<PAGE>
EXHIBIT 4.1
EXECUTION COPY
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AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION III LLC,
AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC
AND
AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION II,
AS TRANSFERORS,
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.,
AS SERVICER,
AND
THE BANK OF NEW YORK,
AS TRUSTEE AND AS SECURITIES INTERMEDIARY
AMERICAN EXPRESS CREDIT ACCOUNT MASTER TRUST
POOLING AND SERVICING AGREEMENT
DATED AS OF MAY 16, 1996,
AS AMENDED AND RESTATED AS OF JANUARY 1, 2006
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ARTICLE I
DEFINITIONS................................................................................1
Section 1.01
Definitions.......................................................................1
Section 1.02
Other Definitional
Provisions....................................................26
ARTICLE II
CONVEYANCE OF
RECEIVABLES.................................................................27
Section 2.01
Conveyance of
Receivables........................................................27
Section 2.02
Acceptance by
Trustee............................................................30
Section 2.03
Representations and Warranties of Each Transferor Relating to
Such
Transferor.......................................................................30
Section 2.04
Representations and Warranties of each Transferor Relating to
the
Agreement and any Supplement and the
Receivables.................................32
Section 2.05
Reassignment of Ineligible
Receivables...........................................34
Section 2.06
Reassignment of Certificateholders' Interest in Trust
Portfolio..................35
Section 2.07
Covenants of each
Transferor.....................................................36
Section 2.08
Additional Covenants of Each Transferor Regarding the Terms of
the
Accounts.........................................................................39
Section 2.09
Addition of
Accounts.............................................................40
Section 2.10
Removal of Accounts and Participation
Interests..................................44
Section 2.11
Account
Allocations..............................................................46
Section 2.12
Discount
Option..................................................................46
Section 2.13
Premium
Option...................................................................47
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES...............................................49
Section 3.01
Acceptance of Appointment and Other Matters Relating to the
Servicer.............49
Section 3.02
Servicing
Compensation...........................................................50
Section 3.03
Representations, Warranties and Covenants of the
Servicer........................50
Section 3.04
Reports and Records for the
Trustee..............................................52
Section 3.05
Annual Certificate of
Servicer...................................................53
Section 3.06
Annual Servicing Report of Independent Public Accountants; Copies
of
Reports
Available................................................................53
Section 3.07
Tax
Treatment....................................................................53
Section 3.08
Notices to American Express
Entities.............................................54
Section 3.09
Adjustments......................................................................54
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Section 3.10
Recoveries.......................................................................55
Section 3.11
Reports to the
Commission........................................................55
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF
COLLECTIONS................56
Section 4.01
Rights of
Certificateholders.....................................................56
Section 4.02
Establishment of Collection Account and Special Funding
Account..................56
Section 4.03
Collections and
Allocations......................................................59
Section 4.04
Shared Principal
Collections.....................................................60
Section 4.05
Allocation of Trust Assets to Series or
Groups...................................60
Section 4.06
Issuer Rate
Fees.................................................................61
Section 4.07
Manner of Holding Trust
Assets...................................................61
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS...........................................63
ARTICLE VI
THE
CERTIFICATES..........................................................................64
Section 6.01
The
Certificates.................................................................64
Section 6.02
Authentication of
Certificates...................................................64
Section 6.03
New
Issuances....................................................................65
Section 6.04
Registration of Transfer and Exchange of
Certificates............................66
Section 6.05
Mutilated, Destroyed, Lost or Stolen
Certificates................................69
Section 6.06
Persons Deemed
Owners............................................................70
Section 6.07
Appointment of Paying
Agent......................................................70
Section 6.08
Access to List of Registered Certificateholders' Names and
Addresses.............71
Section 6.09
Authenticating
Agent.............................................................71
Section 6.10
Book-Entry
Certificates..........................................................72
Section 6.11
Notices to Clearing
Agency.......................................................73
Section 6.12
Definitive
Certificates..........................................................73
Section 6.13
Global Certificate; Exchange
Date................................................74
Section 6.14
Meetings of
Certificateholders...................................................75
Section 6.15
Uncertificated
Classes...........................................................77
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ARTICLE VII
OTHER MATTERS RELATING TO EACH
TRANSFEROR.................................................78
Section 7.01
Liability of each
Transferor.....................................................78
Section 7.02
Merger or Consolidation of, or Assumption of the Obligations of,
a
Transferor.......................................................................78
Section 7.03
Limitations on Liability of each
Transferor......................................79
Section 7.04
Liabilities......................................................................79
Section 7.05
Assumption of a Transferor's
Obligations.........................................79
Section 7.06
Expenses.........................................................................81
ARTICLE VIII
OTHER MATTERS RELATING TO THE
SERVICER....................................................82
Section 8.01
Liability of the
Servicer........................................................82
Section 8.02
Merger or Consolidation of, or Assumption of the Obligations of,
the
Servicer.........................................................................82
Section 8.03
Limitation on Liability of the Servicer and
Others...............................82
Section 8.04
Servicer Indemnification of the Trust and the
Trustee............................83
Section 8.05
Resignation of the
Servicer......................................................83
Section 8.06
Access to Certain Documentation and Information Regarding the
Receivables........84
Section 8.07
Delegation of
Duties.............................................................84
Section 8.08
Examination of
Records...........................................................84
ARTICLE IX
INSOLVENCY
EVENTS.........................................................................85
Section 9.01
Rights upon the Occurrence of an Insolvency
Event................................85
ARTICLE X
SERVICER
DEFAULTS.........................................................................87
Section 10.01
Servicer
Defaults................................................................87
Section 10.02
Trustee To Act; Appointment of
Successor.........................................89
ARTICLE XI
THE
TRUSTEE...............................................................................92
Section 11.01
Duties of
Trustee................................................................92
Section 11.02
Certain Matters Affecting the
Trustee............................................93
Section 11.03
Trustee Not Liable for Recitals in
Certificates..................................95
Section 11.04
Trustee May Own
Certificates.....................................................95
Section 11.05
The Servicer To Pay Trustee's Fees and
Expenses..................................95
Section 11.06
Eligibility Requirements for
Trustee.............................................96
Section 11.07
Resignation or Removal of
Trustee................................................96
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Section 11.08
Successor
Trustee................................................................96
Section 11.09
Merger or Consolidation of
Trustee...............................................97
Section 11.10
Appointment of Co-Trustee or Separate
Trustee....................................97
Section 11.11
Tax
Returns......................................................................98
Section 11.12
Trustee May Enforce Claims Without Possession of
Certificates....................99
Section 11.13
Suits for
Enforcement............................................................99
Section 11.14
Rights of Certificateholders To Direct
Trustee...................................99
Section 11.15
Representations and Warranties of
Trustee.......................................100
Section 11.16
Maintenance of Office or
Agency.................................................100
ARTICLE XII
TERMINATION..............................................................................101
Section 12.01
Termination of
Trust............................................................101
Section 12.02
Final
Distribution..............................................................101
Section 12.03
Transferor's Termination
Rights.................................................102
Section 12.04
Defeasance......................................................................102
ARTICLE XIII
MISCELLANEOUS
PROVISIONS.................................................................105
Section 13.01
Amendment; Waiver of Past
Defaults..............................................105
Section 13.02
Protection of Right, Title and Interest to
Trust................................107
Section 13.03
Limitation on Rights of
Certificateholders......................................108
Section 13.06
Severability of
Provisions......................................................110
Section 13.07
Certificates Nonassessable and Fully
Paid.......................................110
Section 13.08
Further
Assurances..............................................................110
Section 13.09
Nonpetition
Covenant............................................................111
Section 13.10
No Waiver; Cumulative
Remedies..................................................111
Section 13.11
Counterparts....................................................................111
Section 13.12
Third-Party
Beneficiaries.......................................................111
Section 13.13
Actions by
Certificateholders...................................................111
Section 13.14
Rule 144A
Information...........................................................111
Section 13.15
Merger and
Integration..........................................................112
Section 13.16
Headings........................................................................112
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Section 13.17
Fiscal
Year.....................................................................112
Section 13.18
Force
Majeure...................................................................112
ARTICLE XIV
COMPLIANCE WITH REGULATION
AB............................................................113
Section 14.01
Intent of the Parties;
Reasonableness...........................................113
Section 14.02
Additional Representations and Warranties of the
Trustee........................113
Section 14.03
Information to Be Provided by the
Trustee.......................................113
Section 14.04
Report on Assessment of Compliance and
Attestation..............................114
Section 14.05
Additional Representations and Warranties of the
Servicer.......................115
Section 14.06
Information to Be Provided by the
Servicer......................................115
Section 14.07
Report on Assessment of Compliance and
Attestation..............................117
Section 14.08
Use of Subservicers and Servicing
Participants..................................118
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<PAGE>
EXHIBITS
Exhibit A Form
of Transferor Certificate
Exhibit B Form
of Assignment of Receivables in Additional Accounts
Exhibit C Form
of Reassignment of Receivables in Removed Accounts
Exhibit D
[Reserved]
Exhibit E-1 Form of Opinion of
Counsel with respect to Amendments
Exhibit E-2 Form of Opinion of
Counsel with respect to Accounts
Exhibit E-3 Form of Annual Opinion
of Counsel
Exhibit F-1 Form of Certificate of
Foreign Clearing Agency
Exhibit F-2 Form of Alternate
Certificate to be delivered to Foreign Clearing
Agency
Exhibit F-3 Form of Certificate to
be delivered to Foreign Clearing Agency
Exhibit G-1 Private Placement
Legend
Exhibit G-2 Representation
Letter
Exhibit G-3 ERISA Legend
Exhibit H Form of
Annual Certification
Exhibit I Servicing
Criteria to be Addressed in Assessment of Compliance
Exhibit J Form of
Annual Certification
Exhibit K Servicing
Criteria to be Addressed in Assessment of Compliance
SCHEDULES
Schedule 1 List of Accounts
[Deemed Incorporated]
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of May 16, 1996, as
amended and restated as of January 1, 2006, among (i) AMERICAN
EXPRESS
RECEIVABLES FINANCING CORPORATION II, a Delaware corporation,
AMERICAN EXPRESS
RECEIVABLES FINANCING CORPORATION III LLC, a Delaware limited
liability company,
and AMERICAN EXPRESS RECEIVABLES FINANCING CORPORATION IV LLC, a
Delaware
limited liability company, as Transferors; (ii) AMERICAN EXPRESS
TRAVEL RELATED
SERVICES COMPANY, INC., a New York corporation, as Servicer; and
(iii) THE BANK
OF NEW YORK, a New York banking corporation, as Trustee.
WHEREAS, this Pooling and Servicing Agreement, dated as of May
16, 1996 (as amended and supplemented, the "Original Pooling
Agreement"), was
amended and restated on April 16, 2004, and as so amended and
restated was among
American Express Receivables Financing Corporation II, American
Express
Receivables Financing Corporation III LLC and American Express
Receivables
Financing Corporation IV LLC, as Transferors, American Express
Travel Related
Services Company, Inc., as Servicer, and The Bank of New York, as
Trustee (the
"Amended PSA");
WHEREAS, the parties hereto agree to and do hereby amend and
restate the Amended PSA as of January 1, 2006, to read in its
entirety as set
forth herein.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, this Agreement is hereby amended and restated to
read in its
entirety as follows and each party agrees as follows for the
benefit of the
other parties and the Certificateholders:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings, and
the
definitions of such terms are applicable to the singular as well as
the plural
forms of such terms and to the masculine as well as to the feminine
and neuter
genders of such terms.
"Account" shall mean (a) each Initial Account, (b) each
Additional Account (but only from and after the Addition Date with
respect
thereto), (c) each Related Account and (d) each Transferred
Account, but shall
exclude (e) any Account, all the Receivables of which are either
(i) after the
Removal Date, removed by a Transferor pursuant to Section 2.10,
(ii) reassigned
to a Transferor pursuant to Section 2.05 or (iii) assigned and
transferred to
the Servicer pursuant to Section 3.03.
"Account Agreement" shall mean, with respect to an Account,
the agreement between an Account Owner and the Obligor governing
the terms and
conditions of such Account, as such agreement may be amended,
modified or
otherwise changed from time to time.
"Account Owner" shall mean, with respect to an Account,
Centurion Bank, FSB or any other entity that, pursuant to the
Account Agreement
related to such Account, is the issuer of the credit or charge
cards related to,
or the owner of, such Account; provided that the Transferors shall
notify
Standard & Poor's promptly following the designation of any
Account Owner other
than Centurion Bank or FSB.
<PAGE>
"Accumulation Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving
Period, which
shall be the controlled accumulation period, the principal
accumulation period,
the rapid accumulation period, the optional accumulation period,
the limited
accumulation period or other accumulation period, in each case as
defined with
respect to such Series in the related Supplement.
"Act" shall mean the Securities Act of 1933, as amended.
"Addition Cut-Off Date" shall mean (a) with respect to
Aggregate Addition Accounts or Participation Interests, the date
specified as
such in the notice delivered with respect thereto pursuant to
subsection 2.09(c)
and (b) with respect to New Accounts, the later of the dates on
which such New
Accounts are originated or designated pursuant to subsection
2.09(d).
"Addition Date" shall mean (a) with respect to Aggregate
Addition Accounts, the date from and after which such Aggregate
Addition
Accounts are to be included as Accounts pursuant to subsection
2.09(a) or (b),
(b) with respect to Participation Interests, the date from and
after which such
Participation Interests are to be included as assets of the Trust
pursuant to
subsection 2.09(a) or (b), and (c) with respect to New Accounts,
the first
Distribution Date following the calendar month in which such New
Accounts are
originated or designated pursuant to subsection 2.09(a) or (b).
"Addition Selection Date" shall mean, for each Aggregate
Addition, the date specified as such in the notice delivered with
respect
thereto pursuant to subsection 2.09(c).
"Additional Account" shall mean each New Account and each
Aggregate Addition Account.
"Additional Transferor" shall have the meaning specified in
subsection 2.09(g).
"Adjusted Invested Amount" shall mean, with respect to any
Series and for any date, an amount equal to the "Adjusted Invested
Amount" as
specified in the related Supplement.
"Adverse Effect" shall mean, with respect to any action, that
such action will (a) result in the occurrence of a Pay-Out Event or
a
Reinvestment Event or (b) materially adversely affect the amount or
timing of
distributions to be made to the Investor Certificateholders of any
Series or
Class pursuant to this Agreement and the related Supplement.
"Affiliate" shall mean, with respect to any specified Person,
any other Person controlling or controlled by or under common
control with such
specified Person. For the purposes of this definition, "control"
shall mean the
power to direct the management and policies of a Person, directly
or indirectly,
whether through the ownership of voting securities, by contract or
otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the
foregoing.
2
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"Aggregate Addition" shall mean the designation of additional
Eligible Accounts, other than New Accounts, to be included as
Accounts or of
Participation Interests to be included as Trust Assets pursuant to
subsection
2.09(a) or (b).
"Aggregate Addition Account" shall mean each Eligible Account
designated pursuant to subsection 2.09(a) or (b) to be included as
an Account
and identified in the computer file or microfiche list delivered to
the Trustee
by a Transferor pursuant to Section 2.01 and subsection
2.09(h).
"Aggregate Invested Amount" shall mean, as of any date of
determination, the aggregate Adjusted Invested Amounts of all
Series of
Certificates issued and outstanding on such date of
determination.
"Agreement" shall mean the Original Pooling Agreement (i) as
amended and restated by the Amended PSA and as further amended and
restated by
this Pooling and Servicing Agreement and (ii) with respect to each
Series, as
supplemented by each related Supplement, as the same may be further
amended,
supplemented or otherwise modified from time to time.
"Amended PSA" shall have the meaning specified in the recitals
of this Agreement.
"American Express Credco" shall mean American Express Credit
Corporation, a Delaware corporation, and its successors and
permitted assigns.
"Amortization Period" shall mean, with respect to any Series,
or any Class within a Series, a period following the Revolving
Period, which
shall be the controlled amortization period, the principal
amortization period,
the early amortization period, the optional amortization period,
the limited
amortization period or other amortization period, in each case as
defined with
respect to such Series in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.08.
"Appointment Date" shall have the meaning specified in
subsection 9.02(a).
"Assignment" shall have the meaning specified in subsection
2.09(h).
"Authorized Newspaper" shall mean any newspaper or newspapers
of general circulation in the Borough of Manhattan, The City of New
York,
printed in the English language (and, with respect to any Series or
Class, if
and so long as the Investor Certificates of such Series are listed
on the
Luxembourg Stock Exchange and such exchange shall so require, in
Luxembourg,
printed in any language satisfying the requirements of such
exchange) and
customarily published on each Business Day at such place, whether
or not
published on Saturdays, Sundays or holidays.
"Average Rate," unless otherwise provided in any Supplement,
shall mean, as of any date of determination and with respect to any
Group, the
percentage equivalent of a decimal equal to the sum of the amounts
for each
outstanding Series (or each Class within any Series consisting of
more than one
Class) within such Group obtained by multiplying (a) the
Certificate Rate
(reduced to take into account the payments received pursuant to any
interest
rate agreements net of any amounts payable under such agreements,
or, if such
agreements result in a net amount payable, increased by such net
amount payable)
for such Series or Class, by (b) a fraction, the numerator of which
is the
aggregate unpaid principal amount of the Investor Certificates of
such Series or
Class and the denominator of which is the aggregate unpaid
principal amount of
all Investor Certificates within such Group.
3
<PAGE>
"Bankruptcy Code" shall have the meaning specified in Section
7.02.
"Bearer Certificates" shall have the meaning specified in
Section 6.01.
"Benefit Plan" shall have the meaning specified in subsection
6.04(c).
"Book-Entry Certificates" shall mean Investor Certificates
that are registered in the name of a Clearing Agency or a Foreign
Clearing
Agency, or the nominee of either such entity, ownership and
transfers of which
shall be made through book entries by such Clearing Agency or
Foreign Clearing
Agency as described in Section 6.10.
"Business Day" shall mean (i) any day other than (a) a
Saturday or Sunday or (b) any other day on which national banking
associations
or state banking institutions in New York, New York, or any other
State in which
the principal executive offices of Centurion Bank, FSB, the
Trustee, or any
Account Owner, as the case may be, are located, are authorized or
are obligated
by law, executive order or governmental decree to be closed or (c)
for purposes
of any particular Series, any other day specified in the applicable
Supplement
and (ii) with respect to the determination of LIBOR, a London
Business Day (as
such term is defined in the related Supplement).
"Cash Advance Fees" shall mean cash advance transaction fees
and cash advance late fees, if any, as specified in any Account
Agreement
applicable to an Account.
"Centurion Bank" shall mean American Express Centurion Bank, a
Utah industrial bank, and its successors and permitted assigns.
"Centurion Bank - RFC III Purchase Agreement" shall mean that
certain Receivables Purchase Agreement, dated as of April 16, 2004,
between
Centurion Bank and RFC III, as the same may be, or may have been,
amended,
supplemented or otherwise modified from time to time.
"Centurion Bank - RFC III Revolving Credit Agreement" shall
mean the Revolving Credit Agreement by and between Centurion Bank
and RFC III,
dated as of April 16, 2004, as such agreement may be amended from
time to time
in accordance therewith, or any substantially similar agreement
entered into
between any lender and RFC III.
"Certificate" shall mean any one of the Investor Certificates
or the Transferor Certificates.
"Certificateholder" or "Holder" shall mean an Investor
Certificateholder or, if used with respect to the Transferors'
Interest, a
Person in whose name a Transferor Certificate is registered or a
Person in whose
name ownership of an uncertificated interest in the Transferors'
Interest is
registered in the books and records of the Trust maintained by the
Trustee.
4
<PAGE>
"Certificateholders' Interest" shall have the meaning
specified in Section 4.01. For purposes of determining whether
Holders of
Investor Certificates evidencing a specified percentage of the
Certificateholders' Interest have approved, consented or otherwise
agreed to any
action hereunder, such determination shall be made based on the
percentage of
the Invested Amount or Adjusted Invested Amount, as specified in
the related
Supplement, represented by such Investor Certificates.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the owner of a security entitlement
with respect
to such Book-Entry Certificate, as reflected on the books of the
Clearing
Agency, or on the books of a Person maintaining an account with
such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect
participant,
in accordance with the rules of such Clearing Agency).
"Certificate Rate" shall mean, as of any particular date of
determination and with respect to any Series or Class, the
certificate rate as
of such date specified therefor in the related Supplement.
"Certificate Register" shall mean the register maintained
pursuant to Section 6.04, providing for the registration of the
Registered
Certificates and transfers and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the
classes of Investor Certificates of that Series.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act, and
serving as
clearing agency for a Series or Class of Book-Entry
Certificates.
"Clearing Agency Participant" shall mean a broker, dealer,
bank, other financial institution or other Person for whom from
time to time a
Clearing Agency effects book-entry transfers and pledges of
securities deposited
with the Clearing Agency.
"Clearstream" shall mean Clearstream Bank, societe anonyme, a
professional depository incorporated under the laws of Luxembourg,
and any
successor thereto.
"Closing Date" shall mean, with respect to any Series, the
closing date specified in the related Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collection Account" shall have the meaning specified in
Section 4.02.
"Collections" shall mean all payments by or on behalf of
Obligors (including Insurance Proceeds) received in respect of the
Receivables,
in the form of cash, checks, wire transfers, electronic transfers,
ATM transfers
or any other form of payment in accordance with the Account
Agreement in effect
from time to time and all other amounts specified by this Agreement
or any
Supplement as constituting Collections. As specified in any
Participation
Interest Supplement, Collections shall include amounts received
with respect to
Participation Interests. With respect to any Monthly Period, all
Issuer Rate
Fees received with respect to the preceding Monthly Period and all
Recoveries
with respect to Receivables previously charged-off as uncollectible
will be
treated as Collections of Finance Charge Receivables.
5
<PAGE>
"Commission" shall have the meaning specified in subsection
3.01(b).
"Companion Series" shall mean (i) each Series which has been
paired with another Series (which Series may be prefunded or
partially
prefunded), such that the reduction of the Invested Amount or
Adjusted Invested
Amount of such Series results in the increase of the Invested
Amount or Adjusted
Invested Amount, respectively, of such other Series, as described
in the related
Supplements, and (ii) such other Series.
"Corporate Trust Office" shall have the meaning specified in
Section 11.16.
"Coupon" shall have the meaning specified in Section 6.01.
"Credco-Centurion Bank Purchase Agreement" shall mean,
collectively, the Receivables Purchase Agreements, each dated as of
October 1,
1987, between Centurion Bank and American Express Credco, as the
same may be, or
may have been, amended, supplemented or otherwise modified from
time to time.
"Credco-RFC II Purchase Agreement" shall mean that certain
Receivables Purchase Agreement, dated as of May 16, 1996, between
American
Express Credco and RFC II, as the same may be, or may have been,
amended,
supplemented or otherwise modified from time to time.
"Credit Guidelines" shall mean the respective policies and
procedures of Centurion Bank, FSB or any other Account Owner, as
the case may
be, as such policies and procedures may be amended from time to
time, (a)
relating to the operation of its credit or charge business, as the
case may be,
which generally are applicable to its portfolio of similar
accounts, including
the policies and procedures for determining the creditworthiness of
customers
and the extension of credit or charge privileges to customers, and
(b) relating
to the maintenance of accounts and collection of related
receivables.
"Date of Processing" shall mean, with respect to any
transaction or receipt of Collections, the Business Day after such
transaction
is first output, in written form under the Servicer's customary and
usual
practices, from the Servicer's computer file of accounts comparable
to the
Accounts (without regard to the effective date of recordation).
"Defaulted Account" shall mean any Account that has Defaulted
Receivables.
"Defaulted Amount" shall mean, with respect to any Monthly
Period, an amount (which shall not be less than zero) equal to (a)
the amount of
Principal Receivables which became Defaulted Receivables in such
Monthly Period,
minus (b) the amount of any Defaulted Receivables of which a
Transferor or the
Servicer became obligated to accept reassignment or assignment in
accordance
with the terms of this Agreement during such Monthly Period;
provided, however,
that, if an Insolvency Event occurs with respect to any Transferor,
the amount
of such Defaulted Receivables which are subject to reassignment to
such
Transferor in accordance with the terms of this Agreement shall not
be added to
the sum so subtracted and, if any of the events described in
subsection 10.01(d)
occur with respect to the Servicer, the amount of such Defaulted
Receivables
which are subject to assignment to the Servicer in accordance with
the terms of
this Agreement shall not be added to the sum so subtracted.
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<PAGE>
"Defaulted Receivables" shall mean, with respect to any
Monthly Period, all Principal Receivables which are charged off as
uncollectible
in such Monthly Period in accordance with the Credit Guidelines and
the
Servicer's customary and usual servicing procedures for servicing
accounts
comparable to the Accounts. A Principal Receivable shall become a
Defaulted
Receivable on the Date of Processing on which such Principal
Receivable is
recorded as charged-off on the Servicer's computer file of
Accounts.
"Defeasance" shall have the meaning specified in subsection
12.04(a).
"Defeased Series" shall have the meaning specified in
subsection 12.04(a).
"Definitive Certificates" shall have the meaning specified in
Section 6.10.
"Definitive Euro-Certificates" shall have the meaning
specified in subsection 6.13(a).
"Deposit Date" shall mean each day on which the Servicer
deposits Collections in the Collection Account.
"Depository Agreement" shall mean, with respect to any Series
or Class of Book-Entry Certificates, the agreement among the
Transferors, the
Trustee and the Clearing Agency substantially in the form attached
to the
applicable Supplement.
"Determination Date" shall mean, unless otherwise specified in
the Supplement for a particular Series, the earlier of the third
Business Day
and the fifth calendar day (or if the fifth calendar day is not a
Business Day,
then the preceding Business Day) preceding each Distribution
Date.
"Discount Option Date" shall mean each date on which a
Discount Percentage designated by the Transferors pursuant to
Section 2.12 takes
effect.
"Discount Option Receivables" shall have the meaning specified
in Section 2.12. The aggregate amount of Discount Option
Receivables outstanding
on any Date of Processing occurring on or after the Discount Option
Date shall
equal the sum of (a) the aggregate Discount Option Receivables at
the end of the
prior Date of Processing (which amount, prior to the Discount
Option Date, shall
be zero) plus (b) any new Discount Option Receivables created on
such Date of
Processing minus (c) any Discount Option Receivable Collections
received on such
Date of Processing. Discount Option Receivables created on any Date
of
Processing shall mean the product of the amount of any Principal
Receivables
created on such Date of Processing (without giving effect to the
proviso in the
definition of Principal Receivables) and the Discount
Percentage.
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<PAGE>
"Discount Option Receivable Collections" shall mean on any
Date of Processing occurring in any Monthly Period succeeding the
Monthly Period
in which the Discount Option Date occurs, the product of (a) the
Discount
Percentage and (b) Collections of Principal Receivables on such
Date of
Processing (without giving effect to the proviso in the definition
of Principal
Receivables).
"Discount Percentage" shall mean the percentage, if any,
designated from time to time by the Transferors pursuant to Section
2.11.
"Distribution Date" shall mean, with respect to any Series,
the fifteenth day of each calendar month or, if such fifteenth day
is not a
Business Day, the next succeeding Business Day, or the date
otherwise specified
in the applicable Supplement for such Series.
"Dollars," "$" or "U.S. $" shall mean United States dollars.
"Eligible Account" shall mean a credit or charge account or
line of credit (if, with respect to the line of credit, the full
receivable
balance is not due upon receipt of a monthly billing statement
(excluding the
billing statement with respect to the final payment of such
balance) and the
line of credit contains a code designation in the related
securitization field
as described in Section 2.01) owned by Centurion Bank, in the case
of the
Initial Accounts on the selection date related to its date of
designation as an
"Account" under the Original Pooling Agreement, or Centurion Bank,
FSB or any
other Account Owner, in the case of Additional Accounts, that, with
respect to
an Initial Account, as of the selection date related to its date of
designation
as an "Account" under the Original Pooling Agreement or, with
respect to an
Additional Account, as of the Addition Selection Date, meets the
following
requirements:
(a) is a credit or other charge account or line of credit (if,
with respect to the line of credit, the full receivable balance is
not due upon
receipt of a monthly billing statement (excluding the billing
statement with
respect to the final payment of such balance) and the line of
credit contains a
code designation in the related securitization field as described
in Section
2.01) in existence and maintained by Centurion Bank, FSB or such
other Account
Owner, as the case may be;
(b) is payable in Dollars;
(c) has an Obligor that has not been confirmed by the Servicer
in its computer files as being involved in a voluntary or
involuntary bankruptcy
proceeding;
(d) has an Obligor who has provided as his or her most recent
billing address an address located in the United States or its
territories or
possessions or Canada or a United States military address;
provided, however,
that as of any date of determination, up to 3% of the Accounts
(calculated by
number of Accounts) may have Obligors who have provided as their
billing
addresses, addresses located outside of such jurisdictions;
(e) if such account is a credit card or charge card account,
has not been identified as an account with respect to which a
related card has
been lost or stolen;
8
<PAGE>
(f) has not been sold or pledged to any other party except for
any other Account Owner that has either entered into (or, on or
prior to the
Addition Date, will enter into) a Receivables Purchase Agreement or
that is (or,
on or prior to the Addition Date, will be) a Transferor;
(g) does not have receivables that have been sold or pledged
by Centurion Bank, FSB or any other Account Owner, as the case may
be, to any
Person other than American Express Credco or any Transferor;
and
(h) does not have receivables that are Defaulted Receivables
or that have been identified by the Servicer as having been
incurred as a result
of the fraudulent use of a related credit or charge card.
Notwithstanding the above requirements, Eligible Accounts may
include accounts,
the receivables of which have been written off, or with respect to
which the
Servicer has confirmed the related Obligor is bankrupt, in each
case as of the
selection dates related to their date of designation as "Accounts"
under the
Original Pooling Agreement, with respect to Initial Accounts, and
as of the
related Addition Selection Date, with respect to Additional
Accounts; provided
that (a) the balance of all receivables included in such accounts
is reflected
on the books and records of the related Account Owner (and is
treated for
purposes of this Agreement) as "zero" and (b) borrowing and
charging privileges
with respect to all such accounts have been canceled in accordance
with the
Credit Guidelines applicable thereto and will not be reinstated by
the related
Account Owner or the Servicer.
"Eligible Deposit Account" shall mean either (a) a segregated
account with an Eligible Institution (other than any Account Owner)
or (b) a
segregated trust account with the corporate trust department of a
depository
institution (other than any Account Owner) organized under the laws
of the
United States or any one of the states thereof, including the
District of
Columbia (or any domestic branch of a foreign bank), and acting as
a trustee for
funds deposited in such account, so long as any of the unsecured,
unguaranteed
senior debt securities of such depository institution shall have a
credit rating
from each Rating Agency in one of its generic credit rating
categories that
signifies investment grade.
"Eligible Institution" shall mean the Trustee or any
depository institution organized under the laws of the United
States, any one of
the states thereof or the District of Columbia (or any domestic
branch of a
foreign bank), which depository institution at all times (a) is a
member of the
FDIC and (b) has (i) a long-term unsecured debt rating acceptable
to each Rating
Agency or (ii) a certificate of deposit rating acceptable to the
Rating Agency.
Notwithstanding the previous sentence any institution the
appointment of which
satisfies the Rating Agency Condition shall be considered an
Eligible
Institution. If so qualified, the Servicer may be considered an
Eligible
Institution for the purposes of this definition.
"Eligible Investments" shall mean negotiable instruments or
investment property, or, in the case of deposits described below,
deposit
accounts held in the name of the Trustee in trust for the benefit
of the
Certificateholders, subject to the exclusive custody and control of
the Trustee
and for which the Trustee has sole signature authority, which
evidence:
9
<PAGE>
(a) direct obligations of, or obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depository
institutions
or trust companies incorporated under the laws of the United States
of America,
any state thereof or the District of Columbia (or domestic branches
of foreign
banks) and subject to supervision and examination by federal or
state banking or
depository institution authorities; provided that at the time of
the Trust's
investment or contractual commitment to invest therein, the
short-term debt of
such depository institution or trust company shall be rated at
least "A-1+" by
Standard & Poor's (or any other rating from Standard &
Poor's, subject to
receipt by the Transferors, the Servicer and the Trustee of written
notification
from Standard & Poor's that investments of such type at such
other rating will
not result in Standard & Poor's reducing or withdrawing its
then existing rating
of the Certificates of any outstanding Series or Class with respect
to which it
is a Rating Agency) and shall be satisfactory to each other Rating
Agency;
(c) commercial paper (having original or remaining maturities
of no more than 30 days), that shall be rated, at the time of the
Trust's
investment or contractual commitment to invest therein, at least
"A-1+" by
Standard & Poor's (or any other rating from Standard &
Poor's, subject to
receipt by the Transferors, the Servicer and the Trustee of written
notification
from Standard & Poor's that investments of such type at such
other rating will
not result in Standard & Poor's reducing or withdrawing its
then existing rating
of the Certificates of any outstanding Series or Class with respect
to which it
is a Rating Agency) and shall be satisfactory to each other Rating
Agency;
(d) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC having, at the time of the
Trust's
investment therein, a rating satisfactory to the Rating Agency;
(e) bankers' acceptances (having original maturities of no
more than 365 days) issued by any depository institution or trust
company
referred to in clause (b) above;
(f) time deposits (having maturities not later than the next
Transfer Date) other than as referred to in clause (b) above, with
a Person the
commercial paper of which shall be rated at least "A-1+" by
Standard & Poor's
(or any other rating from Standard & Poor's, subject to receipt
by the
Transferors, the Servicer and the Trustee of written notification
from Standard
& Poor's that investments of such type at such other rating
will not result in
Standard & Poor's reducing or withdrawing its then existing
rating of the
Certificates of any outstanding Series or Class with respect to
which it is a
Rating Agency) and shall be satisfactory to each other Rating
Agency;
(g) only to the extent permitted by Rule 3a-7 under the
Investment Company Act, (i) money market funds that shall be rated,
at the time
of the Trust's investment therein, at least "AAA-m" or "AAAm-G" by
Standard &
Poor's (or any other rating from Standard & Poor's, subject to
receipt by the
Transferors, the Servicer and the Trustee of written notification
from Standard
& Poor's that investments of such type at such other rating
will not result in
Standard & Poor's reducing or withdrawing its then existing
rating of the
Certificates of any outstanding Series or Class with respect to
which it is a
Rating Agency) and in the highest rating category of each other
Rating Agency
(including any such fund for which the Trustee or any Affiliate of
the Trustee
is investment manager or advisor) or (ii) any other investment of a
type or
rating that satisfies the Rating Agency Condition; or
10
<PAGE>
(h) any other investments permitted by Rule 3a-7 of the
Investment Company Act and approved in writing by each Rating
Agency;
provided that Eligible Investments shall not include securities
issued by, or
other obligations of, any Account Owner; and provided further that
no Eligible
Investments shall be contrary to the status of the Trust as a
qualified special
purpose entity under existing accounting literature.
"Eligible Receivable" shall mean each Receivable:
(a) that has arisen in an Eligible Account;
(b) that was created in compliance in all material respects
with all Requirements of Law applicable to the Account Owner of
such Eligible
Account and pursuant to an Account Agreement that complies in all
material
respects with all Requirements of Law applicable to such Account
Owner, in
either case, the failure to comply with which would have an Adverse
Effect;
(c) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations or declarations
with, any
Governmental Authority required to be obtained, effected or given
in connection
with the creation of such Receivable or the execution, delivery and
performance
by such Account Owner of the Account Agreement pursuant to which
such Receivable
was created, have been duly obtained, effected or given and are in
full force
and effect;
(d) as to which at the time of the transfer of such Receivable
to the Trust, a Transferor or the Trust will have good and
marketable title
thereto, free and clear of all Liens (other than any Lien for
municipal or other
local taxes of a Transferor or an Account Owner if such taxes are
not then due
and payable or if such Transferor or such Account Owner is then
contesting the
validity thereof in good faith by appropriate proceedings and has
set aside on
its books adequate reserves with respect thereto);
(e) that has been the subject of either a valid transfer and
assignment from a Transferor to the Trust of all such Transferor's
right, title
and interest therein (including any proceeds thereof), or the grant
of a
first-priority perfected security interest therein (and in the
proceeds
thereof), effective until the termination of the Trust;
(f) that is the legal, valid and binding payment obligation of
the Obligor thereon, enforceable against such Obligor 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);
11
<PAGE>
(g) that, at the time of transfer to the Trust, has not been
waived or modified except as permitted in accordance with the
Credit Guidelines
and which waiver or modification is reflected in the Servicer's
computer file of
accounts;
(h)
that, at the time of transfer to the Trust, is not subject
to any right of rescission, setoff, counterclaim or any other
defense (including
defenses arising out of violations of usury laws) of the Obligor,
other than
defenses arising out of applicable bankruptcy, insolvency,
reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights
in general;
(i) as to which, at the time of transfer to the Trust, the
Transferor thereof has satisfied all its obligations required to be
satisfied by
such time;
(j) as to which, at the time of transfer to the Trust, none of
the Transferors, Centurion Bank, FSB, any other Account Owner or
American
Express Credco, as the case may be, has taken any action which
would impair, or
omitted to take any action the omission of which would impair, the
rights of the
Trust or the Certificateholders therein; and
(k) that constitutes either an "account" or a "general
intangible" under and as defined in Article 9 of the UCC as then in
effect in
any state where the filing of a financing statement is then
required to perfect
the Trust's interest in the Receivables and the proceeds
thereof.
"Eligible Servicer" shall mean the Trustee, TRS or Centurion
Bank or, if the Trustee, TRS or Centurion Bank is not acting as
Servicer, an
entity, the appointment of which shall satisfy the Rating Agency
Condition, or
an entity that, at the time of its appointment as Servicer, (a) is
servicing a
portfolio of credit accounts, (b) is legally qualified and has the
capacity to
service the Accounts, (c) in the sole determination of the Trustee,
which
determination shall be conclusive and binding, has demonstrated the
ability to
service professionally and competently a portfolio of similar
accounts in
accordance with high standards of skill and care, (d) is qualified
to use the
software that is then being used to service the Accounts or obtains
the right to
use or has its own software which is adequate to perform its duties
under this
Agreement and (e) has a net worth of at least $50,000,000 as of the
end of its
most recent fiscal quarter.
"Enhancement Agreement" shall mean any agreement, instrument
or document governing the terms of any Series Enhancement or
pursuant to which
any Series Enhancement is issued or outstanding.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Euroclear Operator" shall mean Euroclear Bank S.A. / N.V., as
operator of the Euroclear System, and any successor thereto.
"Excess Allocation Series" shall mean any Series that,
pursuant to the Supplement related to such Series, is entitled to
receive
certain excess Collections of Finance Charge Receivables as more
fully described
in such Supplement.
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<PAGE>
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Date" shall mean, with respect to any Series, any
date that is after the related Closing Date, in the case of
Definitive
Euro-Certificates in registered form, or upon presentation of
certification of
non-United States beneficial ownership (as described in Section
6.13), in the
case of Definitive Euro-Certificates in bearer form.
"FDIC" shall mean the Federal Deposit Insurance Corporation or
any successor.
"Finance Charge Receivables" shall mean all amounts billed to
the Obligors on any Account in respect of (i) all Periodic Rate
Finance Charges,
(ii) Cash Advance Fees, (iii) annual membership fees and annual
service charges,
(iv) Late Fees, (v) Overlimit Fees, (vi) Discount Option
Receivables, if any,
and (vii) any other fees with respect to the Accounts designated by
the
Transferors at any time and from time to time to be included as
Finance Charge
Receivables; provided, however, that after the Premium Option Date,
Finance
Charge Receivables on any Date of Processing shall mean the amount
of Finance
Charge Receivables as otherwise determined pursuant to this
definition less the
amount of Premium Option Receivables. Finance Charge Receivables
shall also
include (a) the interest portion of Participation Interests as
shall be
determined pursuant to, and only if so provided in, the applicable
Participation
Interest Supplement or Series Supplement, (b) any amounts
designated to be
Finance Charge Receivables pursuant to Section 4.05, (c) all
Recoveries with
respect to Receivables previously charged off as uncollectible and
(d) the
Issuer Rate Fees received with respect to the related Monthly
Period.
"Foreign Clearing Agency" shall mean Clearstream and the
Euroclear Operator.
"FSB" shall mean American Express Bank, FSB, a federal savings
bank, and its successors and permitted assigns.
"FSB - RFC IV Purchase Agreement" shall mean that certain
Receivables Purchase Agreement, dated as of April 16, 2004, between
FSB and RFC
IV, as the same may be, or may have been, amended, supplemented or
otherwise
modified from time to time.
"FSB - RFC IV Revolving Credit Agreement" shall mean the
Revolving Credit Agreement by and between FSB and RFC IV, dated as
of April 16,
2004, as such agreement may be amended from time to time in
accordance
therewith, or any substantially similar agreement entered into
between any
lender and RFC IV.
"Global Certificate" shall have the meaning specified in
subsection 6.13(a).
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any
entity
exercising executive, legislative, judicial, regulatory or
administrative
functions of or pertaining to government.
"Group" shall mean, with respect to any Series, the group of
Series, if any, in which the related Supplement specifies such
Series is to be
included.
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<PAGE>
"Holders of the Transferor Certificates" or "holders of the
Transferor Certificates" shall mean the Holders of the Transferor
Certificates
or the Holders of any uncertificated interests in the Transferors'
Interest.
"Independent Director" shall have the meaning specified in
subsection 2.07(h)(vii).
"Ineligible Receivables" shall have the meaning specified in
subsection 2.05(a).
"Initial Account" shall mean each Optima(R) Card, Optima Line
of Credit and Sign and Travel(R) credit account established
pursuant to an
Account Agreement between Centurion Bank or other Account Owner and
any Person,
which account is identified in the computer file or microfiche list
delivered to
the Trustee by the Transferors pursuant to Section 2.01 on the
Substitution
Date.
"Initial Cut-Off Date" shall mean the close of business on
April 16, 2004.
"Insolvency Event" shall have the meaning specified in
subsection 9.01(a).
"Insolvency Proceeds" shall have the meaning specified in
subsection 9.01(b).
"Insurance Proceeds" shall mean all Insurance Proceeds as
defined in the related Receivables Purchase Agreement that are paid
to a
Transferor as provided in the related Receivables Purchase
Agreement.
"Invested Amount" shall mean, with respect to any Series and
for any date, an amount equal to the "Invested Amount," as
specified in the
related Supplement.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.
"Investor Certificateholder" shall mean the Person in whose
name a Registered Certificate is registered in the Certificate
Register or the
bearer of any Bearer Certificate (or the Global Certificate, as the
case may be)
or Coupon.
"Investor Certificates" shall mean any certificated or
uncertificated interest in the Trust designated as, or deemed to
be, an
"Investor Certificate" in the related Supplement.
"Issuer Rate Fees" shall mean issuer rate fees paid to a
Transferor pursuant to the related Receivables Purchase
Agreement.
"Late Fees" shall have the meaning specified in the Account
Agreement applicable to each Account for late fees or similar
terms.
"LIBOR" for any Series shall have the meaning specified in the
Supplement related to such Series.
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<PAGE>
"Lien" shall mean any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment, deposit arrangement,
equity interest,
encumbrance, lien (statutory or other), preference, participation
interest,
priority or other security agreement or preferential arrangement of
any kind or
nature whatsoever, including any conditional sale or other title
retention
agreement, or any financing lease having substantially the same
economic effect
as any of the foregoing; provided, however, that any assignment
permitted by
Section 7.02 or 7.05 and the lien created by this Agreement, the
Original
Pooling Agreement, the Amended PSA or any Receivables Purchase
Agreement shall
not be deemed to constitute a Lien.
"Manager" shall mean the lead manager, manager or co-manager
or Person performing a similar function with respect to an offering
of
Definitive Euro-Certificates.
"Monthly Period" shall mean, with respect to each Distribution
Date, unless otherwise provided in a Supplement, the period (i)
from and
including the second day following the last day of the seventh
billing cycle
applicable to the Accounts ending during the second preceding
calendar month and
(ii) to and including the day following the last day of the seventh
billing
cycle applicable to the Accounts ending in the calendar month
immediately
preceding the calendar month in which such Distribution Date shall
occur;
provided, however, that the initial Monthly Period with respect to
any Series
will commence on the Closing Date with respect to such Series.
"Moody's" shall mean Moody's Investors Service, Inc., or its
successor.
"New Account" shall mean each Optima Card(R) and Sign &
Travel(R) account or other credit or charge account or line of
credit (if, with
respect to the line of credit, the full receivable balance is not
due upon
receipt of a monthly billing statement (excluding the billing
statement with
respect to the final payment of such balance) and the line of
credit contains a
code designation in the related securitization field as described
in Section
2.01) established pursuant to an Account Agreement, which account
or line of
credit is designated pursuant to subsection 2.09(d) to be included
as an Account
and is identified in the computer file or microfiche list delivered
to the
Trustee by the Transferors pursuant to Section 2.01 and subsection
2.09(h).
"Notices" shall have the meaning specified in subsection
13.05(a).
"Obligor" shall mean, with respect to any Account, the Person
or Persons obligated to make payments with respect to such Account,
including
any guarantor thereof, but excluding any merchant.
"Officer's Certificate" shall mean, unless otherwise specified
in this Agreement, a certificate signed by the President, any Vice
President or
the Treasurer of a Transferor or the Servicer, as the case may be,
or by the
President, any Vice President or the financial controller (or an
officer holding
an office with equivalent or more senior responsibilities) of a
Successor
Servicer.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel for, or an employee of, the Person providing the
opinion and
who shall be reasonably acceptable to the Trustee.
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<PAGE>
"Original Pooling Agreement" shall have the meaning specified
in the Recitals to this Agreement.
"Original Transferor Certificate" shall mean, if the
Transferors elect (i) to evidence their interests in the
Transferors' Interest
in certificated form pursuant to Section 6.01, the certificate
executed by the
Transferors and authenticated by or on behalf of the Trustee,
substantially in
the form of Exhibit A, as the same may be modified in accordance
with Exhibit A,
or (ii) to have their interests in the Transferors' Interest be
uncertificated
pursuant to Section 6.01, such uncertificated interests.
"Overlimit Fees" shall have the meaning specified in the
Account Agreement applicable to each Account for overlimit fees or
similar terms
if such fees are provided for with respect to such Account.
"Partial Amortization SFA Amounts" shall mean the amounts
specified by the Transferors pursuant to Section 4.02 which are to
be applied to
the partial amortization of each Series as specified in the related
Supplement.
"Participation Interest Supplement" shall mean a Supplement
entered into pursuant to subsection 2.09(a)(ii) or (b) in
connection with the
conveyance of Participation Interests to the Trust.
"Participation Interests" shall have the meaning specified in
subsection 2.09(a)(ii).
"Paying Agent" shall mean any paying agent appointed pursuant
to Section 6.07 and shall initially be the Trustee; provided that
if the
Supplement for a Series so provides, a separate or additional
Paying Agent may
be appointed with respect to such Series.
"Pay-Out Event" shall mean, with respect to any Series, any
Pay-Out Event specified in the Supplement related to such
Series.
"Periodic Rate Finance Charges" shall have the meaning
specified in the Account Agreement applicable to each Account for
finance
charges (due to periodic rate) or any similar term.
"Permitted Activities" means the primary activities of the
Trust, which are:
(a) holding Receivables transferred from the Transferors and
the other assets of the Trust, including passive derivative
financial
instruments that pertain to beneficial interests issued or sold to
parties other
than the Transferors, their Affiliates or their agents;
(b) issuing Certificates and other interests in the Trust
Assets;
(c) receiving Collections and making payments on such
Certificates and interests in accordance with the terms of this
Agreement and
any Supplement; and
16
<PAGE>
(d) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which activities
cannot be
contrary to the status of the Trust as a qualified special purpose
entity under
existing accounting literature.
"Person" shall mean any person or entity, including any
individual, corporation, limited liability company, partnership,
joint venture,
association, joint-stock company, trust, unincorporated
organization,
governmental entity or other entity of similar nature.
"Portfolio Yield" shall mean with respect to the Trust as a
whole and, with respect to any Monthly Period, the annualized
percentage
equivalent of a fraction (a) the numerator of which is the
aggregate of the sum
of the Series Allocable Finance Charge Collections for all Series
during the
immediately preceding Monthly Period calculated on a cash basis,
after
subtracting therefrom the Series Allocable Defaulted Amounts for
all Series with
respect to such Monthly Period and (b) the denominator of which is
the total
amount of Principal Receivables plus (without duplication) the then
outstanding
principal amount of any Participation Interests conveyed to the
Trust, plus the
amount of funds on deposit in the Special Funding Account, in each
case, as of
the last day of the immediately preceding Monthly Period; provided
that, with
respect to any Monthly Period in which an Aggregate Addition occurs
or a removal
of Accounts pursuant to Section 2.10 occurs, the amount of
Principal Receivables
and Participation Interests referred to in clause (b) shall be the
average
amount of Principal Receivables and Participation Interests in the
Trust on each
Business Day during such Monthly Period based upon the assumptions
that (1) the
aggregate amount of Principal Receivables in the Trust plus the
then outstanding
principal amount of any Participation Interests conveyed to the
Trust at the end
of the day on the last day of the prior Monthly Period is the
aggregate amount
of Principal Receivables and Participation Interests in the Trust
on each
Business Day of the period from and including the first day of such
Monthly
Period to but excluding the related Addition Date or Removal Date
and (2) the
aggregate amount of Principal Receivables in the Trust plus the
then outstanding
principal amount of any Participation Interests conveyed to the
Trust at the end
of the day on the related Addition Date or Removal Date is the
aggregate amount
of Principal Receivables and Participation Interests in the Trust
on each
Business Day of the period from and including the related Addition
Date or
Removal Date to and including the last day of such Monthly
Period.
"Premium Option Date" shall mean each date on which a Premium
Percentage designated by the Transferors pursuant to Section 2.13
takes effect.
"Premium Option Receivables" shall have the meaning specified
in Section 2.13. The aggregate amount of Premium Option Receivables
outstanding
on any Date of Processing occurring on or after the Premium Option
Date shall
equal the sum of (a) the aggregate Premium Option Receivables at
the end of the
prior Date of Processing (which amount, prior to the Premium Option
Date, shall
be zero) plus (b) any new Premium Option Receivables created on
such Date of
Processing minus (c) any Premium Option Receivable Collections
received on such
Date of Processing. Premium Option Receivables created on any Date
of Processing
shall mean the product of the amount of any Finance Charge
Receivables created
on such Date of Processing (without giving effect to the proviso in
the
definition of Finance Charge Receivables) and the Premium
Percentage.
17
<PAGE>
"Premium Option Receivable Collections" shall mean on any Date
of Processing occurring in any Monthly Period succeeding the
Monthly Period in
which the Premium Option Date occurs, the product of (a) the
Premium Percentage
and (b) Collections of Finance Charge Receivables on such Date of
Processing
(without giving effect to the proviso in the definition of Finance
Charge
Receivables).
"Premium Percentage" shall mean the percentage, if any,
designated from time to time by the Transferors pursuant to Section
2.13.
"Principal Receivables" shall mean (i) all amounts charged by
Obligors for merchandise and services and cash advances or
otherwise borrowed by
such Obligors under any line of credit existing under an Account,
but shall not
include Finance Charge Receivables or Defaulted Receivables plus
(ii) Premium
Option Receivables, if any; provided, however, that after the
Discount Option
Date, Principal Receivables on any Date of Processing thereafter
shall mean
Principal Receivables as otherwise determined pursuant to this
definition minus
the amount of any Discount Option Receivables. Principal
Receivables shall also
include the principal portion of Participation Interests as shall
be determined
pursuant to, and only if so provided in, the applicable
Participation Interest
Supplement or Series Supplement. In calculating the aggregate
amount of
Principal Receivables on any day, the amount of Principal
Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts
on such day.
Any Principal Receivables which a Transferor is unable to transfer
as provided
in Section 2.11 shall not be included in calculating the amount of
Principal
Receivables.
"Principal Shortfalls" shall have the meaning specified in
Section 4.04.
"Principal Sharing Series" shall mean a Series that, pursuant
to the Supplement therefor, is entitled to receive Shared Principal
Collections.
"Principal Terms" shall mean, with respect to any Series, (i)
the name or designation; (ii) the initial principal amount (or
method for
calculating such amount), the Invested Amount, the Series Invested
Amount and
the Required Series Transferor Amount; (iii) the Certificate Rate
(or method for
the determination thereof); (iv) the payment date or dates and the
date or dates
from which interest shall accrue; (v) the method for allocating
Collections to
Investor Certificateholders; (vi) the designation of any Series
Accounts and the
terms governing the operation of any such Series Accounts; (vii)
the Servicing
Fee; (viii) the issuer and terms of any form of Series Enhancements
with respect
thereto; (ix) the terms on which the Investor Certificates of such
Series may be
exchanged for Investor Certificates of another Series, repurchased
by a
Transferor or remarketed to other investors; (x) the Series
Termination Date;
(xi) the number of Classes of Investor Certificates of such Series
and, if more
than one Class, the rights and priorities of each such Class; (xii)
the extent
to which the Investor Certificates of such Series will be issuable
in temporary
or permanent global form (and, in such case, the depositary for
such global
certificate or certificates, the terms and conditions, if any, upon
which such
global certificate may be exchanged, in whole or in part, for
Definitive
Certificates, and the manner in which any interest payable on a
temporary or
global certificate will be paid); (xiii) whether the Investor
Certificates of
such Series may be issued in bearer form and any limitations
imposed thereon;
(xiv) the priority of such Series with respect to any other Series;
(xv) whether
such Series will be part of a Group; (xvi) whether such Series will
be a
Principal Sharing Series; (xvii) whether such Series will be an
Excess
Allocation Series; (xviii) the Distribution Date; and (xix) any
other terms of
such Series.
18
<PAGE>
"Rating Agency" shall mean, with respect to any outstanding
Series or Class, each rating agency, as specified in the applicable
Supplement,
selected by the Transferors to rate the Investor Certificates of
such Series or
Class.
"Rating Agency Condition" shall mean, with respect to any
action, that each Rating Agency shall have notified the
Transferors, the
Servicer and the Trustee in writing that such action will not
result in a
reduction or withdrawal of the then existing rating of any
outstanding Series or
Class with respect to which it is a Rating Agency.
"Reassignment" shall have the meaning specified in Section
2.10.
"Receivables" shall
mean all amounts shown on the Servicer's
records as amounts payable by Obligors on any Account from time to
time,
including amounts payable for Principal Receivables and Finance
Charge
Receivables. Receivables that become Defaulted Receivables will
cease to be
included as Receivables as of the day on which they become
Defaulted
Receivables.
"Receivables Purchase Agreements" shall mean (i) the FSB - RFC
IV Purchase Agreement, (ii) the Centurion Bank - RFC III Purchase
Agreement,
(iii) the Credco - RFC II Purchase Agreement, (iv) the Credco -
Centurion Bank
Purchase Agreement and (v) any other receivables purchase
agreement
substantially in the form of any such agreement that may be entered
into by RFC
II, RFC III, RFC IV or an Additional Transferor and an Account
Owner in the
future, pursuant to which RFC II, RFC III, RFC IV or such
Additional Transferor
will acquire from such Account Owner Receivables for transfer,
directly or
indirectly, to the Trustee on behalf of the Trust, in each case, as
the same may
be amended, supplemented or otherwise modified from time to
time.
"Record Date" shall mean, with respect to any Distribution
Date, the last day of the calendar month immediately preceding such
Distribution
Date unless otherwise specified for a Series in the applicable
Supplement.
"Recoveries" shall mean all Recoveries as defined in the
related Receivables Purchase Agreement that are paid to a
Transferor as provided
in the related Receivables Purchase Agreement.
"Registered Certificateholder" shall mean the Holder of a
Registered Certificate.
"Registered Certificates" shall have the meaning specified in
Section 6.01.
"Regulation AB" shall mean Subpart 229.1100 - Asset Backed
Securities (Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as
such may be
amended from time to time, and subject to such clarification and
interpretation
as have been provided by the Commission in the adopting release
(Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506,
1,531 (Jan.
7, 2005)) or by the staff of the Commission, or as may be provided
by the
Commission or its staff from time to time.
19
<PAGE>
"Reinvestment Event" shall mean, with respect to any Series,
the meaning specified in the Supplement related to such Series.
"Reinvestment Period" shall mean, if applicable, with respect
to any Series, any Reinvestment Event specified in the Supplement
related to
such Series.
"Related Account" shall mean an Account with respect to which
a new account number has been issued by the applicable Account
Owner or the
Servicer (a)(i) resulting from a lost or stolen credit or charge
card relating
to such Account (if such Account is a credit or charge card
account) or (ii)
under circumstances not requiring the standard application and
credit evaluation
procedures under the Credit Guidelines applicable to such Account,
and (b) that
can be traced or identified by reference to or by way of Schedule 1
to this
Agreement and the computer or other records of the applicable
Account Owner or
the Servicer.
"Removal Date" shall have the meaning specified in Section
2.10.
"Removed Accounts" shall have the meaning specified in Section
2.10.
"Removed Participation Interests" shall have the meaning
specified in Section 2.10.
"Required Designation Date" shall have the meaning specified
in subsection 2.09(a).
"Required Minimum Principal Balance" shall mean, with respect
to any date (a) the sum of the Series Invested Amounts for each
Series
outstanding on such date plus the sum of the Series Required
Transferor Amounts
for each Series outstanding on such date, minus (b) the Special
Funding Amount.
"Required Transferor Amount" shall mean, with respect to any
date, an amount equal to the product of (A) the Required Transferor
Percentage
and (B) the aggregate amount of Principal Receivables.
"Required Transferor Percentage" shall mean 7% or any other
percentage specified in any Supplement; provided, however, that the
Transferors
may reduce the Required Transferor Percentage upon (x) 30 days'
prior notice to
the Trustee and each Rating Agency, (y) satisfaction of the Rating
Agency
Condition with respect thereto and (z) delivery to the Trustee of a
certificate
of a Vice President or more senior officer of each Transferor
stating that such
Transferor reasonably believes that such reduction will not, based
on the facts
known to such officer at the time of such certification, then or
thereafter have
an Adverse Effect; provided further that the Required Transferor
Percentage
shall not at any time be less than 2%.
"Requirements of Law" shall mean any law, treaty, rule or
regulation, or determination of an arbitrator or Governmental
Authority, whether
Federal, state or local (including, without limitation, usury laws,
the Federal
Truth in Lending Act and Regulation B and Regulation Z of the Board
of Governors
of the Federal Reserve System), and, when used with respect to any
Person, the
certificate of incorporation and by-laws or other organizational or
governing
documents of such Person.
20
<PAGE>
"Responsible Officer" shall mean, when used with respect to
the Trustee, any officer within the Corporate Trust Administration
Department
(or any successor group) of the Trustee, including any vice
president, assistant
vice president, trust officer or any other officer of the Trustee
customarily
performing functions similar to those performed by the persons who
at the time
shall be such officers or to whom any corporate trust matter is
referred at the
Corporate Trust Office because of such officer's knowledge of and
familiarity
with the particular subject.
"Revolving Credit Agreements" shall mean (i) the Centurion
Bank - RFC III Revolving Credit Agreement and (ii) the FSB - RFC IV
Revolving
Credit Agreement, in each case, as the same may be amended,
supplemented or
otherwise modified from time to time.
"Revolving Period" shall mean, with respect to any Series, the
period specified as such in the Supplement related to such
Series.
"RFC II" shall mean American Express Receivables Financing
Corporation II, a Delaware corporation, and its successors and
permitted
assigns.
"RFC III" shall mean American Express Receivables Financing
Corporation III LLC, a Delaware limited liability company, and its
successors
and permitted assigns.
"RFC IV" shall mean American Express Receivables Financing
Corporation IV LLC, a Delaware limited liability company, and its
successors and
permitted assigns.
"Sarbanes Certification" shall have the meaning specified in
Section 14.04.
"Securitization Transaction" shall mean any new issuance of
Investor Certificates, pursuant to Section 6.03, whether publicly
offered or
privately placed, rated or unrated.
"Series" shall mean any series of Investor Certificates issued
pursuant to Section 6.03.
"Series Account" shall mean any deposit, securities, trust,
escrow or similar account maintained for the benefit of the
Investor
Certificateholders of any Series or Class, as specified in any
Supplement.
"Series Adjusted Invested Amount" shall mean, with respect to
any Series and for any Monthly Period, the Series Invested Amount
of such
Series, after subtracting therefrom the excess, if any, of the
cumulative amount
(calculated in accordance with the terms of the related Supplement)
of investor
charge-offs, subordination of principal collections and funding of
the investor
default amount for any other Class of Investor Certificates of such
Series or
another Series allocable to the Invested Amount for such Series as
of the last
day of the immediately preceding Monthly Period over the aggregate
reimbursement
of such investor charge-offs, subordination of principal
collections and funding
of the investor default amount for any other Class of Investor
Certificates of
such Series or another Series as of such last day, or such lesser
amount as may
be provided in the Supplement for such Series.
21
<PAGE>
"Series Allocable Defaulted Amount" shall mean, with respect
to any Series and for any Monthly Period, the product of the Series
Allocation
Percentage and the Defaulted Amount with respect to such Monthly
Period.
"Series Allocable Finance Charge Collections" shall mean, with
respect to any Series and for any Monthly Period, the product of
the Series
Allocation Percentage and the amount of Collections of Finance
Charge
Receivables deposited in the Collection Account for such Monthly
Period.
"Series Allocable Principal Collections" shall mean, with
respect to any Series and for any Monthly Period, the product of
the Series
Allocation Percentage and the amount of Collections of Principal
Receivables
deposited in the Collection Account for such Monthly Period.
"Series Allocation Percentage" shall mean, with respect to any
Series and for any Monthly Period, the percentage equivalent of a
fraction, the
numerator of which is the Series Adjusted Invested Amount and the
denominator of
which is the Trust Adjusted Invested Amount.
"Series Enhancement" shall mean the rights and benefits
provided to the Trust or the Investor Certificateholders of any
Series or Class
pursuant to any letter of credit, surety bond, insurance policy,
cash collateral
guaranty, subordinated interest in the Trust Assets, cash
collateral account,
collateral interest, spread account, guaranteed rate agreement,
maturity
liquidity facility, tax protection agreement, interest rate swap
agreement,
interest rate cap agreement or other similar arrangement. The
subordination of
any Series or Class to another Series or Class shall be deemed to
be a Series
Enhancement.
"Series Enhancer" shall mean the Person or Persons providing
any Series Enhancement, other than (except to the extent otherwise
provided with
respect to any Series in the Supplement for such Series) the
Investor
Certificateholders of any Series or Class which is subordinated to
another
Series or Class.
"Series Invested Amount" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"Series Issuance Date" shall mean, with respect to any Series,
the date on which the Investor Certificates of such Series are to
be originally
issued in accordance with Section 6.03 and the related
Supplement.
"Series Required Transferor Amount" shall have the meaning,
with respect to any Series, as specified in the related
Supplement.
"Series Termination Date" shall mean, with respect to any
Series, the termination date for such Series specified in the
related
Supplement.
"Service Transfer" shall have the meaning specified in Section
10.01.
22
<PAGE>
"Servicer" shall mean TRS, in its capacity as Servicer
pursuant to this Agreement, and, after any Service Transfer, the
Successor
Servicer.
"Servicer Default" shall have the meaning specified in Section
10.01.
"Servicing Criteria" shall mean the "servicing criteria" set
forth in Item 1122(d) of Regulation AB, as such may be amended from
time to
time.
"Servicing Fee" shall mean, with respect to any Series, the
servicing fee specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Servicer or
an attorney-in-fact of the Servicer who in either case is involved
in, or
responsible for, the administration and servicing of the
Receivables and whose
name appears on a list of servicing officers furnished to the
Transferors and
the Trustee by the Servicer, as such list may from time to time be
amended.
"Servicing Participant" shall mean the Servicer, any
Subservicer or any Person that participates in any of the servicing
functions
specified in Item 1122(d) of Regulation AB with respect to the
Receivables. For
the avoidance of doubt, subject to Section 14.01, the term
"Servicing
Participant" shall not include the Trustee.
"Servicing Party" shall have the meaning specified in Section
14.06(a).
"Shared Principal Collections" shall have the meaning
specified in Section 4.04.
"Small Balances" shall have the meaning established in
accordance with the Credit Guidelines.
"Special Funding Account" shall have the meaning set forth in
Section 4.02.
"Special Funding Amount" shall mean the amount on deposit in
the Special Funding Account.
"Standard &
Poor's" shall
mean Standard & Poor's Ratings
Services or its successor.
"Subservicer" shall mean any Person that services the
Receivables on behalf of the Servicer or any Subservicer and is
responsible for
the performance (whether directly or through Subservicers or
Servicing
Participants) of a substantial portion of the material servicing
functions
required to be performed by the Servicer under this Agreement or
any Supplement
that are identified in Item 1122(d) of Regulation AB. For the
avoidance of
doubt, subject to Section 14.01, the term "Subservicer" shall not
include the
Trustee.
"Substitution Date" shall mean the close of business on April
16, 2004.
"Successor Servicer" shall have the meaning specified in
subsection 10.02(a).
23
<PAGE>
"Supplement" shall mean, with respect to any Series, a
supplement to this Agreement, executed and delivered in connection
with the
original issuance of the Investor Certificates of such Series
pursuant to
Section 6.03, and, with respect to any Participation Interest, an
amendment to
this Agreement executed pursuant to Section 13.01, and, in either
case,
including all amendments thereof and supplements thereto.
"Supplemental
Certificate" shall have the meaning specified in
Section 6.03.
"Tax Opinion" shall mean, with respect to any action, an
Opinion of Counsel to the effect that, for federal income tax
purposes, (a) such
action will not adversely affect the tax characterization as debt
of the
Investor Certificates of any outstanding Series or Class that was
characterized
as debt at the time of its issuance, (b) following such action the
Trust will
not be deemed to be an association (or publicly traded partnership)
taxable as a
corporation, (c) such action will not cause or constitute an event
in which gain
or loss would be recognized by any Investor Certificateholder and
(d) except as
is otherwise provided in a Supplement, in the case of Section
6.03(b)(vi), the
Investor Certificates of the Series established pursuant to such
Supplement will
be properly characterized as debt.
"Termination Notice" shall have the meaning specified in
Section 10.01.
"Termination Proceeds" shall have the meaning specified in
subsection 12.02(c).
"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.04.
"Transfer Date" shall mean the Business Day immediately
preceding each Distribution Date.
"Transfer Restriction Event" shall have the meaning specified
in Section 2.10.
"Transferor Amount" shall mean on any date of determination an
amount equal to (I) the sum of (A) the aggregate balance of
Principal
Receivables at the end of the day immediately prior to such date
of
determination and (B) the Special Funding Amount at the end of the
day
immediately prior to such date of determination minus (II) the
Aggregate
Invested Amount at the end of such day.
"Transferor Certificates" shall mean, collectively, the
Original Transferor Certificate and any outstanding Supplemental
Certificates.
"Transferors" shall mean (a) prior to the Substitution Date,
Centurion Bank and RFC II and (b) on and after the Substitution
Date, (i) RFC
II, RFC III and RFC IV and (ii) any Additional Transferor or
Transferors.
References to "each Transferor" shall refer to each entity
mentioned in the
preceding sentence and, whenever the context may so require,
references to "the
Transferor" shall refer, collectively, to all of such entities.
"Transferors' Interest" shall have the meaning specified in
Section 4.01.
24
<PAGE>
"Transferred Account" shall mean each credit or charge account
or line of credit (if, with respect to the line of credit, the full
receivable
balance is not due upon receipt of a monthly billing statement
(excluding the
billing statement with respect to the final payment of such
balance) and the
line of credit contains a code designation as described in Article
II) into
which an Account shall be transferred provided that (i) such
transfer was made
in accordance with the Credit Guidelines and (ii) it can be traced
or identified
in the applicable Transferor's or Account Owner's computer files
with the code
identified in Article II or in the applicable Assignment as a
Transferred
Account into which an Account has been transferred by reference to
or by way of
the computer files or microfiche lists delivered to the Trustee
pursuant to
Article II.
"TRS" shall mean American Express Travel Related Services
Company, Inc., a New York corporation, and its successors and
permitted assigns.
"TRS Insolvency Event" shall mean any of the following events:
(i) the consent by TRS to, or the failure by TRS to object to, the
appointment
of a bankruptcy trustee or conservator, receiver or liquidator in
any bankruptcy
proceeding or other insolvency, readjustment of debt, marshalling
of assets and
liabilities or similar proceedings of or relating to TRS or all or
substantially
all of TRS' property; (ii) the entering of a decree or order by a
court or
agency or supervisory authority having jurisdiction in the premises
for the
appointment of a bankruptcy trustee or conservator, receiver or
liquidator in
any insolvency, readjustment of debt, marshalling of assets and
liabilities or
similar proceedings, or for the winding-up, insolvency,
bankruptcy,
reorganization, conservatorship, receivership or liquidation of
TRS' affairs,
which decree or order shall have remained in force undischarged or
unstayed for
a period of 60 days; (iii) TRS' inability, or the admission by TRS
in writing of
TRS' inability, to pay its debts generally as its debts become due;
(iv) the
filing of any petition, the effect of which would cause TRS to take
advantage of
any applicable bankruptcy, insolvency or reorganization,
receivership or
conservatorship statute; (v) the making by TRS of an assignment for
the benefit
of TRS' creditors; (vi) the voluntary suspension by TRS of the
payment of TRS'
obligations; or (vii) the consent by TRS to, or the failure of TRS
to object to,
the filing of any petition described in clause (iv) above, or, if
TRS shall have
objected to the filing of any such petition, the failure of such
petition to
have been dismissed within 60 days of the filing thereof.
"Trust" shall mean the American Express Credit Account Master
Trust, the trust heretofore created and continued by this
Agreement.
"Trust Adjusted Invested Amount" shall mean, with respect to
any Monthly Period, the aggregate Series Adjusted Invested Amounts
as adjusted
in any Supplement for all outstanding Series for such Monthly
Period.
"Trust Assets" shall have the meaning specified in Section
2.01.
"Trust Excess Principal Collections" shall have the meaning
specified in the applicable Supplement.
"Trustee" shall mean The Bank of New York, a New York banking
corporation, in its capacity as trustee on behalf of the Trust, or
its successor
in interest, or any successor trustee appointed as herein
provided.
"UCC" shall mean the Uniform Commercial Code, as amended from
time to time, as in effect in any specified jurisdiction.
25
<PAGE>
Section 1.02 Other Definitional Provisions.
(a) With respect to any Series, all terms used herein and not
otherwise defined herein shall have meanings ascribed to them in
the related
Supplement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or
delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting
terms not
defined in this Agreement or in any such certificate or other
document, and
accounting terms partly defined in this Agreement or in any such
certificate or
other document to the extent not defined, shall have the respective
meanings
given to them under generally accepted accounting principles as in
effect on the
date of this Agreement. To the extent that the definitions of
accounting terms
in this Agreement or in any such certificate or other document are
inconsistent
with the meanings of such terms under generally accepted accounting
principles
or regulatory accounting principles in the United States, the
definitions
contained in this Agreement or in any such certificate or other
document shall
control.
(d) The agreements, representations and warranties of RFC II,
RFC III, RFC IV and TRS in this Agreement in each of their
respective capacities
as Transferor and Servicer shall be deemed to be the agreements,
representations
and warranties of RFC II, RFC III, RFC IV and TRS solely in each
such capacity
for so long as RFC II, RFC III, RFC IV and TRS shall act in each
such capacity
under this Agreement.
(e) For purposes of determining whether Holders of Investor
Certificates evidencing a specified percentage of the
Certificateholders'
Interest have approved, voted on, consented or otherwise agreed to
any action
hereunder or under a related Supplement, any Investor Certificates
owned by a
Transferor, any Affiliate thereof, any agent thereof or any other
party
consolidated with such Transferor for purposes of United States
generally
accepted accounting principles shall be disregarded when making
such
determination.
(f) Any reference to each Rating Agency shall only apply to
any specific rating agency if such rating agency is then rating any
outstanding
Series.
(g) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such
amount at the
close of business on such day.
(h) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a
whole and not to any particular provision of this Agreement;
references to any
Section, subsection, Schedule or Exhibit are references to
Sections,
subsections, Schedules and Exhibits in or to this Agreement unless
otherwise
specified; and the term "including" means "including without
limitation."
[END OF ARTICLE I]
26
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01 Conveyance of Receivables. By execution of this
Agreement, each Transferor does hereby transfer, assign, set over
and otherwise
convey to the Trustee, on behalf of the Trust, for the benefit of
the
Certificateholders, without recourse except as provided herein, all
of its
right, title and interest, whether now owned or hereafter acquired,
in, to and
under the Receivables existing at the close of business on the
Initial Cut-Off
Date, in the case of Receivables arising in the Initial Accounts
(including
Related Accounts and Transferred Accounts with respect to such
Initial
Accounts), and at the close of business on each Addition Cut-Off
Date, in the
case of Receivables arising in the Additional Accounts (including
Related
Accounts and Transferred Accounts with respect to such Additional
Accounts), and
in each case thereafter created from time to time in such Accounts
until the
termination of the Trust, all Issuer Rate Fees and Recoveries
allocable to the
Trust as provided herein, all monies due and to become due and all
amounts
received with respect to all of the foregoing and all proceeds
(including
Insurance Proceeds and "proceeds" as defined in the UCC) thereof.
Each
Transferor does hereby further transfer, assign, set over and
otherwise convey
to the Trustee, on behalf of the Trust, all of its rights,
remedies, powers,
privileges and claims under or with respect to any related
Receivables Purchase
Agreement (whether arising pursuant to the terms of such
Receivables Purchase
Agreement or otherwise). Such property, together with all monies
and other
property on deposit in the Collection Account, the Series Accounts
and the
Special Funding Account, the rights of the Trustee on behalf of the
Trust under
this Agreement and any Supplement, the property conveyed to the
Trustee on
behalf of the Trust under any Participation Interest Supplement,
any Series
Enhancement and the right to receive Recoveries shall constitute
the assets of
the Trust (the "Trust Assets"). The foregoing does not constitute
and is not
intended to result in the creation or assumption by the Trust, the
Trustee, any
Investor Certificateholder or any Series Enhancer of any obligation
of Centurion
Bank, FSB, any other Account Owner, American Express Credco, any
Transferor, any
Additional Transferor, the Servicer 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, merchants clearance
systems or
insurers. The foregoing transfer, assignment, set-over and other
conveyance to
the Trust shall be made to the Trustee, on behalf of the Trust, and
each
reference in this Agreement to such transfer, assignment, set-over
and
conveyance shall be construed accordingly.
Each Transferor agrees to record and file, at its own expense,
financing statements (and amendments thereto when applicable) with
respect to
the Trust Assets conveyed by such Transferor 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,
assignment, set-over
or other conveyance of its interest in such Trust Assets to the
Trustee, and to
deliver a file-stamped copy of each such financing statement or
amendment or
other evidence of such filing to the Trustee as soon as practicable
after the
Substitution Date, in the case of Trust Assets relating to the
Initial Accounts,
and (if any additional filing is so necessary) as soon as
practicable after the
applicable Addition Date, in the case of Trust Assets relating to
Additional
Accounts. The Trustee shall be under no obligation whatsoever to
file such
financing statements or amendments thereto or to make any other
filing under the
UCC in connection with such transfer, assignment, set-over or other
conveyance.
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Each Transferor further agrees, at its own expense, (a) on or
prior to (i) the Substitution Date, in the case of the Initial
Accounts, (ii)
the applicable Addition Date, in the case of Additional Accounts,
and (iii) 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 have been
conveyed to the
Trustee pursuant to this Agreement for the benefit of the
Certificateholders (or
conveyed to such Transferor or its designee in accordance with
Section 2.10, in
the case of Removed Accounts) by including (or deleting in the case
of Removed
Accounts) in the securitization field of such computer files, in
the case of the
Initial Accounts, the code "F," "G," "H," "I," "J," "L," "M," "N,"
"O," "P,"
"S," "T" or "V," or any other related code designations specified
at the dates
of their designation as "Accounts" under the Original Pooling
Agreement and, in
the case of Additional Accounts, a similar code designation that
shall be
specified in the Assignment related thereto, in each case,
identifying each such
account as an Account and (b) on or prior to (w) the date that is
five Business
Days after the Substitution Date, in the case of the Initial
Accounts, (x) the
date that is five Business Days after the applicable Addition Date,
in the case
of Aggregate Additions, (y) the date that is 90 days after the
applicable
Addition Date, in the case of New Accounts, and (z) the date that
is five
Business Days after the applicable Removal Date, in the case of
Removed
Accounts, to deliver to the Trustee a computer file or microfiche
list
containing a true and complete list of all such Accounts specifying
for each
such Account, as of the Initial Cut-Off Date, in the case of the
Initial
Accounts, the applicable Addition Cut-Off Date, in the case of
Additional
Accounts, and the applicable Removal Date, in the case of Removed
Accounts, its
account number and, other than in the case of New Accounts and the
Initial
Accounts, the aggregate amount outstanding in such Account. Each
such file or
list, as supplemented, from time to time, to reflect Related
Accounts,
Transferred Accounts, 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. Each Transferor further agrees not to alter the
code
referenced in this paragraph with respect to any Account during the
term of this
Agreement unless and until such Account becomes a Removed
Account.
The parties to this Agreement intend that the conveyance of
Trust Assets pursuant to this Agreement constitute a sale, and not
a secured
borrowing, for accounting purposes. Nevertheless, this Agreement
also shall
constitute a security agreement under applicable law, and the
Transferors hereby
grant to the Trustee a first priority perfected security interest
in all of
their right, title and interest, whether now owned or hereafter
acquired, in and
to the Receivables and the other Trust Assets, and all money,
accounts, general
intangibles, chattel paper, instruments, documents, goods,
investment property,
deposit accounts, letters of credit and letter-of-credit rights
consisting of,
arising from or related to the Trust Assets, and all proceeds
thereof, to secure
their obligations hereunder.
By executing this Agreement and any Receivables Purchase
Agreement, the parties hereto and thereto do not intend to cancel,
release or in
any way impair the conveyance made by RFC II or Centurion Bank in
their
respective capacities as a "Transferor" under the Original Pooling
Agreement.
Without limiting the foregoing, the parties hereto acknowledge and
agree as
follows:
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(a) The Trust created by and maintained under the Original
Pooling Agreement and maintained under the Amended PSA shall
continue to exist
and be maintained under this Agreement.
(b) All series of investor certificates issued under the
Original Pooling Agreement and the Amended PSA shall constitute
Series issued
and outstanding under this Agreement, and any supplement existing
in connection
with such series shall constitute a Supplement executed
hereunder.
(c) All references to the Original Pooling Agreement or the
Amended PSA in any other instruments or documents shall be deemed
to constitute
references to this Agreement. All references in such instruments or
documents to
Centurion Bank in its capacity as a "Transferor" of receivables and
related
assets under the Original Pooling Agreement shall be deemed to
include reference
to RFC III and RFC IV in such capacities hereunder.
(d) Subject to clause (f) below, RFC III and RFC IV hereby
agree to perform all obligations of Centurion Bank, in its capacity
as a
"Transferor," under or in connection with the Original Pooling
Agreement (as
amended and restated by the Amended PSA), any Supplements to the
Original
Pooling Agreement and any related Enhancement Agreements. RFC II
shall remain as
a Transferor under this Agreement on and after the Substitution
Date and all
references to "Transferor" shall include references to RFC II.
(e) To the extent this Agreement requires that certain actions
were to be taken as of a date prior to the date of the Amended PSA,
RFC II's or
Centurion Bank's, as applicable, taking of such action under the
Original
Pooling Agreement shall constitute satisfaction of such
requirement.
(f) All representations, warranties and covenants of RFC II or
Centurion Bank, as applicable, made in Article II of the Original
Pooling
Agreement and in any Assignment of Additional Accounts with respect
to
receivables and related assets transferred to the Trustee prior to
the
Substitution Date, shall remain in full force and effect with
respect to RFC II
or Centurion Bank, as applicable.
(g) If, through inadvertance, negligence or mistake, a
Transferor indicates in its computer files that Receivables have
been
transferred, assigned, set over or otherwise conveyed to the
Trustee, on behalf
of the Trust, pursuant to this Agreement for the benefit of the
Certificateholders, and the Servicer discovers that such
Transferor, in fact at
the time of such transfer, assignment, set over or conveyance, did
not have any
right, title or interest in such Receivables, then the Servicer
shall cause the
computer files of such Transferor to be corrected to reflect that
such
Receivables have in fact not been transferred and are not Trust
Assets. Further,
the Servicer shall correct, or cause to be corrected, as
appropriate, all
computer files and microfiche lists and all accounting entries, if
any. The
Transferor Amount shall also be adjusted downward by the amount of
such
Receivables in accordance with Section 3.09(a) and, if following
the exclusion
of such Receivables from the calculation of the Transferor Amount,
the
Transferor Amount would be less than the Required Transferor
Amount, then the
Transferors shall make a deposit into the Special Funding Account
in accordance
with Section 3.09(a).
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<PAGE>
Section 2.02 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance on behalf
of the Trust of all right, title and interest to the Trust Assets
conveyed to
the Trustee pursuant to Section 2.01 and declares that it shall
maintain such
right, title and interest, upon the trust herein set forth, for the
benefit of
all Certificateholders. The Trustee further acknowledges that,
prior to or
simultaneously with the execution and delivery of this Agreement,
the
Transferors delivered to the Trustee the computer file or
microfiche list
relating to the Initial Accounts described in the third to last
paragraph of
Section 2.01. The Trustee shall maintain a copy of Schedule 1, as
delivered from
time to time, at the Corporate Trust Office.
(b) The Trustee hereby agrees not to disclose to any Person
any of the account numbers or other information contained in the
computer files
or microfiche lists marked as Schedule 1 delivered to the Trustee,
from time to
time, except (i) to a Successor Servicer or as required by a
Requirement of Law
applicable to the Trustee, (ii) in connection with the performance
of the
Trustee's duties hereunder, (iii) in enforcing the rights of
Certificateholders
or (iv) to bona fide creditors or potential creditors of Centurion
Bank, FSB,
any other Account Owner, American Express Credco or any Transferor
for the
limited purpose of enabling any such creditor to identify
Receivables or
Accounts subject to this Agreement or the Receivables Purchase
Agreements. The
Trustee agrees to take such measures as shall be reasonably
requested by any
Account Owner or any Transferor to protect and maintain the
security and
confidentiality of such information and, in connection therewith,
shall allow
each Account Owner and each Transferor or their duly authorized
representatives
to inspect the Trustee's security and confidentiality arrangements
from time to
time during business hours. The Trustee shall provide the
applicable Account
Owner and the applicable Transferor with notice five Business Days
prior to
disclosure of any information of the type described in this
subsection 2.02(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other
than as
contemplated in this Agreement.
Section 2.03
Representations and Warranties of Each Transferor
Relating to Such Transferor. Each Transferor hereby severally
represents and
warrants to the Trust (and agrees that the Trustee may rely on each
such
representation and warranty in accepting the Receivables in trust
and in
authenticating the Certificates) as of the Substitution Date and as
of each
Closing Date (but only if it was a Transferor on such date)
that:
(a) Organization and Good Standing. Such Transferor is a
limited liability company or corporation validly existing under the
laws of the
jurisdiction of its organization or incorporation and has, in all
material
respects, full power and authority to own its properties and
conduct its
business as presently owned or conducted, and to execute, deliver
and perform
its obligations under this Agreement, each Receivables Purchase
Agreement (if
any) to which it is a party and each applicable Supplement and to
execute and
deliver to the Trustee the Certificates.
(b)
Due Qualification. Such Transferor is duly qualified to do
business and is in good standing as a foreign limited liability
company or a
foreign corporation 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 (i) render any Account Agreement relating to an
Account
specified herein or any Receivable conveyed to the Trustee by such
Transferor
unenforceable by such Transferor, the Servicer or the Trustee and
(ii) have a
material adverse effect on the Investor Certificateholders;
provided, however,
that no Transferor makes any representation or warranty with
respect to any
qualification, license or approval that the Trustee would have to
obtain to do
business in any state in which the Trustee seeks to enforce any
Receivable.
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<PAGE>
(c) Due Authorization. The execution and delivery by such
Transferor of this Agreement, each Supplement and each Receivables
Purchase
Agreement (if any) to which such Transferor is a party and the
execution and
delivery to the Trustee of the Certificates and the consummation by
such
Transferor of the transactions provided for in this Agreement, each
Supplement
and each such Receivables Purchase Agreement (if any) have been
duly authorized
by such Transferor by all necessary limited liability company or
corporate
action on the part of such Transferor.
(d) No Conflict. The execution and delivery by such Transferor
of this Agreement, each Supplement, and the Certificates, the
performance by
such Transferor of the transactions contemplated by this Agreement
and each
Supplement and the fulfillment by such Transferor of the terms
hereof and
thereof applicable to such Transferor, will not conflict with or
violate any
Requirements of Law applicable to such 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 such Transferor is a party or by which it or its properties
are bound.
(e) No Proceedings. There are no proceedings or
investigations, pending or, to the best knowledge of such
Transferor, threatened
against such Transferor before any Governmental Authority (i)
asserting the
invalidity of this Agreement, any Supplement or the Certificates,
(ii) seeking
to prevent the issuance of any of the Certificates or the
consummation of any of
the transactions contemplated by this Agreement, any Supplement or
the
Certificates, (iii) seeking any determination or ruling that, in
the reasonable
judgment of such Transferor, would materially and adversely affect
the
performance by such Transferor of its obligations under this
Agreement or any
Supplement, (iv) seeking any determination or ruling that, in such
Transferor's
reasonable judgment, would materially and adversely affect the
validity or
enforceability of this Agreement, any Supplement or the
Certificates or (v)
seeking to affect adversely the income or franchise tax attributes
of the Trust
under the United States Federal or any State income or franchise
tax systems.
(f)
All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority
required to be obtained, effected or given by such Transferor in
connection with
the execution and delivery by such Transferor of this Agreement,
each Supplement
and the Certificates and the performance of the transactions
contemplated by
this Agreement and each Supplement by such Transferor have been
duly obtained,
effected or given and are in full force and effect.
31
<PAGE>
Section 2.04 Representations and Warranties of each Transferor
Relating to the Agreement and any Supplement and the
Receivables.
(a) Representations and Warranties. Each Transferor hereby
severally represents and warrants to the Trust and the Trustee as
of the
Substitution Date, each subsequent Closing Date and, with respect
to Additional
Accounts, as of the related Addition Date (but only if it was a
Transferor on
such date) that:
(i) each of the Receivables Purchase Agreements (if
any) to which such Transferor is a party, this Agreement, each
Supplement and, in the case of Additional Accounts, each
related Assignment, constitutes a legal, valid and binding
obligation of such Transferor, enforceable against such
Transferor 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 or general principles of equity;
(ii) as of the Initial Cut-Off Date with respect to
Initial Accounts and as of the related Addition Cut-Off Date
with respect to Additional Accounts, Schedule 1 to this
Agreement, as supplemented to such date, is an accurate and
complete listing in all material respects of all the Accounts
specified herein as of the Initial Cut-Off Date or such
Addition Cut-Off Date, as the case may be, and the information
contained therein with respect to the identity of such
Accounts and the Receivables existing thereunder is true and
correct in all material respects as of the Initial Cut-Off
Date or such Addition Cut-Off Date, as the case may be;
(iii) each Receivable conveyed to the Trustee by such
Transferor has been conveyed to the Trustee free and clear of
any Lien (other than as permitted by clause (d) of the term
"Eligible Receivable");
(iv) all authorizations, consents, orders or
approvals of or registrations or declarations with any
Governmental Authority required to be obtained, effected or
given by such Transferor in connection with the conveyance by
such Transferor of Receivables to the Trust have been duly
obtained, effected or given and are in full force and effect;
(v) subject, in each case pertaining to proceeds, to
Section 9-315 of the UCC, and further subject to any Liens
permitted by clause (d) of the term "Eligible Receivable",
each of this Agreement or, in the case of Additional Accounts,
the related Assignment either constitutes a valid transfer and
assignment to the Trustee of all right, title and interest of
such Transferor in the Receivables conveyed to the Trustee by
such Transferor and the proceeds thereof and Recoveries
identified as relating to the Receivables conveyed to the
Trustee by
such Transferor which have become Defaulted
Receivables, or it constitutes a grant of a first-priority
"security interest" (as defined in the UCC) in such property
to the Trustee, which, in the case of existing Receivables and
the proceeds thereof and such Recoveries, is enforceable upon
execution and delivery of this Agreement, or, with respect to
then existing Receivables in Additional Accounts, as of the
applicable Addition Date, and which will be enforceable with
respect to such Receivables hereafter and thereafter created
and the proceeds and Recoveries thereof upon such creation.
Upon the filing of the financing statements and, in the case
of Receivables hereafter created and the proceeds and
Recoveries thereof, upon the creation thereof, the Trustee
shall have a first-priority perfected security or ownership
interest in such property and proceeds;
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<PAGE>
(vi) on the applicable Addition Selection Date, each
related
Additional Account is an Eligible Account;
(vii) on the applicable Addition Selection Date, each
Receivable then existing in the related Additional Accounts
and conveyed to the Trustee by such Transferor is an Eligible
Receivable;
(viii) as of the date of the creation of any new
Receivable in a related Account specified herein, such
Receivable is an Eligible Receivable; and
(ix) no selection procedures believed by such
Transferor to be materially adverse to the interests of the
Investor Certificateholders have been used in selecting such
related Accounts.
(b) Notice of Breach. The representations and warranties set
forth in Section 2.03, this Section 2.04 and subsection 2.09(f)
shall survive
the transfers and assignments of the Trust Assets to the Trustee
and the
issuance of the Certificates. Upon discovery by any Transferor, the
Servicer or
the Trustee of a breach of any of the representations and
warranties set forth
in Section 2.03, this Section 2.04 or subsection 2.09(f), the party
discovering
such breach shall give notice to the other parties and to each
Series Enhancer
within three Business Days following such discovery; provided that
the failure
to give notice within three Business Days does not preclude
subsequent notice.
(c) Representations and Warranties of Each Transferor Relating
to Security Interests. Each Transferor hereby makes the
following
representations and warranties with respect to the Receivables it
conveys to the
Trustee. Such representations and warranties shall survive until
the termination
of this Agreement and each shall speak as of the Substitution Date
and, with
respect to Receivables in Additional Accounts, as of the related
Addition Date.
None of the following shall be waived by any of the parties to this
Agreement
unless each Rating Agency shall have notified the Transferors, the
Servicer and
the Trustee in writing that such waiver will not result in a
reduction or
withdrawal of the rating of any outstanding Series or Class to
which it is a
Rating Agency.
(a) This Agreement creates a valid and continuing
security interest (as defined in the applicable UCC) in favor
of the Trustee in the Receivables described in Section 2.01 of
this Agreement or in Section 3(a) of any Assignment (the
"Collateral"), which security interest is prior to all other
Liens except as otherwise permitted hereunder, and is
enforceable as such against creditors of and purchasers from
such Transferor.
33
<PAGE>
(b) The Collateral constitutes "accounts" or "general
intangibles" within the meaning of the applicable UCC.
(c) At the time of its transfer of any Receivable to
the Trustee pursuant to this Agreement or an Assignment, such
Transferor owned and had good and marketable title to such
Receivable free and clear of any lien, claim or encumbrance of
any Person except as otherwise permitted hereunder.
(d) Such Transferor has caused or will have caused,
within ten (10) days of the initial execution of this
Agreement and each Assignment, the filing of all appropriate
financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to
perfect the security interest in the related Collateral
granted to the Trustee pursuant to this Agreement or such
Assignment.
(e) Other than the security interest granted to the
Trustee pursuant to this Agreement or an Assignment, such
Transferor has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed the Collateral. Such
Transferor has not authorized the filing of and is not aware
of any financing statements against such Transferor that
include a description of the Collateral other than any
financing statement relating to the security interest granted
to the Trustee pursuant to this Agreement or an Assignment or
that has been terminated. Such Transferor is not aware of any
judgment or tax lien filings against such Transferor.
Section 2.05 Reassignment of Ineligible Receivables.
(a) Reassignment of Receivables. In the event (i) any
representation or warranty contained in subsection 2.04(a)(ii),
(iii), (iv),
(vi), (vii) or (viii) is not true and correct in any material
respect as of the
date specified therein with respect to any Receivable or the
related Account and
such breach has a material adverse effect on the Investor
Certificateholders
(which determination shall be made without regard to whether funds
are then
available pursuant to any Series Enhancement) unless cured within
60 days (or
such longer period, not in excess of 120 days, as may be agreed to
by the
Trustee and the Servicer) after the earlier to occur of the
discovery thereof by
the Transferor that conveyed such Receivables to the Trust or
receipt by such
Transferor of written notice thereof given by the Trustee or the
Servicer, or
(ii) it is so provided in subsection 2.07(a) or 2.09(d)(iii) with
respect to any
Receivables conveyed to the Trust by such Transferor, then such
Transferor shall
accept reassignment of the Certificateholders' Interest in all
Receivables in
the related Account ("Ineligible Receivables") on the terms and
conditions set
forth in paragraph (b) below.
(b) Price of Reassignment. The Servicer shall deduct the
portion of such Ineligible Receivables reassigned to each
Transferor which are
Principal Receivables from the aggregate amount of the Principal
Receivables
used to calculate the Transferor Amount. In the event that,
following the
exclusion of such Principal Receivables from the calculation of the
Transferor
Amount, the Transferor Amount would be less than the Required
Transferor Amount,
not later than 1:00 P.M., New York City time, on the first
Distribution Date
following the Monthly Period in which such reassignment obligation
arises, the
applicable Transferor shall make a deposit into the Special Funding
Account in
immediately available funds in an amount equal to the amount by
which the
Transferor Amount would be below the Required Transferor Amount (up
to the
amount of such Principal Receivables).
34
<PAGE>
Upon reassignment of any Ineligible Receivable, the Trustee,
on behalf of the Trust, shall automatically and without further
action sell,
transfer, assign, set over and otherwise convey to the applicable
Transferor or
its designee, without recourse, representation or warranty, all the
right, title
and interest of the Trustee and the Trust in and to such Ineligible
Receivable,
all monies due or to become due and all proceeds thereof and such
reassigned
Ineligible Receivable shall be treated by the Trust as collected in
full as of
the date on which it was transferred. The obligation of each
Transferor to
accept reassignment of any Ineligible Receivables conveyed to the
Trustee by
such Transferor, and to make the deposits, if any, required to be
made to the
Special Funding Account as provided in this Section, shall
constitute the sole
remedy respecting the event giving rise to such obligation
available to
Certificateholders (or the Trustee on behalf of the
Certificateholders) or any
Series Enhancer. Notwithstanding any other provision of this
subsection 2.05(b),
a reassignment of an Ineligible Receivable in excess of the amount
that would
cause the Transferor Amount to be less than the Required Transferor
Amount shall
not occur if the applicable Transferor fails to make any deposit
required by
this subsection 2.05(b) with respect to such Ineligible Receivable.
The Trustee
shall execute such documents and instruments of transfer or
assignment and take
such other actions as shall reasonably be requested by the
applicable Transferor
to effect the conveyance of such Ineligible Receivables pursuant to
this
subsection 2.05(b), but only upon receipt of an Officer's
Certificate from such
Transferor certifying that all conditions set forth in this Section
2.05 have
been satisfied.
Section 2.06 Reassignment of Certificateholders' Interest in
Trust Portfolio. In the event any representation or warranty of a
Transferor set
forth in subsection 2.03(a) or (c) or subsection 2.04(a)(i) or (v)
is not true
and correct in any material respect and such breach has a material
adverse
effect on the Investor Certificateholders (which determination
shall be made
without regard to whether funds are then available pursuant to any
Series
Enhancement), then either the Trustee or the Holders of Investor
Certificates
evidencing not less than 50% of the aggregate unpaid principal
amount of all
outstanding Investor Certificates, by notice then given to such
Transferor and
the Servicer (and to the Trustee if given by the Investor
Certificateholders),
may direct such Transferor to accept a reassignment of the
Certificateholders'
Interest in the Receivables and any Participation Interests
conveyed to the
Trust by such 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 120 days, as may be specified in such
notice), and upon
those conditions such Transferor shall be obligated to accept such
reassignment
on the terms set forth below; provided, however, that such
Receivables will not
be reassigned to such Transferor if, on any day prior to the end of
such 60-day
or longer period (i) the relevant representation and warranty shall
then be true
and correct in all material respects and (ii) such Transferor shall
have
delivered to the Trustee a certificate of an authorized officer
describing the
nature of such breach and the manner in which the relevant
representation and
warranty has become true and correct.
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<PAGE>
The applicable
Transferor shall deposit in the Collection
Account in immediately available funds not later than 1:00 P.M.,
New York City
time, on the first Transfer Date following the Monthly Period in
which such
reassignment obligation arises, in payment for such reassignment,
an amount
equal to the sum of the amounts specified therefor with respect to
each
outstanding Series in the related Supplement. Notwithstanding
anything to the
contrary in this Agreement, such amounts shall be distributed to
the Investor
Certificateholders on such Distribution Date in accordance with the
terms of
each Supplement. If the Trustee or the Investor Certificateholders
give notice
directing the applicable Transferor to accept a reassignment of
the
Certificateholders' Interest in the Receivables as provided above,
the
obligation of such Transferor to accept such reassignment pursuant
to this
Section and to make the deposit required to be made to the
Collection Account as
provided in this paragraph shall constitute the sole remedy
respecting an event
of the type specified in the first sentence of this Section
available to the
Certificateholders (or the Trustee on behalf of the
Certificateholders) or any
Series Enhancer.
Section 2.07 Covenants of each Transferor. Each Transferor
hereby severally covenants that:
(a) Receivables Not To Be Evidenced by Promissory Notes.
Except in connection with its enforcement or collection of an
Account, such
Transferor will take no action to cause any Receivable conveyed by
it to the
Trustee to be evidenced by any instrument (as defined in the UCC)
and if any
such Receivable is so evidenced as a result of any action taken by
such
Transferor it shall be deemed to be an Ineligible Receivable in
accordance with
subsection 2.05(a) and shall be reassigned to such Transferor in
accordance with
subsection 2.05(b).
(b) Security Interests. Except for the conveyances hereunder,
such Transferor will not sell, pledge, assign or transfer to any
other Person,
or grant, create, incur, assume or suffer to exist (except as
permitted by
clause (d) of the definition of the term "Eligible Receivable") any
Lien on, any
Receivable or Participation Interest conveyed by it to the Trust,
whether now
existing or hereafter created, or any interest therein, and such
Transferor
shall defend the right, title and interest of the Trustee in, to
and under the
Receivables and any Participation Interest, whether now existing or
hereafter
created, against all claims of third parties claiming through or
under such
Transferor.
(c) Transferors' Interest. Except for (i) the conveyances
hereunder, in connection with any transaction permitted by Section
7.02 or
Section 7.05 and as provided in subsection 2.09(g) and Section 6.03
or (ii)
conveyances with respect to which the Rating Agency Condition shall
have been
satisfied and a Tax Opinion shall have been delivered to the
Trustee, such
Transferor agrees not to transfer, sell, assign, exchange or
otherwise convey or
pledge, hypothecate or otherwise grant a security interest in, the
Transferors'
Interest represented by the Original Transferor Certificate or any
Supplemental
Certificate and any such attempted transfer, assignment, exchange,
conveyance,
pledge, hypothecation, grant or sale shall be void. Nothing
contained in this
subsection 2.07(c) shall be interpreted to prohibit or in any way
limit any
Transferor's ability to grant to another Person a participation
interest in the
Transferors' Interest upon the delivery to the Trustee of a Tax
Opinion.
(d) Delivery of Collections or Recoveries. In the event that
such Transferor receives Collections or Recoveries, such Transferor
agrees to
pay the Servicer all such Collections and Recoveries as soon as
practicable
after receipt thereof.
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(e) Notice of Liens. Such Transferor shall notify the Trustee
and each Series Enhancer promptly after becoming aware of (except
as permitted
by clause (d) of the definition of the term "Eligible Receivable")
any Lien on
any Receivable or Participation Interest conveyed by it to the
Trust other than
the conveyances hereunder and under any Receivables Purchase
Agreement to which
such Transferor is a party.
(f) Issuer Rate Fees. On or prior to each Determination Date,
such Transferor shall notify the Servicer of the amount of Issuer
Rate Fees to
be included as Collections of Finance Charge Receivables with
respect to the
preceding Monthly Period, which shall be equal to the amount of
Issuer Rate Fees
paid to such Transferor pursuant to the relevant Receivables
Purchase Agreement
with respect to such Monthly Period.
(g) Separate Corporate Existence. Such 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 formation or as a corporation under the laws
of the state of its incorporation 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
applicable Receivables Purchase Agreement and each other
instrument or agreement necessary or appropriate to proper
administration hereof and to 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 such Transferor, with financial
institutions. The funds of such Transferor will not be
diverted to any other Person or for other than the company use
of such Transferor, and, except as may be expressly permitted
by this Agreement or the applicable Receivables Purchase
Agreement, the funds of such Transferor shall not be
commingled with those of any other Person.
(iii) Ensure that, to the extent that it shares the
same officers or other employees as any of its members or
other 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 members or other 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 such entities, and each such entity
shall bear its fair share of such costs. To the extent that
such 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.
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(v) Ensure that all material transactions between
such Transferor and any of its Affiliates shall be only on an
arm's-length basis and shall not be on terms more favorable to
either party than the terms that would be found in a similar
transaction involving unrelated third parties.
(vi) Maintain a principal executive and
administrative office through which its business is conducted
and a telephone number separate from those of its members and
other Affiliates. To the extent that such Transferor and any
of its members or other 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.
(vii) Conduct its affairs strictly in accordance with
its certificate of formation and limited liability company
agreement or its certificate of incorporation and bylaws and
observe all necessary, appropriate and customary company
formalities, including, but not limited to, holding all
regular and special members' and directors' meetings
appropriate to authorize all 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 members' and directors' meetings
shall be held at least annually.
(viii) Ensure that its board of directors shall at
all times include at least one Independent Director (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, member or
shareholder of any Affiliate of such Transferor which is not a
special purpose entity, (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).
(ix) Ensure that decisions with respect to its
business and daily operations shall be independently made by
such Transferor (although the officer making any particular
decision may also be an officer or director of an Affiliate of
such Transferor) and shall not be dictated by an Affiliate of
such Transferor.
(x) Act solely in its own company name and through
its own authorized officers and agents, and no Affiliate of
such Transferor shall be appointed to act as agent of such
Transferor. Such Transferor shall at all times use its own
stationery and business forms and describe itself as a
separate legal entity.
(xi) Other than as provided in the relevant Revolving
Credit Agreement, ensure that no Affiliate of such Transferor
shall advance funds or loan money to such Transferor, and no
Affiliate of such Transferor will otherwise guaranty debts of
such Transferor.
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(xii) Other than organizational expenses and as
expressly provided herein, pay all expenses, indebtedness and
other obligations incurred by it using its own funds.
(xiii) 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 Affiliate of such Transferor nor shall such
Transferor make any loans to any Person.
(xiv) Ensure that any financial reports required of
such Transferor shall comply with generally accepted
accounting principles 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 describing the effect of the transactions between
such Transferor and such Affiliate and also state that the
assets of such Transferor are not available to pay creditors
of the Affiliate.
(xv) Ensure that at all times it is adequately
capitalized to engage in the transactions contemplated in its
certificate of formation and its limited liability company
agreement or in its certificate of incorporation and bylaws.
(h) RFC II hereby further covenants that:
(i) Amendment of the Certificate of Incorporation.
RFC II will not amend in any material respect its Certificate
of Incorporation without providing each Rating Agency with
notice no later than the fifth Business Day prior to such
amendment (unless the right to such notice is waived by such
Rating Agency) and satisfying the Rating Agency Condition.
(ii) Other Indebtedness. RFC II shall not incur any
additional debt, unless each Rating Agency is 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 each Rating Agency) and the Rating Agency
Condition is satisfied with respect to the incurrence of such
debt.
Section 2.08 Additional Covenants of Each Transferor Regarding
the Terms of the Accounts. Each Transferor, in its capacity as
purchaser of
Receivables from any Account Owner (each, a "Receivables
Originator") or
American Express Credco pursuant to a Receivables Purchase
Agreement (if any) to
which such Transferor is a party, hereby covenants that such
Transferor will at
all times enforce the covenants and agreements of such Receivables
Originators
or American Express Credco in such Receivables Purchase Agreements,
including
covenants to the effect set forth below only to the extent to which
they are
enforceable against such Receivables Originators or American
Express Credco
pursuant to such Receivables Purchase Agreements:
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(a) Periodic Rate Finance Charges. (i) Except (x) as otherwise
required by any Requirements of Law or (y) as is deemed by
Centurion Bank, FSB
or other Account Owner, as the case may be, to be necessary in
order for it to
maintain its credit or charge business, as applicable, or a program
operated by
such credit or charge business, as applicable, on a competitive
basis based on a
good faith assessment by it of the nature of the competition with
respect to
such credit or charge business or such program, such Receivables
Originator
shall not at any time take any action which would have the effect
of reducing
the Portfolio Yield to a level that could be reasonably expected to
cause any
Series to experience any Pay-Out Event or Reinvestment Event based
on the
insufficiency of the Portfolio Yield or any similar test and (ii)
except as
otherwise required by any Requirements of Law, such Receivables
Originator shall
not take any action which would have the effect of reducing the
Portfolio Yield
to be less than the then-current highest Average Rate for any
Group.
(b) Account Agreements and Guidelines. Subject to compliance
with all Requirements of Law and paragraph (a) above, Centurion
Bank, FSB or
other Account Owner, as the case may be, may change the terms and
provisions of
the applicable Account Agreements or the applicable Credit
Guidelines in any
respect (including the calculation of the amount or the timing of
charge-offs
and the Periodic Rate Finance Charges to be assessed thereon).
Notwithstanding
the above, unless required by Requirements of Law or as permitted
by paragraph
(a) above, Centurion Bank, FSB or other Account Owner, as the case
may be, will
not take any action with respect to the applicable Account
Agreements or the
applicable Credit Guidelines, which, at the time of such action,
Centurion Bank,
FSB or other Account Owner, as the case may be, reasonably believes
will have a
material adverse effect on the rights of the Trust or the
Investor
Certificateholders.
Each Transferor further covenants that it will not enter into
any amendment to any Receivables Purchase Agreement to which it is
a party, or
enter into a new Receivables Purchase Agreement unless the Rating
Agency
Condition shall have been satisfied.
Section 2.09 Addition of Accounts.
(a) Required Additional Accounts. (i) If, as of the end of any
Monthly Period, the total amount of Principal Receivables and the
then
outstanding principal amount of any Participation Interests
theretofore conveyed
to the Trust is less than the Required Minimum Principal Balance on
such date,
the Transferors shall on or prior to the close of business on the
tenth Business
Day of the next Monthly Period (the "Required Designation Date"),
cause to be
designated additional Eligible Accounts to be included as Accounts
as of the
Required Designation Date or any earlier date in a sufficient
amount (or such
lesser amount as shall represent all Eligible Accounts then
available to the
Transferors under the Receivables Purchase Agreements) such that,
after giving
effect to such addition, the aggregate principal balance of
Principal
Receivables, plus the then outstanding principal amount of any
Participation
Interests conveyed to the Trustee as of the close of business on
the Addition
Date, is at least equal to the Required Minimum Principal Balance
on such date.
(ii) Optional Participation Interests. In lieu of, or
in addition to, causing the designation of Additional Accounts
pursuant to clause (i) above, subject to the conditions
specified in paragraph (c) below, the Transferors may (but
shall not be required to) convey to the Trust participations
(including 100% participations) representing undivided
interests in a pool of assets primarily consisting of one or
more of the following ("Participation Interests"): credit card
or other credit account receivables, charge card or other
charge account receivables, consumer loan receivables (secured
and unsecured), and/or any interests in any of the foregoing,
including securities representing or backed by such
receivables, and other self-liquidating financial assets
including any "Eligible Assets" as such term is defined in
Rule 3a-7 under the Investment Company Act (or any successor
to such rule) and collections, together with all earnings,
revenues, dividends, distributions, income, issues and profits
thereon. The addition of Participation Interests in the Trust
pursuant to this paragraph (a) or paragraph (b) below shall be
effected by a Participation Interest Supplement, dated the
applicable Addition Date and entered into pursuant to
subsection 13.01(a).
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(iii) Any Additional Accounts or Participation
Interests designated to be included as Trust Assets pursuant
to clauses (i) or (ii) above may only be so included if (x)
Standard & Poor's shall have notified the Transferors, the
Servicer and the Trustee in writing that such addition will
not result in a reduction or withdrawal of the then existing
rating of any outstanding Series or Class with respect to
which Standard & Poor's is a Rating Agency and (y) the
applicable conditions specified in paragraph (c) below have
been satisfied.
(b) Permitted Aggregate Additions. Each Transferor may from
time to time, at its sole discretion, subject to the conditions
specified in
paragraph (c) below, voluntarily cause the designation of
additional Eligible
Accounts to be included as Accounts and the related Receivables and
any
Participation Interests to be included as Trust Assets, in either
case, as of
the applicable Addition Date.
(c) Conditions to Aggregate Additions. On the Addition Date
with respect to any Aggregate Additions, the Trustee shall acquire
the
Receivables existing in Aggregate Addition Accounts (and such
Aggregate Addition
Accounts shall be deemed to be Accounts for purposes of this
Agreement) as of
the close of business on the applicable Addition Cut-Off Date or
shall acquire
such Participation Interests, subject to the satisfaction of the
following
conditions:
(i) on or before the eighth Business Day immediately
preceding the Addition Date, the applicable Transferor shall
have given the Trustee, the Servicer and each Rating Agency
notice (unless such notice requirement is otherwise waived)
that the Aggregate Addition Accounts or Participation
Interests will be included and specifying the applicable
Addition Date, Addition Cut-Off Date and Addition Selection
Date;
(ii) all Aggregate Addition Accounts shall be
Eligible Accounts;
(iii) the applicable Transferor shall have delivered
to the Trustee copies of UCC financing statements covering
such Aggregate Addition Accounts, if necessary to perfect the
Trustee's interest in the Receivables arising therein;
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(iv) to the extent required by Section 4.03, the
applicable Transferor
shall have deposited in the Collection
Account all Collections with respect to such Aggregate
Addition Accounts since the Addition Cut-Off Date;
(v) as of each of the Addition Cut-Off Date and the
Addition Date, no Insolvency Event shall have occurred nor
shall the transfer of the Receivables arising in the Aggregate
Addition Accounts or of the Participation Interests to the
Trust have been made in contemplation of the occurrence
thereof;
(vi) solely with respect to Aggregate Additions
designated pursuant to subsection 2.09(b), the Rating Agency
Condition shall have been satisfied;
(vii) the applicable Transferor shall have delivered
to the Trustee an Officer's Certificate of such Transferor,
dated the Addition Date, confirming, to the extent applicable,
the items set forth in clauses (ii) through (vi) above;
(viii) the addition to the Trust of the Receivables
arising in the Aggregate Addition Accounts or of the
Participation Interests will not result in an Adverse Effect
and, in the case of Aggregate Additions, the applicable
Transferor shall have delivered to the Trustee an Officer's
Certificate of such Transferor, dated the Addition Date,
stating that such Transferor reasonably believes that the
addition to the Trust of the Receivables arising in the
Aggregate Addition Accounts or of the Participation Interests
will not have an Adverse Effect; and
(ix) the applicable Transferor shall have delivered
to the Trustee and each Rating Agency an Opinion of Counsel,
dated the Addition Date, in accordance with subsection
13.02(d)(ii) or (iv), as applicable.
(d) New Accounts.
(i) Each Transferor may from time to time, at its
sole discretion,
subject to and in compliance with the
limitations specified in clause (ii) below and the conditions
specified in paragraph (e) below, voluntarily designate newly
originated Eligible Accounts to be included as New Accounts.
For purposes of this paragraph, Eligible Accounts shall be
deemed to include only credit or charge accounts of the same
nature as those included as Initial Accounts or which have
previously been included in any Aggregate Addition if the
Assignment related to such Aggregate Addition expressly
provides that such type of credit or charge account is
permitted to be
designated as a New Account.
(ii) Unless and until each Rating Agency otherwise
consents in writing, the Transferors shall not be permitted to
designate New Accounts and, upon obtaining such consent, the
number and balance of New Accounts designated with respect to
any period designated by the Rating Agency shall not exceed
the amounts designated by the Rating Agency.
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(iii) With respect to each semi-annual period in
which New Accounts are added as Accounts, the failure of the
applicable Transferor to deliver an Opinion of Counsel
substantially in the form of Exhibit E-2 (or, if the owner of
the applicable Accounts has a long-term rating below "A" by
Moody's or "AA-" by Standard & Poor's, such Opinion of
Counsel
shall be delivered quarterly, and if the long-term rating of
the owner of the applicable Accounts is not rated by Moody's
or Standard & Poor's or, if rated, is not rated at least
"A-"
by Standard
& Poor's and in one of the generic categories of
each other Rating Agency which signifies investment grade,
such Opinion of Counsel shall be delivered monthly) with
respect to the New Accounts included as Accounts shall result
in all Receivables arising in the New Accounts to which such
failure relates to be deemed to be Ineligible Receivables in
accordance with subsection 2.05(a) and all such Receivables
shall be reassigned to such Transferor in accordance with
subsection 2.05(b). The opinion delivery requirement set forth
in the immediately preceding sentence may be modified provided
that the Rating Agency Condition is satisfied.
(e) Conditions to Addition of New Accounts. On the Addition
Date with respect to any New Accounts, at the direction of the
Servicer, the
Trustee, on behalf of the Trust, shall acquire the Receivables
existing in such
New Accounts (and such New Accounts shall be deemed to be Accounts
for purposes
of this Agreement) as of the close of business on the applicable
Addition
Cut-Off Date, subject to the satisfaction of the following
conditions:
(i) the New Accounts shall all be Eligible Accounts;
(ii) the applicable Transferor shall have delivered
to the Trustee copies of UCC financing statements covering
such New Accounts, if necessary to perfect the Trustee's
interest in the Receivables arising therein;
(iii) to the extent required by Section 4.03, the
applicable Transferor shall have deposited in the Collection
Account all Collections with respect to such New Accounts
since the Addition Cut-Off Date;
(iv) as of each of the Addition Cut-Off Date and the
Addition Date, no Insolvency Event shall have occurred nor
shall the transfer to the Trustee of the Receivables arising
in the New Accounts have been made in contemplation of the
occurrence thereof; and
(v) the addition of the Receivables arising in the
New Accounts to the Trust will not result in the occurrence of
a Pay-Out Event or a Reinvestment Event.
(f) Representations and Warranties. Each Transferor conveying
any Receivables in Additional Accounts or Participation Interests
hereby
represents and warrants to the Trust and the Trustee as of the
related Addition
Date as to the matters set forth in clauses (v) and (viii) of
subsection 2.09(c)
above and that, in the case of Additional Accounts, the list
delivered pursuant
to subsection 2.09(h) below is, as of the applicable Addition
Cut-Off Date, true
and complete in all material respects.
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(g) Additional Transferors. A Transferor may designate
Affiliates of such Transferor to be included as Transferors
("Additional
Transferors") under this Agreement in an amendment hereto pursuant
to subsection
13.01(a) and, in connection with such designation, such Transferor
shall (i) if
the Original Transferor Certificate is certificated, surrender the
Original
Transferor Certificate to the Trustee in exchange for a newly
issued Original
Transferor Certificate modified to reflect such Additional
Transferor's interest
in the Transferors' Interest or (ii) if the Original Transferor
Certificate is
uncertificated, direct the Trustee to register in the books and
records of the
Trust such Additional Transferor's interest in the Transferors'
Interest;
provided, however, that prior to any such designation of an
Additional
Transferor, the conditions set forth in clauses (iv) and (vi) of
subsection
6.03(b) shall have been satisfied with respect thereto.
(h) Delivery of Documents. In the case of the designation of
Additional Accounts, the Transferor designating such Accounts shall
deliver to
the Trustee (i) the computer file or microfiche list required to be
delivered
pursuant to Section 2.01 with respect to such Additional Accounts
on the date
such file or list is required to be delivered pursuant to Section
2.01 and (ii)
a duly executed, written Assignment (including an acceptance by the
Trustee for
the benefit of the Certificateholders), substantially in the form
of Exhibit B
(the "Assignment"), on the related Addition Date. In addition, in
the case of
the designation of New Accounts, the Transferor designating such
Accounts shall
deliver to the Trustee on the Addition Date an Officer's
Certificate of such
Transferor confirming, to the extent applicable, the items set
forth in clauses
(i) through (v) of subsection 2.09(e) above.
Section 2.10 Removal of Accounts and Participation Interests.
On any day of any Monthly Period, each 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 monies due or to become due and all amounts received
thereafter
with respect thereto and all proceeds thereof in or with respect to
the Accounts
specified herein (the "Removed Accounts") or Participation
Interests conveyed to
the Trust by such Transferor (the "Removed Participation
Interests") (unless
otherwise set forth in the applicable Participation Interest
Supplement or
Series Supplement), and designated for removal by the Transferor,
upon
satisfaction of the conditions in clauses (i), (iii), (iv) and (v)
below:
(i) on or before the eighth Business Day immediately
preceding the Removal Date, such Transferor shall have given
the Trustee, the Servicer, the Rating Agency and each Series
Enhancer notice (unless such notice requirement is otherwise
waived) of such removal and specifying the date for removal of
the Removed Accounts and removed Participation Interests (the
"Removal Date");
(ii) on or prior to the date that is five Business
Days after the Removal Date, such Transferor shall amend
Schedule 1 by delivering to the Trustee a computer file or
microfiche list containing a true and complete list of the
Removed Accounts specifying for each such Account, as of the
date notice of the Removal Date is given, its account number
and the aggregate amount of Receivables outstanding in such
Account;
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(iii) such Transferor shall have represented and
warranted as of the Removal Date that the list of Removed
Accounts delivered pursuant to paragraph (ii) above, as of the
Removal Date, is true and complete in all material respects;
(iv) the Rating Agency Condition shall have been
satisfied with respect to the removal of the Removed Accounts
and removed Participation Interests;
(v) such Transferor shall have delivered to the
Trustee an Officer's Certificate of such Transferor, dated the
Removal Date, to the effect that such Transferor reasonably
believes that (a) such removal will not have an Adverse
Effect, (b) such removal will not result in the occurrence of
a Pay-Out Event or a Reinvestment Event, and (c) no selection
procedures believed by such Transferor to be materially
adverse to, or materially beneficial to, the interests of the
Investor Certificateholders have been used in selecting the
Removed Accounts from among any pool of Accounts of a similar
type.
In addition to the terms and conditions contained in clauses
(i)-(v) above, the Transferors' right to require the reassignment
to them or
their designees of all the Trustee's right, title and interest in,
to and under
the Receivables in Removed Accounts and Removed Participation
Interests, shall
be subject to the following restrictions:
(a) Except for Removed Accounts described in clause (b) below,
there shall be no more than one Removal Date in any Monthly Period
and the
Accounts to be designated as Removed Accounts shall be selected at
random by the
applicable Transferor; and
(b) A Transferor may designate Removed Accounts as provided in
and subject to the terms and conditions contained in this Section
2.10 without
being subject to the restrictions set forth in clause (a) above if
the Removed
Accounts are Accounts (i) originated or acquired under a specific
affinity
agreement, private label agreement, merchant agreement, co-branding
agreement or
other program which is co-owned, operated or promoted, provided
that such
agreement has terminated in accordance with the terms therein or
(ii) being
removed due to other circumstances caused by requirements of
agreements in which
the right to such Removed Accounts or control thereof is determined
by a party
or parties to such agreements other than the Transferors, any
Affiliate of the
Transferors or any agent of the Transferors.
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver to such Transferor a written reassignment in
substantially
the form of Exhibit C (the "Reassignment") and shall, without
further action, be
deemed to sell, transfer, assign, set over and otherwise convey to
such
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 and Removed
Participation
Interests, all monies due and to become due and all amounts
received with
respect thereto and all proceeds thereof and any Insurance Proceeds
relating
thereto. The Trustee may conclusively rely on the Officer's
Certificate
delivered pursuant to this Section 2.10 and shall have no duty to
make inquiries
with regard to the matters set forth therein and shall incur no
liability in so
relying.
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In addition to the foregoing, on the date when an Account
becomes a Defaulted Account, the Trustee shall automatically and
without further
action or consideration transfer, set over and otherwise convey to
the
applicable Transferor with respect to such Account, without
recourse,
representation or warranty, all right, title and interest of the
Trustee and the
Trust in and to the Receivables in such Defaulted Account, all
monies due or to
become due with respect thereto, all proceeds thereof and any
Insurance Proceeds
relating thereto; provided, that Recoveries of such Defaulted
Account shall be
applied as provided herein.
Section 2.11 Account Allocations. In the event that any
Transferor is unable for any reason to transfer Receivables to the
Trustee in
accordance with the provisions of this Agreement, including by
reason of the
application of the provisions of Section 9.01 or any order of any
Governmental
Authority (a "Transfer Restriction Event"), then, in any such
event, (a) such
Transferor agrees (except as prohibited by any such order) to
allocate and pay
to the Trust, after the date of such inability, all Collections,
including
Collections of Receivables transferred to the Trust prior to the
occurrence of
such event, and all amounts which would have constituted
Collections but for
such Transferor's inability to transfer Receivables (up to an
aggregate amount
equal to the amount of Receivables transferred to the Trust by such
Transferor
in the Trust on such date), (b) such Transferor and the Servicer
agree that such
amounts will be applied as Collections in accordance with Article
IV and the
terms of each Supplement and (c) for so long as the allocation and
application
of all Collections and all amounts that would have constituted
Collections are
made in accordance with clauses (a) and (b) above, Principal
Receivables and all
amounts which would have constituted Principal Receivables but for
such
Transferor's inability to transfer Receivables to the Trust which
are written
off as uncollectible in accordance with this Agreement shall
continue to be
allocated in accordance with Article IV and the terms of each
Supplement. For
the purpose of the immediately preceding sentence, such Transferor
and the
Servicer shall treat the first received Collections with respect to
the Accounts
as allocable to the Trust until the Trust shall have been allocated
and paid
Collections in an amount equal to the aggregate amount of Principal
Receivables
in the Trust as of the date of the occurrence of such event. If
such Transferor
and the Servicer are unable pursuant to any Requirements of Law to
allocate
Collections as described above, such Transferor and the Servicer
agree that,
after the occurrence of such event, payments on each Account with
respect to the
principal balance of such Account shall be allocated first to the
oldest
principal balance of such Account and shall have such payments
applied as
Collections in accordance with Article IV and the terms of each
Supplement. The
parties hereto agree that Finance Charge Receivables, whenever
created, accrued
in respect of Principal Receivables which have been conveyed to the
Trust shall
continue to be a part of the Trust notwithstanding any cessation of
the transfer
of additional Principal Receivables to the Trust and Collections
with respect
thereto shall continue to be allocated and paid in accordance with
Article IV
and the terms of each Supplement.
Section 2.12 Discount Option.
(a) The Transferors shall have the option to designate at any
time and from time to time a percentage or percentages, which may
be a fixed
percentage or a variable percentage (the "Discount Percentage"), of
all or any
specified portion of Principal Receivables created after the
Discount Option
Date to be treated as Finance Charge Receivables ("Discount
Option
Receivables"). The Transferors shall also have the option of
increasing,
reducing or withdrawing the Discount Percentage, at any time and
from time to
time, on and after such Discount Option Date. The Transferors shall
provide to
the Servicer, the Trustee and any Rating Agency 30 days' prior
written notice of
the Discount Option Date and any such designation or increase,
reduction or
withdrawal, and such designation, increase, reduction or withdrawal
shall become
effective on the Discount Option Date specified therefor upon
satisfaction of
the following conditions:
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(i) each Transferor shall have delivered to the
Trustee and any Series Enhancer entitled thereto (if any) an
Officer's Certificate of such Transferor certifying that,
based upon facts known to such Transferor at such time, such
designation, increase,
reduction or withdrawal will not, at
the time of its occurrence, cause a Pay-Out Event or a
Reinvestment Event, or an event that, with notice or the lapse
of time or both, would constitute a Pay-Out Event or a
Reinvestment Event, to occur with respect to any Series;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such designation, increase,
reduction or withdrawal; and
(iii) only in connection with a reduction or
withdrawal of the Discount Percentage, the Transferors shall
have caused an Opinion of Counsel to the effect described in
clause (a) of the definition of "Tax Opinion" in Section 1.01
to have been delivered to the Trustee.
Notwithstanding any of the foregoing conditions to the designation
of the
Discount Percentage, beginning on the Substitution Date, the
initial Discount
Percentage shall be 0.0%, and any Collections with respect to
Discount Option
Receivables in effect after the close of business on March 26, 2004
shall be
treated as Collections of Principal Receivables.
(b) After any Discount Option Date, Discount Option Receivable
Collections (calculated using the Discount Percentage specified on
such Discount
Option Date) shall be treated as Collections of Finance Charge
Receivables.
Section 2.13 Premium Option.
(a) The Transferors shall have the option to designate at any
time and from time to time a percentage or percentages, which may
be a fixed
percentage or a variable percentage (the "Premium Percentage"), of
all or any
specified portion of Finance Charge Receivables created on and
after the Premium
Option Date to be treated as Principal Receivables ("Premium
Option
Receivables"). The Transferors shall also have the option of
increasing,
reducing or withdrawing the Premium Percentage, at any time and
from time to
time, on and after such Premium Option Date. The Transferors shall
provide to
the Servicer, the Trustee and any Rating Agency 30 days' prior
written notice of
the Premium Option Date and any such designation or increase,
reduction or
withdrawal, and such designation, increase, reduction or withdrawal
shall become
effective on the Premium Option Date specified therefor upon
satisfaction of the
following conditions:
(i) each Transferor shall have delivered to the
Trustee and any Series Enhancer entitled thereto (if any) an
Officer's Certificate of such Transferor certifying that,
based upon facts known to such Transferor at such time, such
designation, increase, reduction or withdrawal will not, at
the time of its occurrence, cause a Pay-Out Event or a
Reinvestment Event, or an event that, with notice or the lapse
of time or both, would constitute a Pay-Out Event or a
Reinvestment Event, to occur with respect to any Series;
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(ii) the Rating Agency Condition shall have been
satisfied with respect to such designation, increase,
reduction or withdrawal; and
(iii) only in connection with the designation or any
increase of the Premium Percentage, the Transferors shall have
caused an Opinion of Counsel to the effect described in clause
(a) of the definition of "Tax Opinion" in Section 1.01 to have
been delivered to the Trustee.
(b) After any Premium Option Date, Premium Option Receivable
Collections (calculated using the Premium Percentage specified on
such Premium
Option Date) shall be treated as Collections of Principal
Receivables.
[END OF ARTICLE II]
48
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters
Relating to the Servicer.
(a) TRS has agreed to act, and has acted, as the Servicer
under the Original Pooling Agreement and the Amended PSA, and TRS
hereby agrees
to act as the Servicer under this Agreement. The Certificateholders
by their
acceptance of the Certificates shall be deemed to consent to TRS
acting as
Servicer.
(b) As agent for each Transferor and the Trust, the Servicer
shall service and administer the Receivables and any Participation
Interests,
shall collect and deposit into the Collection Account payments due
under the
Receivables and any Participation Interests and shall charge-off
as
uncollectible Receivables, all in accordance with its customary and
usual
servicing procedures for servicing credit or charge receivables
comparable to
the Receivables and in accordance with the applicable Credit
Guidelines. As
agent for each Transferor and the Trust, the 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 and subject to Section 10.01, the
Servicer or its
designee is hereby authorized and empowered, unless such power is
revoked by the
Trustee on account of the occurrence of a Servicer Default pursuant
to Section
10.01, (i) to instruct the Trustee to make withdrawals and payments
from the
Collection Account, the Special Funding Account and any Series
Account, as set
forth in this Agreement or any Supplement, (ii) to take any action
required or
permitted under any Series Enhancement, as set forth in this
Agreement or any
Supplement, (iii) to execute and deliver, on behalf of the Trust
for the benefit
of the Certificateholders, any and all instruments of satisfaction
or
cancellation, or of partial or full release or discharge, and all
other
comparable instruments, with respect to the Receivables and, after
the
delinquency of any Receivable and to the extent permitted under and
in
compliance with applicable Requirements of Law, to commence
collection
proceedings with respect to such Receivables and (iv) at the
expense of the
Transferors, to make any filings, reports, notices, applications
and
registrations with, and to seek any consents or authorizations
from, the
Securities and Exchange Commission (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 or reporting requirements or other
laws or
regulations. The Trustee shall furnish the Servicer with any
documents necessary
or appropriate to enable the Servicer to carry out its servicing
and
administrative duties hereunder.
(c) The Servicer shall not, and no Successor Servicer shall,
be obligated to use separate servicing procedures, offices,
employees or
accounts for servicing the Receivables from the procedures,
offices, employees
and accounts used by the Servicer or such Successor Servicer, as
the case may
be, in connection with servicing other comparable receivables.
(d) The Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in
accordance with the
Account Agreements relating to the Accounts and the applicable
Credit Guidelines
and all applicable rules and regulations affecting the Accounts and
the
Receivables, except insofar as any failure to so comply or perform
would not
materially and adversely affect the Trust or the Investor
Certificateholders.
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<PAGE>
(e) The Servicer shall pay out of its own funds, without
reimbursement, all expenses incurred in connection with the
servicing activities
hereunder including all expenses related to enforcement of the
Receivables, fees
and disbursements of the Trustee (including the reasonable fees and
expenses of
its outside counsel) and independent accountants for the
Servicer.
Section 3.02 Servicing Compensation. As full compensation for
its servicing activities hereunder and as reimbursement for any
expense incurred
by it in connection therewith, the Servicer shall be entitled to
receive the
Servicing Fee specified in any Supplement.
Section 3.03 Representations, Warranties and Covenants of the
Servicer. TRS, as initial Servicer, hereby makes, and any Successor
Servicer by
its appointment hereunder shall make, with respect to itself, on
each Closing
Date (and on the date of any such appointment), the following
representations,
warranties and covenants on which the Trustee shall be deemed to
have relied in
accepting the Receivables in trust and in authenticating the
Certificates:
(a) Organization and Good Standing. The Servicer is a
corporation or other legal entity validly existing under the
applicable law of
the jurisdiction of its organization or incorporation and has, in
all material
respects, full power and authority to own its properties and
conduct its
servicing business as presently owned or conducted, and to execute,
deliver and
perform its obligations under this Agreement and each
Supplement.
(b) Due Qualification. The Servicer is duly qualified to do
business and is in good standing as a foreign corporation or other
foreign
entity (or is exempt from such requirements) and has obtained all
necessary
licenses and approvals in each jurisdiction in which the servicing
of the
Receivables and any Participation Interests as required by this
Agreement
requires such qualification except where the failure to so qualify
or obtain
licenses or approvals would not have a material adverse effect on
its ability to
perform its obligations as Servicer under this Agreement.
(c) Due Authorization. The execution, delivery, and
performance by the Servicer of this Agreement and each Supplement,
and the other
agreements and instruments executed or to be executed by the
Servicer as
contemplated hereby, have been duly authorized by the Servicer by
all necessary
action on the part of the Servicer.
(d) Binding Obligation. This Agreement and each Supplement
constitutes a legal, valid and binding obligation of the Servicer,
enforceable
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 or by
general principles of equity.
(e) No Conflict. The execution and delivery of this Agreement
and each Supplement by the Servicer, and the performance by the
Servicer of the
transactions contemplated by this Agreement and each Supplement and
the
fulfillment by the Servicer of the terms hereof and thereof
applicable to the
Servicer, will not conflict with, violate or 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 the Servicer
is a party or
by which it or its properties are bound.
50
<PAGE>
(f) No
Violation. The execution and delivery of this Agreement
and each Supplement by the Servicer, the performance by the
Servicer of the
transactions contemplated by this Agreement and each Supplement and
the
fulfillment by the Servicer of the terms hereof and thereof
applicable to the
Servicer will not conflict with or violate any Requirements of Law
applicable to
the Servicer.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer, threatened
against the
Servicer before any Governmental Authority seeking to prevent the
consummation
of any of the transactions contemplated by this Agreement or any
Supplement or
seeking any determination or ruling that, in the reasonable
judgment of the
Servicer, would materially and adversely affect the performance by
the Servicer
of its obligations under this Agreement or any Supplement.
(h) Compliance with Requirements of Law. The Servicer shall
duly satisfy all obligations on its part to be fulfilled under or
in connection
with each Receivable and the related Account, if any, will maintain
in effect
all qualifications required under Requirements of Law in order to
service
properly each Receivable and the related Account, if any, and will
comply in all
material respects with all other Requirements of Law in connection
with
servicing each Receivable and the related Account the failure to
comply with
which would have an Adverse Effect.
(i) No Rescission or Cancellation. The Servicer shall not
authorize any rescission or cancellation of any Receivable except
in accordance
with the applicable Credit Guidelines or as ordered by a court of
competent
jurisdiction or other Governmental Authority.
(j) Protection of Rights. The Servicer shall take no action
which, nor omit to take any action the omission of which, would
impair the
rights of the Trustee in any Receivable, if any, nor shall it
reschedule, revise
or defer payments due on any Receivable except in accordance with
the applicable
Credit Guidelines, nor shall it sell any assets in the Trust except
as provided
in this Agreement or a related Supplement.
(k) Receivables Not To Be Evidenced by Instruments. Except in
connection with its enforcement or collection of an Account, the
Servicer will
take no action to cause any Receivable to be evidenced by any
instrument (as
defined in the UCC) and if any Receivable is so evidenced as a
result of the
Servicer's action, it shall be assigned to the Servicer as provided
in this
Section.
(l) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority
required to be obtained, effected or given by the Servicer in
connection with
the execution and delivery of this Agreement and each Supplement by
the Servicer
and the performance of the transactions contemplated by this
Agreement and each
Supplement by the Servicer, have been duly obtained, effected or
given and are
in full force and effect.
51
<PAGE>
In the event (x) any of the representations, warranties or
covenants of the Servicer contained in subsection 3.03(h), (i) or
(j) with
respect to any Receivable or the related Account is breached, and
such breach
has a material adverse effect on the Trustee's interest in such
Receivable
(which determination shall be made without regard to whether funds
are then
available to any Investor Certificateholders pursuant to any Series
Enhancement)
and is not cured within 60 days (or such longer period, not in
excess of 150
days, as may be agreed to by the Trustee and the Transferors) of
the earlier to
occur of the discovery of such event by the Servicer, or receipt by
the Servicer
of notice of such event given by the Trustee or a Transferor, or
(y) as provided
in subsection 3.03(k) with respect to any Receivable, all
Receivables in the
Account or Accounts to which such event relates shall be assigned
and
transferred to the Servicer on the terms and conditions set forth
below.
The Servicer shall effect such assignment by making a deposit
into the Collection Account in immediately available funds on the
Transfer Date
following the Monthly Period in which such assignment obligation
arises in an
amount equal to the amount of such Receivables.
Upon each such assignment to the Servicer, the Trustee, on
behalf of the Trust, shall automatically and without further action
sell,
transfer, assign, set over and otherwise convey to the Servicer,
without
recourse, representation or warranty, all right, title and interest
of the
Trustee and the Trust in and to such Receivables, all monies due or
to become
due and all amounts received with respect thereto and all proceeds
thereof. The
Trustee shall execute such documents and instruments of transfer or
assignment
and take such other actions as shall be reasonably requested by the
Servicer to
effect the conveyance of any such Receivables pursuant to this
Section but only
upon receipt of an Officer's Certificate of the Servicer that
states that all
conditions set forth in this section have been satisfied. The
obligation of the
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 Certificateholders (or the Trustee on
behalf of
Certificateholders) or any Series Enhancer, except as provided in
Section 8.04.
Section 3.04 Reports and Records for the Trustee.
(a) Daily Records. For as long as deposits of Collections are
required to be made daily by the Servicer pursuant to subsection
4.03(a), on
each Business Day, the Servicer shall make or cause to be made
available at the
office of the Servicer for inspection by the Trustee or any
Transferor upon
request a record setting forth (i) the Collections in respect of
Principal
Receivables and in respect of Finance Charge Receivables processed
by the
Servicer on the second preceding Business Day in respect of each
Account and
(ii) the amount of Receivables as of the close of business on the
second
preceding Business Day in each Account. The Servicer shall, at all
times,
maintain its computer files with respect to the Accounts in such a
manner so
that the Accounts may be specifically identified and shall make
available to the
Trustee and the Transferors at the office of the Servicer on any
Business Day
any computer programs necessary to make such identification. The
Trustee and the
Transferors shall enter into such confidentiality agreements as the
Servicer
shall deem necessary to protect its interests.
52
<PAGE>
(b) Monthly Servicer's Certificate. Not later than the second
Business Day preceding each Distribution Date, the Servicer shall,
with respect
to each outstanding Series, deliver to the Trustee, the Transferors
and each
Rating Agency a certificate of a Servicing Officer in substantially
the form set
forth in the related Supplement.
Section 3.05 Annual Certificate of Servicer. The Servicer
shall deliver to the Trustee, the Transferors and each Rating
Agency on or
before the 90th day following the end of each fiscal year,
beginning with the
fiscal year ending December 31, 2006, the statement of compliance
required under
Item 1123 of Regulation AB with respect to such fiscal year, which
statement
will be in the form of an Officer's Certificate of the Servicer
(with
appropriate insertions) to the effect that (a) a review of the
activities of the
Servicer during such fiscal year and of its performance under this
Agreement was
made under the supervision of the officer signing such certificate
and (b) to
the best of such officer's knowledge, based on such review, the
Servicer has
fulfilled all its obligations under this Agreement in all material
respects
throughout such fiscal year or, if there has been a failure to
fulfill any such
obligation in any material respect, specifying each such failure
known to such
officer and the nature and status thereof; provided, however, that
on or before
March 31, 2006, the Servicer shall cause to be delivered the
Officer's
Certificate of the Servicer (with appropriate insertions) as was
required to be
delivered pursuant to, and in accordance with, Section 3.05 of the
Amended PSA.
Section 3.06 Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available.
(a) On or before the 90th day following the end of each fiscal
year, beginning with the fiscal year ending December 31, 2006, the
Servicer
shall cause a firm of nationally recognized independent public
accountants (who
may also render other services to the Servicer or a Transferor) to
furnish to
the Trustee, the Servicer, the Transferors and each Rating Agency
each
attestation report on assessments of compliance with the Servicing
Criteria with
respect to the Servicer or any affiliate thereof during the related
fiscal year
delivered by such accountants pursuant to Rule 13(a)-18 or Rule
15(d)-18 of the
Exchange Act and Item 1122 of Regulation AB; provided, however,
that on or
before March 31, 2006, the Servicer shall cause to be furnished the
reports as
were required to be delivered pursuant to, and in accordance with,
Section 3.06
of the Amended PSA.
(b) A copy of each certificate and report provided pursuant to
subsection 3.04(b), or Section 3.05 or 3.06 may be obtained by any
Investor
Certificateholder or Certificate Owner by a request in writing to
the Trustee
addressed to the Corporate Trust Office.
53
<PAGE>
Section 3.07 Tax Treatment. Except as otherwise specified in a
Supplement with respect to a particular Series, the Transferors
have entered
into this Agreement, and the Certificates will be issued, with the
intention
that, for federal, state and local income and franchise tax
purposes, (i) the
Investor Certificates of each Series which are characterized as
indebtedness at
the time of their issuance will qualify as indebtedness secured by
the
Receivables and (ii) the Trust shall not be treated as an
association or
publicly traded partnership taxable as a corporation. Each of the
Transferors,
by entering into this Agreement, each of the Holders of the
Transferor
Certificates, by acquisition of its interest in the Transferors'
Interest, and
each Certificateholder, by the acceptance of any such Certificate
(and each
Certificate Owner, by its acceptance of an interest in the
applicable
Certificate), agree to treat such Investor Certificates for
federal, state and
local income and franchise tax purposes as indebtedness. Each
Holder of such
Investor Certificate agrees that it will cause any Certificate
Owner acquiring
an interest in a Certificate through it to comply with this
Agreement as to
treatment as indebtedness under applicable tax law, as described in
this Section
3.07. Subject to Section 11.11, the Trustee shall treat the Trust
as a security
arrangement for federal income tax purposes and shall not file any
federal
income tax returns or obtain any federal employer identification
number for the
Trust. The provisions of this Agreement shall be construed in
furtherance of the
foregoing intended tax treatment.
Section 3.08 Notices to American Express Entities. In the
event that TRS is no longer acting as Servicer, any Successor
Servicer also
shall deliver or make available to Centurion Bank, FSB and TRS each
certificate
and report required to be provided thereafter pursuant to
subsection 3.04(b) and
Sections 3.05 and 3.06, as well as all information reasonably
requested by
Centurion Bank, FSB or TRS.
Section 3.09 Adjustments.
(a) If the Servicer adjusts downward the amount of any
Receivable because of a rebate, refund, unauthorized charge or
billing error to
an account Obligor, because such Receivable was created in respect
of
merchandise which was refused or returned by an account Obligor, or
because the
Servicer or applicable Account Owner charges off as uncollectible
Small
Balances, or if the 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 (other than cases resulting
from Servicer
error), the amount of Principal Receivables used to calculate the
Transferor
Amount, the Transferors' Interest, and (unless otherwise specified)
any other
amount required herein or in any Supplement to be calculated by
reference to the
amount of Principal Receivables, will be reduced by the amount of
the
adjustment. Similarly, the amount of Principal Receivables used to
calculate the
Transferor Amount and (unless otherwise specified) any other amount
required
herein or in any Supplement to be calculated by reference to the
amount of
Principal Receivables will be reduced by the amount of the Trust's
percentage of
any Receivable which was discovered as having been created through
a fraudulent
or counterfeit charge or with respect to which the covenant
contained in Section
2.07(b) was breached. Any adjustment required pursuant to either of
the two
preceding sentences shall be made on or prior to the end of the
Monthly Period
in which such adjustment obligation arises. In the event that,
following the
exclusion of such Principal Receivables from the calculation of the
Transferor
Amount, the Transferor Amount would be less than the Required
Transferor Amount,
not later than 1:00 P.M., New York City time, on the Distribution
Date following
the Monthly Period in which such adjustment obligation arises, the
Transferors
shall make a deposit into the Special Funding Account in
immediately available
funds in an amount equal to the amount by which the Transferor
Amount would be
less than the Required Transferor Amount, due to adjustments with
respect to
Receivables conveyed by such Transferors (up to the amount of such
Principal
Receivables).
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such
Collection was
received by the Servicer in the form of a check which is not
honored for any
reason or (ii) the Servicer makes a mistake with respect to the
amount of any
Collection and deposits an amount that is less than or more than
the actual
amount of such Collection, the Servicer shall appropriately adjust
the amount
subsequently deposited into the Collection Account to reflect such
dishonored
check or mistake. Any Receivable in respect of which a dishonored
check is
received shall be deemed not to have been paid. Notwithstanding the
first two
sentences of this paragraph, adjustments made pursuant to this
paragraph shall
not require any change in any report previously delivered pursuant
to subsection
3.04(a) or (b).
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Section 3.10 Recoveries. If at any time the Servicer cannot
identify the Recoveries that relate to specific Defaulted
Receivables, then the
Servicer shall reasonably estimate, on or prior to each
Determination Date, the
amount of Recoveries to be attributed to such Defaulted
Receivables.
Section 3.11 Reports to the Commission. The Servicer shall, on
behalf of the Trust and at the expense of the Transferors, cause to
be filed
with the Commission any periodic reports required to be filed under
the
provisions of the Exchange Act, and the rules and regulations of
the Commission
thereunder. The Transferors shall, at their expense, cooperate in
any reasonable
request of the Servicer in connection with such filings.
[END OF ARTICLE III]
55
<PAGE>
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01 Rights of Certificateholders. The Investor
Certificates shall represent fractional undivided interests in the
Trust, which,
with respect to each Series, shall consist of the right to receive,
to the
extent necessary to make the required payments with respect to the
Investor
Certificates of such Series at the times and in the amounts
specified in the
related Supplement, the portion of Collections allocable to
Investor
Certificateholders of such Series pursuant to this Agreement and
such
Supplement, funds on deposit in the Collection Account and the
Special Funding
Account allocable to Certificateholders of such Series pursuant to
this
Agreement and such Supplement, funds on deposit in any related
Series Account
and funds available pursuant to any related Series Enhancement
(collectively,
with respect to all Series, the "Certificateholders' Interest"), it
being
understood that, except as specifically set forth in the Supplement
with respect
thereto, the Investor Certificates of any Series or Class shall not
represent
any interest in any Series Account or Series Enhancement for the
benefit of any
other Series or Class. The Transferor Certificates or, as the case
may be, the
uncertificated interests in the Transferors' Interest shall
represent the
ownership interest in the remainder of the Trust Assets not
allocated pursuant
to this Agreement or any Supplement to the Certificateholders'
Interest,
including the right to receive Collections with respect to the
Receivables and
other amounts at the times and in the amounts specified in any
Supplement to be
paid to the Transferors on behalf of all holders of the Transferor
Certificates
(the "Transferors' Interest"); provided, however, that if the
Transferors elect
to have their interests in the Transferors' Interest be
uncertificated as
provided in Section 6.01 hereof, then such uncertificated interests
shall
represent the Transferors' Interest; provided further, however,
that the
Transferor Certificates or, as the case may be, the uncertificated
interests in
the Transferors' Interest shall not represent any interest in the
Collection
Account, any Series Account or any Series Enhancement, except as
specifically
provided in this Agreement or any Supplement.
Section 4.02 Establishment of Collection Account and Special
Funding Account. The Servicer, for the benefit of the
Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the
Trust, an
Eligible Deposit Account bearing a
