Document/Exhibit Description Pages Size
1: 8-K Current Report 4 20K
2: EX-1.1 Underwriting Agreement 31 121K
3: EX-3.1 Articles of Incorporation/Organization or By-Laws 30 91K
4: EX-4.1 Instrument Defining the Rights of Security Holders 108 387K
13: EX-4.10 Instrument Defining the Rights of Security Holders 10 40K
14: EX-4.11 Instrument Defining the Rights of Security Holders 5 23K
15: EX-4.12 Instrument Defining the Rights of Security Holders 5 23K
16: EX-4.13 Instrument Defining the Rights of Security Holders 5 23K
5: EX-4.2 Instrument Defining the Rights of Security Holders 88 258K
6: EX-4.3 Instrument Defining the Rights of Security Holders 75 244K
7: EX-4.4 Instrument Defining the Rights of Security Holders 28 109K
8: EX-4.5 Instrument Defining the Rights of Security Holders 17 57K
9: EX-4.6 Instrument Defining the Rights of Security Holders 115 439K
10: EX-4.7 Instrument Defining the Rights of Security Holders 14 42K
11: EX-4.8 Instrument Defining the Rights of Security Holders 40 130K
12: EX-4.9 Instrument Defining the Rights of Security Holders 18 90K
EX-4.3 — Instrument Defining the Rights of Security Holders
Exhibit Table of Contents
Exhibit 4.3
TRANSFER AND SERVICING AGREEMENT
between
WFN CREDIT COMPANY, LLC,
Transferor,
WORLD FINANCIAL NETWORK NATIONAL BANK,
Servicer,
and
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST,
Issuer,
Dated as of August 1, 2001
TABLE OF CONTENTS
[Enlarge/Download Table]
PAGE
ARTICLE I DEFINITIONS.......................................................................1
Section 1.1 Definitions..............................................................1
Section 1.2 Other Definitional Provisions............................................1
ARTICLE II CONVEYANCE OF RECEIVABLES.........................................................2
Section 2.1 Conveyance of Receivables................................................2
Section 2.2 Acceptance by Issuer.....................................................4
Section 2.3 Representations and Warranties of Transferor Relating to Transferor......4
Section 2.4 Representations and Warranties of Transferor Relating to Transaction
Documents and the Receivables............................................6
Section 2.5 Covenants of Transferor.................................................11
Section 2.6 Addition of Accounts....................................................17
Section 2.7 Removal of Accounts.....................................................22
Section 2.8 Discount Option.........................................................24
Section 2.9 Additional Transferors..................................................25
Section 2.10 Additional Credit Card Originators......................................25
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES......................................25
Section 3.1 Acceptance of Appointment and Other Matters Relating to Servicer........26
Section 3.2 Servicing Compensation..................................................27
Section 3.3 Representations, Warranties and Covenants of Servicer...................28
Section 3.4 Reports and Records for Indenture Trustee...............................31
Section 3.5 Annual Servicer's Certificate...........................................32
Section 3.6 Annual Independent Public Accountants' Servicing Report.................32
Section 3.7 Tax Treatment...........................................................33
Section 3.8 Notices to Transferor...................................................33
Section 3.9 Adjustments.............................................................33
Section 3.10 Reports to the Commission...............................................34
ARTICLE IV OTHER MATTERS RELATING TO TRANSFEROR.............................................34
Section 4.1 Liability of Transferor.................................................34
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Section 4.2 Merger or Consolidation of, or Assumption of the Obligations of,
Transferor etc..........................................................37
Section 4.3 Limitation on Liability of Transferor...................................38
ARTICLE V OTHER MATTERS RELATING TO SERVICER...............................................39
Section 5.1 Liability of Servicer...................................................39
Section 5.2 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer................................................39
Section 5.3 Limitation on Liability of Servicer and Others..........................40
Section 5.4 Indemnification of Issuer and Owner Trustee.............................40
Section 5.5 Servicer Not to Resign..................................................41
Section 5.6 Access to Certain Documentation and Information
Regarding the Receivables...............................................42
Section 5.7 Delegation of Duties....................................................42
ARTICLE VI INSOLVENCY EVENTS................................................................42
Section 6.1 Rights upon the Occurrence of an Insolvency Event.......................42
ARTICLE VII SERVICER DEFAULTS................................................................43
Section 7.1 Servicer Defaults.......................................................43
Section 7.2 Indenture Trustee to Act; Appointment of Successor......................45
Section 7.3 Notification to Noteholders.............................................47
ARTICLE VIII TERMINATION......................................................................47
Section 8.1 Termination of Agreement................................................47
ARTICLE IX MISCELLANEOUS PROVISIONS.........................................................47
Section 9.1 Amendment; Waiver of Past Defaults......................................47
Section 9.2 Protection of Right, Title and Interest to Issuer.......................50
Section 9.3 GOVERNING LAW...........................................................51
Section 9.4 Notices; Payments.......................................................51
Section 9.5 Severability of Provisions..............................................51
Section 9.6 Further Assurances......................................................52
Section 9.7 No Waiver; Cumulative Remedies..........................................52
Section 9.8 Counterparts............................................................52
Section 9.9 Third-Party Beneficiaries...............................................52
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Section 9.10 Actions by Noteholders..................................................52
Section 9.11 Rule 144A Information...................................................53
Section 9.12 Merger and Integration..................................................53
Section 9.13 No Bankruptcy Petition..................................................53
Section 9.14 Rights of Indenture Trustee.............................................53
Section 9.15 Rights of Owner Trustee.................................................53
EXHIBITS
--------
EXHIBIT A Form of Assignment of Receivables in Additional Accounts ...........................A-1
EXHIBIT B Form of Reassignment of Receivables in Removed Accounts ............................B-1
EXHIBIT C Form of Annual Servicer's Certificate...............................................C-1
EXHIBIT D-1 Form of Opinion of Counsel with Respect to Amendments.............................D-1-1
EXHIBIT D-2 Form of Opinion of Counsel with Respect to Addition of
Supplemental Accounts.............................................................D-2-1
EXHIBIT D-3 Provisions to be Included in Annual Opinion of Counsel............................D-3-1
SCHEDULES
---------
SCHEDULE 1 List of Accounts 1-1
iii
TRANSFER AND SERVICING AGREEMENT, dated as of August 1, 2001 (this
"AGREEMENT"), among WFN CREDIT COMPANY, LLC, a Delaware limited liability
company, as Transferor, WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association, as Servicer, and WORLD FINANCIAL NETWORK CREDIT CARD MASTER
NOTE TRUST, a business trust organized under the laws of the State of Delaware,
as Issuer.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Noteholders and any
Enhancement Provider to the extent provided herein, in the Indenture and in any
Indenture Supplement:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein are defined in ANNEX A to the Master Indenture, dated
as of the date hereof, between World Financial Network Credit Card Master Note
Trust and BNY Midwest Trust Company.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. All terms defined directly
or by reference in this Agreement shall have the defined meanings when used in
any certificate or other document delivered pursuant hereto unless otherwise
defined therein. For purposes of this Agreement and all such certificates and
other documents, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under GAAP; (b) terms defined in Article 9 of the UCC as in effect in the
State of Delaware and not otherwise defined in this Agreement are used as
defined in that Article; (c) any reference to each Rating Agency shall only
apply to any specific rating agency if such rating agency is then rating any
outstanding Series; (d) references to any amount as on deposit or outstanding on
any particular date means such amount at the close of business on such day; (e)
the words "hereof," "herein" and "hereunder" and words of similar import refer
to this Agreement (or the certificate or other document in which they are used)
as a whole and not to any particular provision of this Agreement (or such
certificate or document); (f) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement (or the
certificate or other document in which the reference is made), and references to
any paragraph, Section, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (g) the term "including" means "including without
limitation"; (h) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (i) references to any Person include that Person's successors and
assigns; and (j) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
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ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.1 CONVEYANCE OF RECEIVABLES. (a) By execution of this
Agreement, Transferor does hereby transfer, assign, set over and otherwise
convey to Issuer, without recourse except as provided herein, all its right,
title and interest in, to and under (a) the Collateral Certificate, and (b)
effective on the Certificate Trust Termination Date, (i) the Receivables
existing at the opening of business on the Certificate Trust Termination Date,
and thereafter created from time to time until the termination of Issuer, all
Collections and Recoveries allocable to Issuer as provided herein and the right
to any Enhancement with respect to any Series, in each case together with all
monies due or to become due and all amounts received or receivable with respect
thereto and all proceeds thereof and Insurance Proceeds relating thereto and
(ii) without limiting the generality of the foregoing or the following, all of
Transferor's rights pursuant to the Receivables Purchase Agreement to receive
from the RPA Seller payments made by any Merchant under any Credit Card
Processing Agreement on account of amounts received by such Merchant in payment
of Receivables ("IN-STORE PAYMENTS") and all proceeds of such rights. Such
property, together with all monies and other property credited to the Collection
Account, the Series Accounts and the Excess Funding Account (including any
subaccounts of any such account) and the rights of Issuer under this Agreement
and the Trust Agreement shall constitute the assets of Issuer (the "TRUST
ASSETS"). The foregoing does not constitute and is not intended to result in the
creation or assumption by Issuer, Owner Trustee, Indenture Trustee or any
Noteholder of any obligation of any Credit Card Originator, Servicer, Transferor
or any other Person in connection with the Accounts or the Receivables or under
any agreement or instrument relating thereto, including any obligation to
Obligors, merchant banks, merchants, clearance systems or insurers. Effective on
the Certificate Trust Termination Date, Transferor does hereby further transfer,
assign, set over and otherwise convey to Issuer all of its right, title and
interest in and under the Receivables Purchase Agreement.
(b) On or prior to the Initial Closing Date, Transferor shall
deliver to Issuer a registered certificate representing the Collateral
Certificate. On or prior to the Certificate Trust Termination Date, Transferor
agrees to record and file, at its own expense, financing statements (and
continuation statements when applicable) with respect to the Receivables
conveyed by Transferor existing on the Certificate Trust Termination Date and
thereafter created meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect, and maintain the
perfection of, the transfer and assignment of its interest in such Receivables
to Issuer, and to deliver a file stamped copy of each such financing statement
or other evidence of such filing (which may, for purposes of this SECTION 2.1
consist of telephone confirmation of such filing promptly followed by delivery
to Owner Trustee of a file-stamped copy) to Owner Trustee as soon as practicable
after the Certificate Trust Termination Date, and (if any additional filing is
so necessary) as soon as practicable after the applicable Addition Date,
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in the case of Receivables arising in Supplemental Accounts and any related
Automatic Additional Accounts. Owner Trustee shall be under no obligation
whatsoever to file such financing or continuation statements or to make any
other filing under the UCC in connection with such transfer and assignment.
(c) Transferor further agrees, at its own expense, (i) on or prior
to (w) the Certificate Trust Termination Date, (x) the Automatic Addition
Termination Date or any Automatic Addition Suspension Date, or subsequent
Restart Date, in the case of the Accounts designated pursuant hereto prior to
such date, (y) the applicable Addition Date, in the case of Supplemental
Accounts and (z) the applicable Removal Date, in the case of Removed Accounts,
to indicate in the appropriate computer files that Receivables created (or
reassigned, in the case of Removed Accounts) in connection with the Accounts
owned by the Credit Card Originator have been conveyed to Issuer pursuant to
this Agreement (or conveyed to Transferor or its designee in accordance with
SECTION 2.7, in the case of Removed Accounts) by including in such computer
files the code identifying each such Account (or, in the case of Removed
Accounts, either including such a code identifying the Removed Accounts only if
the removal occurs prior to the Automatic Addition Termination Date or an
Automatic Addition Suspension Date, or subsequent to a Restart Date, or deleting
such code thereafter) and (ii) on or prior to the date referred to in CLAUSES
(i)(w), (x), (y) or (z), as applicable, to deliver to Issuer an Account Schedule
(PROVIDED that such Account Schedule shall be provided in respect of Automatic
Additional Accounts on or prior to the Determination Date relating to the
Monthly Period during which their respective Addition Dates occur), specifying
for each such Account, as of the Certificate Trust Termination Date, in the case
of clause (i)(w), as of the Automatic Addition Termination Date, the Automatic
Addition Suspension Date or Restart Date, in the case of clause (i)(x), the
applicable Addition Cut Off Date, in the case of Supplemental Accounts and the
Removal Date, in the case of Removed Accounts, its account number and, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables outstanding in such Account. Such Account Schedule, as
supplemented from time to time to reflect Additional Accounts and Removed
Accounts shall be marked as SCHEDULE 1 to this Agreement and is hereby
incorporated into and made a part of this Agreement. Once the code referenced in
CLAUSE (i) of this paragraph has been included with respect to any Account,
Transferor further agrees not to alter such code during the remaining term of
this Agreement unless and until (x) such Account becomes a Removed Account, (y)
a Restart Date has occurred on which Transferor starts including Automatic
Additional Accounts as Accounts or (z) Transferor shall have delivered to Issuer
at least 30 days' prior written notice of its intention to do so and has taken
such action as is necessary or advisable to cause the interest of Issuer in the
Receivables and the other Trust Assets to continue to be perfected with the
priority required by this Agreement.
(d) If the arrangements with respect to the Receivables hereunder
shall constitute a loan and not a purchase and sale of such Receivables, it is
the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable
3
law, and that Transferor shall be deemed to have granted to Issuer a first
priority perfected security interest in all of Seller's right, title and
interest, whether owned on the Certificate Trust Termination Date or thereafter
acquired, in, to and under the Receivables and the other Trust Assets conveyed
by Transferor, and all money, accounts, general intangibles, chattel paper,
instruments, documents, goods, investment property, deposit accounts,
certificates of deposit, letters of credit, and advices of credit consisting of,
arising from or related to the Trust Assets, to secure its obligations
hereunder.
Section 2.2 ACCEPTANCE BY ISSUER.
(a) Issuer hereby acknowledges its acceptance of all right, title
and interest to the property, now existing and hereafter created, conveyed to
Issuer pursuant to SECTION 2.1. Owner Trustee shall maintain a copy of SCHEDULE
1, as delivered to it from time to time, at its Corporate Trust Office.
(b) Owner Trustee hereby agrees not to disclose to any Person any
of the account numbers or other information contained in the Account Schedule
marked as SCHEDULE 1 and delivered to Owner Trustee or Issuer, from time to
time, except (i) to a Successor Servicer or as required by a Requirement of Law
applicable to Owner Trustee, (ii) in connection with the performance of Owner
Trustee's or Issuer's duties hereunder, (iii) to Indenture Trustee in connection
with its duties in enforcing the rights of Noteholders or (iv) to bona fide
creditors or potential creditors of Servicer or Transferor for the limited
purpose of enabling any such creditor to identify Receivables or Accounts
subject to this Agreement or the Receivables Purchase Agreement. Owner Trustee
agrees to take such measures as shall be reasonably requested by Transferor to
protect and maintain the security and confidentiality of such information and,
in connection therewith, shall allow Transferor or its duly authorized
representatives to inspect Owner Trustee's security and confidentiality
arrangements as they specifically relate to the administration of Issuer from
time to time during normal business hours upon prior written notice. Owner
Trustee shall promptly notify the Transferor of any request received by the
Owner Trustee to disclose information of the type described in this SECTION
2.2(b), which notice shall in any event be provided no later than five (5)
Business Days prior to disclosure of any such information unless the Owner
Trustee is compelled pursuant to a Requirement of Law to disclose such
information prior to the date that is five (5) Business Days after the giving of
such notice.
Section 2.3 REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSFEROR. Transferor hereby represents and warrants to Issuer as of each
Closing Date that:
(a) ORGANIZATION AND GOOD STANDING. Transferor is a limited
liability company validly existing in good standing under the laws of the State
of Delaware, and has full power, authority and legal right to own its properties
and conduct its business as presently owned and conducted, to execute, deliver
and perform its obligations under each Transaction Document.
4
(b) DUE QUALIFICATION. Transferor is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would render any Credit Card Agreement or any Receivable transferred
to Issuer by Transferor unenforceable by the Credit Card Originator, Transferor,
Servicer, Issuer or Indenture Trustee and would have a material adverse effect
on the interests of the Holders.
(c) DUE AUTHORIZATION. The execution, delivery and performance by
Transferor of this Agreement and each other Transaction Document to which it is
a party, the execution and delivery of the Notes by Transferor and the
consummation by Transferor of the transactions provided for in each Transaction
Document to which it is a party have been duly authorized by Transferor by all
necessary limited liability company action on the part of Transferor.
(d) NO CONFLICT. The execution and delivery by Transferor of each
Transaction Document to which it is a party and the Notes, the performance by
Transferor of the transactions contemplated by each Transaction Document to
which it is a party and the fulfillment by Transferor of the terms hereof and
thereof will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which Transferor is a party or by which it
or any of its properties are bound.
(e) NO VIOLATION. The execution and delivery by Transferor of each
Transaction Document to which it is a party and the Notes, the performance by
Transferor of the transactions contemplated by the Transaction Documents and the
fulfillment by Transferor of the terms thereof will not conflict with or violate
any Requirements of Law applicable to Transferor.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against Transferor,
before any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of any Transaction
Documents or the Notes, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by any Transaction
Documents or the Notes, (iii) seeking any determination or ruling that, in the
reasonable judgment of Transferor, would materially and adversely affect the
performance by Transferor of its obligations under any Transaction Document,
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of any Transaction Documents or the Notes
or (v) seeking to affect adversely the income tax attributes of Issuer under the
Federal or applicable state income or franchise tax systems.
(g) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in
5
connection with the execution and delivery by Transferor of each Transaction
Document and the Notes, the performance by Transferor of the transactions
contemplated by each Transaction Document, and the fulfillment of or terms
hereof and thereof, have been obtained.
(h) INSOLVENCY. No Insolvency Event with respect to Transferor has
occurred. Transferor did not (i) execute the Transaction Documents, (ii) grant
to Issuer the security interests described in SECTION 2.1, (iii) cause, permit,
or suffer the perfection or attachment of such a security interest, (iv)
otherwise effectuate or consummate any transfer to Issuer pursuant to any
Transaction Document or (v) acquire its interest in Issuer, in each case:
(A) in contemplation of insolvency;
(B) with a view to preferring one creditor over
another or to preventing the application of its assets in the
manner required by applicable law or regulations;
(C) after committing an act of insolvency; or
(D) with any intent to hinder, delay, or defraud
itself or its creditors.
The representations and warranties set forth in this SECTION 2.3 shall survive
the transfer and assignment by Transferor of the respective Receivables and
other Trust Assets to Issuer and the pledge thereof to Indenture Trustee
pursuant to the Indenture. Upon discovery by Transferor, Servicer or Owner
Trustee of a breach of any of the representations and warranties set forth in
this SECTION 2.3, the party discovering such breach shall give prompt written
notice to the others and each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Indenture Supplement. Transferor agrees to cooperate
with Servicer and Owner Trustee in attempting to cure any such breach. For
purposes of the representations and warranties set forth in this SECTION 2.3,
each reference to an Indenture Supplement shall be deemed to refer only to those
Indenture Supplements in effect as of the relevant Closing Date.
Section 2.4 REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSACTION DOCUMENTS AND THE RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. Transferor represents and
warrants to Issuer as of the date of the Initial Closing Date, each Closing
Date, the Certificate Trust Termination Date and, with respect to Additional
Accounts, the related Addition Date that:
(i) each Transaction Document and, in the case of
Supplemental Accounts, the related Assignment, each constitutes a
legal, valid and binding
6
obligation of Transferor, enforceable against Transferor in accordance
with its terms, except as such enforceability may be limited by
applicable Debtor Relief Laws now or hereafter in effect and by general
principles of equity (whether considered in a suit at law or in
equity);
(ii) as of the Automatic Addition Termination Date or any
Automatic Addition Suspension Date and as of each subsequent Addition
Date with respect to Supplemental Accounts, and as of the applicable
Removal Date with respect to the Removed Accounts, the Account Schedule
delivered pursuant to this Agreement, as supplemented to such date, is
an accurate and complete listing in all material respects of all the
Accounts as of such Automatic Addition Termination Date, such Automatic
Addition Suspension Date, the related Addition Cut Off Date or such
Removal Date, as the case may be, and the information contained therein
with respect to the identity of such Accounts and the Receivables
existing in such Accounts is true and correct in all material respects
as of such specified date;
(iii) Transferor is the legal and beneficial owner of all
right, title and interest in each Receivable and Transferor has the
full right to transfer such Receivables to Issuer, and each Receivable
conveyed to Issuer by Transferor has been conveyed to Issuer free and
clear of any Lien of any Person claiming through or under Transferor or
any of its Affiliates (other than Liens permitted under SECTION 2.5(b))
and in compliance, in all material respects, with all Requirements of
Law applicable to Transferor;
(iv) all authorizations, consents, orders or approvals of
or registrations or declarations with any Governmental Authority
required to be obtained, effected or given by Transferor in connection
with the conveyance by Transferor of the Collateral Certificate and
Receivables to Issuer have been duly obtained, effected or given and
are in full force and effect;
(v) the transfer and assignment of the Collateral
Certificate herein contemplated constitutes either (i) a sale of the
Collateral Certificate, (ii) a grant of a perfected security interest
therein from Transferor to Issuer or (iii) a grant of a perfected
security interest therein from Transferor to Indenture Trustee. The
Collateral Certificate has not been sold, transferred, assigned or
pledged by Transferor to any Person other than pursuant to this
Agreement. Immediately prior to the transfer and assignment herein
contemplated, Transferor had good and marketable title to the
Collateral Certificate, free and clear of all Liens and rights of
others and, immediately upon the transfer thereof, Issuer shall have
good and marketable title to the Collateral Certificate, free and clear
of all Liens and rights of others or a first priority perfected
security interest therein; and the transfer has been perfected, by the
filing of appropriate financing statements pursuant to the
7
UCC, under the UCC. Transferor has no knowledge of any current
statutory or other non-consensual liens to which the Collateral
Certificate is subject.
(vi) all actions necessary under the applicable UCC in any
jurisdiction to be taken (A) to give Issuer a first priority perfected
security interest or ownership interest in the Collateral Certificate,
and (B) to give Indenture Trustee a first priority perfected security
interest in the Collateral (including, without limitation, UCC filings
with the Delaware Secretary of State), in each case subject to any
statutory or other non-consensual liens with respect to the Collateral
Certificate, have been taken. Transferor has no knowledge of any
current statutory or other non-consensual liens to which the Collateral
Certificate is subject.
(vii) this Agreement or, in the case of Supplemental
Accounts, the related Assignment constitutes either a valid sale,
transfer and assignment to Issuer of all right, title and interest of
Transferor in the Receivables and other Trust Assets conveyed to Issuer
by Transferor and all monies due or to become due with respect thereto
and the proceeds thereof or a grant of a security interest in such
property to Issuer, which, (A) with respect to Receivables existing on
the Certificate Trust Termination Date and the proceeds thereof, is
enforceable upon the Certificate Trust Termination Date, or (B) with
respect to the then existing Receivables in Additional Accounts, as of
the applicable Addition Date, and which will be enforceable with
respect to such Receivables thereafter created and the proceeds thereof
upon such creation, in each case except as such enforceability may be
limited by applicable Debtor Relief Laws, now or hereafter in effect,
and by general principles of equity (whether considered in a suit at
law or in equity). Upon the filing of the financing statements pursuant
to SECTION 2.1 and, in the case of Receivables hereafter created and
the proceeds thereof, upon the creation thereof, Issuer shall have a
first priority perfected security interest in such property and
proceeds except for Liens permitted under SECTION 2.5(b);
(viii) except as otherwise expressly provided in this
Agreement, the Indenture or any Indenture Supplement, neither
Transferor nor any Person claiming through or under Transferor has any
claim to or interest in the Collection Account, the Excess Funding
Account, any Series Account or any Enhancement;
(ix) on the date of its creation or the date it otherwise
becomes an Automatic Additional Account, with respect to each Automatic
Additional Account and, on the applicable Addition Cut Off Date, with
respect to each related Supplemental Account, each such Account is an
Eligible Account;
(x) on the date of creation of each Automatic Additional
Account or the date the related account otherwise becomes an Automatic
Additional Account, each Receivable contained in such Automatic
Additional Account is an Eligible
8
Receivable and, on the applicable Addition Cut Off Date, each
Receivable contained in any related Supplemental Account is an Eligible
Receivable; and
(xi) as of the date of the creation of any new Receivable,
such Receivable is an Eligible Receivable.
(b) As of the Certificate Trust Termination Date, Transferor
agrees that (i) all representations and warranties made by it in its capacity as
Transferor under the Pooling and Servicing Agreement with respect to any Account
or Receivable pursuant to SECTION 2.4(a) of the Pooling and Servicing Agreement
and (ii) all of the covenants made by it under SECTION 2.7 of the Pooling and
Servicing Agreement, in each case, shall be deemed for all purposes (including
the reassignment obligations under SECTION 2.4(d)) to have been made by
Transferor to Issuer pursuant to this Agreement as of the day when each was made
or deemed made, as if this Agreement had been in effect on that day.
(c) NOTICE OF BREACH. The representations and warranties of
Transferor set forth in this SECTION 2.4 shall survive the transfer and
assignment by Transferor of the Collateral Certificate and Receivables to Issuer
and the pledge thereof to Indenture Trustee pursuant to the Indenture. Upon
discovery by Transferor, Servicer or a Responsible Officer of Owner Trustee of a
breach of any of the representations and warranties by Transferor set forth in
this SECTION 2.4, the party discovering such breach shall give prompt written
notice to the others and to each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Indenture Supplement. Transferor agrees to cooperate
with Servicer and Owner Trustee in attempting to cure any such breach. For
purposes of the representations and warranties set forth in this SECTION 2.4,
each reference to an Indenture Supplement shall be deemed to refer only to those
Indenture Supplements in effect as of the date of the relevant representations
or warranties.
(d) REASSIGNMENT OF INELIGIBLE RECEIVABLES. If (i) any
representation or warranty of Transferor contained in SECTION 2.4(a)(ii), (iii),
(iv), (ix), (x) or (xi) or any representation or warranty of Transferor (as
defined in the Pooling and Servicing Agreement) contained in SECTION 2.4(a)(ii),
(iii), (iv), (vii), (viii) or (ix) of the Pooling and Servicing Agreement and
deemed made under this Agreement pursuant to SECTION 2.4(b) of this Agreement is
not true and correct in any material respect as of the date specified therein
with respect to any Receivable transferred to Issuer by Transferor or any
Account and as a result of such breach any Receivables in the related Account
become Defaulted Receivables or Issuer's rights in, to or under such Receivables
or the proceeds of such Receivables are impaired or such proceeds are not
available for any reason to Issuer free and clear of any Lien, unless cured
within 60 days (or such longer period, not in excess of 150 days, as may be
agreed to by Indenture Trustee) after the earlier to occur of the discovery
thereof by Transferor or receipt by Transferor or a designee of Transferor of
notice thereof given by Indenture Trustee, or (ii) it is so provided in SECTION
2.5(a) with respect to any Receivables transferred to Issuer by Transferor, then
such Receivable shall be designated an "INELIGIBLE RECEIVABLE" and shall be
assigned a
9
principal balance of zero for the purpose of determining the aggregate amount of
Principal Receivables on any day; PROVIDED that such Receivables will not be
deemed to be Ineligible Receivables but will be deemed Eligible Receivables and
such Principal Receivables shall be included in determining the aggregate
Principal Receivables in Issuer if, on any day prior to the end of such 60-day
or longer period, (x) either (A) in the case of an event described in CLAUSE
(i), the relevant representation and warranty shall be true and correct in all
material respects as if made on such day or (B) in the case of an event
described in CLAUSE (ii), the circumstances causing such Receivable to become an
Ineligible Receivable shall no longer exist and (y) Transferor shall have
delivered an Officer's Certificate describing the nature of such breach and the
manner in which the relevant representation and warranty became true and
correct.
(e) PRICE OF REASSIGNMENT. On and after the date of its
designation as an Ineligible Receivable, each Ineligible Receivable shall not be
given credit in determining the aggregate amount of Principal Receivables used
to calculate the Transferor Amount or the Allocation Percentages applicable to
any Series. If, following the exclusion of such Principal Receivables from the
calculation of the Transferor Amount, the Transferor Amount would be less than
the Specified Transferor Amount, Transferor shall make a deposit into the Excess
Funding Account in immediately available funds prior to the next succeeding
Business Day in an amount equal to the amount by which the Transferor Amount
would be less than the Specified Transferor Amount (up to the amount of such
Principal Receivables). The payment of such deposit amount in immediately
available funds shall otherwise be considered payment in full of all of the
Ineligible Receivables.
The obligation of Transferor to make the deposits, if any, required to
be made to the Excess Funding Account as provided in this Section, shall
constitute the sole remedy respecting the event giving rise to such obligation
available to Issuer, Owner Trustee, the Holders (or Indenture Trustee on behalf
of the Noteholders) or any Enhancement Provider.
(f) REASSIGNMENT OF RECEIVABLES IN TRUST PORTFOLIO. If any
representation or warranty of Transferor contained in SECTION 2.3(a), (b) or (c)
or SECTION 2.4(a)(i), (vii) or (viii) of this Agreement, or any representation
or warranty of Transferor (as defined in the Pooling and Servicing Agreement)
contained in Section 2.4(a)(i), (v) or (vi) of the Pooling and Servicing
Agreement and deemed made under this Agreement pursuant to SECTION 2.4(b) of
this Agreement, is not true and correct in any material respect and such breach
has a material adverse effect on the Receivables transferred to Issuer by
Transferor or the availability of the proceeds thereof to Issuer, then any of
Issuer, Indenture Trustee or the Majority Holders, by notice then given to
Transferor and Servicer (and to Indenture Trustee if given by the Noteholders),
may direct Transferor to accept a reassignment of the Receivables transferred to
Issuer by Transferor if such breach and any material adverse effect caused by
such breach is not cured within 60 days of such notice (or within such longer
period, not in excess of 150 days, as may be specified in such notice), and upon
those conditions Transferor shall be obligated to
10
accept such reassignment on the terms set forth below; PROVIDED that such
Receivables will not be reassigned to Transferor if, on any day prior to the end
of such 60-day or longer period (i) the relevant representation and warranty
shall be true and correct in all material respects as if made on such day and
(ii) Transferor shall have delivered an Officer's Certificate describing the
nature of such breach and the manner in which the relevant representation and
warranty became true and correct.
Transferor shall deposit in the Collection Account in immediately
available funds not later than 12:00 noon, New York City time, on the first
Distribution Date following the Monthly Period in which such reassignment
obligation arises, in payment for such reassignment, an amount equal to the sum
of the amounts specified therefor with respect to each outstanding Series in the
related Indenture Supplement. Notwithstanding anything to the contrary in this
Agreement, such amounts shall be distributed on such Distribution Date in
accordance with the Indenture and each Indenture Supplement. The payment of such
deposit amount in immediately available funds shall otherwise be considered
payment in full of all of the Receivables.
Upon the deposit, if any, required to be made to the Collection Account
as provided in this SECTION 2.4(f), Issuer shall automatically and without
further action be deemed to transfer, assign, set over and otherwise convey to
Transferor or its designee, without recourse, representation or warranty, all
the right, title and interest of Issuer in and to the applicable Receivables,
all moneys due or to become due and all amounts received with respect thereto
and all proceeds thereof. Issuer shall execute such documents and instruments of
transfer or assignment and take such other actions as shall reasonably be
requested by Transferor to effect the conveyance of such Receivables pursuant to
this Section. The obligation of Transferor to accept reassignment of any
Receivables, and to make the deposits, if any, required to be made to the
Collection Account as provided in this Section, shall constitute the sole remedy
respecting the event giving rise to such obligation available to Issuer, Owner
Trustee, the Holders (or Indenture Trustee on behalf of the Noteholders).
Section 2.5 COVENANTS OF TRANSFEROR. Transferor hereby covenants that:
(a) RECEIVABLES TO BE ACCOUNTS. Except in connection with the
enforcement or collection of an Account, Transferor will take no action to cause
any Receivable transferred by it to the Trust to be evidenced by any instrument
and, if any such Receivable is so evidenced (whether or not in connection with
the enforcement or collection of an Account), it shall be deemed to be an
Ineligible Receivable in accordance with SECTION 2.4(d) and shall be reassigned
to Transferor in accordance with SECTION 2.4(e).
(b) SECURITY INTERESTS. Except for the conveyances hereunder,
Transferor will not sell, pledge, assign or transfer or otherwise convey to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on any
Receivable, whether now existing or hereafter created, or any interest therein;
Transferor will immediately notify Issuer and
11
Indenture Trustee of the existence of any Lien on any Receivable of which
Transferor has knowledge; and Transferor shall defend the right, title and
interest of the Issuer and Indenture Trustee in, to and under the Receivables,
whether now existing or hereafter created, against all claims of third parties
claiming through or under Transferor or RPA Seller; PROVIDED that nothing in
this SECTION 2.5(b) shall prevent or be deemed to prohibit Transferor from
suffering to exist upon any of the Receivables any Liens for taxes if such taxes
shall not at the time be due and payable or if Transferor or RPA Seller, as
applicable, shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
with respect thereto. Notwithstanding the foregoing, nothing in this SECTION
2.5(b) shall be construed to prevent or be deemed to prohibit the transfer of
the Transferor Interest in accordance with this Agreement and the Trust
Agreement.
(c) THE TRANSFEROR INTEREST. Except as otherwise permitted herein
and in the Trust Agreement, including in SECTIONS 2.9 and 4.2 of this Agreement
and in Section 3.4 of the Trust Agreement, Transferor agrees not to transfer,
assign, exchange or otherwise convey or pledge, hypothecate or otherwise grant a
security interest in the Transferor Interest (or any interest therein) or any
Supplemental Interest (or any interest therein) and any such attempted transfer,
assignment, exchange, conveyance, pledge, hypothecation or grant shall be void.
(d) DELIVERY OF COLLECTIONS OR RECOVERIES. If Transferor receives
Collections or Recoveries, then Transferor agrees to pay Servicer all such
Collections and Recoveries as soon as practicable after receipt thereof but in
no event later than two Business Days after the Date of Processing by
Transferor.
(e) NOTICE OF LIENS. Transferor shall notify Issuer, Indenture
Trustee and each Enhancement Provider, if any, entitled to such notice pursuant
to the relevant Indenture Supplement promptly after becoming aware of any Lien
on any Receivable other than the conveyances hereunder or Liens permitted under
SECTION 2.5(b).
(f) CONTINUOUS PERFECTION. Transferor shall not change its name,
identity or structure in any manner that might cause any financing or
continuation statement filed pursuant to this Agreement to be misleading within
the meaning of Section 9-402(7) of the UCC (or any other then applicable
provision of the UCC) unless Transferor shall have delivered to Issuer at least
30 days prior written notice thereof and, no later than 30 days after making
such change, shall have taken all action necessary or advisable to amend such
financing statement or continuation statement so that it is not misleading.
Transferor shall not change the jurisdiction under whose laws it is organized,
its chief executive office or the location of its principal records concerning
the Receivables, the Trust Assets or the Collections unless it has delivered to
Issuer at least 30 days prior written notice of its intention to do so and has
taken such action as is necessary or advisable to cause the interest of Issuer
in the Receivables and other Trust Assets to continue to be perfected with the
priority required by this Agreement.
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(g) CREDIT CARD AGREEMENT AND GUIDELINES. Transferor shall enforce
the covenant in the Receivables Purchase Agreement requiring the Credit Card
Originator to comply with and perform its obligations under the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines except
insofar as any failure to comply or perform would not materially or adversely
affect the rights of the Trust or the Holders under any Transaction Document or
the Certificates. Transferor may permit the Credit Card Originator to change the
terms and provisions of the Credit Card Agreements or the Credit Card Guidelines
in any respect (including the reduction of the required minimum monthly payment,
the calculation of the amount, or the timing, of charge offs and Periodic
Finance Charges and other fees assessed thereon), but only if such change is
made applicable to any comparable segment of the revolving credit card accounts
owned and serviced by the Credit Card Originator which have characteristics the
same as, or substantially similar to, the Accounts that are the subject of such
change, except as otherwise restricted by an endorsement, sponsorship or other
agreement between the Credit Card Originator and an unrelated third party or by
the terms of the Credit Card Agreements.
(h) RECEIVABLES PURCHASE AGREEMENT. Transferor, in its capacity as
Purchaser of Receivables from the RPA Seller under the Receivables Purchase
Agreement, shall enforce the covenants and agreements of the RPA Seller set
forth in such Receivables Purchase Agreement, where a failure of the RPA Seller
to comply would have an Adverse Effect.
(i) ACCOUNT ALLOCATIONS. If Transferor is unable for any reason
to transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including by reason of the application of the provisions of
SECTION 6.1 or an order by any Federal governmental agency having regulatory
authority over Transferor or any court of competent jurisdiction that
Transferor not transfer any additional Principal Receivables to the Issuer)
then, in any such event: (A) Transferor agrees to allocate and pay to the
Issuer, after the date of such inability, all Collections with respect to
Principal Receivables, all Discount Option Receivables Collections, and all
amounts which would have constituted Collections with respect to Principal
Receivables and all Discount Option Receivables Collections but for
Transferor's inability to transfer such Receivables (up to an aggregate
amount equal to the amount of Principal Receivables and the Discount Option
Receivables Amount in the Trust on such date); (B) Transferor agrees to have
such amounts applied as Collections in accordance with Article VIII of the
Indenture; and (C) for only so long as all Collections and all amounts which
would have constituted Collections are allocated and applied in accordance
with CLAUSES (A) and (B), Principal Receivables and Discount Option
Receivables (and all amounts which would have constituted Principal
Receivables or Discount Option Receivables, as the case may be, but for
Transferor's inability to transfer Receivables to the Trust) that are charged
off as uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with Article VIII of the Indenture, and all amounts
that would have constituted Principal Receivables or Discount Option
Receivables, as the case may be,
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but for Transferor's inability to transfer Receivables to the Trust shall be
deemed to be Principal Receivables or Discount Option Receivables, as the
case may be, for the purpose of calculating the applicable Allocation
Percentage with respect to any Series. If Transferor is unable pursuant to
any Requirement of Law to allocate Collections as described above, Transferor
agrees that it shall in any such event allocate, after the occurrence of such
event, payments on each Account with respect to the principal balance of such
Account first to the oldest principal balance of such Account and to have
such payments applied as Collections in accordance with Article VIII of the
Indenture. The parties hereto agree that Finance Charge Receivables, whenever
created, accrued in respect of Principal Receivables that have been conveyed
to the Trust, or that would have been conveyed to the Trust but for the above
described inability to transfer such Receivables, shall continue to be a part
of the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables and Discount Option Receivables to the Trust, and
Collections with respect thereto shall continue to be allocated and paid in
accordance with Article VIII of the Indenture.
(j) PERIODIC FINANCE CHARGES AND OTHER FEES. Transferor hereby
agrees that, except as otherwise required by any Requirement of Law, or as is
deemed by the Credit Card Originator to be necessary in order for it to maintain
its credit card business, based upon the Credit Card Originator's good faith
assessment, in its sole discretion, of the nature of the competition in the
credit card business, it shall not at any time permit the Credit Card Originator
to reduce the Periodic Finance Charges assessed on any Receivable or other fees
on any Account if, as a result of such reduction, Transferor's reasonable
expectation of the Portfolio Yield for any Series as of such date would be less
than the then Base Rate for that Series.
(k) NOTICES OF CERTAIN EVENTS. Transferor shall promptly notify
each Rating Agency after Transferor obtains knowledge that: (i) the Welsh,
Carson, Anderson & Stowe Partnerships and The Limited and its Affiliates (in the
aggregate) fail to own a majority of the outstanding common stock of Holding
(PROVIDED that common stock owned by employees, either individually or through
employee stock ownership or other stock based benefit plans, shall not be
included in the calculation of ownership interests for this purpose); (ii) any
Merchant whose program gives rise to more than 10% of the Principal Receivables
(measured as of the end of the most recent Monthly Period) terminates its
private label credit card program with WFN; (iii) Indenture Trustee gives a
resignation notice pursuant to Section 6.8 of the Indenture; or (iv) an
Additional Limitation Event or an Automatic Addition Limitation Event occurs.
(l) SALE TREATMENT. Transferor agrees to treat the conveyance
hereunder of the Collateral Certificate and the proceeds thereof and the
Receivables and the proceeds thereof as a sale for accounting purposes.
(m) AMENDMENT OF THE ORGANIZATIONAL DOCUMENTS. Transferor shall
not amend in any material respect its certificate of formation or its limited
liability company
14
agreement without providing the Rating Agencies with notice no later than the
fifth Business Day prior to such amendment (unless the right to such notice is
waived by the Rating Agency) and satisfying the Rating Agency Condition.
(n) OTHER INDEBTEDNESS. Except as contemplated by the Receivables
Purchase Agreement, Transferor shall not incur any additional debt, unless (i)
such debt is contemplated by the Transaction Documents or (ii) the Rating
Agencies are provided with notice no later than the fifth Business Day prior to
the incurrence of such additional debt (unless the right to such notice is
waived by the Rating Agency) and the Rating Agency Condition is satisfied with
respect to the incurrence of such debt.
(o) SEPARATE CORPORATE EXISTENCE. Transferor shall:
(i) Maintain in full effect its existence, rights and
franchises as a limited liability company under the laws of the state
of its organization and will obtain and preserve its qualification to
do business in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this
Agreement and the Receivables Purchase Agreement and each other
instrument or agreement necessary or appropriate to proper
administration hereof and permit and effectuate the transactions
contemplated hereby.
(ii) Except as provided herein, maintain its own deposit,
securities and other account or accounts, separate from those of any
Affiliate of Transferor, with financial institutions. The funds of
Transferor shall not be diverted to any other Person or for other than
the corporate use of Transferor, and, except as may be expressly
permitted by this Agreement or the Receivables Purchase Agreement, the
funds of Transferor shall not be commingled with those of any other
person or entity.
(iii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or Affiliates,
the salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary
and benefit costs associated with all such common officers and
employees.
(iv) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with vendors
or service providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among entities, and each such
entity shall bear its fair share of such costs. To the extent that
Transferor contracts or does business with vendors or service providers
where the goods and services provided are partially for the benefit of
any other Person, the costs incurred in so doing shall be fairly
allocated to or among such entities for whose benefit the goods and
services are provided, and each such entity shall bear its fair share
of such costs. All material transactions between Transferor and any of
its Affiliates shall be only on an arm's-length basis and
15
shall receive the approval of Transferor's Board of Directors including
at least one Independent Director (defined below).
(v) Maintain a principal executive and administrative
office through which its business is conducted and a telephone number
separate from those of its stockholders and Affiliates. To the extent
that Transferor and any of its members or Affiliates have offices in
contiguous space, there shall be fair and appropriate allocation of
overhead costs (including rent) among them, and each such entity shall
bear its fair share of such expenses.
(vi) Conduct its affairs strictly in accordance with its
certificate of formation and observe all necessary, appropriate and
customary corporate formalities including, but not limited to, holding
all regular and special directors' meetings appropriate to authorize
all limited liability company action, keeping separate and accurate
minutes of such meetings, passing all resolutions or consents necessary
to authorize actions taken or to be taken, and maintaining accurate and
separate books, records and accounts, including, but not limited to,
intercompany transaction accounts. Regular directors' meetings shall be
held at least annually.
(vii) Ensure that its board of directors shall at all times
include at least two Independent Directors (for purposes hereof,
"INDEPENDENT DIRECTOR" shall mean any member of the board of directors
of such Transferor that is not and has not at any time been (x) an
officer, agent, advisor, consultant, attorney, accountant, employee or
shareholder of any Affiliate which is not a special purpose entity of
such Transferor, (y) a director of any Affiliate of such Transferor
other than an independent director of any Affiliate which is a special
purpose entity or (z) a member of the immediate family of any of the
foregoing.
(viii) Ensure that decisions with respect to its business
and daily operations shall be independently made by Transferor
(although the officer making any particular decision may also be an
officer or director of an Affiliate of Transferor) and shall not be
dictated by any Affiliate of Transferor.
(ix) Act solely in its own legal name and through its own
authorized officers and agents, and, except as contemplated by the
Transaction Documents, no Affiliate of Transferor shall be appointed to
act as agent of Transferor. Transferor shall at all times use its own
stationery and business forms and describe itself as a separate legal
entity.
(x) Ensure that none of its Affiliates shall advance
funds to it, and no Affiliate of Transferor will otherwise guaranty its
debts.
16
(xi) Other than organizational expenses and as expressly
provided herein, pay all expenses, indebtedness and other obligations
incurred by it using its own funds.
(xii) Not enter into any guaranty, or otherwise become
liable, with respect to or hold its assets or creditworthiness out as
being available for the payment of any obligation of any of its
Affiliates.
(xiii) Ensure that any financial reports required of
Transferor shall comply with GAAP and shall be issued separately from,
but may be consolidated with, any reports prepared for any of its
Affiliates so long as such consolidated reports contain footnotes
identifying Transferor as a separate entity and describing the effect
of the transactions between Transferor and such Affiliate.
(xiv) Ensure that at all times it is adequately capitalized
to engage in the transactions contemplated in its certificate of
formation and limited liability company agreement.
Section 2.6 ADDITION OF ACCOUNTS.
(a) AUTOMATIC ADDITIONAL ACCOUNTS. Subject to the limitations
specified below in this SECTION 2.6(a) and to any further limitations specified
in any Indenture Supplement, Automatic Additional Accounts shall be included as
Accounts from and after the date upon which they are created, and all
Receivables in Automatic Additional Accounts purchased by Transferor pursuant to
the Receivables Purchase Agreement, whether such Receivables are then existing
or thereafter created, shall be transferred automatically to the Trust upon
their creation. For all purposes of this Agreement, all receivables relating to
Automatic Additional Accounts shall be treated as Receivables upon their
creation and shall be subject to the eligibility criteria specified in the
definitions of "Eligible Receivable" and "Eligible Account." Transferor may
elect at any time to terminate the inclusion in Accounts of new accounts which
would otherwise be Automatic Additional Accounts as of any Business Day (the
"AUTOMATIC ADDITION TERMINATION DATE"), or suspend any such inclusion as of any
Business Day (an "AUTOMATIC ADDITION SUSPENSION DATE") until a date (the
"RESTART DATE") to be notified in writing by Transferor to Issuer by delivering
to Issuer, Indenture Trustee, Servicer and each Rating Agency ten days prior
written notice of such election at least 10 days prior to such Automatic
Addition Termination Date, Automatic Addition Suspension Date or Restart Date,
as the case may be. Promptly after each of an Automatic Addition Termination
Date, an Automatic Addition Suspension Date and a Restart Date, Transferor and
Issuer agree to execute, and Transferor agrees to record and file at its own
expense, an amendment to the financing statements referred to in SECTION 2.1 to
specify the accounts then subject to this Agreement (which specification may
incorporate a list of accounts by reference) and, except in connection with any
such filing made after a Restart Date, to release any security interest in any
accounts created after the Automatic Addition Termination Date or Automatic
Addition Suspension Date. Notwithstanding
17
the foregoing, during any period after an Automatic Addition Limitation Event
has occurred and before the Rating Agency Condition has been satisfied as to the
resumption of treating new accounts as Automatic Additional Accounts, no new
accounts that would otherwise be Automatic Additional Accounts shall be treated
as such on any Addition Date if the number of such Automatic Additional Accounts
would exceed an amount equal to the lesser of:
(i) the excess (if any) of (1) 20% of the aggregate
number of Accounts determined as of the first day of the fiscal year of
Transferor in which the Addition Date occurs OVER (2) the aggregate
amount of Automatic Additional Accounts and Supplemental Accounts the
Addition Date for which has occurred since the first day of such fiscal
year (including, with respect to the fiscal year in which the
Certificate Trust Termination Date occurs, the amount of "Automatic
Additional Accounts" and "Supplemental Accounts" under (and as defined
in the Pooling and Servicing Agreement), the Addition Date (as defined
in the Pooling and Servicing Agreement) for which has occurred since
the first day of such fiscal year); and
(ii) the excess (if any) of (1) 15% of the aggregate
number of Accounts determined as of the first day of the fiscal quarter
of Transferor in which the Addition Date occurs OVER (2) the aggregate
amount of Automatic Additional Accounts and Supplemental Accounts the
Addition Date for which has occurred since the first day of such fiscal
quarter (including, with respect to the fiscal year in which the
Certificate Trust Termination Date occurs, the amount of "Automatic
Additional Accounts" and "Supplemental Account" under (and as defined
in) the Pooling and Servicing Agreement, the Addition Date (as defined
in the Pooling and Servicing Agreement) for which has occurred since
the first day of such fiscal quarter).
In addition, during any period after an Additional Limitation Event has
occurred and before the Rating Agency Condition has been satisfied as to the
resumption of treating new accounts as Automatic Additional Accounts, no new
accounts that would otherwise be Automatic Additional Accounts shall be treated
as such on any Addition Date if:
(i) the aggregate balance of Receivables in Automatic
Additional Accounts and Supplemental Accounts designated during a
twelve month (or shorter) period beginning on the Additional Limitation
Event (or any anniversary thereof) would exceed an amount equal to the
excess (if any) of 20% of the aggregate balance of Receivables
determined as of the first day after the Additional Limitation Event
(or such anniversary); or
(ii) the aggregate balance of Receivables in Automatic
Additional Accounts and Supplemental Accounts designated during a three
month (or shorter) period beginning on the Additional Limitation Event
(or the first day of
18
the third month commencing thereafter or of any ensuing third month)
would exceed 15% of the aggregate balance of Receivables determined as
of the first day after the occurrence of the Additional Limitation
Event (or the first day of such third month or ensuing third month).
(b) REQUIRED ADDITIONS OF SUPPLEMENTAL ACCOUNTS. On or after the
Certificate Trust Termination Date, if during any period of thirty consecutive
days, the Transferor Amount averaged over that period is less than the Minimum
Transferor Amount for that period, Transferor shall designate additional
Eligible Accounts ("SUPPLEMENTAL ACCOUNTS") to be included as Accounts in a
sufficient amount such that the average of the Transferor Amount for such 30-day
period, computed by assuming that the amount of the Principal Receivables of
such Supplemental Accounts shall be deemed to be outstanding in the Trust during
each day of such 30-day period, is at least equal to the Minimum Transferor
Amount. For purposes of the preceding sentence, the terms "Transferor Amount"
and "Minimum Transferor Amount" shall have the meanings ascribed to such terms
as set forth in the Pooling and Servicing Agreement with respect to any day
falling in the period prior to the Certificate Trust Termination Date. In
addition, if on any Business Day on or after the Certificate Trust Termination
Date, the Aggregate Principal Balance is less than the Required Principal
Balance, Transferor shall designate Supplemental Accounts from any Approved
Portfolio to be included as Accounts in a sufficient amount such that the
Aggregate Principal Balance will be equal to or greater than the Required
Principal Balance. Receivables from all such Supplemental Accounts shall be
transferred to the Trust on or before the fifth Business Day following such
thirty-day period or Business Day, as the case may be. In lieu of, or in
addition to, designating Supplemental Accounts as required above, Transferor may
convey to the Trust participations or trust certificates representing undivided
legal or beneficial interests in a pool of assets primarily consisting of
receivables arising under revolving credit card accounts or other revolving
credit accounts owned by Transferor or any of its Affiliates and collections
thereon ("PARTICIPATION INTERESTS"). Any addition of Participation Interests to
the Trust (whether pursuant to this PARAGRAPH (b) or PARAGRAPH (c) below) shall
be effected by an amendment hereto, dated the applicable Addition Date, pursuant
to SUBSECTION 9.1(a).
(c) PERMITTED ADDITIONS. In addition to its obligation under
PARAGRAPH (b), on or after the Certificate Trust Termination Date Transferor
may, but shall not be obligated to, from time to time designate Supplemental
Accounts or Participation Interests to be included as Trust Assets, in either
case as of the applicable Addition Date, so long as after giving effect to such
addition no more than 20% of the Receivables, by outstanding balance, will be 30
or more days delinquent.
(d) CERTAIN CONDITIONS FOR ADDITIONS OF SUPPLEMENTAL ACCOUNTS AND
PARTICIPATION INTERESTS. Transferor agrees that any transfer of Receivables from
Supplemental Accounts or Participation Interests under PARAGRAPHS (b) or (C)
shall occur only upon satisfaction of the following conditions (to the extent
applicable):
19
(i) on or before the tenth Business Day prior to the
Addition Date (the "NOTICE DATE"), Transferor shall give Issuer,
Indenture Trustee, each Rating Agency and Servicer written notice that
such Supplemental Accounts or Participation Interests will be included,
which notice shall specify the approximate aggregate amount of the
Receivables or Participation Interests to be transferred; and, in the
case of any transfer pursuant to PARAGRAPH (c), the Rating Agency
Condition shall have been satisfied;
(ii) on or before the Addition Date, Transferor shall have
delivered to Issuer a written assignment (including an acceptance by
Issuer) in substantially the form of EXHIBIT A (the "ASSIGNMENT") and
the Credit Card Originator shall have indicated in its computer files
that the Receivables created in connection with the Supplemental
Accounts have been transferred to Issuer and, within five Business Days
thereafter, Transferor shall have delivered to Issuer an Account
Schedule listing such Supplemental Accounts, which as of the date of
such Assignment, shall be deemed incorporated into and made a part of
such Assignment and this Agreement;
(iii) Transferor shall represent and warrant that (x) each
Supplemental Account is, as of the Addition Date, an Eligible Account,
and each Receivable in such Supplemental Account is, as of the Addition
Cut Off Date, an Eligible Receivable, (y) no selection procedures
believed by Transferor to be materially adverse to the interests of the
Noteholders were utilized in selecting the Additional Accounts from the
available Eligible Accounts in an Approved Portfolio, and (z) as of the
Addition Date, Transferor is not insolvent;
(iv) Transferor shall represent and warrant that, as of
the Addition Date, the Assignment constitutes either (x) a valid
transfer and assignment to the Trust of all right, title and interest
of Transferor in and to the Receivables then existing and thereafter
created in the Supplemental Accounts, and all proceeds of such
Receivables and Insurance Proceeds relating thereto and such
Receivables and all proceeds thereof and Insurance Proceeds and
Recoveries relating thereto will be held by the Trust free and clear of
any Lien of any Person claiming through or under Transferor or any of
its Affiliates, except for (i) Liens permitted under SECTION 2.5(b),
(ii) the interest of the Holders of the Transferor Interest and (iii)
Transferor's right to receive interest accruing on, and investment
earnings in respect of, the Excess Funding Account, or any Series
Account as provided in this Agreement, the Indenture and any Indenture
Supplement or (y) a grant of a security interest in such property to
Issuer, which is enforceable with respect to then existing Receivables
in the Supplemental Accounts, the proceeds thereof and Insurance
Proceeds and Recoveries
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relating thereto upon the conveyance of such Receivables to the Trust,
and which will be enforceable with respect to the Receivables
thereafter created in respect of Supplemental Accounts conveyed on such
Addition Date, the proceeds thereof and Insurance Proceeds and
Recoveries relating thereto upon such creation; and (z) if the
Assignment constitutes the grant of a security interest to Issuer in
such property, upon the filing of a financing statement as described in
SECTION 2.1 with respect to such Supplemental Accounts and in the case
of the Receivables thereafter created in such Supplemental Accounts and
the proceeds thereof, and Insurance Proceeds and Recoveries relating
thereto, upon such creation, the Trust shall have a first priority
perfected security interest in such property (subject to Section 9-306
of the UCC), except for Liens permitted under SECTION 2.5(b);
(v) Transferor shall deliver an Officer's Certificate to
Indenture Trustee confirming the items set forth in CLAUSE (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Supplemental Accounts to Indenture
Trustee (with a copy to each Rating Agency) substantially in the form
of EXHIBIT D-2.
(e) ADDITIONAL APPROVED PORTFOLIOS. On and after the Certificate
Trust Termination Date, Transferor may from time to time designate additional
portfolios of accounts as "Approved Portfolios" if the Rating Agency Condition
is satisfied with respect to that designation (except as to any Series or Class
that expressly waives this requirement in the applicable Indenture Supplement).
Transferor agrees that prior to any transfer of Receivables from Automatic
Additional Accounts arising in a portfolio that is designated as an Approved
Portfolio pursuant to the immediately preceding sentence Transferor shall
satisfy the following requirements:
(i) on or before the tenth Business Day prior to the
Addition Date, Transferor shall give Issuer, Indenture Trustee, each
Rating Agency and Servicer written notice that such Automatic
Additional Accounts will be included;
(ii) on or before the Addition Date, Transferor shall have
delivered to Issuer a written Assignment (including an acceptance by
Issuer) substantially in the form of EXHIBIT A (with appropriate
modifications) and the Credit Card Originator shall have indicated in
its computer files that the Receivables created in connection with the
Automatic Additional Accounts have been transferred to the Trust;
(iii) Transferor shall represent and warrant that (x) each
Automatic Additional Account is, as of the Addition Date, an Eligible
Account, and each Receivable in such Automatic Additional Account is,
as of the Addition Date, an Eligible Receivable, (y) no selection
procedures believed by Transferor to be materially adverse to the
interests of the Noteholders were utilized in selecting the new
Approved Portfolio, and (z) as of the Addition Date, Transferor is not
insolvent;
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(iv) Transferor shall represent and warrant that, as of
the Addition Date, the Assignment constitutes either (x) a valid
transfer and assignment to the Trust of all right, title and interest
of Transferor in and to the Receivables then existing and thereafter
created in the Automatic Additional Accounts, and all proceeds of such
Receivables and Insurance Proceeds relating thereto and such
Receivables and all proceeds thereof and Insurance Proceeds and
Recoveries relating thereto will be held by the Trust free and clear of
any Lien of any Person claiming through or under Transferor or any of
its Affiliates, except for (i) Liens permitted under SECTION 2.5(b),
(ii) the interest of the Holders of the Transferor Interest and (iii)
Transferor's right to receive interest accruing on, and investment
earnings in respect of, the Excess Funding Account, or any Series
Account as provided in this Agreement, the Indenture and any Indenture
Supplement or (y) a grant of a security interest in such property to
Issuer, which is enforceable with respect to then existing Receivables
in the Automatic Additional Accounts, the proceeds thereof and
Insurance Proceeds and Recoveries relating thereto upon the conveyance
of such Receivables to the Trust, and which will be enforceable with
respect to the Receivables thereafter created in respect of Automatic
Additional Accounts conveyed on such Addition Date, the proceeds
thereof and Insurance Proceeds and Recoveries relating thereto upon
such creation; and (z) if the Assignment constitutes the grant of a
security interest to Issuer in such property, upon the filing of a
financing statement as described in SECTION 2.1 with respect to such
Automatic Additional Accounts and in the case of the Receivables
thereafter created in such Automatic Additional Accounts and the
proceeds thereof, and Insurance Proceeds and Recoveries relating
thereto, upon such creation, the Trust shall have a first priority
perfected security interest in such property (subject to Section 9-306
of the UCC), except for Liens permitted under SECTION 2.5(b);
(v) Transferor shall deliver an Officer's Certificate to
Indenture Trustee confirming the items set forth in CLAUSE (ii); and
(vi) Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Automatic Additional Accounts to
Indenture Trustee (with a copy to each Rating Agency) substantially in
the form of EXHIBIT D-2 (with appropriate modifications).
Section 2.7 REMOVAL OF ACCOUNTS.
(a) On any day of any Monthly Period after the Certificate Trust
Termination Date, Transferor shall have the right to require the reassignment to
it or its designee of all the Trust's right, title and interest in, to and under
the Receivables then existing and thereafter created, all moneys due or to
become due and all amounts received with respect thereto and all proceeds
thereof in or with respect to the Accounts then owned by the Credit Card
Originator and designated by Transferor (the "REMOVED ACCOUNTS") or
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Participation Interests (unless otherwise set forth in the applicable Indenture
Supplement), upon satisfaction of the following conditions:
(i) on or before the tenth Business Day immediately
preceding the Removal Date (the "REMOVAL NOTICE DATE") Transferor shall
have given Issuer, Servicer, each Rating Agency and any Enhancement
Provider entitled thereto pursuant to the relevant Indenture Supplement
written notice of such removal and specifying the date for removal of
the Removed Accounts and Participation Interests (the "REMOVAL DATE");
Transferor shall provide each Rating Agency with such additional
information relating to such removal as the Rating Agency shall
reasonably request;
(ii) with respect to Removed Accounts, on or prior to the
date that is 10 Business Days after the Removal Date, Transferor shall
have delivered to Issuer an Account Schedule listing the Removed
Accounts and specifying for each such Account, as of the Removal Notice
Date, its account number, the aggregate amount outstanding, and the
aggregate amount of Principal Receivables outstanding in such Account;
(iii) with respect to Removed Accounts, Transferor shall
have represented and warranted as of the Removal Date that the list of
Removed Accounts delivered pursuant to PARAGRAPH (ii), as of the
Removal Date, is true and complete in all material respects;
(iv) with respect to any removal pursuant to SECTION
2.7(b) that is being made as a result of the applicable Merchant
exercising a purchase right as to which Transferor has no reasonable
control (an "INVOLUNTARY REMOVAL"), Transferor shall use reasonable
efforts to satisfy the Rating Agency Condition; and as to any other
removal, the Rating Agency Condition shall have been satisfied;
(v) Transferor shall have delivered to Indenture Trustee
and any Enhancement Provider entitled thereto pursuant to the relevant
Indenture Supplement an Officer's Certificate, dated as of the Removal
Date, to the effect that Transferor reasonably believes that (A) in the
case of any removal other than an Involuntary Removal, such removal
will not, based on the facts known to such officer at the time of such
certification, then or thereafter cause an Early Amortization Event to
occur with respect to any Series, (B) in the case of any Involuntary
Removal, Transferor has used reasonable efforts to avoid having such
removal result in an Early Amortization Event and (C) in either case,
(i) no selection procedure believed by Transferor to be materially
adverse to the interests of the Noteholders has been used in removing
Removed Accounts from among any pool of Accounts or Participation
Interests of a similar type (it being understood that Transferor will
not be deemed to have used such an adverse selection procedure in
connection with any Involuntary Removal); and (ii)
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Accounts (or administratively convenient groups of Accounts, such as
billing cycles) were chosen for removal on a random basis or another
basis that Transferor believes is consistent which achieving
derecognition of the Receivables under GAAP;
(vi) in the case of any removal pursuant to SECTION
2.7(a), the aggregate Principal Receivables in the Removed Accounts
shall not exceed the lesser of (A) the excess of the Transferor Amount
over the Minimum Transferor Amount or (B) the excess of the Aggregate
Principal Balance over the Required Principal Balance, all measured as
of the end of the most recently ended Monthly Period;
(vii) in the case of any removal pursuant to SECTION
2.7(b), the removal shall not cause the Transferor Amount to be less
than the Minimum Transferor Amount or cause the Aggregate Principal
Balance to be less than the Required Principal Balance; and
(viii) such removal shall not cause a decrease in the sum of
the Collateral Amounts for all outstanding Series.
Upon satisfaction of the above conditions, Issuer shall execute and
deliver to Transferor or its designee a written reassignment in substantially
the form of EXHIBIT B (the "REASSIGNMENT") and shall, without further action, be
deemed to transfer, assign, set over and otherwise convey to Transferor or its
designee, effective as of the Removal Date, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to the
Receivables arising in the Removed Accounts or the Participation Interests, all
moneys due and to become due and all amounts received with respect thereto and
all proceeds thereof. In addition, Issuer shall execute such other documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by Transferor to effect the conveyance of Receivables
pursuant to this Section.
(b) After the Certificate Trust Termination Date, Transferor may
from time to time designate as Removed Accounts any Accounts designated for
purchase by a Merchant pursuant to the terms of the related Credit Card
Processing Agreement. Any repurchase of the Receivables in Removed Accounts
designated pursuant to this SECTION 2.7(b) shall be effected in the manner and
at a price determined in accordance with SECTION 2.4(e), as if the Receivables
being repurchased were Ineligible Receivables. Amounts deposited in the
Collection Account in connection therewith shall be deemed to be Collections of
Principal Receivables and shall be applied in accordance with the terms of
Article VIII of the Indenture and each Indenture Supplement.
Section 2.8 DISCOUNT OPTION. (a) Transferor shall have the option to
designate at any time a fixed or floating percentage (the "DISCOUNT PERCENTAGE")
of the amount of Receivables arising in the Accounts on or after the date such
designation becomes effective that would otherwise constitute Principal
Receivables (prior to subtracting from
24
Principal Receivables, Finance Charge Receivables that are Discount Option
Receivables) to be treated as Finance Charge Receivables. Transferor may from
time to time increase (subject to the limitations described below), reduce or
eliminate the Discount Percentage for Discount Option Receivables arising in the
Accounts on and after the date of such change. Transferor must provide 30 days'
prior written notice to Servicer, Issuer, Indenture Trustee and each Rating
Agency of any such increase, reduction or elimination, and such increase,
reduction or elimination shall become effective on the date specified therein
only if (i) Transferor has delivered to Indenture Trustee an Officer's
Certificate to the effect that, based on the facts known to such officer at the
time, Transferor reasonably believes that such increase, reduction or
elimination will not at the time of its occurrence cause an Early Amortization
Event, or an event which with notice or the lapse of time would constitute an
Early Amortization Event, to occur with respect to any Series and (ii) in the
case of any increase, the Discount Percentage shall not exceed 3% after giving
effect to that increase, unless the Rating Agency Condition has been satisfied
with respect to the increase.
(b) On each Date of Processing after the date on which
Transferor's exercise of its discount option takes effect, Transferor shall
treat Discount Option Receivables Collections as Collections of Finance Charge
Receivables.
Section 2.9 ADDITIONAL TRANSFERORS. Transferor may designate additional
or substitute Persons to be included as Transferors under this Agreement by an
amendment to this Agreement (which amendment shall be subject to SECTION 9.1,
any applicable restrictions in the Indenture Supplement for any outstanding
Series and satisfaction of the Rating Agency Condition) and in connection with
such designation, the initial Transferor shall transfer a portion of the
Transferor Interest to such additional Transferor reflecting such additional
Transferor's interest in the Transferor Interest; PROVIDED that prior to any
such designation and issuance the conditions set forth in Section 3.4(b) of
Trust Agreement shall have been satisfied with respect to a transfer of
Transferor's Interest.
Section 2.10 ADDITIONAL CREDIT CARD ORIGINATORS. Transferor may
designate additional Persons as Credit Card Originators under this Agreement by
an amendment to this Agreement (which amendment shall be subject to SECTION 9.1,
satisfaction of the Rating Agency condition and any applicable restrictions in
the Indenture Supplement for any outstanding Series).
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Prior to the Certificate Trust Termination Date, the Receivables shall
be serviced as provided in the Pooling and Servicing Agreement, and this ARTICLE
III will have no effect. On and after the Certificate Trust Termination Date:
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Section 3.1 ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
SERVICER.
(a) WFN agrees to act as Servicer under this Agreement. The
Noteholders by their acceptance of the Notes consent to WFN acting as Servicer.
(b) Subject to the provisions of this Agreement, Servicer shall
service and administer the Receivables, shall collect payments due under the
Receivables and shall charge off as uncollectible Receivables, all in accordance
with its customary and usual servicing procedures for servicing credit card and
other consumer open end credit receivables comparable to the Receivables and in
accordance with the Credit Card Guidelines. Servicer shall have full power and
authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, subject to SECTION 7.1, and provided WFN is
Servicer, Servicer or its designee (rather than Indenture Trustee or Owner
Trustee) is hereby authorized and empowered (i) to make withdrawals from the
Collection Account and any Series Account, as set forth in this Agreement, the
Indenture or any Indenture Supplement, (ii) to instruct Indenture Trustee to
make withdrawals and payments from the Collection Account and any Series
Accounts in accordance with such instructions as set forth in this Agreement,
the Indenture or any Indenture Supplement, (iii) to instruct Indenture Trustee
in writing as provided herein, (iv) to take any action required or permitted
under any Enhancement, as set forth in this Agreement, the Indenture or any
Indenture Supplement and (v) to execute and deliver, on behalf of Issuer for the
benefit of the Noteholders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables. Without limiting the generality of
the foregoing and subject to SECTION 7.1, Servicer or its designee is authorized
and empowered to make any filings, reports, notices, applications and
registrations with, and to seek any consents or authorizations from, the
Commission and any state securities authority on behalf of the Trust as may be
necessary or advisable to comply with any Federal or state securities laws or
reporting requirements. Indenture Trustee shall furnish Servicer with any powers
of attorney or other documents necessary or appropriate to enable Servicer to
carry out its servicing and administrative duties hereunder. Owner Trustee shall
furnish Servicer with any powers of attorney and other documents necessary or
appropriate to enable Servicer to carry out its servicing and administrative
duties hereunder.
(c) Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by Servicer in connection
with servicing other credit card receivables.
26
(d) Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance with the
Credit Card Agreements relating to the Accounts and the Credit Card Guidelines
except insofar as any failure to so comply or perform would not materially and
adversely affect the Trust or the Noteholders.
(e) Servicer shall be liable for the payment, without
reimbursement, of all expenses incurred in connection with the Trust and the
servicing activities hereunder including expenses related to enforcement of the
Receivables, fees and disbursements of Owner Trustee that are due and payable to
it under Article 7 of the Trust Agreement, Indenture Trustee, the Administrator,
any Paying Agent and any Transfer Agent and Registrar (including the reasonable
fees and expenses of its counsel), fees and disbursements of independent
accountants and all other fees and expenses, including the costs of filing UCC
continuation statements and the costs and expenses relating to obtaining and
maintaining the listing of any Notes on any stock exchange, that are not
expressly stated in this Agreement to be payable by the Trust, the Noteholders
of a Series or Transferor (other than Federal, state, local and foreign income,
franchise and other taxes, if any, or any interest or penalties with respect
thereto, assessed on the Trust).
(f) Servicer shall maintain fidelity bond or other appropriate
insurance coverage insuring against losses through wrongdoing of its officers
and employees who are involved in the servicing of credit card receivables
covering such actions and in such amounts as Servicer believes to be reasonable
from time to time.
Section 3.2 SERVICING COMPENSATION. As full compensation for its
servicing activities hereunder and as reimbursement for any expense incurred by
it in connection therewith, Servicer shall be entitled to receive a servicing
fee (the "SERVICING FEE") with respect to each Monthly Period after the
Certificate Trust Termination Date, payable monthly on the related Distribution
Date, in an amount equal to one-twelfth of the product of (a) the weighted
average of the Series Servicing Fee Percentages with respect to each outstanding
Series (based upon the Series Servicing Fee Percentage for each Series and the
Collateral Amount (or such other amount as specified in the related Indenture
Supplement) of such Series, in each case as of the last day of the prior Monthly
Period) and (b) the amount of Principal Receivables on the last day of the prior
Monthly Period. The share of the Servicing Fee allocable to each Series with
respect to any Monthly Period (the "NOTEHOLDER SERVICING FEE") will be
determined in accordance with the relevant Indenture Supplement. The portion of
the Servicing Fee with respect to any Monthly Period not so allocated to a
particular Series, or otherwise allocated in any Indenture Supplement, shall be
paid from Finance Charge Collections allocable to Transferor on the related
Distribution Date. In no event shall Issuer, Indenture Trustee, the Noteholders
of any Series or any Enhancement Provider be liable for the share of the
Servicing Fee with respect to any Monthly Period allocable to the Transferor
Amount.
27
Section 3.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SERVICER. WFN,
as initial Servicer, hereby makes, and any successor Servicer by its appointment
hereunder shall make, on each Closing Date (and on the date of any such
appointment) the following representations and warranties and covenants to
Issuer on which Owner Trustee has relied in accepting the Receivables in trust,
Owner Trustee has relied in executing the Notes and Indenture Trustee has relied
in authenticating Notes:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a national banking
association (or with respect to such Successor Servicer, such other corporate
entity as may be applicable) duly organized, validly existing and in good
standing under the laws of the United States, and has full corporate power,
authority and legal right to execute, deliver and perform its obligations under
this Agreement and, in all material respects, to own its properties and conduct
its business as such properties are presently owned and as such business is
presently conducted.
(b) DUE QUALIFICATION. Servicer is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would have a material adverse effect on the interests of the
Noteholders.
(c) DUE AUTHORIZATION. The execution, delivery, and performance of
this Agreement have been duly authorized by Servicer by all necessary corporate
action on the part of Servicer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of Servicer, enforceable against Servicer in accordance
with its terms, except as enforceability may be limited by applicable Debtor
Relief Laws now or hereafter in effect (or with respect to such Successor
Servicer, such other corporate entity as may be applicable) and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by
Servicer, the performance of the transactions contemplated by this Agreement and
the other Transaction Documents and the fulfillment of the terms hereof and
thereof applicable to Servicer, will not conflict with, violate, result in any
breach of any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
Requirement of Law applicable to Servicer or any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which Servicer is a party or by
which it or any of its properties are bound.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Servicer, threatened against Servicer
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality seeking to prevent the issuance of the Notes or the
consummation of any of the transactions
28
contemplated by this Agreement and the other Transaction Documents, seeking any
determination or ruling that, in the reasonable judgment of Servicer, would
materially and adversely affect the performance by Servicer of its obligations
under this Agreement and the other Transaction Documents, or seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement and the other Transaction Documents.
(g) COMPLIANCE WITH REQUIREMENTS OF LAW. Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in connection with
the Receivables and the related Accounts, will maintain in effect all
qualifications required under Requirements of Law in order to properly service
the Receivables and the related Accounts and will comply in all material
respects with all other Requirements of Law in connection with servicing the
Receivables and the related Accounts, the failure to comply with which would
have a material adverse effect on the interests of the Noteholders.
(h) NO RESCISSION OR CANCELLATION. Servicer shall not permit any
rescission or cancellation of a Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in the ordinary course
of its business and in accordance with the Credit Card Guidelines. Servicer
shall reflect any such rescission or cancellation in its computer file of
revolving credit card accounts. In addition, Servicer may waive the accrual
and/or payment of certain Finance Charge Receivables in respect of certain past
due Accounts, the Obligors of which have enrolled with a consumer credit
counseling service, and the Receivables in such Accounts shall not fail to be
Eligible Receivables solely as a result of such waiver.
(i) PROTECTION OF HOLDERS' RIGHTS. Servicer shall take no action
which, nor omit to take any action the omission of which, would materially
impair the rights of Holders in any Receivable or Account, nor shall it, except
in the ordinary course of its business and in accordance with the Credit Card
Guidelines, reschedule, revise or defer Collections due on the Receivables.
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Except in
connection with its enforcement or collection of an Account, Servicer will take
no action to cause any Receivable to be evidenced by any instrument, other than
an instrument that, taken together with one or more other writings, constitutes
chattel paper and, if any Receivable is so evidenced (whether or not in
connection with the enforcement or collection of an Account), it shall be
reassigned or assigned to Servicer as provided in this Section.
(k) ALL CONSENTS REQUIRED. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by Servicer of
this Agreement, the performance by Servicer of the transactions contemplated by
this Agreement and the other Transaction Documents and the fulfillment by
Servicer of the terms hereof and
29
thereof have been obtained; PROVIDED that Servicer makes no representation
or warranty as to state securities or "blue sky" laws.
(l) MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. Servicer shall
maintain and implement administrative and operating procedures (including the
ability to recreate records evidencing the Receivables in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, computer records and other information, reasonably necessary or advisable
for the collection of all the Receivables. Such documents, books and computer
records shall reflect all facts giving rise to the Receivables, all payments and
credits with respect thereto, and, to the extent required pursuant to SECTION
2.1, such documents, books and computer records shall indicate the interests of
Issuer in the Receivables.
As of the Certificate Trust Termination Date, Servicer agrees that all
representations and warranties made by it in its capacity as Servicer under the
Pooling and Servicing Agreement with respect to any Account or Receivable
pursuant to Section 3.3 of the Pooling and Servicing Agreement shall be deemed
for all purposes to have been made by Servicer to Issuer pursuant to this
Agreement as of the day when each was made or deemed made, as if this Agreement
had been in effect on that day.
After the Certificate Trust Termination Date, if any of the
representations, warranties or covenants of Servicer contained in PARAGRAPH (g),
(h), (i) or (j) of this SECTION 3.3 or PARAGRAPHS (g) (h), (i) or (j) of Section
3.3 of the Pooling and Servicing Agreement with respect to any Receivable or the
related Account is breached, and as a result of such breach Issuer's rights in,
to or under any Receivables in the related Account or the proceeds of such
Receivables are materially impaired or such proceeds are not available for any
reason to Issuer free and clear of any Lien, then no later than the expiration
of 60 days (or such longer period, not in excess of 150 days, as may be agreed
to by Trustee) from the earlier to occur of the discovery of such event by
Servicer, or receipt by Servicer of notice of such event given by Indenture
Trustee, all Receivables in the Account or Accounts to which such event relates
shall be reassigned or assigned to Servicer as set forth below; PROVIDED that
such Receivables will not be reassigned or assigned to Servicer if, on any day
prior to the end of such 60-day or longer period, (i) the relevant
representation and warranty shall be true and correct, or the relevant covenant
shall have been complied with, in all material respects and (ii) Servicer shall
have delivered an Officer's Certificate describing the nature of such breach and
the manner in which such breach was cured.
Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds prior to the next succeeding
Business Day in an amount equal to the amount of such Receivables, which deposit
shall be considered a Collection with respect to such Receivables and shall be
applied in accordance with Article VIII of the Indenture and each Indenture
Supplement.
30
Upon each such assignment to Servicer, Issuer shall automatically and
without further action be deemed to transfer, assign, set over and otherwise
convey to Servicer, without recourse, representation or warranty all right,
title and interest of Issuer in and to such Receivables, all moneys due or to
become due and all amounts received with respect thereto and all proceeds
thereof. Issuer shall execute such documents and instruments of transfer or
assignment and take such other actions as shall be reasonably requested by
Servicer to effect the conveyance of any such Receivables pursuant to this
Section. The obligation of Servicer to accept assignment of such Receivables,
and to make the deposits, if any, required to be made to the Collection Account
as provided in the preceding paragraph, shall constitute the sole remedy
respecting the event giving rise to such obligation available to Issuer, Owner
Trustee, Holders (or Indenture Trustee on behalf of the Noteholders) or any
Enhancement Provider.
Section 3.4 REPORTS AND RECORDS FOR INDENTURE TRUSTEE.
(a) DAILY REPORTS. On the second Business Day immediately
following each Date of Processing, Servicer shall prepare and make available at
the office of Servicer for inspection by Indenture Trustee a report (the "DAILY
REPORT") that shall set forth (i) the aggregate amounts of Collections,
Collections with respect to Principal Receivables and Collections with respect
to Finance Charge Receivables processed by Servicer on such Date of Processing,
(ii) the aggregate amount of Defaulted Receivables for such Date of Processing,
and (iii) the aggregate amount of Principal Receivables in the Receivables Trust
as of such Date of Processing.
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in any
Indenture Supplement as to the related Series, on each Determination Date,
Servicer shall forward to Indenture Trustee, the Paying Agent, each Rating
Agency and each Enhancement Provider, if any, a certificate of a Servicing
Officer setting forth (i) the aggregate amounts for the preceding Monthly Period
with respect to each of the items specified in CLAUSE (i) of SECTION 3.4(a),
(ii) the aggregate Defaulted Receivables and Recoveries for the preceding
Monthly Period, (iii) a calculation of the Portfolio Yield and Base Rate for
each Series then outstanding, (iv) the aggregate amount of Receivables and the
balance on deposit in the Collection Account (or any subaccount thereof) or any
Series Account applicable to any Series then outstanding with respect to
Collections processed as of the end of the last day of the preceding Monthly
Period, (v) the aggregate amount of adjustments from the preceding Monthly
Period, (vi) the aggregate amount, if any, of withdrawals, drawings or payments
under any Enhancement with respect to each Series required to be made with
respect to the previous Monthly Period, (vii) the sum of all amounts payable to
the Noteholders on the succeeding Distribution Date in respect of interest and
principal payable with respect to the Notes and (viii) such other amounts,
calculations, and/or information as may be required by any relevant Indenture
Supplement.
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(c) TRANSFERRED ACCOUNTS. Servicer covenants and agrees hereby to
deliver to Indenture Trustee, on or prior to the Automatic Addition Termination
Date or any Automatic Addition Suspension Date (but in the latter case, prior to
a Restart Date) within a reasonable time period after any Transferred Account is
created, but in any event not later than 15 days after the end of the month
within which the Transferred Account is created, a notice specifying the new
account number for any Transferred Account and the replaced account number.
Section 3.5 ANNUAL SERVICER'S CERTIFICATE. Unless Servicer has been
relieved of all of its obligations under this Agreement because the final Series
has been repaid during the prior calendar year, Servicer shall deliver to
Indenture Trustee, any Enhancement Provider and any Rating Agency on or before
the 90th day following the end of Servicer's fiscal year in which the
Certificate Trust Termination Date occurs and each subsequent fiscal year, an
Officer's Certificate substantially in the form of EXHIBIT C.
Section 3.6 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) On or before the 90th day following the end of Servicer's
fiscal year in which the Certificate Trust Termination Date occurs and each
subsequent fiscal year, Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to Servicer,
the Credit Card Originator or Transferor) to furnish a report (addressed to
Indenture Trustee) to Indenture Trustee, Servicer and each Rating Agency to the
effect that they have applied certain procedures with Servicer and such firm has
examined certain documents and records relating to the servicing of Accounts
under this Agreement, compared the information contained in Servicer's
certificates delivered pursuant to this Agreement during the period covered by
such report with such documents and records and that, on the basis of such
agreed upon procedures (and assuming the accuracy of any reports generated by
Servicer's third party agents), such servicing was conducted in compliance with
this Agreement during the period covered by such report (which shall be the
prior fiscal year, or the portion thereof falling after the Certificate Trust
Termination Date), except for such exceptions, errors or irregularities as such
firm shall believe to be immaterial and such other exceptions, errors or
irregularities as shall be set forth in such report. Such report shall set forth
the agreed upon procedures performed. A copy of such report shall be delivered
to each Enhancement Provider, if any, entitled thereto pursuant to the relevant
Indenture Supplement.
(b) On or before the 90th day following the end of Servicer's
fiscal year in which the Certificate Trust Termination Date occurs and each
subsequent fiscal year, Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to Servicer,
Credit Card Originator or Transferor) to furnish a report to Indenture Trustee,
Servicer and each Rating Agency to the effect that they have applied certain
procedures agreed upon with Servicer to compare the
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mathematical calculations of certain amounts set forth in Servicer's
Certificates delivered pursuant to SECTION 3.4(c) during the period covered by
such report with Servicer's computer reports which were the source of such
amounts and that on the basis of such agreed upon procedures and comparison,
such amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such statement. A
copy of such report shall be delivered to each Enhancement Provider, if any,
entitled thereto pursuant to the relevant Indenture Supplement.
(c) A copy of each certificate and report provided pursuant to
SECTION 3.4(b), 3.5 or 3.6 or the corresponding section of the Pooling and
Servicing Agreement may be obtained by any Noteholder or Note Owner by a request
to Indenture Trustee addressed to the Corporate Trust Office.
(d) In the event such firm rendering a report under this SECTION
3.6 requires Indenture Trustee to agree to the procedures performed by such
firm, Servicer shall direct Indenture Trustee in writing to so agree; it being
understood and agreed that Indenture Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of Servicer, and Indenture
Trustee makes no independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.
Section 3.7 TAX TREATMENT. Transferor has structured this Agreement and
the Notes to facilitate a secured, credit-enhanced financing on favorable terms
with the intention that the Notes will constitute indebtedness of Transferor for
federal income and state and local income and franchise tax purposes; and
Transferor and each Noteholder by acceptance of its Note (and each Note Owner,
by its acceptance of an interest in the applicable Note) agrees to recognize and
report the Notes as indebtedness of Transferor for purposes of federal, state
and local income and franchise taxes and any other tax imposed on or measured by
gross or net income, and to report all receipts and payments relating thereto in
a manner that is consistent with such characterization.
Section 3.8 NOTICES TO TRANSFEROR. If WFN is no longer acting as
Servicer, any Successor Servicer appointed pursuant to SECTION 7.2 shall deliver
or make available to Transferor each certificate and report required to be
prepared, forwarded or delivered thereafter pursuant to SECTIONS 3.4(b), 3.5 and
3.6.
Section 3.9 ADJUSTMENTS.
(a) If Servicer adjusts downward the amount of any Receivable
because of a rebate, refund, unauthorized charge or billing error to an
accountholder, or because such Receivable was created in respect of merchandise
which was refused or returned by an accountholder, or if Servicer otherwise
adjusts downward the amount of any Receivable without receiving Collections
therefor or charging off such amount as uncollectible, then, in any such case,
the amount of Principal Receivables used to calculate the Transferor Amount or
the Allocation Percentages applicable to any Series will be reduced by the
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amount of the adjustment. Similarly, the amount of Principal Receivables used to
calculate the Transferor Amount and the Allocation Percentages applicable to any
Series will be reduced by the amount of any Principal Receivable which was
discovered as having been created through a fraudulent or counterfeit charge or
with respect to which the covenant of Transferor contained in SECTION 2.5(b) has
been breached. Any adjustment required pursuant to either of the two preceding
sentences shall be made on the first Business Day after the Date of Processing
for the event giving rise to such adjustment. If, following the exclusion of
such Principal Receivables from the calculation of the Transferor Amount, the
Transferor Amount would be less than the Specified Transferor Amount, not later
than the close of business on such first Business Day, Transferor shall make a
deposit into the Excess Funding Account in immediately available funds in an
amount equal to the amount by which the Transferor Amount would be less than the
Specified Transferor Amount (up to the amount of such Principal Receivables).
Any amount deposited into the Excess Funding Account pursuant to the preceding
sentence shall be considered Collections of Principal Receivables and shall be
applied in accordance with Article VIII of the Indenture and each Indenture
Supplement.
(b) If (i) Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received by
Servicer in the form of a check which is not honored for any reason or (ii)
Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any Receivable in respect of which a dishonored check is received shall
be deemed not to have been paid. Notwithstanding the first two sentences of this
paragraph, any adjustments made pursuant to this paragraph will be reflected in
a current report but will not change any amount of Collections previously
reported pursuant to SECTION 3.4(b).
Section 3.10 REPORTS TO THE COMMISSION. Servicer shall, on behalf of
Issuer, cause to be filed with the Commission any periodic reports required to
be filed under the provisions of the Securities Exchange Act of 1934, and the
rules and regulations of the Commission thereunder. Transferor shall, at its own
expense, cooperate in any reasonable request of Servicer in connection with such
filings. Issuer agrees to cooperate with Servicer in connection with such
filings.
ARTICLE IV
OTHER MATTERS RELATING TO TRANSFEROR
Section 4.1 LIABILITY OF TRANSFEROR. Transferor shall be liable in
accordance herewith to the extent, and only to the extent, of the obligations
specifically undertaken by it in its capacity as Transferor hereunder.
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Section 4.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, TRANSFEROR ETC.
(a) Transferor shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person unless:
(i) the Person formed by such consolidation or into which
Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of Transferor substantially as an
entirety shall be, if Transferor is not the surviving entity, an entity
organized and existing under the laws of the United States of America
or any State or the District of Columbia, and, if Transferor is not the
surviving entity, such entity shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Owner, in form
reasonably satisfactory to Owner Trustee, the performance of every
covenant and obligation of Transferor hereunder;
(ii) Transferor has delivered to Indenture Trustee (A) an
Officer's Certificate stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Section and that all conditions precedent herein provided for relating
to such transaction have been complied with, and (B) an Opinion of
Counsel to the effect that such supplemental agreement is a valid and
binding obligation of such surviving entity enforceable against such
surviving entity in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(iii) Transferor shall have delivered to Indenture Trustee
and each Rating Agency a Tax Opinion, dated the date of such
consolidation, merger, conveyance or transfer, with respect thereto;
(iv) in connection with any merger or consolidation, or
any conveyance or transfer referred to above, the business entity into
which Transferor shall merge or consolidate, or to which such
conveyance or transfer is made, shall be (x) a business entity that may
not become a debtor in any case, action or other proceeding under Title
11 of the United States Code or (y) a special-purpose corporation, the
powers and activities of which shall be limited to the performance of
Transferor's obligations under this Agreement and the other Transaction
Documents;
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(v) if Transferor is not the surviving entity, the
surviving entity shall file new UCC-1 financing statements with respect
to the interest of Issuer in the Receivables and the Collateral
Certificate, if any; and
(vi) the Rating Agency Condition has been satisfied with
respect to such merger, conveyance or transfer.
(b) This SECTION 4.2 shall not be construed to prohibit or in any
way limit Transferor's ability to effectuate any consolidation or merger
pursuant to which Transferor would be the surviving entity.
(c) Transferor shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this SECTION
4.2.
(d) The obligations of Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of Transferor
hereunder except in each case in accordance with (i) the provisions of the
foregoing paragraphs, (ii) SECTION 2.9 of this Agreement or Section 3.4 of the
Trust Agreement or (iii) conveyances, mergers, consolidations, assumptions,
sales or transfers to other entities (1) for which Transferor delivers an
Officer's Certificate to Indenture Trustee indicating that Transferor reasonably
believes that such action will not adversely affect in any material respect the
interests of any Noteholder, (2) which meet the requirements of CLAUSE (ii) of
PARAGRAPH (a) and (3) for which such purchaser, transferee, pledgee or entity
shall expressly assume, in an agreement supplemental hereto, executed and
delivered to Owner Trustee and Indenture Trustee in writing in form satisfactory
to Owner Trustee and Indenture Trustee, the performance of every covenant and
obligation of Transferor thereby conveyed.
Section 4.3 LIMITATION ON LIABILITY OF TRANSFEROR. Subject to SECTION
4.1, neither Transferor, any Holder of the Transferor Interest nor any of their
directors, officers, employees or agents of Transferor acting in such capacities
shall be under any liability to Issuer, Owner Trustee, the Holders, any
Enhancement Provider or any other Person for any action taken or for refraining
from the taking of any action in good faith in their capacities as Transferor
pursuant to this Agreement; PROVIDED that this provision shall not protect
Transferor, any Holder of the Transferor Interest or any such Person against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. Transferor and any director,
officer, employee or agent of Transferor may rely in good faith on any document
of any kind prima facie properly executed and submitted by any Person (other
than Transferor) respecting any matters arising hereunder.
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ARTICLE V
OTHER MATTERS RELATING TO SERVICER
Section 5.1 LIABILITY OF SERVICER. Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Servicer in such capacity herein.
Section 5.2 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER.
(a) Servicer shall not consolidate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of Servicer substantially as an
entirety shall be a corporation or a banking association organized and
existing under the laws of the United States of America or any State or
the District of Columbia and, if Servicer is not the surviving entity,
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to Owner Trustee in form satisfactory to Owner Trustee,
the performance of every covenant and obligation of Servicer hereunder;
(ii) Servicer has delivered to Indenture Trustee (A) an
Officer's Certificate stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Section and that all conditions precedent herein provided for relating
to such transaction have been complied with, and (B) an Opinion of
Counsel to the effect that such supplemental agreement is a valid and
binding obligation of such surviving entity enforceable against such
surviving entity in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
(iii) either (x) the entity formed by such consolidation or
into which Servicer is merged or the Person which acquired by
conveyance or transfer the properties and assets of Servicer
substantially as an entirety shall be an Eligible Servicer (taking into
account, in making such determination, the experience and operations of
the predecessor Servicer) or (y) upon the effectiveness of such
consolidation, merger, conveyance or transfer, a Successor Servicer
shall have assumed the obligations of Servicer in accordance with this
Agreement;
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(b) This SECTION 5.2 shall not be construed to prohibit or in any
way limit Servicer's ability to effectuate any consolidation or merger pursuant
to which Servicer would be the surviving entity.
(c) Servicer shall notify each Rating Agency promptly after any
consolidation, merger, conveyance or transfer effected pursuant to this SECTION
5.2.
Section 5.3 LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Except as
provided in SECTION 5.4 with respect to Issuer and Owner Trustee and SECTION 6.7
of the Indenture with respect to Indenture Trustee, neither Servicer nor any of
the directors, officers, employees or agents of Servicer in its capacity as
Servicer shall be under any liability to Issuer, Owner Trustee, Indenture
Trustee, the Holders, any Enhancement Providers or any other person for any
action taken or for refraining from the taking of any action in good faith in
its capacity as Servicer pursuant to this Agreement; PROVIDED that this
provision shall not protect Servicer or any such Person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. Servicer and any director, officer,
employee or agent of Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person (other than Servicer)
respecting any matters arising hereunder. Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Servicer in accordance with this Agreement and which
in its reasonable judgment may involve it in any expense or liability. Servicer
may, in its sole discretion, undertake any such legal action which it may deem
necessary or desirable for the benefit of the Holders with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Holders hereunder.
Section 5.4 INDEMNIFICATION OF ISSUER AND OWNER TRUSTEE. Servicer shall
indemnify and hold harmless Issuer and Owner Trustee and their respective
officers, directors, employees and agents, from and against any loss, liability,
expense, damage or injury (i) suffered or sustained by reason of any acts or
omissions of Servicer with respect to Issuer pursuant to this Agreement, and
(ii) arising from or incurred in connection with Owner Trustee's administration
of Issuer and the performance of its duties hereunder or under the Indenture or
Indenture Supplements or any transaction or document contemplated in connection
herewith or therewith including any judgment, award, settlement, reasonable
attorneys' fees and expenses and other costs or expenses incurred in connection
with the defense of any action, proceeding or claim; PROVIDED that (a) Servicer
shall not indemnify Owner Trustee if such acts, omissions or alleged acts or
omissions constitute or are caused by fraud, gross negligence, or willful
misconduct by Owner Trustee, (b) Servicer shall not indemnify Issuer, the
Noteholders or the Note Owners for any liabilities, costs or expenses of Issuer
with respect to any action taken by Owner Trustee at the request of the
Noteholders, (c) Servicer shall not indemnify Issuer, the Noteholders or the
Note Owners as to any losses, claims or damages incurred by any of them in their
capacities as investors, including losses with respect to market or
38
investment risks associated with ownership of the Notes or losses incurred as a
result of Defaulted Receivables and (d) Servicer shall not indemnify Issuer, the
Noteholders or the Note Owners for any liabilities, costs or expenses of Issuer,
the Noteholders or the Note Owners arising under any tax law, including any
Federal, state, local or foreign income or franchise taxes or any other tax
imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith) required to be paid by
Issuer, the Noteholders or the Note Owners in connection herewith to any taxing
authority. Indemnification pursuant to this Section shall not be payable from
the Trust Assets. The provisions of this indemnity shall run directly to and be
enforceable by an indemnitee subject to the limitations hereof. This SECTION 5.4
shall survive the termination of this Agreement and the earlier removal or
resignation of Owner Trustee.
Servicer shall indemnify Indenture Trustee as provided in Section 6.7
of the Indenture.
Section 5.5 SERVICER NOT TO RESIGN. Servicer shall not resign from the
obligations and duties hereby imposed on it except (x) upon the determination
that (i) the performance of its duties hereunder is no longer permissible under
Requirements of Law (other than the charter and by-laws of Servicer) and (ii)
there is no reasonable action which Servicer could take to make the performance
of its duties hereunder permissible under such Requirements of Law or (y) as may
be required, in connection with Servicer's consolidation with, or merger into
any other corporation or Servicer's conveyance or transfer of its properties and
assets substantially as an entirety to any person in each case, in accordance
with SECTION 5.2. Any determination permitting the resignation of Servicer
pursuant to clause (x) above shall be evidenced by an Opinion of Counsel to such
effect delivered to Indenture Trustee. No resignation shall become effective
until Indenture Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of Servicer in accordance with SECTION 7.2. If
within 120 days of the date of the determination that Servicer may no longer act
as Servicer, and if Indenture Trustee is unable to appoint a Successor Servicer,
Indenture Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, Indenture Trustee shall, if it is legally unable so to act, petition
a court of competent jurisdiction to appoint any established institution having
a net worth of not less than $50,000,000 and whose regular business includes the
servicing of credit card accounts as the Successor Servicer hereunder. Indenture
Trustee shall give prompt notice to each Rating Agency and each Enhancement
Provider, if any, entitled thereto under the applicable Indenture Supplement
upon the appointment of a Successor Servicer.
Section 5.6 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE RECEIVABLES. Servicer shall provide to Indenture Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where
Indenture Trustee is required in connection with the enforcement of the rights
of the Noteholders, or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business
39
hours, (iii) subject to Servicer's normal security and confidentiality
procedures and (iv) at offices designated by Servicer. Nothing in this SECTION
5.6 shall derogate from the obligation of each Credit Card Originator,
Transferor, Indenture Trustee and Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure of
Servicer to provide access as provided in this SECTION 5.6 as a result of such
obligation shall not constitute a breach of this SECTION 5.6.
Section 5.7 DELEGATION OF DUTIES. In the ordinary course of business,
Servicer may at any time delegate any duties hereunder to any Person who agrees
to conduct such duties in accordance with the Credit Card Guidelines and this
Agreement. Any such delegations shall not relieve Servicer of its liability and
responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of SECTION 5.5, and Servicer shall remain jointly
and severally liable with such Person for any amounts which would otherwise be
payable pursuant to this ARTICLE V as if Servicer had performed such duty;
PROVIDED that in the case of any significant delegation to a Person other than
an Affiliate of WFN, at least 30 days' prior written notice shall be given to
Indenture Trustee, each Rating Agency and each Enhancement Provider, if any,
entitled thereto pursuant to the relevant Indenture Supplement, of such
delegation to any entity that is not an Affiliate of Servicer.
ARTICLE VI
INSOLVENCY EVENTS
Section 6.1 RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT. If an
Insolvency Event occurs with respect to Transferor or any Holder of the
Transferor Interest (excluding any Supplemental Interest), Transferor shall on
the day any such event occurs, immediately cease to transfer Principal
Receivables, or interests in Principal Receivables represented by any
Participation Interests to Issuer and shall promptly give notice to Indenture
Trustee, Owner Trustee and the Rating Agencies thereof. Notwithstanding any
cessation of the transfer to Issuer of additional Principal Receivables or any
Participation Interests, Principal Receivables or any Participation Interests
transferred to Issuer prior to the occurrence of such Insolvency Event and
Collections in respect of such Principal Receivables and Participation
Interests, and Finance Charge Receivables whenever created accrued in respect of
such Principal Receivables, shall continue to be property of Issuer.
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ARTICLE VII
SERVICER DEFAULTS
Section 7.1 SERVICER DEFAULTS. If any one of the following events (a
"SERVICER DEFAULT") shall occur and be continuing after the Certificate Trust
Termination Date:
(a) any failure by Servicer to make any payment, transfer or
deposit or to give instructions or notice to Indenture Trustee on or before the
date occurring five Business Days after the date such payment, transfer,
deposit, or such instruction or notice is required to be made or given by
Servicer, as the case may be, under the terms of this Agreement, the Indenture
or any Indenture Supplement; or
(b) failure on the part of Servicer duly to observe or perform in
any material respect any other covenants or agreements of Servicer set forth in
this Agreement which has a material adverse effect on the Noteholders of any
Series or Class (which determination shall be made without regard to whether
funds are then available pursuant to any Enhancement), which continues
unremedied for a period of 60 days after the date on which written notice of
such failure requiring the same to be remedied shall have been given to Servicer
by Indenture Trustee, or to Servicer and Indenture Trustee by the Noteholders
holding not less than 25% of the Outstanding Amount (or, with respect to any
failure that does not relate to all Series, 25% of the aggregate outstanding
principal amount of all Series to which such failure relates); or Servicer shall
delegate its duties under this Agreement except as permitted by SECTION 5.2 or
5.7, a Responsible Officer of Indenture Trustee has actual knowledge of such
delegation and such delegation continues unremedied for 15 days after the date
on which written notice thereof, requiring the same to be remedied, shall have
been given to Servicer by Indenture Trustee, or to Servicer and Indenture
Trustee by Noteholders holding not less than 25% of the Outstanding Amount; or
(c) any representation, warranty or certification made by Servicer
in this Agreement or in any certificate delivered pursuant to this Agreement
shall prove to have been incorrect when made, which has a material adverse
effect on the rights of the Noteholders of any Series or Class (which
determination shall be made without regard to whether funds are then available
pursuant to any Enhancement) and which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to Servicer by
Indenture Trustee, or to Servicer and Indenture Trustee by the Noteholders
holding not less than 25% of the Outstanding Amount (or, with respect to any
such representation, warranty or certification that does not relate to all
Series, 25% of the aggregate outstanding principal amount of all Series to which
such representation, warranty or certification relates);
(d) Servicer shall fail generally to, or admit in writing its
inability to, pay its debts as they become due; or a proceeding shall have been
instituted in a court having
41
jurisdiction in the premises seeking a decree or order for relief in respect of
Servicer in an involuntary case under any Debtor Relief Law, or for the
appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of such Person or for any
substantial part of its property, or for the winding-up or liquidation of its
affairs and, if instituted against Servicer, any such proceeding shall continue
undismissed or unstayed and in effect, for a period of 60 consecutive days, or
any of the actions sought in such proceeding shall occur; or the commencement by
Servicer, of a voluntary case under any Debtor Relief Law, or such Person's
consent to the entry of an order for relief in an involuntary case under any
Debtor Relief Law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of such Person or for any substantial part of its
property, or any general assignment for the benefit of creditors; or such Person
or any Subsidiary of such Person shall have taken any corporate action in
furtherance of any of the foregoing actions; or
(e) with respect to any Series, any other event specified in the
Indenture Supplement for such Series, then, in the event of any Servicer
Default, so long as Servicer Default shall not have been remedied, either
Indenture Trustee or Noteholders holding more than 50% of the Outstanding
Amount, by notice given to Servicer (and to Indenture Trustee and any
Enhancement Provider entitled thereto pursuant to the relevant Indenture
Supplement if given by the Noteholders) (a "TERMINATION NOTICE"), may terminate
all but not less than all the rights and obligations of Servicer, as Servicer,
under this Agreement and in and to the Receivables and the proceeds thereof.
Upon the occurrence of a Servicer Default, the Indenture Trustee shall promptly
notify each Rating Agency of such Servicer Default.
After receipt by Servicer of such Termination Notice, and on the date
that a Successor Servicer shall have been appointed by Indenture Trustee
pursuant to SECTION 7.2, all authority and power of Servicer under this
Agreement shall pass to and be vested in the Successor Servicer (a "SERVICE
TRANSFER"); and, without limitation, Indenture Trustee is hereby authorized and
empowered (upon the failure of Servicer to cooperate) to execute and deliver, on
behalf of Servicer, as attorney-in-fact or otherwise, all documents and other
instruments upon the failure of Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights.
Servicer agrees to cooperate with Indenture Trustee and the Successor Servicer
in effecting the termination of the responsibilities and rights of Servicer to
conduct servicing hereunder including the transfer to the Successor Servicer of
all authority of Servicer to service the Receivables provided for under this
Agreement, including all authority over all Collections which shall on the date
of transfer be held by Servicer for deposit, or which have been deposited by
Servicer, in the Collection Account, or which shall thereafter be received with
respect to the Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds. Servicer shall promptly transfer its
electronic records relating to the
42
Receivables to the Successor Servicer in such electronic form as the Successor
Servicer may reasonably request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents necessary for the
continued servicing of the Receivables in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that compliance with
this SECTION 7.1 shall require Servicer to disclose to the Successor Servicer
information of any kind which Servicer reasonably deems to be confidential, the
Successor Servicer shall be required to enter into such customary licensing and
confidentiality agreements as Servicer shall deem appropriate to protect its
interests.
Notwithstanding the foregoing, any delay in or failure of performance
under SECTION 7.1(a) for a period of five Business Days or under SECTION 7.1(b)
or (c) for a period of 60 days (in addition to any period provided in SECTION
7.1(a), (b) or (c)) shall not constitute a Servicer Default until the expiration
of such additional five Business Days or 60 days, respectively, if such delay or
failure could not be prevented by the exercise of reasonable diligence by
Servicer and such delay or failure was caused by an act of God or the public
enemy, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence shall not relieve Servicer from
the obligation to use its best efforts to perform its obligations in a timely
manner in accordance with this Agreement and Servicer shall provide Indenture
Trustee, each Rating Agency, any Enhancement Provider entitled thereto pursuant
to the relevant Indenture Supplement and Transferor with an Officer's
Certificate giving immediate notice of such failure or delay by it, together
with a description of its efforts to so perform its obligations.
Section 7.2 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) On
and after the receipt by Servicer of a Termination Notice pursuant to SECTION
7.1, Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Termination Notice or otherwise
specified by Indenture Trustee or until a date mutually agreed upon by Servicer
and Indenture Trustee. Indenture Trustee shall, as promptly as possible after
the giving of a Termination Notice, appoint an Eligible Servicer as a successor
servicer (the "SUCCESSOR SERVICER"), and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to Indenture
Trustee. If a Successor Servicer has not been appointed or has not accepted its
appointment at the time when Servicer ceases to act as Servicer, Indenture
Trustee without further action shall automatically be appointed the Successor
Servicer. Indenture Trustee may delegate any of its servicing obligations to an
Affiliate of Indenture Trustee or agent in accordance with SECTION 3.1(b) and
5.7. Notwithstanding the foregoing, Indenture Trustee shall, if it is legally
unable so to act, petition a court of competent jurisdiction to appoint any
established institution having a net worth of not less than $50,000,000 and
whose regular business includes the servicing of credit card receivables as the
Successor Servicer hereunder. Indenture Trustee shall give prompt notice to each
43
Rating Agency and each Enhancement Provider, if any, entitled thereto pursuant
to the applicable Indenture Supplement upon the appointment of a Successor
Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to Servicer with respect to servicing functions under
this Agreement and shall be subject to all the responsibilities, duties and
liabilities (except for liabilities arising during the period of time when the
prior Servicer was performing and acting as Servicer) relating thereto placed on
Servicer by the terms and provisions hereof, and all references in this
Agreement to Servicer shall be deemed to refer to the Successor Servicer.
(c) In connection with any Termination Notice, Indenture Trustee
will review any bids which it obtains from Eligible Servicers and shall be
permitted to appoint any Eligible Servicer submitting such a bid as a Successor
Servicer for servicing compensation not in excess of the aggregate Servicing
Fees for all Series; PROVIDED, HOWEVER, that the Holder of the Transferor
Interest shall be responsible for payment of the portion of such aggregate
Servicing Fees allocable to the Holder of the Transferor Interest and that no
such monthly compensation paid out of Collections shall be in excess of such
aggregate Servicing Fees. Each Holder of the Transferor Interest agrees that, if
WFN (or any Successor Servicer) is terminated as Servicer hereunder, the portion
of the Collections in respect of Finance Charge Receivables that Transferor is
entitled to receive pursuant to this Agreement or any Indenture Supplement shall
be reduced by an amount sufficient to pay Transferor's share (determined by
reference to the Indenture Supplements with respect to any outstanding Series)
of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination of
Issuer pursuant to the Trust Agreement and shall pass to and be vested in
Transferor and, Transferor is hereby authorized and empowered to execute and
deliver, on behalf of the Successor Servicer, as attorney-in-fact or otherwise,
all documents and other instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer of
servicing rights. The Successor Servicer agrees to cooperate with Transferor in
effecting the termination of the responsibilities and rights of the Successor
Servicer to conduct servicing on the Receivables. The Successor Servicer shall
transfer its electronic records relating to the Receivables to Transferor in
such electronic form as Transferor may reasonably request and shall transfer all
other records, correspondence and documents to Transferor in the manner and at
such times as Transferor shall reasonably request. To the extent that compliance
with this SECTION 7.2 shall require the Successor Servicer to disclose to
Transferor information of any kind which the Successor Servicer deems to be
confidential, Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests.
44
Section 7.3 NOTIFICATION TO NOTEHOLDERS. Within two Business Days after
Servicer becomes aware of any Servicer Default, Servicer shall give notice
thereof to Indenture Trustee, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Indenture Supplement and Indenture
Trustee shall give notice to the Noteholders at their respective addresses
appearing in the Note Register. Upon any termination or appointment of a
Successor Servicer pursuant to this ARTICLE VII, Indenture Trustee shall give
prompt written notice thereof to Noteholders at their respective addresses
appearing in the Note Register.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION OF AGREEMENT. This Agreement and the respective
obligations and responsibilities of Issuer, Transferor and Servicer under this
Agreement shall terminate, except with respect to the duties described in
SECTION 5.4, on the Trust Termination Date.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 AMENDMENT; WAIVER OF PAST DEFAULTS.
(a) This Agreement may be amended from time to time by Servicer,
Transferor and Issuer, without the consent of any of Indenture Trustee or any
Noteholder to cure any ambiguity, to correct or supplement any provisions herein
which may be inconsistent with any other provisions herein or to add any other
provisions with respect to matters or questions raised under this Agreement
which shall not be inconsistent with the provisions of this Agreement; PROVIDED,
HOWEVER, that such action shall not adversely affect in any material respect the
interests of any of the Noteholders. Additionally, this Agreement may be amended
from time to time by Servicer, Transferor and Issuer by a written instrument
signed by each of them, without the consent of Indenture Trustee or any of the
Noteholders; PROVIDED that (i) Transferor shall have delivered to Indenture
Trustee and Owner Trustee an Officer's Certificate, dated the date of any such
Amendment, stating that Transferor reasonably believes that such amendment will
not have an Adverse Effect and (ii) the Rating Agency Condition shall have been
satisfied with respect to any such amendment. Additionally, notwithstanding the
preceding sentence, this Agreement will be amended by Servicer and Issuer at the
direction of Transferor without the consent of Indenture Trustee or any of the
Noteholders or Enhancement Providers to add, modify or eliminate such provisions
as may be necessary or advisable in order to enable all or a portion of Issuer
(1) to qualify as, and to permit an election to be made to cause Issuer to be
treated as, a "financial asset securitization investment trust" as described in
the provisions of Section 860L of the Code, and (2) to avoid the imposition of
state or local income or franchise taxes imposed on Issuer's
45
property or its income; PROVIDED, HOWEVER, that (A) Transferor delivers to
Indenture Trustee and Owner Trustee an Officer's Certificate to the effect that
the proposed amendments meet the requirements set forth in this Section, (B) the
Rating Agency Condition has been satisfied, and (C) such amendment does not
affect the rights, duties or obligations of Indenture Trustee or Owner Trustee
hereunder. The amendments which Transferor may make without the consent of
Noteholders or Enhancement Providers pursuant to the preceding sentence may
include the addition of a Transferor.
(b) This Agreement may also be amended from time to time by
Servicer, Transferor and Issuer, with the consent of the Noteholders holding
more than 66 2/3% of the Outstanding principal amount of the Notes of each
Series affected thereby for which Transferor has not delivered an Officer's
Certificate stating that there is no Adverse Effect, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders;
PROVIDED, HOWEVER, that no such amendment shall (i) reduce in any manner the
amount of or delay the timing of any distributions to be made to Noteholders or
deposits of amounts to be so distributed or the amount available under any
Enhancement without the consent of each affected Noteholder, (ii) change the
definition of or the manner of calculating the interest of any Noteholder
without the consent of each affected Noteholder or (iii) reduce the aforesaid
percentage required to consent to any such amendment without the consent of each
Noteholder or (iv) adversely affect the rating of any Series or Class by any
Rating Agency without the consent of the Noteholders of such Series or Class
holding more than 66 2/3% of the Outstanding principal amount of the Notes of
such Series or Class affected thereby.
(c) Promptly after the execution of any such amendment or consent,
Issuer shall furnish notification of the substance of such amendment to
Indenture Trustee and each Noteholder, and Servicer shall furnish notification
of the substance of such amendment to each Rating Agency and each Enhancement
Provider.
(d) It shall not be necessary for the consent of Noteholders under
this SECTION 9.1 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Noteholders shall be subject to such reasonable
requirements as Indenture Trustee may prescribe.
(e) Notwithstanding anything in this SECTION 9.1 to the contrary,
no amendment may be made to this Agreement which would adversely affect in any
material respect the interests of any Enhancement Provider without the consent
of such Enhancement Provider.
(f) Any Indenture Supplement executed in accordance with the
provisions of ARTICLE X of the Indenture shall not be considered an amendment of
this Agreement for the purposes of this SECTION 9.1.
46
(g) The Noteholders holding 66 2/3% or more of the Outstanding
principal amount of the Notes of each Series or, with respect to any Series with
two (2) or more Classes, of each Class (or, with respect to any default that
does not relate to all Series, 66 2/3% or more of the principal amount of the
Outstanding Notes of each Series to which such default relates or, with respect
to any such Series with two or more Classes, of each Class) may, on behalf of
all Noteholders, waive any default by Transferor or Servicer in the performance
of their obligations hereunder and its consequences, except the failure to make
any distributions required to be made to Noteholders or to make any required
deposits of any amounts to be so distributed. Upon any such waiver of a past
default, such default shall cease to exist, and any default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. Upon the occurrence
of any such waiver, the Indenture Trustee shall promptly notify each Rating
Agency of such waiver.
(h) Owner Trustee may, but shall not be obligated to, enter into
any such amendment which affects Owner Trustee's rights, duties or immunities
under this Agreement or otherwise. In connection with the execution of any
amendment hereunder, Owner Trustee shall be entitled to receive the Opinion of
Counsel described in SECTION 9.2(d).
Section 9.2 PROTECTION OF RIGHT, TITLE AND INTEREST TO ISSUER.
(a) Transferor shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation statements and
any other necessary documents covering Indenture Trustee's and Issuer's right,
title and interest to Issuer to be promptly recorded, registered and filed, and
at all times to be kept recorded, registered and filed, all in such manner and
in such places as may be required by law fully to preserve and protect the
right, title and interest of Indenture Trustee, Noteholders and Issuer hereunder
to all property comprising the Trust Assets. Transferor shall deliver to
Indenture Trustee file-stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available following
such recording, registration or filing. Transferor shall cooperate fully with
Servicer in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this paragraph.
(b) Within thirty (30) days after Transferor makes any change in
its name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with PARAGRAPH (a)
seriously misleading within the meaning of Section 9-402(7) (or any comparable
provision) of the UCC, Transferor shall give Indenture Trustee notice of any
such change and shall file such financing statements or amendments as may be
necessary to continue the perfection of Issuer's security interest or ownership
interest in the Receivables and the proceeds thereof.
47
(c) Each of Transferor and Servicer shall give Indenture Trustee
prompt notice of any relocation of its chief principal executive office or any
change in the jurisdiction under whose laws it is organized and whether, as a
result of such relocation or change, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall file such
financing statements or amendments as may be necessary to perfect or to continue
the perfection of Issuer's security interest in the Receivables and the proceeds
thereof. Each of Transferor and Servicer shall at all times maintain its chief
principal executive offices within the United States and shall at all times be
organized under the laws of a jurisdiction located within the United States.
(d) Transferor shall deliver to Indenture Trustee, Owner Trustee
and any Enhancement Provider entitled thereto pursuant to the relevant Indenture
Supplement (i) upon the execution and delivery of each amendment of this
Agreement, an Opinion of Counsel to the effect specified in EXHIBIT D-1; (ii) on
each Addition Date on which any Supplemental Accounts are to be designated as
Accounts pursuant to SECTION 2.8(a) or (b), an Opinion of Counsel substantially
in the form of EXHIBIT D-2; and on each Addition Date on which any Participation
Interests are to be designated to Issuer pursuant to SECTION 2.8(a) or (b), an
Opinion of Counsel covering the same substantive legal issues addressed by
EXHIBIT D-2 but conformed to the extent appropriate to relate to Participation
Interests; and (iii) on or before March 31 of each year following the year in
which the Certificate Trust Termination Date occurs, an Opinion of Counsel
substantially in the form of EXHIBIT D-3.
Section 9.3 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.4 NOTICES; PAYMENTS.
(a) All demands, notices, instructions, directions and
communications (collectively, "NOTICES") under this Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered at,
mailed by registered mail, return receipt requested, or sent by facsimile
transmission (i) in the case of Transferor and Servicer, to World Financial
Network National Bank, 800 Techcenter Drive, Gahanna, Ohio 43230, (ii) in the
case of Issuer or Owner Trustee, to the Corporate Trust Office, Attn:
Institutional Trust Services, with a copy to the Administrator, (iii) in the
case of the Rating Agency for a particular Series, the address, if any,
specified in the Indenture Supplement relating to such Series, and (iv) to any
other Person as specified in the Indenture or any Indenture Supplement; or, as
to each party, at such other address or facsimile number as shall be designated
by such party in a written notice to each other party.
48
(b) Any Notice required or permitted to be given to a Holder of
Registered Notes shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Note Register. Any Notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Noteholder receives such Notice. In
addition, in the case of any Series or Class with respect to which any Notes are
outstanding, any Notice required or permitted to be given to Noteholders of such
Series or Class shall be published in an Authorized Newspaper within the time
period prescribed in this Agreement.
Section 9.5 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Notes or the rights of the Noteholders.
Section 9.6 FURTHER ASSURANCES. Transferor and Servicer agree to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by Owner Trustee and Indenture
Trustee more fully to effect the purposes of this Agreement, including the
execution of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
Section 9.7 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of Owner Trustee, Indenture Trustee or the
Noteholders, any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided under this
Agreement are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 9.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
Section 9.9 THIRD-PARTY BENEFICIARIES. This Agreement will inure to the
benefit of and be binding upon the parties hereto, Indenture Trustee, the
Noteholders, and any Enhancement Provider. Except as otherwise expressly
provided in this Agreement, no other Person will have any right or obligation
hereunder.
49
Section 9.10 ACTIONS BY NOTEHOLDERS.
(a) Wherever in this Agreement a provision is made that an action
may be taken or a Notice given by Noteholders, such action or Notice may be
taken or given by any Noteholder, unless such provision requires a specific
percentage of Noteholders.
(b) Any Notice, request, authorization, direction, consent, waiver
or other act by the Noteholder shall bind such Holder and every subsequent
Holder of such Note and of any Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or omitted to be done by Issuer, Owner Trustee, Transferor or Servicer in
reliance thereon, whether or not notation of such action is made upon such Note.
Section 9.11 RULE 144A INFORMATION. For so long as any of the Notes of
any Series or Class are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, each of Transferor, Owner Trustee, Indenture
Trustee, Servicer and any Enhancement Provider agree to cooperate with each
other to provide to any Noteholders of such Series or Class and to any
prospective purchaser of Notes designated by such Noteholder, upon the request
of such Noteholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
Section 9.12 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 9.13 NO BANKRUPTCY PETITION. Each of Issuer (with respect to
Transferor only), Servicer, each Enhancement Provider, if any, and each Holder
of a Supplemental Interest and Transferor (with respect to Issuer only)
severally and not jointly, hereby covenants and agrees that it will not at any
time institute against, solicit or join or cooperate with or encourage any
institution against Issuer or Transferor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under any United States federal or state bankruptcy or similar law. Nothing in
this SECTION 9.13 shall preclude, or be deemed to estop, any of the foregoing
Persons from taking (to the extent such action is otherwise permitted to be
taken by such Person hereunder) or omitting to take any action prior to such
date in (i) any case or proceeding with respect to Issuer or Transferor
voluntarily filed or commenced by or on behalf of Issuer or Transferor,
respectively, under or pursuant to any such law or (ii) any involuntary case or
proceeding pertaining to Issuer or Transferor, as applicable under or pursuant
to any such law.
Section 9.14 RIGHTS OF INDENTURE TRUSTEE. Indenture Trustee shall have
herein the same rights, protections, indemnities and immunities as specified in
the Indenture.
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Section 9.15 RIGHTS OF OWNER TRUSTEE. Each of the parties hereto
acknowledges and agrees that this Agreement is being executed and delivered by
Chase Manhattan Bank USA, National Association not individually but solely and
exclusively in its capacity as Owner Trustee on behalf of World Financial
Network Credit Card Master Note Trust for the purpose and with the intention of
binding World Financial Network Credit Card Master Note Trust. No obligations or
liabilities hereunder shall run against Chase Manhattan Bank USA, National
Association in its individual capacity or against its properties or assets.
51
IN WITNESS WHEREOF, Transferor, Servicer and Issuer have caused this
Transfer and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
WFN CREDIT COMPANY, LLC, as
Transferor
By: /s/ Robert P. Armiak
------------------------------
Name: Robert P. Armiak
Title: Vice President and Treasurer
WORLD FINANCIAL NETWORK
NATIONAL BANK, as Servicer
By: /s/ Robert P. Armiak
------------------------------
Name: Robert P. Armiak
Title: Vice President and Treasurer
WORLD FINANCIAL NETWORK
CREDIT CARD MASTER NOTE
TRUST, Issuer
By: Chase Manhattan Bank USA, National
Association, not in its individual capacity
but solely as Owner Trustee on behalf of Issuer
By: /s/ Denis Kelly
------------------------------
Name: Denis Kelly
Title: Assistant Vice President
S-1
TRANSFER AND SERVICING AGREEMENT
SIGNATURE PAGE
Acknowledged and Accepted:
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ Eric Lindahl
------------------------------
Name: Eric Lindahl
Title: Assistant Vice President
S-2
EXHIBIT A
to
TRANSFER AND SERVICING AGREEMENT
FORM OF ASSIGNMENT OF RECEIVABLES
IN SUPPLEMENTAL ACCOUNTS
(As required by SECTION 2.6 of the Transfer and Servicing Agreement)
ASSIGNMENT No. __ OF RECEIVABLES IN SUPPLEMENTAL ACCOUNTS dated as of
_____________, by and among WFN Credit Company, LLC, a Delaware limited
liability company, as Transferor (the "TRANSFEROR"), WORLD FINANCIAL NETWORK
NATIONAL BANK, a national banking association, as Servicer (the "SERVICER") and
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST (the "ISSUER"), pursuant
to the Transfer and Servicing Agreement referred to below.
WITNESSETH
WHEREAS, Transferor, Servicer and Issuer are parties to the Transfer
and Servicing Agreement, dated as of August 1, 2001 (as it may be amended and
supplemented from time to time the "AGREEMENT");
WHEREAS, pursuant to the Agreement, Transferor wishes to designate
Supplemental Accounts owned by the Credit Card Originator to be included as
Accounts and to convey the Receivables of such Supplemental Accounts, whether
now existing or hereafter created, to Issuer (as each such term is defined in
the Agreement); and
WHEREAS, Issuer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Issuer hereby agree as
follows:
1. DEFINED TERMS. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise defined herein.
"ADDITION DATE" means, with respect to the Supplemental Accounts
designated hereby, ____________, _____.
"ADDITION CUT OFF DATE" means, with respect to the Supplemental
Accounts designated hereby, _____________, _____.
2. DESIGNATION OF SUPPLEMENTAL ACCOUNTS. On or before the Document
Delivery Date, Transferor will deliver to Owner Trustee an Account Schedule
containing a true and complete schedule identifying all such Supplemental
Accounts specifying for
Exhibit A-1
each such Account, as of the Addition Cut Off Date, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables outstanding in such Account, which Account Schedule shall
supplement any other Account Schedule previously delivered to Issuer pursuant to
the Agreement.
3. CONVEYANCE OF RECEIVABLES. (a) Transferor does hereby transfer,
assign, set over and otherwise convey, without recourse except as set forth in
the Transfer and Servicing Agreement, to Issuer, all its right, title and
interest in, to and under the Receivables of such Supplemental Accounts existing
at the close of business on the Addition Cut Off Date and thereafter created
from time to time until the termination of Issuer, all Recoveries related
thereto, all monies due or to become due and all amounts received or receivable
with respect thereto and all proceeds thereof. The foregoing does not constitute
and is not intended to result in the creation or assumption by Issuer, Owner
Trustee, Indenture Trustee, any Noteholders or any Enhancement Provider of any
obligation of Servicer, Transferor, the Credit Card Originator or any other
Person in connection with the Accounts, the Receivables or under any agreement
or instrument relating thereto, including any obligation to Obligors, merchant
banks, merchants clearance systems or insurers.
(b) Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with respect
to the Receivables in Supplemental Accounts existing on the Addition Cut Off
Date and thereafter created meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect, and maintain
perfection of, the sale and assignment of its interest in such Receivables to
Issuer, and to deliver a file-stamped copy of each such financing statement or
other evidence of such filing to Issuer on or prior to the Addition Date. Owner
Trustee shall be under no obligation whatsoever to file such financing or
continuation statements or to make any other filing under the UCC in connection
with such sale and assignment.
(c) In connection with such assignment, Transferor further agrees,
at its own expense, on or prior to the date of this Assignment, to cause the
Credit Card Originator to indicate in the appropriate computer files that
Receivables created in connection with the Supplemental Accounts and designated
hereby have been conveyed to Issuer pursuant to the Agreement and this
Assignment.
(d) Transferor does hereby grant to Issuer a security interest in
all of its right, title and interest, whether now owned or hereafter acquired,
in and to the Receivables in the Supplemental Accounts existing on the Addition
Cut Off Date and thereafter created, all Recoveries related thereto, and all
proceeds thereof. This Assignment constitutes a security agreement under the
UCC.
4. ACCEPTANCE BY ISSUER. Issuer hereby acknowledges its acceptance of
all right, title and interest to the property, existing on the Addition Cut Off
Date and thereafter created, conveyed to Issuer pursuant to SECTION 3(a) of this
Assignment. Issuer
Exhibit A-2
further acknowledges that, prior to or simultaneously with the execution and
delivery of this Assignment, Transferor delivered to it the Account Schedule
described in SECTION 2 of this Assignment.
5. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor
hereby represents and warrants to Issuer as of the date of this Assignment and
as of the Addition Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Assignment
constitutes a legal, valid and binding obligation of Transferor
enforceable against Transferor in accordance with its terms, except as
such enforceability may be limited by applicable receivership or
conservatorship, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and the rights of creditors of national
banking associations and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or
in equity);
(b) ELIGIBILITY OF ACCOUNTS AND RECEIVABLES. Each Supplemental
Account designated hereby is an Eligible Account and each Receivable in
such Accounts is, as of the Addition Cut Off Date, an Eligible
Receivable;
(c) INSOLVENCY. As of each of the Addition Cut Off Date and
the Addition Date, no Insolvency Event with respect to the Credit Card
Originator or Transferor has occurred and the transfer by Transferor of
Receivables arising in the Supplemental Accounts to Issuer has not been
made in contemplation of the occurrence thereof;
(d) EARLY AMORTIZATION EVENT. Transferor reasonably believes
that (A) the addition of the Receivables arising in the Supplemental
Accounts will not, based on the facts known to Transferor, then or
thereafter cause an Early Amortization Event to occur with respect to
any Series and (B) no selection procedure was utilized by Transferor
which would result in the selection of Supplemental Accounts (from
among the available Eligible Accounts owned by the Credit Card
Originator) that would be materially less favorable to the interests of
the Noteholders of any Series as of the Addition Date than a random
selection;
(e) SECURITY INTEREST. Either this Assignment constitutes a
valid transfer and assignment to Issuer of all right, title and
interest of Transferor in the Receivables and other Trust Assets
conveyed to Issuer by Transferor and all monies due or to become due
and all amounts received with respect thereto and the proceeds thereof,
or this Assignment constitutes a grant of a security interest in such
property to Issuer, which, in the case of existing Receivables and the
proceeds thereof, is enforceable upon execution and delivery of this
Assignment, and which will be enforceable with respect to such
Receivables hereafter created and the proceeds thereof upon such
creation. Upon the filing of the financing
Exhibit A-3
statements described in SECTION 3 of this Assignment and, in the case
of the Receivables hereafter created and the proceeds thereof, upon the
creation thereof, Issuer shall have a first priority security interest
in such property except for Liens permitted under SECTION 2.7(b) of the
Agreement;
(f) NO CONFLICT. The execution and delivery by Transferor of
this Assignment, the performance of the transactions contemplated by
this Assignment and the fulfillment of the terms hereof applicable to
Transferor, will not conflict with or violate any Requirements of Law
applicable to Transferor or conflict with, result in any breach of any
of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust or other
instrument to which Transferor is a party or by which it or its
properties are bound;
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against
Transferor before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (i) asserting the
invalidity of this Assignment, (ii) seeking to prevent the consummation
of any of the transactions contemplated by this Assignment, (iii)
seeking any determination or ruling that, in the reasonable judgment of
Transferor, would materially and adversely affect the performance by
Transferor of its obligations under this Assignment, (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Assignment or (v) seeking to affect
adversely the income tax attributes of Issuer under the Federal, or
applicable state income or franchise tax systems; and
(h) ALL CONSENTS. All authorizations, consents, orders or
approvals or other actions of any Person or of any court or other
governmental authority required to be obtained by Transferor in
connection with the execution and delivery of this Assignment by
Transferor and the performance of the transactions contemplated by this
Assignment by Transferor, have been obtained.
7. AMENDMENT OF THE TRANSFER AND SERVICING AGREEMENT. The Transfer and
Servicing Agreement is hereby amended to provide that all references therein to
the "Transfer and Servicing Agreement", to "this Agreement" and "herein" shall
be deemed from and after the Addition Date to be a dual reference to the
Transfer and Servicing Agreement as supplemented by this Assignment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Transfer and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and effect
in accordance with its terms and except as expressly provided herein shall not
constitute or be deemed to constitute a waiver of compliance with or a consent
to noncompliance with any term or provision of the Transfer and Servicing
Agreement.
Exhibit A-4
8. COUNTERPARTS. This Assignment may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
9. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto acknowledges and
agrees that this Agreement is being executed and delivered by Chase Manhattan
Bank USA, National Association not individually but solely and exclusively in
its capacity as Owner Trustee on behalf of World Financial Network Credit Card
Master Note Trust for the purpose and with the intention of binding World
Financial Network Credit Card Master Note Trust. No obligations or liabilities
hereunder shall run against Chase Manhattan Bank USA, National Association in
its individual capacity or against its properties or assets.
10. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Exhibit A-5
IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Additional Accounts to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
WFN CREDIT COMPANY, LLC,
Transferor
By:_________________________________
Name:
Title:
WORLD FINANCIAL NETWORK
NATIONAL BANK, Servicer
By:_________________________________
Name:
Title:
WORLD FINANCIAL NETWORK
CREDIT CARD MASTER NOTE
TRUST,
Issuer
By: Chase Manhattan Bank USA, National
Association,
not in its individual capacity but solely on
behalf of Issuer
By:_________________________________
Name:
Title:
Exhibit A-6
Schedule 1
to Assignment of Receivables
in Additional Accounts
ADDITIONAL ACCOUNTS
-------------------
Exhibit A-7
EXHIBIT B
to
TRANSFER AND SERVICING AGREEMENT
FORM OF REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
(As required by SECTION 2.7 of the Transfer and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________, by and
among WFN CREDIT COMPANY, LLC, a Delaware limited liability company, as
Transferor (the "TRANSFEROR"), WORLD FINANCIAL NETWORK NATIONAL BANK, a national
banking association, as Servicer (the "SERVICER"), and WORLD FINANCIAL NETWORK
CREDIT CARD MASTER NOTE TRUST (the "ISSUER"), pursuant to the Transfer and
Servicing Agreement referred to below.
WITNESSETH:
WHEREAS Transferor, Servicer and Issuer are parties to the Transfer and
Servicing Agreement, dated as of August 1, 2001 (as it may be amended and
supplemented from time to time the "AGREEMENT");
WHEREAS pursuant to the Agreement, Transferor wishes to remove from
Issuer all Receivables owned by Issuer in certain designated Accounts and to
cause Issuer to reconvey the Receivables of such Removed Accounts, whether now
existing or hereafter created, from Issuer to Transferor; and
WHEREAS Issuer is willing to accept such designation and to reconvey
the Receivables in the Removed Accounts subject to the terms and conditions
hereof;
NOW, THEREFORE, Transferor, Servicer and Issuer hereby agree as
follows:
1. DEFINED TERMS. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"REMOVAL DATE" means, with respect to the Removed Accounts designated
hereby, ___________, ____.
"REMOVAL NOTICE DATE" means, with respect to the Removed Accounts
______________, ____.
2. DESIGNATION OF REMOVED ACCOUNTS. On or before the date that is ten
(10) Business Days after the Removal Date, Transferor will deliver to Issuer an
Account Schedule identifying all Accounts the Receivables of which are being
removed from Issuer, specifying for each such Account, as of the Removal Notice
Date, its account
Exhibit B-1
number, the aggregate amount outstanding in such Account and the aggregate
amount of Principal Receivables in such Account, which Account Schedule shall
supplement any Account Schedule previously delivered to Issuer pursuant to the
Agreement.
3. CONVEYANCE OF RECEIVABLES. (a) Issuer does hereby transfer, assign,
set over and otherwise convey to Transferor, without representation, warranty or
recourse, on and after the Removal Date, all right, title and interest of Issuer
in, to and under the Receivables existing at the close of business on the
Removal Date and thereafter created from time to time in the Removed Accounts
designated hereby, all Recoveries related thereto, all monies due or to become
due and all amounts received or receivable with respect thereto and all proceeds
thereof.
(b) In connection with such transfer, Issuer agrees to execute and
deliver to the Seller on or prior to the date this Reassignment is delivered,
applicable termination statements prepared by Transferor with respect to the
Receivables existing at the close of business on the Removal Date and thereafter
created from time to time in the Removed Accounts reassigned hereby and the
proceeds thereof evidencing the release by Issuer of its interest in the
Receivables in the Removed Accounts, and meeting the requirements of applicable
state law, in such manner and such jurisdictions as are necessary to terminate
such interest.
4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Issuer as of the Removal Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Reassignment Agreement
constitutes a legal, valid and binding obligation of Transferor enforceable
against Transferor in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
(b) EARLY AMORTIZATION EVENT. Transferor reasonably believes that (A)
the removal of the Receivables existing in the Removed Accounts will not, based
on the facts known to Transferor, then or thereafter cause an Early Amortization
Event to occur with respect to any Series, (B) no selection procedure was
utilized by Transferor which would result in a selection of Removed Accounts
from among any pools of Accounts of a similar type that would be materially
adverse to the interests of the Noteholders of any Series as of the Removal Date
and (C) Accounts (or administratively convenient groups of Accounts, such as
billing cycles) were chosen for removal on a random basis or another basis that
Transferor believes is consistent with achieving derecognition of the
Receivables under GAAP;
Exhibit B-2
(c) LIST OF REMOVED ACCOUNTS. The list of Removed Accounts delivered
pursuant to Section 2.7(a)(ii) of the Agreement, as of the Removal Date, is true
and complete in all material respects;
(d) DEFAULTED RECEIVABLES. No selection procedure was utilized by
Transferor with the intent to include a disproportionately higher level of
Defaulted Receivables in the Removed Accounts than exist in the Accounts or to
remove Accounts for the intended purpose of mitigating losses to the Trust;
(e) RECEIVABLES TESTS. The aggregate Principal Receivables in the
Removed Accounts did not exceed the lesser of (i) the excess of the Transferor
Amount over the Minimum Transferor Amount or (ii) the excess of the Aggregate
Principal Balance over the Required Principal Balance, all measured as of the
end of the most recently ended Monthly Period; and
(f) COLLATERAL AMOUNTS. Such removal shall not cause a decrease in the
sum of the Collateral Amounts for all outstanding Series.
5. RATIFICATION OF AGREEMENT. As supplemented by this Reassignment, the
Agreement is in all respects ratified and confirmed and the Agreement as so
supplemented by this Reassignment shall be read, taken and construed as one and
the same instrument.
6. COUNTERPARTS. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
8. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto acknowledges and
agrees that this Agreement is being executed and delivered by Chase Manhattan
Bank USA, National Association not individually but solely and exclusively in
its capacity as Owner Trustee on behalf of World Financial Network Credit Card
Master Note Trust for the purpose and with the intention of binding World
Financial Network Credit Card Master Note Trust. No obligations or liabilities
hereunder shall run against Chase Manhattan Bank USA, National Association in
its individual capacity or against its properties or assets.
Exhibit B-3
IN WITNESS WHEREOF, the undersigned have caused this Reassignment
Agreement to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
WFN CREDIT COMPANY, LLC,
Transferor
By:_______________________________
Name:
Title:
WORLD FINANCIAL NETWORK
NATIONAL BANK, Servicer
By:_______________________________
Name:
Title:
WORLD FINANCIAL NETWORK
CREDIT CARD MASTER NOTE
TRUST, Issuer
By: Chase Manhattan Bank USA,
National Association,
not in its individual capacity but solely on
behalf of Issuer
By:_______________________________
Name:
Title:
Exhibit B-4
Schedule 1
to Reassignment Agreement
REMOVED ACCOUNTS
----------------
Exhibit B-5
EXHIBIT C
to
TRANSFER AND SERVICING AGREEMENT
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before the
90th day following the end of the fiscal year
of Transferor pursuant to SECTION 3.5 of the Transfer and
Servicing Agreement referred to below)
WORLD FINANCIAL NETWORK NATIONAL BANK
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
The undersigned, a duly authorized representative of World Financial
Network National Bank, as Servicer ("WFN"), pursuant to the Transfer and
Servicing Agreement dated as of August 1, 2001 (as may be amended and
supplemented from time to time, the "AGREEMENT"), among WFN Credit Company, LLC,
as Transferor, WFN, as Servicer, and World Financial Network Credit Card Master
Note Trust, as Issuer, does hereby certify that:
1. WFN is, as of the date hereof, Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective meanings as set
forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to Indenture
Trustee.
3. A review of the activities of Servicer during the fiscal year ended
__________, ____, and of its performance under the Agreement was conducted under
my supervision.
4. Based on such review, Servicer has, to the best of my knowledge,
performed in all material respects its obligations under the Agreement
throughout such year and no default in the performance of such obligations has
occurred or is continuing except as set forth in PARAGRAPH 5.
5. The following is a description of each default in the performance of
Servicer's obligations under the provisions of the Agreement known to me to have
been made by Servicer during the fiscal year ended ___________, _____, which
sets forth in detail (i) the nature of each such default, (ii) the action taken
by Servicer, if any, to remedy each such default and (iii) the current status of
each such default: if applicable, insert "None."
Exhibit C-1
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this ______ day of ____________, 20___.
WORLD FINANCIAL NETWORK
NATIONAL BANK, Servicer
By:_______________________________
Name:
Title:
Exhibit C-2
EXHIBIT D-1
to
TRANSFER AND SERVICING AGREEMENT
FORM OF OPINION OF COUNSEL WITH RESPECT
TO AMENDMENTS
(Provisions to be included in
Opinion of Counsel to be delivered pursuant
to SECTION 9.2(d)(i))
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions Of Counsel
delivered on any applicable Closing Date.
(i) The amendment to the Transfer and Servicing Agreement
attached hereto as Schedule 1 (the "AMENDMENT"), has been duly
authorized, executed and delivered by Transferor and Servicer and
constitutes the legal, valid and binding agreement of Transferor and
Servicer, respectively, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws from time to time
in effect affecting creditors' rights generally or the rights of
creditors of national banking associations. The enforceability of the
respective obligations of Transferor and Servicer is also subject to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law)
(ii) The Amendment has been entered into in accordance with
the terms and provisions of SECTION 9.1 of the Transfer and Servicing
Agreement.
Exhibit D-1-1
EXHIBIT D-2
to
TRANSFER AND SERVICING AGREEMENT
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF SUPPLEMENTAL ACCOUNTS
(Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
SECTION 9.2(d)(ii))
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions.
1. The Receivables arising in such Supplemental Accounts constitute
accounts.
2. The Transfer and Servicing Agreement creates in favor of the Trust a
security interest in Transferor's rights in the Receivables in such Supplemental
Accounts and the proceeds thereof (the "SPECIFIED ASSETS").
3. The security interest in the Specified Assets created by the Pooling
and Servicing Agreement will be perfected by the filing of the Financing
Statements as described and defined in such opinion. Based solely upon our
review of the UCC Searches as described and defined in such opinion, we hereby
confirm to you that no Person other than the Trust has filed any financing
statement with the Filing Offices as described and defined in such opinion that
covers the Specified Assets and that would have priority over the security
interest, if any, of the Trust by virtue of such filing.
4. The Receivables Purchase Agreement creates in favor of Transferor a
security interest in the RPA Seller's rights in the Specified Assets.
5. The security interest in the Specified Assets created by the
Receivables Purchase Agreement will be perfected by the filing of the Financing
Statements as described and defined in such opinion. Based solely upon our
review of the UCC Searches as described and defined in such opinion, we hereby
confirm to you that no Person other than Transferor has filed any financing
statement with the Filing Offices as described and defined in such opinion that
covers the Specified Assets and that would have priority over the security
interest, if any, of Transferor by virtue of such filing.
Exhibit D-2-1
EXHIBIT D-3
PROVISIONS TO BE INCLUDED IN
ANNUAL OPINION OF COUNSEL
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the opinion of counsel
to Transferor with respect to similar matters delivered on the Initial Closing
Date. Unless otherwise indicated, all capitalized terms used herein shall have
the meanings ascribed to them in the Transfer and Servicing Agreement.
1. No filing or other action, other than such filing or other action
described in this opinion letter, is necessary from the date of this opinion
letter through March 31 of the following year to continue the perfected status
of the security interest of the Trust in the Receivables described in the
financing statements referenced in this opinion letter.
2. No filing or other action, other than such filing or other action
described in this opinion letter, is necessary from the date of this opinion
letter through March 31 of the following year to continue the perfected status
of the security interest of Indenture Trustee in the Receivables described in
the financing statements referenced in this opinion letter.
Exhibit D-3-1
SCHEDULE 1
LIST OF ACCOUNTS
----------------
[Original list delivered to Owner Trustee]
-1-
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 8/31/01 |
| For Period End: | | 8/21/01 | | | | | | | 8-K |
| | 8/1/01 | | 1 | | 70 |
| List all Filings |
9 Subsequent Filings that Reference this Filing
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