EXHIBIT 4.12
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SPIEGEL CREDIT CORPORATION III,
Seller,
FIRST CONSUMERS NATIONAL BANK,
Servicer,
and
BNY MIDWEST TRUST COMPANY,
Trustee
on behalf of the Collateral Certificateholder
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COLLATERAL SERIES SUPPLEMENT
Dated as of ________, 2000
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of December 13, 1994
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SPIEGEL MASTER TRUST
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TABLE OF CONTENTS
Page
SECTION 1. Designation................................................. 1
SECTION 2 Definitions................................................. 1
SECTION 3. Reassignment and Transfer Terms............................. 2
SECTION 4. Delivery and Payment for the Collateral Certificates........ 2
SECTION 5. Form of Delivery of Collateral Certificates................. 2
SECTION 6. Article IV of Agreement..................................... 2
SECTION 7. Series Pay Out Events....................................... 3
SECTION 8. Successors and Assigns...................................... 3
SECTION 9. Ratification of Agreement................................... 3
SECTION 10. Counterparts................................................ 3
SECTION 11. Governing Law............................................... 3
EXHIBITS
Exhibit A Form of Collateral Certificate
Exhibit B Form of New Receivables Purchase Agreement
COLLATERAL SERIES SUPPLEMENT dated as of __________, 2000 (this
"Series Supplement"), among Spiegel Credit Corporation III, a Delaware
corporation, as Seller, First Consumers National Bank, a national banking
association, as Servicer, and BNY Midwest Trust Company (as successor to ▇▇▇▇▇▇
Trust and Savings Bank), as Trustee under the Amended and Restated Pooling and
Servicing Agreement dated as of December 13, 1994 among Seller, the Servicer and
the Trustee (the "Agreement").
Section 6.12 of the Agreement provides, among other things, that
Seller and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the delivery by
Seller to the Trustee for execution and authentication of one or more Series of
Certificates.
Pursuant to this Series Supplement, Seller shall create a new Series
of Investor Certificates and shall specify the Principal Terms thereof and add
and amend certain provisions of the Agreement.
SECTION 1. Designation. There is hereby created a Series of
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Investor Certificates to be issued pursuant to the Agreement and this Series
Supplement to be known as the "Collateral Certificates". The Collateral
Certificates will be transferred by the Seller to Spiegel Credit Card Master
Note Trust (the "Note Trust") pursuant to a Transfer and Servicing Agreement
dated as of ____________, 2000 among the Seller, the Servicer and
_____________________, as owner trustee for the Note Trust. The Note Trust will
pledge the Collateral Certificates as collateral for one or more series of notes
(each, a "Note Series") to be issued by the Note Trust pursuant to a Master
Indenture dated as of ____________, 2000 between _____________________, as owner
trustee for the Note Trust, and BNY Midwest Trust Company, as indenture trustee,
and one or more supplements to the Master Indenture (each, an "Indenture
Supplement" and, together with the Master Indenture referred to above, the
"Indenture"). The portions of the Collateral Certificates primarily securing
each Note Series shall be treated as separate Series (each, a "Collateral
Series") under the Agreement and this Series Supplement. Certain terms
pertaining to each Collateral Series will be defined in the applicable Indenture
Supplements (but are hereby incorporated by reference into this Series
Supplement). Unless and until the Trust has been terminated as permitted by
Section 3(b) of this Series Supplement: (a) each Indenture Supplement executed
and delivered by the Note Trust shall be deemed to supplement this Series
Supplement; (b) a new Collateral Series shall be deemed to be issued upon the
issuance of each Note Series and shall have the same designation (e.g., Series
2000-A) as the related Note Series; (c) the amounts payable as interest and
principal on such Collateral Series shall equal the aggregate of the amounts
payable on the related Note Series and shall be payable at the times and in the
amounts specified for such Note Series, (d) all amounts available and applied as
credit enhancement with respect to such Note Series shall be deemed to be
available and applied as credit enhancement with respect to such Collateral
Series; (e) all amounts payable to the Seller pursuant to the related Indenture
Supplement shall be deemed to be payable to the Seller pursuant to this Series
Supplement; and (f) the conditions
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defined in Section 6.12 of the Agreement for issuance of new Series must be
satisfied in connection with each issuance of a Note Series.
SECTION 2. Definitions. If any term or provision contained herein
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shall conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern. All
Article, Section or subsection references herein shall mean Article, Section or
subsections of the Agreement, as amended or supplemented by this Series
Supplement, except as otherwise provided herein. All capitalized terms not
otherwise defined herein are used herein as defined in the Agreement. Each
capitalized term defined herein shall relate only to the Collateral Certificates
and no other Series of Certificates issued by the Trust.
"Base Rate" is defined for each Collateral Series in the related Indenture
Supplement.
"Certificate" means a Collateral Certificate.
"Certificateholder" means the holder of record of any Certificate.
"Certificate Rate" means, for any Collateral Series, the average of the
interest rates applicable to the notes in the related Note Series, weighted by
the outstanding principal amount of the applicable classes of notes.
"Closing Date" means, for any Collateral Series, the "Closing Date" for the
related Note Series, as defined in the related Indenture Supplement.
"Collateral Certificates" is defined in Section 1 of this Series
Supplement.
"Collateral Series" is defined in Section 1 of this Series Supplement.
"Enhancement Provider" if applicable to any Collateral Series will be the
["Enhancement Provider"] defined in the related Indenture Supplement.
"Finance Charge Shortfall" means, for any Collateral Series, the Finance
Charge Shortfall for the related Note Series, as defined in the related
Indenture Supplement.
"Indenture" is defined in Section 1 of this Series Supplement.
"Indenture Supplement" is defined in Section 1 of this Series Supplement.
"Initial Investor Amount" means, for any Collateral Series, the "Initial
Collateral Amount" of the related Note Series, as defined in the related
Indenture Supplement.
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"Investor Amount" means, for any Collateral Series, the "Collateral Amount"
of the related Note Series, as defined in the related Indenture Supplement.
"Minimum Seller Percentage" is defined for each Collateral Series in the
related Indenture Supplement.
"Note Series" is defined in Section 1 of this Series Supplement.
"Note Trust" is defined in Section 1 of this Series Supplement.
"Principal Shortfall" means, for any Collateral Series, the Principal
Shortfall for the related Note Series, as defined in the related Indenture
Supplement.
"Rating Agency" means, for any Collateral Series, the rating agencies for
the related Note Series, as defined in the related Indenture Supplement.
"Series Accounts" means, for any Collateral Series, any bank accounts
established for the benefit of the related Note Series, as defined in the
related Indenture Supplement.
"Series Servicing Fee Percentage" is defined for each Collateral Series in
the related Indenture Supplement.
"Series Termination Date" means, for any Collateral Series, the final
maturity date for the related Note Series defined in the related Indenture
Supplement.
SECTION 3. Reassignment and Transfer Terms.
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(a) If the Servicer purchases, redeems or prepays any Note Series
pursuant to a clean-up call under the related Indenture Supplement, then the
related Collateral Series shall be deemed to have been retired.
(b) Once each Series of Certificates issued under the Agreement has
been retired, other than the Collateral Series and any other Series the
requisite holders of which have consented to the following transactions, the
Seller shall have the option to transfer the Exchangeable Seller Certificate to
the Note Trust, upon which transfer the Trust shall terminate, and all of the
Trust Assets shall be distributed to the Note Trust, as holder of all of the
beneficial interests in the Trust; provided that no such termination may occur
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unless contemporaneously with such termination the parties to the Receivables
Purchase Agreement enter into a new receivables purchase agreement substantially
in the form of Exhibit B.
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SECTION 4. Delivery and Payment for the Collateral Certificates.
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The Trustee shall deliver the Collateral Certificates when authenticated in
accordance with Section 6.2.
SECTION 5. Form of Delivery of Collateral Certificates.
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(a) The Collateral Certificates shall be delivered as Definitive
Certificates.
(b) For purposes of voting with respect to any consent or other matter
under the Agreement or this Series Supplement, each class of notes included in
any Note Series shall be deemed to be a Class of Certificates in the related
Collateral Series, and the provisions for voting by beneficial owners of such
notes specified in the Indenture shall apply mutatis mutandis to voting under
the Agreement and this Series Supplement.
SECTION 6. Article IV of Agreement. (a) Sections 4.1 and 4.2 and
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subsections 4.3(b) through (j) of the Agreement shall read in their entirety as
provided in the Agreement. Subsection 4.3(a) of the Agreement shall read in its
entirety as follows:
(a) Collections. The Servicer shall, subject to subsections 4.2(d),
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4.3(c) and 4.3(f) and, with respect to any Series, the provisions of the related
Supplement, deposit all Collections in the Collection Account as promptly as
possible after the Date of Processing of such Collections, but in no event later
than the second Business Day following such Date of Processing.
(b) The remainder of Article IV of the Agreement shall read in its
entirety as follows and shall be applicable only to the Collateral Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1A Rights of Investor Certificateholders. The Collateral
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Certificates shall represent Undivided Interests in the Trust, consisting of the
right to receive (a) the related Investor Percentage (as defined in the related
Indenture Supplement) of Collections, (b) funds on deposit in the Collection
Account and the Excess Funding Account allocable to the Collateral Certificates
and (c) Shared Principal Collections allocated to the Collateral Certificates in
accordance with subsection 4.3(g). Unless otherwise specified in the related
Indenture Supplement, each Collateral Series shall consist of a single Class and
shall not be senior or subordinated to any other Series. The Exchangeable
Seller Certificate shall represent the ownership interest in the Trust Assets
not allocated to the Collateral Certificates or any other Series outstanding;
provided, however, the ownership interest represented by the Exchangeable Seller
Certificate and any other Series outstanding shall not represent any interest in
the
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Collection Account or any other Series Account, except as specifically provided
in this Article IV.
Section 4.4 Allocations. The Servicer shall, prior to the close of
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business on the day any Collections are deposited in the Collection Account,
allocate from the Collection Account to the Collateral Series related to each
Note Series the amounts specified in the related Indenture Supplement, which
shall be deposited or otherwise applied as provided in such Indenture
Supplement.
SECTION 7. Series Pay Out Events and Events of Default. The
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Series Pay Out Events applicable to each Collateral Series shall be the Series
Pay Out Events specified in the related Indenture Supplement. In addition, each
Note Series will have the benefit of applicable "Events of Default," as defined
in the Indenture. Upon the occurrence of an applicable Event of Default, the
Indenture Trustee shall have the right to foreclose upon a portion of the
Receivables, as defined (and subject to the limitations stated) in the Indenture
notwithstanding the continuing existence of the Trust.
SECTION 9. Successors and Assigns. This Series Supplement shall
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be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SECTION 10. Modification to and Ratification of Agreement. For
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purposes of this Supplement and each Collateral Series:
(a) Section 2.8(a) of the Agreement shall be deemed to read as
follows:
"(a) If, during any period of 30 consecutive days either (i) the
average Aggregate Net Principal Receivables is less than the Minimum
Aggregate Principal Receivables averaged for such period or (ii) the
average Seller Amount is less than the Minimum Seller Amount averaged
for such period, either Seller or the Servicer (whichever shall first
become aware of same) promptly shall give the Owner Trustee written
notice thereof, and as soon as practicable (but in no event later than
10 Business Days thereafter) Seller shall designate additional
Eligible Accounts ("Additional Accounts") to be included as Accounts
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and shall transfer the Receivables in such Additional Accounts to the
Issuer, in a sufficient amount so that (x) the average Aggregate Net
Principal Receivables would at least equal the Minimum Aggregate
Principal Receivables averaged for such 30-day period and (ii) the
average Seller Amount would at least equal the Minimum Seller Amount
averaged for such 30-day period would have, if the Receivables from
such Additional Accounts had been transferred to the Issuer during
such 30-day period. Each of the averages referred to in the preceding
sentence shall be calculated by taking the sum of the specified amount
at the end of each Business
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Day falling in that period and dividing by the number of Business Days
falling in that period."; and
(b) Section 12.2(b) of the Agreement shall be deemed to read as
follows:
"(b) If on the Determination Date in the second month immediately
preceding the month in which the Series Termination Date occurs (after
giving effect to all transfers, withdrawals, deposits and drawings to
occur on the next Transfer Date and the payment of principal on the
notes in the related Note Series to be made on the related
Distribution Date pursuant to the Indenture), the outstanding
principal amount of the notes in the related Note Series would be
greater than zero, the Servicer shall sell, dispose of, or otherwise
liquidate, in a commercially reasonable manner and on commercially
reasonable terms (which shall include the solicitation of competitive
bids from Persons who are not Affiliates of Seller), within 30 days of
such Determination Date, an amount of Receivables equal to (i) 110% of
the Investor Amount with respect to such Series determined as of the
date of such sale, disposition or liquidation provided, however, that
the Servicer shall give Seller at least 10 days advance written notice
of such sale, disposition or other liquidation. Seller shall have the
option, exercisable at any time after the Servicer has obtained an
offer from any Person that is not an Affiliate of Seller and prior to
the consummation of such sale, disposition or liquidation by giving
notice of the exercise thereof to the Servicer, to purchase such
Receivables for cash (payable im immediately payable funds on the
Series Termination Date) for the lesser of (i) 100% of the amount of
such Receivables, or (ii) the highest price offered therefor pursuant
to such proposed sale, disposition or other liquidation. The proceeds
received upon the sale, disposition or other liquidation of such
Receivables in an amount up to (i) the outstanding principal amount of
the notes in the related Note Series on the Series Termination Date,
plus (ii) unpaid interest thereon as of the Series Termination Date
with respect to such Series, less (iii) amounts on deposit on such
date in the Series Accounts with respect to such Series, shall be
distributed to the Holder of the Collateral Certificate for the
benefit of such Series on the related Series Termination Date.
Notwithstanding Sections 12.2(c) and 12..3, such funds shall be
distributed in accordance with the terms of the related Indenture
Supplement, and the Holder of the Collateral Certificate will not be
required to present the Collateral Certificate in order to receive
final payment with respect to any Collateral Series, whether pursuant
to this Section 12.2 or otherwise. Proceeds received in excess of the
amount to be deposited as aforesaid shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance
with the provisions of Article IV; provided that the Servicer shall
determine conclusively the amount of such proceeds which are allocable
to Finance Charge Receivables and the amount of such proceeds which
are allocable to Principal Receivables.".
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In addition, to the extent that the terms of this Series Supplement
(directly or as supplemented by any Indenture Supplement) are deemed to be
inconsistent with the terms of the Agreement, this Series Supplement shall be
deemed to modify or amend the terms of the Agreement solely as applied to each
Collateral Series affected by any such inconsistency, as permitted by Section
6.12(c) of the Agreement. Otherwise, as supplemented by this Series Supplement
(and the various Indenture Supplements executed form time to time), the
Agreement is in all respects ratified and confirmed and the Agreement as so
amended and supplemented by this Series Supplement shall be read, taken and
construed as one and the same instrument.
SECTION 11. Counterparts. This Series Supplement may be executed
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in any number of counterparts, each of which so executed shall be deemed to be
an original, but all of such counterparts shall together constitute but one and
the same instrument.
SECTION 12. Governing Law. This Series Supplement shall be
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construed in accordance with the laws of the State of Illinois, 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.
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IN WITNESS WHEREOF, the parties have caused this Series 1995-A
Supplement to be duly executed by their respective officers as of the day and
year first above written.
SPIEGEL CREDIT CORPORATION III
By:___________________________________
Title:________________________________
FIRST CONSUMERS NATIONAL BANK
By:___________________________________
Title:________________________________
BNY MIDWEST TRUST COMPANY
By:___________________________________
Title:________________________________
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EXHIBIT A
to
COLLATERAL SERIES SUPPLEMENT
FORM OF COLLATERAL CERTIFICATE
No.____________ $__________________
SPIEGEL MASTER TRUST
COLLATERAL CERTIFICATE
Evidencing an undivided interest in a trust originated by Spiegel Credit
Corporation III ("SCC"), the corpus of which consists of a portfolio of
receivables created under charge accounts originated by First Consumers National
Bank ("FCNB") or Spiegel, Inc. ("Spiegel") and other assets and interests
constituting the trust under the Pooling and Servicing Agreement described
below.
(Not an interest in or obligation of
FCNB, SCC or Spiegel)
This certifies that SPIEGEL CREDIT CARD MASTER NOTE TRUST (the
"Certificateholder") is the registered owner of an undivided interest in a trust
(the "Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under selected charge accounts
originated by FCNB or Spiegel and acquired by SCC from FCNB and Spiegel
Acceptance Corporation ("SAC") pursuant to a Receivables Purchase Agreement,
dated as of September 20, 1994, among SCC, FCNB and SAC, as amended, and
transferred by SCC to the Trust, all monies due or to become due with respect
thereto and the other assets and interests constituting the Trust pursuant to an
Amended and Restated Pooling and Servicing Agreement, dated as of December 13,
1994, as amended by the Series 1995-A Supplement thereto and the Transfer
Agreement No. 1 of Receivables in Additional Accounts, dated March 16, 1995 and
as supplemented by the Collateral Series Supplement thereto dated __________,
2000 (collectively, the "Pooling and Servicing Agreement"), among SCC, FCNB and
BNY Midwest Trust Company (as successor to ▇▇▇▇▇▇ Trust and Savings Bank), as
trustee.
THIS COLLATERAL CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN
INTEREST IN, FCNB, SCC OR SPIEGEL, AND NONE OF THIS CERTIFICATE, THE RECEIVABLES
AND THE ACCOUNTS IS INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL
AGENCY. THIS COLLATERAL CERTIFICATE IS LIMITED IN RIGHT OF PAYMENT TO CERTAIN
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COLLECTIONS RESPECTING THE RECEIVABLES, ALL AS MORE SPECIFICALLY SET FORTH IN
THE POOLING AND SERVICING AGREEMENT.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Pooling and Servicing Agreement. This Collateral
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Certificateholder by
virtue of its acceptance hereof assents and by which the Certificateholder is
bound.
This Certificate is one of a series of Certificates entitled "Spiegel
Master Trust Collateral Certificates" (the "Collateral Certificates"), which
represents an undivided interest in the Trust.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual or facsimile signature of a duly
authorized signatory, this Certificate shall not be entitled to any benefit
under the Pooling and Servicing Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Class A Certificate to
be duly executed under its official seal.
BNY MIDWEST TRUST COMPANY.
as Trustee
By:_____________________________
Vice President
[Seal]
Attested to:
By:_________________________
Assistant Secretary
Date:
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Trustee's Certificate of Authentication
This is one of the Collateral Certificates referred to in the within-
mentioned Pooling and Servicing Agreement.
BNY MIDWEST TRUST COMPANY,
as Trustee
By:______________________________
Authorized Officer
Exhibit B to Collateral Series Supplement
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RECEIVABLES PURCHASE AGREEMENT
among
SPIEGEL CREDIT CORPORATION III,
Buyer,
and
FIRST CONSUMERS NATIONAL BANK
and
SPIEGEL ACCEPTANCE CORPORATION,
Sellers,
Dated as of [___________], 2000
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS....................................................... 1
Section 1.1. Definitions....................................................... 1
Section 1.2. Other Definitional Provisions..................................... 1
ARTICLE II PURCHASE AND CONVEYANCE OF RECEIVABLES............................ 2
Section 2.1. Purchase.......................................................... 2
Section 2.2. Addition of Additional Accounts................................... 3
Section 2.3. Sellers of Receivables............................................ 4
ARTICLE III CONSIDERATION AND PAYMENT......................................... 5
Section 3.1. Purchase Price.................................................... 5
Section 3.2. Payment of Purchase Price......................................... 5
Section 3.3. Adjustments to Purchase Price..................................... 5
Section 3.4. Settlement........................................................ 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................... 6
Section 4.1. Seller's Representations and Warranties........................... 6
Section 4.2. Sellers' Representations and Warranties Regarding
Additional Accounts.............................................. 9
Section 4.3. Representations and Warranties of Buyer........................... 11
Section 4.4. Other Matters..................................................... 12
ARTICLE V COVENANTS OF SELLERS AND BUYER.................................... 12
Section 5.1. Seller Covenants.................................................. 12
Section 5.2. Buyer Covenants Regarding Nondisclosure; Inspection............... 16
ARTICLE VI REPURCHASE OBLIGATION............................................. 16
Section 6.1. Mandatory Repurchase.............................................. 16
Section 6.2. Optional Repurchases.............................................. 17
Section 6.3. Conveyance of Repurchased Receivables............................. 18
Section 6.4. Sole Remedy....................................................... 18
Section 6.5. Selection of Removed Accounts..................................... 19
Section 6.6. Assignment of Repurchase Rights and Obligations................... 19
i
ARTICLE VII CONDITIONS PRECEDENT.............................................. 19
Section 7.1. Conditions to Buyer's Obligations Regarding Initial Receivables... 19
Section 7.2. Conditions to Buyer's Obligations Regarding Supplemental
Conveyances...................................................... 20
Section 7.3. Conditions Precedent to Sellers' Obligations...................... 21
ARTICLE VIII TERM & TERMINATION................................................ 22
Section 8.1. Term.............................................................. 22
Section 8.2. Effect of Termination............................................. 22
ARTICLE IX MISCELLANEOUS PROVISIONS.......................................... 23
Section 9.1. Amendment......................................................... 23
Section 9.2. Governing Law..................................................... 23
Section 9.3. Notices........................................................... 23
Section 9.4. Severability of Provisions........................................ 23
Section 9.5. Assignment........................................................ 24
Section 9.6. Acknowledgment and Agreement of Sellers........................... 24
Section 9.7. Further Assurances................................................ 24
Section 9.8. No Waiver; Cumulative Remedies.................................... 24
Section 9.9. Counterparts...................................................... 24
Section 9.10. Binding Effect; Third-Party Beneficiaries......................... 24
Section 9.11. Merger and Integration............................................ 24
Section 9.12. Headings.......................................................... 25
Section 9.13. Schedules and Exhibits............................................ 25
Section 9.14. Estimation and Calculation of Finance Charge Receivables.......... 25
Section 9.15. FCNB Records...................................................... 25
ii
RECEIVABLES PURCHASE AGREEMENT, dated as of [________], 2000, (this
"Agreement") among FIRST CONSUMERS NATIONAL BANK, a national banking association
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("FCNB"), SPIEGEL ACCEPTANCE CORPORATION, a Delaware corporation ("SAC"; FCNB
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and SAC are collectively referred to herein as the "Sellers"), and SPIEGEL
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CREDIT CORPORATION III, a Delaware corporation ("Buyer").
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W I T N E S S E T H:
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WHEREAS, Buyer desires to purchase from time to time certain Receivables
arising under certain specified preferred charge accounts of FCNB; and
WHEREAS, Sellers desire to sell from time to time and assign such
Receivables to Buyer upon the terms and conditions hereinafter set forth; and
WHEREAS, it is contemplated that the Receivables purchased hereunder will
be transferred by Buyer to the Issuer in connection with the issuance of certain
Notes; and
WHEREAS, Buyer will grant to the Trustee a security interest in Buyer's
rights relating to the Receivables under this Agreement, and Sellers agree that
the covenants and agreements made by Sellers herein shall also be for the
benefit of the Owner Trustee, the Indenture Trustee and all holders of the
Notes;
NOW, THEREFORE, it is hereby agreed among the parties hereto as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Capitalized terms used herein not otherwise
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defined herein are defined in Annex A to the Master Indenture, dated as of the
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date hereof, between Spiegel Credit Card Master Note Trust and BNY Midwest Trust
Company (the "Indenture").
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Section 1.2. Other Definitional Provisions. All terms defined directly or
-----------------------------
by reference in this Agreement shall have the defined meanings when used in any
certificate or other document delivered pursuant hereto unless otherwise defined
therein. For purposes of this Agreement and all such certificates and other
documents, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC as in effect in the State of Illinois 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
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.1. Purchase. (a) Subject to and upon the terms and conditions
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hereinafter set forth, each Seller (i) hereby sells, transfers, conveys, and
assigns to Buyer, without recourse, all of such Seller's right, title, and
interest in, to, and under the Receivables existing at the opening of business
on the SMT Termination Date (excluding Receivables in respect of Defaulted
Accounts), and thereafter created in respect of each Account listed on Schedule
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1 identified by account number and by Receivable balance as of the SMT
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Termination Date (the "Accounts"), together with all monies due or to become due
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with respect thereto (including all Finance Charge Receivables), all
Collections, Recoveries and other proceeds thereof and Insurance Proceeds
relating thereto, and (ii) subject to the provisions of Section 2.2, on each
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Addition Date each Seller shall sell, transfer, convey and assign to Buyer,
without recourse, all of such Seller's rights, titles, and interests in, to, and
under the Receivables then existing or thereafter created in respect of each
Additional Account designated in a Supplemental Conveyance effective on the
Addition Date therefor, together with all monies due or to become due with
respect thereto (including all Finance Charge Receivables), all Collections,
Recoveries and other proceeds thereof and Insurance Proceeds relating thereto.
(b) In connection with such sale and conveyance, each Seller shall, at its
own expense, on or prior to the SMT Termination Date (i) indicate or cause to be
indicated in its computer files relating to the Receivables that Receivables
created in connection with the Accounts have been sold to Buyer in accordance
with this
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Agreement and transferred to the Issuer pursuant to the Servicing Agreement for
the benefit of the Noteholders and (ii) deliver or cause to be delivered to
Buyer (or to the Trustee, if Buyer so directs) a computer file or microfiche
list containing a true and complete list of all such Accounts, identified by
account number and by the Receivables balance as of the SMT Termination Date.
(c) In connection with such sale and conveyance, each Seller agrees (i) to
record and file, at its own expense, any financing statement for the purchase of
accounts (as defined in Section 9-106 of the UCC as in effect in any state where
such Seller's chief executive offices or books and records relating to the
Receivables are located) with respect to the Receivables now existing and
hereafter created in respect of each Account (including Receivables in
Additional Accounts), meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the sale of the
Receivables from such Seller to Buyer, and (ii) to deliver a file-stamped copy
of such financing statements or other evidence of such filings (which may, for
purposes of this Section 2.1, consist of telephone confirmations of such
-----------
filings) to Buyer (or to the Trustee, if Buyer so directs) on or prior to the
SMT Termination Date.
(d) On the SMT Termination Date, Sellers shall deposit in the Collection
Account an amount equal to the amount that Buyer is required to deposit therein
pursuant to Section 8.4 of the Indenture.
-----------
Section 2.2. Addition of Additional Accounts. (a) If from time to time,
-------------------------------
Buyer becomes obligated to designate Additional Accounts pursuant to Section
-------
2.6(a) of the Servicing Agreement (or any other provision thereof calling for
------
compliance with the procedures set forth in such Section 2.6(a)), then Buyer
--------------
shall give Sellers written notice thereof on or before the Notice Date prior to
the Addition Date therefor and Sellers shall on or before the Addition Date
designate sufficient Eligible Accounts to be included as Additional Accounts so
that after the inclusion thereof Buyer will be in compliance with the
requirements of said Section 2.6(a). Additionally, subject to the limitations,
--------------
if any, on Buyer's ability to add Additional Accounts under Section 2.6(b) of
--------------
the Servicing Agreement, from time to time Eligible Accounts may be designated
to be included as Additional Accounts, upon the mutual agreement of Buyer and
Sellers. In either event, Sellers shall have responsibility for selecting the
Additional Accounts and shall on or prior to the Addition Date therefore execute
and deliver a Supplemental Conveyance identifying the Additional Accounts by
account number and Receivables balance and Principal Receivables balance as of
the Addition Date, which Supplemental Conveyance shall be effective upon receipt
by Buyer.
(b) On or before each Addition Date with respect to Additional Accounts
added pursuant to Section 2.2(a), FCNB (i) shall indicate or cause to be
--------------
indicated in its books and records and in the computer files of the Receivables
that the
-3-
Receivables created in connection with such Additional Accounts have been sold
to Buyer in accordance with this Agreement and transferred by Buyer to the
Issuer pursuant to the Servicing Agreement, and (ii) shall deliver or cause to
be delivered to Buyer a computer file or microfiche list containing a true and
complete list of all Additional Accounts designated in the respective
Supplemental Conveyance or, if Buyer shall so direct, such computer file or
microfiche list shall be delivered to the Trustee pursuant to the Servicing
Agreement. FCNB's failure to deliver or cause to be delivered the list prior to
termination shall not be deemed to render such transfer executory or
uncompleted.
(c) At any time that Receivables in an Eligible Account are required to be
transferred to the Issuer pursuant to Section 2.6(e) of the Servicing Agreement,
--------------
such Eligible Account shall, until notice from FCNB or Buyer to the other
parties hereto to the contrary, automatically be designated to be included as an
Account effective as of the date specified in Section 2.6(e) of the Servicing
--------------
Agreement. FCNB shall on or before five Business Days after the first day of
each calendar month next succeeding the Monthly Period of such conveyance
execute a Supplemental Conveyance solely for the purposes of confirming the
transfer and assignment of such included Accounts under this Section 2.2(c) and
--------------
identifying all such included Accounts so designated during the preceding
Monthly Period, by account number and the aggregate amount of the Receivables
and the aggregate amount of Principal Receivables in such included Accounts as
of such fifth Business Day.
(d) On or before five Business Days after the first day of the Monthly
Period next succeeding the calendar month in which Accounts were included
pursuant to Section 2.2(c), FCNB (i) shall indicate or cause to be indicated in
--------------
its books and records and in the computer files of the Receivables that the
Receivables created in connection with such included Accounts have been sold to
Buyer in accordance with this Agreement and transferred by Buyer to the Issuer
pursuant to the Servicing Agreement and (ii) shall deliver or cause to be
delivered to Buyer a computer file or microfiche list containing a true and
complete list of all such included Accounts identified in the respective
Supplemental Conveyance, or, if Buyer shall so direct, such computer file or
microfiche list shall be delivered to the Trustee pursuant to the Servicing
Agreement.
Section 2.3. Sellers of Receivables. The parties acknowledge and agree
----------------------
that Eligible Receivables arising under Additional Accounts prior to the
applicable Addition Date may on each Addition Date be transferred to Buyer
hereunder by either Seller, as the Sellers may agree between themselves without
the necessity of any consent or approval of any other Person, but that in any
event Eligible Receivables arising under Additional Accounts on or after the
applicable Addition Date and which are to be transferred to Buyer hereunder
shall be so transferred by FCNB.
-4-
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1. Purchase Price. Except as provided in Section 3.2, the
-------------- -----------
Purchase Price for all Receivables (including Receivables in Additional
Accounts) conveyed to the Buyer under this Agreement shall be a dollar amount
equal to the total recorded unpaid balance of such Receivables (including
Principal Receivables and Finance Charge Receivables) on the date conveyed to
Buyer hereunder.
Section 3.2. Payment of Purchase Price. The Purchase Price for
-------------------------
Receivables shall be paid or provided for on the SMT Termination Date, each
Addition Date and each Settlement Date, as the case may be, in either of the
following ways (or any combination thereof) as Buyer and the appropriate Seller
may mutually agree from time to time: (i) by payment in cash in immediately
available funds; or (ii) by the sale, transfer, and assignment from Buyer to the
appropriate Seller of an undivided participation in the Seller Interest,
entitling such seller to receive a portion of all payments made to the holder of
the Seller Interest in the proportion that the principal amount of the purchased
Receivables not paid for in cash as provided in clause (i) above bears to the
Principal Receivables evidenced by the Seller Interest. In the absence of any
agreement to the contrary, any portion of the Purchase Price not paid in cash on
the SMT Termination Date, any Addition Date (other than Addition Dates arising
under Section 2.2), or Settlement Date shall automatically be deemed the
-----------
purchase of a participation in the Seller Interest in accordance with the terms
of this Section 3.2 in an amount equal to the unpaid portion of the Purchase
-----------
Price payable on such date, which participation interest shall be evidenced by
the Settlement Statement as provided in Section 3.4.
-----------
Section 3.3. Adjustments to Purchase Price. The Purchase Price payable to
-----------------------------
each Seller shall be adjusted on a monthly basis (a "Credit Adjustment") with
-----------------
respect to any Receivable purchased from such Seller (i) which was created in
respect of merchandise refused or returned by the Obligor thereunder, (ii) which
is reduced by the Servicer by any rebate, refund, chargeback, or adjustment,
(iii) as to which the Obligor thereunder has asserted a counterclaim or defense
and either (x) the Servicer has agreed such counterclaim or defense is valid or
(y) a final, nonappealable judgment or decree has been entered in favor of such
Obligor in respect of such counterclaim or defense by a court or arbitral body
having jurisdiction thereof, or (iv) which the Servicer has determined was
created as a result of a fraudulent or counterfeit charge, but only if and to
the extent such fraudulent or counterfeit charges are not included as charge-
offs under the Charge Account Guidelines.
-5-
Section 3.4. Settlement. On each Determination Date under the Servicing
----------
Agreement (herein, a "Settlement Date"), FCNB shall deliver or cause to be
---------------
delivered to Buyer a Settlement Statement in substantially the form of Exhibit
-------
C, showing the aggregate amount of Receivables conveyed by each Seller from the
-
previous Settlement Date (or from the SMT Termination Date in the case of the
first Settlement Date) to such date, the amount of all payments of the Purchase
Price received by each Seller prior to such Settlement Date in respect of such
Receivables, any Credit Adjustments to be made pursuant to Section 3.4, and the
-----------
settlements of the remaining Purchase Price for such Receivables to be made as
of such Settlement Date between Buyer and each Seller in accordance with Section
-------
3.3. The balance due, if any, from Buyer to a Seller as reflected in immediately
---
available funds, or, unless otherwise agreed, shall automatically be deemed an
assignment of an interest in the Seller Interest in accordance with Section 3.3
-----------
in an amount equal to the unpaid portion of the Purchase Price then due and
payable, which participation shall be evidenced by the Settlement Statement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Seller's Representations and Warranties. Each Seller, but
---------------------------------------
only as to itself and as to those Receivables, if any, transferred by it
hereunder, hereby severally (and not jointly) represents and warrants to, and
agrees with, Buyer as of the SMT Termination Date that:
(a) Organization, Good Standing, and Qualification. SAC is a corporation
----------------------------------------------
duly organized and validly existing in good standing under the laws of the State
of Delaware, and has full corporate power, authority, and right to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted, and to execute, deliver and perform
its obligations under this Agreement. FCNB is a national banking association
duly organized and validly existing and in good standing under the laws of the
United States of America, and has full corporate power, authority, and right to
own its properties and to conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under this Agreement. Such Seller is duly qualified to
do business and is in good standing in each State of the United States where the
nature of its business requires it to be so qualified.
(b) Due Authorization. The execution and delivery of this Agreement, any
-----------------
Supplemental Conveyance, the Servicing Agreement, or any other document or
instrument delivered pursuant hereto or thereto (the "Conveyance Papers"), to
-----------------
the extent that such Seller is party thereto, and the consummation of the
transactions provided for in this Agreement or any such other Conveyance Paper,
have been duly authorized by all necessary corporate action on the part of such
Seller.
-6-
(c) No Conflict. The execution and delivery of the Conveyance Papers, the
-----------
performance of the transactions contemplated by the Conveyance Papers, and the
fulfillment of the terms of the Conveyance Papers 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 such Seller is a party or by which it or any of its properties are bound.
(d) No Violation. The execution and delivery of the Conveyance Papers, the
------------
performance of the transactions contemplated by the Conveyance Papers, and the
fulfillment of the terms of the Conveyance Papers will not conflict with or
violate any material Requirements of Law applicable to such Seller.
(e) No Proceedings. There are no proceedings or investigations pending or,
--------------
to the best knowledge of such Seller, threatened against such Seller, before any
Governmental Authority (i) asserting the invalidity of the Conveyance Papers,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by the Conveyance Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of such Seller, would materially and adversely affect the
performance by such Seller of its obligations under the Conveyance Papers, or
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of the Conveyance Papers.
(f) All Consents Required. All approvals, licenses, authorizations,
---------------------
consents, orders, or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery of the
Conveyance Papers by such Seller, the performance by such Seller of the
transactions contemplated by the Conveyance Papers, and the fulfillment by such
Seller of the terms of the Conveyance Papers, have been obtained.
(g) Identification of Accounts and Receivables. As of the SMT Termination
------------------------------------------
Date, FCNB or SAC, as appropriate, has (i) indicated or caused to be indicated
in its books and records and in the computer files of the Receivables that
Receivables created in respect of the Accounts have been sold to Buyer in
accordance with this Agreement and transferred to the Issuer pursuant to the
Servicing Agreement for the benefit of Noteholders and (ii) has delivered or
caused to be delivered to Buyer (or to the Trustee, if so directed by Buyer) a
computer file or microfiche list containing a true and complete list of all such
Accounts, identified by account number and by the Receivable balance as of the
SMT Termination Date.
(h) Existing Financing Statements. There is no financing statement or
-----------------------------
similar statement or instrument of registration naming such Seller as "debtor",
"transferor" or similar party (other than those, if any, which have been
released or
-7-
terminated or the scope of which has otherwise been effectively limited) under
the law of any jurisdiction now on file or registered in any public office
covering any interest of any kind in the Accounts or Receivables, or intended so
to be, and such Seller will not execute or authorize there to be on file in any
public office any financing statement or similar statement or instrument of
registration under the laws of any jurisdiction relating to the Accounts or
Receivables, except (i) any financing statements or assignments to be filed in
respect of and covering any security or other interest of Buyer or the Trustee
pursuant to this Agreement or the Servicing Agreement, and (ii) any financing
statements filed against FCNB with respect to its regular transfers of
receivables to SAC.
(i) Filings. All filings and recordings required to perfect the title of
-------
Buyer to the Receivables purchased hereunder have been or will have been
accomplished prior to the SMT Termination Date and each Addition Date and are in
full force and effect, and such Seller shall at its expense perform all acts and
execute all documents reasonably requested by Buyer at any time to evidence,
perfect, maintain, and enforce the title of Buyer in such Receivables and the
transfer thereof to the Issuer. Such Seller will, at the reasonable request of
Borrower, execute and file additional financing statements reasonably
satisfactory in form and substance to Buyer. All filings and recordings required
to perfect the title of SAC the Receivables to be transferred by it to Buyer
pursuant to Sections 2.3(a)(i) and 2.3(b) have been accomplished and are in full
------------------ ------
force and effect.
(j) Binding Obligations. The Conveyance Papers to which such Seller is
-------------------
party constitute legal, valid and binding obligations of such Seller,
enforceable against such Seller in accordance with their terms, except as such
enforceability may be limited by Debtor Relief Laws and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(k) Valid Conveyance. As of the SMT Termination Date, the Conveyance Papers
----------------
then in existence constitute a valid sale, assignment, and conveyance to Buyer
of all right, title and interest of such seller in, to, and under the
Receivables then existing and thereafter created in the Accounts (other than
Receivables in the Additional Accounts), all monies due or to become due with
respect thereto (including all Finance Charge Receivables), together with all
Collections, Recoveries and other proceeds of such Receivables and Insurance
Proceeds relating thereto, and such property will be owned free and clear of any
Lien of any Person claiming through or under such Seller and its Affiliates,
except for Liens permitted under Section 5.1(d).
--------------
(l) Eligibility of Receivables. Such Seller hereby represents and warrants
--------------------------
to Buyer as of the SMT Termination Date that (i) as of the SMT Termination Date,
Schedule 1 to this Agreement and the computer file or microfiche list delivered
----------
pursuant to Section 2.1(b) is an accurate and complete listing in all material
--------------
respects
-8-
of all the Accounts as of the SMT Termination Date and the information contained
therein with respect to the identity of such Accounts and the Receivables
existing thereunder is true and correct in all material respects as of the SMT
Termination Date, (ii) each Receivable then existing is an Eligible Receivable,
(iii) each Receivable then existing has been conveyed to Buyer free and clear of
any Lien of any Person and in compliance, in all material respects, with all
Requirements of Law applicable to such Seller and (iv) with respect to each
Receivable then existing, all consents, licenses, approvals, or authorizations
of or registrations or declarations with any Governmental Approval required to
be obtained, effected or given by such Seller in connection with the transfer of
such Receivable to Buyer have been duly obtained, effected, or given and are in
full force and effect. On each day on which any new Receivable is conveyed by
such Seller to Buyer hereunder, such Seller shall be deemed to represent and
warrant to Buyer that (i) each Receivable conveyed on such day is an Eligible
Receivable, (ii) each Receivable conveyed on such day has been conveyed to Buyer
free and clear of any Lien of any Person and in compliance, in all material
respects, with all Requirements of Law applicable to such Seller, (iii) with
respect to each such Receivable, all consents, licenses, approvals or
authorizations of or registrations or declarations with, any Governmental
Authority required to be obtained, effected, or given by such Seller in
connection with the conveyance of such Receivable to the Issuer have been duly
obtained, effected or given and are in full force and effect, and (iv) the
representations and warranties set forth in Sections 4.1(j) and (k) are true and
---------------- ---
correct with respect to each Receivable transferred on such day as if made on
such day.
(m) Eligible Accounts. As of the SMT Termination Date, each Account (other
-----------------
than Additional Accounts) is an Eligible Account.
(n) Selection Procedures. The Accounts were assigned randomly to Cycles by
--------------------
FCNB. No selection procedures believed by such Seller to be materially adverse
to the interests of Buyer or its successors and assigns were utilized by such
Seller in selecting the Accounts.
Section 4.2. Sellers' Representations and Warranties Regarding Additional
------------------------------------------------------------
Accounts. Each Seller, but only as to itself and as to those Receivables, if
--------
any, transferred by it hereunder, hereby severally (and not jointly) represents
and warrants, and agrees with Buyer, as of each Addition Date, that:
(a) Reconfirmation of Representations and Warranties. All representations
------------------------------------------------
and warranties made by such Seller pursuant to Section 4.1 remain true and
-----------
correct in all respects as of such Addition Date as if made on such date.
(b) Identification of Accounts and Receivables. FCNB has, as of the
------------------------------------------
Addition Date with respect to Additional Accounts added pursuant Section 2.2(a),
--------------
and will have, as of the fifth Business Day after the first day of the calendar
month
-9-
occurring after any Addition Date occurring under Section 2.2(c), (i) indicated
--------------
or caused to be indicated in its books and records and in the computer files of
the Receivables that Receivables created in respect of the Additional Accounts
have been sold to Buyer in accordance with this Agreement and transferred to the
Issuer pursuant to the Servicing Agreement for the benefit of the Noteholders
and (ii) delivered or caused to be delivered to Buyer (or to the Trustee, if so
directed by Buyer) a computer file or microfiche list containing a true and
correct list of all such Additional Accounts, identified by account number and
by the Receivable balance as of the Addition Date for Additional Accounts added
pursuant to Section 2.2(a) and as of such fifth Business Day of a calendar month
--------------
with respect to Additional Accounts added pursuant to Section 2.2(b) and any
--------------
such computer file or microfiche list is or will be an accurate and complete
listing in all material respects of all the Additional Accounts as of the
Addition Date or as of such fifth Business Day and the information contained
therein with respect to the identity of such Additional Accounts and the
Receivables existing thereunder is true and correct in all material respects as
of such date.
(c) Eligibility of Accounts. Each Additional Account is, as of the Addition
-----------------------
Date, an Eligible Account.
(d) Selection Procedures. The Additional Accounts were assigned randomly to
--------------------
Cycles by FCNB. No selection procedures believed by such Seller to be materially
adverse to the interests of Buyer or its successors and assigns were utilized by
such Seller in selecting the Additional Accounts from available Eligible
Accounts.
(e) Insolvency. Such Seller is not insolvent as of the Addition Date.
----------
(f) Bankruptcy Proceeding. Such Seller has not filed a voluntary proceeding
---------------------
under the Debtor Relief Laws and has no knowledge of the filing of any
involuntary proceeding against it under such laws.
(g) Valid Conveyance. As of each Addition Date, a valid sale, assignment
----------------
and conveyance to Buyer of all right, title, and interest of such Seller in, to,
and under the Receivables then existing and thereafter created in respect of the
Additional Accounts, all monies due or to become due with respect thereto
(including all Finance Charge Receivables), together with all proceeds of such
Receivables and Insurance Proceeds relating thereto, has been consummated and
such property will be held free and clear of any Lien of any Person claiming
through or under such Seller and its Affiliates, except for Liens permitted
under Section 5.1(d).
--------------
-10-
Section 4.3. Representations and Warranties of Buyer. As of the SMT
---------------------------------------
Termination Date, and each Addition Date, Buyer hereby represents and warrants
to, and agrees with, the Sellers that:
(a) Organization and Good Standing. Buyer is a corporation duly organized
------------------------------
and validly existing in good standing under the laws of the State of Delaware
and has full corporate power, authority, and right to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted, and to execute, deliver, and perform its obligations under
the Conveyance Papers.
(b) Due Qualification. Buyer is neither required to qualify, nor to
-----------------
register, as a foreign corporation in any state in order to conduct its
business, and has obtained all necessary licenses and approvals with respect to
Buyer required under federal and Delaware law.
(c) Due Authorization. The execution and delivery of the Conveyance Papers
-----------------
and the consummation of the transactions provided for in the Conveyance Papers
have been duly authorized by Buyer by all necessary corporate action on the part
of Buyer.
(d) No Conflict. The execution and delivery of the Conveyance Papers, the
-----------
performance of the transactions contemplated by the Conveyance Papers and the
fulfillment of the terms of the Conveyance Papers 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 Buyer is a party or by which it or any of its properties are bound.
(e) No Violation. The execution and delivery of the Conveyance Papers, the
------------
performance of the transactions contemplated by the Conveyance Papers, and the
fulfillment of the terms of the Conveyance Papers will not conflict with or
violate any Requirements of Law applicable to Buyer.
(f) No Proceedings. There are no proceedings or investigations pending or,
--------------
to the best knowledge of Buyer, threatened against Buyer, before any
Governmental Authority (i) asserting the invalidity of the Conveyance Papers,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by the Conveyance Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of Buyer, would materially and adversely affect the Papers,
or (iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of the Conveyance Papers.
-11-
(g) All Consents Required. All approvals, authorizations, licenses,
---------------------
consents, orders, or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery of the
Conveyance Papers, the performance of the transactions contemplated by the
Conveyance Papers, and the fulfillment of the terms of the Conveyance Papers
have been obtained.
Section 4.4. Other Matters.
-------------
(a) The representations and warranties set forth in this Article IV shall
----------
survive the conveyance of the Receivables to Buyer, and termination of the
rights and obligations of the Buyer and Sellers under this Agreement. Upon
discovery by Buyer or a Seller of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the others.
(b) In no event shall Buyer be liable to either Seller on account of breach
of any representation or warranty of Buyer set forth herein.
ARTICLE V
COVENANTS OF SELLERS AND BUYER
Section 5.1. Seller Covenants. Each Seller, but only as to itself and as
----------------
to those Receivables, if any, transferred by it hereunder, hereby severally (and
not jointly) covenants and agrees with Buyer as follows:
(a) Charge Account Agreements and Charge Account Guidelines. FCNB shall
-------------------------------------------------------
comply with and perform its obligations under the Charge Account Guidelines,
except insofar as any failure to so comply or conform would not materially and
adversely affect the rights of the Trustee and Noteholders under the Servicing
Agreement or under the Notes. In that regard, except as aforesaid, and so long
as such changes are made applicable to comparable segments of the charge
accounts originated by FCNB which have characteristics the same as, or
substantially similar to, the Accounts pursuant to which the Receivables were
created, FCNB shall be free to change the terms and provisions of such Charge
Account Agreements or the Charge Account Guidelines in any respect (including
the calculation of the amount, the timing, or charge-offs).
(b) Finance Charges and Other Fees. Except (i) as otherwise required by any
------------------------------
Requirements of Law or (ii) as is consistent with the provisions of the
Servicing Agreement and all Supplements thereto and as is deemed by FCNB to be
advisable for the charge account program based on a good faith assessment by
FCNB of the various factors impacting the use of FCNB charge accounts, FCNB
shall not reduce at any time (x) the Finance Charges assessed in respect of any
Accounts or (y) any other fees charged on any of the Accounts, if as a result of
any such reduction,
-12-
FCNB's reasonable expectation of the Portfolio Yield as of such date would be
less than the highest of the Base Rates for the Notes then outstanding.
(c) Receivables Not to be Evidenced by Promissory Notes. FCNB will take no
---------------------------------------------------
action to cause any Receivable to be evidenced by any instrument.
(d) Security Interests. Except for the conveyances hereunder, (i) such
------------------
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any Receivable, whether now
existing or hereafter created, or any interest therein; (ii) such Seller will
immediately notify Buyer and the Trustee of the existence of any Lien on any
Receivable; and (iii) such Seller shall defend the right, title, and interest of
Buyer and its successors and assigns in, to, and under the Receivables, whether
now existing or hereafter created, against all claims of third parties claiming
through or under such Seller; provided, however, that nothing in this Section
-------- ------- -------
5.1(d) shall prevent or be deemed to prohibit such Seller from suffering to
------
exist upon any of the Accounts or Receivables any Liens for municipal or other
local taxes if such taxes shall not at the time be due and payable or if such
Seller shall concurrently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
with respect thereto.
(e) Chief Executive Office; State of Organization. Each Seller's chief
---------------------------------------------
executive office and state of organization is identified on Schedule 2. Neither
----------
Seller will relocate its chief executive office or state of organization, unless
such Seller shall have given to Buyer not less than 15 days' written notice of
its intention to do so, clearly describing the new location or state of
organization. If as a result of such relocation, the applicable provisions of
the UCC or any other applicable law require the filing of any amendment to any
previously-filed financing or continuation statement or the filing of a new
financing statement, the appropriate Seller shall file such financing statement
or amendment as may be necessary with respect to the transfer of accounts (as
defined in Section 9-106 of the UCC in effect in the State of Illinois).
Additionally, FCNB shall clearly and unambiguously identify or cause to be
identified each Account (including any Additional Account designated pursuant to
Section 2.2) in its computer records relating to the Receivables, to reflect
-----------
that the Receivables arising in such Account have been sold to Buyer and
transferred by Buyer to the Issuer pursuant to the Servicing Agreement. Such
Seller shall, prior to the sale or transfer to a third party of any receivable
owned by such Seller or held in its custody, examine its books and records,
including any computer records, to determine that such receivable is not a
Receivable.
(f) Change of Name or Corporate Structure. Within 30 days after such Seller
-------------------------------------
makes any change in its name, identity, or corporate structure which would make
any financing statement or continuation statement filed in accordance with
Section 2.1 above seriously misleading within the meaning of Section 9-402(7) of
-----------
-13-
the UCC as in effect in the state where such financing statement or continuation
statement was filed, such Seller shall file such financing statements or
amendments as may be necessary with respect to the transfer of Accounts.
(g) Further Assurances. Such Seller will make, execute or endorse,
------------------
acknowledge, and file or deliver to Buyer from time to time such schedules,
confirmatory assignments, conveyances, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Receivables and other rights covered by this
Agreement, as Buyer may request and reasonably require.
(h) Indemnification. Such Seller agrees to indemnify, defend and hold Buyer
---------------
harmless from and against any and all loss, liability, damage, judgment, claim,
deficiency, or expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) to which Buyer may become subject insofar
as such loss, liability, damage, judgment, claim, deficiency, or expense arises
out of or is based upon (i) a breach by such Seller of its warranties and
covenants contained in Section 4.1 (provided, however, with respect to the
----------- -------- -------
representations and warranties contained in Sections 4.1(1) and (m) above the
--------------- ---
indemnification provided for herein shall apply only to a breach involving a
material amount of Accounts or Receivables) or (ii) the representations of such
Seller contained in Section 4.2, or any information certified in any Schedule
-----------
delivered by such Seller hereunder, being untrue in any material respect at any
time. The obligations of the Sellers under this Section 5.1(h) shall be
--------------
considered to have been relied upon by Buyer and shall survive the execution,
delivery, and performance of this Agreement regardless of any investigation made
by Buyer or on its behalf.
(i) Municipal and Local Taxes. FCNB or the Servicer shall be responsible
-------------------------
for collecting all state, local, and municipal taxes associated with the
Accounts and Receivables and for remitting the same to the appropriate
Governmental Authority, together with all tax returns, reports, or affidavits
required by such Governmental Authority in connection therewith.
(j) Conveyance of Accounts. Such Seller shall not convey, assign, exchange,
----------------------
or otherwise transfer the Accounts to any Person prior to termination of this
Agreement, and the Servicing Agreement.
(k) Non-Petition. Each Seller hereby covenants and agrees that prior to the
------------
date which is one year and one day after the Trust Termination Date, it will not
institute against, or join any other person in instituting against, Buyer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any federal or state bankruptcy or similar law; provided, however, that,
-------- -------
while the Notes are outstanding, the agreement of the Sellers set forth in this
sentence will terminate and be of no force and effect if the absence of such
agreement would not
-14-
in and of itself result in the lowering, suspension or withdrawal by Standard
and Poor's, if such rating agency then rates the Notes, or by ▇▇▇▇▇'▇, if such
rating agency then rates the Notes, of their respective ratings of the Notes.
Nothing in this Section 5.1(1) shall preclude, or be deemed to estop, either
--------------
Seller (a) from taking or omitting to take any action prior to such date (i) in
any case or proceeding voluntarily filed or commenced by or on behalf of Buyer
under or pursuant to any such law or (ii) except for joining in the involuntary
petition, in any involuntary case or proceeding pertaining to Buyer which is
filed or commenced by or on behalf of a Person other than a Seller (or any
Person to which a Seller shall have assigned, transferred or otherwise conveyed
any part of its obligations hereunder) under or pursuant to any such law or (b)
from commencing or prosecuting any legal action which is not an involuntary case
or proceeding under or pursuant to any such law against Buyer or any of its
properties.
(l) Merger; Consolidation. FCNB 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 FCNB is
merged or the Person which acquires by conveyance or transfer the
properties and assets of FCNB substantially as an entirety shall be, if
FCNB is not the surviving entity, organized and existing under the laws of
the United States of America or any State or the District of Columbia, and
shall be a national banking association, federal savings association, state
banking corporation or state savings association which is not subject to
the bankruptcy laws of the United States of America and shall expressly
assume, by an agreement supplemental hereto, executed and delivered to the
Buyer, in form satisfactory to the Buyer, the performance of every covenant
and obligation of FCNB, as applicable hereunder, and shall benefit from all
the rights granted to FCNB, as applicable hereunder. To the extent that any
right, covenant or obligation of FCNB, 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; and
(ii) FCNB shall have delivered to the Buyer an Officer's Certificate
and an Opinion of Counsel, each, in form and substance reasonably
acceptable to the Buyer, stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Agreement and that all conditions precedent herein provided for relating to
such transaction have been complied with and, in the case of the Opinion of
Counsel, that such supplemental agreement is legal, valid and binding with
respect to FCNB.
-15-
Section 5.2. Buyer Covenants Regarding Nondisclosure; Inspection. Buyer
---------------------------------------------------
hereby covenants and agrees with the Sellers (and agrees to cause the Trustee)
not to disclose to any Person any of the account numbers or other information
contained in the computer files or microfiche lists delivered to Buyer (or to
Trustee if buyer so directs) pursuant to Sections 2.1 and 2.2, and Section
------------ --- -------
4.2(b), 7.1(c) and 7.2(c), except (i) as is required in connection with the
------ ------ ------
performance of the Trustee's duties under the Servicing Agreement or in
enforcing the rights of the Noteholders and (ii) such disclosures as are
required upon appointment of a successor Servicer under the Servicing Agreement.
Buyer agrees (and shall cause the Trustee) to take such measures as shall be
reasonably requested by either Seller to protect and maintain the security and
confidentiality of such information, and in connection therewith, shall allow
the Sellers to inspect the applicable security and confidentiality arrangements
from time to time in normal business hours. Buyer shall (and shall cause the
Trustee to) give the Sellers five days prior written notice of any disclosure
pursuant to this Section 5.2.
-----------
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1. Mandatory Repurchase.
--------------------
(a) Ineligible Receivables. Except as hereinafter provided, in the event of
----------------------
a breach by a Seller of any representation and warranty of such Seller set forth
in Section 4.1(1), within 60 days (or with the prior written consent of Buyer,
--------------
such longer period specified in such consent) of the earlier to occur of the
discovery of such breach by such Seller, or receipt by such Seller of written
notice of such breach given by Buyer, such Seller shall repurchase and Buyer
shall convey, without recourse, representation, or warranty, all of Buyer's
right, title, and interest in each Principal Receivable to which such breach
relates (an "Ineligible Receivable") on the terms and conditions set forth
---------------------
below; provided, however, that no such repurchase shall be required to be made
-------- -------
with respect to such Ineligible Receivable if, on any day within such 60-day
period (or such longer period as may be specified in the consent), either (i)
the representations and warranties of such Seller in the second sentence of
Section 4.1(1) with respect to such Ineligible Receivable shall then be true and
--------------
correct in all material respects with respect to such Ineligible Receivable as
if such Ineligible Receivable had been conveyed to Buyer on such day, or (ii)
the aggregate amount of Ineligible Receivables outstanding at any time and with
respect to which such representations and warranties continue to be incorrect in
any material respect does not in the sole reasonable judgment of an officer of
Buyer have a material adverse effect on the interest of the Issuer in the
Receivables as a whole, including the ability of the Servicer in its sole
reasonable judgment to collect the Receivables. Notwithstanding anything
contained in this Section 6.1(a) to the contrary, in the event of breach of any
--------------
representation and warranty of a Seller set forth in Section
-------
-16-
4.1(1) with respect to (x) each Receivable existing as of the SMT Termination
------
Date or an Addition Date, as applicable, and (y) each new Receivable acquired by
Buyer hereunder, having been conveyed to Buyer free and clear of any Lien of any
Person claiming through or under such Seller and its Affiliates and in
compliance in all material respects with all Requirements of Law applicable to
such Seller, immediately upon the earlier to occur of the discovery of such
breach by such Seller, or receipt by such Seller of written notice of such
breach given by Buyer, such Seller shall repurchase and Buyer shall convey,
without recourse, representation or warranty, all of Buyer's right, title and
interest in each Ineligible Receivable affected by such breach.
(b) In the event of a breach of the representations and warranties of a
Seller set forth in Sections 4.1(j) and (k), Buyer may give such Seller written
--------------- ---
notice directing such Seller to repurchase all of the Principal Receivables
transferred by such Seller hereunder within 45 days after such notice (or within
such longer period as may be specified in such notice); whereupon, such Seller
shall repurchase and Buyer shall convey to such Seller, without recourse,
representation, or warranty, all of Buyer's right, title and interest in all of
the Principal Receivables transferred by such Seller, on a Settlement Date first
occurring after such applicable period on the terms and conditions set forth
below; provided, however, that no such repurchase by a Seller shall be required
-------- --------
to be made if, at any time during such applicable period the representations and
warranties of such Seller contained in Sections 4.1(j) and (k) shall then be
--------------- ---
true and correct in all material respects.
(c) The Repurchase Price for the Principal Receivables shall be an amount
equal to: (i) for Ineligible Receivables repurchased pursuant to Section 6.1(a),
--------------
the aggregate face amount of each such Ineligible Receivable on the date of
repurchase, and (ii) for Principal Receivables repurchased pursuant to Section
-------
6.3(b), an amount equal to the "deposit amount" paid pursuant to Section 2.4(e)
------ --------------
of the Servicing Agreement. Payment of the Repurchase Price may be made, at the
option of the repurchasing Seller: (i) in immediately available funds; (ii) as a
reduction in such Seller's interest in and to any participation interest in the
Seller Interest in an amount equal to the unpaid portion of the Repurchase
Price; or (iii) any combination of the foregoing; provided, however, that such
-------- -------
Seller must make payment of a sufficient portion of the Repurchase Price in
immediately available funds to enable Buyer to make any cash payment to the
Issuer then required under the Servicing Agreement.
Section 6.2. Optional Repurchases. (a) Buyer shall have the option to
--------------------
require either Seller to repurchase all of Buyer's rights, titles, and interests
in, to, and under all Receivables transferred by such Seller hereunder and
created pursuant to certain Accounts designated by Buyer (the "Removed
-------
Accounts"); provided that, Buyer shall only be entitled to require such
-------- -------- ----
repurchase (i) if Buyer is able to effect a retransfer of such Receivables from
the Issuer in compliance with Section 2.7 or
-----------
-17-
7.2 of the Servicing Agreement, (ii) if Buyer and both Sellers mutually agree as
---
to the designation of the Removed Accounts, and (iii) the repurchasing Seller
shall deliver an Opinion of Counsel reasonably acceptable to Buyer and the
Trustee that such repurchase would not constitute a fraudulent conveyance by
such Seller. On or before the fifth Business Day (the "Repurchase Notice Date")
----------------------
prior to the date on which the Removed Accounts will be designated by Buyer,
Buyer shall give the repurchasing Seller or Sellers (as the case may be) written
notice of its election to require such Seller or Sellers to so repurchase the
Receivables of the Removed Accounts on the date specified in such notice (the
"Repurchase Date"). The Repurchase Price for an optional repurchase effected
---------------
pursuant to this Section 6.2(a) shall be: (i) for Receivables purchased pursuant
--------------
to Section 2.7 of the Servicing Agreement, an amount equal to the total recorded
-----------
unpaid balance of such repurchased Receivables (including Principal Receivables
and Finance Charge Receivables) on the Repurchase Date, and (ii) for Receivables
purchased pursuant to Section 7.2 of the Servicing Agreement, an amount equal to
-----------
the "deposit amount" paid in compliance with Section 4.2 of the Servicing
-----------
Agreement. Upon execution and delivery of any Reconveyance effecting any
repurchase as contemplated in this Section 6.2(a), Buyer shall have no further
--------------
right, title, or interest in any Receivables from the Removed Accounts.
(b) Payment of the Repurchase Price as specified in Section 6.2(a) above
--------------
shall be made in any manner provided for in Section 6.1; provided, however, that
----------- -------- -------
the repurchasing Seller must make payment of a sufficient portion of the
Repurchase Price in immediately available funds to enable Buyer to make any cash
payment to the Issuer then required under the Servicing Agreement.
Section 6.3. Conveyance of Repurchased Receivables. On or prior to the
-------------------------------------
date that a Seller is required to repurchase Receivables under Section 6.1, or
-----------
on the date a Seller is permitted to purchase any Receivables under Section 6.2,
-----------
or on any Repurchase Date, as the case may be, Buyer shall execute and deliver
to the repurchasing Seller a Reconveyance substantially in the form and upon the
terms of Exhibit B, pursuant to which Buyer conveys to such Seller all of
---------
Buyer's right, title, and interest in the Receivables to be repurchased by such
seller and, with respect to repurchases effected pursuant to Section 6.2, within
-----------
three Business Days thereafter, a computer file or microfiche list containing a
true and complete list of all Removed Accounts identified by account number and
the aggregate Receivable balances to be repurchased by such Seller in such
Removed Accounts as of the Repurchase Notice Date. Buyer shall (and shall cause
the Trustee to) execute such other documents or instruments of conveyance or
take such other actions as the repurchasing Seller may reasonably require to
effect any repurchase of Receivables pursuant to this Article VI.
----------
Section 6.4. Sole Remedy. The obligation of a Seller to repurchase
-----------
Ineligible Receivables pursuant to Section 6.1 shall constitute the sole remedy
-----------
-18-
available to Buyer, the Trustee, any Noteholder, any Servicer, any Enhancement
Provider or any other Person respecting any breach of the representations and
warranties set forth in Sections 4.1(j), (k), (l) and (m) with respect to such
--------------- --- --- ---
Receivables.
Section 6.5. Selection of Removed Accounts. By giving the written notice
-----------------------------
on the Repurchase Notice Date as required in Section 6.2 and by acceptance of
-----------
the Reconveyance, a Seller represents and warrants that no selection procedures
believed by such Seller to be materially adverse to the interests of Buyer or
the holders of the Notes were utilized in selecting the Removed Accounts.
Section 6.6. Assignment of Repurchase Rights and Obligations. The Sellers
-----------------------------------------------
may elect (between themselves, and without the necessity of any consent or
approval of any other Person) that any repurchase of Receivables required or
permitted to be effected by a Seller (the "Assignor Seller") under Section 6.1
--------------- -----------
or Section 6.2 may be effected by the other Seller (the "Assignee Seller"), with
----------- ---------------
such election to be made by the Sellers' delivery to Buyer of notice, not more
than two Business Days prior to the date of such repurchase (or such later time
as to which Buyer may consent) of such election, which notice shall identify the
Receivables subject to such election. Upon delivery of such notice all rights
and obligations of the Assigner Seller in respect of such repurchase shall be
automatically assigned to the Assignee Seller, the Assignor Seller shall have no
rights, liabilities or obligations in respect of such repurchase, and such
repurchase shall thereupon be consummated by and in the name of the Assignee
Seller.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to Buyer's Obligations Regarding Initial
---------------------------------------------------
Receivables. The obligations of Buyer to purchase the Receivables in Accounts on
-----------
the SMT Termination Date shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of the Sellers contained in this
Agreement shall be true and correct on the SMT Termination Date with the same
effect as though such representations and warranties had been made on such date;
(b) All information concerning the Accounts provided to Buyer shall be true
and correct as of the SMT Termination Date in all material respects;
(c) FCNB shall have delivered or caused to be delivered to Buyer a computer
file or microfiche list containing a true and complete list of all Accounts
identified by account number and by the Receivables balance as of the SMT
-19-
Termination Date, and the Sellers shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement;
(d) Each Seller shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables (other than Receivables in
Additional Accounts) now existing and hereafter created for the transfer of
accounts (as defined in Section 9-106 of the UCC as in effect in the State of
Illinois) meeting the requirements of applicable state law in such manner and in
such jurisdictions as are necessary to perfect the sale of the Receivables to
Buyer, and shall have delivered a file-stamped copy of such financing statements
or other evidence of such filings (which may, for purposes of this paragraph,
consist of telephone confirmations of such filings) to Buyer;
(e) On or before the SMT Termination Date, the Servicing Agreement shall
have been duly executed and delivered by the parties thereto and the initial
closing under the Servicing Agreement shall take place simultaneously with the
initial closing hereunder; and
(f) All corporate and legal proceedings and all instruments in connection
with the transactions contemplated by this Agreement shall be satisfactory in
form and substance to Buyer, and Buyer shall have received from the Sellers
copies of all documents (including records of corporate proceedings) relevant to
the transactions herein contemplated as Buyer may reasonably have requested.
Section 7.2. Conditions to Buyer's Obligations Regarding Supplemental
--------------------------------------------------------
Conveyances. The obligations of Buyer to purchase any Receivables created under
-----------
any Additional Accounts shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of the Sellers contained in this
Agreement shall be true and correct on the Addition Date with the same effect as
though such representations and warranties had been made on such date;
(b) All information concerning the Additional Accounts provided or to be
provided to Buyer shall be true and correct in all material respects as of the
Addition Date with respect to Additional Accounts added pursuant to Section
-------
2.2(a) and as of the fifth Business Day after the first day of the calendar
------
month occurring after any Addition Date arising under Section 2.2(c);
--------------
(c) On or before each Addition Date with respect to Additional Accounts
added pursuant to Section 2.2(a) and on or before the fifth Business Day after
--------------
the first day of the Monthly Period occurring after any Addition Date arising
under Section 2.2(c): (i) FCNB shall have indicated or caused to be indicated in
--------------
the computer files of the Receivables that Receivables created in respect of the
-20-
Additional Accounts have been sold to Buyer in accordance with this Agreement
and transferred to the Issuer pursuant to the Servicing Agreement for the
benefit of the Noteholders; (ii) FCNB shall have delivered or caused to be
delivered to Buyer (or to the Trustee, if so directed by Buyer) a computer file
or microfiche list containing a true and correct list of all such Additional
Accounts, identified by account number and by the Receivable balance as of the
Addition Date for Additional Accounts added pursuant to Section 2.2(a) or as of
--------------
such fifth Business Day of a Monthly Period with respect to Additional Accounts
added pursuant to Section 2.2(c); and (iii) the Seller shall have substantially
--------------
performed all other obligations required to be performed by the provisions of
this Agreement;
(d) The appropriate Seller or Sellers shall have executed and delivered a
Supplemental Conveyance in conform with the requirement of Section 2.2; and
-----------
(e) Each Seller shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables in such Additional Accounts
now existing and hereafter created in connection with the transfer of accounts
(as defined in Section 9-106 of the UCC as in effect in the State of Illinois)
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale of the Receivables to Buyer,
and shall have delivered a file-stamped copy of such financing statements or
other evidence of such filings (which may, for purposes of this paragraph,
consist of telephone confirmations of such filings) to Buyer.
Section 7.3. Conditions Precedent to Sellers' Obligations. The
--------------------------------------------
obligations of a Seller to sell Receivables on the SMT Termination Date and on
any Addition Date shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of Buyer contained in this Agreement
shall be true and correct with the same effect as though such representations
and warranties had been made on such date;
(b) Payment or provision for payment of the Purchase Price shall have been
made in accordance with the provisions of Sections 3.3 and 3.4.
------------ ---
(c) All corporate and legal proceedings and all instruments in connection
with the transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Sellers, and the Sellers shall have received from
Buyer copies of all documents (including records of corporate proceedings)
relevant to the transactions herein contemplated as the sellers may reasonably
have requested.
-21-
ARTICLE VIII
TERM & TERMINATION
Section 8.1. Term. This Agreement shall commence as of the date of
----
execution and delivery hereof and shall continue in full force and effect until:
(a) the Issuer terminates; or (b) upon the occurrence of any of the following
events: Buyer or either Seller shall (i) become insolvent, (ii) fail to pay its
debts generally as they become due, (iii) voluntarily seek, consent to, or
acquiesce in the benefit or benefits of any Debtor Relief Law, (iv) become a
party to (or be made the subject of) any proceeding provided for by any Debtor
Relief Law, other than as a creditor or claimant, and, in the event such
proceeding is involuntary, (1) within 10 Business Days after Buyer or such
Seller, as applicable, has knowledge of such proceeding or the filing thereof
either (x) the petition instituting same has not been dismissed or (y) an order
has not been entered by the court having jurisdiction which allows continued
transfer to the Issuer or Buyer, as applicable, of Principal Receivables, in the
case of a Seller's involuntary petition with no adverse effect to either Buyer,
the Issuer or the Noteholders, and in the case of Buyer's involuntary petition
with no adverse effect to either the Issuer or the Noteholders, or (2) an order
as contemplated in (1)(y) above having previously been entered, is no longer in
effect other than by reason of the termination of such proceeding; provided,
--------
however, that Buyer shall have no duty to continue to purchase Receivables or
-------
accept designation of Additional Accounts from and after the filing of an
involuntary petition but prior to dismissal; or (v) become unable for any reason
to convey or reconvey Receivables in accordance with the provisions of this
Agreement; provided, however, that the termination of this Agreement pursuant to
-------- -------
this Section 8.1(b) shall not discharge any Person from any obligations incurred
--------------
prior to such termination, including any obligations with respect to Receivables
sold prior to such termination. Notwithstanding anything contained herein to the
contrary, upon any termination of this Agreement, Buyer shall not purchase
Receivables created or accept Additional Accounts designated on or after the
date of such termination.
Section 8.2. Effect of Termination. No termination or rejection or
---------------------
failure to assume the executory obligations of this Agreement upon the
bankruptcy of either Seller or Buyer shall be deemed to impair or affect the
obligations pertaining to any executed sale or executed obligations, including
pre-termination breaches of representations and warranties by either Seller or
Buyer. Without limiting the foregoing, prior to termination, neither the failure
of FCNB to deliver or cause to be delivered computer records of Additional
Accounts or Settlement Statements, nor the failure of Buyer to pay a Settlement
Statement shall render such transfer or obligation executory, nor shall the
continued duties of the parties pursuant to Section 5 or Section 9.1 of this
--------- -----------
Agreement render an executed sale executory.
-22-
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Amendment. This Agreement and the other Conveyance Papers
---------
and the rights and obligations of the parties hereunder may not be changed
orally, but only by an instrument in writing signed by Buyer and the Sellers in
accordance with this Section 9.1. This Agreement and any other Conveyance Papers
-----------
may be amended from time to time by Buyer and the Sellers to correct or
supplement any provisions herein or in any other Conveyance Papers which may be
inconsistent with any other provisions herein or to add any other provisions
with respect to matters or questions arising under this Agreement or any other
Conveyance Papers which shall not be inconsistent with the provisions of this
Agreement or any other Conveyance Papers; provided, however, that such action
-------- -------
shall not (as evidenced by an Opinion of Counsel delivered to the Trustee and
reasonably acceptable to the Rating Agencies) adversely affect in any material
respect the interests of the Trustee for the benefit of the Notes, unless the
Trustee shall consent thereto. Any Supplemental Conveyance or Reconveyance
executed in accordance with the provisions hereof shall not be considered
amendments to this Agreement.
Section 9.2. Governing Law. This Agreement and the other Conveyance
-------------
Papers shall be construed in accordance with the laws of the State of Illinois,
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 9.3. Notices. All demands, notices and communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to (a) in
the case of FCNB, First Consumers National Bank, ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President, (b) in the case of SAC, Spiegel
Acceptance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Attn: President, and (c) in the case of Buyer, Spiegel Credit Corporation
III, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇
▇▇▇▇▇▇, Treasurer; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
Section 9.4. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement or any other
Conveyance Paper shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions, or terms of this Agreement or any
other Conveyance Paper and shall in no way affect the validity or enforceability
of the other provisions of this Agreement or of any other Conveyance Paper.
-23-
Section 9.5. Assignment. Notwithstanding anything to the contrary
----------
contained herein, other than Buyer's assignment of its rights, title, and
interests in, to, and under this Agreement to the Trustee for the benefit of the
Noteholders as contemplated by the Servicing Agreement and Section 9.6, and the
-----------
Sellers' limited assignment rights set forth in Section 6.6, this Agreement and
-----------
all other Conveyance Papers may not be assigned by the parties hereto.
Section 9.6. Acknowledgment and Agreement of Sellers. By execution below,
---------------------------------------
the Sellers expressly acknowledge and agree that all of Buyer's rights, titles
and interest in, to and under this Agreement, including all of Buyer's rights,
titles and interests in and to the Receivables purchased pursuant to this
Agreement, shall be assigned by Buyer to the Trustee for the benefit of the
Noteholders, and the Sellers consent to such assent.
Section 9.7. Further Assurances. Buyer and the Sellers agree to do and
------------------
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party more fully to
effect the purposes of this Agreement and the other Conveyance Papers, including
the execution of any financing statements or continuation statements or
equivalent documents relating to the Receivables for filing under the provisions
of the UCC or other law of any applicable jurisdiction.
Section 9.8. No Waiver; Cumulative Remedies. No failure to exercise and
------------------------------
no delay in exercising, on the part of Buyer and either Seller, any right,
remedy, power or privilege hereunder, shall operate a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 9.9. Counterparts. This Agreement and all other Conveyance Papers
------------
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 9.10. Binding Effect; Third-Party Beneficiaries. This Agreement
-----------------------------------------
and the other Conveyance Papers will inure to the benefit of and be binding upon
the parties hereto, and their respective successors and permitted assigns. The
Trustee shall be considered a third-party beneficiary of this Agreement.
Section 9.11. Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement and all the other Conveyance Papers set forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior
-24-
understandings, written or oral, are superseded by this Agreement and all the
other Conveyance Papers. This Agreement and the other Conveyance Papers may not
be modified, amended, waived or supplemented except as provided herein.
Section 9.12. Headings. The headings herein are for purposes of reference
--------
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 9.13. Schedules and Exhibits. The schedules and exhibits attached
----------------------
hereto and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.
Section 9.14. Estimation and Calculation of Finance Charge Receivables. At
--------------------------------------------------------
all times and for all purposes of this Agreement, the amount of Finance Charge
Receivables outstanding at any point in time shall be determined in the manner
described in Section 1.3 of the Servicing Agreement.
-----------
Section 9.15. FCNB Records. FCNB covenants and agrees that this Agreement
------------
is and shall remain continuously a part of FCNB's records, and that all
supplemental documentation to be delivered by FCNB under this Agreement shall be
and remain continuously a part of FCNB's records.
-25-
IN WITNESS WHEREOF, Buyer and Sellers have caused this Agreement to be duly
executed by their respective officers as of the day and year first written
above.
SPIEGEL CREDIT CORPORATION III
By: ___________________________________
Title:
FIRST CONSUMERS NATIONAL BANK
By: ___________________________________
Title:
SPIEGEL ACCEPTANCE CORPORATION
By: __________________________________
Title:
-26-
SCHEDULE ONE
to
RECEIVABLES PURCHASE AGREEMENT
Accounts
--------
As contained on an appropriately Labeled Computer Record
Delivered Contemporaneously with this Agreement.
Aggregate Receivables as of the SMT Termination Date: $_____________________
Aggregate Principal Balance as of the SMT Termination Date: $__________________
SCHEDULE TWO
to
RECEIVABLES PURCHASE AGREEMENT
SAC's Chief Executive Office:
▇▇▇ ▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FCNB's Chief Executive Office:
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Locations Of Books And Records:
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
to
RECEIVABLES PURCHASE AGREEMENT
FORM OF SUPPLEMENTAL CONVEYANCE
-------------------------------
SUPPLEMENTAL CONVEYANCE No. ___ OF RECEIVABLES IN ADDITIONAL ACCOUNTS (the
"Supplemental Conveyance"), dated as of _____________, 200_, by and among FIRST
-----------------------
CONSUMERS NATIONAL BANK, a national banking association ("FCNB"), SPIEGEL
----
ACCEPTANCE CORPORATION III, a Delaware corporation ("SAC"; FCNB and SAC are
---
collectively referred to herein as the "Sellers"), and SPIEGEL CREDIT
-------
CORPORATION III, a Delaware corporation ("Buyer"), pursuant to the Receivables
-----
Purchase Agreement referred to below.
W I T N E S S E T H :
-------------------
WHEREAS, Buyer and Sellers are parties to the Receivables Purchase
Agreement, dated as of [___________], 2000 ( the "Purchase Agreement");
-------- ---------
WHEREAS, pursuant to Section 2.2 of the Purchase Agreement, (i) under
------- ---
certain conditions, Sellers are required to sell Receivables in Additional
Accounts; or (ii) Sellers may designate and sell Additional Accounts to be
included as Accounts; or (iii) under certain circumstances, an Eligible Account
of any Included Cycle is to be automatically included as an Additional Account;
WHEREAS, Sellers now wish to sell the Receivables in the Additional
Accounts described on Schedule 1, whether now existing or hereafter created, to
-------- -
Buyer; and
WHEREAS, Buyer is willing to accept such sale and conveyance subject to the
terms and conditions hereof;
NOW THEREFORE, Sellers and Buyer hereby agree as follows:
1. Defined Terms. Capitalized terms used in this Supplemental Conveyance
-------------
have their respective meanings set forth in the Purchase Agreement, except that
"Addition Date" means, with respect to the Additional Accounts added pursuant to
-------------
Section 2.2(a) of the Purchase Agreement and designated hereby,________, 200_.
--------------
A-1
"Notice Date" means, with respect to the Additional Accounts added pursuant
-----------
to Section 2.2 of the Purchase Agreement and designated hereby,___________, 200_
-----------
(which shall be a date on or before the fifth Business Day prior to the Addition
Date).
2. Designation of Additional Accounts. On or prior to the Addition Date,
in respect of Additional Accounts added pursuant to Section 2.2 of the Purchase
-----------
Agreement and on or before five Business Days after the first day of the
calendar month next succeeding the calendar month in which Additional Accounts
were added pursuant to Section 2.2(c), FCNB shall have delivered or caused to be
--------------
delivered to Buyer (or to the Trustee, if Buyer so directs) a computer file or
microfiche list containing a true and complete list of all charge accounts which
as of the Addition Date shall be deemed to be Additional Accounts, such
Additional Accounts being identified by account number and by Receivable balance
as of the Addition Date in respect of Additional Accounts added pursuant to
Section 2.2(a) of the Purchase Agreement or as of such fifth Business Day of the
--------------
month in respect of Additional Accounts added during the preceding month
pursuant to Section 2.2(c) of the Purchase Agreement. Such list shall be marked
--------------
as Schedule 1 to this Supplemental Conveyance, delivered to Buyer as
----------
confidential and proprietary and, as of the Addition Date, shall be incorporated
into and made a part of this Supplemental Conveyance, the Purchase Agreement,
and any other Conveyance Paper.
3. Sale of Receivables. (a) For value received, each Seller does hereby
-------------------
sell, transfer, convey and assign to Buyer, without recourse, on and after the
Addition Date, all of such Seller's right, title and interest in, to and under
the Receivables now existing or hereafter created in the Additional Accounts
designated on Schedule 1, all monies due or to become due with respect thereto
----------
(including all Finance Charge Receivables), all Collections, Recoveries and
other proceeds hereof and Insurance Proceeds relating thereto.
(b) In connection with such sale and conveyance, each Seller agrees (i) to
record and file at its own expense, any financing statement for the purchase of
accounts (as defined in Section 9-106 of the UCC as in effect in the State of
Illinois), with respect to the Receivables now existing and hereafter created in
the Additional Accounts designated hereby, meeting the requirements of
applicable state law and in such jurisdictions as are necessary to perfect the
sale of the Receivables from such Seller to Buyer and the transfer of such
Receivables from Buyer to the Issuer, and (ii) to deliver a file-stamped copy of
such financing statements or other evidence of such filings (which may, for
purposes of this Section 3, consist of telephone confirmations of such filings)
---------
to Buyer (or to the Trustee, if Buyer so directs) on or prior to the date of
this Supplemental Conveyance.
A-2
(c) In connection with such sale and conveyance, FCNB agrees, at its own
expense, on or prior to the date of this Supplemental Conveyance to indicate or
cause to be indicated in its books and records and in the computer files of the
Receivables as required by the Purchase Agreement that Receivables created in
connection with the Additional Accounts designated hereby have been sold to
Buyer in accordance with the Purchase Agreement and transferred by Buyer to the
Issuer for the benefit of the Noteholders.
(d) The parties acknowledge and agree that, as contemplated by Section 2.3
-----------
of the Purchase Agreement, the Receivables to be transferred hereunder to Buyer
on the Addition Date shall be so transferred to Buyer by [FCNB] [SAC], and that
Receivables in the Additional Accounts designated hereby which are to be
transferred to Buyer after the Addition Date, shall be so transferred by FCNB.
4. Acceptance by Buyer. Buyer hereby acknowledges its acceptance of all
-------------------
right, title and interest previously held by Sellers in, to and under the
Receivables sold and conveyed hereby. Buyer further acknowledges that, prior to
or simultaneously with the execution and delivery of this Supplemental
Conveyance, FCNB delivered or caused to be delivered to Buyer or to the Trustee
the computer file or microfiche list described in Section 2 of this Supplemental
---------
Conveyance.
5. Representations and Warranties of Seller. Each Seller, but only as to
----------------------------------------
itself and as to those Receivables, if any, transferred by it hereunder, hereby
severally (and not jointly) represents and warrants to Buyer as of the Addition
Date that:
(a) Legal, Valid and Binding Obligation. This Supplemental conveyance
-----------------------------------
constitutes a legal, valid, and binding obligation of such Seller, enforceable
against such Seller in accordance with its terms, except as such enforceability
may be limited by Debtor Relief Laws and except as such enforceability may be
limited by general principles of equity (whether considered in a suit or law or
in equity);
(b) Schedule 1. Schedule 1 to this Supplemental Conveyance and the
---------- ----------
computer file or microfiche list delivered pursuant to Section 2 of this
---------
Supplemental Conveyance is an accurate and complete listing in all material
respects of all the Additional Accounts as of the Addition Date and the
information contained therein with respect to the identify of such Additional
Accounts and the Receivables existing thereunder is true and correct in all
material respects as of the Addition Date;
(c) Eligibility of Accounts. Each Additional Account designated hereby is
-----------------------
an Eligible Account;
(d) Selection Procedures. The Additional Accounts were assigned randomly
--------------------
to Cycles by FCNB and no selection procedures believed by such Seller
A-3
to be materially adverse to the interests of Buyer or its successors and assigns
were utilized in selecting the Additional Accounts designated hereby from
available Eligible Accounts;
(e) Insolvency. Such Seller is not insolvent; and, after giving effect to
----------
the conveyance set forth in Section 3 of this Supplemental Conveyance, will not
---------
be insolvent;
(f) Security Interest. This Supplemental Conveyance constitutes either (i)
-----------------
a valid sale, assignment, and conveyance or, in the case of Accounts added
pursuant to Section 2.2(c) of the Purchase Agreement, confirmation of a valid
--------------
sale, assignment, and conveyance to Buyer of all rights, title and assignment,
and conveyance to Buyer of all right, title and interest of such Seller in, to,
and under the Receivables now existing and hereafter created in respect of the
Additional Accounts designated hereby, all monies due or to become due with
respect thereto (including all Finance Charge Receivables) together with all
Recoveries, Collections and other proceeds of such Receivables and Insurance
Proceeds relating thereto, or (ii) a grant of a security interest in such
Receivables, and such property will be held free and clear of any Lien of any
Person claiming through or under such Seller except for Liens permitted under
Section 5.1(d) of the Purchase Agreement.
--------------
(g) Reconfirmation of Representations and Warranties. All representations
------------------------------------------------
and warranties made by such Seller pursuant to Section 4.1 of the Purchase
-----------
Agreement remain true and correct in all respects as of the Addition Date as if
made on such date.
6. Conditions Precedent. (a) The acceptance of Buyer set forth in Section
-------------------- -------
4 above and the amendment of the Purchase Agreement set forth in Section 8 below
- ---------
are subject to the satisfaction by the Sellers, on or prior to the Addition
Date, of the following conditions precedent:
(i) All information concerning the Additional Accounts provided or to
be provided to Buyer shall be true and correct in all material respects as
of the Addition Date with respect to Additional Accounts added pursuant to
Section 2.2 (a) of the Purchase Agreement and as of the fifth Business Day
---------------
after the first day of the calendar month occurring after any Additional
Date arising under Section 2.2(c) of the Purchase Agreement;
--------------
(ii On or before each Addition Date with respect to Additional
Accounts added pursuant to Section 2.2(a) of the Purchase Agreement: (i)
--------------
FCNB shall have indicated or caused to be indicated in its books and
records and in the computer files of the Receivables that Receivables
created in respect of the Additional Accounts have been sold to Buyer in
accordance with this Agreement for the benefit of the Noteholders, (ii)
FCNB shall have
A-4
delivered or caused to be delivered to Buyer (or to the Trustee, if so
directed by Buyer) a computer file or microfiche list containing a true and
correct list of all such Additional Accounts, identified by account number
and by Receivable balance as of the Addition Date, and (iii) the Sellers
shall have substantially performed all other obligations required to be
performed by the provisions of the Purchase Agreement and this Supplemental
Conveyance;
(iii) Each Seller shall have recorded and filed, at its expense, all
financing statements required to comply with Section 3(b) of this
------------
Supplemental Conveyance.
(b) The sale by the Sellers set forth in Section 3 and the amendment of
---------
the Purchase Agreement set forth in Section 8 are subject to the satisfaction
---------
by Buyer, on or prior to the Addition Date, of the following:
(i) All representations and warranties of Buyer contained in the
Purchase Agreement shall be true and correct with the same effect as though
such representations and warranties had been made on such date;
(ii) Payment or provisions for payment of the Purchase Price by
Buyer in accordance with the provisions of Section 3 of the Purchase
---------
Agreement; and
(iii) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Supplemental
Conveyance shall be satisfactory in form and substance to the Sellers, and
the Sellers shall have received from Buyer copies of all documents
(including records of corporate proceedings) relevant to the transactions
herein contemplated as the Sellers may reasonably have requested.
7. Additional Information. Each Seller shall have delivered to Buyer such
----------------------
information as was reasonably requested by Buyer to satisfy itself as to the
accuracy of the representation and warranty set forth in Section 5(e) of this
------------
Supplemental Conveyance.
8. Amendment of the Purchase Agreement. The Purchase Agreement is hereby
-----------------------------------
amended to provide that al references therein to the "Receivables Purchase
Agreement", to "this Agreement", and "herein" shall be deemed from and after the
Addition Date to be a dual reference to the Purchase Agreement a supplemented by
this Supplemental Conveyance. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants, and conditions of the Purchase
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
A-5
or a consent to noncompliance with any term or provision of the Purchase
Agreement.
9. Counterparts. This Supplemental Conveyance 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.
10 Governing Law. This Supplemental Conveyance shall be construed
-------------
in accordance with the laws of the State of Illinois, 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.
A-6
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Conveyance to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
FIRST CONSUMERS NATIONAL BANK
By:___________________________
Title:________________________
SPIEGEL ACCEPTANCE CORPORATION
By:___________________________
Title:________________________
SPIEGEL CREDIT CORPORATION III
By:___________________________
Title:________________________
A-7
SCHEDULE 1
----------
ADDITIONAL ACCOUNTS
-------------------
SCHEDULE 2
----------
EXHIBIT B
to
RECEIVABLES PURCHASE AGREEMENT
FORM OF RECONVEYANCE
--------------------
RECONVEYANCE No. ____ OF RECEIVABLES (this "Reconveyance"), dated as
------------
of _____________, 200__, by and between SPIEGEL CREDIT CORPORATION III, a
Delaware corporation, ("SCCIII") and __________, a ___________ ("Seller"),
------ ------
pursuant to the Receivables Purchase Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, SCCIII, Seller and [First Consumers National Bank] [Spiegel
Acceptance Corporation] are parties to the Receivables Purchase Agreement, dated
as of [_____], 2000 (the "Purchase Agreement");
------------------
WHEREAS, pursuant to Section 6 of the Purchase Agreement (i) under certain
---------
conditions, Seller is required to repurchase Receivables in certain Accounts, or
(ii) SCCIII may designate from time to time certain Accounts for repurchase;
WHEREAS, pursuant to Section 6 of the Purchase Agreement SCIII wishes to
---------
sell and convey to Seller the Receivables from the Accounts listed on Schedule 1
----------
(the "Removed Accounts"); and
----------------
WHEREAS, Seller is willing to repurchase Receivables under the Removed
Accounts by payment, or provision for the payment, of the Repurchase Price
therefor pursuant to Section 6 of the Purchase Agreement;
---------
NOW THEREFORE, SCCIII and Seller hereby agree as follows:
1. Defined Terms. Capitalized terms used in this Reconveyance have their
-------------
respective meanings set forth in the Purchase Agreement, except that "Repurchase
----------
Date" means, with respect to the Removed Accounts designated hereby,
----
____________, 200_.
2. Designation of Removed Accounts. Within three Business Days after the
-------------------------------
Repurchase Date, Seller shall deliver or cause to be delivered to SCCIII a
computer file, microfiche or written list containing a true and complete list of
all Removed Accounts identified by account number and Receivable balance of such
Removed Accounts. Such list shall be marked as Schedule 1 to this Reconveyance
----------
B-1
and shall be incorporated into and made a part of this Reconveyance as of the
Repurchase Date and of the Purchase Agreement and other Conveyance Papers.
3. Conveyance of Receivables. (a) For value received, SCCIII does hereby
-------------------------
sell, transfer, assign, and set-over to Seller, without recourse, on and after
the Repurchase Date, all right, title and interest of SCCIII in, to, and under
the Receivables now existing and hereafter created in the Removed Accounts
designated hereby, all monies due or to become due with respect thereto
(including all Finance Charge Receivables), all proceeds thereof and Insurance
Proceeds relating thereto.
(b) In connection with such transfer, SCCIII agrees to (and agrees to
cause Trustee to) execute and deliver to Seller on or prior to the date of this
Reconveyance, a termination statement or partial release with respect to the
Receivables now existing and hereafter created in the Removed Accounts
designated hereby evidencing the sale and conveyance of the Receivables in the
Removed Accounts and the release of all liens or security interests thereon,
which shall meet the requirements of applicable state law and shall be filed in
such manner and in such jurisdictions as are necessary to evidence such sale and
conveyance and remove such lien.
4. Acceptance by Seller. Seller hereby acknowledges that, prior to or
--------------------
simultaneously with the execution and delivery of this Reconveyance, SCCIII
delivered or caused to be delivered to Seller the computer file or microfiche
list described in Section 2 of this Reconveyance.
---------
5. Representations and Warranties of SCCIII. SCCIII hereby represents and
----------------------------------------
warrants to Seller as of the Repurchase Date:
(a) Legal, Valid and Binding Obligation. This Reconveyance constitutes a
-----------------------------------
legal, valid, and binding obligation of SCCIII, enforceable against SCCIII in
accordance with its terms, except as such enforceability may be limited by
Debtor Relief Laws and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity); and
(b) Schedule 1. Schedule 1 to this Reconveyance and the computer file or
---------- ----------
microfiche list delivered pursuant to Section 2 of this Reconveyance is an
---------
accurate and complete listing in all material respects of all the Removed
Accounts as of the Repurchase Date and the information contained therein with
respect to the identity of such Removed Accounts and the Receivables existing
thereunder is true and correct in all material respects as of the Repurchase
Date;
(c) Compliance with Servicing Agreement. SCCIII has effected a retransfer
-----------------------------------
from the Issuer of the Receivables now existing or hereafter arising under
B-2
the Removed Accounts in compliance with the provisions of the Servicing
Agreement.
(d) Selection Procedures. In respect of Removed Accounts designated
--------------------
pursuant to Section 6.2 of the Purchase Agreement, SCCIII and Seller have
-----------
mutually agreed as to the designation of the Removed Accounts.
(e) Insolvency. As of the Repurchase Notice Date and as of the Repurchase
----------
Date, SCCIII is not insolvent and, after giving effect to the conveyance set
forth in Section 3 of this Reconveyance, SCCIII will not be insolvent.
---------
6. Conditions Precedent. (a) The amendment of the Purchase Agreement set
--------------------
forth in Section 7 is subject to the satisfaction by SCCIII, on or prior to the
---------
Repurchase Date, of the following conditions precedent:
(i) All information concerning the Removed Accounts provided or to
be provided to Seller shall be true and correct in all material respects as
of the Repurchase Date;
(ii) SCCIII shall have, and on or before the third Business Day
after the Repurchase Date: (i) delivered to Seller a computer file or
microfiche list containing a true and correct list of all such Removed
Accounts, identified by account number and by Receivable balance as of the
Repurchase Date; and (ii) substantially performed all other obligations
required to be performed by the provisions of this Reconveyance.
(iii) SCCIII shall have delivered to Seller the termination
statements and partial releases required to be delivered in Section 3(b) of
------------
this Reconveyance.
(b) The amendment of the Purchase Agreement set forth in Section 7 is
---------
subject to payment or provision for payment of the Repurchase Price in
accordance with the provisions of Section 6 of the Purchase Agreement on or
---------
prior to the Repurchase Date.
7. Amendment of the Purchase Agreement. The Purchase Agreement is hereby
-----------------------------------
amended to provide that all references therein to the "Receivables Purchase
Agreement", to "this Agreement" and "herein" shall be deemed from and after the
Repurchase Date to be a dual reference to the Purchase Agreement as supplemented
by this Reconveyance. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions of the Purchase
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
B-3
or a consent to non-compliance with any term or provision of the Purchase
Agreement.
8. Counterparts. This Reconveyance may be executed in two or more
------------
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
9. Governing Law. This Reconveyance shall be construed in accordance with
-------------
the laws of the State of Illinois, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.
[FIRST CONSUMERS
NATIONAL BANK]
[SPIEGEL ACCEPTANCE
CORPORATION]
By:________________________
Title:______________________
SPIEGEL CREDIT
CORPORATION III
By:_______________________
Title:_____________________
B-4
SCHEDULE 1
REMOVED ACCOUNTS
----------------
EXHIBIT C
to
RECEIVABLES PURCHASE AGREEMENT
FORM OF SETTLEMENT STATEMENT
SPIEGEL CREDIT CORPORATION III
RECEIVABLES PURCHASE AGREEMENT
Current Settlement Date: _______________, 2000___
First Consumers National Bank ("FCNB"), Spiegel Acceptance Corporation
----
("SAC") and Spiegel Credit Corporation III ("Buyer"), pursuant to the
--- -----
Receivables Purchase Agreement (the "Purchase Agreement") dated as of [______],
------------------
2000, by and among FCNB, SAC and Buyer, do hereby agree and certify as follows:
1. Capitalized terms used in this Settlement Statement have their
respective meanings in the Purchase Agreement. As used herein, the
term "Subject Period" means the Monthly Period immediately preceding
--------------
the calendar month in which this Settlement Statement is delivered.
This Settlement Statement is being delivered pursuant to Section 3.5
-----------
of the Purchase Agreement. References hereto to certain sections are
references to the respective sections in the Purchase Agreement.
2. The date of this Settlement Statement is a Settlement Date under the
Purchase Agreement.
A. RECEIVABLES PURCHASED FROM FCNB AND PURCHASE PRICE FOR SUBJECT PERIOD
3. The aggregate unpaid balance of Receivables conveyed to
Buyer by FCNB and balance of Receivables created in
Accounts pursuant to the Purchase Agreement during the
Subject Period was equal to.............................. $_________.
4. The portion of the amount shown in item 3 paid in cash
during the Subject Period was equal to................... $_________.
5. The portion of the amount shown in item 3 not paid in cash
during the Subject Period (item 3 minus item 4) is equal
to....................................................... $_________.
C-1
B. RECEIVABLES PURCHASED FROM SAC AND PURCHASE PRICE FOR SUBJECT PERIOD
6. The aggregate unpaid balance of Receivables conveyed to
Buyer by SAC pursuant to the Purchase Agreement during
the Subject Period was equal to.......................... $_________.
7. The portion of the amount shown in item 6 paid in cash
during the Subject Period was equal to................... $_________.
8. The portion of the amount shown in item 6 not paid in cash
during the Subject Period (item 6 minus item 7) is equal to
$_________.
C. RECEIVABLES REPURCHASED BY FCNB AND REPURCHASE PRICE FOR SUBJECT PERIOD
9. The aggregate Repurchase Price of Receivables repurchased
by FCNB pursuant to Section 6.1 or 6.2 of the Purchase
----------- ---
Agreement during the Subject Period (the "FCNB
----
Repurchased Receivables") was equal to................... $_________.
-----------------------
10. The portion of the Repurchase Price for the FCNB
Repurchased Receivables paid in cash during the Subject
Period was equal to...................................... $_________.
11. The portion of the Repurchase Price for the FCNB
Repurchased Receivables not paid in cash during the
Subject Period (item 9 minus item 10) is equal to........ $_________.
D. RECEIVABLES REPURCHASED BY SAC AND REPURCHASE PRICE FOR SUBJECT PERIOD
12. The aggregate Repurchase Price of Receivables repurchased
by SAC pursuant to Section 6.1 or 6.2 of the Purchase
----------- ---
Agreement during the Subject Period (the "SAC
---
Repurchased Receivables") was equal to................... $_________.
-----------------------
13. The portion of the Repurchase Price for the SAC
Repurchased Receivables paid in cash during the Subject
Period was equal to...................................... $_________.
C-2
14. The portion of the Repurchase Price for the SAC
Repurchased Receivables not paid in cash during the
Subject Period (item 12 minus item 13) is equal to....... $_________.
In witness whereof, the undersigned have duly executed and delivered
this Settlement Statement this ________ day of 200___.
FIRST CONSUMERS
NATIONAL BANK
By:____________________________
Title:____________________________
SPIEGEL ACCEPTANCE
CORPORATION
By:____________________________
Title:___________________________
SPIEGEL CREDIT
CORPORATION III
By:_____________________________
Title:____________________________
C-3