EXHIBIT 4.3
TRANSFER AND SERVICING AGREEMENT
Dated as of October 24, 2002
FIRST NATIONAL FUNDING LLC,
Transferor,
FIRST NATIONAL BANK OF OMAHA,
Servicer,
and
FIRST NATIONAL MASTER NOTE TRUST,
Issuer
FIRST NATIONAL MASTER NOTE TRUST
ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................................................... 1
Section 1.02. Other Definitional Provisions............................................................. 1
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables................................................................. 2
Section 2.02. Acceptance by Issuer...................................................................... 4
Section 2.03. Representations and Warranties of Transferor Relating to Transferor....................... 4
Section 2.04. Representations and Warranties of Transferor Relating to Transaction Documents and the
Receivables ............................................................................. 6
Section 2.05. Covenants of Transferor................................................................... 13
Section 2.06. Addition of Accounts...................................................................... 19
Section 2.07. Removal of Accounts....................................................................... 21
Section 2.08. Discount Option Receivables............................................................... 23
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to Servicer.......................... 24
Section 3.02. Servicing Compensation.................................................................... 25
Section 3.03. Representations, Warranties and Covenants of Servicer..................................... 26
Section 3.04. Reports and Records for Indenture Trustee................................................. 29
Section 3.05. Annual Servicer's Certificate............................................................. 31
Section 3.06. Annual Independent Accountants' Servicing Report.......................................... 31
Section 3.07. Tax Treatment............................................................................. 32
Section 3.08. Notices to Transferor..................................................................... 32
Section 3.09. Adjustments............................................................................... 32
Section 3.10. Transfer of Receivables in Defaulted Accounts............................................. 33
Section 3.11. Reports to the Commission................................................................. 33
ARTICLE IV
OTHER MATTERS RELATING TO TRANSFEROR
Section 4.01. Liability of Transferor................................................................... 33
Section 4.02. Merger or Consolidation of, or Assumption of the Obligations of, Transferor............... 33
Section 4.03. Limitation on Liability of Transferor..................................................... 34
Section 4.04. Transferor Indemnification................................................................ 35
ARTICLE V
OTHER MATTERS RELATING TO SERVICER
Section 5.01. Liability of Servicer..................................................................... 37
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, Servicer................. 37
Section 5.03. Limitation on Liability of Servicer and Others............................................ 38
Section 5.04. Servicer Indemnification.................................................................. 38
Section 5.05. Servicer Not To Resign.................................................................... 40
Section 5.06. Access to Certain Documentation and Information Regarding the Receivables................. 40
Section 5.07. Delegation of Duties...................................................................... 41
Section 5.08. Examination of Records.................................................................... 41
ARTICLE VI
INSOLVENCY EVENTS
Section 6.01. Rights upon the Occurrence of an Insolvency Event......................................... 41
ARTICLE VII
SERVICER DEFAULTS
Section 7.01. Servicer Defaults......................................................................... 41
Section 7.02. Indenture Trustee to Act; Appointment of Successor........................................ 44
Section 7.03. Notification to Noteholders............................................................... 45
ARTICLE VIII
TERMINATION
Section 8.01. Termination of Agreement.................................................................. 45
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment; Waiver of Past Defaults........................................................ 46
Section 9.02. Protection of Right, Title and Interest to Issuer......................................... 47
Section 9.03. GOVERNING LAW............................................................................. 48
Section 9.04. Notices; Payments......................................................................... 49
Section 9.05. Severability of Provisions................................................................ 49
Section 9.06. Further Assurances........................................................................ 49
Section 9.07. No Waiver; Cumulative Remedies............................................................ 49
Section 9.08. Counterparts.............................................................................. 49
Section 9.09. Third-party Beneficiaries................................................................. 50
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Section 9.10. Actions by Noteholders.................................................................... 50
Section 9.11. Rule 144A Information..................................................................... 50
Section 9.12. Merger and Integration.................................................................... 50
Section 9.13. No Bankruptcy Petition.................................................................... 50
Section 9.14. Rights of Indenture Trustee............................................................... 51
Section 9.15. Rights of Owner Trustee................................................................... 51
Section 9.16. Assignment................................................................................ 51
Section 9.17. Headings.................................................................................. 51
EXHIBIT A PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL WITH RESPECT TO AMENDMENTS
EXHIBIT B FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
EXHIBIT C FORM OF MONTHLY SERVICER'S CERTIFICATE
EXHIBIT D FORM OF ANNUAL SERVICER'S CERTIFICATE
EXHIBIT E PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL WITH RESPECT TO ADDITION OF ACCOUNTS
EXHIBIT F PROVISIONS TO BE INCLUDED IN ANNUAL OPINION OF COUNSEL
EXHIBIT G FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
SCHEDULE 1 LIST OF ACCOUNTS -- COMPUTER LIST OR MICROFICHE DELIVERED SEPARATELY
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TRANSFER AND SERVICING AGREEMENT (this "Agreement"), dated as of October
24, 2002 among FIRST NATIONAL FUNDING LLC, a Nebraska limited liability company,
as Transferor, FIRST NATIONAL BANK OF OMAHA, a national banking association, as
Servicer, and FIRST NATIONAL MASTER NOTE TRUST, a statutory trust organized
under the laws of the State of Delaware, as Issuer.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Noteholders and any
Enhancement Provider to the extent provided herein, in the Indenture and in any
Indenture Supplement:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein are defined in Annex A to the Master Indenture, dated as of the
date hereof, between First National Master Note Trust, as Issuer, and The Bank
of New York, as Indenture Trustee.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. All terms defined directly or
by reference in this Agreement shall have the defined meanings when used in any
certificate or other document delivered pursuant hereto unless otherwise defined
therein. For purposes of this Agreement and all such certificates and other
documents, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under GAAP; (b) terms defined in Article 9 of the UCC as in effect in the
State of Nebraska and not otherwise defined in this Agreement are used as
defined in that Article; (c) any reference to each Rating Agency shall only
apply to any specific rating agency if such rating agency is then rating any
outstanding Series; (d) references to any amount as on deposit or outstanding on
any particular date means such amount at the close of business on such day; (e)
the words "hereof," "herein" and "hereunder" and words of similar import refer
to this Agreement (or the certificate or other document in which they are used)
as a whole and not to any particular provision of this Agreement (or such
certificate or document); (f) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement (or the
certificate or other document in which the reference is made), and references to
any paragraph, Section, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (g) the term "including" means "including without
limitation;" (h) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (i) references to any Person include that Person's successors and
assigns; and (j) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. CONVEYANCE OF RECEIVABLES.
(a) By execution of this Agreement, Transferor does hereby transfer,
assign, set over and otherwise convey to Issuer, without recourse except
as provided herein, all its right, title and interest in, to and under (i)
the Collateral Certificate and (ii) effective on the Certificate Trust
Termination Date, (A) the Receivables existing at the opening of business
on the Certificate Trust Termination Date, and thereafter created from
time to time until the termination of Issuer, all Collections and
Recoveries allocable to Issuer as provided herein and the right to any
Enhancement with respect to any Series, in each case together with all
monies due or to become due and all amounts received or receivable with
respect thereto and all proceeds thereof and Insurance Proceeds relating
thereto and (B) without limiting the generality of the foregoing or the
following, all of Transferor's rights, remedies, powers and privileges
under the Receivables Purchase Agreement and (C) all proceeds of any of
the foregoing. Such property, together with all monies and other property
credited to the Collection Account, the Series Accounts and the Excess
Funding Account (including any subaccounts of any such account) and the
rights of Issuer under this Agreement and the Trust Agreement shall
constitute the assets of Issuer (the "Trust Assets"). The foregoing does
not constitute and is not intended to result in the creation or assumption
by Issuer, Owner Trustee, Indenture Trustee or any Noteholder of any
obligation of any Credit Card Originator, Servicer, Transferor or any
other Person in connection with the Accounts or the Receivables or under
any agreement or instrument relating thereto, including any obligation to
Obligors, clearance systems or insurers.
(b) On or prior to the Initial Closing Date, Transferor shall
deliver to Issuer a registered certificate representing the Collateral
Certificate. On or prior to the Certificate Trust Termination Date,
Transferor agrees to record and file, at its own expense, financing
statements (and continuation statements when applicable) with respect to
the Receivables conveyed by Transferor existing on the Certificate Trust
Termination Date and thereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions as are
necessary to perfect, and maintain the perfection of, the transfer and
assignment of its interest in such Receivables to Issuer, and to deliver a
file stamped copy of each such financing statement or other evidence of
such filing (which may, for purposes of this Section 2.01 consist of
telephone confirmation of such filing promptly followed by delivery to
Owner Trustee of a file-stamped copy) to Owner Trustee as soon as
practicable after the Certificate Trust Termination Date, and (if any
additional filing is so necessary) as soon as practicable after the
applicable Addition Date, in the case of Receivables arising in any
Additional Accounts. Owner Trustee shall be under no obligation whatsoever
to file such financing or continuation statements or to make any other
filing under the UCC in connection with such transfer and assignment.
(c) Transferor further agrees, at its own expense, (i) on or prior
to (w) the Certificate Trust Termination Date, (x) the applicable Addition
Date, in the case of
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Additional Accounts and (y) the applicable Removal Date, in the case of
Removed Accounts, to indicate in the appropriate computer files that
Receivables created (or reassigned, in the case of Removed Accounts) in
connection with the Accounts owned by FNBO have been conveyed to Issuer
pursuant to this Agreement (or conveyed to Transferor or its designee in
accordance with Section 2.07, in the case of Removed Accounts) by
including in such computer files the code identifying each such Account
(or, in the case of Removed Accounts, either by including a code
identifying the Removed Accounts or by deleting the code identifying such
Account) and (ii) on or prior to the Certificate Trust Termination Date,
to deliver to Issuer an Account Schedule, specifying for each such
Account, as of the most recent calendar month end, its account number and,
the aggregate amount outstanding in such Account and the aggregate amount
of Principal Receivables outstanding in such Account. Such Account
Schedule, as supplemented from time to time to reflect Additional Accounts
and Removed Accounts, shall be in the form of computer files or microfiche
lists and shall be marked as Schedule 1 to this Agreement and is hereby
incorporated into and made a part of this Agreement. Once the code
referenced in clause (i) of this paragraph has been included with respect
to any Account, Transferor further agrees not to alter such code during
the remaining term of this Agreement unless and until (A) such Account
becomes a Removed Account, or (B) Transferor shall have delivered to
Issuer at least 30 days' prior written notice of its intention to do so
and has taken such action as is necessary or advisable to cause the
interest of Issuer in the Receivables and the other Trust Assets to
continue to be perfected with the priority required by this Agreement.
(d) The parties intend that the transfer made herein shall be deemed
to be a sale, but if, and to the extent that, such transfer is not deemed
to be a sale, Transferor shall be deemed to have granted, and does hereby
so grant, to Issuer, effective on the Certificate Trust Termination Date,
a first priority perfected security interest in all of Transferor's right,
title and interest, whether owned on the Certificate Trust Termination
Date or thereafter acquired, in, to and under the Receivables and the
other Trust Assets conveyed by Transferor, and all money, accounts,
general intangibles, chattel paper, instruments, documents, goods,
investment property, deposit accounts, certificates of deposit, letters of
credit and advices of credit consisting of, arising from or related to the
Trust Assets, to secure Transferor's obligations hereunder, and that this
Agreement shall constitute a security agreement under applicable law.
(e) On or prior to each Determination Date following the Certificate
Trust Termination Date, Transferor shall cause FNBO to notify Servicer of
the amount of Interchange to be included as Collections of Finance Charge
Receivables allocable to the Accounts with respect to the Related Monthly
Period, which amount shall be equal to the product of:
(i) the total amount of Interchange paid or payable to FNBO
with respect to such Related Monthly Period; and
(ii) a fraction the numerator of which is the volume during
the Related Monthly Period of sales net of cash advances on the
Accounts and the
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denominator of which is the amount of sales net of cash advances
during the Related Monthly Period on all VISA and MasterCard
accounts owned by FNBO.
On each Transfer Date following the Certificate Trust Termination Date,
Transferor shall pay to Servicer, or cause FNBO to pay to Servicer, and Servicer
shall deposit into the Collection Account for each outstanding Series, in
immediately available funds, each Series pro rata share of such Interchange, as
specified in the applicable Indenture Supplement.
SECTION 2.02. ACCEPTANCE BY ISSUER.
(a) Issuer hereby acknowledges its acceptance of all right, title
and interest to the property, now existing and hereafter created, conveyed
to Issuer pursuant to Section 2.01. Owner Trustee shall maintain a copy of
Schedule 1, as delivered to it from time to time, at its Corporate Trust
Office.
(b) Owner Trustee hereby agrees not to disclose to any Person any of
the account numbers or other information contained in the Account Schedule
marked as Schedule 1 and delivered to Owner Trustee or Issuer, from time
to time, except (i) to a Successor Servicer or as required by a
Requirement of Law applicable to Owner Trustee, (ii) in connection with
the performance of Owner Trustee's or Issuer's duties hereunder, (iii) to
Indenture Trustee in connection with its duties in enforcing the rights of
Noteholders or (iv) to bona fide creditors of Servicer or Transferor for
the limited purpose of enabling any such creditor to identify Receivables
or Accounts subject to this Agreement or the Receivables Purchase
Agreement. Owner Trustee agrees (i) to take such measures as shall be
reasonably requested by Transferor to protect and maintain the security
and confidentiality of such information and, in connection therewith,
shall allow Transferor or its duly authorized representatives to inspect
Owner Trustee's security and confidentiality arrangements as they
specifically relate to the administration of Issuer from time to time
during normal business hours upon prior written notice and (ii) not to use
any Account Schedule information to compete, directly or indirectly, with
Transferor or FNBO. Owner Trustee shall promptly notify Transferor of any
request received by Owner Trustee to disclose information of the type
described in this Section 2.02(b), which notice shall in any event be
provided no later than five (5) Business Days prior to disclosure of any
such information unless Owner Trustee is compelled pursuant to a
Requirement of Law to disclose such information prior to the date that is
five (5) Business Days after the giving of such notice.
SECTION 2.03. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSFEROR. Transferor hereby represents and warrants to Issuer as of each
Closing Date and the Certificate Trust Termination Date and, with respect to
Additional Accounts, the related Addition Date that:
(a) ORGANIZATION AND GOOD STANDING. Transferor is a limited
liability company validly existing in good standing under the laws of the
State of Nebraska, and has full power, authority and legal right to own
its properties and conduct its business as presently owned and conducted,
to execute, deliver and perform its obligations under each Transaction
Document to which it is a party.
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(b) DUE QUALIFICATION. Transferor is duly qualified to do business
and is in good standing (or is exempt from such requirements) in any state
required in order to conduct business, and has obtained all necessary
licenses and approvals with respect to Transferor required under federal
and Nebraska law; provided, however, that no representation or warranty is
made with respect to any qualifications, licenses or approvals which
Indenture Trustee would have to obtain to do business in any state in
which Indenture Trustee seeks to enforce any Receivable.
(c) DUE AUTHORIZATION. The execution, delivery and performance by
Transferor of this Agreement and each other Transaction Document to which
Transferor is a party and the consummation by Transferor of the
transactions provided for in this Agreement and each such other
Transaction Document have been duly authorized by Transferor by all
necessary limited liability company action on its part.
(d) NO CONFLICTS. The execution and delivery of this Agreement and
each other Transaction Document to which Transferor is a party, the
performance of the transactions contemplated by this Agreement and each
such Transaction Document and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which
Transferor is a party or by which it or any of its properties are bound.
(e) NO VIOLATION. The execution and delivery of this Agreement and
each other Transaction Document to which Transferor is a party, the
performance of the transactions contemplated by this Agreement and each
such Transaction Document and the fulfillment of the terms hereof and
thereof, will not conflict with or violate in any material way any
Requirements of Law applicable to Transferor or FNBO.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Transferor, threatened against
Transferor, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the
invalidity of the Notes or any other Transaction Documents, (ii) seeking
to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by the Notes or any other Transaction Documents,
(iii) seeking any determination or ruling that, in the reasonable judgment
of Transferor, would materially and adversely affect the performance by
Transferor of its obligations under any Transaction Document, (iv) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of the Notes or any other Transaction Document
or (v) seeking to affect adversely the income tax attributes of Issuer
under the federal or any applicable state income or franchise tax systems.
(g) ALL CONSENTS REQUIRED. All approvals, authorizations, consents,
orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by
Transferor of this Agreement and each other Transaction Document to which
Transferor is a party, the performance by Transferor of the transactions
contemplated by this Agreement and each such other
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Transaction Document, and the fulfillment of the terms hereof and thereof,
have been obtained; provided, however, that no representation or warranty
is made as to state securities or blue sky laws regarding the distribution
of the Notes.
(h) INSOLVENCY. No Insolvency Event with respect to Transferor has
occurred. Transferor did not (i) execute the Transaction Documents, (ii)
grant to Issuer the security interests described in Section 2.01, (iii)
cause, permit, or suffer the perfection or attachment of such a security
interest, (iv) otherwise effectuate or consummate any transfer to Issuer
pursuant to any Transaction Document or (v) acquire its interest in
Issuer, in each case: (A) in contemplation of insolvency; (B) with a view
to preferring one creditor over another or to preventing the application
of its assets in the manner required by applicable law or regulations; (C)
after committing an act of insolvency; or (D) with any intent to hinder,
delay, or defraud itself or its creditors.
The representations and warranties set forth in this Section 2.03 shall survive
the transfer and assignment by Transferor of the respective Receivables and
other Trust Assets to Issuer and the pledge thereof to Indenture Trustee
pursuant to the Indenture. Upon discovery by Transferor, Servicer or Owner
Trustee of a breach of any of the representations and warranties set forth in
this Section 2.03, the party discovering such breach shall give prompt written
notice to the others and each Enhancement Provider, if any, entitled thereto
pursuant to the relevant Indenture Supplement. Transferor agrees to cooperate
with Servicer and Owner Trustee in attempting to cure any such breach. For
purposes of the representations and warranties set forth in this Section 2.03,
each reference to an Indenture Supplement shall be deemed to refer only to those
Indenture Supplements in effect as of the date of the relevant representation or
warranty.
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR RELATING TO
TRANSACTION DOCUMENTS AND THE RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. Transferor represents and
warrants to Issuer as of each Closing Date, the Certificate Trust
Termination Date and, with respect to Additional Accounts, the related
Addition Date that:
(i) Enforceability. Each Transaction Document to which
Transferor is a party constitutes and, in the case of Additional
Accounts, the related Assignment, when executed and delivered on
behalf of Transferor, will constitute, a legal, valid and binding
obligation of Transferor, enforceable against Transferor in
accordance with its terms, except as such enforceability may be
limited by applicable Debtor Relief Laws now or hereafter in effect
and by general principles of equity (whether considered in a suit at
law or in equity).
(ii) Accurate Account Schedule. As of the Certificate Trust
Termination Date, as of each Addition Date with respect to
Additional Accounts, and as of the applicable Removal Date with
respect to Removed Accounts, the Account Schedule delivered pursuant
to this Agreement, as supplemented to such date, is an accurate and
complete listing in all material respects of all the Accounts as of
each such date (or, with respect to the Account Schedule delivered
on the Certificate Trust Termination Date, as of the then most
recent month end)
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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 such specified date.
(iii) No Liens. (A) On and after the Certificate Trust
Termination Date, Transferor is the legal and beneficial owner of
all right, title and interest in each Receivable and Transferor has
the full right, power and authority to transfer such Receivables to
Issuer pursuant to this Agreement, and (B) each Receivable conveyed
to Issuer by Transferor pursuant to this Agreement has been conveyed
to Issuer free and clear of any Lien (other than Liens permitted
under Section 2.05(b)) and in compliance, in all material respects,
with all Requirements of Law applicable to Transferor and/or FNBO.
(iv) Consents. All approvals, licenses, authorizations,
consents, orders or other actions of any Person or registrations or
declarations with any Governmental Authority required to be
obtained, effected or given by Transferor or FNBO in connection with
the conveyance of the Collateral Certificate and the Receivables to
Issuer pursuant to this Agreement have been duly obtained, effected
or given and are in full force and effect.
(v) Collateral Certificate. The transfer and assignment of the
Collateral Certificate herein contemplated constitutes either (A) a
sale of the Collateral Certificate, (B) a grant of a perfected
security interest therein from Transferor to Issuer or (C) a grant
of a perfected security interest therein from Transferor to
Indenture Trustee. The Collateral Certificate has not been sold,
transferred, assigned or pledged by Transferor to any Person other
than pursuant to this Agreement. Immediately prior to the transfer
and assignment herein contemplated, Transferor had good and
marketable title to the Collateral Certificate, free and clear of
all Liens and rights of others except for Liens permitted by Section
2.05(b) and, immediately upon the transfer thereof, Issuer shall
have good and marketable title to the Collateral Certificate, free
and clear of all Liens and rights of others or a first priority
perfected security interest therein except for Liens permitted by
Section 2.05(b); and the transfer has been perfected, by the filing
of appropriate financing statements pursuant to the UCC, under the
UCC. Transferor has no knowledge of any current statutory or other
non-consensual liens to which the Collateral Certificate is subject.
All actions necessary under the applicable UCC in any jurisdiction
to be taken (A) to give Issuer a first priority perfected security
interest or ownership interest in the Collateral Certificate except
for Liens permitted by Section 2.05(b), and (B) to give Indenture
Trustee a first priority perfected security interest in the
Collateral Certificate (including, without limitation, UCC filings
with each of the Delaware Secretary of State (Issuer as debtor) and
Nebraska Secretary of State (Transferor as debtor)), in each case
subject to any statutory or other nonconsensual liens with respect
to the Collateral Certificate, have been taken. The representations
made in this subsection (v) shall not be made on or after the
Certificate Trust Termination Date.
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(vi) Perfection. This Agreement or, in the case of Additional
Accounts, the related Assignment, constitutes either a valid sale,
transfer and assignment to Issuer of all right, title and interest
of Transferor in the Receivables and other Trust Assets conveyed to
Issuer by Transferor hereunder or thereunder or a grant of a
security interest in such property to Issuer, which, (A) with
respect to Receivables existing on the Certificate Trust Termination
Date and the proceeds thereof, is enforceable upon the Certificate
Trust Termination Date or (B) with respect to the then existing
Receivables in Additional Accounts added after the Certificate Trust
Termination Date, as of the applicable Addition Date, and which will
be enforceable with respect to such Receivables thereafter created
and the proceeds thereof upon such creation, in each case except as
such enforceability may be limited by applicable Debtor Relief Laws,
now or hereafter in effect, and by general principles of equity
(whether considered in a suit at law or in equity). All actions
necessary under the applicable UCC in any jurisdiction to be taken
to give Issuer a first priority perfected security interest in such
property and proceeds, except for Liens permitted under Section
2.05(b), have been taken.
(vii) Accounts. Except as otherwise expressly provided in this
Agreement or any other Transaction Document, neither Transferor nor
any other Person has any claim to or interest in the Collection
Account, the Excess Funding Account, any Series Account or any
Enhancement.
(viii) Eligible Accounts. With respect to Additional Accounts
added after the Certificate Trust Termination Date, each such
Account is classified as an Eligible Account as of the relevant
Addition Date and no selection procedures adverse to the Noteholders
have been employed in selecting the Accounts from among the Eligible
Accounts.
(ix) Eligible Receivables. On the date each Additional Account
added after the Certificate Trust Termination Date becomes an
Account, each Receivable contained in such Additional Account is an
Eligible Receivable. As of the date of the creation of any new
Receivable in an Account, such Receivable is an Eligible Receivable.
(x) Subsequent Receivables. On each day after the Certificate
Trust Termination Date on which any new Receivable is created,
Transferor represents and warrants to Issuer that the
representations and warranties made in Section 2.04(a)(i), (iii),
(iv), (vi) and (ix) are true and correct with respect to each such
Receivable as of such day of creation.
(xi) Additional Perfection Representations and Warranties.
Debtor hereby makes the Perfection Representations and Warranties to
Secured Party. For purposes of this Section 2.04(a)(xi): Debtor
shall mean Transferor, Secured Party shall mean Issuer, and
Specified Agreement shall mean this Transfer and Servicing
Agreement. The rights and remedies with respect to any breach of the
Perfection Representations and Warranties made under this Section
2.04(a)(xi)
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shall be continuing and shall survive any termination of the
Specified Agreement. Secured Party shall not waive a breach of any
Perfection Representation and Warranty. In order to evidence the
interests of Debtor and Secured Party under the Specified Agreement,
the Debtor and Servicer shall, from time to time take such action,
and execute and deliver such instruments (including, without
limitation, such actions or filings as are requested by the Secured
Party and financing statements under the UCC as enacted and then in
effect in any other jurisdiction in which the Debtor is organized,
has its principal place of business or maintains any books, records,
files or other information concerning the Receivables) in order to
maintain and perfect, as a first priority interest, the Secured
Party's security interest in the Receivables. Debtor hereby
authorizes Servicer and Indenture Trustee to file financing
statements under the UCC without Debtor's signature where allowed by
applicable law.
(xii) Transferor hereby represents, warrants and covenants to
Issuer as follows as of the Initial Closing Date:
(A) This Agreement creates a valid and continuing
security interest (as defined in the applicable UCC) in the
Collateral Certificate and the proceeds thereof, in favor of
the Issuer or the Indenture Trustee.
(B) The Collateral Certificate constitutes a
"certificated security" within the meaning of the applicable
Uniform Commercial Code.
(C) Transferor owns and has good and marketable title to
the Collateral Certificate free and clear of any Lien, claim
or encumbrance of any Person; provided that nothing in this
clause (iii) shall prevent or be deemed to prohibit Transferor
from suffering to exist upon the Collateral Certificate or any
of the Receivables any Liens for any taxes if such taxes shall
not at the time be due and payable or if FNBO, Transferor,
Seller or Issuer, as applicable, shall currently be contesting
the validity thereof in good faith by appropriate proceedings
and shall have set aside on its books adequate reserves with
respect thereto.
(D) There are no consents or approvals required by the
terms of the Collateral Certificate for the transfer of the
Collateral Certificate made in this Agreement or the pledge of
the Collateral Certificate to the Indenture Trustee pursuant
to the Indenture.
(E) Transferor has caused 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 granted to the Issuer under this
Agreement and in the Collateral Certificate.
(F) There is only one executed copy of the Collateral
Certificate and such copy has been delivered to the Indenture
Trustee.
9
The Collateral Certificate is registered in the name
of the Indenture Trustee, as secured party, upon original
issue.
(G) Other than the pledge of the Collateral Certificate
to the Issuer pursuant to this Agreement, Transferor has not
pledged, assigned, sold, granted a security interest in, or
otherwise conveyed the Collateral Certificate. Transferor has
not authorized the filing of and is not aware of any financing
statements against Transferor that include a description of
collateral covering the Collateral Certificate, except for the
financing statement filed pursuant to this Agreement.
Transferor is not aware of any judgment or tax lien filings
against Transferor.
(H) The Collateral Certificate does not have any marks
or notations indicating that it has been pledged, assigned or
otherwise conveyed to any Person other than the Indenture
Trustee.
(I) Notwithstanding any other provision of this
Agreement, the representations and warranties set forth in
this subsection (xi) shall be continuing, and remain in full
force and effect, until such time as the Collateral
Certificate is retired.
(b) As of the Certificate Trust Termination Date, Transferor agrees
that (i) all representations and warranties made by it in its capacity as
Transferor under the Pooling and Servicing Agreement with respect to any
Account or Receivable pursuant to Section 2.04 of the Pooling and
Servicing Agreement and (ii) all of the covenants made by it under Section
2.05 of the Pooling and Servicing Agreement, in each case, shall be deemed
for all purposes (including the reassignment obligations under Section
2.04(d)) to have been made by Transferor to Issuer pursuant to this
Agreement as of the day when each was made or deemed made, as if this
Agreement had been in effect on that day.
(c) NOTICE OF BREACH. The representations and warranties of
Transferor made pursuant to this Section 2.04 shall survive the transfer
and assignment by Transferor of the Collateral Certificate and Receivables
to Issuer and the pledge thereof to Indenture Trustee pursuant to the
Indenture and the Certificate Trust Termination Date. Upon discovery by
Transferor, Servicer or a Responsible Officer of Owner Trustee of a breach
of any of the representations and warranties by Transferor made pursuant
to this Section 2.04, the party discovering such breach shall give prompt
written notice to the others and to each Enhancement Provider, if any,
entitled thereto pursuant to the relevant Indenture Supplement. Transferor
agrees to cooperate with Servicer and Owner Trustee in attempting to cure
any such breach. For purposes of the representations and warranties made
pursuant to this Section 2.04, each reference to an Indenture Supplement
shall be deemed to refer only to those Indenture Supplements in effect as
of the date of the relevant representations or warranties.
10
(d) TRANSFER OF INELIGIBLE RECEIVABLES.
(i) Automatic Removal. From and after the Certificate Trust
Termination Date, in the event of a breach with respect to a
Receivable of any representations and warranties set forth in
subsection 2.04(a)(iii)(B), or in the event that a Receivable is not
an Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (d) of the definition of Eligible
Receivable, and any of the following three conditions is met: (A) as
a result of such breach or event such Receivable is charged off as
uncollectible or Issuer's rights in, to or under such Receivable or
its proceeds are impaired or the proceeds of such Receivable are not
available for any reason to Issuer free and clear of any Lien,
except Liens permitted under subsection 2.05(b); (B) the Lien upon
the subject Receivable (1) arises in favor of the United States of
America or any State or any agency or instrumentality thereof and
involves taxes or liens arising under Title IV of ERISA or (2) has
been consented to by Transferor or the applicable Credit Card
Originator; or (C) the unsecured short-term debt rating of FNBO is
not at least "P-1" by Moody's and the Lien upon the subject
Receivable ranks prior to the Lien created pursuant to this
Agreement, then, upon the earlier to occur of the discovery of such
breach or event by Transferor or Servicer or receipt by Transferor
of written notice of such breach or event given by Indenture
Trustee, Receivables of the Account containing such ineligible
Receivable shall be automatically reassigned to Transferor on the
terms and conditions set forth in subsection 2.04(d)(iii).
(ii) Removal After Cure Period. In the event of a breach of
any of the representations and warranties set forth in subsection
2.04(a) other than a breach or event as set forth in subsection
2.04(d)(i) above, and as a result of such breach the related Account
becomes a Defaulted Account or Issuer's rights in, to or under the
Receivable or its proceeds are impaired or the proceeds of such
Receivable are not available for any reason to Issuer free and clear
of any Lien, except Liens permitted under subsection 2.05(b), then
upon the expiration of 60 days from the earlier to occur of the
discovery of any such event by either Transferor or Servicer, or
receipt by Transferor of written notice of any such event given by
Indenture Trustee, the Receivables of the Account containing such
ineligible Receivable shall be reassigned to Transferor on the terms
and conditions set forth in subsection 2.04(d)(iii); provided,
however, that no such removal shall be required to be made if, on
any day within such applicable period, such representations and
warranties with respect to such Receivable shall then be true and
correct in all material respects as if such Receivable had been
created on such day.
(iii) Procedures for Reassignment. When the provisions of
subsection 2.04(d)(i) or (ii) above require reassignment of a
Receivable, Transferor shall accept reassignment of such Receivable
(an "Ineligible Receivable") by directing Servicer to deduct the
principal balance of each such Ineligible Receivable from the
Aggregate Principal Receivables in the Trust and to decrease
Transferor Interest by such amount. On and after the date of such
reassignment, each
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Ineligible Receivable shall be assigned a principal balance of zero
for the purpose of determining the Principal Receivables on any day.
In the event that the exclusion of an Ineligible Receivable from the
calculation of the Aggregate Principal Receivables would cause
Transferor Interest to be reduced below the Minimum Transferor
Interest, or would cause the Aggregate Principal Receivables to be
less than the Minimum Aggregate Principal Receivables, or would
otherwise not be permitted by law, Transferor shall immediately, but
in no event later than 10 Business Days after such event, make a
deposit in the Excess Funding Account in immediately available funds
prior to the next succeeding Transfer Date in an amount sufficient
to cure any such shortfall. The portion of such deposit allocated to
the Notes of each Series shall be distributed to the Noteholders of
each Series in the manner specified in Article IV, if applicable, on
the Distribution Date relating to the Monthly Period in which such
deposit is made. Upon the reassignment to Transferor of an
Ineligible Receivable, Issuer shall automatically and without
further action be deemed to transfer, assign, set over and otherwise
convey to Transferor, without recourse, representation or warranty,
all the right, title and interest of Issuer in and to such
Ineligible Receivable, all moneys due or to become due with respect
thereto and all proceeds thereof and Insurance Proceeds relating
thereto and Interchange (if any) allocated to such Ineligible
Receivable pursuant to any Indenture Supplement. Such reassigned
Ineligible Receivable shall be treated by Issuer as collected in
full as of the date on which it was transferred. Issuer and
Indenture Trustee shall execute such documents and instruments of
transfer or assignment and take other actions as shall reasonably be
requested by Transferor to evidence the conveyance of such
Ineligible Receivable pursuant to this subsection 2.04(d)(iii). The
obligation of Transferor set forth in this subsection 2.04(d)(iii),
or the automatic reassignment of such Receivable from Issuer, as the
case may be, shall constitute the sole remedy respecting any breach
of the representations and warranties set forth in the
above-referenced subsections with respect to such Receivable
available to Issuer or Indenture Trustee on behalf of Noteholders.
(iv) Proceeds Held by Servicer. For the purposes of
subsections 2.04(d)(i) and (ii) above, proceeds of a Receivable
shall not be deemed to be impaired hereunder solely because such
proceeds are held by Servicer (if Servicer is FNBO or Transferor)
for more than the applicable period under Section 9-315 of the UCC.
(e) REASSIGNMENT OF TRUST PORTFOLIO. From and after the Certificate
Trust Termination Date, in the event of a breach of any of the
representations and warranties set forth in subsections 2.03(a), (b) or
(c) or subsection 2.04(a)(i), (vi) or (vii) which has a material adverse
effect on the Receivables or the availability of the proceeds of the
Receivables to Issuer, then Indenture Trustee or the Majority Holders, by
notice then given in writing to Transferor (and to Indenture Trustee and
Servicer, if given by the Majority Holders), may direct Transferor to
accept reassignment of an amount of Principal Receivables (as specified
below) within 60 days of such notice (or within such longer period as may
be specified in such notice), and Transferor shall be obligated to accept
reassignment of such Principal Receivables on a Transfer Date specified by
12
Transferor (as to such Transfer Date, the "Reassignment Date") occurring
within such applicable period on the terms and conditions set forth below;
provided, however, that no such reassignment shall be required to be made
if, at any time during such applicable period, each such representation
and warranty shall then be true and correct in all material respects.
Transferor shall deposit in next-day funds on the Reassignment Date an
amount equal to the reassignment deposit amount for such Receivables in
the Collection Account or the applicable Series Account, as provided in
the related Indenture Supplement, for distribution to the Noteholders
pursuant to this Indenture and the applicable Indenture Supplement. The
reassignment deposit amount with respect to each Series for such
reassignment, unless otherwise stated in the related Indenture Supplement,
shall be equal to (i) the aggregate outstanding Note Principal Balance of
such Series at the end of the day on the last day of the Monthly Period
preceding the Reassignment Date, less the amount, if any, previously
allocated for payment of principal, or paid as principal to such
Noteholders on the related Distribution Date in the Monthly Period in
which the Reassignment Date occurs, plus (ii) an amount equal to all
interest accrued but unpaid on the Notes of such Series at the applicable
Note Interest Rate through such last day, less the amount, if any,
previously allocated for payment of interest or paid as interest to the
Noteholders of such Series on the related Distribution Date in the Monthly
Period in which the Reassignment Date occurs (the "Portfolio Reassignment
Price"). Payment of the reassignment deposit amount with respect to each
Series, and all other amounts in the Collection Account or the applicable
Series Account in respect of the preceding Monthly Period shall be
considered a prepayment in full of the Receivables. On the Reassignment
Date on which such amount has been deposited in full into the Collection
Account or the applicable Series Account, the Receivables and all moneys
due or to become due with respect thereto and all proceeds of the
Receivables and Insurance Proceeds relating thereto and Interchange (if
any) allocated to the Receivables pursuant to any Indenture Supplement
shall be released to Transferor after payment of all amounts otherwise due
hereunder on or prior to such dates and Issuer and Indenture Trustee shall
execute and deliver such instruments of transfer or assignment, in each
case without recourse, representation or warranty, as shall be prepared by
and as are reasonably requested by Transferor to vest in Transferor, or
its designee or assignee, all right, title and interest of Issuer and
Indenture Trustee in and to the Receivables, all moneys due or to become
due with respect thereto and all proceeds of the Receivables and Insurance
Proceeds relating thereto and Interchange (if any) allocated to the
Receivables pursuant to any Indenture Supplement. If Indenture Trustee or
the Majority Holders give notice directing Transferor to accept
reassignment as provided above, the obligation of Transferor to accept
reassignment of the Receivables and pay the reassignment deposit amount
pursuant to this subsection 2.04(e) shall constitute the sole remedy
respecting a breach of the representations and warranties contained in
subsections 2.03(a), (b) or (c) or subsections 2.04(a)(i), (vi) or (vii)
available to the Noteholders, Issuer or Indenture Trustee.
SECTION 2.05. COVENANTS OF TRANSFEROR. Transferor hereby covenants that:
(a) RECEIVABLES TO BE ACCOUNTS. Transferor will take no action to
cause any Receivable to be evidenced by any instrument (as defined in the
UCC). Each Receivable shall be payable pursuant to a contract which does
not create a Lien on any goods
13
purchased thereunder. Transferor will take no action to cause any
Receivable to be anything other than an "account" (as defined in the UCC).
(b) SECURITY INTERESTS. Except for the conveyances hereunder and
under the other Transaction Documents, Transferor will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any Receivable or the Collateral Certificate,
whether now existing or hereafter created, or any interest therein;
Transferor will immediately notify Issuer, Indenture Trustee and each
Enhancement Provider entitled to such notice pursuant to the relevant
Indenture Supplement of the existence of any Lien on any Receivable or the
Collateral Certificate; and Transferor shall defend the right, title and
interest of Issuer and Indenture Trustee in, to and under the Receivables
and the Collateral Certificate, whether now existing or hereafter created,
against all claims of third parties; provided, however, that nothing in
this subsection 2.05(b) shall prevent or be deemed to prohibit Transferor
from suffering to exist upon any of the Receivables or the Collateral
Certificate any Liens for taxes if such taxes shall not at the time be due
and payable or if Transferor shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set aside
on its books adequate reserves with respect thereto; and, provided
further, that nothing in this subsection 2.05(b) shall be deemed to
prohibit the transfer of Transferor Interest in accordance with this
Agreement and the Trust Agreement.
(c) CREDIT CARD AGREEMENTS AND ACCOUNT GUIDELINES. Transferor shall
enforce the covenant in the Receivables Purchase Agreement requiring FNBO
to comply with and perform its obligations under the Credit Card
Agreements relating to the Accounts and the Credit Card Guidelines and all
applicable rules and regulations of VISA USA, Inc. and MasterCard
International Incorporated, except insofar as any failure to comply or
perform would not materially and adversely affect the rights and interests
of Issuer, Indenture Trustee or the Noteholders under any Transaction
Documents or the Notes. Except as expressly provided in any Indenture
Supplement, Transferor may permit FNBO to change the terms and conditions
of the Credit Card Agreements or the Credit Card Guidelines in any respect
(including, without limitation, the reduction of the required minimum
monthly payment, the calculation of the amount, or the timing, of
charge-offs and the Periodic Finance Charges and other fees to be assessed
thereon) only if such change (i) would not, in the reasonable belief of
Transferor, cause a Pay Out Event to occur, and (ii) is made applicable to
a substantial portion of the comparable segment of the revolving credit
card accounts owned and serviced by FNBO which have characteristics the
same as, or substantially similar to, the Accounts that are the subject of
such change, except as otherwise restricted by an endorsement,
sponsorship, or other agreement between FNBO and an unrelated third party
or by the terms of the Credit Card Agreements; provided, however, with
respect to FNBO, that clause (ii) shall be deemed to be satisfied at any
time that Transferor Interest exceeds 14% of the Aggregate Principal
Receivables; and provided, further, that for purposes of FNBO's debt
deferral and debt cancellation program, the requirements of subsection
2.05(c)(ii) shall be deemed to be satisfied if the opportunity to initiate
the change is made available to a substantial portion of the comparable
segment of the revolving credit card accounts owned and serviced by FNBO
which have characteristics the same as, or substantially similar to, the
Accounts to which such opportunity is made available.
14
(d) ACCOUNT ALLOCATIONS. In the event that Transferor is unable for
any reason to transfer Receivables to Issuer in accordance with the
provisions of this Agreement (including, without limitation, by reason of
the application of the provisions of Section 6.01 or an order by any
federal governmental agency having regulatory authority over Transferor or
FNBO or any court of competent jurisdiction that Transferor not transfer
any additional Principal Receivables to Issuer) then, in any such event,
(i) Transferor agrees to allocate and pay to Issuer, after the date of
such inability, all Collections with respect to Principal Receivables, all
Discount Option Receivables Collections, and all amounts which would have
constituted Collections with respect to Principal Receivables and Discount
Option Receivables Collections but for Transferor's inability to transfer
such Receivables (up to an aggregate amount equal to the amount of
Principal Receivables and Discount Option Receivables in the Trust on such
date); (ii) Transferor agrees to have such amounts applied as Collections
in accordance with Article VIII of the Indenture; and (iii) for only so
long as all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses (i) and
(ii) above, Principal Receivables and Discount Option Receivables (and all
amounts which would have constituted Principal Receivables or Discount
Option Receivables, as the case may be, but for Transferor's inability to
transfer Receivables to Issuer) that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in
accordance with Article VIII of the Indenture, and all amounts that would
have constituted Principal Receivables or Discount Option Receivables, as
the case may be, but for Transferor's inability to transfer Receivables to
Issuer shall be deemed to be Principal Receivables or Discount Option
Receivables, as the case may be, for the purpose of calculating the
applicable Allocation Percentage with respect to any Series. If Transferor
is unable pursuant to any Requirement of Law to allocate Collections as
described above, Transferor agrees that it shall in any such event
allocate, after the occurrence of such event, payments on each Account
with respect to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied as
Collections in accordance with Article VIII of the Indenture. The parties
hereto agree that Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables that have been conveyed to Issuer, or
that would have been conveyed to Issuer but for the above described
inability to transfer such Receivables, shall continue to be owned by
Issuer notwithstanding any cessation of the transfer of additional
Principal Receivables and Discount Option Receivables to Issuer and
Collections with respect thereto shall continue to be allocated and paid
in accordance with Article VIII of the Indenture.
(e) DELIVERY OF COLLECTIONS. Transferor agrees to pay to Servicer
all payments received by Transferor in respect of the Receivables as soon
as practicable after receipt thereof by Transferor but, in any event, no
later than two Business Days after the Date of Processing.
(f) CONVEYANCE OF ACCOUNTS. Transferor covenants and agrees that,
except as provided in Section 2.05(b), it will not convey, assign,
exchange or otherwise transfer the Accounts to any Person prior to the
termination of this Agreement pursuant to Article VIII; provided, however,
that Transferor shall not be prohibited hereby from
15
conveying, assigning, exchanging or otherwise transferring the Accounts in
connection with a transaction complying with the provisions of Section
4.02.
(g) RECEIVABLES PURCHASE AGREEMENT. Transferor, in its capacity as
purchaser of Receivables from RPA Seller under the Receivables Purchase
Agreement, shall enforce the covenants and agreements of RPA Seller as set
forth in the Receivables Purchase Agreement, including its agreement to
designate Additional Accounts as and when required in order for Transferor
to fulfill its undertakings in Section 2.06. Transferor shall not amend,
waive or otherwise modify the Receivables Purchase Agreement except in
accordance with its terms.
(h) OFFICIAL RECORDS. The resolutions of the Board of Directors of
Transferor's Managing Member approving each of the Transaction Documents
and all documents relating thereto are and shall be continuously reflected
in the minutes of the Board of Directors of Transferor's Managing Member
and in the official records of Transferor. Each of the Transaction
Documents and all documents relating thereto are and shall, continuously
from the time of their respective execution by Transferor, be official
records of Transferor.
(i) TRANSFEROR INTEREST. Except as otherwise permitted in Section
3.04 of the Trust Agreement or Section 4.02 of this Agreement, Transferor
agrees not to transfer, assign, exchange or otherwise convey or pledge,
hypothecate or otherwise grant a security interest in Transferor Interest
(or any interest therein) or any Supplemental Interest (or any interest
therein) and any such attempted transfer, assignment, exchange,
conveyance, pledge, hypothecation or grant shall be void.
(j) PERIODIC FINANCE CHARGES AND OTHER FEES. Transferor hereby
agrees that, except as otherwise required by any Requirement of Law, or as
is deemed by FNBO to be necessary in order for it to maintain its credit
card business, based upon a good faith assessment by FNBO of the nature of
the competition in the credit card business, it shall not at any time
permit FNBO to reduce the Periodic Finance Charges assessed on any
Receivable or other fees on any Account if, as a result of such reduction,
Transferor's reasonable expectation of the Portfolio Yield for any Series
as of such date would be less than the then Base Rate for that Series.
(k) COVENANTS REGARDING OPERATIONS. Transferor shall:
(i) Not incur, assume or guarantee any indebtedness other than
Transferor's obligations with respect to or contemplated by the
Transaction Documents.
(ii) Not engage in any business or activity other than as
permitted in its articles of organization.
(iii) Not consolidate or merge with or into any other entity
or convey or transfer its properties and assets substantially as an
entirety to any entity, except as specifically permitted by the
Transaction Documents.
16
(iv) Not dissolve or liquidate, in whole or in part.
(v) Not commingle its funds or assets with those of any other
individual or entity.
(vi) Not hold itself out as being liable for the debts of any
other party and not pay from its assets any obligations or
indebtedness of any other individual or entity.
(vii) Pay from its assets all obligations and indebtedness of
any kind incurred by Transferor.
(viii) Not form, or cause to be formed, any subsidiaries.
(ix) Not file any voluntary petition or consent to the filing
of any petition in or institute any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other
proceeding under any federal or state bankruptcy or similar law on
behalf of itself without the prior unanimous written consent of all
of its members, including the Independent Member (as defined in its
Operating Agreement).
(x) Not permit its managing member to withdraw.
(xi) At all times have at least one managing member which
shall have each of the characteristics of the Independent Member as
set forth on Appendix A to its Operating Agreement.
(xii) Act solely in its name and through its duly authorized
agents in the conduct of its business, and shall conduct its
business so as not to mislead others as to the identity of the
entity with which they are concerned.
(xiii) Transact business with any Affiliate, if at all, on an
arms length basis and pursuant to enforceable agreements. To the
extent that the Transferor and any of its members or affiliates have
offices in contiguous space, there shall be fair and appropriate
allocation of overhead costs (including rent) among them, and each
such entity shall bear its fair share of such expenses. For purposes
of this covenant and the definition of the term "Affiliate", the
term "control" means the possession, directly or indirectly, of the
power to direct or the cause the direction of the management and
policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
(xiv) Maintain separate records and books of account and
financial statements and shall not commingle its records and books
of account with the records and books of account of any entity. The
Transferor shall use separate stationery, invoices and checks.
17
(xv) Make no asset distributions, including, without
limitation, any distribution of dividends, except to the extent of
cash on hand in excess of that needed to cover the expected cash
needs of Transferor.
(xvi) Observe all organizational formalities in its relations
with its members.
(xvii) Notwithstanding any other provisions of this Agreement,
not terminate, dissolve or liquidate while owing any amount under
the Transaction Documents despite the occurrence of any event which
might terminate the continued membership of a member in Transferor,
including the following:
(A) a member:
(1) makes an assignment for the benefit of
creditors;
(2) files a voluntary petition in bankruptcy;
(3) is adjudged bankrupt or insolvent, or has
entered against it an order for relief, in any
bankruptcy or insolvency proceeding;
(4) files a petition or answer seeking for itself
any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief
under any statute, law or regulation;
(5) files an answer or other pleading admitting or
failing to contest the material allegations of a
petition filed against it in any proceeding of this
nature;
(6) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the
member or of all or any substantial part of its
properties; or
(B) 120 days after the commencement of any proceeding
against the member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, if the proceeding
has not been dismissed, or if within 90 days after the
appointment without the member's consent or acquiescence of a
trustee, receiver or liquidator of the member or of all or any
substantial part of its properties, the appointment is not
vacated or stayed, or within 90 days after the expiration of
any such stay, the appointment is not vacated.
(l) SALE TREATMENT. Transferor agrees to treat the conveyance
hereunder of the Collateral Certificate and the proceeds thereof and the
Receivables and the proceeds thereof as a sale for accounting purposes.
18
(m) AMENDMENT OF THE ORGANIZATIONAL DOCUMENTS. Transferor shall not
amend in any material respect its certificate of formation or its limited
liability company agreement without providing the Rating Agencies with
notice no later than the fifth Business Day prior to such amendment
(unless the right to such notice is waived by the Rating Agency) and
satisfying the Rating Agency Condition.
SECTION 2.06. ADDITION OF ACCOUNTS.
(a) If, (i) during any Monthly Period ending on or after the
Certificate Trust Termination Date, Transferor Interest averaged over that
period is less than the Minimum Transferor Interest (calculated using the
Average Principal Receivables for such Monthly Period as the Aggregate
Principal Receivables on the date of determination), Transferor shall
designate additional eligible MasterCard or VISA accounts ("Additional
Accounts") to be included as Accounts in a sufficient amount such that the
average of Transferor Interest as a percentage of the Average Principal
Receivables for such Monthly Period, computed by assuming that the amount
of the Average Principal Receivables of such Additional Accounts shall be
deemed to be outstanding in the Trust during each day of such Monthly
Period, is at least equal to the Minimum Transferor Interest, or (ii) on
any Record Date the Aggregate Principal Receivables is less than the
Minimum Aggregate Principal Receivables, Transferor shall designate
Additional Accounts to be included as Accounts in a sufficient amount such
that the Aggregate Principal Receivables will be equal to or greater than
the Minimum Aggregate Principal Receivables. For purposes of the preceding
sentence, the terms "Transferor Interest" and "Minimum Transferor
Interest" shall have the meanings assigned to such terms in the Pooling
and Servicing Agreement, and the term "Minimum Aggregate Principal
Receivables" shall have the meaning assigned to such term in the
Collateral Series Supplement to the Pooling and Servicing Agreement, in
each case with respect to any day prior to the Certificate Trust
Termination Date. Receivables from such Additional Accounts shall be
transferred to Issuer on or before the tenth Business Day following such
Monthly Period; provided, however, that to the extent Transferor
designates Additional Accounts with Principal Receivables substantially in
excess of the amount of Principal Receivables required under this
subsection 2.06(a), such excess shall be deemed to be optional Additional
Accounts under subsection 2.06(b) below and will be permitted to be so
designated solely to the extent permitted by subsection 2.06(b).
(b) In addition to its obligation under subsection 2.06(a),
Transferor may, but shall not be obligated to, designate from time to time
certain Additional Accounts (the "Automatic Additional Accounts") to be
included as Accounts, provided that Transferor shall not make more than
one such designation in any one Monthly Period; and provided, further,
that such Automatic Additional Accounts shall not exceed the Maximum
Addition Amount or include Financial Institutions Accounts unless
Transferor shall have received the notice from the Rating Agencies
required by subsection 2.06(c)(vii) below.
(c) Transferor agrees that any such transfer of Receivables from
Additional Accounts under subsection 2.06(a) or (b) shall satisfy the
following conditions (to the extent provided below):
19
(i) on or before the fifth Business Day prior to the Addition
Date with respect to additions pursuant to subsection 2.06(a) and on
or before the tenth Business Day prior to the Addition Date with
respect to additions pursuant to subsection 2.06(b) (the "Notice
Date"), Transferor shall give Issuer, Indenture Trustee, each Rating
Agency and Servicer written notice that such Additional Accounts
will be included, which notice shall specify the approximate
aggregate amount of the Receivables to be transferred;
(ii) on or before the Addition Date, Transferor shall have
delivered to Indenture Trustee, a written assignment (including an
acceptance by Issuer) in substantially the form of Exhibit B (the
"Assignment") and Transferor shall direct Servicer to indicate in
its computer files (and to cause FNBO to indicate in its computer
files) that the Receivables created in connection with the
Additional Accounts have been transferred to Issuer and, within five
Business Days thereafter, Servicer shall have delivered to Issuer,
with a copy delivered to Indenture Trustee, a computer file or
microfiche list containing a true and complete list of all
Additional Accounts, identified by account number and the aggregate
amount of the Receivables in such Additional Accounts, as of the
Addition Date, which computer file or microfiche list shall be as of
the date of such Assignment, shall be incorporated into and made a
part of such Assignment and this Agreement, and shall be subject to
the confidentiality obligations under Section 2.02 hereof;
(iii) Transferor shall represent and warrant that (A) each
Additional Account is, as of the Addition Date, an Eligible Account,
and each Receivable in such Additional Account, is, as of the
Addition Date, an Eligible Receivable, (B) no selection procedures
believed by Transferor to be materially adverse to the interests of
the Noteholders were utilized in selecting the Additional Accounts
from the available Eligible Accounts (or, in the case of Financial
Institutions Accounts, from the available Financial Institutions
Accounts constituting Eligible Accounts) and (C) as of the Addition
Date, Transferor is not insolvent;
(iv) Transferor shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either (A) a valid
transfer and assignment to Issuer of all right, title and interest
of Transferor in and to the Receivables then existing and thereafter
created in the Additional Accounts, and all proceeds (as defined in
the UCC) of such Receivables and Insurance Proceeds relating thereto
and such Receivables and all proceeds thereof and Insurance Proceeds
relating thereto will be held by Issuer free and clear of any Lien,
except for (1) Liens permitted under subsection 2.05(b), (2) the
interest of the Holder of Transferor Interest and (3) Servicer's
right, if any, to receive interest accruing on, and investment
earnings in respect of, the Finance Charge Account, the Collection
Account, the Principal Account, or any Series Account as provided in
the Indenture and any related Indenture Supplement or (B) a grant of
a first priority perfected security interest (as defined in the UCC)
in such property to Issuer, which is enforceable with respect to
then existing Receivables of the Additional Accounts, the proceeds
(as defined in the UCC) thereof and Insurance Proceeds
20
relating thereto upon the conveyance of such Receivables to Issuer,
and which will be enforceable with respect to the Receivables
thereafter created in respect of Additional Accounts conveyed on
such Addition Date, the proceeds (as defined in the UCC) thereof and
Insurance Proceeds relating thereto upon such creation;
(v) Transferor shall deliver an Officer's Certificate
substantially in the form of Schedule 2 to Exhibit B to Issuer and
Indenture Trustee (with a copy thereof to each Rating Agency); it
being understood that Issuer and Indenture Trustee may conclusively
rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein and shall
incur no liability in so relying;
(vi) Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Additional Accounts to Issuer and
Indenture Trustee (with a copy to any of the Rating Agencies which
shall have requested in writing such copies) substantially in the
form of Exhibit E; and
(vii) with respect to Financial Institutions Accounts or
Accounts in excess of the Maximum Addition Amount, Transferor shall
have received notice from each Rating Agency that the inclusion of
such accounts as Additional Accounts pursuant to subsection 2.06(b)
will not result in the reduction or withdrawal of its then existing
rating of any Series of Notes then issued and outstanding.
SECTION 2.07. REMOVAL OF ACCOUNTS.
(a) Subject to the conditions set forth below, on or after the
Certificate Trust Termination Date, Transferor may, but shall not be
obligated to, designate Receivables from Accounts to be reassigned to it
or its designee ("Removed Accounts"); provided, however, that Transferor
shall not make more than one such designation in any one Monthly Period.
On or before the fifth Business Day (the "Removal Notice Date") prior to
the date on which the designated Removed Accounts will be reassigned by
Issuer to Transferor (the "Removal Date"), Transferor shall give Issuer,
Indenture Trustee and Servicer written notice that the Receivables from
such Removed Accounts are to be reassigned to Transferor.
(b) Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts on or after
the Certificate Trust Termination Date only upon satisfaction of the
following conditions:
(i) the removal of any Receivables of any Removed Accounts on
any Removal Date shall not, in the reasonable belief of Transferor,
(A) cause a Pay Out Event to occur; provided, however, that for the
purposes of this subsection 2.07(b)(i), the Receivables of each
Removed Account shall be considered to have been removed as of the
Removal Date, (B) cause the Transferor Interest as a percentage of
the Aggregate Principal Receivables to be less than the Minimum
Transferor Interest on such Removal Date, (C) result in
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the failure to make any payment specified in the related Indenture
Supplement with respect to any Series, or (D) cause the Aggregate
Principal Receivables to be less than the Minimum Aggregate
Principal Receivables on such Removal Date;
(ii) on or prior to the Removal Date, Transferor shall have
delivered to Issuer and Indenture Trustee for execution a written
assignment in substantially the form of Exhibit G (the
"Reassignment") and, within five Business Days thereafter,
Transferor shall have delivered to Issuer a computer file or
microfiche list containing a true and complete list of all Removed
Accounts identified by account number and the aggregate amount of
the Receivables in such Removed Accounts as of the Removal Date,
which computer file or microfiche list shall as of the Removal Date
modify and amend and be made a part of this Agreement;
(iii) Transferor shall represent and warrant as of each
Removal Date that (x)(i) Accounts (or administratively convenient
groups of Accounts, such as billing cycles) were chosen for removal
randomly or otherwise not on a basis intended to select particular
accounts or groups of accounts for any reason other than
administrative convenience and (ii) no selection procedure was used
by Transferor which is materially adverse to the interests of the
Noteholders or (y) Accounts were identified for removal because of a
third-party cancellation, or expiration without renewal, of an
affinity, private-label, agent bank or similar arrangement;
(iv) on or before the tenth Business Day prior to the Removal
Date, each Rating Agency shall have received notice of such proposed
removal of the Receivables of such Accounts and Transferor shall
have received notice prior to the Removal Date from such Rating
Agency that such proposed removal will not result in a downgrade or
withdrawal of its then current rating of any outstanding Series;
(v) on any Removal Notice Date, the amount of the Principal
Receivables of the Removed Accounts to be reassigned to Transferor
on the related Removal Date shall not equal or exceed 5% of the
Aggregate Principal Receivables on such Removal Date, provided that
if any Series has been paid in full, the Principal Receivables in
such Removed Accounts may equal the Initial Collateral Amount of
such Series; and
(vi) Transferor shall have delivered to Issuer and Indenture
Trustee an Officer's Certificate confirming the items set forth in
clauses (i) through (v) above. Issuer and Indenture Trustee may
conclusively rely on such Officer's Certificate, shall have no duty
to make inquiries with regard to the matters set forth therein and
shall incur no liability in so relying.
Upon satisfaction of the above conditions, Issuer and Indenture
Trustee shall execute and deliver the Reassignment to Transferor, and the
Receivables from the Removed Accounts shall, without further action, be
deemed to be transferred, assigned
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and conveyed to Transferor or its designee, effective as of the Removal
Date, without recourse.
SECTION 2.08. DISCOUNT OPTION RECEIVABLES.
(a) On or after the Certificate Trust Termination Date, Transferor
shall have the option to designate a percentage (the "Discount
Percentage") of the Principal Receivables in all or certain of the
Accounts created on and after such date of designation to be treated as
Finance Charge Receivables ("Discount Option Receivables") in accordance
with the provisions of this Section 2.08. The Discount Percentage shall
not apply to Finance Charges, or any other fees and charges (other than
Insurance Proceeds) or to Receivables in or recoveries of Defaulted
Accounts. The Discount Percentage may be fixed or variable and shall not
exceed 4%.
(b) Discount Option Receivables shall be considered Finance Charge
Receivables for all purposes hereunder, including for the purposes of
allocating Collections pursuant to the Indenture.
(c) Transferor shall have the option to increase the Discount
Percentage to a percentage not greater than 4%, to reduce the Discount
Percentage, to apply the Discount Percentage to Principal Receivables
created in Accounts not previously subject to the Discount Percentage and
to cease to apply the Discount Percentage to Principal Receivables created
in Accounts previously subject to the Discount Percentage; provided,
however, that Transferor shall not change any existing Discount Option
Receivables into Principal Receivables and Transferor shall not increase
the Discount Percentage during any Rapid Amortization Period (as defined
in any Indenture Supplement) or if such increase would cause the
Transferor Interest to be less than the Minimum Transferor Interest or
would cause the Aggregate Principal Receivables in the Trust to be less
than the Minimum Aggregate Principal Receivables.
(d) Transferor shall provide to Servicer, Issuer, Indenture Trustee
and each Rating Agency 30 days' prior written notice of any designation,
increase or reduction of the Discount Percentage, and such designation,
increase or reduction shall become effective on the date specified in such
notice if such designation, increase or reduction in the reasonable belief
of Transferor, as set forth by Transferor in an Officer's Certificate
delivered to the Indenture Trustee, would not cause a Pay Out Event, or an
event which, with notice or the lapse of time or both, would constitute a
Pay Out Event, to occur; provided, however, that the Rating Agency
Condition shall have been satisfied.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Prior to the Certificate Trust Termination Date, the Receivables shall be
serviced as provided in the Pooling and Servicing Agreement, and this Article
III will have no effect. On and after the Certificate Trust Termination Date:
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SECTION 3.01. ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
SERVICER.
(a) FNBO agrees to act as Servicer under this Agreement. The
Noteholders of each Series by their acceptance of the related Notes
consent to FNBO acting as Servicer.
(b) Servicer shall service and administer the Receivables and shall
collect payments due under the Receivables and shall charge off
Receivables as uncollectible, in accordance with its customary and usual
servicing procedures for servicing credit card receivables comparable to
the Receivables and, subject to subsection (d) below, in accordance with
the Credit Card Guidelines and shall have full power and authority acting
alone or through any party properly designated by it hereunder, to do any
and all things in connection with such servicing and administration which
it may deem necessary or desirable. Without limiting the generality of the
foregoing and subject to Section 7.01, Servicer is hereby authorized and
empowered (i) to make withdrawals from the Collection Account, the Excess
Funding Account or any Series Account to the extent and as set forth in
this Agreement, the Indenture or any Indenture Supplement, (ii) unless
such power and authority is revoked on account of the occurrence of a
Servicer Default pursuant to Section 7.01, to instruct Indenture Trustee
to make withdrawals and payments, from the Collection Account, the Excess
Funding Account and any Series Account, in accordance with such
instructions as set forth in this Agreement, the Indenture or any
Indenture Supplement, (iii) unless such power and authority is revoked on
account of the occurrence of a Servicer Default pursuant to Section 7.01,
to instruct Indenture Trustee in writing, as set forth in this Agreement,
the Indenture or any Indenture Supplement, (iv) to take any actions
required or permitted under any Enhancement, (v) to execute and deliver,
on behalf of Issuer for the benefit of the Noteholders, any and all
instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable law and regulations, to
commence enforcement proceedings with respect to such Receivables and (vi)
to make any filings, reports, notices, applications, registrations with,
and to seek any consents or authorizations from, the Commission and any
state securities authority on behalf of Issuer as may be necessary or
advisable to comply with any federal or state securities or reporting
requirements. Indenture Trustee agrees that it shall promptly follow the
written instructions of Servicer to withdraw funds from the Collection
Account, the Excess Funding Account or any Series Account and to take any
action required under any Enhancement at such time as required under this
Agreement, the Indenture or any Indenture Supplement. Each of Owner
Trustee and Indenture Trustee shall execute at Servicer's written request
such documents prepared by Transferor and acceptable to Owner Trustee or
Indenture Trustee (as applicable) as may be necessary or appropriate to
enable Servicer to carry out its servicing and administrative duties
hereunder.
Owner Trustee shall furnish Servicer with any powers of attorney and
other documents from Owner Trustee and Indenture Trustee necessary or
appropriate to enable Servicer to carry out its servicing and
administrative duties hereunder.
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(c) In the event that Transferor is unable for any reason to
transfer Receivables to Issuer in accordance with the provisions of this
Agreement (including by reason of the application of the provisions of
Section 6.01 or the order of any federal governmental agency having
regulatory authority over Transferor or any court of competent
jurisdiction that Transferor not transfer any additional Principal
Receivables to Issuer) then, in any such event, Servicer agrees to
allocate in accordance with the provisions of Section 2.05(d).
(d) Servicer shall comply with and perform its servicing obligations
with respect to the Accounts and Receivables in accordance with the Credit
Card Agreements relating to the Accounts and the Credit Card Guidelines
and all applicable rules and regulations of VISA USA, Inc. and MasterCard
International Incorporated, except insofar as any failure to so comply or
perform would not materially and adversely affect Issuer, Indenture
Trustee or the Noteholders.
(e) Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables
from the procedures, offices, employees and accounts used by Servicer in
connection with servicing other credit card receivables.
(f) Servicer shall maintain fidelity bond coverage insuring against
losses through wrongdoing of its officers and employees who are involved
in the servicing of credit card receivables covering such actions and in
such amounts as Servicer believes to be reasonable from time to time.
(g) The relationship of Servicer (and of any successor to Servicer
as servicer under this Agreement) to Indenture Trustee under this
Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent of Indenture
Trustee.
SECTION 3.02. SERVICING COMPENSATION. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, Servicer shall be entitled to receive a monthly
servicing fee in respect of any Monthly Period or portion thereof after the
Certificate Trust Termination Date (with respect to each Monthly Period, the
"Monthly Servicing Fee"). The share of the Monthly Servicing Fee allocable to
each Series of Notes with respect to any Monthly Period (or portion thereof)
shall be payable on the related Distribution Date and, with respect to each
Series (unless otherwise provided in the related Indenture Supplement), shall be
equal to one-twelfth of the product of (a) the applicable Series Servicing Fee
Percentage per annum and (b) the Collateral Amount of such Series as of the last
day of the Monthly Period preceding such Distribution Date (the "Noteholder
Servicing Fee") and shall be paid to Servicer pursuant to the applicable
Indenture Supplement. The servicing fee payable by the Holder of Transferor
Interest shall be equal to the product of one-twelfth of the product of (i)
Transferor Interest and (ii) the weighted average of the Series Servicing Fee
Percentages with respect to each Series of Notes then outstanding (the
"Transferor Servicing Fee"). The Monthly Servicing Fee for each Monthly Period
shall equal the sum of (A) the aggregate amount of Noteholder Servicing Fees for
such Monthly Period with respect to each Series then outstanding and (B)
Transferor Servicing Fee for such Monthly
25
Period. The Noteholder Servicing Fee with respect to any Series is payable in
arrears on the related Transfer Date (unless otherwise provided in the related
Indenture Supplement) and Transferor Servicing Fee is payable in arrears no
later than the last Transfer Date with respect to any Series occurring in a
Monthly Period. Transferor Servicing Fee and, unless otherwise provided in an
Indenture Supplement, each Noteholder Servicing Fee, shall be calculated on the
basis of actual days elapsed and a year of 365 days or 366 days, as the case may
be. The compensation payable to Servicer hereunder, including the Monthly
Servicing Fee, may not be transferred except to a Successor Servicer. In no
event shall Issuer, Indenture Trustee, the Noteholders of a Series or any
Enhancement Provider be liable for Transferor Servicing Fee.
Servicer's expenses include the amounts due to Owner Trustee pursuant to
Article VII of the Trust Agreement and the reasonable fees and disbursements of
Indenture Trustee, Administrator, any Paying Agent, any Transfer Agent and
Registrar, independent public accountants and all other expenses incurred by
Servicer in connection with its activities hereunder, including expenses related
to the enforcement of the Receivables and all other fees and expenses that are
not expressly stated in this Agreement or any other Transaction Document to be
payable by Issuer, the Noteholders of a Series or Transferor, including the
costs of filing the UCC continuation statements and the costs and expenses
relating to obtaining and maintaining the listing of any Notes on any stock
exchange. Servicer shall not be liable for any liabilities, costs or expenses of
the Trust or the Noteholders arising under any tax law, including without
limitation any federal, state or local income or franchise taxes or any other
tax imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith). Servicer shall be
required to pay such expenses for its own account and shall not be entitled to
any payment therefor other than the Monthly Servicing Fee.
SECTION 3.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SERVICER. FNBO,
as initial Servicer, hereby makes, and any successor Servicer by its appointment
hereunder shall make (with such changes as shall be applicable to such Successor
Servicer), on each Closing Date (and on the date of any such appointment) the
following representations and warranties and covenants to Issuer on which Owner
Trustee has relied in executing the Notes and Indenture Trustee has relied in
authenticating Notes:
(a) ORGANIZATION AND GOOD STANDING. Servicer is a national banking
association (or with respect to such Successor Servicer, such other
corporate entity as may be applicable) duly organized, validly existing
and in good standing under the laws of the United States, and has full
corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and as such
business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement and the other Transaction Documents to
which it is a party.
(b) DUE QUALIFICATION. Servicer is not required to qualify nor
register as a foreign corporation in any state in order to service the
Receivables as required by this Agreement and the other Transaction
Documents to which it is a party, other than such states as to which
Servicer has so qualified and is in good standing or failure to so qualify
and maintain good standing would not have a material adverse effect on
Servicer's ability to perform its obligations hereunder or the interests
of Noteholders, and has obtained all
26
licenses and approvals necessary in order to so service the Receivables as
required under federal and Nebraska law.
(c) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action on
the part of Servicer and this Agreement, and each such other Transaction
Document, will remain, from the time of its execution, an official record
of Servicer.
(d) BINDING OBLIGATION. This Agreement and each other Transaction
Document to which Servicer is a party constitutes a legal, valid and
binding obligation of Servicer, enforceable in accordance with its terms,
except as enforceability may be limited by applicable Debtor Relief Laws
now or hereinafter in effect, affecting the enforcement of creditors'
rights in general and the rights of creditors of national banking
associations and by general principles of equity (whether considered in a
suit at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement and
each other Transaction Document to which Servicer is a party by Servicer,
and the performance of the transactions contemplated by this Agreement and
each such other Transaction Document and the fulfillment of the terms
hereof and thereof applicable to Servicer, will not conflict with,
violate, result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
default under any Requirement of Law applicable to Servicer or any
indenture contract, agreement, mortgage, deed of trust or other instrument
to which Servicer is a party or by which it is bound.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Servicer, threatened against Servicer
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality seeking to prevent the issuance of the
Notes or the consummation of any of the transactions contemplated by this
Agreement and the other Transaction Documents, seeking any determination
or ruling that, in the reasonable judgment of Servicer, would materially
and adversely affect the performance by Servicer of its obligations under
this Agreement or any other Transaction Document to which it is a party,
or seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement or any other
Transaction Document.
(g) COMPLIANCE WITH REQUIREMENTS OF LAW. Servicer shall duly satisfy
all obligations on its part to be fulfilled under or in connection with
each Receivable and the related Account, will maintain in effect all
qualifications required under Requirements of Law in order to properly
service each Receivable and the related Account and will comply in all
material respects with all other Requirements of Law in connection with
servicing each Receivable and the related Account, the failure to comply
with which would have a material adverse effect on the interests of the
Noteholders or any Enhancement Provider.
27
(h) NO RESCISSION OR CANCELLATION. Servicer shall not permit any
rescission or cancellation of a Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in the ordinary
course of its business and in accordance with the Credit Card Guidelines.
Servicer shall reflect any such rescission or cancellation in its computer
file of revolving credit card accounts.
(i) PROTECTION OF HOLDERS' RIGHTS. Servicer shall take no action
which, nor omit to take any action the omission of which, would materially
impair the rights of Holders in any Receivable or Account, nor shall it,
except in the ordinary course of its business and in accordance with the
Credit Card Guidelines, reschedule, revise or defer Collections due on the
Receivables, except as permitted in subsection 3.03(h).
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Except in
connection with its enforcement or collection of an Account, Servicer will
take no action to cause any Receivable to be evidenced by any instrument,
other than an instrument that, taken together with one or more other
writings, constitutes chattel paper and, if any Receivable is so evidenced
(whether or not in connection with the enforcement or collection of an
Account), it shall be reassigned or assigned to Servicer as provided in
this Section.
(k) ALL CONSENTS REQUIRED. All approvals, authorizations, consents,
orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by
Servicer of this Agreement and each other Transaction Document to which it
is a party, the performance by Servicer of the transactions contemplated
by this Agreement and the other Transaction Documents and the fulfillment
by Servicer of the terms hereof and thereof have been obtained; provided
that Servicer makes no representation or warranty as to state securities
or "blue sky" laws.
(l) MAINTENANCE OF RECORDS AND BOOKS OF ACCOUNT. Servicer shall
maintain and implement administrative and operating procedures (including
the ability to recreate records evidencing the Receivables in the event of
the destruction of the originals thereof), and keep and maintain all
documents, books, computer records and other information, reasonably
necessary or advisable for the collection of all the Receivables. Such
documents, books and computer records shall reflect all facts giving rise
to the Receivables, all payments and credits with respect thereto, and, to
the extent required pursuant to Section 2.01, such documents, books and
computer records shall indicate the interests of Issuer in the
Receivables.
(m) TRANSACTION DOCUMENTS. Servicer shall observe and perform each
and every obligation of Servicer under any other Transaction Documents.
(n) DELINQUENCIES. Receivables will be charged off at the earlier of
(a) the date they become 180 days Delinquent, or (b) when required
pursuant to the Credit Card Guidelines.
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As of the Certificate Trust Termination Date, Servicer agrees that all
representations and warranties made by it in its capacity as Servicer under the
Pooling and Servicing Agreement with respect to any Account or Receivable
pursuant to Section 3.03 of the Pooling and Servicing Agreement shall be deemed
for all purposes to have been made by Servicer to Issuer pursuant to this
Agreement as of the day when each was made or deemed made, as if this Agreement
had been in effect on that day.
After the Certificate Trust Termination Date, if any of the
representations, warranties or covenants of Servicer contained in paragraph (g),
(h), (i) or (j) of this Section 3.03 or paragraphs (g) (h), (i) or (j) of
Section 3.03 of the Pooling and Servicing Agreement with respect to any
Receivable or the related Account is breached, and as a result of such breach
Issuer's rights in, to or under any Receivables in the related Account or the
proceeds of such Receivables are materially impaired or such proceeds are not
available for any reason to Issuer free and clear of any Lien, then no later
than the expiration of 60 days from the earlier to occur of the discovery of
such event by Servicer, or receipt by Servicer of notice of such event given by
Indenture Trustee, all Receivables in the Account or Accounts to which such
event relates shall be reassigned or assigned to Servicer as set forth below;
provided that such Receivables will not be reassigned or assigned to Servicer
if, on any day prior to the end of such 60-day period, (i) the relevant
representation and warranty shall be true and correct, or the relevant covenant
shall have been complied with, in all material respects and (ii) Servicer shall
have delivered to Indenture Trustee an Officer's Certificate describing the
nature of such breach and the manner in which such breach was cured. Indenture
Trustee will have no duty to monitor for such events, but will provide notice to
Servicer only upon its receipt of notice from another party.
Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds prior to the next succeeding
Business Day in an amount equal to the aggregate amount of such Receivables,
which deposit shall be considered a Collection with respect to such Receivables
and shall be applied in accordance with Article VIII of the Indenture and each
Indenture Supplement.
Upon each such assignment to Servicer, Issuer and Indenture Trustee shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to Servicer, without recourse, representation or warranty
all right, title and interest of Issuer and Indenture Trustee in and to such
Receivables, all moneys due or to become due and all amounts received with
respect thereto and all proceeds thereof. Issuer and Indenture Trustee shall
execute such documents and instruments of transfer or assignment and take such
other actions as shall be reasonably requested by Servicer to effect the
conveyance of any such Receivables pursuant to this Section. The obligation of
Servicer to accept assignment of such Receivables, and to make the deposits, if
any, required to be made to the Collection Account as provided in the preceding
paragraph, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Issuer, Owner Trustee, Holders (or Indenture
Trustee on behalf of the Noteholders) or any Enhancement Provider.
SECTION 3.04. REPORTS AND RECORDS FOR INDENTURE TRUSTEE.
(a) DAILY REPORTS. On each Business Day, Servicer, with prior
notice, shall prepare and make available at the office of Servicer for
inspection by Indenture Trustee a
29
record setting forth (i) the aggregate amount of Collections processed by
Servicer on the preceding Business Day and (ii) the aggregate amount of
Receivables as of the close of business on the preceding Business Day.
(b) MONTHLY SERVICER'S CERTIFICATE. Unless otherwise stated in the
related Indenture Supplement with respect to any Series, on each
Determination Date Servicer shall forward to Indenture Trustee, Paying
Agent, any Enhancement Provider and each Rating Agency a certificate of a
Servicing Officer substantially in the form of Exhibit C (which includes
any Schedule thereto specified as such in the applicable Indenture
Supplement) for each Series setting forth the following information for
the preceding Monthly Period: (i) the aggregate amount of Collections
processed for Issuer, (ii) the aggregate amount of Collections of
Principal Receivables processed, (iii) the aggregate amount of Collections
of Finance Charge Receivables processed, (iv) the aggregate Allocation
Percentage of Collections of Principal Receivables, (v) the aggregate
Allocation Percentage of Collections of Finance Charge Receivables, (vi)
the aggregate amount of Principal Receivables in Accounts which became
Defaulted Accounts, (vii) the aggregate Allocation Percentage of Principal
Receivables in Accounts which became Defaulted Accounts, (viii) the
Interchange allocated to Issuer, (ix) the aggregate amount of Recoveries
for Issuer, (x) the aggregate Adjustment Amount for Issuer, (xi) the
aggregate amount of Receivables in Issuer at the end of the Monthly
Period, (xii) the aggregate amount of the Collections of Principal
Receivables allocated to such Series, (xiii) the aggregate amount of
Collections of Finance Charge Receivables allocated to such Series, (xiv)
the aggregate amount, if any, of withdrawals, drawings or payments under
any Enhancement, if any, for such Series required to be made pursuant to
the related Transaction Documents, (xv) the sum of all amounts payable to
the Noteholders of each Series on the succeeding Distribution Date in
respect of principal and interest, (xvi) for months during which Servicer
is required to make deposits of Collections after the Distribution Date,
the balance on deposit in the Collection Account or any Series Account
(not covered elsewhere in the certificate) applicable to any Series
outstanding on such Determination Date with respect to Collections
processed by Servicer during the preceding Monthly Period, (xvii) the
portfolio yield and the base rate for each Series then outstanding and
(xviii) such other matters as are set forth in Exhibit C or the applicable
Indenture Supplement. The monthly Servicer's certificate shall be in
substantially the form of Exhibit C, with such changes as Servicer may
determine to be necessary or desirable; provided, however, that no such
change shall serve to exclude information required by this Agreement or
any Indenture Supplement. Servicer shall, upon making such determination,
deliver to Indenture Trustee and each Rating Agency an Officer's
Certificate to which shall be annexed the form of Exhibit C as so changed.
Upon the delivery of such Officer's Certificate to the Trustee, Exhibit C,
as so changed, shall for all purposes of this Agreement constitute such
Exhibit. The Trustee may conclusively rely upon such Officer's Certificate
in determining whether Exhibit C, as changed, conforms to the requirements
of this Agreement.
(c) TRANSFERRED ACCOUNTS. Servicer shall deliver to Indenture
Trustee, within a reasonable time period after any Transferred Account is
created, but in any event not later than 15 days after the end of the
month within which the Transferred Account is
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created, a notice specifying the new account number for any Transferred
Account and the replaced account number.
SECTION 3.05. ANNUAL SERVICER'S CERTIFICATE. On or before March 31 of each
calendar year, Servicer will deliver to Indenture Trustee, Owner Trustee, any
Enhancement Provider and each Rating Agency an Officer's Certificate
substantially in the form of Exhibit D stating that (a) a review of the
activities of Servicer during the 12-month period ending on December 31 of the
prior calendar year, and of its performance under this Agreement was made under
the supervision of the officer signing such certificate, (b) to the best of such
officer's knowledge based on such review, Servicer has fully performed all its
obligations under this Agreement throughout such period, or, if there has been a
default in the performance of any such obligation, specifying each such default
known to such officer and the nature and status thereof, (c) during such period,
for each outstanding Series, Servicer prepared the monthly reports required by
Section 3.04(b) of this Agreement and each other monthly report required by the
applicable Indenture Supplement in accordance with Section 3.04(b) of this
Agreement and the applicable provisions of each such Indenture Supplement, (d)
the amounts included in such reports agree with the computer records of Servicer
and (e) the calculated amounts included in such reports are mathematically
correct and made in accordance with the applicable definitions in this Agreement
and the other applicable Transaction Documents. A copy of such certificate may
be obtained by any Noteholder by a request in writing to Indenture Trustee
addressed to the Corporate Trust Office.
SECTION 3.06. ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT.
(a) On or before March 31 of each calendar year, beginning with
March 31, 2003, Servicer shall provide to Indenture Trustee, Owner
Trustee, any Enhancement Provider and each Rating Agency a copy of the
report required by 12 C.F.R. Section 363.3(b) (or any comparable successor
regulation) from a firm of nationally recognized independent certified
public accountants (who may also render other services to Servicer or
Transferor) to the effect that, in accordance with attestation standards
established by the American Institute of Certified Public Accountants,
such firm has examined Servicer's assertion that it maintained effective
internal accounting controls during the preceding calendar year, and that
such firm is of the opinion that Servicer's assertion is fairly stated in
all material respects, based on the criteria established in "Internal
Control - Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Unless otherwise provided with
respect to any Series in the related Indenture Supplement, a copy of such
report may be obtained by any Noteholder by a request in writing to
Indenture Trustee addressed to the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with
March 31, 2003, Servicer shall cause a firm of nationally recognized
independent certified public accountants (who may also render other
services to Servicer or Transferor) to furnish a report (or reports) to
Indenture Trustee, prepared using attestation standards established by the
American Institute of Certified Public Accountants, to the effect that
they have examined Servicer's assertions for each outstanding Series made
pursuant to subsections 3.05(c), (d) and (e) above, and have concluded
that such assertions are fairly stated in all material respects, except
for such exceptions as shall be set forth in such report. Servicer
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shall also provide copies of the report for each Series to each Rating
Agency, the Owner Trustee and Enhancement Provider. A copy of such report
may be obtained by any Noteholder by a request in writing to Indenture
Trustee addressed to the Corporate Trust Office.
SECTION 3.07. TAX TREATMENT. Transferor has structured this Agreement and
the Notes to facilitate a secured, credit-enhanced financing on favorable terms
with the intention that the Notes will constitute indebtedness of Transferor for
federal income and state and local income and franchise tax purposes.
Transferor, Servicer, each Holder of Transferor Interest and each Noteholder by
acceptance of its Note (and each Note Owner, by its acceptance of an interest in
the applicable Note) agree to treat and to take no action inconsistent with the
treatment of the Notes (or beneficial interests therein) as indebtedness of
Transferor for purposes of federal, state, local and foreign income or franchise
taxes and any other tax imposed on or measured by income. Each Holder of
Transferor Interest, each Noteholder, by acceptance of its Note, and each Note
Owner, by acquisition of a beneficial interest in a Note, agrees to be bound by
the provisions of this Section 3.07. Each Noteholder agrees that it will cause
any Note Owner acquiring an interest in a Note through it to comply with this
Agreement as to treatment as indebtedness under applicable tax law, as described
in this Section 3.07.
SECTION 3.08. NOTICES TO TRANSFEROR. In the event that FNBO is no longer
acting as Servicer, any Successor Servicer appointed pursuant to Section 7.02
shall deliver or make available to Transferor each certificate and report
required to be prepared, forwarded or delivered thereafter pursuant to Sections
3.04, 3.05 and 3.06.
SECTION 3.09. ADJUSTMENTS. For each Monthly Period, Servicer shall be
obligated to reduce, on a net basis, the Aggregate Principal Receivables used to
calculate Transferor Interest and the Aggregate Principal Receivables (a "Credit
Adjustment") with respect to any Principal Receivable (i) which was created in
respect of merchandise refused or returned by the Obligor thereunder or as to
which the Obligor thereunder has asserted a counterclaim or defense, (ii) which
is reduced by Servicer by any rebate, refund, charge-back or adjustment
(including Servicer errors), (iii) which was created as a result of a fraudulent
or counterfeit charge or (iv) which was credited pursuant to a debt cancellation
or debt deferral program and not recovered during such Monthly Period from
Collections from insurance proceeds or reserves funded by fees generated through
such programs. In the event that the inclusion of the amount of a Credit
Adjustment in the calculation of Transferor Interest would cause Transferor
Interest to be an amount less than the Minimum Transferor Interest, or would
cause the Aggregate Principal Receivables to be less than the Minimum Aggregate
Principal Receivables, Transferor shall make a deposit, no later than the
earlier of (A) the Business Day following the Date of Processing of such Credit
Adjustment, and (B) the last day of the Monthly Period in which such Date of
Processing occurs, to the Excess Funding Account in immediately available funds
in an amount sufficient to cure any such shortfall. Any amount deposited into
the Excess Funding Account in connection with the adjustment of a Receivable as
specified above shall be applied in accordance with Article VIII of the
Indenture and each Indenture Supplement. In the event that Transferor shall fail
to pay to Servicer for deposit into the Excess Funding Account any amount
required to be so paid pursuant to this Section 3.09 or subsection 2.04(d)(iii)
(an "Adjustment Amount"), and shall not have subsequently paid such Amount,
Collections of Principal Receivables shall not be distributed or otherwise
released to Transferor hereunder, but shall
32
instead be deposited to the Excess Funding Account until an amount equal to the
Adjustment Amount has been so deposited. The Adjustment Amount shall be reduced
to the extent of such deposits.
In the event that Servicer adjusts upwards the principal amount of any
Receivable, the Aggregate Principal Receivables shall be increased by the amount
of such upward adjustment.
SECTION 3.10. TRANSFER OF RECEIVABLES IN DEFAULTED ACCOUNTS. Unless
otherwise provided in any Indenture Supplement, on the last day of each Monthly
Period, Issuer and Indenture Trustee shall automatically and without further
action or consideration be deemed to transfer, set over, and otherwise convey to
Transferor, without recourse, representation or warranty, all the right, title
and interest of Issuer and Indenture Trustee in and to Receivables in Accounts
which became Defaulted Accounts during such Monthly Period, all moneys due or to
become due with respect thereto, all proceeds thereof (other than Recoveries
relating thereto) and Interchange (if any) allocable to the Trust with respect
to such Receivables.
SECTION 3.11. REPORTS TO THE COMMISSION. Servicer shall, on behalf of
Issuer, cause to be filed with the Commission any periodic reports required to
be filed under the provisions of the Securities Exchange Act of 1934, and the
rules and regulations of the Commission thereunder. Issuer shall sign any
certifications required in any filings relating to the Notes or the Trust Estate
required under the Exchange Act, including Section 3.02 of the Sarbanes - Oxley
Act of 2002. Transferor shall, at its own expense, cooperate in any reasonable
request of Servicer in connection with such filings. Issuer agrees to cooperate
with Servicer in connection with such filings.
ARTICLE IV
OTHER MATTERS RELATING TO TRANSFEROR
SECTION 4.01. LIABILITY OF TRANSFEROR. Transferor shall be liable in
accordance herewith to the extent, and only to the extent, of the obligations
specifically undertaken by it in its capacity as Transferor hereunder.
SECTION 4.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, TRANSFEROR.
(a) Transferor shall not consolidate with or merge into, or convey
or transfer its properties and assets substantially as an entirety to, any
other Person, unless:
(i) the corporation formed by such consolidation or into which
Transferor is merged or the Person which acquires by conveyance or
transfer the properties and assets of Transferor substantially as an
entirety shall be, if Transferor is not the surviving entity,
organized and existing under the laws of the United States of
America or any state, and shall be either (1) a business entity that
may not become a debtor in a proceeding under Title 11 of the United
States Code or (2) a special-purpose entity, the powers and
activities of which shall be limited to the performance of
Transferor's obligations under this Agreement and under the other
Transaction Documents and shall expressly assume, by an agreement
33
supplemental hereto, executed and delivered to Indenture Trustee and
Owner Trustee, in form satisfactory to Indenture Trustee and Owner
Trustee, the performance of every covenant and obligation of
Transferor, as applicable hereunder and thereunder, and shall
benefit from all the rights granted to Transferor, as applicable
hereunder and thereunder. To the extent that any right, covenant or
obligation of Transferor, as applicable hereunder, is inapplicable
to the successor entity, such successor entity shall be subject to
such covenant or obligation, or benefit from such right, as would
apply, to the extent practicable, to such successor entity. In
furtherance hereof, in applying this Section 4.02 to a successor
entity, Section 6.01 hereof shall be applied by reference to events
of involuntary liquidation, receivership or conservatorship
applicable to such successor entity;
(ii) Transferor shall have delivered to Indenture Trustee an
Officer's Certificate signed by a Vice President (or any more senior
officer) of Transferor stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with
this Section 4.02 and that all conditions precedent herein provided
for relating to such transaction have been complied with and an
Opinion of Counsel that such supplemental agreement is legal, valid
and binding, and enforceable against such surviving entity in
accordance with its terms;
(iii) Servicer shall have delivered notice to the Rating
Agencies of such consolidation, merger, conveyance or transfer and
the Rating Agency Condition shall have been met;
(iv) Transferor shall have delivered to Indenture Trustee and
each Rating Agency a Tax Opinion, dated the date of such
consolidation, merger, conveyance or transfer, with respect thereto;
and
(v) if Transferor is not the surviving entity, the surviving
entity shall file new UCC-1 financing statements with respect to the
interest of Issuer in the Receivables and the Collateral
Certificate, if any.
(b) This Section 4.02 shall not be construed to prohibit or in any
way limit Transferor's ability to effectuate any consolidation or merger
pursuant to which Transferor would be the surviving entity.
(c) The obligations of Transferor hereunder shall not be assignable
nor shall any Person succeed to the obligations of Transferor hereunder
except for mergers, consolidations, assumptions or transfers in accordance
with the provisions of the foregoing paragraphs.
SECTION 4.03. LIMITATION ON LIABILITY OF TRANSFEROR. Subject to Section
4.01 and except as provided in Section 4.04, neither Transferor, any Holder of
Transferor Interest nor any of the directors, officers, employees or agents of
Transferor acting in such capacities shall be under any liability to Issuer,
Owner Trustee, the Holders, any Enhancement Provider or any
34
other Person for any action taken or for refraining from the taking of any
action in good faith in their capacities as Transferor pursuant to this
Agreement; provided that this provision shall not protect Transferor, any Holder
of Transferor Interest or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. Transferor and any director, officer, employee
or agent of Transferor may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person (other than Transferor)
respecting any matters arising hereunder.
SECTION 4.04. TRANSFEROR INDEMNIFICATION.
(a) Transferor shall indemnify and hold harmless Issuer, the
Certificate Trust, Certificate Trust Trustee, Indenture Trustee and Owner
Trustee, and their respective officers, directors, employees and agents
(each, an "Indemnified Person"), from and against any loss, liability,
expense, damage or injury (i) suffered or sustained by reason of any acts
or omissions or alleged acts or omissions arising out of or based upon the
arrangement created by this Agreement and the other Transaction Documents,
or (ii) arising from or incurred in connection with Owner Trustee's
administration of Issuer and the performance of its duties pursuant to
this Agreement or any other Transaction Document, including any judgment,
award, settlement, reasonable attorneys' fees and other costs or expenses
incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, that Transferor shall not
indemnify any such Indemnified Person if such acts, omissions or alleged
acts or omissions constitute or are caused by fraud, negligence, or
willful misconduct by such Indemnified Person; and provided, further, that
Transferor shall not indemnify Issuer, the Certificate Trust or any
Noteholder or Note Owner for any liabilities, costs or expenses with
respect to any action taken by Certificate Trust Trustee at the direction
of the Holders of Notes and Investor Certificates, or by Indenture Trustee
at the direction of the Noteholders, in either case given in accordance
with the applicable Transaction Documents; and provided, further, that
Transferor shall not indemnify Issuer, the Certificate Trust or any
Noteholder or Note Owner as to any losses, claims or damages incurred by
any of them as owners of secured notes, for example, as a result of the
performance of the Receivables, market fluctuations, a shortfall or
failure to make payment under any Enhancement or other similar market or
investment risks associated with ownership of secured notes; and provided,
further, that Transferor shall not indemnify Issuer, the Certificate Trust
or any Noteholder or Note Owner for any liabilities, costs or expenses of
the Receivables Trust, Issuer, the Noteholders or the Note Owners arising
under any tax law, including, without limitation, any federal, state,
local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or
arising from a failure to comply therewith) required to be paid by Issuer,
the Certificate Trust, the Noteholders or the Note Owners in connection
herewith to any taxing authority. Any such indemnifications under this
Section 4.04 shall not be payable from the assets of the Issuer or the
Certificate Trust and shall be subordinated to the Notes. The provisions
of this indemnity shall run directly to and be enforceable by an injured
party subject to the limitations hereof.
35
(b) Transferor shall not be liable under this Section 4.04 for any
settlement of any claim or action effected without its prior written
consent, which shall not be unreasonably withheld.
(c) Promptly after receipt by an injured party under this Section
4.04 of notice of the commencement of any action or proceeding for which
such injured party is entitled to indemnification under this Section 4.04,
such injured party will, if a claim in respect thereof is to be made
against Transferor under this Section 4.04, notify Transferor of the
commencement thereof; but the omission to so notify Transferor (i) will
not relieve it from any liability under Section 4.04 unless and to the
extent that such failure to notify results in the forfeiture by
Transferor, or the material impairment, of substantial rights and defenses
and (ii) will not, in any event, relieve Transferor from any obligations
to any injured party that are in addition to the indemnification
obligation provided in this Section 4.04. If any such action or proceeding
is brought that involves any injured party, the injured party shall
promptly notify Transferor of the commencement thereof and Transferor will
be entitled to participate therein and, to the extent that it may wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
injured party; provided, however, that if (x) the use of counsel chosen by
Transferor to represent the injured party would present such counsel with
a conflict of interest which, if such counsel had been retained, would
have required such counsel to withdraw from such representation, (y) the
injured party shall have been advised by counsel that there may be one or
more legal defenses available to it that are different from or additional
to those available to Transferor or to other indemnified parties, or (z)
Transferor shall not have employed counsel satisfactory to the injured
party to represent the injured party within a reasonable time after
receipt by Transferor of notice of the institution of such action or
proceeding, then, in each such case, (1) Transferor shall not have the
right to direct the defense of such action on behalf of such injured party
or parties, (2) such injured party or parties shall have the right to
select separate counsel to defend such action on behalf of such injured
party or parties (provided that, if more than one injured party is subject
to the circumstances described in clause (y), then, to the extent
permitted by the rules of professional conduct applicable to attorneys,
all such indemnified parties shall be represented by one such separate
counsel) and (3) all costs and expenses of each such injured party in
connection with such action or proceeding shall be paid by Transferor
pursuant to Section 4.04(a) above. Transferor may settle any claim for
which an injured party seeks indemnification under this Section 4.04 so
long as (A) Transferor pays the settlement in full and (B) as a result
thereof, the injured party is released from all liability under such
claim.
(d) After notice from Transferor to such injured party of
Transferor's election so to assume the defense thereof and approval by
such injured party of counsel appointed to defend such action, Transferor
will not be liable to such injured party under this Section 4.04 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such injured party in connection with the defense
thereof, unless (i) the injured party shall have employed separate counsel
in accordance with the immediately preceding paragraph or (ii) Transferor
has authorized in writing the employment of counsel for the injured party
at the expense of Transferor. If Transferor assumes the defense of any
such action or proceeding, the injured party shall have the
36
right to employ separate counsel therein, and to participate in the
defense thereof, but the fees and expenses of such counsel shall be borne
exclusively by such injured party without any right or entitlement to
reimbursement by Transferor or its Affiliates except as otherwise provided
in the preceding sentence and in the preceding paragraph.
(e) The provisions of this Section 4.04 shall survive the
termination of this Agreement and the earlier removal or resignation of
the Owner Trustee.
ARTICLE V
OTHER MATTERS RELATING TO SERVICER
SECTION 5.01. LIABILITY OF SERVICER. Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Servicer in such capacity herein.
SECTION 5.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SERVICER.
(a) Servicer shall not consolidate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
Servicer is merged or the Person which acquires by conveyance or
transfer the properties and assets of Servicer substantially as an
entirety shall be a national banking association, state banking
corporation or other entity organized and existing under the laws of
the United States or any of its states that is not subject to the
bankruptcy laws of the United States of America and, if Servicer is
not the surviving entity, shall expressly assume, by an agreement
supplemental hereto, executed and delivered to Owner Trustee and
Indenture Trustee in form satisfactory to Owner Trustee and
Indenture Trustee, the performance of every covenant and obligation
of Servicer hereunder (to the extent that any right, covenant or
obligation of Servicer, as applicable hereunder, is inapplicable to
the successor entity, such successor entity shall be subject to such
covenant or obligation, or benefit from such right, as would apply,
to the extent practicable, to such successor entity);
(ii) Servicer shall have delivered to Indenture Trustee an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section
5.02 and that all conditions precedent herein provided for relating
to such transaction have been complied with and an Opinion of
Counsel that such supplemental agreement is legal, valid and binding
with respect to Servicer and enforceable against such surviving
entity in accordance with its terms;
(iii) Servicer shall have delivered notice to the Rating
Agencies of such consolidation, merger, conveyance or transfer; and
37
(iv) either (A) the entity formed by such consolidation or
into which Servicer is merged or the Person which acquired by
conveyance or transfer the properties and assets of Servicer
substantially as an entirety shall be an Eligible Servicer (taking
into account, in making such determination, the experience and
operations of the predecessor Servicer) or (B) upon the
effectiveness of such consolidation, merger, conveyance or transfer,
a Successor Servicer shall have assumed the obligations of Servicer
in accordance with this Agreement.
(b) This Section 5.02 shall not be construed to prohibit or in any
way limit Servicer's ability to effectuate any consolidation or merger
pursuant to which Servicer would be the surviving entity.
SECTION 5.03. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Except as
provided in Section 5.04 and with respect to Indenture Trustee, Section 6.07 of
the Indenture, neither Servicer nor any of the directors, officers, employees or
agents of Servicer in its capacity as Servicer shall be under any liability to
Issuer, Owner Trustee, Indenture Trustee, the Holders, any Enhancement Providers
or any other Person for any action taken or for refraining from the taking of
any action in good faith in its capacity as Servicer pursuant to this Agreement;
provided that this provision shall not protect Servicer or any such Person
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Servicer and
any director, officer, employee or agent of Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person (other than Servicer) respecting any matters arising hereunder. Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties as Servicer in accordance with this
Agreement and which in its reasonable judgment may involve it in any expense or
liability. Servicer may, in its sole discretion, undertake any such legal action
which it may deem necessary or desirable for the benefit of the Holders with
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Holders hereunder. Servicer shall not be liable for any
settlement of any claim or action effected without its prior written consent,
which shall not be unreasonably withheld.
SECTION 5.04. SERVICER INDEMNIFICATION. (a) Servicer shall indemnify and
hold harmless Issuer, the Certificate Trust, the Certificate Trust Trustee,
Owner Trustee and Indenture Trustee, and their respective officers, directors,
employees and agents (each, an "Indemnified Person"), from and against any loss,
liability, expense, damage or injury suffered or sustained by reason of any acts
or omissions or alleged acts or omissions of Servicer with respect to activities
of the Certificate Trust, Issuer, Indenture Trustee, Certificate Trust Trustee
or Owner Trustee pursuant to this Agreement or any other Transaction Document,
including any judgment, award, settlement, reasonable attorneys' fees and other
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided, however, that Servicer shall
not indemnify any such Indemnified Person if such acts, omissions or alleged
acts or omissions constitute or are caused by fraud, negligence, or willful
misconduct by such Indemnified Person; and provided, further, that Servicer
shall not indemnify Issuer, the Certificate Trust or any Noteholder or Note
Owner for any liabilities, costs or expenses with respect to any action taken by
Certificate Trust Trustee, at the direction of Holders of the Notes and the
Investor Certificates, or by Indenture Trustee at the direction of the
Noteholders, in either
38
case, given in accordance with the applicable Transaction Documents; and
provided, further, that Servicer shall not indemnify Issuer, the Certificate
Trust or any Noteholder or Note Owner as to any losses, claims or damages
incurred by any of them as owners of secured notes, for example, as a result of
the performance of the Receivables, market fluctuations, a shortfall or failure
to make payment under any Enhancement or other similar market or investment
risks associated with ownership of secured notes; and provided, further, that
Servicer shall not indemnify Issuer, the Certificate Trust or any Noteholder or
Note Owner for any liabilities, costs or expenses of the Receivables Trust,
Issuer, the Noteholders or the Note Owners arising under any tax law, including,
without limitation, any federal, state, local or foreign income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith)
required to be paid by Issuer, the Noteholders or the Note Owners in connection
herewith to any taxing authority. Any such indemnifications under this Section
5.04 shall not be payable from the assets of Issuer or the Certificate Trust and
shall be subordinated to the Notes. The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof. Servicer shall also indemnify Indenture Trustee as provided in Section
6.07 of the Indenture.
(b) Servicer shall not be liable under this Section 5.04 for any
settlement of any claim or action effected without its prior written
consent, which shall not be unreasonably withheld.
(c) Promptly after receipt by an injured party under this Section
5.04 of notice of the commencement of any action or proceeding for which
such injured party is entitled to indemnification under this Section 5.04,
such injured party will, if a claim in respect thereof is to be made
against Servicer under this Section 5.04, notify Servicer of the
commencement thereof; but the omission to so notify Servicer (i) will not
relieve it from any liability under Section 5.04 unless and to the extent
that such failure to notify results in the forfeiture by Servicer, or the
material impairment, of substantial rights and defenses and (ii) will not,
in any event, relieve Servicer from any obligations to any injured party
that are in addition to the indemnification obligation provided in this
Section 5.04. If any such action or proceeding is brought that involves
any injured party, the injured party shall promptly notify Servicer of the
commencement thereof and Servicer will be entitled to participate therein
and, to the extent that it may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such injured party; provided, however,
that if (x) the use of counsel chosen by Servicer to represent the injured
party would present such counsel with a conflict of interest which, if
such counsel had been retained, would have required such counsel to
withdraw from such representation, (y) the injured party shall have been
advised by counsel that there may be one or more legal defenses available
to it that are different from or additional to those available to Servicer
or to other indemnified parties, or (z) Servicer shall not have employed
counsel satisfactory to the injured party to represent the injured party
within a reasonable time after receipt by Servicer of notice of the
institution of such action or proceeding, then, in each such case, (1)
Servicer shall not have the right to direct the defense of such action on
behalf of such injured party or parties, (2) such injured party or parties
shall have the right to select separate counsel to defend such action on
behalf of such injured party or parties (provided that, if more than one
injured party is subject to the circumstances described in clause (y),
then, to the extent permitted by the rules of
39
professional conduct applicable to attorneys, all such indemnified parties
shall be represented by one such separate counsel) and (3) all costs and
expenses of each such injured party in connection with such action or
proceeding shall be paid by Servicer pursuant to Section 5.04(a) above.
Servicer may settle any claim for which an injured party seeks
indemnification under this Section 5.04 so long as (A) Servicer pays the
settlement in full and (B) as a result thereof, the injured party is
released from all liability under such claim.
(d) After notice from Servicer to such injured party of Servicer's
election so to assume the defense thereof and approval by such injured
party of counsel appointed to defend such action, Servicer will not be
liable to such injured party under this Section 5.04 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such injured party in connection with the defense thereof,
unless (i) the injured party shall have employed separate counsel in
accordance with the immediately preceding paragraph or (ii) Servicer has
authorized in writing the employment of counsel for the injured party at
the expense of Servicer. If Servicer assumes the defense of any such
action or proceeding, the injured party shall have the right to employ
separate counsel therein, and to participate in the defense thereof, but
the fees and expenses of such counsel shall be borne exclusively by such
injured party without any right or entitlement to reimbursement by
Servicer or its Affiliates except as otherwise provided in the preceding
sentence and in the preceding paragraph.
(e) The provisions of this Section 5.04 shall survive the
termination of this Agreement and the earlier removal or resignation of
the Owner Trustee.
SECTION 5.05. SERVICER NOT TO RESIGN. Servicer shall not resign from the
obligations and duties hereby imposed on it except (a) upon determination that
(i) the performance of its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action which Servicer could take
to make the performance of its duties hereunder permissible under applicable law
or (b) as may be required, in connection with Servicer's consolidation with, or
merger into any other corporation or Servicer's conveyance or transfer of its
properties and assets substantially as an entirety to any person in each case,
in accordance with Section 5.02. Any such determination permitting the
resignation of Servicer shall be evidenced as to clause (a) above by an Opinion
of Counsel to such effect delivered to Indenture Trustee. No such resignation
shall become effective until Indenture Trustee or a Successor Servicer shall
have assumed the responsibilities and obligations of Servicer in accordance with
Section 7.02 hereof. If Indenture Trustee is unable within 120 days of the date
of such determination to appoint a Successor Servicer, Indenture Trustee shall
(i) serve as Successor Servicer hereunder until such time as a Successor
Servicer shall have been appointed and assumed the obligations of Servicer in
accordance with Section 7.02 hereunder or (ii) if Indenture Trustee is legally
unable so to act, petition a court of competent jurisdiction to appoint a
Successor Servicer in accordance with Section 7.02 such that the appointment is
made within the 120-day period.
SECTION 5.06. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE RECEIVABLES. Servicer shall provide to Indenture Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where
Indenture Trustee is required in connection with the enforcement of the rights
of the Noteholders, or by applicable statutes or
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regulations to review such documentation, such access being afforded without
charge but only (a) upon reasonable request, (b) during normal business hours,
(c) subject to Servicer's normal security and confidentiality procedures and (d)
at offices designated by Servicer. Nothing in this Section 5.06 shall derogate
from the obligation of FNBO, Transferor, Indenture Trustee and Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors and the failure of Servicer to provide access as provided in this
Section 5.06 as a result of such obligation shall not constitute a breach of
this Section 5.06.
SECTION 5.07. DELEGATION OF DUTIES. It is understood and agreed by the
parties hereto that Servicer may delegate certain of its duties hereunder to any
Affiliate which is wholly owned by Servicer or its parent, First National of
Nebraska, Inc. In the ordinary course of business, Servicer may at any time
delegate any duties hereunder to any Person who agrees to conduct such duties in
accordance with the Credit Card Guidelines and this Agreement. Any such
delegations shall not relieve Servicer of its liability and responsibility with
respect to such duties and shall not constitute a resignation within the meaning
of Section 5.05 hereof. If any such delegation is to a party other than an
Affiliate, as permitted above, notification thereof shall be given to each
Rating Agency, Indenture Trustee and each Enhancement Provider entitled
therefrom pursuant to the applicable Indenture Supplement.
SECTION 5.08. EXAMINATION OF RECORDS. Servicer shall clearly and
unambiguously identify each Account (including any Additional Account designated
pursuant to Section 2.06) in its computer or other records to reflect that the
Receivables arising in such Account have been conveyed to Issuer pursuant to
this Agreement. Servicer shall, prior to the sale or transfer to a third party
of any receivable held in its custody, examine its computer and other records to
determine that such receivable is not a Receivable.
ARTICLE VI
INSOLVENCY EVENTS
SECTION 6.01. RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT. If an
Insolvency Event occurs with respect to Transferor, FNBO or any Holder of
Transferor Interest (excluding any Supplemental Interest), Transferor shall on
the day any such event occurs, immediately cease to transfer Principal
Receivables to Issuer and shall promptly give notice to Indenture Trustee, Owner
Trustee and the Rating Agencies thereof. Notwithstanding any cessation of the
transfer to Issuer of additional Principal Receivables, Principal Receivables
transferred to Issuer prior to the occurrence of such Insolvency Event and
Collections in respect of such Principal Receivables, and Finance Charge
Receivables whenever created accrued in respect of such Principal Receivables,
shall continue to be property of Issuer.
ARTICLE VII
SERVICER DEFAULTS
SECTION 7.01. SERVICER DEFAULTS. If any one of the following events
(subject to the last paragraph of this Section 7.01, a "Servicer Default") shall
occur and be continuing after the Certificate Trust Termination Date:
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(a) any failure by Servicer to make any payment, transfer or deposit
or to give instructions or notice to Indenture Trustee pursuant to Article
VIII of the Indenture (as modified by any Indenture Supplement) or to
instruct Indenture Trustee to make any required drawing, withdrawal or
payment under any Enhancement on or before the later of (i) the date
occurring 10 Business Days after the date such payment, transfer, deposit,
withdrawal or drawing or such instruction or notice is required to be made
or given, as the case may be, under the terms of this Agreement, the
Indenture or any Indenture Supplement or (ii) three Business Days after
written notice of such failure shall have been given to Servicer;
(b) failure on the part of Servicer duly to observe or perform in
any respect any other covenants or agreements of Servicer set forth in
this Agreement which has a material adverse effect on the Noteholders of
any Series (which determination shall be made without regard to whether
funds are then available pursuant to any Enhancement) and which continues
unremedied for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to Servicer by Indenture Trustee, or to Servicer and Indenture Trustee by
the Holders of not less than 25% of the Outstanding Amount of any Series
adversely affected thereby and continues to materially adversely affect
such Holders for such period; or Servicer shall delegate its duties under
this Agreement, except as permitted by Section 5.07;
(c) any representation, warranty or certification made by Servicer
in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which has a
material adverse effect on the Noteholders of any Series (which
determination shall be made without regard to whether funds are then
available pursuant to any Enhancement) and which continues to be incorrect
in any material respect for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to Servicer by Indenture Trustee, or to Servicer and
Indenture Trustee by the Holders of Notes evidencing not less than 25% of
the Outstanding Amount of any Series adversely affected thereby and
continues to materially adversely affect such Holders for such period; or
(d) Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to Servicer or of or relating to all or substantially all of its
property; or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or Servicer shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make any assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations;
(e) with respect to any Series, any other event specified in the
Indenture Supplement for such Series,
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then, so long as such Servicer Default shall not have been remedied or waived,
either Indenture Trustee, or the Majority Holders of all outstanding Series, by
notice then given in writing to Servicer (and to Indenture Trustee if given by
the Majority Holders) and to any Enhancement Provider entitled thereto pursuant
to the applicable Indenture Supplement (a "Termination Notice"), may terminate
all of the rights and obligations (other than unsatisfied obligations for acts
or omissions during its tenure as Servicer) of Servicer as Servicer under this
Agreement. Upon Indenture Trustee's receipt of notice, or actual knowledge of a
Responsible Officer of Indenture Trustee, of the occurrence of a Servicer
Default, Indenture Trustee shall promptly notify each Rating Agency of such
Servicer Default.
After receipt by Servicer of such Termination Notice, and on the date that
a Successor Servicer shall have been appointed by Indenture Trustee pursuant to
Section 7.02, all authority and power of Servicer under this Agreement shall
pass to and be vested in the Successor Servicer (a "Service Transfer"); and,
without limitation, Indenture Trustee is hereby authorized and empowered (upon
the failure of Servicer to cooperate) to execute and deliver, on behalf of
Servicer, as attorney-in-fact or otherwise, all documents and other instruments
upon the failure of Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights and
obligations. Servicer agrees to cooperate with Indenture Trustee and the
Successor Servicer in effecting the termination of the responsibilities and
rights of Servicer to conduct servicing hereunder including the transfer to the
Successor Servicer of all authority of Servicer to service the Receivables
provided for under this Agreement, including all authority over all Collections
which shall on the date of transfer be held by Servicer for deposit, or which
have been deposited by Servicer, in the Collection Account or any Series
Account, or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer and in enforcing all rights to Insurance
Proceeds and Interchange (if any) applicable to Issuer. Servicer shall promptly
transfer its electronic records or electronic copies thereof relating to the
Receivables to the Successor Servicer in such electronic form as the Successor
Servicer may reasonably request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents necessary for the
continued servicing of the Receivables in the manner and at such times as the
Successor Servicer shall reasonably request. To the extent that compliance with
this Section 7.01 shall require Servicer to disclose to the Successor Servicer
information of any kind which Servicer reasonably deems to be confidential, the
Successor Servicer shall be required to enter into such customary licensing and
confidentiality agreements as Servicer shall deem necessary to protect its
interests. Servicer shall, on the date of any Service Transfer, transfer all of
its rights and obligations under the Enhancement with respect to any Series to
the Successor Servicer. Servicer being terminated shall bear all costs of a
Service Transfer, including but not limited to those of Indenture Trustee
reasonably allocable to specific employees and overhead, legal fees and
expenses, accounting and financial consulting fees and expenses, and costs of
amending this Agreement, if necessary.
Notwithstanding the foregoing, any delay in or failure of performance
referred to in Section 7.01(a) for a period of ten Business Days or under
Section 7.01(b) or (c) for a period of 60 days (in addition to any period
provided in Section 7.01(a), (b) or (c)) shall not constitute a Servicer Default
until the expiration of such additional ten Business Days or 60 days,
respectively, if such delay or failure could not be prevented by the exercise of
reasonable diligence by Servicer and such delay or failure was caused by an act
of God or the public enemy,
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acts of declared or undeclared war, public disorder, rebellion, riot or
sabotage, epidemics, landslides, lightning, fire, hurricanes, tornados,
earthquakes, nuclear disasters or meltdowns, floods, power outages or similar
causes. The preceding sentence shall not relieve Servicer from the obligation to
use its best efforts to perform its obligations in a timely manner in accordance
with the terms of this Agreement and Servicer shall provide Indenture Trustee,
each Rating Agency, any Enhancement Provider entitled thereto pursuant to the
relevant Indenture Supplement and Transferor with an Officer's Certificate
giving immediate notice of such failure or delay by it, together with a
description of the cause of such failure or delay and its efforts to so perform
its obligations.
SECTION 7.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the receipt by Servicer of a Termination Notice
pursuant to Section 7.01, Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by Indenture Trustee or until a date
mutually agreed upon by Servicer and Indenture Trustee; however, the
parties acknowledge and agree that the Indenture Trustee will not be
obligated to designate or agree to a date prior to the date on which a
Successor Servicer appointed in accordance with this Section 7.02 is
willing to accept its appointment. Indenture Trustee shall, as promptly as
possible after the giving of a Termination Notice, appoint an Eligible
Servicer as a successor servicer (the "Successor Servicer"), and such
Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to Indenture Trustee. If a Successor Servicer has not
been appointed or has not accepted its appointment at the time when
Servicer ceases to act as Servicer, Indenture Trustee without further
action shall automatically be appointed the Successor Servicer. Indenture
Trustee may delegate any of its servicing obligations to an Affiliate of
Indenture Trustee or agent in accordance with Section 3.01(b) and 5.07.
Notwithstanding the foregoing, Indenture Trustee shall, if it is legally
unable so to act, petition a court of competent jurisdiction to appoint an
Eligible Servicer as the Successor Servicer hereunder. Indenture Trustee
shall give prompt notice to each Rating Agency and each Enhancement
Provider, if any, entitled thereto pursuant to the applicable Indenture
Supplement upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities,
duties and liabilities (except for liabilities arising during the period
of time when the prior Servicer was performing and acting as Servicer)
relating thereto placed on Servicer by the terms and provisions hereof,
and all references in this Agreement to Servicer shall be deemed to refer
to the Successor Servicer.
(c) In connection with any Termination Notice, Indenture Trustee
will review any bids which it obtains from Eligible Servicers and shall be
permitted to appoint any Eligible Servicer submitting such a bid as a
Successor Servicer for servicing compensation not in excess of the
aggregate Monthly Servicing Fees for all Series; provided, however, that
the Holder of Transferor Interest shall be responsible for payment of the
portion of such aggregate Monthly Servicing Fees allocable to the Holder
of Transferor Interest and that no such monthly compensation paid out of
Collections
44
shall be in excess of such aggregate Monthly Servicing Fees. Each Holder
of Transferor Interest agrees that, if FNBO (or any Successor Servicer) is
terminated as Servicer hereunder, the portion of the Collections in
respect of Finance Charge Receivables that Holders of Transferor Interest
are entitled to receive pursuant to this Agreement or any Indenture
Supplement shall be reduced by an amount sufficient to pay their share
(determined by reference to the Indenture Supplements with respect to any
outstanding Series) of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of
Issuer pursuant to the Trust Agreement and shall pass to and be vested in
Transferor and, Transferor is hereby authorized and empowered to execute
and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish
all other acts or things necessary or appropriate to effect the purposes
of such transfer of servicing rights. The Successor Servicer agrees to
cooperate with Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing
on the Receivables. The Successor Servicer shall transfer its electronic
records relating to the Receivables to Transferor in such electronic form
as Transferor may reasonably request and shall transfer all other records,
correspondence and documents to Transferor in the manner and at such times
as Transferor shall reasonably request. To the extent that compliance with
this Section 7.02 shall require the Successor Servicer to disclose to
Transferor information of any kind which the Successor Servicer deems to
be confidential, Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall
deem necessary to protect its interests.
(e) Nothing in this Agreement shall be construed to require any
Successor Servicer to assume or succeed to any duty or obligation of Transferor.
SECTION 7.03. NOTIFICATION TO NOTEHOLDERS. Within two Business Days after
Servicer becomes aware of any Servicer Default, Servicer shall give notice
thereof to Indenture Trustee, each Rating Agency and any Enhancement Provider
entitled thereto pursuant to the relevant Indenture Supplement. Promptly after
receipt of such notice, Indenture Trustee shall give notice to the Noteholders
at their respective addresses appearing in the Note Register. Upon any
termination or appointment of a Successor Servicer pursuant to Section 5.05 or
this Article VII, Indenture Trustee shall give prompt written notice thereof to
Noteholders at their respective addresses appearing in the Note Register and to
any Enhancement Provider entitled thereto under the applicable Indenture
Supplement.
ARTICLE VIII
TERMINATION
SECTION 8.01. TERMINATION OF AGREEMENT. This Agreement and the respective
obligations and responsibilities of Issuer, Transferor and Servicer under this
Agreement shall terminate, except with respect to the duties described in
Section 5.04, on the Trust Termination Date.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01. AMENDMENT; WAIVER OF PAST DEFAULTS.
(a) This Agreement may be amended from time to time by Servicer,
Transferor and Issuer, without the consent of any of Indenture Trustee or
any Noteholder to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein or to add any other provisions with respect to matters or questions
raised under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall
not adversely affect in any material respect the interests of any of the
Noteholders. Additionally, this Agreement may be amended from time to time
by Servicer, Transferor and Issuer by a written instrument signed by each
of them, without the consent of Indenture Trustee or any of the
Noteholders; provided that (i) Transferor shall have delivered to
Indenture Trustee and Owner Trustee an Officer's Certificate, dated the
date of any such Amendment, stating that Transferor reasonably believes
that such amendment will not have an Adverse Effect and (ii) the Rating
Agency Condition shall have been satisfied with respect to any such
amendment. Additionally, notwithstanding the preceding sentence, this
Agreement will be amended by Servicer and Issuer at the direction of
Transferor without the consent of Indenture Trustee or any of the
Noteholders or Enhancement Providers to add, modify or eliminate such
provisions as may be necessary or advisable in order to enable all or a
portion of Issuer (A) to qualify as, and to permit an election to be made
to cause Issuer to be treated as, a "financial asset securitization
investment trust" as described in the provisions of Section 860L of the
Code and (B) to avoid the imposition of state or local income or franchise
taxes imposed on Issuer's property or its income; provided, however, that
(1) Transferor delivers to Indenture Trustee and Owner Trustee an
Officer's Certificate to the effect that the proposed amendments meet the
requirements set forth in this Section, (2) the Rating Agency Condition
has been satisfied and (3) such amendment does not affect the rights,
duties or obligations of Indenture Trustee (including Indenture Trustee in
its role as Successor Servicer) or Owner Trustee hereunder.
(b) This Agreement may also be amended from time to time by
Servicer, Transferor and Issuer, with the consent of the Noteholders
holding more than 66-2/3% of the Outstanding Amount of the Notes of each
Series affected thereby for which Transferor has not delivered an
Officer's Certificate stating that there is no Adverse Effect, for the
purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of or delay the timing
of any distributions to be made to Noteholders or deposits of amounts to
be so distributed or the amount available under any Enhancement without
the consent of each affected Noteholder, (ii) change the definition of or
the manner of calculating the interest of any Noteholder without the
consent of each affected Noteholder or (iii) reduce the aforesaid
percentage required to consent to any such amendment without the consent
of each affected Noteholder.
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(c) Promptly after the execution of any such amendment or consent,
Issuer shall furnish notification of the substance of such amendment to
Indenture Trustee and each Noteholder, and Servicer shall furnish
notification of the substance of such amendment to each Rating Agency and
each Enhancement Provider.
(d) It shall not be necessary for the consent of Noteholders under
this Section 9.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Noteholders shall be subject
to such reasonable requirements as Indenture Trustee may prescribe.
(e) Notwithstanding anything in this Section 9.01 to the contrary,
no amendment may be made to this Agreement which would adversely affect in
any material respect the interests of any Enhancement Provider without the
consent of such Enhancement Provider.
(f) Any Indenture Supplement executed in accordance with the
provisions of Article X of the Indenture shall not be considered an
amendment of this Agreement for the purposes of this Section 9.01.
(g) The Noteholders holding 66-2/3% or more of the Outstanding
Amount of the Notes of each Series adversely affected by a default by
Transferor or Servicer in the performance of their obligations hereunder
may, on behalf of all Noteholders, waive any such default and its
consequences, except the failure to make any distributions required to be
made to Noteholders or to make any required deposits of any amounts to be
so distributed, which requires the consent of all Noteholders of each
Series adversely affected by that default. Upon any such waiver of a past
default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived. Upon the occurrence of any such waiver, Indenture Trustee shall
promptly notify each Rating Agency of such waiver.
(h) Owner Trustee may, but shall not be obligated to, enter into any
such amendment which affects Owner Trustee's rights, duties or immunities
under this Agreement or otherwise. In connection with the execution of any
amendment hereunder, Owner Trustee shall be entitled to receive the
Opinion of Counsel described in Section 9.02(d).
(i) This Agreement may not be amended to add an additional
Transferor unless the Rating Agency Condition shall have been satisfied
with respect to such amendment.
SECTION 9.02. PROTECTION OF RIGHT, TITLE AND INTEREST TO ISSUER.
(a) Servicer shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation
statements and any other necessary
47
documents covering Indenture Trustee's and Issuer's right, title and
interest to Issuer to be promptly recorded, registered and filed, and at
all times to be kept recorded, registered and filed, all in such manner
and in such places as may be required by law fully to preserve and protect
the right, title and interest of Issuer hereunder, and of Indenture
Trustee and Noteholders under the Indenture, to all property comprising
the Trust Assets. Servicer shall deliver to Indenture Trustee file-stamped
copies of, or filing receipts for, any document recorded, registered or
filed as provided above, as soon as available following such recording,
registration or filing. Transferor shall cooperate fully with Servicer in
connection with the obligations set forth above and will execute any and
all documents reasonably required to fulfill the intent of this paragraph.
(b) Within thirty (30) days after Transferor makes any change in its
name, identity or organizational structure which would make any financing
statement or continuation statement filed in accordance with paragraph (a)
seriously misleading within the meaning of the UCC, Transferor shall give
Issuer and Indenture Trustee notice of any such change, and Servicer shall
file such financing statements or amendments as may be necessary to
continue the perfection of Issuer's security interest or ownership
interest in the Receivables and the proceeds thereof.
(c) Each of Transferor and Servicer shall give Indenture Trustee
prompt notice of any relocation of its chief principal executive office or
any change in the jurisdiction under whose laws it is organized and
whether, as a result of such relocation or change, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new
financing statement, and Servicer shall file such financing statements or
amendments as may be necessary to perfect or to continue the perfection of
Issuer's security interest in the Receivables and the proceeds thereof.
Each of Transferor and Servicer shall at all times maintain its chief
principal executive offices within the United States and shall at all
times be organized under the laws of a jurisdiction located within the
United States.
(d) Transferor shall deliver to Indenture Trustee, Owner Trustee and
any Enhancement Provider entitled thereto pursuant to the relevant
Indenture Supplement (i) upon the execution and delivery of each amendment
of this Agreement, an Opinion of Counsel to the effect specified in
Exhibit A; (ii) on each Addition Date on which any Additional Accounts are
to be designated as Accounts pursuant to Section 2.08(a) or (b), an
Opinion of Counsel substantially in the form of Exhibit E; and (iii) on or
before March 31 of each year, an Opinion of Counsel substantially in the
form of Exhibit F.
SECTION 9.03. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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SECTION 9.04. NOTICES; PAYMENTS.
(a) All demands, notices, instructions, directions and
communications (collectively, "Notices") under this Agreement shall be in
writing and shall be deemed to have been duly given if personally
delivered at, mailed by registered mail, return receipt requested, or sent
by facsimile transmission (i) in the case of Transferor and Servicer, to
First National Bank of Omaha, 1620 Dodge Street, Stop Code 3198, Omaha,
Nebraska 68197 - 3198, Facsimile (402) 636 - 6019, (ii) in the case of
Issuer or Owner Trustee, to the Corporate Trust Office, Attention:
Institutional Trust Services, with a copy to the Administrator, (iii) in
the case of the Rating Agency for a particular Series, the address, if
any, specified in the Indenture Supplement relating to such Series and
(iv) to any other Person as specified in the Indenture or any Indenture
Supplement; or, as to each party, at such other address or facsimile
number as shall be designated by such party in a written notice to each
other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Notes shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Note Register. Any Notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Noteholder receives
such Notice.
SECTION 9.05. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions of this
Agreement or of the Notes or the rights of the Noteholders.
SECTION 9.06. FURTHER ASSURANCES. Transferor and Servicer agree to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by Owner Trustee and Indenture
Trustee more fully to effect the purposes of this Agreement, including the
execution of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 9.07. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of Owner Trustee, Indenture Trustee, the
Noteholders or any Enhancement Provider, any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
provided under this Agreement are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
SECTION 9.08. COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
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SECTION 9.09. THIRD-PARTY BENEFICIARIES. This Agreement will inure to the
benefit of and be binding upon the parties hereto, Indenture Trustee, the
Noteholders, each Indemnified Person and any Enhancement Provider. Except as
otherwise expressly provided in this Agreement, no other Person will have any
right or obligation hereunder.
SECTION 9.10. ACTIONS BY NOTEHOLDERS.
(a) Wherever in this Agreement a provision is made that an action
may be taken or a Notice given by Noteholders, such action or Notice may
be taken or given by any Noteholder, unless such provision requires a
specific percentage of Noteholders.
(b) Any Notice, request, authorization, direction, consent, waiver
or other act by the Noteholder shall bind such Holder and every subsequent
Holder of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by Issuer, Owner Trustee, Transferor
or Servicer in reliance thereon, whether or not notation of such action is
made upon such Note.
SECTION 9.11. RULE 144A INFORMATION. For so long as any of the Notes of
any Series or Class are "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act, each of Transferor, Owner Trustee, Indenture
Trustee, Servicer and any Enhancement Provider agree to cooperate with each
other to provide to any Noteholders of such Series or Class and to any
prospective purchaser of Notes designated by such Noteholder, upon the request
of such Noteholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
SECTION 9.12. MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 9.13. NO BANKRUPTCY PETITION. Each of Issuer (with respect to
Transferor only), Servicer, each Enhancement Provider, if any, and each Holder
of a Supplemental Interest and Transferor (with respect to Issuer only)
severally and not jointly, hereby covenants and agrees that it will not at any
time institute against, solicit or join or cooperate with or encourage any
institution against Issuer or Transferor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under any United States federal or state bankruptcy or similar law or, in the
case of Transferor, direct Owner Trustee to take any such action with respect to
the Note Trust. Nothing in this Section 9.13 shall preclude, or be deemed to
estop, any of the foregoing Persons from taking (to the extent such action is
otherwise permitted to be taken by such Person hereunder) or omitting to take
any action prior to such date in (a) any case or proceeding with respect to
Issuer or Transferor voluntarily filed or commenced by or on behalf of Issuer or
Transferor, respectively, under or pursuant to any such law or (b) any
involuntary case or proceeding pertaining to Issuer or Transferor, as applicable
under or pursuant to any such law.
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SECTION 9.14. RIGHTS OF INDENTURE TRUSTEE. Indenture Trustee shall have
herein the same rights, protections, indemnities and immunities as specified in
the Indenture.
SECTION 9.15. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto
acknowledges and agrees that this Agreement is being executed and delivered by
Wilmington Trust Company, not individually but solely and exclusively in its
capacity as Owner Trustee on behalf of First National Master Note Trust for the
purpose and with the intention of binding First National Master Note Trust. No
obligations or liabilities hereunder shall run against Wilmington Trust Company
in its individual capacity or against its properties or assets.
SECTION 9.16. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.02, this Agreement may not be
assigned by Servicer without the prior consent of the Majority Holders of each
Series. Upon any such assignment, Servicer shall give prior written notice to
each Rating Agency for outstanding Notes that has provided its rating at
Transferor's request.
SECTION 9.17. HEADINGS. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
[Remainder of page intentionally left blank]
51
IN WITNESS WHEREOF, Transferor, Servicer and Issuer have caused this
Transfer and Servicing Agreement to be duly executed by their respective
officers as of the day and year first above written.
FIRST NATIONAL FUNDING LLC, as
Transferor
By /s/ Jean L. Koenck
-----------------------------------
Name Jean L. Koenck
-----------------------------------
Title Senior Vice President
-----------------------------------
FIRST NATIONAL BANK OF OMAHA, as
Servicer
By /s/ Matthew W. Lawver
-----------------------------------
Name Matthew W. Lawver
-----------------------------------
Title Senior Vice President
-----------------------------------
FIRST NATIONAL MASTER NOTE TRUST,
Issuer
By Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee on behalf of Issuer
Acknowledged and Accepted:
THE BANK OF NEW YORK, By /s/ James P. Lawler
not in its individual capacity but -----------------------------------
solely as Indenture Trustee Name James P. Lawler
------------------------------------
Title Vice President
-----------------------------------
By /s/ Robert D. Foltz
- -----------------------------------
Name Robert D. Foltz
- -----------------------------------
Title Agent
- -----------------------------------
TRANSFER AND SERVICING AGREEMENT SIGNATURE PAGE
EXHIBIT A
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
WITH RESPECT TO AMENDMENTS
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions Of Counsel
delivered on any applicable Closing Date.
(i) The Amendment to the Transfer and Servicing Agreement has been
duly authorized, executed and delivered by Transferor and Servicer and
constitutes the legal, valid and binding agreement of Transferor and
Servicer, respectively, enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws from time to time in
effect affecting creditors' rights generally or the rights of creditors of
national banking associations. The enforceability of the respective
obligations of Transferor and Servicer is also subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(ii) The Amendment has been entered into in accordance with the
terms and provisions of Section 9.01 of the Transfer and Servicing Agreement.
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES
IN ADDITIONAL ACCOUNTS
(As required by Section 2.06 of the Transfer and Servicing Agreement)
ASSIGNMENT No. OF RECEIVABLES IN ADDITIONAL ACCOUNTS (this "Assignment")
dated as of , by and among FIRST NATIONAL FUNDING LLC, a Nebraska limited
liability company, as Transferor (the "Transferor"), FIRST NATIONAL BANK OF
OMAHA, a national banking association, as Servicer (the "Servicer") and FIRST
NATIONAL MASTER NOTE TRUST (the "Issuer"), pursuant to the Transfer and
Servicing Agreement referred to below.
W I T N E S S E T H :
WHEREAS, Transferor, Servicer and Issuer are parties to the Transfer and
Servicing Agreement, dated as of October 24, 2002 (as it may be amended and
supplemented from time to time the "Agreement"); and
WHEREAS, pursuant to the Agreement, Transferor wishes to designate
Additional Accounts to be included as Accounts and to convey the Receivables of
such Additional Accounts, whether now existing or hereafter created, to Issuer
(as each such term is defined in the Agreement); and
WHEREAS, Issuer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Issuer hereby agree as follows:
1. DEFINED TERMS. All terms defined in the Agreement and used herein shall
have such defined meanings when used herein, unless otherwise defined herein.
"ADDITION DATE" shall mean, with respect to the Additional Accounts
designated hereby, [ ], 20[ ].
"NOTICE DATE" shall mean, with respect to the Additional Accounts
designated hereby, [ ], 20[ ] (which shall be a date on or prior
to the fifth Business Day prior to the Addition Date with respect to
additions pursuant to Section 2.06(a) of the Agreement and the tenth
Business Day prior to the Addition Date with respect to additions pursuant
to Section 2.06(b) of the Agreement).
2. DESIGNATION OF ADDITIONAL ACCOUNTS. Transferor shall deliver to Issuer
not later than five Business Days after the Addition Date, a computer file or
microfiche list containing a true and complete list of each MasterCard and VISA
account which as of the Addition Date shall be deemed to be an Additional
Account, such accounts being identified by account number and by the amount of
Receivables in such accounts as of the close of business on the Addition Date.
Such list shall be delivered five Business Days after the date of this
Assignment and shall be
marked as Schedule 1 to this Assignment and, as of the Addition Date, shall be
incorporated into and made a part of this Assignment and shall supplement
Schedule 1 to the Agreement as required by Section 2.01(c) of the Agreement.
3. CONVEYANCE OF RECEIVABLES.
(a) Transferor does hereby transfer, assign, set-over and otherwise
convey to Issuer, without recourse, except as set forth in the
Agreement, on and after the Addition Date, all right, title and
interest of Transferor in and to the Receivables now existing and
hereafter created in the Additional Accounts designated hereby[, all
monies due or to become due and all amounts received or receivable
with respect thereto and the proceeds thereof,] (including all
Finance Charge Receivables) and all proceeds of such Receivables and
Insurance Proceeds and Recoveries relating thereto. The foregoing
does not constitute and is not intended to result in the creation or
assumption by Issuer, Owner Trustee, Indenture Trustee, any
Noteholders or any Enhancement Provider of any obligation of
Servicer, Transferor, the Credit Card Originator or any other Person
in connection with the Accounts, the Receivables or under any
agreement or instrument relating thereto, including any obligation
to Obligors, merchant banks, merchants clearance systems or
insurers.
(b) In connection with such transfer, Servicer agrees to record and
file, at its own expense, a financing statement (and continuation
statements, when applicable) with respect to the Receivables now
existing and hereafter created in the Additional Accounts designated
hereby (which may be a single financing statement with respect to
all such Receivables) for the transfer of accounts as defined in
Section 9-102 of the UCC meeting the requirements of applicable law
in such manner and such jurisdiction as are necessary to perfect,
and maintain the perfection of, the assignment of such Receivables
to Issuer, and to deliver a file-stamped copy of such financing
statement or other evidence of such filing (which may, for purposes
of this Section 3, consist of telephone confirmation of such filing)
to Indenture Trustee on or prior to the date of the Assignment.
(c) In connection with such transfer, Servicer further agrees, at its
own expense, on or prior to the date of this Assignment to indicate
in its computer files that Receivables created in connection with
the Additional Accounts designated hereby have been transferred to
Issuer pursuant to the Agreement and this Assignment.
(d) The parties intend that the transfer shall be deemed to be a sale,
but if, and to the extent that, such transfer is not deemed to be a
sale, Transferor shall be deemed hereunder to have granted, and does
hereby so grant, to Issuer a first priority perfected security
interest in all of Transferor's right, title and interest in, and
under the Receivables now existing and hereafter created and arising
in connection with the Additional Accounts, all payments on such
Receivables received after the Addition Date, all Insurance Proceeds
relating thereto and all
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proceeds thereof (including Recoveries) and this Assignment shall
constitute a security agreement under applicable law.
4. ACCEPTANCE BY ISSUER. Issuer hereby acknowledges its acceptance of all
right, title and interest in and to the Receivables now existing and hereafter
created, conveyed to it by Transferor pursuant to Section 3(a) of this
Assignment.
5. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Issuer as of the Addition Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Assignment constitutes a
legal, valid and binding obligation of Transferor enforceable
against Transferor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general and
the rights of creditors of national banking associations and except
as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
(b) ELIGIBILITY OF ACCOUNTS AND RECEIVABLES. Each Additional Account
designated hereby is an Eligible Account and each Receivable in such
Additional Account is an Eligible Receivable.
(c) SELECTION PROCEDURES. No selection procedures believed by Transferor
to be materially adverse to the interests of Issuer or the
Noteholders were utilized in selecting the Additional Accounts
designated hereby from the available [Financial Institutions
Accounts] [Accounts owned by FNBO] constituting Eligible Accounts
[and in connection with its acquisition of Financial Institution
Accounts added to the Trust, FNBO has conducted a due diligence
review of the accounts of each selling third-party financial
institution, including a review of its origination policies and a
review of a random sample of its recently processed account
applications. Based on such diligence reviews, such Financial
Institution Accounts were originated under origination policies
which do not differ significantly from those used by FNBO.]
(d) INSOLVENCY. Transferor is not insolvent and, after giving effect to
the conveyance set forth in Section 3 of the Assignment, will not be
insolvent. No Insolvency Event with respect for FNBO or Transferor
has occurred, and the transfer pursuant to Section 3(a) has not been
made in contemplation of the occurrence thereof.
(e) SECURITY INTEREST. This Assignment constitutes either (A) a valid
transfer and assignment to Issuer of all right, title and interest
of Transferor in and to the Receivables existing and hereafter
created in the Additional Accounts, and all proceeds (as defined in
the UCC) of such Receivables and Insurance Proceeds relating thereto
[and all monies due or to become due and all amounts received with
respect thereto and the proceeds thereof] and such Receivables[,
monies and
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amounts received or receivable] and all proceeds thereof and
Insurance Proceeds relating thereto will be held by Issuer free and
clear of any Lien, except for (1) Liens permitted under subsection
2.05(b) of the Agreement, (2) the interest of the Holder of
Transferor Interest and (3) Servicer's right, if any, to receive
interest accruing on, and investment earnings in respect of, the
Finance Charge Account, the Collection Account, the Principal
Account, or any Series Account as provided in the Indenture and any
related Indenture Supplement or (B) a grant of a first priority
security interest (as defined in the UCC) in such property to
Issuer, which is enforceable with respect to then existing
Receivables of the Additional Accounts, the proceeds (as defined in
the UCC) thereof and Insurance Proceeds relating thereto upon the
execution and delivery of this Assignment, and which will be
enforceable with respect to the Receivables thereafter created in
respect of Additional Accounts conveyed on such Addition Date, the
proceeds (as defined in the UCC) thereof and Insurance Proceeds
relating thereto, upon such creation;
(f) REQUIRED RATING AGENCY REPRESENTATIONS. To the extent this
Assignment constitutes a grant of a security interest, with respect
to existing Receivables in the Additional Accounts:
(i) This Assignment creates a valid and continuing security
interest (as defined in the UCC) in such Receivables and
proceeds thereof and Insurance Proceeds relating thereto in
favor of Issuer, which security interest is prior to all other
Liens (except Liens permitted under Subsection 2.05(b) of the
Agreement), and is enforceable as such as against creditors of
and purchasers from Transferor;
(ii) Such Receivables constitute "accounts" within the meaning of
the UCC;
(iii) Transferor owns and has good and marketable title to such
Receivables free and clear of any Lien, claim or encumbrance
of any Person (except Liens permitted under Subsection 2.05(b)
of the Agreement);
(iv) Transferor has caused or will have caused, within ten days,
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
such Receivables granted to Issuer hereunder;
(v) Other than the security interest granted to Issuer pursuant to
this Assignment, Transferor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of
such Receivables and has not authorized the filing of and is
not aware of any financing statements against Transferor that
include a description of collateral covering the Receivables
other than any financing statement (i) relating to the
security interest granted to Issuer hereunder or (ii) that has
been terminated and Transferor is not aware of any judgment or
tax lien filings against Transferor;
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(vi) The representations made in clauses (i) through (v) above will
be true with respect to Receivables hereafter created in
respect of Additional Accounts designated hereby upon such
creation; and
(vii) Transferor confirms and agrees that the foregoing
representations and warranties shall survive the execution and
delivery of this Assignment and that any breach thereof may
not be waived without prior written confirmation from each
Rating Agency that none of its ratings on outstanding Notes or
related commercial paper shall be adversely affected by such
waiver.
(g) RAPID AMORTIZATION EVENT. Transferor reasonably believes that the
addition of the Receivables arising in the Additional Accounts will
not, based on the facts known to Transferor, then or thereafter
cause a Pay Out Event to occur with respect to any Series.
(h) NO CONFLICT. The execution and delivery by Transferor of this
Assignment, the performance of the transactions contemplated by this
Assignment and the fulfillment of the terms hereof applicable to
Transferor, will not conflict with or violate any Requirements of
Law applicable to Transferor or conflict with, result in any breach
of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default
under, any indenture, contract, agreement, mortgage, deed of trust
or other instrument to which Transferor is a party or by which it or
its properties are bound.
(i) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the best knowledge of Transferor, threatened against
Transferor before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Assignment, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this
Assignment, (iii) seeking any determination or ruling that, in the
reasonable judgment of Transferor, would materially and adversely
affect the performance by Transferor of its obligations under this
Assignment, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of
this Assignment or (v) seeking to affect adversely the income tax
attributes of Issuer under the federal, or applicable state income
or franchise tax systems.
(j) ALL CONSENTS. All authorizations, consents, orders or approvals or
other actions of any Person or of any court or other governmental
authority required to be obtained by Transferor in connection with
the execution and delivery of this Assignment by Transferor and the
performance of the transactions contemplated by this Assignment by
Transferor, have been obtained.
6. CONDITIONS PRECEDENT. The acceptance by Issuer set forth in Section 4
and the amendment of the Agreement set forth in Section 7 are subject to the
satisfaction, on or prior to the Addition Date, of the following conditions
precedent:
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(a) OFFICER'S CERTIFICATE. Transferor shall have delivered to Issuer and
Indenture Trustee a certificate of a Vice President or more senior
officer substantially in the form of Schedule 2 hereto, certifying
that (i) all requirements set forth in Section 2.06 of the Agreement
for designating Additional Accounts and conveying the Principal
Receivables of such Accounts, whether now existing or hereafter
created, have been satisfied and (ii) each of the representations
and warranties made by Transferor in Section 5 is true and correct
as of the Addition Date. Issuer and Indenture Trustee may
conclusively rely on such Officer's Certificate, shall have no duty
to make inquiries with regard to the matters set forth therein, and
shall incur no liability in so relying.
(b) OPINION OF COUNSEL. Transferor shall have delivered to Issuer and
Indenture Trustee an Opinion of Counsel with respect to the
Additional Accounts designated hereby substantially in the form of
Exhibit E to the Agreement.
(c) ADDITIONAL INFORMATION. Transferor shall have delivered to Issuer
and Indenture Trustee such information as was reasonably requested
by either of Issuer or Indenture Trustee to satisfy itself as to the
accuracy of the representation and warranty set forth in subsection
5(d) to this Assignment.
7. AMENDMENT OF THE AGREEMENT. The Agreement is hereby amended to provide
that all references therein to the "Transfer and Servicing Agreement," to "this
Agreement" and "herein" shall be deemed from and after the Addition Date to be a
reference to the Transfer and Servicing Agreement as supplemented by this
Assignment. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Transfer and Servicing
Agreement shall remain unamended and shall continue to be, and shall remain, in
full force and effect in accordance with its terms and except as expressly
provided herein shall not constitute or be deemed to constitute a waiver of
compliance with or a consent to noncompliance with any term or provision of the
Transfer and Servicing Agreement.
8. COUNTERPARTS. This Assignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
9. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of Nebraska, without regard to its
conflict of law provisions.
10. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto acknowledges and
agrees that this Assignment is being executed and delivered by Wilmington Trust
Company, not individually but solely and exclusively in its capacity as Owner
Trustee on behalf of First National Master Note Trust for the purpose and with
the intention of binding First National Master Note Trust. No obligations or
liabilities hereunder shall run against Wilmington Trust Company in its
individual capacity or against its properties or assets.
11. INSTRUCTION TO OWNER TRUSTEE. The Transferor hereby instructs the
Owner Trustee to execute this Agreement on behalf of the Trust.
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IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Additional Accounts to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
FIRST NATIONAL FUNDING LLC,
Transferor
By
------------------------------------
Name
------------------------------------
Title
----------------------------------
FIRST NATIONAL BANK OF OMAHA,
Servicer
By
------------------------------------
Name
------------------------------------
Title
----------------------------------
FIRST NATIONAL MASTER NOTE TRUST,
Issuer
By Wilmington Trust Company, not in its
individual capacity but solely
on behalf of Issuer
By
------------------------------------
Name
------------------------------------
Title
----------------------------------
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SCHEDULE 1
TO ASSIGNMENT OF RECEIVABLES
IN ADDITIONAL ACCOUNTS
ACCOUNT SCHEDULE
(ADDITIONAL ACCOUNTS)
List to be delivered separately.
B-8
SCHEDULE 2
TO ASSIGNMENT OF RECEIVABLES
IN ADDITIONAL ACCOUNTS
OFFICER'S CERTIFICATE
(Officer's Certificate Of Transferor)
(i) All requirements set forth in Section 2.06 of the Agreement for
designating Additional Accounts and conveying the Principal Receivables of such
Accounts, whether now existing or hereafter created, have been satisfied and
(ii) each of the representations and warranties made by Transferor in Section 5
of the Assignment is true and correct as of the Addition Date.
B-9
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
FIRST NATIONAL MASTER NOTE TRUST SERIES [ ]
MONTHLY PERIOD ENDING:
The undersigned, a duly authorized representative of First National Bank
of Omaha ("FNBO"), as Servicer pursuant to the Transfer and Servicing
Agreement dated as of (as amended, the "Transfer and Servicing
Agreement") by and between FNBO, as Servicer, First National Funding LLC,
as Transferor, and First National Master Note Trust, as Issuer, does
hereby certify as follows:
(a) The rights of the Issuer under the Transfer and Servicing Agreement
have been assigned to The Bank of New York, as Indenture Trustee, under
the Master Indenture dated as of [ ], 2002 (the "Indenture"), by and
between Issuer and the Indenture Trustee, and acknowledged by Transferor
and Servicer, as supplemented by the Series [ ] Indenture Supplement,
dated as of [ ], by and between Issuer and Indenture Trustee, and
acknowledged by Transferor and Servicer (the "Supplement"). Capitalized
terms used in this Certificate have their respective meanings set forth in
the Transfer and Servicing Agreement. References herein to certain
sections and subsections are references to the respective sections and
subsections of the related Indenture Supplement. This Certificate is
delivered pursuant to Section 3.04 of the Transfer and Servicing Agreement
and Article VIII and IX of the Indenture.
(b) FNBO is Servicer under Transferor and Servicing Agreement.
(c) The undersigned is a Servicing Officer.
(d) The date of this Certificate is the Determination Date relating to the
Distribution Date (the "Distribution Date").
(e) To the knowledge of the undersigned, there are no Liens on any
Receivables in the Trust except as described below:
[If applicable, insert "None".]
(f) To the knowledge of the undersigned, no Series [ ] Pay Out Event and
no Trust Pay Out Event has occurred except as described below:
[If applicable, insert "None"]
(g) As of the date hereof the Available Spread Account Amount equals the
Required Spread Account Amount[, the amount on deposit in the Cash
Collateral Account equals the Required Cash Collateral Amount] and, if the
Reserve Account Funding Date has occurred, the Available Reserve Account
Amount equals the Required Reserve Account Amount.
A. INFORMATION REGARDING THE PERFORMANCE OF THE RECEIVABLES
1. Principal Receivables
(a) Beginning of Monthly Period Principal Receivables ____________________
(b) End of Monthly Period Principal Receivables ____________________
(c) Average Principal Receivables ____________________
2. End of Monthly Period Trust Receivables ____________________
3. Delinquent Balances ____________________
Percentage of
Delinquency Aggregate Account Total
Category Balance Receivables
_______________________________________________________________________________
(a) 30 to 59 days _________________________________________
(b) 60 to 89 days _________________________________________
(c) 90 to 119 days _________________________________________
(d) 120 to 149 days _________________________________________
(e) 150 or more days _________________________________________
Total: _________________________________________
4. Aggregate amount of Collections _________________________________________
(a) Total Collections ________________
(b) Total Collections of Principal Receivables
(c) Total Collections of Finance Charge Receivables ________________
(d) Aggregate Allocation Percentages for Outstanding Series ________________
(e) Aggregate Allocation Percentage of Collections of Principal ________________
Receivables
(f) Aggregate Allocation Percentage of Collections of Finance ________________
Charge Receivables
5. Aggregate amount of Principal Receivables in Accounts which ________________
became Defaulted Accounts during the Monthly Period
6. Calculation of Interchange allocable to the Issuer for the
Monthly Period ________________
(a) Sales net of cash advances during the Monthly Period\
on all FNBO MasterCard and VISA(1) accounts ________________
(b) Sales net of cash advances during the Monthly
Period on Account designated to the
Receivables Trust ________________
(1) MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and of VISA USA, Inc., respectively.
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(c) Total amount of Interchange paid or payable to FNBO with respect to
the Monthly Period _________________
(d) Amount of Interchange allocable to the Receivables Trust with respect
to the Monthly Period ([c]/[b/a]) _________________
(e) Servicer Interchange amount (1% of Collateral Amount at end of prior
Monthly Period) _________________
(f) Adjustment to Noteholder Servicing Fee (excess of (e) over (f))
7. The aggregate amount of Collections of Finance Charge Receivables for the
Issuer for the Monthly Period _________________
(a) Interchange ________________
(b) Recoveries ________________
(c) Finance Charges and Fees ________________
(d) Discount Receivables ________________
Total ________________
8. Aggregate Uncovered Dilution Amount (as defined in the Indenture
Supplement) for the Monthly Period ________________
B. INFORMATION REGARDING THE SERIES [ ] NOTES
1. Collateral Amount at the close of business on the prior Distribution
Date
(a) Reductions due to Investor Charge-Offs (including Uncovered
Dilution Amounts) to be made on the related Distribution Date _________________
(b) Reimbursements to be made on the related Distribution Date from
Available Finance Charge Collections _________________
(c) Collateral Amount at the close of business on the Distribution
Date _________________
2. Note Principal Balance at the close of business on the Distribution
Date during the Monthly Period
(a) Class A Note Principal Balance _________________
(b) Class B Note Principal Balance _________________
(c) Class C Note Principal Balance _________________
Total Note Principal Balance _________________
3. Allocation Percentages for the Monthly Period
(a) Principal Collections _________________
(b) Finance Charge Collections _________________
(c) Default Amounts _________________
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4. Investor Principal Collections processed during the Monthly Period and
allocated to the Series _________________
5. Excess Principal Collections from other Group I Series allocated to the
Series _________________
6. Aggregate amounts treated as Available Principal Collections pursuant to
subsections [4.04(a)(v)] of the related Indenture Supplement _________________
7. Reallocated Principal Collections (up to the Monthly Principal Reallocation
Amount) applied pursuant to Section [4.06] of the related Indenture
Supplement _________________
8. AVAILABLE PRINCIPAL COLLECTIONS (4+5+6+7) _________________
9. Principal Accumulation Investment Proceeds _________________
10. Investor Finance Charge Collections (including Interchange and Recoveries)
processed during the Monthly Period _________________
11. Excess Finance Charge Collections from Group I allocated to the Series _________________
12. Reserve Account withdrawals pursuant to Section [4.10(b) or (d)] of the
related Indenture Supplement _________________
13. Excess amounts from Spread Account to be treated as Available Finance Charge
Collections pursuant to [Section 4.12(g)] of the related Indenture Supplement _________________
14. AVAILABLE FINANCE CHARGE COLLECTIONS (9+10+11+12+13) _________________
15. Distributions of principal and interest to Noteholders on the Distribution
Date:
(a) Class A Noteholders
(b) Class B Noteholders
(c) Class C Noteholders _________________
16. Distributions of principal to Noteholders on the Distribution Date: _________________
(a) Class A Noteholders _________________
(b) Class B Noteholders _________________
(c) Class C Noteholders _________________
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17.Distributions of interest to Noteholders on the Distribution Date:
(a) Class A Noteholders _________________
(b) Class B Noteholders _________________
(c) Class C Noteholders _________________
18. The aggregate amount of all Principal Receivables in Accounts which became
Defaulted Accounts during the Monthly Period which were allocated to the
Series _________________
(a) Default Amount
(b) Allocation Percentage (B.3.(c) above) Total Investor Default Amount _________________
(axb)
19.The aggregate amount of Uncovered Dilution Amount allocated to the
Series for the Monthly Period _________________
(a) Dilutions not covered by Transferor
(b) Series Allocation Percentage (as defined in the related Indenture
Supplement) _________________
(c) Total Uncovered Dilution Amount
20. The aggregate amount of Investor Charge-Offs (including any Uncovered
Dilution Amount not covered by Transferor) for the Monthly Period _________________
21. Noteholder Servicing Fee for the Monthly Period payable to Servicer (after
adjustment for Servicer Interchange shortfall, if any) _________________
22. Ratings of the Class A Notes
Moody's _________________
S&P _________________
Fitch _________________
23. Ratings of the Class B Notes
Moody's _________________
S&P _________________
Fitch _________________
24. Ratings of the Class C Notes
Moody's _________________
S&P _________________
Fitch _________________
25. Note Interest Rate for the Monthly Period
(a) Class A Note Interest Rate _________________
(b) Class B Note Interest Rate _________________
(c) Class C Note Interest Rate _________________
C-5
C. QUARTERLY NET YIELD
1. Base Rate for the Monthly Period _________________
2. Portfolio Yield for the Monthly Period _________________
3. Net Yield for the Monthly Period (Portfolio Yield MINUS Base Rate) _________________
4. Quarterly Net Yield for the related Distribution Date _________________
D. INFORMATION REGARDING THE PRINCIPAL ACCUMULATION ACCOUNT
1. Opening Principal Accumulation Account Balance on the Distribution Date for _________________
the Monthly Period
2. Controlled Deposit Amount to be deposited to the Principal Accumulation _________________
Account on the Distribution Date for the Monthly Period
(a) Controlled Accumulation Amount _________________
(b) Accumulation Shortfall _________________
(c) Controlled Deposit Amount (a+b) _________________
3. Amounts withdrawn from the Principal Accumulation Account for distribution
to Noteholders on the related Distribution Date
(a) Distribution in reduction of the Class A Notes _________________
(b) Distribution in reduction of the Class B Notes _________________
(c) Distribution in reduction of the Class C Notes _________________
4. Principal Accumulation Account ending balance after deposit/withdrawal on
the Distribution Date for the Monthly Period
E. INFORMATION REGARDING THE SPREAD ACCOUNT
1. Opening Available Spread Account Amount on the Distribution Date for the
Monthly Period _________________
2. Aggregate amount required to be withdrawn pursuant to Section [4.12(c)] of
the related Indenture Supplement for distribution to Class C Noteholders
pursuant to Section [4.04(a)(iv)] of the related Indenture Supplement _________________
3. Aggregate amount required to be withdrawn pursuant to Section [4.12(d)] of
the related Indenture Supplement for distribution in reduction of the Class C
Note Principal Balance _________________
4. Spread Account Percentage for the Distribution Date for the Monthly Period _________________
5. Closing Required Spread Account Amount for the Distribution Date for the
Monthly Period _________________
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6. Amount on deposit in Spread Account after required withdrawals on the
Distribution Date for the Monthly Period (1-(2+3)) _________________
7. Spread Account Deficiency, if any (5 MINUS 6) _________________
8. Amounts deposited pursuant to Section [4.04(a)(vii) or 4.10(e)] of the
related Indenture Supplement _________________
9. Remaining Spread Account Deficiency, if any (7 minus 8) _________________
F. INFORMATION REGARDING THE RESERVE ACCOUNT
1. Reserve Account Funding Date _________________
2. Opening Available Reserve Account Amount on the Distribution Date for the
Monthly Period _________________
3. Aggregate amount required to be withdrawn pursuant to Section 4.10(d) of the
related Indenture Supplement for inclusion in Available Finance Charge _________________
Collections:
(a) Covered Amount _________________
(b) Principal Accumulation Investment Proceeds _________________
(c) Reserve Draw Amount (a MINUS b) _________________
4. Required Reserve Account Amount _________________
5. Reserve Account Surplus (4-(2-3)) _________________
G. INFORMATION REGARDING ACCUMULATION PERIOD
(REQUIRED ON AND AFTER DISTRIBUTION DATE)
1. Accumulation Period Length (months) _________________
H. AGGREGATE OPENING AND CLOSING BALANCE ON DEPOSIT AND
WITHDRAWALS FROM ANY OTHER ENHANCEMENT ACCOUNTS _________________
1. Opening Balance _________________
2. Withdrawals pursuant to Section [ ] of the related Indenture Supplement _________________
3. Closing Balance _________________
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[I. PRE-FUNDING ACCOUNT]
1. Opening Balance _________________
2. Withdrawals pursuant to Section 4.18 of the related Indenture Supplement _________________
3. Closing Balance _________________
4. Balance to be distributed as principal to Noteholders (following end of
Funding Period) _________________
[J. INFORMATION REGARDING THE CASH COLLATERAL ACCOUNT
1. Opening Available Cash Collateral Amount on the Distribution Date for the
Monthly Period _________________
2. Required Draw Amount required to be withdrawn pursuant to Section 4.12(c) of
the related Indenture Supplement _________________
3. Required Cash Collateral Amount _________________
4. Deposits pursuant to Section 4.04(vii) of the related Indenture Supplement _________________
5. Closing Available Cash Collateral Amount _________________
[L. OTHER ENHANCEMENT]
1. Aggregate amount of drawings on any other Enhancement for the Series _________________
2. Amount available under other Enhancement for the Series _________________
IN WITNESS thereof, the undersigned has duly executed and delivered this
Certificate the____________ day of_____________ ,_____________ .
FIRST NATIONAL BANK OF OMAHA,
Servicer
By
_______________________________________
Name
_______________________________________
Title
_______________________________________
C-8
Schedule To Monthly
Servicer's Certificate*
FIRST NATIONAL FUNDING LLC
FIRST NATIONAL MASTER NOTE TRUST
*A separate schedule may be attached for each Series, with appropriate
changes and additions to reflect the specifics of the related Indenture
Supplement.
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
FIRST NATIONAL MASTER NOTE TRUST
The undersigned, a duly authorized representative of First National Bank
of Omaha ("FNBO"), as Servicer pursuant to the Transfer and Servicing Agreement
dated as of , 2002 (the "Agreement") by and between FNBO, as Servicer, First
National Funding LLC ("FNF"), as transferor ("Transferor"), and First National
Master Note Trust, as issuer ("Issuer"), does hereby certify that:
1. FNBO is Servicer under the Agreement. Capitalized terms used without
definition in this Certificate shall have the meanings assigned in or pursuant
to the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized pursuant
to the Agreement to execute and deliver this Certificate to Indenture Trustee.
3. This Certificate is delivered pursuant to Section 3.05 of the
Agreement.
4. A review of the activities of Servicer, and of its performance under
the Agreement, during the twelve-month period ending on December 31, [ ], was
conducted under my supervision.
5. Based on such review, Servicer has, to the best of my knowledge, fully
performed all its obligations under the Agreement throughout such period and no
default in the performance of such obligations has occurred or is continuing
except as set forth in Paragraph 6 below.
6. The following is a description of each default in the performance of
Servicer's obligations under the provisions of the Agreement, including any
Supplement, known to me to have been made during such period which sets forth in
detail (i) the nature of each such default, (ii) the action taken by Servicer,
if any, to remedy each such default and (iii) the current status of each such
default:
[If applicable, insert "None".]
7. (a) During such period, for each outstanding Series, Servicer prepared
the monthly reports required by Section 3.04(b) of the Agreement and each other
monthly report required by the applicable Indenture Supplement in accordance
with Section 3.04(b) and the applicable provisions of each such Indenture
Supplement, (b) the amounts included in such reports agree with the computer
records of Servicer and (c) the calculated amounts included in such reports are
mathematically correct and made in accordance with the applicable definitions in
this Agreement and the other applicable Transaction Documents, except as set
forth in paragraph 6 above.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this day of , .
FIRST NATIONAL BANK OF OMAHA, as Servicer
By
--------------------------------------
Name
--------------------------------------
Title
--------------------------------------
D-2
EXHIBIT E
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
WITH RESPECT TO ADDITION OF ACCOUNTS
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the Opinions of Counsel
delivered on any applicable Closing Date.
1. The Receivables arising in such Additional Accounts constitute
accounts.
2. The Transfer and Servicing Agreement, as supplemented by the
Assignment, creates in favor of the Trust a security interest in Transferor's
rights in the Receivables in such Additional Accounts and the proceeds thereof
(the "Specified Assets").
3. The security interest in the Specified Assets created by the Transfer
and Servicing Agreement will be perfected by the filing of the Financing
Statements as described and defined in such opinion. Based solely upon our
review of the UCC Searches as described and defined in such opinion, we hereby
confirm to you that no Person other than the Trust has filed any financing
statement with the Filing Offices as described and defined in such opinion that
covers the Specified Assets and that would have priority over the security
interest of the Trust by virtue of such filing.
4. The Receivables Purchase Agreement, as supplemented by the assignment
of the Specified Assets by FNBO to Transferor, creates in favor of Transferor a
security interest in the RPA Seller's rights in the Specified Assets.
5. The security interest in the Specified Assets created by the
Receivables Purchase Agreement will be perfected by the filing of the Financing
Statements as described and defined in such opinion. Based solely upon our
review of the UCC Searches as described and defined in such opinion, we hereby
confirm to you that no Person other than Transferor has filed any financing
statement with the Filing Offices as described and defined in such opinion that
covers the Specified Assets and that would have priority over the security
interest of Transferor by virtue of such filing.
EXHIBIT F
PROVISIONS TO BE INCLUDED IN
ANNUAL OPINION OF COUNSEL
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the Opinion of Counsel
to Transferor with respect to similar matters delivered on the Initial Closing
Date. Unless otherwise indicated, all capitalized terms used herein shall have
the meanings assigned in or pursuant to the Transfer and Servicing Agreement to
which this Exhibit F is attached.
1. [PRIOR TO CERTIFICATE TRUST TERMINATION DATE.] No further filings or
actions are required under the UCC or other Nebraska law prior to _________,
_____, in order to maintain the perfection and priority of the first priority
security interests created by the Transaction Documents in favor of Issuer and
Indenture Trustee in Transferor's rights in the Collateral Certificate and the
proceeds thereof. Based solely upon our review of the UCC Searches as described
and defined in such opinion, we hereby confirm to you that no Person other than
Issuer and Indenture Trustee has filed any financing statement with the Filing
Offices as described and defined in such opinion that covers the Collateral
Certificate and proceeds thereof and that would have priority over the security
interest of Issuer and Indenture Trustee by virtue of such filing.
2. [AFTER CERTIFICATE TRUST TERMINATION DATE.] No further filings or
actions are required under the UCC or other Nebraska law prior to _________,
_____, in order to maintain the perfection and priority of the first priority
security interests created by the Transaction Documents in favor of Issuer and
Indenture Trustee in Transferor's rights and Issuer's rights, respectively, in
the Receivables, Transferor's rights and Issuer's rights, respectively, under
the Receivables Purchase Agreement, and the proceeds of any of the foregoing
(the "Specified Assets"). Based solely upon our review of the UCC Searches as
described and defined in such opinion, we hereby confirm to you that no Person
other than Issuer and Indenture Trustee has filed any financing statement with
the Filing Offices as described and defined in such opinion that covers the
Specified Assets and that would have priority over the security interests of
Issuer and Indenture Trustee by virtue of such filing.
3. Confirmation or update, as applicable, of the FIRREA analysis delivered
on the Initial Closing Date.
EXHIBIT G
FORM OF REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
REASSIGNMENT No. OF RECEIVABLES dated as of , by and among
FIRST NATIONAL FUNDING LLC, a Nebraska limited liability company, as transferor
("Transferor"), FIRST NATIONAL BANK OF OMAHA, a national banking association, as
servicer ("Servicer"), FIRST NATIONAL MASTER NOTE TRUST, as issuer ("Issuer"),
and THE BANK OF NEW YORK, as indenture trustee ("Indenture Trustee") pursuant to
the Transfer and Servicing Agreement referred to below.
W I T N E S S E T H :
WHEREAS Transferor, Servicer and Issuer are parties to the Transfer and
Servicing Agreement, dated as of [ ], 2002 (as it may be amended and
supplemented from time to time the "Agreement");
WHEREAS, Issuer has assigned its rights under the Agreement, and the
Receivables transferred thereunder, to Indenture Trustee;
WHEREAS pursuant to the Agreement, with respect to certain designated
Accounts Transferor wishes to cause Issuer to reconvey the Receivables of such
Removed Accounts, whether now existing or hereafter created, from Issuer to
Transferor; and
WHEREAS Issuer is willing to accept such designation and to reconvey the
Receivables in the Removed Accounts, and Indenture Trustee is willing to consent
to such reconveyance, subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer, Indenture Trustee and Issuer hereby
agree as follows:
SECTION 1. DEFINED TERMS. All terms defined in the Agreement and used
herein shall have such defined meanings when used herein, unless otherwise
defined herein.
"Removal Date" means, with respect to the Removed Accounts designated
hereby, , .
"Removal Notice Date" means, with respect to the Removed Accounts
designated hereby, , (which shall be a date on or prior to the fifth
Business Day prior to the Removal Date).
SECTION 2. DESIGNATION OF REMOVED ACCOUNTS. Transferor shall deliver to
Issuer and Indenture Trustee, not later than five Business Days after the
Removal Date, a computer file or microfiche list containing a true and complete
list of each MasterCard and VISA account which as of the Removal Date shall be
deemed to be a Removed Account, such accounts being identified by account number
and by the aggregate amount of Receivables, and by the aggregate amount of
Principal Receivables outstanding, in such accounts as of the close of business
on the
Removal Date. Such list shall be marked as Schedule 1 to this Reassignment,
shall be incorporated into and made a part of this Reassignment as of the
Removal Date, and shall supplement any Account Schedule previously delivered
pursuant to the Agreement.
SECTION 3. CONVEYANCE OF RECEIVABLES.
(a) Issuer does hereby transfer, assign, set over and otherwise
convey to Transferor, without representation, warranty or recourse, on and
after the Removal Date, all right, title and interest of Issuer in, to and
under the Receivables existing at the close of business on the Removal
Date and thereafter created from time to time in the Removed Accounts
designated hereby, all Recoveries related thereto, all monies due or to
become due and all amounts received or receivable with respect thereto and
all proceeds thereof.
(b) In connection with such transfer, Issuer agrees to execute and
deliver to Transferor on or prior to the date this Reassignment is
delivered, applicable termination statements prepared by Transferor with
respect to the Receivables existing at the close of business on the
Removal Date and thereafter created from time to time in the Removed
Accounts designated hereby and the proceeds thereof evidencing the release
by Issuer of its interest in the Receivables in the Removed Accounts, and
meeting the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to terminate such interest.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby
represents and warrants to Issuer and Indenture Trustee as of the Removal Date:
(a) LEGAL VALID AND BINDING OBLIGATION. This Reassignment
constitutes a legal, valid and binding obligation of Transferor
enforceable against Transferor in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general and the
rights of creditors of national banking associations and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(b) SELECTION PROCEDURES. No selection procedures believed by
Transferor to be materially adverse to the interests of the Issuer or the
Noteholders were utilized in selecting the Removed Accounts designated
hereby and such Accounts (or administratively convenient groups of
Accounts, such as billing cycles) were chosen for removal randomly or
otherwise not on a basis intended to select particular accounts or groups
of accounts for any reason other than administrative convenience.
[ALTERNATIVE REPRESENTATION: Accounts were identified for removal because
of a third-party cancellation, or expiration without renewal, of an
affinity, private label, agent bank or similar arrangement.]
SECTION 5. CONDITIONS PRECEDENT. The amendment of the Agreement set forth
in Section 6 hereof is subject to the satisfaction, on or prior to the Removal
Date, of the following condition precedent:
G-2
Transferor shall have delivered to Indenture Trustee an Officer's
Certificate certifying that (i) as of the Removal Date, all requirements
set forth in Section 2.07 of the Agreement for designating Removed
Accounts and reconveying the Receivables of such Removed Accounts, whether
now existing or hereafter created, have been satisfied, and (ii) each of
the representations and warranties made by Transferor in Section 4 hereof
is true and correct as of the Removal Date. Indenture Trustee may
conclusively rely on such Officer's Certificate, shall have no duty to
make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
SECTION 6. RATIFICATION OF AGREEMENT. The Agreement is hereby amended to
provide that all references therein to the "Transfer and Servicing Agreement,"
to "this Agreement" and "herein" shall be deemed from and after the Removal Date
to be a reference to the Transfer and Servicing Agreement as supplemented by
this Reassignment. As supplemented by this Reassignment, the Agreement is in all
respects ratified and confirmed and the Agreement as so supplemented by this
Reassignment shall be read, taken and construed as one and the same instrument.
SECTION 7. COUNTERPARTS. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
SECTION 8. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEBRASKA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9. RIGHTS OF OWNER TRUSTEE. Each of the parties hereto
acknowledges and agrees that this Agreement is being executed and delivered by
Wilmington Trust Company, not individually but solely and exclusively in its
capacity as Owner Trustee on behalf of First National Master Note Trust for the
purpose and with the intention of binding First National Master Note Trust. No
obligations or liabilities hereunder shall run against Wilmington Trust Company
in its individual capacity or against its properties or assets.
SECTION 10. INSTRUCTION TO OWNER TRUSTEE. The Transferor hereby instructs
the Owner Trustee to execute this Agreement on behalf of the Trust.
G-3
IN WITNESS WHEREOF, the undersigned have caused this Reassignment
Agreement to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
FIRST NATIONAL FUNDING LLC,
Transferor
By
______________________________________
Name
____________________________________
Title
___________________________________
FIRST NATIONAL BANK OF OMAHA,
Servicer
By
______________________________________
Name
____________________________________
Title
___________________________________
FIRST NATIONAL MASTER NOTE TRUST,
Issuer
By Wilmington Trust Company, not in its
individual capacity but solely on
behalf of Issuer
By
______________________________________
Name
____________________________________
Title
___________________________________
THE BANK OF NEW YORK,
as Indenture Trustee
By
______________________________________
Name
____________________________________
Title
___________________________________
G-4
SCHEDULE 1
TO REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
ACCOUNT SCHEDULE
(REMOVED ACCOUNTS)
List to be delivered separately.
G-5
SCHEDULE 2
TO REASSIGNMENT OF RECEIVABLES
IN REMOVED ACCOUNTS
OFFICER'S CERTIFICATE
G-6
SCHEDULE 1
ACCOUNT SCHEDULE
List to be delivered separately.
G-7