collections in Process" shall have the meaning
specified in subsection 4.3(c)(iii).
"Corporate Trust Office" shall mean the principal
office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at
the date of the execution of this Agreement is located at 1011
Centre Road, suite 200, Wilmington, Delaware 19805.
"Coupon" shall have the meaning specified in
Section 6.1.
"Credit and Collection Policy" means the credit,
collection, customer relations and service policies that apply to
an Eligible Account, as such policies currently exist and as such
policies may be amended, modified or supplemented from time to
time subject to Section 5.01(c) of the Receivables Purchase
Agreement.
"Cut-Off Date" shall mean, for Receivables in Accounts
owned by each Initial Originator, July 30, 1993, and for
Receivables in Accounts owned by each Additional Originator, the
date specified as such in the Additional Originator Agreement.
"Daily Report" shall mean a report in the form
specified in subsection 1.2(e) as may be supplemented pursuant to
any Supplement.
"Date of Processing" shall mean, with respect to any
transaction, the date on which such transaction is first recorded
on the Servicer's computer master file of consumer revolving
credit card accounts (without regard to the effective date of
such recordation).
"Default Amount" shall mean, on any Business Day, the
aggregate amount of Principal Receivables in Accounts which
became Defaulted Accounts on such Business Day; it being
understood that such amount shall not exclude any Defaulted
Receivables by reason of their repurchase pursuant to
Section 2.4(f).
"Defaulted Account" shall mean each Account with
respect to which, in accordance with the Credit and Collection
Policy or the Servicer's customary and usual servicing
procedures, the Servicer has charged off the Receivables in such
Account as uncollectible; an Account shall become a Defaulted
Account on the day on which such Receivables are recorded as
charged off as uncollectible on the Servicer's computer master
file of consumer credit card revolving accounts. Notwithstanding
any other provision hereof, any Receivables in a Defaulted
Account that are Ineligible Receivables shall be treated as
Ineligible Receivables rather than Receivables in Defaulted
Accounts.
"Defaulted Receivable" means any Receivable in a
Defaulted Account.
"Defaulted Receivable Receipts" shall have the meaning
specified in the definition for "Recoveries."
"Defaulted Receivable Repurchase Amount" shall have the
meaning specified in subsection 2.4(f)(ii).
"Defeasance Account" shall, if relevant to any Series,
have the meaning specified in the applicable Supplement.
"Definitive Certificate" shall have the meaning
specified in Section 6.10.
"Depositary" shall have the meaning specified in
Section 6.10.
"Depositary Agreement" shall mean, with respect to each
Series, the agreement among the Transferor, the Trustee and the
Clearing Agency, or as otherwise provided in the related
Supplement.
"Determination Date" shall mean the second Business Day
prior to each Distribution Date.
"Discount Option Receivables" shall mean, on and after
the date on which the Transferor's exercise of its discount
option pursuant to Section 2.8 takes effect, the result of
(a) the aggregate Discount Option Receivables at the end of the
prior day (which amount, prior to the date on which the
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" shall mean on
any Date of Processing, on and after the date on which the
Transferor's exercise of its discount option pursuant to
Section 2.8 takes effect, the product of (a) a fraction the
numerator of which is the amount of Discount Option Receivables
and the denominator of which is the sum of the Principal
Receivables and the 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 (without
giving effect to the proviso in the definition of Principal
Receivables) created on each Date of Processing falling on or
after the date on which the Transferor exercises its discount
option, received on such Date of Processing.
"Discount Percentage" shall mean the fixed percentage,
if any, designated by the Transferor pursuant to Section 2.8.
"Distribution Account" shall have the meaning specified
in subsection 4.2(c).
"Distribution Date" shall mean, unless otherwise
specified in any Supplement for the related Series, the fifteenth
day of each month or, if such fifteenth day is not a Business
Day, the next succeeding Business Day.
"Dollars", "$" or "U.S. $" shall mean United States
dollars.
"Eligible Account" shall mean, as of the Initial
Closing Date (or, with respect to Supplemental Accounts as of
each Addition Date and with respect to Automatic Additional
Accounts, as of the date the Receivables arising in such Accounts
are designated for inclusion in the Trust), each Account owned by
an Account Owner:
(a) which is payable in Dollars;
(b) which has not been identified by such Account
Owner in its computer files as an account as to which such
Account Owner or the Servicer has any confirmed record of any
fraud-related activity by the Obligor;
(c) which has not been sold or pledged to any other
party and which does not have Receivables which have been sold or
pledged to any other party;
(d) which was created in accordance with the Credit
and Collection Policy of such Account Owner at the time of
creation of such account or the Receivables of which each Rating
Agency permits to be added automatically to the Trust;
(e) the Receivables in which such Account Owner has
not charged off in its customary and usual manner for charging
off Receivables in such Accounts as of the Initial Closing Date
(or, with respect to Supplemental Accounts as of the Addition
Date and with respect to Automatic Additional Accounts, as of the
date the Receivables of such Accounts are first designated for
inclusion in the Trust) unless such Account is subsequently
reinstated; and
(f) which is not an Automatic Additional Account
which, during the period specified in subsection 2.6(b)(i) or
(ii), is in excess of the percentage test specified in
subsection 2.6(b)(i) or (ii), respectively.
"Eligible Receivable" shall mean each Receivable that
satisfies each of the following criteria:
(a) it arises under an Eligible Account;
(b) it constitutes an "account," a "general
intangible" or "chattel paper" as defined in Article 9 of the UCC
as then in effect in each Relevant UCC State;
(c) it is at the time of its transfer to the Trust the
legal, valid and binding obligation of a Person who (i) is
living, (ii) is not a minor under the laws of his/her state of
residence and (iii) is competent to enter into a contract and
incur debt (or, with respect to obligations from Persons who do
not qualify under clauses (ii) or (iii), is so guaranteed by a
Person who qualifies under clauses (i), (ii) and (iii));
provided, however that no more than 6.00% of all Eligible
Receivables shall be from Obligors which are non-U.S. Persons,
unless the Rating Agency provides its written consent to an
increase in such percentage;
(d) it and the underlying Charge Account Agreement do
not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation,
rules and regulations relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair
debt collection practices and privacy) that could reasonably be
expected to have an adverse impact on the amount of Collections
thereunder, and the Account Owner under the underlying Charge
Account Agreement is not in violation of any such laws, rules or
regulations in any respect material to such Charge Account
Agreement;
(e) all material consents, licenses, or authorizations
of, or registrations with, any governmental authority required to
be obtained or given in connection with the creation of such
Receivable or the execution, delivery, creation and performance
of the underlying Charge Account Agreement have been duly
obtained or given and are in full force and effect as of the date
of the creation of such Receivables;
(f) at the time of its transfer to the Trust, the
Transferor or the Trust will have good and marketable title free
and clear of all Liens and security interests arising under or
through the Transferor (other than Permitted Liens);
(g) it is not, at the time of its transfer to the
Trust, a Receivable in a Defaulted Account or a Receivable owing
from a bankrupt Obligor; and
(h) it arises under a Charge Account Agreement that
has been duly authorized by (i) the applicable Account Owner or
(ii) the creditor of an account approved by each Rating Agency as
an Automatic Additional Account or Supplemental Account, and
which, together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of the
Obligor of such Receivable enforceable against such Obligor in
accordance with its terms and is not subject at the time of
transfer to the Trust to any dispute, offset, counterclaim or
defense whatsoever.
"Enhancement" shall mean, with respect to any Series,
the cash collateral account, letter of credit, insurance policy,
guaranteed rate agreement, maturity guaranty facility, tax
protection agreement, interest rate caps, interest rate swap,
subordination of the rights of one class to another or any other
contract, agreement or arrangement for the benefit of the
Certificateholders of such Series (or Certificateholders of a
Class within such Series) as designated in the applicable
Supplement.
"Enhancement Provider" shall mean, with respect to any
Series, the Person, if any, designated as such in the related
Supplement.
"Equalization Account" shall have the meaning specified
in subsection 4.2(d).
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"Euroclear Operator" shall mean Morgan Guaranty Trust
Company of New York, Brussels, Belgium office, as operator of the
Euroclear System.
"Exchange" shall mean either of the procedures
described in Section 6.9(b).
"Exchangeable Transferor Certificate" shall mean the
certificate executed by the Transferor and authenticated by the
Trustee, substantially in the form of Exhibit A and exchangeable
as provided in Section 6.9; provided, that at any time there
shall be only one Exchangeable Transferor Certificate.
"Exchange Date" shall have the meaning, with respect to
any Series issued pursuant to an Exchange, specified in
subsection 6.9(b).
"Exchange Notice" shall have the meaning, with respect
to any Series issued pursuant to an Exchange, specified in
subsection 6.9(b).
"Existing Agreement" shall have the meaning specified
in the recitals to this Agreement.
"Extended Trust Termination Date" shall have the
meaning specified in subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance
Corporation, or any successor thereto.
"Fitch" shall mean Fitch IBCA, Inc., or its successors.
"Finance Charge Collections" shall mean, with respect
to any Business Day, Collections received by the Servicer with
respect to Finance Charge Receivables on such Business Day.
"Finance Charge Receivables" shall mean all amounts
billed from time to time to the Obligors on any Account in
respect of (i) Periodic Finance Charges, (ii) over limit fees,
(iii) late charges, (iv) returned check fees, (v) annual
membership fees and annual service charges, if any,
(vi) transaction charges and (vii) all other fees and charges,
plus (x) Recoveries, (y) Discount Option Receivables, if any, and
(z) investment earnings on amounts on deposit in the Equalization
Account, if any.
"Fixed Allocation Percentage" shall have the meaning
for each Series specified in the related Supplement.
"Floating Allocation Percentage" shall have the meaning
for each Series specified in the related Supplement.
"Foreign Clearing Agency" shall mean Cedelbank and the
Euroclear Operator.
"Global Certificate" shall have the meaning specified
in Section 6.13.
"Governmental Authority" shall mean the United States
of America, any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Granite Original Accounts" means Accounts which the
Bank establishes with Obligors who had Charge Account Agreements
with SRI on August 1, 1998.
"Highest Long-Term Credit Rating" shall mean, with
respect to any investment or institution:
(a) if a rating of such investment or institution
is required pursuant to the terms of this Agreement, a
credit rating not lower than the credit rating
specified below from each Person specified below that
is a Rating Agency with respect to any outstanding
Series (or any successor rating designated by the
applicable Rating Agency); and
(b) if a rating of such investment or institution
is required pursuant to the terms of a Supplement, a
credit rating not lower than the credit rating
specified below from each Person specified below that
is a Rating Agency with respect to the Series issued
pursuant to such Supplement (or any successor rating
designated by the applicable Rating Agency):
Rating Agency Credit
Rating
DCR AAA
Fitch AAA
Moody's Aaa
Standard & Poor's AAA
Notwithstanding the foregoing, if either DCR or Fitch is an
applicable Rating Agency but does not maintain a credit rating on
the investment or institution with respect to which such rating
is required, then such investment or institution shall be deemed
to have the Highest Long-Term Credit Rating if it has the
applicable credit rating from the remaining applicable Rating
Agencies.
"Holder" or "Certificateholder" shall mean the Person
in whose name a Certificate is registered in the Certificate
Register, and if applicable, the holder of any Bearer Certificate
or Coupon, as the case may be.
"Ineligible Receivable" shall have the meaning
specified in subsection 2.4(d).
"Initial Closing Date" shall mean July 30, 1993.
"Initial Invested Amount" shall mean, with respect to
any Series of Certificates, the amount stated in the related
Supplement.
"Initial Originator" has the meaning it is given in the
Receivables Purchase Agreement.
"In-Store Payments" shall mean any payment made by an
Obligor with respect to a Receivable by delivery of cash, check,
money order or any other form of payment to a cashier or other
employee of any SRI Store.
"Interest Funding Account" shall have the meaning
specified in subsection 4.2(b).
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
"Invested Amount" shall have, with respect to any
Series of Certificates, the meaning stated in the related
Supplement.
"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended from time to time.
"Investor Account" shall mean each of the Interest
Funding Account, any Principal Account, the Equalization Account,
any Distribution Account and any Series Account.
"Investor Certificate" shall mean any one of the
certificates (including, without limitation, the Bearer
Certificates or the Registered Certificates and any
uncertificated certificates) issued pursuant to any Supplement.
"Investor Certificateholder" shall mean the Holder of
an Investor Certificate.
"Investor Charge Off" shall have, with respect to each
Series, the meaning specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to
any Series of Certificates, the meaning specified in the
applicable Supplement.
"Investor Exchange" shall have the meaning specified in
subsection 6.9(b).
"Investor Percentage" shall mean, with respect to
Principal Collections, Finance Charge Collections and Receivables
in Defaulted Accounts, and any Series of Certificates, the
Floating Allocation Percentage or the Fixed Allocation
Percentage, as applicable, pursuant to the applicable Supplement.
"Late Fees" shall have, with respect to any Account,
the meaning specified in the Charge Account Agreement applicable
to such Account for late fees or similar charges.
"Latest Rating Agency Approval Date" shall mean the
most recent date of written confirmation from the Rating Agency
that the addition of accounts to such date would not result in a
downgrading of the Investor Certificates of such Series.
"Licensed Names" shall have the meaning specified in
Section 2.1.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest,
deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any
financing statement under the UCC (other than any such financing
statement filed for informational purposes only) or comparable
law of any jurisdiction to evidence any of the foregoing;
provided, however, that any assignment pursuant to Section 7.2
shall not be deemed to constitute a Lien.
"Merchant Agreement" means an agreement between the
Bank and a merchant pursuant to which the merchant agrees to
honor credit cards issued by the Bank to Obligors and the Bank
agrees to make loans to Obligors for the purpose of purchasing
goods and services at stores operated by the merchant. Without
limiting the foregoing, the Retail Credit Services Agreement
dated as of August 1, 1998 between the Transferor and the Bank is
a Merchant Agreement.
"Minimum Aggregate Principal Receivables" shall mean,
as of any date of determination, an amount equal to the sum of
(a) the Initial Invested Amounts for all outstanding Series on
such date except a Series created pursuant to a Variable Funding
Supplement at any time or a Paired Series during its Amortization
Period, (b) with respect to a Series created pursuant to a
Variable Funding Supplement, during the Revolving Period for such
Series, the Invested Amount of such Series on such date of
determination or, during the Amortization Period for such Series,
the Invested Amount of such Series on the last day of the
Revolving Period for such Series and (c) with respect to any
Paired Series during its Amortization Period, the Invested Amount
of such Series as of the preceding Distribution Date (after
taking into account any payments or adjustments made on such
Distribution Date).
"Minimum Long-Term Credit Rating" shall mean, with
respect to any investment or institution:
(a) if a rating of such investment or institution
is required pursuant to the terms of this Agreement, a
credit rating not lower than the credit rating
specified below from each Person specified below that
is a Rating Agency with respect to any outstanding
Series (or any successor rating designated by the
applicable Rating Agency); and
(b) if a rating of such investment or institution
is required pursuant to the terms of a Supplement, a
credit rating not lower than the credit rating
specified below from each Person specified below that
is Rating Agency with respect to the Series issued
pursuant to such Supplement (or any successor rating
designated by the applicable Rating Agency):
Rating Agency Credit
Rating
DCR BBB
Fitch BBB
Moody's Baa2
Standard & Poor's BBB
Notwithstanding the foregoing, if either DCR or Fitch is an
applicable Rating Agency but does not maintain a credit rating on
the investment or institution with respect to which such rating
is required, then such investment or institution shall be deemed
to have a Minimum Long-Term Credit Rating if it has the
applicable credit rating from the remaining applicable Rating
Agencies.
"Minimum Retained Interest" shall mean the product of
(i) the sum of (a) the Aggregate Principal Receivables and (b)
the amounts on deposit in the Equalization Account and (ii) the
Minimum Retained Percentage.
"Minimum Retained Percentage" shall mean the highest
Minimum Retained Percentage specified in any Supplement.
"Minimum Transferor Interest" shall mean, as of any
date of determination, the product of (i) the sum of (a) the
Aggregate Principal Receivables and (b) the amounts on deposit in
the Equalization Account and (ii) the Minimum Transferor
Percentage on such date of determination.
"Minimum Transferor Percentage" shall mean the highest
Minimum Transferor Percentage specified in any Supplement.
"Monthly Investor Servicing Fee" shall mean the
Servicing Fee payable to the Servicer with respect to a Monthly
Period.
"Monthly Period" shall mean, unless otherwise defined
with respect to a Series in the related Supplement, the period
from and including the first day of each fiscal month of the
Transferor to and including the last day of such fiscal month.
"Moody's" shall mean Moody's Investors Service, Inc. or
its successors.
"New Discount Option Receivables" shall mean, on any
Date of Processing on and after the date on which the
Transferor's exercise of its discount option pursuant to
Section 2.8 takes effect, the product of the amount of any
Principal Receivables created on such Date of Processing (without
giving effect to the proviso in the definition of Principal
Receivables) and the Discount Percentage.
"Notice Date" shall have the meaning specified in
subsection 2.6 (e)(i).
"Obligor" shall mean a Person obligated to make
payments with respect to a Receivable arising under an Account
pursuant to a Charge Account Agreement.
"Officer's Certificate" shall mean a certificate signed
by any Vice President or more senior officer of the Transferor or
Servicer and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of
counsel, who may be counsel for or an employee of the Person
providing the opinion, and who shall be reasonably acceptable to
the Trustee.
"Originators" shall mean SRI and any subsidiaries of
SRI which are party from time to time to the Receivables Purchase
Agreement in the capacity of an "Originator."
"Outstanding Balance" shall mean, with respect to a
Receivable on any day, the aggregate amount owed by the Obligor
thereunder as of the close of business on the prior Business Day
(net of returns and adjustments).
"Paired Series" shall mean each Series which has been
paired with a prefunded Series, and such prefunded Series.
"Paying Agent" shall mean any paying agent appointed
pursuant to Section 6.6 and shall initially be Bankers Trust
(Delaware).
"Pay Out Commencement Date" shall mean, with respect to
each Series, the date on which (a) a Trust Pay Out Event is
deemed to occur pursuant to Section 9.1 or (b) a Series Pay Out
Event is deemed to occur pursuant to the Supplement for such
Series.
"Pay Out Event" shall mean, with respect to each
Series, a Trust Pay Out Event or a Series Pay Out Event.
"Periodic Finance Charges" shall have, with respect to
any Account, the meaning specified in the Charge Account
Agreement applicable to such Account for finance charges (due to
periodic rate) or any similar term.
"Permitted Lien" shall mean with respect to the
Receivables: (i) Liens in favor of the Bank created pursuant to
the Receivables Transfer Agreement; (ii) Liens in favor of the
Transferor created pursuant to the Receivables Purchase Agreement
assigned to the Trustee pursuant to this Agreement; (iii) Liens
in favor of the Trustee pursuant to this Agreement; (iv) the
rights to repurchase Defaulted Receivables granted to the
Transferor in Section 2.4(f) and to each Originator in
Section 2.04(c) of the Receivables Purchase Agreement; and
(v) Liens which secure the payment of taxes, assessments and
governmental charges or levies, if such taxes are either (a) not
delinquent or (b) being contested in good faith by appropriate
legal or administrative proceedings and as to which adequate
reserves in accordance with generally accepted accounting
principles shall have been established, but only so long as such
proceedings could not subject the Originators, the Transferor,
the Servicer or the Certificateholders to any civil or criminal
penalty or liability or involve any risk of loss, sale or
forfeiture of any property, rights or interests covered by this
Agreement.
"Person" shall mean any legal person, including any
individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization,
governmental entity or other entity of similar nature.
"Portfolio Correction Distribution Amount" means the
aggregate Series Portfolio Distribution Amounts for each Series
then in its Revolving Period.
"Portfolio Imbalance Event" will occur if, on the last
day of any Monthly Period occurring during the Revolving Period
(the "measuring day"), (a) on each of such day and the last day
of each of the preceding eleven consecutive Monthly Periods, (i)
the amount of all Cash Equivalents and other amounts on deposit
in the Equalization Account exceeded 25% of (ii) the sum of all
Principal Receivables and Cash Equivalents and other amounts on
deposit in the Equalization Account on each such day, or (b) on
each of the measurement day and the last day of the preceding
Monthly Period, (i) the amount of all Cash Equivalents and other
amounts on deposit in the Equalization Account exceeded 45% of
(ii) the sum of Principal Receivables and Cash Equivalents and
other amounts on deposit in the Equalization Account on each such
day, with all such amounts calculated after giving effect to all
amounts to be distributed on the Distribution Date following the
last day of the applicable Monthly Period; provided, however,
that no such event shall be deemed to be a Portfolio Imbalance
Event if (A) the Trustee is not a Related Person at the time of
such event or (B) the Transferor shall have delivered an Opinion
of Counsel to the Trustee to the effect that such event will not
cause the Transferor or the Trust to become an "investment
company" or "controlled" by an "investment company" within the
meaning of the Investment Company Act.
"Principal Account" shall have the meaning specified in
subsection 4.2(b).
"Principal Collections" shall mean with respect to any
Business Day the Collections received with respect to each
Principal Receivable on such Business Day.
"Principal Receivables" shall mean amounts shown on the
Servicer's records as amounts payable by Obligors with respect to
Eligible Receivables on any Account other than such amounts that
are Finance Charge Receivables or Receivables in Defaulted
Accounts and shall include, without limitation, amounts payable
for purchases of goods or services; provided, however that if the
Transferor shall have exercised its option pursuant to
Section 2.8, Principal Receivables on any date of determination
thereafter shall mean Principal Receivables as otherwise
determined pursuant to this definition minus the amount of any
Discount Option Receivables. A Receivable shall be deemed to
have been created at the end of the day on the Date of Processing
of such Receivable. In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal
Receivables shall be reduced by the aggregate amount of credit
balances in the Accounts on such day.
"Principal Shortfalls" shall mean, with respect to any
Business Day, the aggregate amount for all outstanding Series
which the related Supplements specify as "Principal Shortfalls"
for such Business Day.
"Principal Terms" shall have the meaning, with respect
to any Series issued pursuant to an Exchange, specified in
subsection 6.9(c).
"Prior Year's Default Ratio" shall have the meaning
specified in subsection 2.4(f)(i).
"Pro Forma Condition" shall mean the determination by
the Servicer that, as of any Distribution Date, the principal
amount of Defaulted Receivables to be repurchased pursuant to
Section 2.4(f) on the applicable Distribution Date is not greater
than the amount by which (i) the aggregate amount of all
Collections that would be allocated and distributed to the
Transferor hereunder on such Distribution Date after giving pro
forma effect to the repurchase of such Defaulted Receivables
exceeds (ii) the aggregate amount of all Collections that would
be allocated and distributed to the Transferor hereunder on such
Distribution Date without giving effect to such repurchase of
Defaulted Receivables.
"Prospective Pay Out Event" shall have the meaning
specified in subsection 2.3(l).
"Purged Account" shall mean an Account that has an
Outstanding Balance of zero and has been terminated pursuant to
the applicable Credit and Collection Policy due to an extended
period of inactivity.
"Qualified Institution" shall have the meaning
specified in subsection 4.2(a)(ii).
"Rating Agency" shall mean, with respect to each
Series, the rating agency or agencies, if any, specified in the
related Supplement.
"Reassignment" shall have the meaning specified in
subsection 2.7(b)(i).
"Reassignment Date" shall have the meaning specified in
subsection 2.4(e).
"Receivable" shall mean, with respect to any Obligor,
any account, chattel paper or general intangible representing the
indebtedness of such Obligor under a Charge Account Agreement
arising in an Account from a sale of merchandise, insurance or
services or from a cash advance, and includes the right to
payment of any interest or finance charges and other obligations
of such Obligor with respect thereto. Each Receivable includes,
without limitation, all rights of the Account Owner and
obligations of the Obligor under the applicable Charge Account
Agreement. Each increase in the Outstanding Balance of any
Receivable (other than any such increase resulting from the
accrual of interest or finance charges or other fees with respect
to such Receivable) shall, for purposes of Article II, constitute
a separate Receivable.
"Receivables Purchase Agreement" shall mean the Amended
and Restated Receivables Purchase Agreement dated as of May 30,
1996, between Palais Royal, Inc., the other Originators named
therein and each Additional Originator which may from time to
time become a party thereto, as sellers, and the Transferor, as
purchaser, as amended or otherwise modified from time to time.
"Receivables Software" shall have the meaning specified
in Section 8.8.
"Record Date" shall mean, with respect to any
Distribution Date, the last Business Day of the preceding Monthly
Period.
"Recoveries," shall mean, with respect to any period,
an amount (which shall not be less than zero) equal to the
product of (i) any amounts received during such period with
respect to Receivables in Accounts which previously became
Defaulted Accounts ("Defaulted Receivable Receipts") and (ii) the
fraction resulting from (A) one minus (B) a fraction, the
numerator of which is the aggregate Defaulted Receivable
Repurchase Amount paid by the Originators during the preceding
six full Monthly Periods pursuant to Section 2.4(f), and the
denominator of which is the total principal amount of Receivables
which became Defaulted Receivables during such six Monthly
Periods.
"Registered Certificates" shall have the meaning
specified in Section 6.1.
"Related Person" shall mean a Person who is, or is an
Affiliate of, SRI, Bankers Trust Company (or any successor
thereof), any Investor Certificateholder, any Enhancement
Provider or any other Person whose affiliation with the
Transferor or the Trust would violate the condition contained in
Section (4)(i) of Rule 3-a7 under the Investment Company Act.
"Related Contracts" shall have the meaning specified in
Section 2.1.
"Relevant UCC State" shall mean each jurisdiction in
which the filing of a UCC financing statement is necessary to
perfect the ownership interest of the Transferor pursuant to the
Receivables Purchase Agreement or the Receivables Transfer
Agreement or the ownership or security interest of the Trustee
established under this Agreement.
"Removal Date" shall have the meaning specified in
subsection 2.7(b).
"Removal Notice Date" shall mean the day, no later than
the fifth Business Day prior to a Removal Date, on which the
Transferor gives notice to the Trustee pursuant to Section 2.7(a)
of its intention to remove Accounts from the Trust.
"Removed Accounts" shall have the meaning specified in
subsection 2.7(a).
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and
by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination
of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person
is subject, whether federal, state or local (including, without
limitation, usury laws, the federal Truth in Lending Act and
Regulation Z and Regulation B of the Board of Governors of the
Federal Reserve System).
"Responsible Officer" shall mean any officer within the
Corporate Trust Office (or any successor group of the Trustee),
including the President, any Vice President or any other officer
of the Trustee customarily performing functions similar to those
performed by any person who at the time shall be an above
designated officer and who shall have direct responsibility for
the administration of this Agreement.
"Retained Interest" shall mean, on any date of
determination, the sum of the Transferor Interest and the
Invested Amount represented by any Transferor Retained
Certificate.
"Retained Percentage" shall mean, on any date of
determination, the percentage equivalent of a fraction the
numerator of which is the Retained Interest and the denominator
of which is the aggregate amount of Principal Receivables at the
end of the day immediately prior to such date of determination
plus all amounts on deposit in the Equalization Account (but not
including investment earnings on such amounts).
"Revolving Period" shall have, with respect to each
Series, the meaning specified in the related Supplement.
"Satisfactory Short-Term Credit Rating" means, with
respect to any investment or institution:
(a) if a rating of such investment or institution
is required pursuant to the terms of this Agreement, a
credit rating not lower than the credit rating
specified below from each Person specified below that
is a Rating Agency with respect to any outstanding
Series (or any successor rating designated by the
applicable Rating Agency); and
(b) if a rating of such investment or institution
is required pursuant to the terms of a Supplement, a
credit rating not lower than the credit rating
specified below from each Person specified below that
is Rating Agency with respect to the Series issued
pursuant to such Supplement (or any successor rating
designated by the applicable Rating Agency):
Rating Agency Credit
Rating
DCR D-1
Fitch F-1
Moody's P-1
Standard & Poor's A-1+
Notwithstanding the foregoing, if either DCR or Fitch is an
applicable Rating Agency but does not maintain a credit rating on
the investment or institution with respect to which such rating
is required, then such investment or institution shall be deemed
to have a Satisfactory Short-Term Credit Rating if it has the
applicable credit rating from the remaining applicable Rating
Agencies.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Series" shall mean any series of Investor
Certificates, which may include within any such Series a Class or
Classes of Investor Certificates subordinate to another such
Class or Classes of Investor Certificates.
"Series Account" shall mean any account or accounts
established pursuant to a Supplement for the benefit of the
related Series.
"Series Pay Out Event" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Series Portfolio Distribution Amounts" shall have,
with respect to any Series, the meaning specified in the related
Supplement.
"Series Servicing Fee Percentage" shall mean, with
respect to any Series, the amount specified as such in the
related Supplement.
"Series Termination Date" shall mean, with respect to
any Series of
s, the date stated as such in the related Supplement.
"Servicer" shall mean initially SRI and thereafter any
Person appointed as successor as herein provided to service the
Receivables.
"Servicer Default" shall have the meaning specified in
Section 10.1.
"Servicing Fee" shall have the meaning specified in the
related Supplement.
"Settlement Statement" shall mean a report in the form
specified in subsection 1.2(e) as may be supplemented pursuant to
any Supplement.
"Shared Principal Collections" shall mean, with respect
to any Business Day, the aggregate amount for all outstanding
Series of Principal Collections which the related Supplements
specify are to be treated as "Shared Principal Collections" for
such Business Day.
"SRI" shall mean Specialty Retailers, Inc., a
corporation organized and existing under the laws of the State of
Texas.
"SRI Store" means any merchant which is a party to a
Merchant Agreement with the Bank.
"Standard & Poor's" shall mean Standard & Poor's
Ratings Services or its successor.
"Successor Servicer" shall have the meaning specified
in subsection 10.2(a).
"Supplement" shall mean, with respect to any Series, a
supplement to this Agreement complying with the terms of
Section 6.9 of this Agreement, executed in conjunction with any
issuance of Certificates of such Series (or, in the case of the
Issuance of Certificates on the Initial Closing Date, the
supplements executed in connection with the issuance of such
Certificates).
"Supplemental Accounts" shall have the meaning
specified in subsection 2.6(c).
"Termination Notice" shall have, with respect to any
Series, the meaning specified in Section 10.1.
"Transfer" shall mean transfer, sell, exchange, pledge,
hypothecate, participate, or otherwise assign, in whole or in
part.
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.3 and shall initially be Bankers Trust
Company, a New York banking corporation.
"Transfer Date" shall mean, with respect to any Series,
the Business Day immediately prior to each Distribution Date.
"Transferor" shall mean SRI Receivables Purchase Co.,
Inc., a corporation organized and existing under the laws of the
State of Delaware, and any successor thereto.
"Transferor Exchange" shall have the meaning specified
in subsection 6.9(b).
"Transferor Fiscal Year" shall mean the approximately
twelve month period ending on the Saturday nearest to January
31st.
"Transferor Interest" shall mean, on any date of
determination, the aggregate amount of Principal Receivables at
the end of the day immediately prior to such date of
determination plus all amounts on deposit in the Equalization
Account (but not including investment earnings on such amounts)
at the end of such immediately preceding day, minus the aggregate
Adjusted Invested Amount for all Series at the end of such
immediately preceding day.
"Transferor Percentage" shall mean, on any date of
determination, when used with respect to Principal Collections,
Finance Charge Collections and Receivables in Defaulted Accounts,
a percentage equal to 100% minus the Aggregate Investor
Percentage with respect to such categories of Receivables.
"Transferor Retained Certificates" shall mean Investor
Certificates of any Series which the Transferor is required to
retain pursuant to the terms of any Supplement.
"Transferred Account" shall mean an Account to which a
new credit account number has been issued under circumstances
resulting from a lost or stolen credit card and not requiring
standard application and credit evaluation procedures under the
Credit and Collection Policy, and which can be traced or
identified by reference to or by way of computer files or
microfiche lists delivered to the Trustee or the bailee of the
Trustee pursuant to Section 2.1 or 2.6 as an account into which
an Account has been transferred.
"Trust" shall mean the trust created by this Agreement,
the corpus of which shall consist of the Trust Property.
"Trust Extension" shall have the meaning specified in
subsection 12.1(a).
"Trust Pay Out Event" shall have, with respect to each
Series, the meaning specified in Section 9.1.
"Trust Property" shall have the meaning assigned in
Section 2.1.
"Trust Termination Date" shall mean the earlier to
occur of (i) unless a Trust Extension shall have occurred, the
day after the Distribution Date with respect to any Series
following the date on which funds shall have been deposited in
the Distribution Account or the applicable Series Account for the
payment of Investor Certificateholders of each Series then issued
and outstanding sufficient to pay in full the Aggregate Invested
Amount plus interest accrued at the applicable Certificate Rate
through the end of the day prior to the Distribution Date with
respect to each such Series and certain other amounts as may be
specified in any Series Supplement, (ii) if a Trust Extension
shall have occurred, the Extended Trust Termination Date, and
(iii) the date specified in Section 12.1.
"Trustee" shall mean Bankers Trust (Delaware) and its
successors and any Person resulting from or surviving any
consolidation or merger to which it or its successors may be a
party and any successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as
amended from time to time, as in effect in the applicable
jurisdiction.
"Undivided Interest" shall mean the undivided interest
in the Trust evidenced by an Investor Certificate.
"Unfunded Certificate" shall have the meaning assigned
in Section 6.9(b).
"Variable Funding Certificates" shall mean a series of
Investor Certificates, in one or more Classes, issued pursuant to
Section 6.9 and a Variable Funding Supplement hereto.
"Variable Funding Supplement" shall mean a supplement
executed in connection with the issuance of Variable Funding
Certificates.
"Year-to-Date Period" shall have the meaning specified
in subsection 2.4(f)(i).
Section I.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this
Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting
terms not defined in Section 1.1, and accounting terms partially
defined in Section 1.1 to the extent not defined, shall have the
respective meanings given to them under generally accepted
accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of
such terms under generally accepted accounting principles, the
definitions contained herein shall control.
(c) The agreements, representations and warranties of
SRI in this Agreement and in any Supplement in its capacity as
Servicer and of SRI Receivables Purchase Co., Inc. in its
capacity as Transferor shall be deemed to be the agreements,
representations and warranties of SRI and SRI Receivables
Purchase Co., Inc. solely in each such capacity for so long as
either of them acts in each such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to any Supplement or this Agreement as a whole and not to any
particular provision of this Agreement or any Supplement; and
Section, subsection , Schedule and Exhibit references contained
in this Agreement or any Supplement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement or
any Supplement unless otherwise specified.
(e) The Daily Report and Settlement Statement shall be
in substantially the forms of Exhibits C and D, with such changes
as the Servicer may determine to be necessary or desirable;
provided, however, that no such change shall serve to exclude
information required by this Agreement or any Supplement. The
Servicer shall, upon making such determination, deliver to the
Trustee and each Rating Agency an Officer's Certificate to which
shall be annexed the form of the related Exhibit, as so changed.
Upon the delivery of such Officer's Certificate to the Trustee,
the related Exhibit, as so changed, shall for all purposes of
this Agreement constitute such Exhibit. The Trustee may
conclusively rely upon such Officer's Certificate.
[End of Article I]
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section II.1 Conveyance of Receivables. The Transferor
does hereby transfer, assign, set-over, and otherwise convey to
the Trust for the benefit of the Certificateholders and, if
specified in any Supplement, any Enhancement Provider, without
recourse, all of its right, title and interest in, to and under
the following (collectively, the "Trust Property"):
(i) all right, title and interest of the Transferor in
and to the Receivables now existing and hereafter created
and arising in connection with the Accounts and any accounts
that meet the definition of Automatic Additional Accounts,
including, without limitation, all accounts, contract
rights, chattel paper, instruments, general intangibles and
other obligations of any Obligor with respect to any such
Receivables, now or hereafter existing, whether or not
arising out of or in connection with the sale or lease of
goods or the rendering of services, including without
limitation the right to payment of any interest, Finance
Charge Receivables, returned check fees or late charges and
other obligations of an Obligor with respect to any such
Receivables, and all rights in and to all security
agreements, and other contracts securing or otherwise
relating to any such accounts, contract rights, chattel
paper, instruments, general intangibles or obligations (any
and all such security agreements and other contracts being
the "Related Contracts");
(ii) all guarantees, insurance and other agreements or
arrangements of whatever character from time to time
supporting or securing payment of any Receivables;
(iii) the Receivables Purchase Agreement including,
without limitation, (A) all rights of the Transferor to
receive moneys due and to become due under or pursuant to
the Receivables Purchase Agreement, whether payable as fees,
expenses, costs or otherwise, (B) all rights of the
Transferor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Receivables
Purchase Agreement, (C) claims of the Transferor for damages
arising out of or for breach of or default under the
Receivables Purchase Agreement, (D) the right of the
Transferor to amend, waive or terminate the Receivables
Purchase Agreement, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder
and (E) all other rights, remedies, powers, privileges and
claims of the Transferor under or in connection with the
Receivables Purchase Agreement (the Trust Property described
in this paragraph (iii) of Section 2.1 being sometimes
described herein as the "Assigned Property");
(iv) the following (the "Account Property"):
(A) any lock boxes maintained by the Servicer or
an Account Owner, the Collection Account, any Interest
Funding Account, any Principal Account, any
Distribution Account and the Equalization Account, all
funds, and all certificates and instruments, if any,
from time to time representing or evidencing or held in
any such lock boxes, the Collection Account, any
Interest Funding Account, any Principal Account, any
Distribution Account and the Equalization Account;
(B) all eligible investments from time to time
and all certificates and instruments, if any, from time
to time representing or evidencing the eligible
investments;
(C) all notes, certificates of deposit and other
instruments from time to time hereafter delivered to or
otherwise possessed by the Trustee for and on behalf of
the Transferor in substitution for or in addition to
any of the then existing Account Property;
(D) all interest, dividends, cash, instruments
and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any and all of the existing Account
Property; and
(E) all additional property that may from time to
time hereafter be assigned or pledged to the Trustee
for the benefit of the Certificateholders hereunder by
the Transferor or by any Person on the Transferor's
behalf;
(v) proceeds of any and all of the Trust Property
described in subparagraphs (i) through (iv) above
(including, without limitation, Recoveries and proceeds that
constitute property of the types described in clauses (i)
through (iv) above) and, to the extent not otherwise
included, all payments under insurance (whether or not the
Trustee is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of such foregoing Trust
Property.
The foregoing transfer, assignment, set-over and conveyance does
not constitute and is not intended to result in a creation or an
assumption by the Trust, the Trustee or any Investor
Certificateholder of any obligation of the Transferor, the
Servicer or any other Person in connection with the Accounts or
Receivables or any agreement or instrument relating thereto,
including, without limitation, any obligation to any Obligors or
insurers, or in connection with the Receivables Purchase
Agreement.
In connection with such transfer, assignment, set-over and
conveyance, the Transferor agrees to record and file, at its own
expense, one or more financing statements (including any
continuation statements with respect to such financing statements
when applicable) with respect to the Receivables now existing and
hereafter created for the transfer of accounts or general
intangibles (as defined in Section 9-106 of the UCC as in effect
in the Relevant UCC State) meeting the requirements of applicable
state law in such manner and in such jurisdictions as are
necessary to perfect the assignment of the Receivables to the
Trust, and to deliver file stamped copies of such financing
statements or continuation statements or other evidence of such
filing (which may, for purposes of this Section 2.1, consist of
telephone confirmation of such filing) to the Trustee on or prior
to the date of issuance of the Certificates, and in the case of
any continuation statements filed pursuant to this Section 2.1,
as soon as practicable after receipt thereof by the Transferor.
The foregoing transfer, assignment, set-over and conveyance to
the Trust shall be made to the Trustee, on behalf of the Trust,
and each reference in this Agreement to such transfer,
assignment, set-over and conveyance shall be construed
accordingly.
In connection with such transfer, the Transferor agrees, at
its own expense, on or prior to each Cut-Off Date on which
Accounts of an Account Owner are designated to the Trust (i) to
annotate and indicate in its computer files that Receivables
created in connection with such Accounts have been transferred to
the Trust pursuant to this Agreement for the benefit of the
Certificateholders and (ii) to deliver to the Trustee or the
bailee of the Trustee a computer file or microfiche list
containing a true and complete list of all such Accounts,
identified by account number and setting forth the Outstanding
Balance of each Receivable as of the applicable Cut-Off Date.
Such file or list shall be marked as Schedule I to this Agreement
(or as a supplement thereto), delivered to the Trustee or the
bailee of the Trustee as confidential and proprietary, and is
hereby incorporated into and made a part of this Agreement. The
Transferor further agrees not to alter the file designation
referenced in clause (i) of this paragraph with respect to any
Account during the term of this Agreement unless and until such
Account becomes a Removed Account.
The Transferor and SRI hereby grant to the Trustee a
non-exclusive and, except to the extent provided below,
non-transferable license to use any tradenames that may from time
to time be used by any Account Owner (collectively, the "Licensed
Names") and to use the Receivables Software. This license and
the rights of use hereunder are contingent on the occurrence and
continuance of a Servicer Default. Following such event, these
licenses and the right of use of the Licensed Names and the
Receivables Software hereunder may be transferred by the Trustee
to the extent necessary to collect the Receivables in a
commercially reasonable manner. The rights of use granted under
these licenses are limited to such uses of the Licensed Names and
Receivables Software as are reasonably necessary to the
collection by the Trustee in a commercially reasonable manner of
the Receivables and are further subject to (i) in the case of the
Receivables Software, the terms of any third-party licenses
thereof and consents in relation thereto and (ii) in the case of
the Licensed Names, maintaining standards of quality of the
business of the Servicer as conducted prior to the Servicer
Default. The licenses are limited to actions taken in accordance
with the terms of this Agreement and shall expire on the
expiration of a reasonable time for the collection of all
Receivables. Notwithstanding any other provisions to the
contrary in this Agreement or in any other agreement between the
parties, no other uses or display of the Licensed Names or
Receivables Software shall be made by Trustee except as granted
in this paragraph.
The Transferor hereby grants and transfers to the Trustee on
behalf of the Trust a first priority perfected security interest
in all of the Transferor's right, title and interest in, to and
under the Trust Property to secure a loan in an amount equal to
the unpaid principal amount of the Investor Certificates issued
hereunder or to be issued pursuant to this Agreement and the
interest accrued thereon at the related Certificate Rate and to
secure all of the Transferor's and Servicer's obligations
hereunder, including, without limitation, the Transferor's
obligation to transfer Receivables hereafter created to the Trust
(the "Secured Obligations"), and agrees that this Agreement shall
constitute a security agreement under applicable law.
Section II.2 Acceptance by Trustee.
(a The Trustee hereby acknowledges its acceptance, on
behalf of the Trust, of all right, title and interest previously
held by the Transferor in, to and under the Trust Property and
declares that it shall maintain such right, title and interest,
upon the Trust herein set forth, for the benefit of all
Certificateholders. The Trustee further acknowledges that, prior
to or simultaneously with the initial execution and delivery of
this Agreement, the Transferor delivered to the Trustee or the
bailee of the Trustee the computer file or microfiche list that
was represented as being the computer file or microfiche list
described in the third paragraph of Section 2.1.
(b The Trustee shall have no power to create, assume
or incur indebtedness or other liabilities in the name of the
Trust other than as contemplated in this Agreement.
Section II.3 Representations and Warranties of the
Transferor. The Transferor hereby represents and warrants to the
Trustee, on behalf of the Trust, as of the Initial Closing Date
and, with respect to any Series of Certificates, as of the date
of the related Supplement and the related Closing Date for such
Series:
(a Organization and Good Standing. The Transferor is
a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware and has full
corporate power, authority and legal right to own its properties
and conduct its business as such properties are presently owned
and such business is presently conducted, and to execute, deliver
and perform its obligations under this Agreement, any Supplement
and the Receivables Purchase Agreement and to execute and deliver
to the Trustee the Certificates pursuant hereto.
(b Due Qualification. The Transferor is duly
qualified to do business and is in good standing (or is exempt
from such requirement) in any state required in order to conduct
business, and has obtained all necessary licenses and approvals
with respect to the Transferor required under federal and
Delaware law; provided, however, that no representation or
warranty is made with respect to any qualifications, licenses or
approvals which the Trustee would have to obtain to do business
in any state in which the Trustee seeks to enforce any
Receivable.
(c Due Authorization. The execution and delivery of
this Agreement, any Supplement and the Receivables Purchase
Agreement and the execution and delivery to the Trustee of the
Certificates by the Transferor and the consummation of the
transactions provided for in this Agreement, any Supplement and
the Receivables Purchase Agreement have been duly authorized by
the Transferor by all necessary corporate action on its part and
this Agreement will remain, from the time of its execution, an
official record of the Transferor.
(d No Conflicts. The execution, delivery and
performance of this Agreement, the Receivables Purchase
Agreement, and any Supplement and the Certificates, the
performance of the transactions contemplated by this Agreement,
the Receivables Purchase Agreement, and any Supplement and the
fulfillment of the terms hereof by the Transferor, do not
(i) contravene its charter or By-Laws, (ii) violate any provision
of, or require any filing (except for the filings under the UCC
required by this Agreement, each of which has been duly made and
is in full force and effect), registration, consent or approval
under, any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect
having applicability to the Transferor, except for such filings,
registrations, consents or approvals as have already been
obtained and are in full force and effect, (iii) result in a
breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Transferor is a party or by
which it or its properties may be bound or affected except those
as to which a consent or waiver has been obtained and is in full
force and effect and an executed copy of which has been delivered
to the Trustee, or (iv) result in, or require, the creation or
imposition of any Lien upon or with respect to any of the
properties now owned or hereafter acquired by the Transferor
other than as specifically contemplated by this Agreement.
(e Taxes. The Transferor has filed on a timely basis
all tax returns (federal, state and local) required to be filed
and has paid or made adequate provision for the payment of all
taxes, assessments and other governmental charges due from the
Transferor or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate
proceedings. The Transferor knows of no basis for any material
additional tax assessment for any fiscal year for which adequate
reserves have not been established.
(f No Violation. The execution and delivery of this
Agreement, any Supplement and the Receivables Purchase Agreement
and the execution and delivery to the Trustee of the
Certificates, the performance of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not
conflict with or violate any Requirements of Law applicable to
the Transferor.
(g No Proceedings. There are no outstanding
injunctions, writs or restraining orders, and no proceedings or
investigations pending or, to the knowledge of the Transferor,
threatened against the Transferor before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement,
any Supplement, the Receivables Purchase Agreement or the
Certificates, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, any Supplement, the Receivables
Purchase Agreement or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of the
Transferor, would materially and adversely affect the performance
by the Transferor of its obligations under this Agreement, any
Supplement or the Receivables Purchase Agreement, (iv) seeking
any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement, any
Supplement, the Receivables Purchase Agreement or the
Certificates or (v) seeking to affect adversely the income tax
attributes of the Trust.
(h All Consents Obtained. 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 of this Agreement, any
Supplement, the Receivables Purchase Agreement and the
Certificates, the performance of the transactions contemplated by
this Agreement, any Supplement and the Receivables Purchase
Agreement and the fulfillment of the terms hereof, have been
obtained.
(i Bona Fide Receivables. Each Receivable is or will
be an account receivable arising out of an Account Owner's
performance (or, in the case of an Account that is an Automatic
Additional Account pursuant to clause (b) of the definition of
Automatic Additional Account, the performance of the originator
of such Account at the time such Receivable was originated) in
accordance with the terms of the Charge Account Agreement giving
rise to such Receivable. The Transferor has no knowledge at the
time of the initial creation of an interest of the Trust in any
Eligible Receivable hereunder of any fact which should have led
it to expect that such Eligible Receivable would not be
enforceable against the Obligor when due.
(j Place of Business. The principal place of
business and chief executive office of the Transferor is in
Houston, Texas. Such location has not changed within the last
four months.
(k Use of Proceeds. No proceeds of the issuance of
any Certificate will be used by the Transferor to purchase or
carry any margin security.
(l Pay Out Event. As of the Initial Closing Date, no
Pay Out Event and no condition that with the giving of notice
and/or the passage of time would constitute a Pay Out Event (a
"Prospective Pay Out Event"), has occurred and is continuing.
(m Not an Investment Company. The Transferor is not
an "investment company" or "controlled" by an "investment
company" within the meaning of the Investment Company Act, or is
exempt from all provisions of the Investment Company Act.
For the purposes of the representations and warranties
contained in this Section 2.3 and made by the Transferor on the
Initial Closing Date, "Certificates" shall mean the Certificates
issued on the Initial Closing Date. The representations and
warranties set forth in this Section 2.3 shall survive the
transfer and assignment of the respective Receivables to the
Trust, and termination of the rights and obligations of the
Servicer pursuant to Section 10.1. The Transferor hereby
represents and warrants to the Trust, with respect to any Series
of Certificates, as of its Closing Date, unless otherwise stated
in the related Supplement, that the representations and
warranties of the Transferor set forth in Section 2.3, are true
and correct as of such date (for the purposes of such
representations and warranties, "Certificates" shall mean the
Certificates issued on the related Closing Date). Upon discovery
by the Transferor, the Servicer or a Responsible Officer of the
Trustee of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt
written notice to the others.
Section II.4 Representations and Warranties of the
Transferor Relating to this Agreement and the Receivables. (a)
Binding Obligation; Valid Transfer and Assignment. The
Transferor hereby represents and warrants to the Trustee, on
behalf of the Trust, that, as of the Initial Closing Date and
with respect to any Series of Certificates, as of the date of its
related Supplement and Closing Date, and, with respect to any
Series and matters involving (X) Supplemental Accounts, as of the
applicable Addition Date and (Y) Automatic Additional Accounts,
as of the date the Receivables of such Accounts are first
designated for inclusion in the Trust:
(i The Receivables Purchase Agreement, this Agreement
and any Supplement each constitutes the legal, valid and
binding obligation of the Transferor, enforceable against
the Transferor in accordance with its terms, except (A) 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 (B) as such enforceability
may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(ii This Agreement constitutes either (A) a valid
transfer, assignment, set-over and conveyance to the Trust
of all right, title and interest of the Transferor in and to
the Trust Property, and such Trust Property will be held by
the Trust free and clear of any Lien of any Person claiming
through or under the Transferor or any of its Affiliates
except for (x) Permitted Liens, (y) the interest of the
Transferor as Holder of the Exchangeable Transferor
Certificate and any other Class of Certificates held by the
Transferor from time to time and (z) the Transferor's right,
if any, to interest accruing on, and investment earnings, if
any, in respect of any Interest Funding Account, any
Principal Account, the Equalization Account, or any Series
Account, as provided in this Agreement or the related
Supplement, or (B) a grant of a security interest (as
defined in the UCC as in effect in the Relevant UCC State)
in, to and under the Trust Property, which grant is
enforceable with respect to the existing Receivables and any
Receivables in Automatic Additional Accounts designated for
inclusion in the Trust (other than Receivables in
Supplemental Accounts) and the proceeds thereof upon
execution and delivery of this Agreement, and which will be
enforceable with respect to such Receivables hereafter
created and the proceeds thereof, upon such creation. If
this Agreement constitutes the grant of a security interest
to the Trust in such property, upon the filing of the
financing statement described in Section 2.1 and in the case
of the Receivables hereafter created and proceeds thereof,
upon such creation, the Trust shall have a first priority
perfected security interest in such property, except for
Permitted Liens. Except as contemplated in this Agreement
or any Supplement, neither the Transferor nor any Person
claiming through or under the Transferor shall have any
claim to or interest in the Collection Account, any
Principal Account, any Interest Funding Account, the
Distribution Account, the Equalization Account, any
principal funding account for any Series or any other Series
Account, except for the Transferor's rights to receive
interest accruing on, and investment earnings in respect of,
any such account as provided in this Agreement (or, if
applicable, any Series Account as provided in any
Supplement) and, if this Agreement constitutes the grant of
a security interest in such property, except for the
interest of the Transferor in such property as a debtor for
purposes of the UCC as in effect in the Relevant UCC State.
The Receivables Purchase Agreement constitutes a valid
transfer, assignment, set-over and conveyance to the
Transferor of all right, title and interest of the
Originators in and to the Receivables purported to be sold
thereunder, whether then existing or thereafter created in
the applicable Accounts and the proceeds thereof.
(iii The Transferor is not insolvent and has adequate
capital to conduct its business as it is presently being
conducted.
(iv The Transferor is (or, with respect to
Receivables arising after the date hereof, will be) the
legal and beneficial owner of all right, title and interest
in and to each Receivable and each Receivable has been or
will be transferred to the Trust free and clear of any Lien
other than Permitted Liens.
(v All consents, licenses, approvals or
authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or
given by the Transferor in connection with the transfer of
Trust Property to the Trust have been duly obtained,
effected or given and are in full force and effect.
(vi The Transferor has clearly and unambiguously
marked all its computer records and all its microfiche
storage files regarding the Receivables as the property of
the Trust and shall maintain such records in a manner such
that the Trust shall have a perfected interest in such
Receivables.
(vii As of the Initial Closing Date, Schedule I to
this Agreement is and will be an accurate and complete
listing of all Accounts in all material respects as of such
day and the information contained therein with respect to
the identity of each Account and the aggregate unpaid
balance of the Receivables existing thereunder is and will
be true and correct in all material respects as of such day;
as of the close of business on the Business Day preceding
the Initial Closing Date the aggregate Outstanding Balance
for all Eligible Receivables was $159,131,000 and the
initial deposit to the Equalization Account was $11,000,000.
(viii Each Account classified as an "Eligible
Account" by the Transferor in any document or report
delivered hereunder will satisfy the requirements contained
in the definition of Eligible Account as of the time of such
document or report and each Receivable classified as an
"Eligible Receivable" by the Transferor in any document or
report delivered hereunder will satisfy the requirements
contained in the definition of Eligible Receivable as of the
time of such document or report.
(ix All information with respect to the Accounts and
the Receivables provided to the Trustee by the Transferor
was true and correct in all material respects as of the
Closing Date, or with respect to Supplemental Accounts as of
each Addition Date and with respect to Automatic Additional
Accounts, as of the day Receivables arising under each such
Account are first designated for inclusion in the Trust, as
the case may be.
(x Each Receivable then existing has been conveyed to
the Trust free and clear of any Lien of any Person claiming
through or under the Transferor or any of its Affiliates
(other than Permitted Liens) and in compliance, in all
material respects, with all Requirements of Law applicable
to the Transferor.
(xi With respect to each Receivable then existing,
all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the
Transferor in connection with the conveyance of such
Receivable to the Trust have been duly obtained, effected or
given and are in full force and effect.
(b) Daily Representations and Warranties. On each day on
which any new Receivable is purchased by the Transferor, the
Transferor shall be deemed to represent and warrant to the Trust
that (A) each Receivable purchased by the Transferor on such day
has been conveyed to the Trust in compliance, in all material
respects, with all Requirements of Law applicable to the
Transferor and free and clear of any Lien of any Person claiming
through or under the Transferor or any of its Affiliates (other
than Permitted Liens) and (B) with respect to each such
Receivable, all consents, licenses, approvals or authorizations
of or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by the
Transferor in connection with the conveyance of such Receivable
to the Trust have been duly obtained, effected or given and are
in full force and effect.
(c) Notice of Breach. The representations and
warranties set forth in this Section 2.4 shall survive the
transfer and assignment of the respective Receivables to the
Trust. Upon discovery by the Transferor, the Servicer or a
Responsible Officer of the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.4, the
party discovering such breach shall give prompt written notice to
the other parties mentioned above. The Transferor agrees to
cooperate with the Servicer and the Trustee in attempting to cure
any such breach.
(d) Designation of Ineligible Receivables. In the
event of a breach with respect to a Receivable of any
representations and warranties set forth in subsection 2.3(i) or
subsections 2.4(a)(iii) through (xi) or subsection 2.4(b), or in
the event that a Receivable is not an Eligible Receivable as a
result of the failure to satisfy the conditions set forth in the
definition of Eligible Receivable, such Receivable shall be
designated an "Ineligible Receivable" and shall be assigned an
Outstanding Balance of zero for the purpose of determining the
aggregate amount of Principal Receivables on any day; provided
however, that if such representations and warranties with respect
to such Receivable shall subsequently be true and correct in all
material respects as if such Receivable had been created on such
day or such Receivable shall subsequently satisfy the conditions
set forth in the definition of Eligible Receivable, such
Receivable shall be designated an Eligible Receivable, and the
principal amount of such Receivable shall be included in
determining the aggregate amount of Principal Receivables on such
day. 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
in the calculation of any Investor Percentage, the Transferor
Percentage or the Transferor Interest. In the event that on any
Business Day the exclusion of an Ineligible Receivable from the
calculation of the Transferor Interest would cause the Transferor
Interest to be reduced below the Minimum Transferor Interest, the
Transferor shall immediately make a deposit in the Equalization
Account (for allocation as a Principal Receivable) in immediately
available funds prior to the next succeeding Business Day in an
amount equal to the amount by which the Transferor Interest would
be reduced below the Minimum Transferor Interest as a result of
the exclusion of such Ineligible Receivable. The portion of such
deposit allocated to the Investor Certificates of each Series
shall be distributed to the Investor Certificateholders of each
Series in the manner specified in Article IV. Such designation
and reduction of the Outstanding Balance provided for above (and
any Pay Out Event that occurs upon failure to make a required
deposit) shall constitute the sole remedy respecting a breach of
any representations and warranties set forth in subsection 2.3(i)
or subsections 2.4(a)(iii) through (xi) or subsection 2.4(b)
available to the Investor Certificateholders of such Series or
the Trustee on behalf of the Investor Certificateholders of such
Series.
(e) Reassignment of Trust Portfolio. In the event of
a breach of any of the representations and warranties set forth
in subsections 2.3(a), (b) and (c) and 2.4(a)(i) and (ii) with
respect to any Series, any of (i) the Trustee, (ii) the Holders
of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested Amount,
(iii) if specified in any Supplement, the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than
a specified percentage of the Invested Amount of any Series or
Class, or (iv) if specified in any Supplement, an Enhancement
Provider, in each case by notice then given in writing to the
Transferor (and to the Trustee and the Servicer, if given by any
Investor Certificateholders), may direct the Transferor to accept
reassignment of an amount of Principal Receivables equal to the
face amount of the Invested Amount to be repurchased (as
specified below) within 60 days of such notice (or within such
longer period as may be specified in such notice), and the
Transferor shall be obligated to accept reassignment of such
Principal Receivables on a Distribution Date specified by the
Transferor (such Distribution Date, the "Reassignment Date")
occurring within such applicable period on the terms and
conditions set forth below; provided, however, that no such
reassignment shall be required to be made, and no notice of such
reassignment may be given, if, at any time during such applicable
period, the representations and warranties contained in
subsections 2.3(a), (b) and (c) and subsections 2.4(a)(i) and
(ii) shall then be true and correct in all material respects.
The Transferor shall, on the Transfer Date (in next day funds)
preceding the Reassignment Date, deposit an amount equal to the
reassignment deposit amount for such Series in the related
Distribution Account or Series Account, as provided in the
related Supplement, for distribution to the Investor
Certificateholders pursuant to Article XII. The reassignment
deposit amount with respect to any Series, unless otherwise
stated in the related Supplement, shall be equal to (i) the
Invested Amount of such Series at the end of the day on the last
day of the Monthly Period preceding the Reassignment Date (less
the amount, if any, previously allocated for payment of principal
to such Certificateholders on the related Reassignment Date, in
the Monthly Period in which the Reassignment Date occurs),
provided, however, that with respect to any Series issued
pursuant to a Variable Funding Supplement such amount shall be
the Invested Amount of such Series as of the Reassignment Date,
plus (ii) an amount equal to all interest accrued but unpaid on
the Investor Certificates of such Series at the applicable
Certificate Rate through the Reassignment Date, less the amount,
if any, previously allocated for payment of interest to the
Certificateholders of such Series on the Reassignment Date, plus
any other amounts accrued and owing as specified in the
applicable Supplement. Payment of the reassignment deposit
amount with respect to any Series, and all other amounts in the
Distribution Account or the applicable Series Account in respect
of the preceding Monthly Period, shall be considered a prepayment
in full of the Receivables represented by the Investor
Certificates of such Series. On the Distribution Date following
the Transfer Date on which such amount has been deposited in full
into the Distribution Account or the applicable Series Account,
the Receivables and all monies due or to become due with respect
thereto and all proceeds of the Receivables allocated to the
Receivables pursuant to the related Supplement shall be released
to the Transferor after payment of all amounts otherwise due
hereunder on or prior to such dates and the Trustee shall execute
and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as shall be
prepared by and as are reasonably requested by the Transferor to
vest in the Transferor, or its designee or assignee, all right,
title and interest of the Trust in and to such Receivables, all
monies due or to become due with respect thereto and all proceeds
of such Receivables allocated to such Series pursuant to the
related Supplement. If the Trustee or the Investor
Certificateholders of any Series give notice directing the
Transferor to accept reassignment as provided above, the
obligation of the Transferor to accept reassignment of the
applicable Receivables and pay the reassignment deposit amount
pursuant to this subsection 2.4(e) shall constitute the sole
remedy respecting a breach of the representations and warranties
contained in subsections 2.3(a), (b) and (c) and 2.4(a)(i) and
(ii) available to the Investor Certificateholders of such Series
or the Trustee on behalf of the Investor Certificateholders of
such Series. The Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Receivable by the Transferor
pursuant to this Agreement or any Supplement or the eligibility
of any Receivable for purposes of this Agreement or any
Supplement.
(f) Limited Repurchase of Defaulted Receivables.
(i) On each Distribution Date with respect to a Monthly Period
during each fiscal year of the Transferor, the Transferor shall
repurchase from the Trust all Receivables transferred to the
Trust by the Transferor which have theretofore become Defaulted
Receivables during the period commencing on the first day of such
fiscal year and ending on the last day of such Monthly Period
(the "Year-to-Date Period"); provided, that (A) the Pro Forma
Condition has been satisfied as of such date, (B) the Originator
has elected to repurchase Defaulted Receivables pursuant to the
Receivables Purchase Agreement, (C) no Amortization Period is
then in effect for any Series, and (D) the Transferor shall not
repurchase, with respect to any Monthly Period, an amount of
Defaulted Receivables which will cause the aggregate cumulative
principal amount of Defaulted Receivables repurchased by the
Transferor for the Year-to-Date Period to exceed 95% of the
product of (1) the cumulative principal amount of Receivables
transferred pursuant to this Agreement by the Transferor during
such Year-to-Date Period multiplied by (2) the percentage
equivalent of a fraction, the numerator of which is the aggregate
principal amount of Defaulted Receivables recorded by the
Transferor during the immediately preceding fiscal year, and the
denominator of which is the cumulative principal amount of
Receivables transferred pursuant to this Agreement by the
Transferor during the immediately preceding fiscal year (such
percentage equivalent, the "Prior Year's Default Ratio").
(ii) The Transferor shall deposit, on the Transfer Date
(in next day funds) preceding each Distribution Date on
which Defaulted Receivables are repurchased, an amount equal
to the principal amount of Defaulted Receivables being
repurchased (the "Defaulted Receivable Repurchase Amount")
into the Collection Account. On such Distribution Date,
such repurchased Defaulted Receivables and all monies due or
to become due with respect thereto and all proceeds of such
repurchased Defaulted Receivables allocated to such
repurchased Defaulted Receivables for which the Defaulted
Receivable Repurchase Amount has been paid shall be released
to the Transferor after payment of all amounts otherwise due
hereunder on or prior to such dates and the Trustee shall
execute and deliver such instruments of transfer or
assignment, in each case without recourse, representation or
warranty, as shall be prepared by and as are reasonably
requested by the Transferor to vest in the Transferor or its
designee or assign, all right, title and interest of the
Trust in and to such repurchased Defaulted Receivables, all
monies due or to become due with respect thereto and all
proceeds of such repurchased Defaulted Receivables.
Thereafter, such repurchased Defaulted Receivables shall not
be considered Receivables for any purpose hereunder other
than (x) for purposes of calculating a Prior Year's Default
Ratio and (y) to the extent provided in the definition of
"Default Amount."
(iii) In consideration for the Transferor's
repurchase of Defaulted Receivables as set forth in this
subsection 2.4(f), so long as the Transferor complies with
such obligation, the Transferor shall retain any amounts
other than Recoveries received by the Transferor with
respect to Defaulted Receivables.
Section 2.5 Covenants of the Transferor. The Transferor
hereby covenants that:
(a Receivables to be Accounts or General
Intangibles. Transferor will take no action to cause any
Receivable to be evidenced by any instrument (as defined in the
UCC as in effect in the Relevant UCC State). The Transferor will
take no action to cause any Receivable to be anything other than
an "account," "general intangible" or "chattel paper" (each as
defined in the UCC as in effect in the Relevant UCC State).
(b Security Interests. Except for the conveyances
hereunder, the Transferor will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien, on any Receivable, whether now existing
or hereafter created, or any interest therein; the Transferor
will immediately notify the Trustee of the existence of any Lien
on any Receivable; and the 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 the Transferor; provided,
however, that nothing in this subsection 2.5(b) shall prevent or
be deemed to prohibit the Transferor from suffering to exist upon
any of the Receivables any Permitted Lien.
(c Charge Account Agreements and Credit and
Collection Policies. The Transferor shall comply with and
perform its obligations and shall take all actions reasonably
within its control to cause the Account Owners to comply with and
perform their obligations under the Charge Account Agreements
relating to the Accounts and the Credit and Collection Policy
except insofar as any failure to comply or perform would not
materially and adversely affect the rights of the Trust or the
Certificateholders hereunder or under the Certificates. The
Transferor may change, and permit the Account Owners to change,
the terms and provisions of the Charge Account Agreements or the
Credit and Collection Policy in any respect (including, without
limitation, the reduction of the required minimum monthly
payment, the calculation of the amount, or the timing, of charge
offs and the periodic finance charges and other fees to be
assessed thereon) only if such change (individually or taken
together with all prior changes to the terms and provisions of
the Charge Account Agreements or the Credit and Collection
Policy) (i) would not, in the reasonable belief of the
Transferor, cause, immediately or with the passage of time, a Pay
Out Event to occur and (ii) (A) (if it owns a comparable segment
of charge card accounts) is made applicable to the comparable
segment of the revolving credit card accounts owned by the
Transferor, if any, which have characteristics the same as, or
substantially similar to, the Accounts that are the subject of
such change and (B) (if it does not own such a comparable
segment) will not be made with the intent to materially benefit
the Transferor over the Investor Certificateholders or to
materially adversely affect the Investor Certificateholders,
except as otherwise restricted by an endorsement, sponsorship, or
other agreement between the Transferor and an unrelated third
party or by the terms of the Charge Account Agreements.
(d Account Allocations. In the event that the
Transferor is unable for any reason to transfer Receivables to
the Trust in accordance with the provisions of this Agreement
(including, without limitation, by reason of the application of
an order by any Governmental Authority or any court of competent
jurisdiction that the Transferor not transfer any additional
Receivables to the Trust) then, in any such event, (A) the
Transferor agrees to allocate and pay to the Trust, after the
date of such inability, all Collections with respect to Principal
Receivables, and all amounts which would have constituted
Collections with respect to Principal Receivables but for the
Transferor's inability to transfer such Receivables; (B) the
Transferor agrees to have such amounts applied as Collections in
accordance with Article IV; and (C) for only so long as all
Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with
clauses (A) and (B) above, Principal Receivables (and all amounts
which would have constituted Principal Receivables but for the
Transferor's inability to transfer Receivables to the Trust) that
are written off as uncollectible in accordance with the
applicable Credit and Collection Policy shall continue to be
allocated in accordance with Article IV, and all amounts that
would have constituted Principal Receivables but for the
Transferor's inability to transfer Receivables to the Trust shall
be deemed to be Principal Receivables for the purpose of
calculating (i) the applicable Investor Percentage with respect
to any Series and (ii) the Aggregate Investor Percentage
thereunder. If the Transferor is unable pursuant to any
Requirement of Law to allocate Collections as described above,
the Transferor agrees that it shall in any such event allocate,
after the occurrence of such event, payments on each Account with
respect to the principal balance of such Account first to the
oldest principal balance of such Account and to have such
payments applied as Collections in accordance with Article IV.
The parties hereto agree that Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables
that have been conveyed to the Trust, or that would have been
conveyed to the Trust but for the above described inability to
transfer such Receivables, shall continue to be a part of the
Trust notwithstanding any cessation of the transfer of additional
Principal Receivables to the Trust and Collections with respect
thereto shall continue to be allocated and paid in accordance
with Article IV.
(e Delivery of Collections. In the event that the
Transferor receives Collections, the Transferor agrees to deposit
such Collections into the Collection Account as soon as
practicable after the receipt thereof, but in no event later than
two Business Days after receipt thereof.
(f Conveyance of Accounts. The Transferor covenants
and agrees that it will not permit the Account Owners to convey,
assign, exchange or otherwise transfer any Account, unless it is
a Removed Account, to any Person other than the Transferor prior
to the termination of this Agreement pursuant to Article XII;
provided, however, that the Transferor shall not be prohibited
hereby from permitting an Account Owner to convey, assign,
exchange or otherwise transfer an Account of such Account Owner
(the removal of which is permitted by Section 2.7) in connection
with a transaction in which such Account Owner and its successor
agree to comply with provisions substantially similar to those of
either Section 2.7 or Section 7.2; provided, further, that
nothing set forth in this Agreement shall prevent one Account
Owner from merging with another Account Owner.
(g Notice of Liens. The Transferor shall notify the
Trustee promptly after becoming aware of any Lien on any
Receivable other than Permitted Liens.
(h No Other Business. The Transferor agrees to
engage in no business other than the business contemplated
hereunder and under the Receivables Purchase Agreement.
(i Enforcement of Receivables Purchase Agreement.
The Transferor agrees to take all action necessary and
appropriate to enforce its rights and claims under the
Receivables Purchase Agreement.
(j Separate Business. Other than with respect to
In-Store Payments, the Transferor will not permit its assets to
be commingled with those of SRI or any Affiliate of SRI, the
Transferor shall maintain separate corporate records and books of
account from those of SRI and its Affiliates, and the Transferor
shall conduct its business from an independent office. The
Transferor will conduct its business solely in its own name and
will cause SRI and its Affiliates to conduct their business
solely in their own names so as not to mislead others as to the
identity of the entity with which those others are concerned.
The Transferor will provide for its own operating expenses and
liabilities from its own funds, except that the organizational
expenses of the Transferor may be paid by SRI. The Transferor
will not hold itself out, or permit itself to be held out, as
having agreed to pay, or as being liable for, the debts of SRI or
any of its Affiliates. The Transferor shall cause SRI and its
Affiliates not to hold themselves out, or permit themselves to be
held out, as having agreed to pay, or as being liable for, the
debts of the Transferor. The Transferor will maintain an arm's
length relationship with SRI and its Affiliates with respect to
any transactions between the Transferor, on the one hand, and SRI
or its Affiliates, on the other.
(k Originators. The Transferor shall not acquire
Receivables from any Person other than an Originator which has
become a party to the Receivables Purchase Agreement. The
Transferor will not permit any additional originator to become a
party to the Receivables Purchase Agreement as an "Originator"
except following an acquisition of Accounts or other transaction
which has satisfied the requirements of clause (b) of the
definition of Automatic Additional Accounts.
(l Receivables Purchase Agreement Notices. The
Transferor (i) shall promptly give the Trustee copies of any
notices, reports or certificates given or delivered to the
Transferor under the Receivables Purchase Agreement, (ii) shall
not, without the consents, approvals and opinions, if any,
required by Section 13.1, as if Section 13.1 related to the
Receivables Purchase Agreement rather than this Agreement, enter
into any amendment, supplement or other modification to, or
waiver of any provision of, the Receivables Purchase Agreement
and (iii) shall not permit the addition or removal of an Account
or Receivable to or from the operation of the Receivables
Purchase Agreement unless there is a corresponding right or
obligation of the Transferor to add or remove such Account or
Receivable to or from the Trust.
(m Notwithstanding any other provisions of this
Agreement and only at such time as a Related Person shall be
Trustee hereunder, in the event that (i) the sum of cash and Cash
Equivalents in the Equalization Account divided by (ii) the sum
of the Aggregate Principal Receivables and the amount described
in clause (i) above is greater than (A) 15% on six consecutive
Determination Dates or (B) 30% on any monthly Determination Date,
each after giving effect to all payments made or to be made on
the monthly Distribution Date next succeeding the applicable
monthly Determination Date, then such Related Person shall be
replaced as Trustee, pursuant to Sections 11.7(c) and 11.8, with
a successor Trustee who is not a Related Person.
Section 2.6 Addition of Accounts. (a0 All Accounts which
meet the definition of Automatic Additional Accounts shall be
included as Accounts from and after the date upon which such
Automatic Additional Accounts are created and all Receivables in
such Automatic Additional Accounts, whether such Receivables are
then existing or thereafter created, shall be transferred
automatically to the Trust upon purchase by the Transferor. For
all purposes of this Agreement, all receivables of such 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."
(b) On any day on which the Receivables in Automatic
Additional Accounts are to be transferred to the Trust, such
Accounts shall be included as Eligible Accounts if, in addition
to satisfying the requirements of clauses (a) through (e) of the
definition thereof, the following conditions are met:
(i the cumulative number of Accounts the Receivables
of which have been added or are designated to be added to
the Trust pursuant to subsection 2.6(a) since the later of
the Initial Closing Date and the first day of the twelfth
preceding Monthly Period which satisfy the conditions of
clause (a) of the definition of "Automatic Additional
Accounts" on such date shall not be in excess of 20% of the
amount equal to (w) the number of the Active Accounts as of
the later of the Initial Closing Date, the Latest Rating
Agency Approval Date and the last day of the twelfth
preceding Monthly Period, plus (x) the number of Accounts
the Receivables of which were designated to be added to the
Trust pursuant to clause (c) of the definition of "Automatic
Additional Accounts" on the first day of such addition after
the later of the Initial Closing Date, the Latest Rating
Agency Approval Date and the last day of the twelfth
preceding Monthly Period, plus (y) the number of
Supplemental Accounts, if any, the Receivables of which were
designated to be added to the Trust after the later of the
Initial Closing Date, the Latest Rating Agency Approval Date
and the last day of the twelfth preceding Monthly Period,
minus (z) any Removed Accounts removed after the later of
the Initial Closing Date, the Latest Rating Agency Approval
Date and the last day of the twelfth preceding Monthly
Period; and
(ii the cumulative number of Accounts the Receivables
of which have been added or are designated to be added to
the Trust pursuant to subsections 2.6(a) and (b) since the
later of the Initial Closing Date and the first day of the
second preceding Monthly Period which satisfy the conditions
of clause (a) or (b) of the definition of Automatic
Additional Accounts on such date shall not be in excess of
15% of the amount equal to (w) the number of the Active
Accounts as of the latest of the Initial Closing Date, the
Latest Rating Agency Approval Date and the first day of the
second preceding Monthly Period, plus (x) the number of
Accounts the Receivables of which were designated to be
added to the Trust pursuant to clause (c) of the definition
of "Automatic Additional Accounts" on the first day of any
such addition and were added after the latest of the Initial
Closing Date, the Latest Rating Agency Approval Date and the
first day of the second preceding Monthly Period, plus
(y) the number of Supplemental Accounts, if any, designated
during the preceding three Monthly Periods and thereafter
added after the later of the Initial Closing Date and the
first day of the second preceding Monthly Period, minus
(z) any Removed Account removed after the later of the
Initial Closing Date and the first day of the second
preceding Monthly Period.
If any Automatic Additional Accounts would have been included as
an Account but for the provisions of Section 2.6(b)(i) or (ii),
they shall be included as Accounts on the first date thereafter
permitted by Section 2.6(b)(i) and (ii).
(c) The Transferor may elect at any time to terminate
or suspend the inclusion in Accounts of Automatic Additional
Accounts by delivering to the Trustee, the Servicer and the
Rating Agency 15 days prior written notice of such election. If
the Transferor has elected to terminate or suspend the inclusion
of Automatic Additional Accounts and (i) on any Record Date, the
Transferor Interest for the related Monthly Period is less than
the Minimum Transferor Interest, the Transferor shall designate
additional credit card accounts or any successor credit card
accounts ("Supplemental Accounts") to be included as Accounts in
a sufficient amount such that the Transferor Interest as a
percentage of the Aggregate Principal Receivables for such
Monthly Period after giving effect to such addition is at least
equal to the Minimum Transferor Interest, (ii) on any Record
Date, the Retained Interest for the related Monthly Period is
less than the Minimum Retained Interest, the Transferor shall
designate Supplemental Accounts to be included as Accounts in a
sufficient amount such that the Retained Interest as a percentage
of the Aggregate Principal Receivables for such Monthly Period
after giving effect to such addition is at least equal to the
Minimum Retained Interest, or (iii) on any Record Date, the
aggregate amount of Principal Receivables is less than the
Minimum Aggregate Principal Receivables, the Transferor shall
designate Supplemental Accounts to be included as Accounts in a
sufficient amount such that the Aggregate Principal Receivables
will be equal to or greater than the Minimum Aggregate Principal
Receivables. Receivables from such Supplemental Accounts shall
be transferred to the Trust on or before the tenth Business Day
following such Record Date. On any day on which the Receivables
in Supplemental Accounts are to be transferred to the Trust, the
Receivables in such Accounts shall be included as Eligible
Receivables if they satisfy the requirements of the definition of
"Eligible Receivables."
(d) In addition to its obligation under
subsection 2.6(c), if and for so long as the Transferor has
elected to terminate or suspend the inclusion of Automatic
Additional Accounts, the Transferor may, by giving twenty
Business Days' notice to the Trustee and each Rating Agency, but
shall not be obligated to, designate from time to time
Supplemental Accounts of the Transferor to be included as
Accounts.
(e) The Transferor agrees that any such transfer of
Receivables from Supplemental Accounts, under subsection 2.6(c)
or (d), shall satisfy the following conditions (to the extent
provided below):
(i) on or before the fifth Business Day prior to the
Addition Date with respect to additions pursuant to
subsection 2.6(c) and on or before the twentieth Business
Day prior to the Addition Date with respect to additions
pursuant to subsection 2.6(d) (as applicable, the "Notice
Date"), the Transferor shall give the Trustee, each Rating
Agency and the Servicer written notice that such
Supplemental Accounts will be included, which notice shall
specify the approximate aggregate amount of the Receivables
to be transferred;
(ii) on or before the applicable Addition Date, the
Transferor shall have delivered to the Trustee a written
assignment (including an acceptance by the Trustee on behalf
of the Trust for the benefit of the Investor
Certificateholders) in substantially the form of Exhibit B
(the "Assignment") and the 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, the Transferor shall have delivered to the
Trustee or the bailee of the Trustee a computer file or
microfiche list containing a true and complete list of all
Supplemental Accounts, identified by account number and the
Outstanding Balance of the Receivables in such Supplemental
Accounts, as of the Addition Cut Off Date, which computer
file or microfiche list shall be as of the date of such
Assignment incorporated into and made a part of such
Assignment and Schedule I to this Agreement;
(iii the Transferor shall represent and warrant
that (x) no selection procedure which is materially adverse
to the interests of the Investor Certificateholders or any
Enhancement Provider was utilized in selecting the
Supplemental Accounts and (y) as of the applicable Addition
Date, the Transferor is not insolvent;
(iv the 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 the Transferor in and to
(A) the Receivables then existing and thereafter created in
the Supplemental Accounts, the Related Contracts and all
proceeds (as defined in the UCC as in effect in the Relevant
UCC State) of such Receivables and (B) Recoveries, and such
Receivables and all proceeds thereof will be held by the
Trust free and clear of any Lien of any Person claiming
through or under the Transferor or any of its Affiliates,
except for (i) Permitted Liens, (ii) the interest of the
Transferor as Holder of the Exchangeable Transferor
Certificate and any other Class or Series of Certificates
and (iii) the Transferor's right to receive interest
accruing on, and investment earnings in respect of, the
Collection Account and any Interest Funding Account and any
Principal Account, or any Series Account as provided in this
Agreement and any related Supplement or (y) a grant of a
security interest (as defined in the UCC as in effect in the
Relevant UCC State) in such property to the Trust, which is
enforceable with respect to then existing Receivables of the
Supplemental Accounts, the proceeds (as defined in the UCC
as in effect in the Relevant UCC State) thereof 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 and the proceeds (as defined in the UCC as in
effect in the Relevant UCC State) thereof upon such
creation; and (z) if the Assignment constitutes the grant of
a security interest to the Trust in such property, upon the
filing of 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 (as defined in the UCC as in
effect in the Relevant UCC State) thereof, upon such
creation, the Trust shall have a first priority perfected
security interest in such property, except for Permitted
Liens;
(v the Transferor shall deliver to the Trustee an
Officer's Certificate substantially in the form of
Schedule II to Exhibit B confirming the items set forth in
paragraph (ii) above;
(vi the Transferor shall deliver to the Trustee an
Opinion of Counsel with respect to the Receivables in the
Supplemental Accounts (with a copy to the Rating Agencies)
substantially in the form of Exhibit F; and
(vii the Transferor shall have received written
notice from the Rating Agencies that the inclusion of such
accounts as Supplemental Accounts pursuant to
subsection 2.6(c) or (d), as the case may be, will not
result in the reduction or withdrawal of its then existing
rating of any Series of Investor Certificates then issued
and outstanding and shall have delivered such notice to the
Trustee.
(f) The Transferor shall also comply with the
requirements of clauses (v) and (vi) of subsection 2.6(e) in
connection with each addition of Automatic Additional Accounts
pursuant to clause (b) of the definition thereof.
Section 2.7 Removal of Accounts.
(a) On each Determination Date that the Transferor
Interest for the related Monthly Period exceeds 5% of the
Aggregate Principal Receivables in the Trust with respect to such
Determination Date, the Trustee shall be deemed to have offered
to the Transferor automatically and without any notice to or
action by or on behalf of the Trustee, as of such Determination
Date, the right to remove from the Trust all of the Trust's
right, title and interest in, to and under the Receivables then
existing and thereafter created, all monies then due or to become
due and all amounts thereafter received with respect thereto and
all proceeds thereof in or with respect to those Accounts
designated by the Transferor (the "Removed Accounts") in an
aggregate amount not greater than (i) at any time the excess of
the Transferor Interest over the Minimum Transferor Interest,
(ii) at any time the excess of the Retained Interest over the
Minimum Retained Interest and (iii) if any Amortization Period
has commenced and is continuing with respect to any Series, the
lesser of (x) the excess of the Transferor Interest over the
Minimum Transferor Interest and (y) the excess of Aggregate
Principal Receivables over the Minimum Aggregate Principal
Receivables. To accept such offer, the Transferor is required to
furnish to the Trustee and each Rating Agency written notice by
the fifth Business Day after the Determination Date specifying
the approximate aggregate amount of Principal Receivables covered
by the offer that the Transferor intends to accept. There shall
be no more than one such removal with respect to any Monthly
Period.
(b) In addition to the satisfaction of the conditions
set forth in subsection 2.7(a), the Transferor shall be permitted
to accept reassignment to it of the Receivables from Removed
Accounts only upon satisfaction of the following conditions:
(i) On each date specified by the Transferor for
removal of the Removed Accounts (a "Removal Date"), the
Transferor shall prepare and the Trustee shall execute and
deliver to the Transferor a written reassignment in
substantially the form of Exhibit H (the "Reassignment")
provided to the Trustee in final execution form and the
Transferor shall deliver to the Trustee or the bailee of the
Trustee a computer file or microfiche list containing a true
and complete schedule identifying all Accounts the
Receivables of which remain in the Trust specifying for each
such Account, as of the Removal Notice Date, its account
number and the Outstanding Balance of such Account. Such
computer file or microfiche list shall be incorporated into
and made part of this Agreement as of the date of such
Reassignment.
(ii) The Transferor shall represent and warrant as of
each Removal Notice Date that (a) the list of the Accounts
not removed from the Trust, as of the Removal Notice Date,
complies in all material respects with the requirements of
paragraph (i) above and (b) no selection procedure used by
the Transferor which is materially adverse to the interests
of the Investor Certificateholders or any Enhancement
Provider was utilized in selecting the Removed Accounts.
(iii) The Transferor shall represent and warrant that
the removal of any Receivables in any Removed Accounts on
any Removal Date shall not, in the reasonable belief of the
Transferor, cause, immediately or with the passage of time,
a Pay Out Event to occur.
(iv) The Transferor shall have delivered at least 20
days' (or such lesser number as any Rating Agency may agree)
prior written notice (which may be given prior to the
Removal Date in expectation that the Trustee will be deemed
to have made the offer described in subsection 2.7(a)) of
such removal to each Rating Agency which has rated any
outstanding Series and the Trustee shall have received
written confirmation from each such Rating Agency that such
Rating Agency will not reduce or withdraw its rating on any
outstanding Series as a result of such removal.
(v) The Transferor shall have delivered to the Trustee
an Officer's Certificate confirming the Transferor's
compliance with the items set forth in paragraphs (i)
through (iv) above. The Trustee may conclusively rely on
such certificate, shall have no duty to make inquiries with
regard to the matters set forth therein and shall incur no
liability in so relying.
(c) Upon satisfaction of the conditions set forth in
subsections 2.7(a) and (b), the Trustee shall execute and
deliver the Reassignment to the Transferor provided to the
Trustee in final execution form, and the Receivables from the
Removed Accounts shall no longer constitute a part of the Trust.
(d) Notwithstanding any other provisions of this
Section 2.7 (but subject to having no more than one removal in
any Monthly Period and maintaining the Minimum Transferor
Interest), the Transferor will be permitted to designate Removed
Accounts and to remove from the Trust all of the Trust's right,
title and interest in, to and under the Receivables then existing
in such Removed Accounts together with all monies then due or to
become due and all amounts then received with respect thereto and
all proceeds thereof or with respect to such Removed Accounts in
connection with the sale by SRI or any Affiliate of SRI of all or
substantially all of the capital stock or assets of any Account
Owner or any former Account Owner if the conditions in clauses
(i), (iii) and (iv) of subsection 2.7(b) have been satisfied and
the Transferor shall have delivered to the Trustee an Officer's
Certificate confirming compliance with such conditions; provided,
however, that the Transferor will have the option under such
circumstances, if it provides the Trustee with an Opinion of
Counsel to the effect that the Trust will continue to have a
first priority perfected security interest in all Receivables
remaining in the Trust subsequent to such Reassignment, to leave
in the Trust all of the Trust's right, title and interest in, to
and under the Receivables then existing, together with all monies
due or to become due and all amounts received with respect
thereto and all proceeds thereof in or with respect to the
Removed Accounts and cease, from and after the applicable Removal
Date, to transfer, assign, set over or otherwise convey to the
Trust the Receivables thereafter created and arising in
connection with the Removed Accounts, all monies due or to become
due and all amounts received with respect thereto and all
proceeds thereof in or with respect to the Removed Accounts, in
which case the Reassignment shall be modified accordingly.
Section 2.8 Discount Option. (a) The Transferor shall have
the option to designate a fixed percentage (the "Discount
Percentage"), not less than 2% and not greater than 4%, of the
principal balance of all Receivables, other than such amounts
that are included in clauses (i) through (vii) of the definition
of Finance Charge Receivables, investment earnings on amounts on
deposit in the Equalization Account and Receivables in Defaulted
Accounts, arising on or after the date of such designation
determination to be treated as Finance Charge Receivables. The
election to exercise this option shall be irrevocable. The
Transferor shall provide to the Servicer, the Trustee, any
Enhancement Provider and the Rating Agency 30 days' prior written
notice of such designation, and such designation shall become
effective on the date designated therein (i) unless such
designation in the reasonable belief of the Transferor would
cause a Pay Out Event to occur, or an event which, with notice or
the lapse of time or both, would constitute a Pay Out Event and
(ii) only if the Rating Agency shall have delivered a letter to
the Transferor and the Trustee confirming that its then current
rating of the Investor Certificates of any Series then
outstanding will not be reduced or withdrawn as a result of such
designation.
(b) After the date on which the Transferor's exercise
of its discount option takes effect, and with respect to
Receivables generated on and after such date, the Transferor, in
accordance with Section 4.3, shall deposit into the Collection
Account in immediately available funds an amount equal to the
amount of the Discount Option Receivables Collections processed
on such day. The deposit made by the Transferor into the
Collection Account under the preceding sentence shall be
considered a payment of such Discount Option Receivables and
shall be applied as Finance Charge Receivables in accordance with
Article IV.
[End of Article II]
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section III.1 Acceptance of Appointment and Other Matters
Relating to the Servicer.
(a) SRI agrees to act as the Servicer under this
Agreement. The Investor Certificateholders of each Series by
their acceptance of the related Certificates consent to SRI
acting as Servicer. Notwithstanding the foregoing or any other
provisions of this Agreement or any Supplement, the Investor
Certificateholders consent to an Affiliate of SRI acting as
Servicer hereunder, in full substitution thereof; provided that
such Affiliate shall expressly assume in writing (unless such
assumption occurs by operation of law), by an agreement
supplemental hereto, executed and delivered to the Trustee, the
performance of every covenant and obligation of the Servicer, as
applicable hereunder, and shall in all respects be designated the
Servicer under this Agreement; provided, further, that SRI will
remain jointly and severally liable with such Affiliate.
(b) The Servicer shall service and administer the
Receivables and shall collect payments due under the Receivables
in accordance with its customary and usual servicing procedures
and the Credit and Collection Policies and shall have full power
and authority, acting alone or through any party properly
designated by it hereunder, to do any and all things in
connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of
the foregoing and subject to Section 10.1, the Servicer is hereby
authorized and empowered (i) to make withdrawals from the
Collection Account as set forth in this Agreement, (ii) unless
such power and authority is revoked by the Trustee on account of
the occurrence of a Servicer Default pursuant to Section 10.1, to
instruct the Trustee in writing to make withdrawals and payments,
from any Interest Funding Account, the Equalization Account, any
Principal Account and any Series Account, in accordance with such
instructions as set forth in this Agreement, (iii) unless such
power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1, to
instruct the Trustee in writing to take any action permitted or
required under any Enhancement at such time as set forth in this
Agreement and any Supplement, (iv) to execute and deliver, on
behalf of the Trust for the benefit of the Certificateholders,
any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable
instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under
and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect to such
Receivables, (v) to make any filings, reports, notices,
applications, registrations with, and to seek any consents or
authorizations from, the Securities and Exchange 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 or reporting requirements and (vi) to delegate certain
of its service, collection, enforcement and administrative duties
hereunder with respect to the Accounts and the Receivables to any
Person who agrees to conduct such duties in accordance with the
Credit and Collection Policies. The Trustee agrees that it shall
promptly follow the instructions of the Servicer to withdraw
funds from any Principal Account, any Interest Funding Account,
the Equalization Account, or any Series Account and to take any
action required under any Enhancement at such time as required
under this Agreement. The Trustee shall execute at the
Servicer's written request such documents prepared by the
Transferor and acceptable to the Trustee as the Servicer
certifies are necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
(c) In the event that the Transferor is unable for any
reason to transfer Receivables to the Trust in accordance with
the provisions of this Agreement (including, without limitation,
by reason of order of any court of competent jurisdiction that
the Transferor not transfer any additional Principal Receivables
to the Trust) then, in any such event, (A) the Servicer agrees to
allocate, after such date, all Collections with respect to
Principal Receivables, and all amounts which would have
constituted Collections with respect to Principal Receivables but
for the Transferor's inability to transfer such Receivables in
accordance with subsection 2.5(d); (B) the Servicer agrees to
apply such amounts as Collections in accordance with Article IV,
and (C) for only so long as all Collections and all amounts which
would have constituted Collections are allocated and applied in
accordance with clauses (A) and (B) above, Principal Receivables
and all amounts which would have constituted Principal
Receivables but for the Transferor's inability to transfer
Receivables to the Trust that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in
accordance with Article IV and all amounts which would have
constituted Principal Receivables but for the Transferor's
inability to transfer Receivables to the Trust shall be deemed to
be Principal Receivables for the purpose of calculating the
applicable Investor Percentage thereunder. If the Servicer is
unable pursuant to any Requirement of Law to allocate payments on
the Accounts as described above, the Servicer agrees that it
shall in any such event allocate, after the occurrence of such
event, payments on each Account with respect to the principal
balance of such Account first to the oldest principal balance of
such Account and to have such payments applied as Collections in
accordance with Article IV.
(d) The Servicer shall not be obligated to use
separate servicing procedures, offices or employees for servicing
the Receivables from the procedures, offices and employees used
by the Servicer in connection with servicing other credit card
receivables.
Section III.2 Servicing Compensation. As compensation for
its servicing activities hereunder and reimbursement for its
expenses as set forth in the immediately following paragraph, the
Servicer shall be entitled to receive a servicing fee in respect
of each day prior to the termination of the Trust pursuant to
Section 12.1 (the "Servicing Fee"), payable in arrears on each
date and in the manner specified in the applicable Supplement,
equal to the product of (i) a fraction, the numerator of which is
the actual number of days in the measuring period specified in
the applicable Supplement and the denominator of which is the
actual number of days in the year, (ii) the weighted average
Series Servicing Fee Percentage (based upon the Series Servicing
Fee Percentage for each Series and the Invested Amount of such
Series) and (iii) the daily average aggregate Outstanding Balance
of all Principal Receivables over the term of such measuring
period. The share of the Servicing Fee allocable to each Series
with respect to any date of payment shall be equal to the product
of (i) a fraction, the numerator of which is the actual number of
days in the measuring period specified in the applicable
Supplement and the denominator of which is the actual number of
days in the year, (ii) the applicable Series Servicing Fee
Percentage for such Series and (iii) the Invested Amount of such
Series, as appropriate, as of the date of determination for such
payment as specified in the applicable Supplement. The remainder
of the Servicing Fee shall be paid by the Transferor, or retained
by the Servicer as provided in Article IV, and in no event shall
the Trust, the Trustee, any Enhancement Provider, or the Investor
Certificateholders be liable for the share of the Servicing Fee
to be paid by the Transferor.
The Servicer shall be responsible for its own expenses,
which shall include the amounts due to the Trustee pursuant to
Section 11.5 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by
the Servicer in connection with its activities hereunder;
provided, that the Servicer shall not be liable for any
liabilities, costs or expenses of the Trust, the Investor
Certificateholders or the Certificate Owners arising under any
tax law, including without limitation any federal, state or local
income or franchise taxes or any other tax imposed on or measured
by income (or any interest, penalties or additions with respect
thereto or arising from a failure to comply therewith). In the
event that the Servicer fails to pay any amounts due to the
Trustee pursuant to Section 11.5, the Trustee shall be entitled
to deduct and receive such amounts from the Servicing Fee prior
to the payment thereof to the Servicer. The Servicer shall be
required to pay such expenses for its own account and shall not
be entitled to any payment therefor other than the Servicing Fee.
Section III.3 Representations and Warranties of the
Servicer. SRI, as initial Servicer, hereby makes, and any
Successor Servicer by its appointment hereunder shall make, the
following representations and warranties on which the Trustee has
relied in accepting the Receivables in trust and in
authenticating the Certificates issued on the Initial Closing
Date:
(a) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and has full
corporate power, authority and legal right to own its properties
and conduct its business as such properties are presently owned
and such business is presently conducted, and to execute, deliver
and perform its obligations under this Agreement and any
Supplement.
(b) Due Qualification. The Servicer is duly qualified
to do business and is in good standing (or is exempt from such
requirements) as a foreign corporation in any state where such
qualification is necessary in order to service the Receivables as
required by this Agreement and any Supplement and has obtained
all necessary licenses and approvals as required under Federal
and state law in order to service the Receivables as required by
this Agreement, and if the Servicer shall be required by any
Requirement of Law to so qualify or register or obtain such
license or approval, then it shall do so except where the failure
to obtain such license or approval does not materially affect the
Servicer's ability to perform its obligations hereunder or the
enforceability of any Receivable.
(c) Due Authorization. The execution, delivery, and
performance of this Agreement and any Supplement have been duly
authorized by the Servicer by all necessary corporate action on
the part of the Servicer and this Agreement and any Supplement
will remain, from the time of its execution, an official record
of the Servicer.
(d) Binding Obligation. This Agreement and any
Supplement constitutes a legal, valid and binding obligation of
the Servicer, enforceable in accordance with its terms, except as
enforceability 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 and as such enforceability may be limited by
general principles of equity (whether considered in a proceeding
at law or in equity).
(e) No Violation. The execution and delivery of this
Agreement and any Supplement by the Servicer, and the performance
of the transactions contemplated by this Agreement and any
Supplement and the fulfillment of the terms hereof applicable to
the Servicer, will not conflict with, violate, result in any
breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the Servicer
or any indenture, contract, agreement, mortgage, deed of trust or
other instrument to which the Servicer is a party or by which it
is bound.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the knowledge of the Servicer,
threatened against the Servicer before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, seeking any determination or
ruling that, in the reasonable judgment of the Servicer, would
materially and adversely affect the performance by the Servicer
of its obligations under this Agreement or any Supplement, or
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement
or any Supplement.
(g) Compliance with Requirements of Law. The Servicer
shall duly satisfy all obligations on its part to be fulfilled
under or in connection with each Receivable and the related
Account, will maintain in effect all qualifications required
under Requirements of Law in order to service properly each
Receivable and the related Account and will comply in all
material respects with all other Requirements of Law in
connection with servicing each Receivable and the related Account
the failure to comply with which would have a material adverse
effect on the Certificateholders or any Enhancement Provider.
(h) Protection of Certificateholders' Rights. The
Servicer shall take no action which, nor omit to take any action
the omission of which, would impair the rights of
Certificateholders in any Receivable or the related Account or
the rights of any Enhancement Provider, nor shall it reschedule,
revise or defer payments due on any Receivable except in
accordance with the Credit and Collection Policies.
(i) All Consents. All authorizations, consents,
orders or approvals of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given
by the Servicer in connection with the execution and delivery of
this Agreement by the Servicer and the performance of the
transactions contemplated by this Agreement by the Servicer, have
been duly obtained, effected or given and are in full force and
effect; provided, however, that the Servicer makes no
representation or warranty regarding State securities or "Blue
Sky" laws in connection with the distribution of the
Certificates.
(j) Rescission or Cancellation. The Servicer shall
not permit any rescission or cancellation of any Receivable
except as ordered by a court of competent jurisdiction or other
Governmental Authority or in accordance with the Credit and
Collection Policy or the normal operating procedures of the
Servicer.
(k) Receivables Not To Be Evidenced by Promissory
Notes. Except in connection with its enforcement or collection
of an Account (in which case any such promissory note would be
made in the name of the Trust on behalf of the
Certificateholders), the Servicer will take no action to cause
any Receivable to be evidenced by an instrument (as defined in
the UCC as in effect in the Relevant UCC State).
(l) Principal Place of Business. The Servicer shall
at all times maintain its principal place of business within the
United States.
Section III.4 Reports and Records for the Trustee.
(a) Daily Records. Upon reasonable prior notice by
the Trustee, the Servicer shall make available at an office of
the Servicer (or other location designated by the Servicer if
such records are not accessible by the Servicer at an office of
the Servicer) selected by the Servicer for inspection by the
Trustee or its agent (reasonably acceptable to the Servicer) on a
Business Day during the Servicer's normal business hours a record
setting forth (i) the Collections on each Receivable and (ii) the
amount of Receivables for the Business Day preceding the date of
the inspection. The Servicer shall, at all times, maintain its
computer files with respect to the Receivables in such a manner
so that the Receivables may be specifically identified and, upon
reasonable prior request of the Trustee, shall make available to
the Trustee, at an office of the Servicer (or other location
designated by the Servicer if such computer files are not located
at an office of the Servicer) selected by the Servicer, on any
Business Day of the Servicer during the Servicer's normal
business hours any computer programs necessary to make such
identification.
(b) Daily Report.
(i) On each Business Day the Servicer shall
prepare a completed Daily Report.
(ii) The Servicer shall deliver to the Trustee
and the Paying Agent the Daily Report by 2:30 p.m. (New York
City time) on each Business Day with respect to activity in
the Receivables for the prior Business Day (or, in the case
of a Daily Report delivered on the second Business Day
following a Saturday, Sunday or other non-Business Day, the
aggregate activity for the preceding Business Day and such
preceding non-Business Days).
(iii) Upon discovery of any error or receipt of
notice of any error in any Daily Report, the Servicer, the
Transferor and the Trustee shall arrange to confer and shall
agree upon any adjustments necessary to correct any such
errors. If any such error is material, the Servicer or the
Trustee, as the case may be, shall retain all Collections
(or such lesser amount as the Trustee and the Servicer shall
agree to be necessary to cover any such error) in the
Collection Account until such material error is corrected.
Unless the Trustee has received written notice of any error
or discrepancy, the Trustee may rely on each Daily Report
delivered to it for all purposes hereunder.
(c) Settlement Statement. On the second Business Day
prior to the fifteenth calendar day of each month, the Servicer
shall, prior to 3:00 p.m. (New York City time) on such day,
deliver to the Trustee and the Paying Agent the Settlement
Statement for the related Monthly Period substantially in the
form of Exhibit D hereto, including the following information
(which, in the case of clauses (iii), (iv) and (v) below, will be
stated on the basis of an original principal amount of $1,000 per
Certificate): (i) the aggregate amount of Collections received
in the Collection Account for the Monthly Period preceding such
Determination Date and the aggregate amount of Finance Charge
Collections and the aggregate amount of Principal Collections
processed during such Monthly Period; (ii) the aggregate amount
of the applicable Investor Percentage of Collections of Principal
Receivables on the last day of the preceding Monthly Period of
each Series of Certificates and the aggregate amount of the
applicable Investor Percentage of Collections on the last day of
the preceding Monthly Period of each Series of Certificates with
respect to Finance Charge Collections and Receivables in
Defaulted Accounts; (iii) for each Series and for each Class
within any such Series, the total amount to be distributed to
Investor Certificateholders on the next succeeding Distribution
Date; (iv) for each Series and for each Class within any such
Series, the amount of such distribution allocable to principal;
(v) for each Series and for each Class within any such Series,
the amount of such distribution allocable to interest; (vi) for
each Series and each Class within a Series, the Investor Default
Amount for the immediately preceding Monthly Period; (vii) for
each Series and each Class within a Series, the amount of the
Investor Charge-Offs and the amount of the reimbursements of
Investor Charge-Offs for such Distribution Date; (viii) for each
Series, the Monthly Investor Servicing Fee for such Distribution
Date; (ix) for each Series, the existing deficit controlled
amortization amount, if applicable; (x) the aggregate amount of
Receivables in the Trust at the close of business on the last day
of the Monthly Period preceding such Distribution Date; (xi) for
each Series, the Invested Amount at the close of business on the
last day of the Monthly Period immediately preceding such
Distribution Date; (xii) the available amount of any Enhancement
for each Class of each Series, if any; (xiii) whether a Pay Out
Event or a Prospective Pay Out Event with respect to any Series
shall have occurred during or with respect to the related Monthly
Period; (xiv) the aggregate amount of Discount Option Receivables
in the Trust at the close of business on the last day of the
Monthly Period preceding such Distribution Date; (xv) the
aggregate amount of Discount Option Receivables Collections
processed during such Monthly Period; and (xvi) such other
calculations as may be required by any Supplement. The Trustee
shall be under no duty to recalculate, verify or recompute the
information supplied to it under this Section 3.4 or such other
matters as are set forth in any Settlement Statement.
Section III.5 Annual Servicer's Certificate. The Servicer
will deliver, as provided in Section 13.5, to the Trustee, any
Enhancement Provider and the Rating Agencies on or before ninety
days following the end of each year, an Officer's Certificate
substantially in the form of Exhibit E stating that (a) a review
of the activities of the Servicer during such year and of its
performance under this Agreement was made under the supervision
of the officer signing such certificate and (b) to such officer's
knowledge, based on such review, the Servicer has fully performed
all its obligations under this Agreement throughout such year,
or, if there has been a default in the performance of any such
obligation, specifying each such default known to such officer
and the nature and status thereof. A copy of such certificate
may be obtained by any Investor Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
Section III.6 Annual Independent Accountants' Servicing
Report.
(a) On or before the 15th day of December of each
year, beginning with December 15, 1993, the Servicer shall cause
a firm of nationally recognized independent public accountants
(who may also render other services to the Servicer or the
Transferor) to furnish a report with respect to the twelve-month
period ending on last day of the August Monthly Period for such
year (or, in the case of the initial such period, the August 1993
Monthly Period) to the Trustee, any Enhancement Provider and each
Rating Agency, to the effect that such firm has applied certain
procedures, agreed upon with the Servicer and the Trustee and
substantially as set forth in Exhibit J hereto, which would
re-perform certain accounting performed by the Servicer to
certain documents and records relating to the servicing of
Accounts under this Agreement. In addition, each report shall
set forth the agreed upon procedures performed and the results of
such procedures. On or before the 150th day following the end of
each Transferor Fiscal Year, beginning with the Transferor Fiscal
Year ending February 5, 1993, the Servicer shall also cause a
firm of nationally recognized independent public accountants (who
may also render other services to the Servicer or the Transferor)
to furnish to the Trustee, any Enhancement Provider and each
Rating Agency audited financial statements with respect to SRI,
the Transferor and the Trust along with a copy of the annual
management letter prepared by such auditors pertaining to SRI and
its subsidiaries. A copy of each such report and set of
financial statements will be sent to each Investor
Certificateholder by the Trustee.
(b) On or before the 15th day of December of each
year, beginning with December 15, 1993, the Servicer shall cause
a firm of nationally recognized independent certified public
accountants (who may also render other services to the Servicer
or the Transferor) to furnish a report to the Trustee, any
Enhancement Provider and the Rating Agency to the effect that
they have compared the mathematical calculations set forth in
each of the monthly certificates forwarded by the Servicer
pursuant to subsection 3.4(c) during the period covered by such
report (which shall be the twelve fiscal months ending with the
August Monthly Period of such year, or for the initial period,
the August 1993 Monthly Period) with the computer reports which
were the source of such amounts and that on the basis of such
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 report. A copy of such
report may be obtained by any Investor Certificateholder by a
request in writing to the Trustee.
Section III.7 Tax Treatment. The Transferor has structured
this Agreement and the Investor Certificates with the intention
that the Investor Certificates will qualify under applicable
federal, state, local and foreign tax law as indebtedness.
Except to the extent expressly specified to the contrary in any
Supplement, the Transferor, the Servicer, the Holder of the
Exchangeable Transferor Certificate, each Investor
Certificateholder, and each Certificate Owner agree to treat and
to take no action inconsistent with the treatment of the Investor
Certificates (or beneficial interests 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. Each Investor Certificateholder, Holder of a Variable
Funding Certificate and the Holder of the Exchangeable Transferor
Certificate, by acceptance of its Certificate and each
Certificate Owner, by acquisition of a beneficial interest in a
Certificate, agrees to be bound by the provisions of this
Section 3.7. Each Certificateholder agrees that it will cause any
Certificate Owner acquiring an interest in a Certificate through
it to comply with this Agreement as to treatment as indebtedness
under applicable tax law, as described in this Section 3.7.
Section III.8 Adjustments. (a) If the Servicer adjusts
downward the amount of any Receivable because of a rebate,
refund, unauthorized charge or billing error to an Obligor,
because such Receivable was created in respect of merchandise
which was refused or returned by an Obligor, or if the Servicer
otherwise adjusts downward the amount of any Receivable without
receiving Collections therefor or without charging off such
amount as uncollectible, then, in any such case, the Transferor
Interest will be reduced and the aggregate amount of the
Principal Receivables used to calculate the Floating Allocation
Percentages applicable to any Series will be reduced by the
principal amount of any such Receivable. Similarly, the
aggregate amount of the Principal Receivables used to calculate
the Floating Allocation 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
contained in subsection 2.5(b) was breached. Any adjustment
required pursuant to either of the two preceding sentences shall
be made on or prior to the end of the Monthly Period in which
such adjustment obligation arises. In the event that, following
any such reduction, the Transferor Interest would be less than
the Minimum Transferor Interest, within two Business Days of the
date on which such adjustment obligation arises, the Transferor
shall pay to the Servicer, for deposit into the Collection
Account, in immediately available funds an amount equal to the
amount by which the Transferor Interest would be reduced below
the Minimum Transferor Interest. Any amount deposited into the
Collection Account in connection with the adjustment of a
Receivable (an "Adjustment Payment") shall be applied in
accordance with Article IV and the terms of each Supplement.
(b) If (i) the Servicer makes a deposit into the
Collection Account in respect of a Collection of a Receivable and
such Collection was received in the form of a check which is not
honored for any reason or (ii) the Servicer makes a mistake with
respect to the amount of any Collection and deposits an amount
that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect
such dishonored check or mistake. Any Receivable in respect of
which a dishonored check is received shall be deemed not to have
been paid. Notwithstanding the first two sentences of this
paragraph, no adjustments shall be made pursuant to this
paragraph that will change any amount of Collections previously
reported pursuant to subsection 3.4 (b).
Section III.9 Notices to SRI. In the event that SRI or any
Affiliate thereof is no longer acting as Servicer, any Successor
Servicer appointed pursuant to Section 10.2 shall deliver or make
available to SRI each certificate and report required to be
prepared, forwarded or delivered thereafter pursuant to Sections
3.4, 3.5 and 3.6.
[End of Article III]
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section IV.1 Rights of Certificateholders. (a) Each Series
of Investor Certificates shall represent Undivided Interests in
the Trust, including the benefits of any Enhancement issued with
respect to such Series and the right to receive the Collections
and other amounts at the times and in the amounts specified in
this Article IV to be deposited in the Investor Accounts or to be
paid to the Investor Certificateholders of such Series; provided,
however, that the aggregate interest represented by such
Certificates at any time in the Principal Receivables shall not
exceed an amount equal to the Invested Amount of such
Certificates. The Exchangeable Transferor Certificate shall
represent the remaining undivided interest in the Trust,
including the right to receive the Collections and other amounts
at the times and in the amounts specified in this Article IV to
be paid to the Holder of the Exchangeable Transferor Certificate;
provided, however, that the aggregate interest represented by
such Certificate at any time in the Principal Receivables shall
not exceed the Transferor Interest at such time and such
Certificate shall not represent any interest in the Investor
Accounts, except as provided in this Agreement, or the benefits
of any Enhancement issued with respect to any Series.
(b) If any Series of Investor Certificates shall be
defeased in full by any means permitted pursuant to the
applicable Supplement, such Series shall have no right to share
in or otherwise receive, any allocations of Collections of
Finance Charge Receivables or Principal Receivables, and the
Fixed Allocation Percentage and Floating Allocation Percentage of
such Series shall equal zero.
Section IV.2 Establishment of Accounts. (a) The Collection
Account. The Servicer, for the benefit of the Certificateholders
and, to the extent specified in any Supplement, each Enhancement
Provider, shall establish in the name of the Trustee, on behalf
of the Trust, a non-interest bearing segregated account (the
"Collection Account") bearing a designation clearly indicating
that the funds deposited therein are held in trust for the
benefit of the Certificateholders, and shall cause such
Collection Account to be established and maintained, (i) in a
segregated trust account with the corporate trust department of a
depositary institution or trust company (which may include the
Trustee) organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia and
whose deposits are insured to the limits provided by law by the
FDIC having corporate trust powers and acting as trustee for
funds deposited therein (provided, however, that such account
need not be maintained as a segregated trust account with the
corporate trust department of such institution if at all times
the certificates of deposit, short-term deposits or commercial
paper or the long-term unsecured debt obligations (other than
such obligation whose rating is based on collateral or on the
credit of a Person other than such institution or trust company)
of such depositary institution or trust company shall have a
Satisfactory Short-Term Credit Rating in the case of the
certificates of deposit, short-term deposits or commercial paper,
or the Highest Long-Term Credit Rating in the case of the
long-term unsecured debt obligations) or (ii) with a depositary
institution, which may include the Trustee, which is acceptable
to the Rating Agency (in the case of (i) and (ii), a "Qualified
Institution"). The Servicer shall give written notice to the
Trustee of the location and account number of the Collection
Account and shall notify the Trustee in writing prior to any
subsequent change thereof. Pursuant to authority granted to it
pursuant to subsection 3.1(b), the Servicer shall have the
revocable power to withdraw funds from the Collection Account for
the purposes of carrying out its duties hereunder.
(b) The Interest Funding and Principal Accounts. The
Servicer, for the benefit of the Investor Certificateholders and,
to the extent specified in any Supplement, each Enhancement
Provider, shall establish and maintain with a Qualified
Institution in the name of the Trust two segregated trust
accounts for each Series (an "Interest Funding Account" and a
"Principal Account," respectively), each bearing a designation
clearly indicating that the funds therein are held for the
benefit of the Investor Certificateholders of such Series and, to
the extent specified in the applicable Supplement, any related
Enhancement Provider. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in any
Interest Funding Account and any Principal Account and in all
proceeds thereof. Except as provided in subsection 4.2(e), each
Interest Funding Account and each Principal Account shall be
under the sole dominion and control of the Trustee for the
benefit of the Investor Certificateholders and, to the extent
specified in the applicable Supplement, any related Enhancement
Provider. Pursuant to authority granted to it hereunder, the
Servicer shall have the revocable power to instruct the Trustee
in writing to withdraw funds from the Interest Funding Account
and any Principal Account for any purpose of carrying out the
Servicer's or the Trustee's duties hereunder. The Trustee at all
times shall maintain accurate records reflecting each transaction
in each Principal Account and each Interest Funding Account and
that funds held therein shall at all times be held in trust for
the benefit of the Investor Certificateholders of such Series
and, to the extent specified in the applicable Supplement, any
related Enhancement Provider.
(c) Distribution Accounts. The Servicer, for the
benefit of the Investor Certificateholders of each Series and, to
the extent specified in any Supplement, each Enhancement
Provider, shall cause to be established and maintained in the
name of the Trust, with an office or branch of a Qualified
Institution a non-interest-bearing segregated demand deposit
account for each Series (a "Distribution Account") bearing a
designation clearly indicating that the funds deposited therein
are held in trust for the benefit of the Investor
Certificateholders of such Series and, to the extent specified in
the applicable Supplement, any related Enhancement Provider. The
Trustee shall possess all right, title and interest in all funds
on deposit from time to time in each Distribution Account and in
all proceeds thereof. Each Distribution Account shall be under
the sole dominion and control of the Trustee for the benefit of
the Investor Certificateholders of the related Series and, to the
extent specified in the applicable Supplement, any related
Enhancement Provider.
(d) The Equalization Account. The Servicer, for the
benefit of the Certificateholders and, to the extent specified in
any Supplement, each Enhancement Provider, shall cause to be
established in the name of the Trustee, on behalf of the
Certificateholders and, to the extent specified in any
Supplement, each Enhancement Provider, with a Qualified
Institution, a segregated trust account (the "Equalization
Account") bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the
Certificateholders and, to the extent specified in the applicable
Supplement, any related Enhancement Provider. The Servicer shall
give written notice to the Trustee of the location and account
number of the Equalization Account and shall notify the Trustee
in writing prior to any subsequent change thereof. Except as
provided in subsection 4.3(f), the Equalization Account shall,
except as otherwise provided herein, be under the sole dominion
and control of the Trustee for the benefit of the
Certificateholders and, to the extent specified in the applicable
Supplement, any related Enhancement Provider. Pursuant to the
authority granted to the Servicer herein, the Servicer shall have
the power, revocable by the Trustee, to make withdrawals and
payments from the Equalization Account for the purpose of
carrying out the Servicer's or Trustee's duties hereunder.
(e) Administration of the Principal Accounts and the
Interest Funding Accounts. Funds on deposit in each Principal
Account and each Interest Funding Account shall at all times be
invested by the Servicer (or, at the direction of the Transferor,
by the Trustee) on behalf of the Transferor in Cash Equivalents.
Any such investment shall mature and such funds shall be
available for withdrawal on or prior to the Transfer Date
following the Monthly Period in which such funds were processed
for collection. The Trustee shall maintain for the benefit of
the Investor Certificateholders and, to the extent specified in
any Supplement, each Enhancement Provider, possession of the
negotiable instruments or securities evidencing the Cash
Equivalents described in clause (a) of the definition thereof
from the time of purchase thereof until the time of sale or
maturity. At the end of each month, all interest and earnings
(net of losses and investment expenses) on funds on deposit in
each Principal Account and each Interest Funding Account (unless
otherwise specified in the applicable Supplement) shall be
deposited by the Trustee in a separate deposit account with a
Qualified Institution in the name of the Servicer, or a Person
designated in writing by the Servicer, which shall not constitute
a part of the Trust, or shall otherwise be turned over by the
Trustee to the Servicer not less frequently than monthly.
Subject to the restrictions set forth above, the Servicer, or a
Person designated in writing by the Servicer, of which the
Trustee shall have received written notification, shall have the
authority to instruct the Trustee with respect to the investment
of funds on deposit in any Principal Account and any Interest
Funding Account. Any investment instructions to the Trustee
shall be in writing and shall include a certification that the
proposed investment is a Cash Equivalent that matures at or prior
to the time required by this Agreement. For purposes of
determining the availability of funds or the balances in any
Interest Funding Account and any Principal Account for any reason
under this Agreement, all investment earnings on such funds shall
be deemed not to be available or on deposit.
Section IV.3 Collections and Allocations.
(a) Collections. Obligors shall make payments on the
Receivables (i) to the Servicer who shall deposit all such
payments in the Collection Account no later than the first
Business Day following the date of receipt or (ii) as In-Store
Payments, which shall be deposited in the Collection Account no
later than the second Business Day following the date of receipt.
The Servicer shall allocate such amounts to each Series
of Investor Certificates and to the Holder of the Exchangeable
Transferor Certificate in accordance with this Article IV and
shall withdraw the required amounts from the Collection Account
or pay such amounts to the Holder of the Exchangeable Transferor
Certificate in accordance with this Article IV. The Servicer
shall make such deposits or payments on the date indicated
therein by wire transfer or as otherwise provided in the
Supplement for any Series of Certificates with respect to such
Series.
Notwithstanding anything in this Agreement to the contrary,
but subject the terms of any Supplement, for so long as, and only
so long as, SRI or an Affiliate of SRI shall remain the Servicer
hereunder, and (a) (i) SRI or an Affiliate of SRI provides to the
Trustee a letter of credit or other form of Enhancement rated in
the highest rating category by the Rating Agency covering the
risk of collection of the Servicer, and (ii) the Transferor shall
not have received a notice from any Rating Agency that such a
letter of credit or other form of Enhancement would result in the
lowering of such Rating Agency's then existing rating of the
Investor Certificates, or (b) SRI shall have and maintain a
Satisfactory Short-Term Credit Rating, the Servicer need not
deposit Collections from the Collection Account into the
Principal Account or the Interest Funding Account or any Series
Account, or make payments to the Holder of the Exchangeable
Transferor Certificate, prior to the close of business on the day
any Collections are deposited in the Collection Account as
otherwise provided in this Article IV, but may instead make such
deposits, payments and withdrawals on each Transfer Date in an
amount equal to the net amount of such deposits, payments and
withdrawals which would have been made but for the provisions of
this paragraph. The Servicer shall deposit all Defaulted
Receivable Receipts into the Collection Account no later than the
first Business Day following the date of receipt (unless such
Defaulted Receivable Receipts are In-Store Payments, which shall
be deposited no later than the second Business Day following the
date of receipt). Upon its determination that any Defaulted
Receivable Receipts are in the Collection Account, the Servicer
shall be entitled to withdraw the portion of such Defaulted
Receivable Receipts not constituting Recoveries from the
Collection Account and to transfer such funds to the Transferor
(or to any Person who acquired the Defaulted Receivables from the
Transferor).
(b) Allocations for the Exchangeable Transferor
Certificate. Throughout the existence of the Trust, unless
otherwise stated in any Supplement, on each Business Day the
Servicer shall allocate to the Holder of the Exchangeable
Transferor Certificate an amount equal to the product of (i) the
Transferor Percentage as of the end of the preceding Business Day
and (ii) the aggregate amount of Principal Collections and
Finance Charge Collections available in the Collection Account.
The Servicer shall pay such amount to the Holder of the
Exchangeable Transferor Certificate on each Business Day;
provided, however, that amounts payable to the Holder of the
Exchangeable Transferor Certificate pursuant to this clause (b)
shall instead be deposited in the Equalization Account to the
extent necessary to prevent the Transferor Interest from being
less than the Minimum Transferor Interest.
(c) Allocation of Finance Charge Collections; Allocations
to Equalization Account.
(i) Any amounts received as Defaulted Receivable
Repurchase Amounts shall be deemed Principal Collections
which are available in the Collection Account on the
applicable Distribution Date.
(ii) For purposes of Section 4.3(d), the amount of
Finance Charge Collections that are available in the
Collection Account on any Business Day shall equal the total
Collections which are available in the Collection Account on
such Business Day (other than Collections representing
Defaulted Receivable Repurchase Amounts) multiplied by a
fraction, the numerator of which is equal to the Collections
received by the Servicer with respect to Finance Charge
Receivables on the immediately preceding Business Day (other
than Collections representing Defaulted Receivable
Repurchase Amounts), and the denominator of which is all
Collections received by the Servicer on the immediately
preceding Business Day. All other Collections which are
available in the Collection Account on such Business Day
shall be deemed Principal Collections.
(iii) For the purpose of this Section 4.3, on any
day which is not a Business Day, the Servicer shall be
permitted to allocate to the Equalization Account a senior
undivided interest in Collections previously received by the
Servicer which have not yet become available funds (such
Collections being "Collections in Process"). The Servicer
shall be permitted to allocate Collections in Process to the
Equalization Account in an amount (which may be a variable
amount) sufficient to ensure that (x) the sum of the
Principal Receivables held by the Trust and the amount
(including any interest in Collections in Process) in the
Equalization Account is equal to or greater than (y) the sum
of the Aggregate Invested Amount and the Minimum Transferor
Interest. As soon as Collections become available in the
Collection Account thereafter, they shall be deposited into
the Equalization Account in an amount sufficient to reduce
the undivided interest of the Equalization Account in
Collections in Process to zero.
(d) Allocation for Series. On each Business Day, (i) the
amount of Finance Charge Collections available in the Collection
Account allocable to each Series shall be determined by
multiplying the aggregate amount of such Finance Charge
Collections by the Floating Allocation Percentage for such
Series, (ii) the amount of Principal Collections available in the
Collection Account allocable to each Series shall be determined
by multiplying the aggregate amount of such Principal Collections
by (x) during the Revolving Period for a Series, the Floating
Allocation Percentage for such Series and (y) during any
Amortization Period for a Series, the Fixed Allocation Percentage
for such Series, and (iii) the Receivables in Defaulted Accounts
allocable to each Series shall be determined by multiplying the
aggregate amount of such Receivables in Defaulted Accounts by the
Floating Allocation Percentage for such Series. The Servicer
shall, prior to the close of business on the day any Collections
are deposited in the Collection Account, withdraw the required
amounts from the Collection Account and deposit such amounts into
the applicable Principal Account, the applicable Interest Funding
Account, the Equalization Account, or any Series Account or pay
such amounts to the Holder of the Exchangeable Transferor
Certificate in accordance with the provisions of this Article IV.
(e) Shared Principal Collections: Equalization Account. On
each Business Day, Shared Principal Collections shall be
allocated to each outstanding Series pro rata based on the
Principal Shortfall, if any, for each such Series, and then, at
the option of the Transferor, any remainder may be applied as
principal with respect to the Variable Funding Certificates. The
Servicer shall pay any remaining Shared Principal Collections on
such Business Day to the Transferor; provided, that if the
Transferor Interest as determined on such Business Day does not
exceed the Minimum Transferor Interest, then such remaining
Shared Principal Collections shall be deposited in the
Equalization Account to the extent necessary to increase the
Transferor Interest above the Minimum Transferor Interest.
(f) Amounts in Equalization Account. Amounts on deposit in
the Equalization Account on any Business Day will be invested by
the Servicer (or, at the direction of the Transferor, by the
Trustee) on behalf of the Transferor in Cash Equivalents which
shall mature and be available on or before the next Business Day
on which amounts may be released from the Equalization Account.
Earnings from such investments received shall be deposited in the
Collection Account and treated as Finance Charge Collections.
Any investment instructions to the Trustee shall be in writing
and shall include a certification that the proposed investment is
a Cash Equivalent that matures at or prior to the date required
by this Agreement. If on any Business Day other than a Business
Day on which a Prospective Pay Out Event has occurred and is
continuing, the Transferor Interest is greater than the Minimum
Transferor Interest, amounts on deposit in the Equalization
Account may, at the option of the Transferor, be released to the
Holder of the Exchangeable Transferor Certificate. On any
Business Day falling in the Amortization Period for any Series,
funds on deposit in the Equalization Account will be treated as
Shared Principal Collections and applied in accordance with
Section 4.3(e).
(g) Portfolio Imbalance Event. On the first Business Day
following a Portfolio Imbalance Event, funds on deposit in the
Equalization Account will be deposited, in accordance with
written instructions from the Servicer, in the Principal Account
to the extent of the Portfolio Correction Distribution Amount;
provided, however, that no such deposit need be made if the
Transferor has furnished the Trustee with an Opinion of Counsel
to the effect that failure to make such deposit and distribute
the amount required to be deposited in accordance with the
Supplements for any outstanding Series will not cause the Trust
or the Transferor to be required to register as an investment
company pursuant to the Investment Company Act.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES]
[End of Article IV]
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL BE SPECIFIED
IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
[End of Article V]
ARTICLE VI
THE CERTIFICATES
Section VI.1 The Certificates. Subject to Sections 6.10 and
6.13, the Investor Certificates of each Series and any Class
thereof may be issued in bearer form (the "Bearer Certificates")
with attached interest coupons and a special coupon
(collectively, the "Coupons") or in fully registered form (the
"Registered Certificates"), and shall be substantially in the
form of the exhibits with respect thereto attached to the related
Supplement. The Exchangeable Transferor Certificate shall be
substantially in the form of Exhibit A. The Investor
Certificates and the Exchangeable Transferor Certificate shall,
upon issue pursuant hereto or to Section 6.9 or Section 6.10, be
executed and delivered by the Transferor to the Trustee for
authentication and redelivery as provided in Sections 2.1 and
6.2. Any Investor Certificate shall be issuable in a minimum
denomination of $1,000 Undivided Interest and integral multiples
thereof, unless otherwise specified in any Supplement, and shall
be issued upon original issuance in an original aggregate
principal amount equal to the Initial Invested Amount. The
Exchangeable Transferor Certificate shall be issued as a single
certificate. Each Certificate shall be executed by manual or
facsimile signature on behalf of the Transferor by its President
or any Vice President. Certificates bearing the manual or
facsimile signature of the individual who was, at the time when
such signature was affixed, authorized to sign on behalf of the
Transferor or the Trustee shall not be rendered invalid,
notwithstanding that such individual has ceased to be so
authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such
Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein, executed by or on
behalf of the Trustee by the manual signature of a duly
authorized signatory, and such certificate upon any Certificate
shall be conclusive evidence, and the only evidence, that such
Certificate has been validly issued and duly authenticated and
delivered hereunder. All Certificates shall be dated the date of
their authentication except Bearer Certificates which shall be
dated the applicable issuance date as provided in the related
Supplement.
Section VI.2 Authentication of Certificates.
Contemporaneously with the initial assignment and transfer of the
Receivables, whether now existing or hereafter created (other
than Receivables in Additional Accounts) and the other components
to the Trust, the Trustee shall authenticate and deliver the
initial Series of Investor Certificates, upon the written order
of the Transferor. Upon the issuance of such Investor
Certificates, such Investor Certificates shall be validly issued,
fully paid and non-assessable. The Trustee shall authenticate
and deliver the Exchangeable Transferor Certificate to the
Transferor simultaneously with its delivery of the initial Series
of Investor Certificates. Upon an Exchange as provided in
Section 6.9 and the satisfaction of certain other conditions
specified therein, the Trustee shall authenticate and deliver the
Investor Certificates of additional Series (with the designation
provided in the related Supplement), upon the written order of
the Transferor, to the persons designated in such Supplement.
Upon the written order of the Transferor, the Certificates of any
Series shall be duly authenticated by or on behalf of the
Trustee, in authorized denominations equal to (in the aggregate)
the Initial Invested Amount of such Series of Investor
Certificates. If specified in the related Supplement for any
Series, the Trustee shall authenticate and deliver outside the
United States the Global Certificate that is issued upon original
issuance thereof, upon the written order of the Transferor, to
the Depositary. If specified in the related Supplement for any
Series, the Trustee shall authenticate Book-Entry Certificates
that are issued upon original issuance thereof, upon the written
order of the Transferor, to a Clearing Agency or its nominee as
provided in Section 6.10.
Section VI.3 Registration of Transfer and Exchange of
Certificates.
(a) The Trustee shall cause to be kept at the office
or agency to be maintained by a transfer agent and registrar (the
"Transfer Agent and Registrar") 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, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless
otherwise provided in the related Supplement) and of transfers
and exchanges of the Investor Certificates as herein provided.
Bankers Trust Company is hereby initially appointed Transfer
Agent and Registrar for the purposes of registering the Investor
Certificates and transfers and exchanges of the Investor
Certificates as herein provided. If any form of Investor
Certificate is issued as a Global Certificate, Bankers Trust
Company may, or if and so long as any Series of Investor
Certificates are listed on a stock exchange and such exchange
shall so require, Bankers Trust Company shall appoint a
co-transfer agent and co-registrar, which will also be a
co-paying agent, in such city as the Transferor may specify. Any
reference in this Agreement to the Transfer Agent and Registrar
shall include any co-transfer agent and co-registrar unless the
context otherwise requires. Bankers Trust Company shall be
permitted to resign as Transfer Agent and Registrar upon 30 days'
written notice to the Servicer. In the event that Bankers Trust
Company shall no longer be the Transfer Agent and Registrar, the
Transferor shall appoint a successor Transfer Agent and
Registrar.
Upon surrender for registration of transfer of any
Certificate at any office or agency of the Transfer Agent and
Registrar, the Transferor shall execute, subject to the
provisions of subsection 6.3(c), and the Trustee shall
authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates in
authorized denominations of like aggregate Undivided Interests;
provided, that the provisions of this paragraph shall not apply
to Bearer Certificates.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of
the same Series in authorized denominations of like aggregate
Undivided Interests, upon surrender of the Investor Certificates
to be exchanged at any such office or agency. At the option of
any Holder of Registered Certificates, Registered Certificates
may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided
Interests in the Trust, upon surrender of the Registered
Certificates to be exchanged at any office or agency of the
Transfer Agent and Registrar maintained for such purpose. At the
option of a Bearer Certificateholder, subject to applicable laws
and regulations (including without limitation, the Bearer Rules),
Bearer Certificates may be exchanged for other Bearer
Certificates or Registered Certificates of the same Series in
authorized denominations of like aggregate Undivided Interests in
the Trust, in the manner specified in the Supplement for such
Series, 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 6.3 shall have attached
thereto (or be accompanied by) all unmatured Coupons, provided
that any Bearer Certificate so surrendered after the close of
business on the Record Date preceding the relevant Distribution
Date after the related Series Termination Date need not have
attached the Coupons relating to such Distribution Date.
Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Transferor shall execute, and the
Trustee shall authenticate and (unless the Transfer Agent and
Registrar is different than the Trustee, in which case the
Transfer Agent and Registrar shall) deliver, the Investor
Certificates of such Series which the Certificateholder making
the exchange is entitled to receive. Every Investor Certificate
presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in a
form satisfactory to the Transferor and the Transfer Agent and
Registrar duly executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3
notwithstanding, the Trustee or the Transfer Agent and Registrar,
as the case may be, shall not be required to register the
transfer or exchange of any Investor Certificate of any Series
for a period of 15 days preceding the due date for any payment
with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no
service charge shall be made for any registration of transfer or
exchange of 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
transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons
attached to Bearer Certificates) surrendered for registration of
transfer or exchange shall be canceled by the Transfer Agent and
Registrar and disposed of in a manner satisfactory to the
Transferor. The Trustee shall cancel and destroy the Global
Certificates upon its exchange in full for Definitive
Certificates and shall deliver a certificate of destruction to
the Transferor. Such certificate shall also state that a
certificate or certificates of each Foreign Clearing Agency to
the effect referred to in Section 6.13 was received with respect
to each portion of the Global Certificate exchanged for
Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or
the Transfer Agent and Registrar, as applicable, Bearer
Certificates and Registered Certificates in such amounts and at
such times as are necessary to enable the Trustee to fulfill its
responsibilities under this Agreement and the Certificates.
(b) Except as provided in Section 6.9 or 7.2 or in any
Supplement, in no event shall the Exchangeable Transferor
Certificate or any interest therein be transferred, sold,
exchanged, pledged, participated or otherwise assignment
hereunder (each of the above, a "Transfer"), in whole or in part,
unless (i) the Servicer shall have provided an Officer's
Certificate to the Trustee to the effect that such sale,
exchange, pledge, participation or assignment will not materially
adversely affect the interests of the Certificateholders, (ii)
such sale, exchange, pledge, participation or assignment shall
not, as evidenced by an Opinion of Counsel, cause the Trust to be
characterized for Federal income tax purposes as an association
taxable as a corporation or otherwise have a material adverse
impact on the Federal income taxation of any outstanding Series
of Investor Certificates and (iii) the Servicer shall have
provided at least ten Business Days prior written notice to each
Rating Agency of such sale, exchange, pledge, participation or
assignment and shall have received written confirmation from each
Rating Agency to the effect of the original rating of any Series
or any class of any Series will not be reduced or withdrawn as a
result of such sale, exchange, pledge, participation or
assignment, a copy of which confirmation will be provided to the
Trustee.
(c) Unless otherwise provided in the related
Supplement, registration of transfer of Registered Certificates
containing a legend relating to the restrictions on transfer of
such Registered Certificates (which legend shall be set forth in
the Supplement relating to such Investor Certificates) shall be
effected only if the conditions set forth in such related
Supplement are satisfied.
Whenever a Registered Certificate containing the legend set
forth in the related Supplement is presented to the Transfer
Agent and Registrar for registration of transfer, the Transfer
Agent and Registrar shall promptly seek instructions from the
Servicer regarding such transfer. The Transfer Agent and
Registrar and the Trustee shall be entitled to receive written
instructions signed by a Servicing Officer prior to registering
any such transfer or authenticating new Registered Certificates,
as the case may be. The Servicer hereby agrees to indemnify the
Transfer Agent and Registrar and the Trustee and to hold each of
them harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of or
in connection with actions taken or omitted by them in reliance
on any such written instructions furnished pursuant to this
subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at
its expense in the Borough of Manhattan, The City of New York, an
office or offices or an agency or agencies where Investor
Certificates of such Series may be surrendered for registration
of transfer or exchange.
Section VI.4 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate (together, in
the case of Bearer Certificates, with all unmatured Coupons, if
any, appertaining thereto) is surrendered to the Transfer Agent
and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of
any Certificate and (b) there is delivered to the Transfer Agent
and Registrar and the Trustee such security or indemnity as may
be required by them to hold each of them and the Trust harmless,
then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the
Transferor shall execute and the Trustee shall authenticate and
(unless the Transfer Agent and Registrar is different from the
Trustee, in which case the Transfer Agent and Registrar shall)
deliver (in compliance with applicable law), in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate
Undivided Interest. In connection with the issuance of any new
Certificate under this Section 6.4, the Trustee or the Transfer
Agent and Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Transfer Agent and Registrar)
connected therewith. Any duplicate Certificate issued pursuant
to this Section 6.4 shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be
found at any time.
Section VI.5 Persons Deemed Owners. Prior to due
presentation of a Certificate for registration of transfer, the
Trustee, the Paying Agent, the Transfer Agent and Registrar and
any agent of any of them may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Article V (as
described in any Supplement) and Article XII and for all other
purposes whatsoever, and neither the Trustee, the Paying Agent,
the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary; provided,
however, that in determining whether the holders of Investor
Certificates evidencing the requisite Undivided Interests have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Investor Certificates owned by the
Transferor, the Servicer or any Affiliate thereof shall be
disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice,
consent or waiver, only Investor Certificates which a Responsible
Officer in the Corporate Trust Office of the Trustee knows to be
so owned shall be so disregarded. Investor Certificates so owned
that have been pledged in good faith shall not be disregarded as
outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such
Investor Certificates and that the pledgee is not the Transferor,
the Servicer or an Affiliate thereof.
In the case of a Bearer Certificate, the Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any of
them may treat the holder of a Bearer Certificate or Coupon as
the owner of such Bearer Certificate or Coupon for the purpose of
receiving distributions pursuant to Article V (as described in
any Supplement) and Article XII and for all other purposes
whatsoever, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall
be affected by any notice to the contrary. 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 the Trustee the pledgee's right so to act
with respect to such Investor Certificates and that the pledgee
is not the Transferor, the Servicer or an Affiliate thereof.
Section VI.6 Appointment of Paying Agent. (a) The Paying
Agent shall make distributions to Investor Certificateholders
from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in this Agreement or
the related Supplement for any Series pursuant to Articles IV and
V hereof. Any Paying Agent shall have the revocable power to
withdraw funds from such appropriate account or accounts for the
purpose of making distributions referred to above. The Trustee
and the Transferor (or the Servicer if the Trustee is the Paying
Agent) may revoke such power and remove the Paying Agent, if the
Trustee and the Transferor (or the Servicer if the Trustee is
the Paying Agent) determine (or determines) that the Paying Agent
shall have failed to perform its obligations under this Agreement
in any material respect or for other good cause. The Paying
Agent, unless the Supplement with respect to any Series states
otherwise, shall initially be the Trustee. The Trustee shall be
permitted to resign as Paying Agent upon 30 days' written notice
to the Servicer. In the event that the Trustee, shall no longer
be the Paying Agent, the Transferor shall appoint a successor to
act as Paying Agent (which shall be a bank or trust company).
Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so
long as the Investor Certificates of such Series are outstanding
and the Paying Agent is not located in New York City, the
Transferor shall maintain a co-paying agent in New York City (for
Registered Certificates only) or any other city designated in
such Supplement.
(b) The Trustee shall cause each Paying Agent (other
than itself) to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums, if any, held by it for payment
to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto and waive all rights of set
off the Paying Agent may have against any sums held by it until
such sums shall be paid to such Certificateholders and shall
agree, and if the Trustee is the Paying Agent it hereby agrees,
that it shall comply with all requirements of the Internal
Revenue Code regarding the withholding by the Trustee of payments
in respect of federal income taxes due from Certificate owners.
Section VI.7 Access to List of Certificateholders' Names and
Addresses. The Trustee will furnish or cause to be furnished by
the Transfer Agent and Registrar to the Servicer or the Paying
Agent, within five Business Days after receipt by the Trustee of
a request therefor from the Servicer or the Paying Agent,
respectively, in writing, a list in such form as the Servicer or
the Paying Agent may reasonably require, of the names and
addresses of the Investor Certificateholders as of the most
recent Record Date for payment of distributions to Investor
Certificateholders. Unless otherwise provided in the related
Supplement, holders of Investor Certificates evidencing Undivided
Interests aggregating not less than lot of the Invested Amount of
the Investor Certificates of any Series (the "Applicants") may
apply in writing to the Trustee, and if such application states
that the Applicants desire to communicate with other Investor
Certificateholders of any Series with respect to their rights
under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants
propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and
expenses, shall afford or shall cause the Transfer Agent and
Registrar to afford such Applicants access during normal business
hours to the most recent list of Certificateholders held by the
Trustee and shall give the Servicer notice that such request has
been made, within five Business Days after the receipt of such
application. Such list shall be as of a date no more than 45
days prior to the date of receipt of such Applicants' request.
Every Certificateholder, by receiving and holding a Certificate,
agrees with the Trustee that neither the Trustee, the Transfer
Agent and Registrar, nor any of their respective agents shall be
held accountable by reason of the disclosure of any such
information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which
such information was obtained.
Section VI.8 Authenticating Agent. (a) The Trustee may
appoint one or more authenticating agents with respect to the
Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the
issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. Whenever reference is made in
this Agreement to the authentication of Certificates by the
Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of
the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an
authenticating agent. Each authenticating agent must be
acceptable to the Transferor. The Trustee hereby initially
appoints Bankers Trust (Delaware) as its Authenticating Agent.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an
authenticating agent without the execution or filing of any paper
or any further act on the part of the Trustee or such
authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to the Trustee and to the
Transferor. The Trustee may at any time terminate the agency of
an authenticating agent by giving notice of termination to such
authenticating agent and to the Transferor. Upon receiving such
a notice of resignation or upon such a termination, or in case at
any time an authenticating agent shall cease to be acceptable to
the Trustee or the Transferor, the Trustee promptly may appoint a
successor authenticating agent. Any successor authenticating
agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an
authenticating agent. No successor authenticating agent shall be
appointed unless acceptable to the Trustee and the Transferor.
(d) The Servicer agrees to pay each authenticating
agent from time to time reasonable compensation for its services
under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3
shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this
Section 6.8, the Certificates may have endorsed thereon, in lieu
of the Trustee's certificate of authentication, an alternate
certificate of authentication in substantially the following
form:
This is one of the certificates described in the Pooling and
Servicing Agreement.
as Authenticating Agent or the
Trustee,
By:
Authorized Signatory
Section VI.9 Tender of Exchangeable Transferor Certificate.
(a) Upon any Exchange, the Transferor shall deliver to the
Trustee for authentication under Section 6.2, one or more new
Series of Investor Certificates. Any such Series of Investor
Certificates shall be substantially in the form specified in the
related Supplement and shall bear, upon its face, the designation
for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supplement for a related
Series, all Investor Certificates of any Series shall rank pari
passu and be equally and ratably entitled as provided herein to
the benefits hereof (except that the Enhancement provided for any
Series shall not be available for any other Series) without
preference, priority or distinction on account of the actual time
or times of authentication and delivery, all in accordance with
the terms and provisions of this Agreement and the related
Supplement.
(b) The Holder of the Exchangeable Transferor
Certificate may (i) tender the Exchangeable Transferor
Certificate to the Trustee in exchange for (A) one or more newly
issued Series of Investor Certificates or, with respect to any
prefunded Series, interests therein and (B) a reissued
Exchangeable Transferor Certificate, (ii) request the Trustee to
issue to it one or more Classes of any newly issued Series of
Investor Certificates which upon payment by the purchaser thereof
of the initial Invested Amount of such Certificates to a
Defeasance Account, will represent an interest in the Trust equal
to such Initial Invested Amount (an "Unfunded Certificate") or
(iii) take a combination of the actions specified in clauses (i)
and (ii) provided that the sum of the amount of Transferor
Interest which is tendered under clause (i) and the amount to be
paid to the Defeasance Account under clause (ii) equals the
Initial Invested Amount of the Investor Certificates delivered to
the Holder of the Exchangeable Transferor Certificate (any such
event under clauses (i), (ii) or (iii), a "Transferor Exchange").
In addition, to the extent permitted for any Series of Investor
Certificates as specified in the related Supplement, the Investor
Certificateholders of such Series may tender their Investor
Certificates and the Holder of the Exchangeable Transferor
Certificate may tender the Exchangeable Transferor Certificate to
the Trustee pursuant to the terms and conditions set forth in
such Supplement in exchange for (i) one or more newly issued
Series of Investor Certificates and (ii) a reissued Exchangeable
Transferor Certificate (an "Investor Exchange"). The Transferor
Exchange and Investor Exchange are referred to collectively
herein as an "Exchange." The Holder of the Exchangeable
Transferor Certificate may perform an Exchange by notifying the
Trustee, in writing, at least five Business Days in advance (an
"Exchange Notice") of the date upon which the Exchange is to
occur (an "Exchange Date"). Any Exchange Notice shall state the
designation of any Series to be issued on the Exchange Date and,
with respect to each such Class or Series: (a) its Initial
Invested Amount (or the method for calculating such Initial
Invested Amount), which at any time may not be greater than the
current principal amount of the Exchangeable Transferor
Certificate at such time (or in the case of an Investor Exchange,
the sum of the Invested Amount of any Class or Series of Investor
Certificates to be exchanged plus the current principal amount of
the Exchangeable Transferor Certificate) taking into account any
Receivables transferred to the Trust simultaneous with such
Exchange, (b) its Certificate Rate (or the method for allocating
interest payments or other cash flows to such Series), if any,
and (c) the Enhancement Provider, if any, with respect to such
Series. On the Exchange Date, the Trustee shall authenticate and
deliver any such Class or Classes of Series of Investor
Certificates only upon delivery to it of the following: (a) a
Supplement satisfying the criteria set forth in subsection 6.9(c)
and in form reasonably satisfactory to the Trustee executed by
the Transferor and the Servicer and specifying the Principal
Terms of such Series, (b) the applicable Enhancement, if any,
(c) the agreement, if any, pursuant to which the Enhancement
Provider agrees to provide the Enhancement, if any, (d) an
Opinion of Counsel to the effect that (i) any Class of the newly
issued Series of Investor Certificates sold to third parties will
be characterized as either indebtedness or partnership interests
for Federal and applicable state income tax purposes, (ii) that
the issuance of the newly issued Series of Investor Certificates
will not adversely affect the Federal and applicable state income
tax characterization of any outstanding Series of Investor
Certificates and (iii) the issuance of the newly issued Series
will not result in the Trust being subject to tax at the entity
level for federal or applicable state tax purposes, (e) written
confirmation from each Rating Agency that the Exchange will not
result in such Rating Agency's reducing or withdrawing its rating
on any then outstanding Series as to which it is a Rating Agency,
(f) an Officer's Certificate of the Transferor, that on the
Exchange Date (i) the Transferor, after giving effect to the
Exchange, would not be required to add Supplemental Accounts
pursuant to subsection 2.6(c), (ii) after giving effect to such
Exchange, the Transferor Interest would be at least equal to the
Minimum Transferor Interest, and (iii) the Retained Interest
would be at least equal to the Minimum Retained Interest, (g) the
existing Exchangeable Transferor Certificate or applicable
Investor Certificates, as the case may be and (h) such other
documents, certificates and Opinions of Counsel as may be
required by the applicable Supplement. Upon satisfaction of such
conditions and upon the receipt of written instructions by the
Transferor, the Trustee shall cancel the existing Exchangeable
Transferor Certificate or applicable Investor Certificates, as
the case may be, and issue, as provided above, such Series of
Investor Certificates and a new Exchangeable Transferor
Certificate, dated the Exchange Date. There is no limit to the
number of Exchanges that may be performed under this Agreement.
(c) In conjunction with an Exchange, the parties
hereto shall execute a Supplement, which shall specify the
relevant terms with respect to any newly issued Series of
Investor Certificates, which may include without limitation:
(i) its name or designation, (ii) the Initial Invested Amount or
the method of calculating the Initial Invested Amount, (iii) the
Certificate Rate (or formula for the determination thereof),
(iv) the Closing Date, (v) the rating agency or agencies rating
such Series, (vi) the name of the Clearing Agency, if any,
(vii) the rights of the Holder of the Exchangeable Transferor
Certificate that have been transferred to the Holders of such
Series pursuant to such Exchange (including any rights to
allocations of Collections of Finance Charge Receivables and
Principal Receivables), (viii) the interest payment date or dates
and the date or dates from which interest shall accrue, (ix) the
method of allocating Collections with respect to Principal
Receivables for such Series and, if applicable, with respect to
any Paired Series and the method by which the principal amount of
Investor Certificates of such Series shall amortize or accrete
and the method for allocating Collections with respect to Finance
Charge Receivables and Receivables in Defaulted Accounts, (x) the
names of any accounts to be used by such Series and the terms
governing the operation of any such account, (xi) the Series
Servicing Fee Percentage, (xii) the Minimum Transferor Interest,
(xiii) the Series Termination Date, (xiv) the terms of any
Enhancement with respect to such Series, (xv) the Enhancement
Provider, if applicable, (xvi) the base rate applicable to such
Series, (xvii) the terms on which the Certificates of such Series
may be repurchased or remarketed to other investors, (xviii) any
deposit into any account provided for such Series, (xix) the
number of Classes of such Series, and if more than one Class, the
rights and priorities of each such Class, (xx) whether any fees
will be included in the funds available to be paid for such
Series, (xxi) the subordination of such Series to any other
Series, (xxii) the Minimum Aggregate Principal Receivables,
(xxiii) whether such Series will be a part of a group or subject
to being paired with any other Series, (xxiv) whether such Series
will be prefunded, and (xxv) any other relevant terms of such
Series (including whether or not such Series will be pledged as
collateral for an issuance of any other securities, including
commercial paper) (all such terms, the "Principal Terms" of such
Series). The terms of such Supplement may modify or amend the
terms of this Agreement solely as applied to such new Series. If
on the date of the issuance of such Series there is issued and
outstanding one or more Series of Investor Certificates and no
Series of Investor Certificates is currently rated by a Rating
Agency, then as a condition to such Exchange a nationally
recognized investment banking firm or commercial bank shall also
deliver to the Trustee an officer's certificate stating, in
substance, that the Exchange will not have an adverse effect on
the timing or distribution of payments to such other Series of
Investor Certificates then issued and outstanding.
Section VI.10 Book-Entry Certificates. Unless otherwise
provided in any related Supplement, the Investor Certificates,
upon original issuance, shall be issued in the form of
typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depositary specified in such
Supplement (the "Depositary") which shall be the Clearing Agency
or Foreign Clearing Agency, by or on behalf of such Series. The
Investor Certificates of each Series shall, unless otherwise
provided in the related Supplement, initially be registered on
the Certificate Register in the name of the nominee of the
Clearing Agency or Foreign Clearing Agency. No Certificate Owner
will receive a Definitive Certificate representing such
Certificate Owner's interest in the related Series of Investor
Certificates, except as provided in Section 6.12. Unless and
until definitive, fully registered Investor Certificates of any
Series ("Definitive Certificates") have been issued to
Certificate Owners pursuant to Section 6.12:
(i) the provisions of this Section 6.10 shall be
in full force and effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying
Agent, the Transfer Agent and Registrar and the Trustee may
deal with the Clearing Agency and the Clearing Agency
Participants for all purposes (including the making of
distributions on the Investor
s of each such Series) as the authorized representatives of the
Owners;
(iii) to the extent that the provisions of this
Section 6.10 conflict with any other provisions of this
Agreement, the provisions of this Section 6.10 shall control
with respect to each such Series; and
(iv) the rights of Certificate Owners of Investor
Certificates of each such Series shall be exercised only
through the Clearing Agency or Foreign Clearing Agency and
the applicable Clearing Agency Participants and shall be
limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency or Foreign
Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Depositary Agreement applicable to a Series,
unless and until Definitive Certificates of such Series are
issued pursuant to Section 6.12, the initial Clearing Agency
will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of
principal and interest on the Investor Certificates to such
Clearing Agency Participants.
Section VI.11 Notices to Clearing Agency. Whenever notice
or other communication to the Certificateholders is required
under this Agreement, unless and until Definitive Certificates
shall have been issued to Certificate Owners pursuant to
Section 6.12, the Trustee, upon written direction by the
Transferor, shall give all such notices and communications
specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency.
Section VI.12 Definitive Certificates. If (i) (A) the
Transferor advises the Trustee in writing that the Clearing
Agency or Foreign Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the applicable
Depositary Agreement, and (B) the Transferor is unable to locate
a qualified successor, (ii) the Transferor, at its option,
advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or Foreign Clearing
Agency with respect to any Series of Certificates or (iii) after
the occurrence of a Servicer Default, Certificate Owners of a
Series representing beneficial interests aggregating not less
than 50% of the Invested Amount of such Series advise the Trustee
and the applicable Clearing Agency or Foreign Clearing Agency
through the applicable Clearing Agency Participants in writing
that the continuation of a book-entry system through the
applicable Clearing Agency or Foreign Clearing Agency is no
longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners of such Series,
through the applicable Clearing Agency Participants, of the
occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Series
requesting the same. Upon surrender to the Trustee of the
Investor Certificates of such Series by the applicable Clearing
Agency or Foreign Clearing Agency, accompanied by registration
instructions from the applicable Clearing Agency or Foreign
Clearing Agency for registration, the Trustee shall issue the
Definitive Certificates of such Series. Neither the Transferor
nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected
in relying on, such instructions. Upon the issuance of
Definitive Certificates of such Series, all references herein to
obligations imposed upon or to be performed by the applicable
Clearing Agency or Foreign Clearing Agency shall be deemed to be
imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the
Trustee shall recognize the Holders of the Definitive
Certificates of such Series as Certificateholders of such Series
hereunder.
Section VI.13 Global Certificate; Euro-Certificate Exchange
Date. If specified in the related Supplement for any Series, the
Investor Certificates may be initially issued in the form of a
single temporary Global Certificate (the "Global Certificate") in
bearer form, without interest coupons, in the denomination of the
Initial Invested Amount of such Series and substantially in the
form attached to the related Supplement. Unless otherwise
specified in the related Supplement, the provisions of this
Section 6.13 shall apply to such Global Certificate. The Global
Certificate will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same
effect as the Definitive Certificates. The Global Certificate
may be exchanged in the manner described in the related
Supplement for Registered or Bearer Certificates in definitive
form.
Section VI.14 Meetings of Certificateholders. To the extent
provided by the Supplement for any Series issued in whole or in
part in Bearer Certificates, the Servicer may at any time call a
meeting of the Certificateholders of such Series, to be held at
such time and at such place as the Servicer shall determine, for
the purpose of approving a modification of or amendment to, or
obtaining a waiver of, any covenant or condition set forth in
this Agreement with respect to such Series or in the Certificates
of such Series, subject to Section 13.1 of this Agreement.
[End of Article VI]
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section VII.1 Liability of the Transferor. The Transferor
shall be liable in accordance herewith solely to the extent of
the obligations specifically undertaken by the Transferor.
Section VII.2 Merger or Consolidation of, or Assumption of
the Obligations of, the Transferor.
(a) The 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 the Transferor is merged or the Person which
acquires by conveyance or transfer the properties and assets
of the Transferor substantially as an entirety shall be, if
the Transferor is not the surviving entity, organized and
existing under the laws of the United States of America or
any State or the District of Columbia and shall expressly
assume, by an agreement supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the
Trustee, the performance of every covenant and obligation of
the Transferor, as applicable hereunder and shall benefit
from all the rights granted to the Transferor, as applicable
hereunder. To the extent that any right, covenant or
obligation of the Transferor, as applicable hereunder, is
inapplicable to the successor entity, such successor entity
shall be subject to such covenant or obligation, or benefit
from such right, as would apply, to the extent practicable,
to such successor entity;
(ii) the Transferor shall have delivered to the
Trustee an Officer's Certificate signed by a Vice President
(or any more senior officer) of the Transferor stating that
such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 7.2 and that
all conditions precedent herein provided for relating to
such transaction have been complied with and an Opinion of
Counsel that such supplemental agreement is legal, valid and
binding and that the entity surviving such consolidation,
conveyance or transfer is organized and existing under the
laws of the United States of America or any State or the
District of Columbia and, subject to customary limitations
and qualifications, such entity will not be substantively
consolidated with any Originator or the Servicer;
(iii) the Transferor shall have delivered notice to
the Rating Agencies of such consolidation, merger,
conveyance or transfer and the Rating Agency shall have
provided written confirmation that such consolidation,
merger, conveyance or transfer will not result in the Rating
Agency reducing or withdrawing its rating on any then
outstanding Series as to which it is a Rating Agency;
(iv) the successor entity shall be a special purpose
bankruptcy remote entity; and
(v) if the Transferor is not the surviving entity, the
Transferor shall file new UCC-1 financing statements with
respect to the interest of the Trust in the Receivables.
(b) The obligations of the Transferor hereunder shall
not be assignable nor shall any Person succeed to the obligations
of the Transferor hereunder except for mergers, consolidations,
assumptions or transfers in accordance with the provisions of the
foregoing paragraph.
Section VII.3 Limitation on Liability. The directors,
officers, employees or agents of the Transferor shall not be
under any liability to the Trust, the Trustee, the
Certificateholders, any Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for,
the execution of this Agreement and any Supplement and the
issuance of the Certificates; provided, however, that this
provision shall not protect the officers, directors, employees,
or agents of the Transferor against any liability which would
otherwise be imposed upon them by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties hereunder.
Except as provided in Sections 7.1 and 7.4 with respect to the
Trust and the Trustee and its officers, directors, employees and
agents, the Transferor shall not be under any liability to the
Trust, the Trustee, its officers, directors, employees and
agents, the Certificateholders, any Enhancement Provider or any
other Person for any action taken or for refraining from the
taking of any action in its capacity as Transferor pursuant to
this Agreement or any Supplement whether arising from express or
implied duties under this Agreement or any Supplement or
otherwise; provided, however, that this provision shall not
protect the Transferor against any liability which would
otherwise be imposed upon it by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties hereunder. The
Transferor and any director, officer, employee or agent may rely
in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters
arising hereunder.
Section VII.4 Liabilities. (a) Subject to the limitations
on liability set forth in Sections 2.4(d), (e) and 7.3, the
Transferor shall indemnify and hold harmless the Trust and the
Trustee from and against any loss, liability, reasonable expense,
damage or injury, including, but not limited to, any judgment,
award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim, suffered or sustained by
reason of any acts or omissions or alleged acts or omissions of
the Transferor with respect to activities of the Trust or the
Trustee for which the Transferor is responsible pursuant to this
Agreement; provided, however, that the Transferor shall not
indemnify or hold harmless the Trust and the Trustee if such
acts, omissions or alleged acts or omissions constitute or are
caused by fraud, negligence, or willful misconduct by the Trustee
(or any of such Trustee's officers, directors, employees or
agents) or the Investor Certificateholders; provided, further,
that the Transferor shall not indemnify or hold harmless the
Trust, the Investor Certificateholders or the Certificate Owners
for any losses, liabilities, expenses, damages or injuries
suffered or sustained by any of them with respect to any action
taken by the Trustee at the request of the Investor
Certificateholders; provided further, that the Transferor shall
not indemnify or hold harmless the Trust, the Investor
Certificateholders or the Certificate Owners as to any losses,
liabilities, expenses, damages or injuries suffered or sustained
by any of them in their capacities as investors, including
without limitation losses incurred as a result of Defaulted
Accounts or Receivables which are written off as uncollectible;
provided further, that the Transferor shall not indemnify or hold
harmless the Trust, the Investor Certificateholders or the
Certificate Owners for any losses, liabilities, expenses, damages
or injuries suffered or sustained by the Trust, the Investor
Certificateholders or the Certificate Owners arising under any
tax law, including without limitation, any federal, state, local
or foreign income or franchise taxes or any other tax imposed on
or measured by income (or any interest, penalties or additions
with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor
Certificateholders or the Certificate Owners in connection
herewith to any taxing authority; and, provided, further, that in
no event will the Transferor be liable, directly or indirectly,
for or in respect of any indebtedness or obligation evidenced or
created by any Certificate, recourse as to which shall be limited
solely to the assets of the Trust allocated for the payment
thereof as provided in this Agreement and any applicable
Supplement.
Section VII.5 Transferor's Records. The Transferor shall
clearly and unambiguously mark its accounting records evidencing
the Receivables being purchased pursuant to the Receivables
Purchase Agreement with a legend stating that such Receivables
have been conveyed to the Trust pursuant to this Agreement.
[End of Article VII]
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section VIII.1 Liability of the Servicer. The Servicer
shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer in such
capacity herein.
Section VIII.2 Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer. Subject to subsection 3.1(a),
the Servicer shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or
into which the Servicer is merged or the Person which
acquires by conveyance or transfer the properties and assets
of the Servicer substantially as an entirety shall be a
corporation organized and existing under the laws of the
United States of America or any State or the District of
Columbia and, if the Servicer is not the surviving entity,
shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Trustee in form satisfactory
to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder (to the extent that any
right, covenant or obligation of the Servicer, as applicable
hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to
the extent practicable, to such successor entity);
(ii) the Servicer shall have delivered to the Trustee
an Officer's Certificate that such consolidation, merger,
conveyance or transfer and such supplemental agreement
comply with this Section 8.2 and that all conditions
precedent herein provided for relating to such transaction
have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with
respect to the Servicer and that the entity surviving such
consolidation, conveyance or transfer is organized and
existing under the laws of the United States of America or
any State or the District of Columbia; and
(iii) the Servicer shall have delivered notice to the
Rating Agency of such consolidation, merger, conveyance or
transfer and the Rating Agency shall have provided written
confirmation that such consolidation, merger, conveyance or
transfer will not result in the Rating Agency reducing or
withdrawing its rating on any then outstanding Series as to
which it is a Rating Agency.
Section VIII.3 Limitation on Liability of the Servicer and
Others. The directors, officers, employees or agents of the
Servicer shall not be under any liability to the Trust, the
Trustee, the Certificateholders, any Enhancement Provider or any
other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability
is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided,
however, that this provision shall not protect the directors,
officers, employees and agents of the Servicer against any
liability which would otherwise be imposed upon them by reason of
willful misfeasance, bad faith or negligence in the performance
of duties or by reason of reckless disregard of obligations and
duties hereunder. Except as provided in Sections 8.1 and 8.4
with respect to the Trustee, its officers, directors, employees
and agents, the Servicer shall not be under any liability to the
Trust, the Trustee, its officers, directors, employees and
agents, the Certificateholders, any Enhancement Provider or any
other Person for any action taken or for refraining from the
taking of any action in its capacity as Servicer pursuant to this
Agreement or any Supplement; provided, however, that this
provision shall not protect the Servicer against any liability
which would otherwise be imposed upon it by reason of willful
misfeasance, bad faith or negligence in the performance of duties
or by reason of its reckless disregard of its obligations and
duties hereunder or under any Supplement. The Servicer may rely
in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters
arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties to service the Receivables
in accordance with this Agreement which in its reasonable opinion
may involve it in any expense or liability.
Section VIII.4 Servicer Indemnification of the Transferor,
the Trust and the Trustee. Subject to the limitations on
liability set forth in Section 8.3, the Servicer shall indemnify
and hold harmless the Transferor and the Trust (each, an
"Indemnified Party") from and against any loss, liability,
reasonable expense, damage or injury, including, but not limited
to, any judgment, award, settlement, reasonable attorneys' fees
and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim,
suffered or sustained by reason of any acts or omissions or
alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee for which the Servicer is
responsible pursuant to this Agreement; provided, however, that
the Servicer shall not indemnify or hold harmless an Indemnified
Party if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful
misconduct by such Indemnified Party (or any of such Indemnified
Party's officers, directors, employees or agents) or the Investor
Certificateholders; provided, further, that the Servicer shall
not indemnify or hold harmless the Trust, the Investor
Certificateholders or the Certificate Owners for any losses,
liabilities, expenses, damages or injuries suffered or sustained
by any of them with respect to any action taken by the Trustee at
the request of the Investor Certificateholders; provided further,
that the Servicer shall not indemnify or hold harmless the Trust,
the Investor Certificateholders or the Certificate Owners as to
any losses, liabilities, expenses, damages or injuries suffered
or sustained by any of them in their capacities as investors,
including without limitation losses incurred as a result of
Defaulted Accounts or Receivables which are written off as
uncollectible; provided further, that the Servicer shall not
indemnify or hold harmless the Transferor, the Trust, the
Investor Certificateholders or the Certificate Owners for any
losses, liabilities, expenses, damages or injuries suffered or
sustained by the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including without
limitation, any federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income
(or any interest, penalties or additions with respect thereto or
arising from a failure to comply therewith) required to be paid
by the Trust, the Investor Certificateholders or the Certificate
Owners in connection herewith to any taxing authority; and,
provided, further, that in no event will the Servicer be liable,
directly or indirectly, for or in respect of any indebtedness or
obligation evidenced or created by any Certificate, recourse as
to which shall be limited solely to the assets of the Trust
allocated for the payment thereof as provided in this Agreement
and any applicable Supplement. Any such indemnification shall
not be payable from the assets of the Trust, but the Servicer
shall be subrogated to the rights of the Trust with respect to
the foregoing matters if and to the extent that the Servicer
shall have indemnified the Trust with respect thereto. The
Servicer shall indemnify and hold harmless the Trustee and its
officers, directors, employees or agents from and against any
loss, liability, reasonable expense, damage or injury suffered or
sustained by reason of the acceptance of this Trust by the
Trustee, the issuance by the Trust of the Certificates or any of
the other matters contemplated herein or in any Supplement;
provided, however, that the Servicer shall not indemnify the
Trustee or its officers, directors, employees or agents for any
loss, liability, expense, damage or injury caused by the fraud,
negligence or willful misconduct of any of them. The provisions
of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof and shall survive
the resignation or removal of the Servicer, the resignation or
removal of the Trustee and/or the termination of the Trust and
shall survive the termination of this Agreement.
Section VIII.5 The Servicer Not to Resign. Subject to
subsection 3.1(a), the Servicer shall not resign from the
obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is
no longer permissible under applicable law and (ii) there is no
reasonable action which the Servicer could take to make the
performance of its duties hereunder permissible under applicable
law. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (i) above by an Opinion
of Counsel to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a
Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 10.2
hereof. If the Trustee is unable within 120 days of the date of
delivery to it of such Opinion of Counsel to appoint a Successor
Servicer, the Trustee shall serve as Successor Servicer hereunder
(but shall have continued authority to appoint another Person as
Successor Servicer).
Section VIII.6 Access to Certain Documentation and
Information Regarding the Receivables. The Servicer shall
provide to the Trustee and its agents (who shall be reasonably
acceptable to the Servicer) access to the documentation regarding
the Accounts and the Receivables in such cases where the Trustee
is required in connection with the enforcement of the rights of
the Investor Certificateholders, or by applicable statutes or
regulations, to review such documentation, such access being
afforded without charge but only (i) upon reasonable request,
(ii) during normal business hours, (iii) subject to the
Servicer's normal security and confidentiality procedures and
(iv) at offices designated by the Servicer. Nothing in this
Section 8.6 shall derogate from the obligation of the Transferor,
the Trustee or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this
Section 8.6 as a result of such obligations shall not constitute
a breach of this Section 8.6.
Section VIII.7 Delegation of Duties. In the ordinary course
of business, the Servicer may at any time delegate any duties
hereunder to any Person who agrees to conduct such duties in
accordance with the Credit and Collection Policies. Any such
delegations shall not relieve the Servicer of its liability and
responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 8.5 hereof
and the Servicer will remain jointly and severally liable with
such Person for any amounts which would otherwise be payable
pursuant to this Article VIII as if the Servicer had performed
such duty; provided, however, that in the case of any significant
delegation to a Person other than an Affiliate of SRI (i) written
notice shall be given to the Trustee and to each Rating Agency of
such delegation and (ii) neither Rating Agency shall have
notified the Transferor or the Trustee in writing that such
delegation will result in the lowering or withdrawal of its then
existing rating of any Series or Class of Investor Certificates.
Section VIII.8 Maintenance of Property; Insurance. The
Servicer will (i) keep all property and assets useful and
necessary in its business as Servicer in good working order and
condition (normal wear and tear excepted), (ii) maintain, with
financially sound and reputable insurance companies, insurance on
all its property and assets necessary in its business as Servicer
in at least such amounts and against at least such risks (and
with such risk retention) in the Servicer's reasonable judgment
as are usually insured against in the same general area by
companies of established repute engaged in the same or a similar
business, (iii) furnish to the Trustee, upon written request,
full information as to the insurance carried, (iv) within five
days of receipt of notice from any insurer, furnish the Trustee
with a copy of any notice of cancellation or material change in
coverage from that existing on the Closing Date and (v)
forthwith, furnish the Trustee with notice of any cancellation or
nonrenewal of coverage by the Servicer. The Servicer will
(A) maintain disaster recovery systems and other information
management systems that, in the Servicer's reasonable judgment,
are sufficient to enable it to perform its obligations as
Servicer without material interruption or loss of the Receivables
or the collections, in the event of damage to, or loss or
destruction of, its primary computer and information management
systems and (B) furnish to the Trustee (x) full information as to
such disaster recovery systems and (y) back-up computer operating
systems and applications software used for the collection of
Receivables (the "Receivables Software"); provided, that the
Servicer shall only be obligated to use its reasonable efforts to
obtain sublicenses or consents from third party licensors of such
Receivables Software to the license set forth in Section 2.1 and
"Receivables Software" shall not include operating systems or
software licensed from such third parties unless and until such
sublicense or consent has been obtained. During the continuance
of a Payout Event, Prospective Payout Event, Servicer Default or
event which, upon the giving of notice or passage of time, would
be a Servicer Default the Trustee may (at the request of the
holders of a majority of the Invested Amount, or the related
Commitments, of any Class) request, and the Servicer shall
provide to the Trustee, copies of back-up data regarding the
Receivables, such data to be provided with such frequency as
designated by the Trustee. The Transferor and the Servicer
hereby represent and warrant that, upon delivery by the Servicer
of the Receivables Software, the Licensed Names and the back-up
data specified in the proviso to the second preceding sentence of
this Section 8.8, and assuming that the third party sublicenses
and consents referenced in this Section 8.8 and the amendment or
new software back-up agreement referenced in the preceding
sentence of this Section 8.8, the Trustee shall have adequate
proprietary rights, Receivables Software and backup data to
permit orderly collection of the Receivables without the
participation of the Servicer.
[End of Article VIII]
ARTICLE IX
PAY OUT EVENTS
Section IX.1 Pay Out Events. If any one of the following
events (each, a "Trust Pay Out Event") shall occur:
(a) the Transferor, any Originator, the Bank or SRI
shall consent to the appointment of a bankruptcy trustee or
receiver or liquidator in any bankruptcy proceeding or any other
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 bankruptcy trustee or
receiver or liquidator in any bankruptcy proceeding or any other
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 the
Transferor, any Originator, the Bank or SRI; or the Transferor,
any Originator, the Bank or SRI 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 including the U.S. bankruptcy code, make
an assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations; or the Transferor shall
become unable for any reason to transfer Receivables to the Trust
in accordance with the provisions of this Agreement; or
(b) the Trust shall become subject to regulation by
the Securities and Exchange Commission as an "investment company"
within the meaning of the Investment Company Act; or
(c) SRI shall fail to own or control, directly or
indirectly, 100% of the issued and outstanding stock of the
Transferor;
then a Pay Out Event with respect to all Series of Certificates
shall occur without any notice or other action on the part of the
Trustee or the Investor Certificateholders immediately upon the
occurrence of such event.
[End of Article IX]
ARTICLE X
SERVICER DEFAULTS
Section X.1 Servicer Defaults. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the
Trustee pursuant to Article IV or to instruct the Trustee to make
any required drawing, withdrawal, or payment under any
Enhancement on or before the date occurring five Business Days
after the date such payment, transfer, deposit, withdrawal or
drawing or such instruction or notice is required to be made or
given, as the case may be, under the terms of this Agreement;
(b) failure on the part of the Servicer duly to
observe or perform in any respect any other covenants or
agreements of the Servicer set forth in this Agreement, which has
a material adverse effect on the Investor Certificateholders of
any Series and which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by
the Trustee, provided that the Trustee has actual knowledge of
such failure, or to the Servicer and the Trustee by the Holders
of Investor Certificates evidencing Undivided Interests
aggregating not less than 50% of the Invested Amount of any
Series materially adversely affected thereby and continues to
materially adversely affect such Investor Certificateholders for
such period; or the Servicer shall delegate its duties under this
Agreement, except as permitted by Section 8.7;
(c) any representation, warranty or certification made
by the Servicer in this Agreement or in any certificate delivered
pursuant to this Agreement shall prove to have been incorrect
when made, which has a material adverse effect on the Investor
Certificateholders of any Series and which continues to be
incorrect in any material respect for a period of 60 days after
the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the
Trustee provided that the Trustee has actual knowledge of such
failure, or to the Servicer and the Trustee by the Holders of
Investor Certificates evidencing Undivided Interests aggregating
not less than 50% of the Invested Amount of any Series materially
adversely affected thereby and continues to materially adversely
affect such Investor Certificateholders for such period; or
(d) the Servicer shall consent to the appointment of a
bankruptcy trustee or receiver or liquidator in any bankruptcy
proceeding or any other insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of
or relating to the Servicer or of or relating to all or
substantially all of its property; or a decree or order of a
court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a bankruptcy trustee or
receiver or liquidator in any bankruptcy proceeding or any other
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 the
Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or the Servicer
shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any
assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations;
then, so long as such Servicer Default shall not have been
remedied, any of (i) the Trustee upon written instruction by the
Transferor, (ii) the Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Aggregate
Invested Amount, (iii) if specified in any Supplement, the
Holders of Investor Certificates evidencing Undivided Interests
aggregating more than a specified percentage of the Invested
Amount of any Series or Class, or (iv) if specified in any
Supplement, an Enhancement Provider, in each case by notice then
given in writing to the Servicer (and to the Trustee if given by
any Investor Certificateholders) (a "Termination Notice"), may
terminate all of the rights and obligations of the Servicer as
Servicer under this Agreement. The Servicer agrees that promptly
after it receives such Termination Notice, the Servicer will at
its own expense deliver to the Trustee or to the bailee of the
Trustee a computer file or microfiche list containing a true and
complete list of all Accounts, identified by account number and
setting forth the Outstanding Balance of each Receivable as of
the date of receipt of such Termination Notice. After receipt by
the Servicer of such Termination Notice, and on the date that a
Successor Servicer shall have been appointed by the Trustee
pursuant to Section 10.2, all authority and power of the Servicer
under this Agreement shall pass to and be vested in a Successor
Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to
cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other
instruments upon the failure of the Servicer to execute or
deliver such documents or instruments, and to do and accomplish
all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights and obligations.
The Servicer agrees to cooperate with the Trustee and such
Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing
hereunder including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service
the Receivables provided for under this Agreement, including,
without limitation, all authority over all Collections which
shall on the date of transfer be held by the Servicer for
deposit, or which have been deposited by the Servicer, in the
Collection Account, the Equalization Account, the Interest
Funding Account or the Principal Account, and any Series Account,
or which shall thereafter be received with respect to the
Receivables. The Servicer shall promptly transfer its electronic
records or electronic copies thereof 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 the Servicer
to disclose to the Successor Servicer information of any kind
which the Servicer reasonably deems to be confidential, the
Successor Servicer shall be required to enter into such customary
licensing and confidentiality agreements as the Servicer shall
deem necessary to protect its interests. The Servicer shall, on
the date of any servicing transfer, transfer all of its rights
and obligations under the Enhancement with respect to any Series
to the Successor Servicer. In connection with any service
transfer, all reasonable costs and expenses (including attorneys,
fees) incurred in connection with transferring the records,
correspondence and other documents with respect to the
Receivables and the other Trust Property to the Successor
Servicer and amending this Agreement to reflect such succession
as Successor Servicer pursuant to this Section 10.1 and
Section 10.2 shall be paid by the Servicer (unless the Trustee is
acting as the Servicer on a temporary basis, in which case the
original Servicer shall be responsible therefor) upon
presentation of reasonable documentation of such costs and
expenses.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.1(a) for a period of two
Business Days or under subsection 10.1(b) or (c) for a period of
60 days, shall not constitute a Servicer Default if such delay or
failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by
an act of God or the public enemy, acts of declared or undeclared
war, public disorder, rebellion, riot or sabotage, epidemics,
landslides, lightning, fire, hurricanes, tornadoes, earthquakes,
nuclear disasters or meltdowns, floods, power outages, computer
failure or similar causes. The preceding sentence shall not
relieve the Servicer from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of
this Agreement and the Servicer shall provide the Trustee, any
Enhancement Provider, the Transferor and the Holders of Investor
Certificates with an Officer's Certificate giving prompt notice
of such failure or delay by it, together with a description of
the cause of such failure or delay and its efforts so to perform
its obligations.
Section X.2 Trustee to Act; Appointment of Successor. (a)
On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, the Servicer shall continue to perform
all servicing functions under this Agreement until the date
specified in the Termination Notice or as otherwise specified by
the Trustee in writing or, if no such date is specified in such
Termination Notice, or otherwise specified by the Trustee, until
a date mutually agreed upon by the Servicer and Trustee upon
written direction by the Transferor. The Trustee shall notify
each Rating Agency of such removal of the Servicer. The Trustee
shall, as promptly as possible after the giving of a Termination
Notice, appoint a successor servicer (the "Successor Servicer"),
and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Trustee. If such
Successor Servicer is unable to accept such appointment, the
Trustee upon written direction by the Transferor may obtain bids
from any potential successor servicer. If the Trustee is unable
to obtain any bids from any potential successor servicer and the
Servicer delivers an Officer's Certificate to the effect that it
cannot in good faith cure the Servicer Default which gave rise to
a transfer of servicing, and if the Trustee is legally unable to
act as Successor Servicer, then the Trustee shall notify each
Enhancement Provider of the proposed sale of the Receivables and
shall provide each such Enhancement Provider an opportunity to
bid on the Receivables and shall offer the Transferor the right
of first refusal to purchase the Receivables on terms equivalent
to the best purchase offer as determined by the Trustee, but in
no event less than an amount equal to the Aggregate Invested
Amount on the date of such purchase plus all interest accrued but
unpaid on all of the outstanding Investor Certificates at the
applicable Certificate Rate through the date of such purchase
plus all amounts owed to any Enhancement Provider; provided,
however, that no such purchase by the Transferor shall occur
unless the Transferor shall deliver an opinion of Counsel
reasonably acceptable to the Trustee that such purchase would not
constitute a fraudulent conveyance of the Transferor. The
proceeds of such sale shall be deposited in the Distribution
Account or any Series Account, as provided in the related
Supplement, for distribution to the Investor Certificateholders
of each outstanding Series pursuant to Section 12.3 of this
Agreement. In the event that a Successor Servicer has not been
appointed and has not accepted its appointment at the time when
the Servicer ceases to act as Servicer, the Trustee without
further action shall automatically be appointed the Successor
Servicer (but shall have continued authority to appoint another
Person as Successor Servicer). The Trustee may delegate any of
its servicing obligations to an affiliate or agent of the Trustee
in accordance with Article III hereof. Notwithstanding the
above, the Trustee shall, if it is legally unable to act,
petition a court of competent jurisdiction to appoint any
established financial institution having, in the case of an
entity that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000 or, in
the case of an entity that is not subject to risk-based capital
requirements, 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.
(b) Upon its appointment, the Successor Servicer shall
be the successor in all respects to the Servicer with respect to
servicing functions under this Agreement and shall be subject to
all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and
all references in this Agreement to the Servicer shall be deemed
to refer to the Successor Servicer. Any Successor Servicer, by
its acceptance of its appointment, will automatically agree to be
bound by the terms and provisions of each Enhancement.
(c) In connection with such appointment and
assumption, the Trustee shall be entitled to such compensation,
or may make such arrangements for the compensation of the
Successor Servicer out of Collections, as it and such Successor
Servicer shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee permitted to
the Servicer pursuant to Section 3.2. The Transferor agrees that
if the Servicer is terminated hereunder, it will agree to deposit
a portion of the Collections in respect of Finance Charge
Receivables that it is entitled to receive pursuant to Article IV
to pay its ratable share 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 the Transferor and, without
limitation, the Transferor is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer
of servicing rights. The Successor Servicer agrees to cooperate
with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct
servicing on the Receivables. The Successor Servicer shall
transfer its electronic records relating to the Receivables to
the Transferor in such electronic form as the Transferor may
reasonably request and shall transfer all other records,
correspondence and documents to the Transferor in the manner and
at such times as the Transferor shall reasonably request. To the
extent that compliance with this Section 10.2 shall require the
Successor Servicer to disclose to the Transferor information of
any kind which the Successor Servicer deems to be confidential,
the Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
Section X.3 Notification to Certificateholders. Within two
Business Days after the Servicer becomes aware of any Servicer
Default, the Servicer shall give prompt written notice thereof to
the Trustee and any Enhancement Provider and, upon receipt of
such written notice, and the Trustee shall give notice to the
Investor Certificateholders at their respective addresses
appearing in the Certificate Register. Upon any termination or
appointment of a Successor Servicer pursuant to this Article X,
the Trustee upon written direction by the Transferor shall give
prompt written notice thereof to Investor Certificateholders at
their respective addresses appearing in the Certificate Register.
Section X.4 Waiver of Past Defaults. The Holders of
Investor Certificates evidencing Undivided Interests aggregating
not less than 66_% of the Invested Amount of each Series
materially adversely affected by any default by the Servicer or
Transferor may, on behalf of all Certificateholders of such
Series, waive any default by the Servicer or Transferor 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 relating to such Series
pursuant to Article IV, which default does not result from the
failure of the Paying Agent to perform its obligations to make
any required deposits or payments of interest and principal in
accordance with Article IV. 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.
[End of Article X]
ARTICLE XI
THE TRUSTEE
Section XI.1 Duties of Trustee. (a) The Trustee, prior to
the occurrence of any Servicer Default of which a Responsible
Officer of the Trustee has actual knowledge 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, and no implied covenants or duties shall
be read into this Agreement against the Trustee. If a
Responsible Officer has received written notice that a Servicer
Default has occurred (and such Servicer Default has not been
cured or waived), the Trustee shall exercise such of the rights
and powers vested in it by this Agreement, and use the same
degree of care and skill in its exercise, as a prudent person
would exercise or use under the circumstances in the conduct of
such person's own affairs; provided, however, that if the Trustee
shall assume the duties of the Servicer pursuant to Section 8.5
or 10.2, the Trustee in performing such duties shall use the
degree of skill and attention customarily exercised by a servicer
with respect to comparable receivables that it services for
itself or others.
(b) The Trustee shall retain all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically
required to be furnished pursuant to any provision of this
Agreement for at least one year after receipt and shall make such
items available for inspection by any Investor Certificateholder
at the Corporate Trust Office, such inspection to be made during
regular business hours and upon reasonable prior notice to the
Trustee.
(c) Subject to subsection 11.1(a), no provision of
this Agreement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Invested Amount
of any Series relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee with respect to such Series, or exercising any trust
or power conferred upon the Trustee with respect to such
Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge
of any failure by the Servicer referred to in clauses (a)
and (b) of Section 10.1 or of any breach by the Servicer
contemplated by clause (c) of Section 10.1 or any Pay Out
Event unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure, breach or Pay Out Event or
the Trustee receives written notice of such failure, breach
or Pay Out Event from the Servicer or any Holders of
Investor Certificates evidencing Undivided Interests
aggregating not less than 10% of the Invested Amount of any
Series adversely affected thereby.
(d) The Trustee shall not be required to expend or
risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it,
and none of the provisions contained in this Agreement shall in
any event require the Trustee to perform, or be responsible for
the manner of performance of, any of the obligations of the
Servicer under this Agreement except during such time, if any, as
the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this
Agreement, the Trustee shall take no action reasonably likely to
impair the interests of the Trust in any Receivable now existing
or hereafter created or to impair the value of any Receivable now
existing or hereafter created.
(f) Except as provided in this Agreement, the Trustee
shall have no power to vary the corpus of the Trust.
(g) If a Responsible Officer of the Trustee has
received written notice that the Paying Agent or the Transfer
Agent and Registrar shall fail to perform any obligation, duty or
agreement in the manner or on the day required to be performed by
the Paying Agent or the Transfer Agent and Registrar, as the case
may be, under this Agreement, the Trustee shall be obligated
promptly upon its obtaining knowledge thereof by a Responsible
Officer of the Trustee to perform such obligation, duty or
agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of
its credit card receivables (other than the Receivables) to
another Person, upon the written request of the Transferor, the
Trustee on behalf of the Trust will enter into such intercreditor
agreements provided to the Trustee in final execution form with
the transferee of such receivables as are customary and necessary
to identify separately the rights, if any, of the Trust and such
other Person in the Transferor's credit card receivables;
provided, however, that the Trust shall not be required to enter
into any intercreditor agreement which could adversely affect the
interests of the Certificateholders or the Trustee and, upon the
request of the Trustee, the Transferor will deliver an Opinion of
Counsel on any matters relating to such intercreditor agreement,
reasonably requested by the Trustee.
Section XI.2 Certain Matters Affecting the Trustee. Except
as otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in
acting on, or in refraining from acting in accordance with, any
assignment of Receivables in Supplemental Accounts, the initial
report, the Daily Report, the Settlement Statement, the annual
Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Certificateholder's
statement, any resolution, Officer's Certificate, certificate of
auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond
or other paper or document believed by it to be genuine and to
have been signed or presented to it pursuant to this Agreement by
the proper party or parties;
(b) the Trustee may consult with counsel, and the
advice or any opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(c) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Agreement or any Enhancement, or to institute, conduct or defend
any litigation hereunder or in relation hereto, at the request,
order or direction of any of the Certificateholders or any
Enhancement Provider, pursuant to the provisions of this
Agreement, unless such Certificateholders or Enhancement Provider
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligations, upon the
occurrence of any Servicer Default (which has not been cured or
waived) of which a Responsible Officer of the Trustee has
knowledge, to exercise such of the rights and powers vested in it
by this Agreement and any Enhancement, and to use the same degree
of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his own
affairs;
(d) the Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any
investigation into the facts of matters stated in any assignment
of Receivables in Supplemental Accounts, the initial report, the
Daily Report, the Settlement Statement, the annual Servicer's
certificate, the monthly payment instructions and notification to
the Trustee, the monthly Certificateholders statement, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document;
(f) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or a custodian, and the
Trustee shall not be responsible for any misconduct or negligence
on the part of any such agent, attorney or custodian appointed
with due care by it hereunder;
(g) except as may be required by subsection 11.1(a),
the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the
Receivables or the Accounts for the purpose of establishing the
presence or absence of defects, the compliance by the Transferor
with its representations and warranties or for any other purpose;
(h) whenever in the administration of this Agreement
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officer's Certificate; and
(i) the right of the Trustee to perform any
discretionary act enumerated in this Agreement or any Supplement
shall not be construed as a duty, and the Trustee shall not be
answerable for performance of any such act.
Section XI.3 Trustee Not Liable for Recitals in
Certificates. The Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the
Certificates (other than the certificate of authentication on the
Certificates). Except as set forth in Section 11.15, the Trustee
makes no representations as to the validity or sufficiency of
this Agreement or of the Certificates (other than the certificate
of authentication on the Certificates) or of any Receivable or
related document. The Trustee shall not be accountable for the
use or application by the Transferor of any of the Certificates
or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Transferor in respect of the
Receivables or deposited in or withdrawn from the Collection
Account, the Equalization Account, the Principal Account or the
Interest Funding Account, or any Series Account or other accounts
now or hereafter established to effectuate the transactions
contemplated herein and in accordance with the terms hereof. The
Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security
interest or Lien granted to it hereunder (unless the Trustee
shall have become the Successor Servicer) or to prepare or file
any Securities and Exchange Commission filing for the Trust or to
record this Agreement or any Supplement.
Section XI.4 Trustee May Own Certificates. The Trustee in
its individual or any other capacity may become the owner or
pledgee of Investor Certificates and may deal with the
Transferor, the Servicer or any Enhancement Provider with the
same rights as it would have if it were not the Trustee. The
Trustee in its capacity as Trustee shall exercise its duties and
responsibilities hereunder independent of and without reference
to its investment, if any, in Investor Certificates.
Section XI.5 The Servicer to Pay Trustee's Fees and
Expenses. The Servicer covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to
receive, reasonable compensation (which shall not be limited by
any provision of law in regard to the compensation of a trustee
of an express trust) for all services rendered by the Trustee in
the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder of the
Trustee, and, subject to Section 8.4, the Servicer will pay or
reimburse the Trustee (without reimbursement from any Investor
Account, any Series Account or otherwise) upon its request for
all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of
this Agreement (including the reasonable fees and expenses of its
agents and counsel) except any such expense, disbursement or
advance as may arise from its own negligence or bad faith and
except as provided in the following sentence. If the Trustee is
appointed Successor Servicer pursuant to Section 10.2, the
provisions of this Section 11.5 shall not apply to expenses,
disbursements and advances made or incurred by the Trustee in its
capacity as Successor Servicer (which shall be covered out of the
Servicing Fee).
The obligations of the Servicer under this Section 11.5
shall survive the termination of the Trust and the resignation or
removal of the Trustee.
Section XI.6 Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times be 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 at least the Minimum Long-Term
Credit Rating and having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based
capital of at least $50,000,000 or, in the case of an entity that
is not subject to risk-based capital adequacy requirements,
having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state
authority. If such 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 corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.6,
the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.7.
Section XI.7 Resignation or Removal of Trustee. (a) The
Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Servicer.
Upon receiving such notice of resignation, the Servicer shall
promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
such appointment within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee.
(b) If at any time the Trustee shall cease to be
eligible in accordance with the provisions of Section 11.6 hereof
and shall fail to resign after written request therefor by the
Transferor, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or
any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Transferor may, but shall
not be required to, remove the Trustee and promptly appoint a
successor trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the Trustee so removed
and one copy to the successor trustee.
(c) If at any time the Trust shall be in
non-compliance with Section 2.5(m), the Trustee shall be removed
and the Servicer shall promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument
shall be delivered to the Trustee so removed and one copy to the
successor trustee.
(d) If (i) the Trustee shall fail to perform any of
its obligations hereunder, (ii) a Certificateholder shall deliver
written notice of such failure to the Trustee, and (iii) the
Trustee shall not have corrected such failure for 60 days
thereafter, then the Holders of Investor Certificates
representing more than 50% of the Invested Amount (including
related commitments of holders of Variable Funding Certificates)
shall have the right to remove the Trustee and (with the consent
of the Transferor, which shall not be unreasonably withheld)
promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
(e) Any resignation or removal of the 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 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section XI.8 Successor Trustee. (a) Any successor trustee
appointed as provided in Section 11.7 hereof shall execute,
acknowledge and deliver to the Transferor and to its predecessor
Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as Trustee
herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and
the Transferor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and
confirming in the successor trustee all such rights, powers,
duties and obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.8 unless at the time of such
acceptance such successor trustee shall be eligible under the
provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor
trustee as provided in this Section 11.8, such successor trustee
shall mail notice of such succession hereunder to all
Certificateholders at their addresses as shown in the Certificate
Register.
Section XI.9 Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a
party, or any Person succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation
shall be eligible under the provisions of Section 11.6 hereof,
without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section XI.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, the Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the trust, or any part thereof,
and, subject to the other provisions of this Section 11.10, such
powers, duties, obligations, rights and trusts as the Trustee may
consider necessary or desirable. 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 Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to
the extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to
the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee
or co-trustee shall refer to this Agreement and the conditions of
this Article XI. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating
to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee as its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do
any lawful act under or in respect to this Agreement on its
behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted
by law, without the appointment of a new or successor trustee.
Section XI.11 Tax Returns. Consistent with Section 3.7, the
Trustee shall not file any Federal tax returns on behalf of the
Trust; provided, however, that if a class of Certificates is
issued that will be characterized as interests in a partnership
for federal income tax purposes, partnership information returns
shall be prepared and signed by the Transferor, as general
partner, and the Transferor shall be the "tax matter partner" as
defined in subsection 6231(a)(7) of the Internal Revenue Code of
1986, as amended, and any successor statute. In the event the
Trust shall be required to file tax returns, the Servicer shall
at its expense prepare or cause to be prepared any tax returns
required to be filed by the Trust and, to the extent possible,
shall remit such returns to the Trustee for signature at least
five days before such returns are due to be filed. The Trustee
is hereby authorized to sign any such return on behalf of the
Trust. The Servicer shall prepare or shall cause to be prepared
all tax information required by law to be distributed to
Certificateholders and shall deliver such information to the
Trustee at least five days prior to the date it is required by
law to be distributed to Certificateholders. The Trustee, upon
request, will furnish the Servicer with all such information
known to the Trustee as may be reasonably required in connection
with the preparation of all tax returns of the Trust and shall,
upon request, execute such returns. In no event shall the
Trustee be liable for any liabilities, costs or expenses of the
Trust, the Investor Certificateholders or the Certificate Owners
arising under any tax law, including without limitation federal,
state, local or foreign income or excise taxes or any other tax
imposed on or measured by income (or any interest or penalty or
addition with respect thereto or arising from a failure to comply
therewith).
Section XI.12 Trustee May Enforce Claims Without Possession
of Certificates. All rights of action and claims under this
Agreement or any Series of Certificates may be prosecuted and
enforced by the Trustee without the possession of any of the
Certificates or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall
be brought in its own name as trustee. Any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
any Series of Certificateholders in respect of which such
judgment has been obtained.
Section XI.13 Suits for Enforcement. If a Servicer Default
of which a Responsible Officer of the Trustee has knowledge shall
occur and be continuing, the Trustee, in its discretion may,
subject to the provisions of Section 10.1, proceed to protect and
enforce its rights and the rights of any Series of
Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in
this Agreement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of
the rights of the Trustee or any Series of Certificateholders.
Section XI.14 Rights of Certificateholders to Direct
Trustee. Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Aggregate Invested
Amount (or, with respect to any remedy, trust or power that does
not relate to all Series, 50% of the aggregate Invested 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 the Trustee, or exercising any trust or power
conferred on the Trustee; provided, however, that Holders of
Investor Certificates aggregating more than 50% of the aggregate
Invested Amount of any Class may direct the Trustee to exercise
its rights under Section 8.6; provided, further, that, subject to
Section 11.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken,
or if the Trustee in good faith shall, by a Responsible Officer
or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in
personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided
further, that nothing in this Agreement shall impair the right of
the Trustee to take any action deemed proper by the Trustee and
which is not inconsistent with such direction of such Holders of
Investor Certificates.
Section XI.15 Representations and Warranties of Trustee.
The Trustee represents and warrants that:
(i) the Trustee is a corporation organized, existing
and authorized to engage in the business of banking under
the laws of the State of its incorporation;
(ii) the 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
(iii) this Agreement has been duly executed and
delivered by the Trustee.
Section XI.16 Maintenance of Office or Agency. The Trustee
will maintain at its expense an office or offices or agency or
agencies, where notices and demands to or upon the Trustee in
respect of the Certificates and this Agreement may be served.
The Trustee initially appoints its Corporate Trust Office as its
office for such purposes. The Trustee will give prompt written
notice to the Servicer and to Certificateholders (or in the case
of Holders of Bearer Certificates, in the manner provided for in
the related Supplement) of any change in the location of the
Certificate Register or any such office or agency.
[End of Article XI]
ARTICLE XII
TERMINATION
Section XII.1 Termination of Trust.
(a) The respective obligations and responsibilities of
the Transferor, the Servicer and the Trustee created hereby
(other than the obligation of the Trustee to make payments to
Certificateholders as hereafter set forth) shall terminate,
except with respect to the duties described in Section 8.4 and
11.5 and subsection 12.3(b), on the Trust Termination Date;
provided, however, that the Trust shall not terminate on the date
specified in clause (i) of the definition of "Trust Termination
Date" if each of the Servicer and the Holder of the Exchangeable
Transferor Certificate notify the Trustee in writing, not later
than five Business Days preceding such date, that they desire
that the Trust not terminate on such date, which notice (such
notice, a "Trust Extension") shall specify the date on which the
Trust shall terminate (such date, the "Extended Trust Termination
Date"); provided, however, that the Extended Trust Termination
Date shall be not later than the expiration of 21 years from the
death of the last survivor of the descendants of Joseph P.
Kennedy, the late Ambassador of the United States to the Court of
St. James, living on the date of this Agreement. The Servicer
and the Holder of the Exchangeable Transferor Certificate may, on
any date following the Trust Extension, so long as no Series of
Certificates is outstanding, deliver a notice in writing to the
Trustee changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not terminated
by the Distribution Date occurring in the second month preceding
the Trust Termination Date, and (ii) the Invested Amount of any
Series (after giving effect to all transfers, withdrawals,
deposits and drawings to occur on such date and the payment of
principal on any Series of Certificates to be made on the related
Distribution Date during such month pursuant to Article IV) would
be greater than zero or any amount shall be owed to any
Enhancement Provider, the Servicer shall sell within 30 days
after such Transfer Date all the Receivables if it can do so in a
commercially reasonable manner. The Servicer shall notify each
Enhancement Provider of the proposed sale of the Receivables and
shall provide each Enhancement Provider an opportunity to bid on
the Receivables. The Transferor shall have the right of first
refusal to purchase the Receivables on terms equivalent to the
best purchase offer as determined by the Trustee in its sole
discretion. The proceeds of any such sale shall be treated as
Collections on the Receivables and shall be allocated and
deposited in accordance with Article IV; provided, however, that
the Trustee shall determine conclusively in its sole discretion
the amount of such proceeds which are allocable to Finance Charge
Collections and the amount of such proceeds which are allocable
to Collections of Principal Receivables. During such thirty-day
period, the Servicer shall continue to collect payments on the
Receivables and allocate and deposit such payments in accordance
with the provisions of Article IV.
(c) All principal or interest with respect to any
Series of Investor Certificates shall be due and payable no later
than the Series Termination Date with respect to such Series.
Unless otherwise provided in a Supplement, in the event that the
Invested Amount of any Series of Certificates is greater than
zero on its Series Termination Date (the "Affected Series"),
after giving effect to all transfers, withdrawals, deposits and
drawings to occur on such date and the payment of principal to be
made on such Series on such date, and the Servicer will sell or
cause to be sold, and the Trustee upon written direction by the
Servicer will pay the proceeds to all Certificateholders of such
Series pro rata in final payment of all principal of and accrued
interest on such Series of Certificates or, if any Class of such
Series is subordinated, in order of their respective seniorities,
an amount of Principal Receivables and the related Finance Charge
Receivables (or interests therein) up to 110% of the Invested
Amount of such Series at the close of business on such date (but
the amount of such Principal Receivables not to be more than an
amount of Receivables equal to the sum of (1) the product of
(A) the Transferor Percentage, (B) the aggregate outstanding
Principal Receivables and (C) a fraction the numerator of which
is the Invested Amount of such Series on such date and the
denominator of which is the sum of the Invested Amounts of all
Series on such Date and (2) the Invested Amount of such Series).
Receivables on which the Obligor has not made the full minimum
payment for the prior months shall be deemed to be in default for
purposes of this Section 12.1(c) to the extent that the cash
allocated to any Class of Transferor Retained Certificates of
such Series pursuant to a sale under Section 12.1(c) is less than
the amount that would have been allocated to the Exchangeable
Transferor Certificate and the Transferor Retained Certificates
had the proceeds from such sale been allocated pursuant to
Section 4.3. The Servicer shall notify each Enhancement Provider
of the proposed sale of such Receivables and shall provide each
Enhancement Provider an opportunity to bid on such Receivables.
The Transferor shall be permitted to purchase such Receivables in
such case and shall have a right of first refusal with respect
thereto to the extent of a bona fide offer by an unrelated third
party or to the extent the Receivables represent Defaulted
Receivables. Any proceeds of such sale in excess of such
principal and interest paid shall be paid to the Holder of the
Exchangeable Transferor Certificate. Upon such Series
Termination Date with respect to the applicable Series of
Certificates, final payment of all amounts allocable to any
Investor Certificates of such Series shall be made in the manner
provided in Section 12.3.
Section XII.2 Optional Termination. (a) If so provided in
any Supplement, the Servicer may, but shall not be obligated to,
cause a final distribution to be made in respect of the related
Series of Certificates on a Distribution Date specified in such
Supplement by depositing into the Distribution Account or the
applicable Series Account, not later than the Transfer Date
preceding such Distribution Date, for application in accordance
with Section 12.3, the amount specified in such Supplement.
(b) The amount deposited pursuant to
subsection 12.2(a) shall be paid to the Investor
Certificateholders of the related Series pursuant to Section 12.3
on the related Distribution Date following the date of such
deposit. All Certificates of a Series with respect to which a
final distribution has been made pursuant to subsection 12.2(a)
shall be delivered by the Holder to, and be canceled by, the
Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor. The Invested
Amount of each Series with respect to which a final distribution
has been made pursuant to subsection 12.2(a) shall, for the
purposes of the definition of "Transferor Interest," be deemed to
be equal to zero on the Distribution Date following the making of
the deposit, and the Transferor Interest shall thereupon be
deemed to have been increased by the Invested Amount of such
Series.
Section XII.3 Final Payment with Respect to any Series. (a)
Written notice of any termination, specifying the Distribution
Date upon which the Investor Certificateholders of any Series may
surrender their Certificates for payment of the final
distribution with respect to such Series and cancellation, shall
be given (subject to at least four Business Days, prior notice
from the Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth
day of the month of such final distribution (or in the manner
provided by the Supplement relating to such Series) specifying
(i) the Distribution Date (which shall be the Distribution Date
in the month (x) in which the deposit is made pursuant to
subsection 2.4(d), 10.2(a), or 12.2(a) of this Agreement or such
other section as may be specified in the related Supplement, or
(y) in which the related Series Termination Date occurs) upon
which final payment of such Investor Certificates will be made
upon presentation and surrender of such Investor Certificates at
the office or offices therein designated (which, in the case of
Bearer Certificates, shall be outside the United States),
(ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and
surrender of the Investor Certificates at the office or offices
therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an
Officer's Certificate setting forth the information specified in
Article V of this Agreement covering the period during the then
current calendar year through the date of such notice and setting
forth the date of such final distribution. The Trustee shall
give such notice to the Transfer Agent and Registrar and the
Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust
pursuant to subsection 12.1(a) or the occurrence of the Series
Termination Date with respect to any Series, all funds then on
deposit in the Equalization Account, the Interest Funding
Account, the Principal Account, the Distribution Account or any
Series Account applicable to the related Series shall continue to
be held in trust for the benefit of the Certificateholders of the
related Series and the Paying Agent or the Trustee shall pay such
funds to the Certificateholders of the related Series upon
surrender of their Certificates (which surrenders and payments,
in the case of Bearer Certificates, shall be made only outside
the United States). In the event that all of the Investor
Certificateholders of any Series shall not surrender their
Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee
shall give a second written notice (or, in the case of Bearer
Certificates, publication notice) to the remaining Investor
Certificateholders of such Series upon receipt of the appropriate
records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the final distribution
with respect thereto. If within one and one half years after the
second notice with respect to a Series, all the Investor
Certificates of such Series shall not have been surrendered for
cancellation, the Trustee may take appropriate steps or may
appoint an agent to take appropriate steps, to contact the
remaining Investor Certificateholders of such Series concerning
surrender of their Certificates, and the cost thereof shall be
paid out of the funds in the Distribution Account or any Series
Account held for the benefit of such Investor Certificateholders.
The Trustee and the Paying Agent shall pay to the Transferor upon
written request any monies held by them for the payment of
principal or interest which remains unclaimed for two years.
After payment to the Transferor, Investor Certificateholders
entitled to the money must look to the Transferor for payment as
general creditors unless an applicable abandoned property law
designates another Person.
(c) All Certificates surrendered for payment of the
final distribution with respect to such Certificates and
cancellation shall be canceled by the Transfer Agent and
Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferor.
Section XII.4 Termination Rights of Holder of Exchangeable
Transferor Certificate. Upon the termination of the Trust
pursuant to Section 12.1, and after payment of all amounts due
hereunder on or prior to such termination and the surrender of
the Exchangeable Transferor Certificate, the Trustee shall
execute a written reconveyance substantially in the form of
Exhibit H pursuant to which it shall reconvey to the Holder of
the Exchangeable Transferor Certificate (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 with respect thereto
(including all accrued interest theretofore posted as Finance
Charge Receivables) allocable to the Trust pursuant to any
Supplement, except for amounts held by the Trustee pursuant to
subsection 12.3(b). Upon written instruction, the Trustee shall
execute and deliver such instruments of transfer and assignment,
delivered to it in final execution form, in each case prepared by
the Transferor and without recourse, representation or warranty
as shall be reasonably requested by the Holder of the
Exchangeable Transferor Certificate to vest in such Holder all
right, title and interest which the Trust had in the Receivables
and other Trust Property.
[End Of Article XII]
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section XIII.1 Amendment. (a) This Agreement (including
any Supplement) may be amended from time to time by the Servicer,
the Transferor and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, to revise any
exhibits or Schedules (other than Schedule I), to correct or
supplement any provisions herein or thereon which may be
inconsistent with any other provisions herein or thereon or (ii)
to add any other provisions with respect to matters or questions
raised under this Agreement which shall not be inconsistent with
the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any of
the Investor Certificateholders. Additionally, this Agreement
may be amended from time to time by the Servicer, the Transferor
and the Trustee, without the consent of any of the
Certificateholders, to add to or change any of the provisions of
this Agreement to provide that Bearer Certificates may be
registrable as to principal, to change or eliminate any
restrictions on the payment of principal of (or premium, if any)
or any interest on Bearer Certificates to comply with the Bearer
Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules),
to permit Bearer Certificates to be issued in exchange for Bearer
Certificates of other authorized denominations or to permit the
issuance of Certificates in uncertificated form. Section 2.7 of
this Agreement may be amended from time to time by the Servicer,
the Transferor and the Trustee, without the consent of any of the
Certificateholders, to further restrict the right of the
Transferor to designate Accounts as Removed Accounts to the
extent necessary to enable the Transferor to achieve
derecognition of the Receivables under generally accepted
accounting principles, as evidenced by an Officer's Certificate
provided by the Transferor to the Trustee.
This Agreement (including any Supplement) and any schedule
or exhibit thereto may also be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of
any of the Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that
(i) the Servicer shall have provided an Officer's Certificate to
the Trustee to the effect that such amendment will not materially
and adversely affect the interests of the Certificateholders,
(ii) such amendment shall not, as evidenced by an Opinion of
Counsel, cause the Trust to be characterized for Federal income
tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the Federal income
taxation of any outstanding Series of Investor Certificates or
any Certificate Owner and (iii) the Servicer shall have provided
at least ten Business Days prior written notice to each Rating
Agency of such amendment and shall have received written
confirmation from each Rating Agency to the effect that the
existing rating of any Series or any class of any Series will not
be reduced or withdrawn as a result of such amendment; provided,
further, that such amendment shall not reduce in any manner the
amount of, or delay the timing of, distributions which are
required to be made on any Investor Certificate of such Series
without the consent of the related Investor Certificateholder,
change the definition of or the manner of calculating the
interest of any Investor Certificateholder of such Series without
the consent of the related Investor Certificateholder or reduce
the percentage pursuant to clause (b) required to consent to any
such amendment, in each case without the consent of all such
Investor Certificateholders.
(b) This Agreement and any Supplement may also be
amended from time to time by the Servicer, the Transferor and the
Trustee with the consent of the Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 66 2/3%
of the Invested Amount of each and every Series adversely
affected, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and
outstanding; provided, however, that no such amendment under this
subsection shall (i) reduce in any manner the amount of, or delay
the timing of, distributions which are required to be made on any
Investor Certificate of such Series without the consent of the
related Investor Certificateholders; (ii) change the definition
of or the manner of calculating the interest of any Investor
Certificateholder of such Series without the consent of the
related Investor Certificateholder or (iii) reduce the aforesaid
percentage required to consent to any such amendment, in each
case without the consent of all such Investor Certificateholders.
(c) Notwithstanding anything in this Section 13.1 to
the contrary, the Supplement with respect to any Series may be
amended on the items and in accordance with the procedures
provided in such Supplement.
(d) Promptly after the execution of any such amendment
(other than an amendment pursuant to paragraph (a)), the Trustee
shall furnish notification of the substance of such amendment to
each Investor Certificateholder of each Series adversely affected
and ten Business Days prior to the proposed effective date for
such amendment the Servicer shall furnish notification of the
substance of such amendment to each Rating Agency providing a
rating for such Series.
(e) It shall not be necessary to obtain the consent of
Investor Certificateholders under this Section 13.1 to approve
the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to
Section 6.9 and any amendments regarding the addition to or
removal of Receivables from the Trust as provided in Sections 2.6
or 2.7, executed in accordance with the provisions hereof, shall
not be considered amendments to this Agreement for the purpose of
subsections 13.1(a) and (b).
(g) In connection with any amendment, the Trustee may
request an opinion of Counsel from the Transferor or Servicer to
the effect that the amendment complies with all requirements of
this Agreement. The Trustee may, but shall not be obligated to,
enter into any amendment which affects the Trustee's rights,
duties or immunities under this Agreement or otherwise.
Section XIII.2 Protection of Right, Title and Interest to
Trust.
(a) The Servicer shall cause this Agreement, all amendments
hereto and/or all financing statements and continuation
statements and any other necessary documents covering the
Certificateholders and the Trustee's right, title and interest to
the Trust to be promptly recorded, registered and filed, and at
all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to
preserve and protect the right, title and interest of the
Certificateholders or the Trustee, as the case may be, hereunder
to all property comprising the Trust. The Servicer shall deliver
to the Trustee file-stamped copies of, or filing receipts for,
any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or
filing. The Transferor shall cooperate fully with the Servicer
in connection with the obligations set forth above and will
execute any and all documents reasonably required to fulfill the
intent of this subsection 13.2(a).
(b) Within 30 days after the 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) above materially misleading within
the meaning of Section 91-402(7) of the UCC as in effect in the
Relevant UCC State, the Transferor shall give the Trustee written
notice of any such change and shall file such financing
statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables
and the proceeds thereof.
(c) Each of the Transferor and the Servicer will give
the Trustee prompt written 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 continue the perfection of the Trust's
security interest in the Receivables and the proceeds thereof.
Each of the Transferor and the Servicer will at all times
maintain each office from which it services Receivables and its
principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee:
(i) upon each date that any Supplemental Accounts are to be
included in the Accounts pursuant to subsection 2.6(c), an
Opinion of Counsel substantially in the form of Exhibit F; and
(ii) on or before March 31 of each year, beginning with March 31,
1994, an Opinion of Counsel substantially in the form of
Exhibit G.
Section XIII.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Investor Certificateholder
shall not operate to terminate this Agreement or the Trust, nor
shall such death or incapacity entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take
any action or commence any proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any
of them.
(b) No Investor Certificateholder shall have any right
to vote (except as provided in Section 13.1 hereof) 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
Certificateholders from time to time as members of an
association; nor shall any Investor Certificateholder be under
any liability to any third person by reason of any action taken
by the parties to this Agreement pursuant to any provision
hereof.
(c) No Certificateholder shall have any right by
virtue of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with
respect to this Agreement, unless such Certificateholder
previously shall have given written notice to the Trustee, and
unless the Holders of Certificates evidencing Undivided Interests
aggregating more than 50% of the Invested Amount of any Series
which may be adversely affected but for the institution of such
suit, action or proceeding, shall have made written request upon
the Trustee to institute such action, suit or proceeding in its
own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Certificateholders shall have the
right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb
or prejudice the rights of the Certificateholders of any other of
the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any
right under this Agreement, except in the manner herein provided
and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the
provisions of this Section 13.3, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Section XIII.4 Governing Law. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section XIII.5 Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed
to have been duly given if personally delivered at, sent by
facsimile to, sent by courier at or mailed by registered mail,
return receipt requested, to (a) in the case of the Transferor to
10201 Main Street, Houston, Texas 77025, Attention: President,
with a copy to the Servicer as provided below, (b) in the case of
the Servicer, to 1020 Willow Creek, Jacksonville, Texas 75766,
Attention: Chief Financial Officer and General Counsel, (c) in
the case of the Trustee, to the Corporate Trust Office, (d) in
the case of the Enhancement Provider for a particular Series, the
address, if any, specified in the Supplement relating to such
Series and (e) in the case of the Rating Agency for a particular
Series, the address, if any, specified in the Supplement relating
to such Series; or, as to each party, at such other address as
shall be designated by such party in a written notice to each
other party. Unless otherwise provided with respect to any
Series in the related Supplement any notice required or permitted
to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Certificateholder
as shown in the Certificate Register, or with respect to any
notice required or permitted to be made to the Holders of Bearer
Certificates, by publication in the manner provided in the
related Supplement. If and so long as any Series or Class is
listed on the Luxembourg Stock Exchange and such Exchange shall
so require, any Notice to Investor Certificateholders shall be
published in an authorized newspaper of general circulation in
Luxembourg within the time period prescribed in this Agreement.
Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
Section XIII.6 Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Certificates or rights of the Certificateholders thereof.
Section XIII.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 8.2,
this Agreement may not be assigned by the Servicer without the
prior consent of Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 66_% of the
Invested Amount of each Series on a Series by Series basis.
Section XIII.8 Certificates Non-Assessable and Fully Paid.
Except to the extent otherwise expressly provided in Section 7.4
with respect to the Transferor, it is the intention of the
parties to this Agreement that the Investor Certificateholders
shall not be personally liable for obligations of the Trust, that
the Undivided Interests represented by the Certificates shall be
non-assessable for any losses or expenses of the Trust or for any
reason whatsoever, and that Certificates upon authentication
thereof by the Trustee pursuant to Sections 2.1 and 6.2 are and
shall be deemed fully paid.
Section XIII.9 Further Assurances. The Transferor and the
Servicer agree to do and perform, from time to time, any and all
acts and to execute any and all further instruments required or
reasonably requested by the Trustee more fully to effect the
purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements
relating to the Receivables and the other Trust Property for
filing under the provisions of the UCC of any applicable
jurisdiction.
Section XIII.10 No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of the
Trustee, any Enhancement Provider or the Investor
Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section XIII.11 Counterparts. This Agreement may be
executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but
all of which together shall constitute one and the same
instrument.
Section XIII.12 Third-Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties
hereto, the Certificateholders and, to the extent provided in the
related Supplement, to the Enhancement Provider named therein,
and their respective successors and permitted assigns. Except as
otherwise provided in this Article XIII, no other Person will
have any right or obligation hereunder.
Section XIII.13 Actions by Certificateholders. (a) Wherever
in this Agreement a provision is made that an action may be taken
or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be
taken or given by any Investor Certificateholder, unless such
provision requires a specific percentage of Investor
Certificateholders.
(b) Any request, demand, authorization, direction,
notice, consent, waiver or other act by a Certificateholder shall
bind such Certificateholder and every subsequent holder of such
Certificate issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything
done or omitted to be done by the Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made
upon such Certificate.
(c) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Agreement or any Supplement to be given or taken by
Certificateholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such
Certificateholders in person or by agent duly appointed in
writing; and except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments
are delivered to the Trustee and, when required, to the
Transferor or the Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement or any Supplement
and conclusive in favor of the Trustee, the Transferor and the
Servicer, if made in the manner provided in this Section.
(d) The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved
in any reasonable manner which the Trustee deems sufficient.
Section XIII.14 Rule 144A Information. For so long as any
of the Investor Certificates of any Series or any Class are
"restricted securities" within the meaning of Rule 144A(a)(3)
under the Securities Act, each of the Transferor, the Servicer,
the Trustee and the Enhancement Provider for such Series agree to
cooperate with each other to provide to any Investor
Certificateholders of such Series or Class and to any prospective
purchaser of Certificates designated by such an Investor
Certificateholder upon the request of such Investor
Certificateholder or prospective purchaser, any information
required to be provided to such holder or prospective purchaser
to satisfy the condition set forth in Rule 144A(d)(4) under the
Securities Act.
Section XIII.15 Merger and Integration; Existing Agreement.
(a) 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 (including the Pooling and
Servicing Agreement dated as of July 30, 1993, the First
Amendment thereto dated as of October 7, 1994, and the Second
Amendment thereto dated as of January 31, 1995, amended and
restated as of August 11, 1995, further amended by a First
Amendment to Amended and Restated Pooling and Servicing Agreement
dated May 30, 1996, and the Second Amendment to Amended and
Restated Pooling and Servicing Agreement dated August 1, 1998,
are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided
herein.
(b) This Agreement amends and restates the Existing
Agreement effective as of the date hereof. This Agreement shall
not effect a novation of the obligations of the parties to the
Existing Agreement, but instead shall be merely a restatement
and, where applicable, an amendment of the terms governing such
obligations.
Section XIII.16 Headings. The headings herein are for
purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.
Section XIII.17 No Bankruptcy Petition Against the
Transferor or the Trust. The Trustee and each Investor
Certificateholder, by its acceptance of an Investor Certificate,
severally and not jointly, hereby covenant and agree that, prior
to the date which is one year and one day after the payment in
full of all outstanding Investor Certificates issued by the
Trust, none of them will institute against, or join any other
Person in instituting against, the Transferor or the Trust any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States.
[End of Article XIII]
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
SRI RECEIVABLES PURCHASE CO., INC.
Transferor
By: /s/ Charles M. Sledge
Name: Charles M. Sledge
Title: SVP Finance & Treasurer
SPECIALTY RETAILERS, INC.
Servicer
By: /s/ Charles M. Sledge
Name: Charles M. Sledge
Title: SVP Finance & Treasurer
BANKERS TRUST (DELAWARE)
Trustee
By: /s/ Patricia MF Russo
Name: Patricia MF Russo
Title: Attorney-in-Fact
EXHIBIT A
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
No. 1 One Unit
SRI RECEIVABLES MASTER TRUST
ASSET BACKED CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY BE SOLD ONLY PURSUANT TO A REGISTRATION STATEMENT
EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN. A COPY OF THE
POOLING AND SERVICING AGREEMENT WILL BE FURNISHED TO THE HOLDER
OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN REQUEST.
This Certificate represents an
Undivided Interest in the SRI Receivables Master Trust
Evidencing an undivided interest in a trust, the corpus of which
consists of receivables generated from time to time in the
ordinary course of business from a portfolio of consumer
revolving credit card accounts generated or to be generated by
certain subsidiaries of Specialty Retailers, Inc. ("SRI" or the
"Servicer") and other assets and interests constituting the Trust
under the Pooling and Servicing Agreement described below.
(Not an interest in or a recourse obligation of
SRI Receivables Purchase Co., Inc., Specialty Retailers, Inc.
or any Affiliate of either of them.)
This certifies that SRI RECEIVABLES PURCHASE CO., INC. (the
"Holder" or the "Transferor," as the context requires) is the
registered owner of a fractional undivided interest in the SRI
Receivables Master Trust (the "Trust") issued pursuant to the
Second Amended and Restated Pooling and Servicing Agreement dated
as of November 1, 1999, among the Transferor, SRI, as Servicer,
and Bankers Trust (Delaware), a banking corporation organized and
existing under the laws of the State of Delaware as Trustee (the
"Pooling and Servicing Agreement"; such term to include any
amendment or Supplement thereto). The corpus of the Trust
consists of all of the Transferor's right, title and interest in,
to and under (i) a portfolio of receivables (the "Receivables")
now existing or hereafter created that are in substantially all
of the consumer revolving credit card accounts existing from time
to time (the "Accounts") as of the Cut-off Date, including
Receivables arising in connection with the accounts that meet the
definition of Automatic Additional Accounts and Supplemental
Accounts, all moneys due or to become due with respect thereto
(including all Finance Charge Receivables), all proceeds of such
Receivables, (ii) the Receivables Purchase Agreement, and (iii)
Recoveries, all monies due or to become due with respect thereto
and all amounts received with respect to the Receivables in
existence in the Accounts on the Cut-off Date or generated
thereafter, all monies on deposit in the Collection Account, the
Interest Funding Account, the Principal Account, the Distribution
Account, and the Equalization Account (excluding any investment
earnings on such deposited amounts except for such amounts as are
on deposit in the Equalization Account), and all other assets and
interests constituting the Trust and all proceeds of the
foregoing.
To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing
Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Pooling and Servicing
Agreement, to which Pooling and Servicing Agreement, as amended
from time to time, the Holder by virtue of the acceptance hereof
assents and by which the Holder is bound.
This Certificate has not been registered or qualified under
the Securities Act of 1933, as amended, or any state securities
law. No sale, transfer or other disposition of this Certificate
shall be permitted other than in accordance with the provisions
of Sections 6.3, 6.9 or 7.2 of the Pooling and Servicing
Agreement.
The Receivables arise generally from amounts charged by
Obligors for goods and services plus the related periodic finance
charges, and amounts charged to the Accounts in respect of late
fees, returned check fees and similar fees and charges.
This Certificate is the Exchangeable Transferor Certificate
(the "Certificate"), which represents an undivided interest in
the Trust, including the right to receive the Collections and
other amounts at the times and in the amounts specified in the
Pooling and Servicing Agreement to be paid to the Holder of the
Certificate. The aggregate interest represented by this
Certificate at any time in the Principal Receivables in the Trust
shall not exceed the Transferor Interest at such time. In
addition to this Certificate, Series of Investor Certificates
will be issued to investors pursuant to the Pooling and Servicing
Agreement, each of which will represent an Undivided Interest in
the Trust. This Certificate shall not represent any interest in
the Investor Accounts or any Enhancement, except to the extent
provided in the Pooling and Servicing Agreement. The Transferor
Interest on any date of determination will be an amount equal to
the aggregate amount of Principal Receivables at the end of the
day immediately prior to such date of determination plus amounts
on deposit in the Equalization Account (but not including any
investment earnings thereon) minus the Aggregate Invested Amount
at the end of such day.
The Servicer shall deposit all Collections in the Collection
Account as promptly as possible after the Date of Processing of
such Collections. Unless otherwise stated in any Supplement,
throughout the existence of the Trust, the Servicer shall
allocate to the Holder of the Certificate an amount equal to the
product of (A) the Transferor Percentage and (B) the aggregate
amount of such Collections allocated to Principal Receivables and
Finance Charge Receivables, respectively, in respect of each
Monthly Period. Notwithstanding the first sentence of this
paragraph, the Servicer need not deposit this amount or any other
amounts so allocated to the Certificate pursuant to the Pooling
and Servicing Agreement into the Collection Account and shall
pay, or be deemed to pay, such amounts as collected to the Holder
of the Certificate.
SRI or any permitted successor or assignee, as Servicer, is
entitled to receive as servicing compensation a monthly servicing
fee. The portion of the servicing fee which will be allocable to
the Holder of the Certificate pursuant to the Pooling and
Servicing Agreement will be payable by the Holder of the
Certificate and neither the Trust nor the Trustee or the Investor
Certificateholders will have any obligation to pay such portion
of the servicing fee.
This Certificate does not represent a recourse obligation
of, or any interest in, the Transferor or the Servicer. This
Certificate is limited in right of payment to certain Collections
respecting the Receivables, all as more specifically set forth
hereinabove and in the Pooling and Servicing Agreement.
Upon the termination of the Trust pursuant to Section 12.1
of the Pooling and Servicing Agreement, the Trustee shall assign
and convey to the Holder of the Certificate (without recourse,
representation or warranty) all right, title and interest of the
Trust in the Receivables, whether then existing or thereafter
created, and all proceeds relating thereto. The Trustee shall
execute and deliver such instruments of transfer and assignment,
in each case without recourse, as shall be reasonably requested
by the Holder of the Certificate to vest in such Holder all
right, title and interest which the Trustee had in the
Receivables.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature,
this Certificate shall not be entitled to any benefit under the
Pooling and Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed.
SRI RECEIVABLES PURCHASE CO., INC.
By:
Name:
Title:
Attested to:
By:
Date:
CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Certificate referred to
in the within-mentioned Pooling and Servicing Agreement.
BANKERS TRUST (DELAWARE), as
Authenticating Agent for the Trustee
By:
Authorized Signatory
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS
(As required by subsection 2.6(e)(ii)
of the Pooling and Servicing Agreement)
ASSIGNMENT No. _____ OF RECEIVABLES IN SUPPLEMENTAL
ACCOUNTS, dated as of ________ __, ___ by and between SRI
RECEIVABLES PURCHASE CO. INC., a corporation organized under the
laws of the State of Delaware (the "Transferor"), to BANKERS
TRUST (DELAWARE), a banking corporation organized and existing
under the laws of the State of Delaware as Trustee (in such
capacity, the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Transferor and the Trustee are parties to the
Second Amended and Restated Pooling and Servicing Agreement,
dated as of ___________, 1999 (the "Pooling and Servicing
Agreement"; such term to include any amendment or Supplement
thereto) among the Transferor, Specialty Retailers, Inc. as
Servicer and the Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement,
the Transferor wishes to designate Supplemental Accounts of the
Transferor 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 Pooling and Servicing
Agreement); and
WHEREAS, the Trustee is willing to accept such designation
and conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Pooling
and Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Addition Date" shall mean, with respect to the
Supplemental Accounts designated hereby, __________, ______.
"Notice Date" shall mean, with respect to the
Supplemental Accounts designated hereby, _________,
_________ (which shall be a date on or prior to the fifth
Business Day prior to the Addition Date with respect to
additions pursuant to subsection 2.6(c) of the Pooling and
Servicing Agreement and the twentieth Business Day prior to
the Addition Date with respect to additions pursuant to
subsection 2.6(d) of the Pooling and Servicing Agreement).
2. Designation of Additional Accounts. The
Transferor shall deliver to the Trustee not later than five
Business Days after the Addition Date, a computer file or
microfiche list containing a true and complete list of each
consumer revolving credit card account which as of the Addition
Date shall be deemed to be a Supplemental Account, such accounts
being identified by account number and by the amount of
Receivables in each such account as of the close of business on
the Addition Date. Such file or list shall be marked as
Schedule I to this Assignment and, as of the Addition Date, shall
be incorporated into and made a part of this Assignment.
3. Conveyance of Receivables. The Transferor does
hereby transfer, assign, set-over and otherwise convey to the
Trust for the benefit of the Certificateholders, without recourse
on and after the Addition Date, all right, title and interest of
the Transferor in and to the Receivables now existing and
hereafter created in the Supplemental Accounts designated hereby,
all monies due or to become due with respect thereto (including
all Finance Charge Receivables) and all proceeds of such
Receivables.
(a) In connection with such transfer, the Transferor
agrees to record and file, at its own expense, a financing
statement with respect to the Receivables now existing and
hereafter created in the Supplemental Accounts designated
hereby (which may be a single financing statement with
respect to all such Receivables) for the transfer of
accounts as defined in Section 9-106 of the UCC as in effect
in the Relevant UCC State meeting the requirements of
applicable state law in such manner and such jurisdictions
as are necessary to perfect the assignment of such
Receivables to the Trust, and to deliver a file-stamped copy
of such financing statement or other evidence of such filing
(which may, for purposes of this Section 3, consist of
telephone confirmation of such filing) to the Trustee on or
prior to the date of this Assignment.
(b) In connection with such transfer, the Transferor
further agrees, at its own expense, on or prior to the date
of this Assignment to indicate in its computer files that
Receivables created in connection with the Supplemental
Accounts designated hereby have been transferred to the
Trust pursuant to this Assignment for the benefit of the
Certificateholders.
4. Acceptance by Trustee. The Trustee hereby
acknowledges its acceptance on behalf of the Trust for the
benefit of the Certificateholders of all right, title and
interest previously held by the Transferor in and to the
receivables now existing and hereafter created, and declares that
it shall maintain such right, title and interest, upon the trust
herein set forth, for the benefit of all Certificateholders.
5. Representations and Warranties of the Transferor.
The Transferor hereby represents and warrants to the just as of
the Addition Date:
(a) Legal Valid and Binding Obligation. This
Assignment constitutes a legal, valid and binding obligation
of the Transferor enforceable against the 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) Selection Procedures. No selection procedures
believed by the Transferor to be materially adverse to the
interests of the Investor Certificateholders were utilized
in selecting the Supplemental Accounts designated hereby
from the available Eligible Accounts held by the Trust
Portfolio.
(c) Insolvency. The Transferor is not insolvent and
after giving effect to the conveyance set forth in Section 3
of this Assignment, will not be insolvent.
(d) Security Interest. This Assignment constitutes
either (i) a valid transfer and assignment to the Trust of
all right, title and interest of the Transferor in and to
Receivables now existing and hereafter created in the
Supplemental Accounts designated hereby, and all proceeds
(as defined in the UCC as in effect in the Relevant UCC
State) of such Receivables, and such Receivables and any
proceeds thereof will be held by the Trust free and clear of
any Lien of any Person claiming through or under the
Transferor or any of its Affiliates except for (x) Permitted
Liens, (y) the interest of the Holder of the Exchangeable
Transferor Certificate and (z) the Transferor's right to
receive interest accruing on, and investment earnings in
respect of, the Interest Funding Account, the Principal
Account and any Series Account as provided in the Pooling
and Servicing Agreement or any Series Supplement; or (ii) it
constitutes a grant of a security interest (as defined in
the UCC as in effect in the Relevant UCC State) in such
property to the Trust, which is enforceable with respect to
the existing Receivables of the Supplemental Accounts
designated hereby, the proceeds (as defined in the UCC as in
effect in the Relevant UCC State) thereof 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 designated
hereby, the proceeds (as defined in the UCC as in effect in
the Relevant UCC State) thereof, upon such creation; and
(iii) if this Assignment constitutes the grant of a security
interest to the Trust in such property, upon the filing of a
financing statement described in Section 3 of this
Assignment with respect to the Supplemental Accounts
designated hereby and in the case of the Receivables of such
Supplemental Accounts thereafter created and the proceeds
(as defined in the UCC as in effect in the Relevant UCC
State) thereof, upon such creation, the Trust shall have a
first priority perfected security interest in such property,
except for Permitted Liens.
6. Conditions Precedent. The acceptance by the
Trustee set forth in Section 4 and the amendment of the Pooling
and Servicing Agreement set forth in Section 7 are subject to the
satisfaction, on or prior to the Addition Date, of the following
conditions precedent:
(a) Officer's Certificate. The Transferor shall have
delivered to the Trustee a certificate of a Vice President
or more senior officer substantially in the form of
Schedule II hereto, certifying that (i) all requirements set
forth in Section 2.6 of the Pooling and Servicing Agreement
for designating Supplemental Accounts and conveying the
Receivables of such Accounts, whether now existing or
hereafter created, have been satisfied and (ii) each of the
representations and warranties made by the Transferor in
Section 5 is true and correct as of the Addition Date.
(b) Opinion of Counsel. The Transferor shall have
delivered to the Trustee an Opinion of Counsel with respect
to the Supplemental Accounts designated hereby substantially
in the form of Exhibit F to the Pooling and Servicing
Agreement.
(c) Additional Information. The Transferor shall have
delivered to the Trustee such information as was reasonably
requested by the Trustee to satisfy itself as to the
accuracy of the representation and warranty regarding the
insolvency of the Transferor set forth in subsection 5(c) to
this Assignment.
7. Amendment of the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement is hereby amended to provide
that all references therein to the "Pooling and Servicing
Agreement," to "this Agreement" and "herein" shall be deemed from
and after the Addition Date to be a dual reference to the Pooling
and Servicing Agreement as supplemented by this Assignment.
Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Pooling and
Servicing Agreement shall remain unamended and shall continue to
be, and shall remain, in full force and effect in accordance with
its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with
or a consent to noncompliance with any term or provision of the
Pooling and Servicing Agreement.
8. Counterparts. This Assignment may be executed in
two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of
which together shall constitute one and the same instrument.
9. Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this
Assignment of Receivables in Supplemental Accounts to be duly
executed and delivered by their respective duly authorized
officers on the day and year first above written.
SRI RECEIVABLES PURCHASE CO., INC.
By:
Name:
Title
BANKERS TRUST (DELAWARE), Trustee
By:
Name:
Title:
Schedule I
to Assignment of
Receivables in
Supplemental Accounts
SUPPLEMENTAL ACCOUNTS
Schedule II
to Assignment of
Receivables in
Supplemental Accounts
SRI Receivables Purchase Co., Inc.
SRI Receivables Master Trust
Officer's Certificate
___________, a duly authorized officer of SRI Receivables
Purchase Co., Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Transferor"), hereby
certifies and acknowledges on behalf of the Transferor that to
the best of his knowledge the following statements are true on
_____, ______ (the "Addition Date"), and further acknowledges on
behalf of the Transferor that this Officer's Certificate will be
relied upon by Bankers Trust (Delaware), a banking corporation
organized and existing under the laws of the State of Delaware,
as Trustee (the "Trustee") of the SRI Receivables Master Trust in
connection with the Trustee entering into Assignment No. ___ of
Receivables in Supplemental Accounts, dated as of the Addition
Date (the "Assignment"), by and between the Transferor and the
Trustee, in connection with the Second Amended and Restated
Pooling and Servicing Agreement, dated as of November 1, 1999
(the "Pooling and Servicing Agreement"; such term to include any
amendment or supplement thereto), among the Transferor, Specialty
Retailers, Inc., as Servicer, and the Trustee. The undersigned
hereby certifies and acknowledges on behalf of the Transferor
that:
(a) Deliveries. On or prior to the Addition Date, the
Transferor has delivered to the Trustee the Assignment (including
an acceptance by the Trustee on behalf of the Trust for the
benefit of the Investor Certificateholders) and the Transferor
has 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 after the
Addition Date the Transferor shall deliver to the Trustee or the
bailee of the Trustee a computer file or microfiche list
containing a true and complete list of all Supplemental Accounts
identified by account number and the aggregate amount of the
Receivables in such Supplemental Accounts as of the Addition
Date, which computer file or microfiche list shall be, as of the
date of such Assignment, incorporated into and made a part of
such Assignment and the Pooling and Servicing Agreement.
(b) Legal Valid and Binding Obligation. The
Assignment constitutes a legal, valid and binding obligation of
the Transferor, enforceable against the 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).
(c) Selection Procedures. No selection procedures
believed by the Transferor to be materially adverse to the
interests of the Investor Certificateholders were utilized in
selecting the Supplemental Accounts designated hereby from the
available Eligible Accounts in the Federated Portfolio.
(d) Insolvency. The Transferor is not insolvent and,
after giving effect to the conveyance set forth in Section 3 of
the Assignment, will not be insolvent.
(e) Security Interest. The Assignment constitutes
either (i) a valid transfer and assignment to the Trust of all
right, title and interest of the Transferor in and to Receivables
now existing and hereafter created in the Supplemental Accounts
designated pursuant to the Assignment, and all proceeds (as
defined in the UCC as in effect in the Relevant UCC State) of
such Receivables, and such Receivables and any proceeds thereof
will be held by the Trust free and clear of any Lien of any
Person claiming through or under the Transferor or any of its
Affiliates except for (x) Permitted Liens, (y) the interest of
the Transferor as holder of the Exchangeable Transferor
Certificate and (z) the Transferor's right to receive interest
accruing on, and investment earnings in respect of, the Interest
Funding Account, the Principal Account or any Series Account as
provided in the Pooling and Servicing Agreement and any
Supplement; or (ii) a grant of a security interest (as defined in
the UCC as in effect in the Relevant UCC State) in such property
to the Trust, which is enforceable with respect to the existing
Receivables of the Supplemental Accounts designated pursuant to
the Assignment, the proceeds (as defined in the UCC as in effect
in the State of Relevant UCC State) thereof 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 designated pursuant to the Assignment, and
the proceeds (as defined in the UCC as in effect in the Relevant
UCC State) thereof, upon such creation; and (iii) if the
Assignment constitutes the grant of a security interest to the
Trust in such property, upon the filing of a financing statement
described in Section 3 of the Assignment with respect to the
Additional Accounts designated pursuant to the Assignment and in
the case of the Receivables of such Additional Accounts
thereafter created and the proceeds (as defined in the UCC as in
effect in the Relevant UCC State) thereof, upon such creation,
the Trust shall have a first priority perfected security interest
in such property, except for Permitted Liens.
(f) Requirements of the Pooling and Servicing
Agreement. All requirements set forth in Section 2.6 of the
Pooling and Servicing Agreement for designating Additional
Accounts and conveying the Principal Receivables of such
Accounts, whether now existing or hereafter created, have been
satisfied.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
_________ ____.
SRI RECEIVABLES PURCHASE CO., INC.
By:
Name:
Title:
EXHIBIT C
FORM OF DAILY REPORT
[SEE ATTACHED]
EXHIBIT D
FORM OF SETTLEMENT STATEMENT
[SEE ATTACHED]
EXHIBIT E
FORM OF QUARTERLY SERVICER'S CERTIFICATE
SRI RECEIVABLES PURCHASE CO., INC.
SRI RECEIVABLES MASTER TRUST
The undersigned, a duly authorized representative of
Specialty Retailers, Inc. ("SRI"), as Servicer pursuant to the
Second Amended and Restated Pooling and Servicing Agreement dated
as of November 1, 1999 (the "Pooling and Servicing Agreement";
such term to include any amendment or supplement thereto), by and
among SRI Receivables Purchase Co., Inc. (the "Transferor"), SRI,
as Servicer and Bankers Trust (Delaware), as trustee (the
"Trustee") does hereby certify that:
1. SRI is Servicer under the Pooling and Servicing
Agreement.
2. The undersigned is duly authorized pursuant to the
Pooling and Servicing Agreement to execute and deliver this
Certificate to the Trustee.
3. This Certificate is delivered pursuant to
Section 3.5 of the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during
(the period from the Closing Date until) (the approximately
twelve month period ended), [19][20]___ was conducted under
our supervision.
5. Based on such review, the Servicer has, to the
best of our knowledge, fully performed all its obligations
under the Pooling and Servicing Agreement throughout such
period and no default in the performance of such obligations
has occurred or is continuing except as set forth in
paragraph 6 below.
6. The following is a description of each default in
the performance of the Servicer's obligations under the
provisions of the Pooling and Servicing Agreement, including
any Supplement, known to us to have been made during such
period which sets forth in detail (i) the nature of each
such default, (ii) the action taken by the 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 __________, ______.
SPECIALTY RETAILERS, INC.,
as Servicer
Name:
Title:
EXHIBIT F
FORM OF OPINION OF COUNSEL
REGARDING SUPPLEMENTAL ACCOUNTS
MATTERS TO BE COVERED IN OPINION OF COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 2.6(e)(vi) OF THE SECOND AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT, DATED AS OF NOVEMBER 1, 1999
The opinions set forth below may be subject to certain
qualifications, assumptions, limitations and exceptions taken or
made in the opinion of the Transferor's counsel with respect to
similar matters delivered on the Closing Date. Such counsel may
rely as to factual matters on certificates of officers of the
Transferor and the Servicer.
(i) The Assignment has been duly authorized, executed
and delivered by the Transferor and constitutes the valid and
legally binding agreement of the Transferor, enforceable against
the Transferor in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditor's rights and except as such enforceability may be
limited by general equity principles (whether considered in a
suit in law or equity).
(ii) The provisions of the Pooling and Servicing
Agreement are effective to create, in favor of the Trustee for
the benefit of the Holders of the Certificates, a valid security
interest in the Receivables and the proceeds thereof. Such
security interest constitutes a first priority perfected security
interest in such Receivables and the proceeds thereof. Except
for Permitted Liens, no other security interest of any creditor
of the Transferor is equal or prior to the security interest of
the Trustee in such Receivables.
(iii) No filing or other action, other than the filing
of a Uniform Commercial Code financing statement in the recording
offices in the Relevant UCC State is necessary to perfect or
maintain the security interest in the Receivables and the
proceeds thereof, except that (a) appropriate Uniform Commercial
Code continuation statements must be filed within the period of
six months prior to the expiration of five years from the date of
the original filing, (b) if the Transferor changes its name,
identity or corporate structure, appropriate Uniform Commercial
Code financing statements must be filed prior to the expiration
of four months after the Transferor changes its name, identity or
corporate structure and (c) if the Transferor changes its chief
executive office or principal place of business to a jurisdiction
other than the State of Delaware, such security interest must be
perfected in such jurisdiction within four months of the date on
which the change occurs (or earlier, if perfection under the laws
of such jurisdiction would have otherwise ceased as set forth in
clause (a) above).
EXHIBIT G
FORM OF ANNUAL OPINION OF COUNSEL
The opinion set forth below, which is to be delivered
pursuant to subsection 13.2(d)(ii) of the Second Amended and
Restated Pooling and Servicing Agreement, dated as of November 1,
1999 may be subject to certain qualifications, assumptions,
limitations and exceptions taken or made in the opinion of
counsel delivered on the Initial Closing Date with respect to
similar matters.
No filing or other action, other than such filing or action
described in such opinion, is necessary from the date of such
opinion through this date of the following year to continue the
perfected status of the interest of the Trust in the collateral
described in the financing statements referred to in such
opinion.
EXHIBIT H
FORM OF REASSIGNMENT OF RECEIVABLES
REASSIGNMENT NO. _____ OF RECEIVABLES, dated as of
___________, by and between SRI RECEIVABLES PURCHASE CO., INC., a
corporation organized and existing under the laws of the State of
Delaware (the "Transferor"), and BANKERS TRUST (DELAWARE), a
banking corporation organized and existing under the laws of the
State of Delaware (the "Trustee") pursuant to the Pooling and
Servicing Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Transferor and the Trustee are parties to the
Second Amended and Restated Pooling and Servicing Agreement,
dated as of November 1, 1999 (hereinafter as such agreement may
have been, or may from time to time be, amended, supplemented or
otherwise modified, the "Pooling and Servicing Agreement") by and
among the Transferor, Specialty Retailers, Inc. as Servicer, and
the Trustee;
WHEREAS, pursuant to Section 2.7 of the Pooling and
Servicing Agreement, the Transferor wishes to remove all
Receivables from certain designated Accounts (collectively, the
"Removed Accounts") and to cause the Trustee to reconvey the
Receivables of such Removed Accounts, whether now existing or
hereafter created, from the Trust to the Transferor (as each such
term is defined in the Pooling and Servicing Agreement); and
WHEREAS, the 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, the Transferor and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Pooling
and Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Removal Date" shall mean, with respect to the Removed
Accounts designated hereby, ___________, _____.
"Removal Notice Date" shall mean, with respect to the
Removed Accounts designated hereby, _________, ______ (which
shall be a date on or prior to the fifth Business Day prior
to the Removal Date).
2. Designation of Removed Accounts. The Transferor
shall deliver to the Trustee or the bailee of the Trustee, not
later than five Business Days after the Removal Date, a computer
file or microfiche list containing a true and complete list of
each revolving consumer credit card account which as of the
Removal Date shall be deemed to be a Removed Account, such
accounts being identified by account number and by the aggregate
amount of Receivables in such accounts as of the close of
business on the Removal Date. Such list shall be marked as
Schedule I to this Reassignment and shall be incorporated into
and made a part of this Reassignment as of the Removal Date.
3. Conveyance of Receivables.
(a) The Trustee does hereby reconvey to the
Transferor, without recourse, representation or warranty, on
and after the Removal Date, all right, title and interest of
the Trust in and to the Receivables now existing and
hereafter created in the Removed Accounts designated hereby,
all monies due or to become due with respect thereto
(including all Finance Charge Receivables) and all proceeds
(as defined in Section 9-306 of the UCC as in effect in the
Relevant UCC State) of such Receivables.
(b) In connection with such transfer, the Trustee
agrees to execute and deliver to the Transferor on or prior
to the date of this Reassignment, a termination statement
with respect to the Receivables now existing and hereafter
created in the Removed Accounts designated hereby evidencing
the release by the Trust of its Lien on the Receivables in
the Removed Accounts, and meeting the requirements of
applicable state law, in such manner and such jurisdictions
as are necessary to remove such Lien.
4. Representations and Warranties of the Transferor.
The Transferor hereby represents and warrants to the Trust as of
the Removal Date:
(a) Legal, Valid and Binding Obligation. This
Reassignment constitutes a legal, valid and binding
obligation of the Transferor enforceable against the
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) Selection Procedures. No selection
procedures believed by the Transferor to be materially
adverse to the interests of the Investor Certificateholders
were utilized in selecting the Removed Accounts designated
hereby.
5. Conditions Precedent. The amendment of the
Pooling and Servicing Agreement set forth in Section 6 hereof is
subject to the satisfaction, on or prior to the Removal Date, of
the following condition precedent:
The Transferor shall have delivered to the Trustee an
Officer's Certificate certifying that (i) as of the Removal Date,
all requirements set forth in Section 2.7 of the Pooling and
Servicing Agreement for designating Removed Accounts and
reconveying the Receivables of such Removed Accounts, whether now
existing or hereafter created, have been satisfied, and (ii) each
of the representations and warranties made by the Transferor in
Section 4 hereof is true and correct as of the Removal Date. The
Trustee may conclusively rely on such Officer's Certificate,
shall have no duty to make inquiries with regard to the matters
set forth therein and shall incur no liability in so relying.
6. Amendment of the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement is hereby amended to provide
that all references therein to the "Pooling and Servicing
Agreement", to "this Agreement" and "herein" shall be deemed from
and after the Removal Date to be a dual reference to the Pooling
and Servicing Agreement as supplemented by this Reassignment.
Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Pooling and
Servicing Agreement shall remain unamended and shall continue to
be, and shall remain, in full force and effect in accordance with
its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with
or a consent to noncompliance with any term or provision of the
Pooling and Servicing Agreement.
7. 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 together shall constitute one and the same instrument.
8. 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.
IN WITNESS WHEREOF, the undersigned have caused this
Reassignment of Receivables to be duly executed and delivered by
their respective duly authorized officers on the day and year
first above written.
SRI RECEIVABLES PURCHASE CO., INC.
By:
Name:
Title:
BANKERS TRUST (DELAWARE), Trustee
By:
Name:
Title:
Schedule I
to Reassignment
of Receivables
REMOVED ACCOUNTS
EXHIBIT I
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE OF RECEIVABLES, dated as of __________ by and
between SRI RECEIVABLES PURCHASE CO., INC., a corporation
organized and existing under the laws of the State of Delaware
(the "Transferor"), and BANKERS TRUST (DELAWARE), a banking
corporation organized and existing under the laws of the State of
Delaware (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Transferor and the Trustee are parties to the
Second Amended and Restated Pooling and Servicing Agreement dated
as of November 1, 1999 (hereinafter as such agreement may have
been, or may from time to time be, amended, supplemented or
otherwise modified, the "Pooling and Servicing Agreement"), by
and among the Transferor, Specialty Retailers, Inc. as Servicer,
and the Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement,
the Transferor wishes to cause the Trustee to reconvey all of the
Receivables and proceeds thereof, whether now existing or
hereafter created, from the Trust to the Transferor pursuant to
the terms of Section 12.4 of the Pooling and Servicing Agreement
upon termination of the Trust pursuant to subsection 12.1(a) of
the Pooling and Servicing Agreement (as each such term is defined
in the Pooling and Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey the Receivables
subject to the terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree
as follows:
1. Defined Terms. All terms defined in the Pooling
and Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Reconveyance Date" shall mean ________ __, [19][20]__.
2. Return of Lists of Accounts. The Trustee shall
deliver to the Transferor or the bailee of the Transferor, not
later than three Business Days after the Reconveyance Date, each
and every computer file or microfiche list of Accounts delivered
to the Trustee pursuant to the terms of the Pooling and Servicing
Agreement.
3. Conveyance of Receivables.
(a) The Trustee does hereby reconvey to the
Transferor, without recourse, representation or warranty, on
and after the Reconveyance Date, all right, title and
interest of the Trust in and to each and every Receivable
now existing and hereafter created in the Accounts, all
monies due or to become due with respect thereto (including
all Finance Charge Receivables), all proceeds (as defined in
Section 9-306 of the UCC as in effect in the Relevant UCC
State) of such Receivables, except for amounts, if any, held
by the Trustee pursuant to subsection 12.3(b) of the Pooling
and Servicing Agreement.
(b) In connection with such transfer, the Trustee
agrees to execute and deliver to the Transferor on or prior
to the date of this Reconveyance, such UCC termination
statements as the Transferor may reasonably request,
evidencing the release by the Trust of its lien on the
Receivables.
4. Counterparts. This Reconveyance 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.
5. Governing Law. THIS RECONVEYANCE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this
Reconveyance of Receivables to be duly executed and delivered by
their respective duly authorized officers on the day and year
first above written.
SRI RECEIVABLES PURCHASE CO., INC.
By:
Name:
Title:
BANKERS TRUST (DELAWARE), Trustee
By
Name:
Title:
SCHEDULE I
LIST OF ACCOUNTS
(Deemed Incorporated)
EXHIBIT J
FORM OF AGREED-UPON PROCEDURES
The Servicer and Trustee will engage a firm of nationally
recognized independent public accountants (who may also render
other services to the Servicer or any of its subsidiaries) to
perform certain agreed upon procedures substantially similar to
the following:
1) The accountants will obtain the schedules showing the
daily roll forward of accounts receivable activity
(hereinafter referred to as the daily roll forward
schedule) for 3% of the days within the period and
compare amounts in excess of $5,000 set forth on the
daily roll forward schedule representing charge sales,
returns, cash collections, finance charges, credit
adjustments and daily ending accounts receivable balances
with the corresponding amounts set forth in the accounts
receivable subsidiary ledgers and verify the mathematical
accuracy of the daily roll forward.
2) For the 3% of the days within the period, the accountants
will compare the store and mail payments appearing on the
daily roll forwards to a credit entry on the relevant
bank statement.
3) The accountants will obtain a listing of new account
applications for the period and select 25 approved
accounts from the listing and compare the account scoring
with the minimum account scoring required for approval as
provided by the Servicer.
4) The accountants will obtain a listing of applications
denied for 10 days during the period and select five
accounts from the listing for each day and compare the
account scoring set forth on the listing to the minimum
account scoring required for approval as provided by the
Servicer.
5) The accountants will report the accounts receivable
agings for five cycle closings during the period and
determine the aggregate customer balances in the "greater
than 240 days" and "current delinquent" categories as
reflected on the accounts receivable aging.
6) The accountants will select 20 individual customer
statements from the period and (i) recalculate finance
charges appearing on the customer statement based upon
the appropriate APR and (ii) recompute the minimum
payment amount based upon information contained in the
standard account application.
7) For 3% of the days within the period, the accountants
will compare beginning principal receivables, ending
principal receivables, principal collections credit
adjustments and finance charge collections, appearing on
the Daily Report with the corresponding amounts appearing
in the daily roll forward schedule.
8) For 3% of the days within the period, the accountants
will recompute the daily allocation of principal and
finance charge collections to each series based upon
information appearing on the Daily Reports.
9) For 3% of the days within the period, the public
accountants will agree the cash transfers indicated on
the Daily Reports to entries on the relevant bank
statements.
10)For each settlement statement, the accountants will
compare the information appearing therein to the
information appearing in the corresponding Daily Reports.
11)The public accountants will inquire as to changes in the
Transferor's finance charge and minimum payment
requirements.
