Exhibit 4.5
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PARTNERS FIRST RECEIVABLES, LLC
and
PARTNERS FIRST RECEIVABLES FUNDING, LLC
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AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 13, 1998
amending and restating the
Receivables Purchase Agreement
dated as of January 29, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Other Definitional Provisions . . . . . . . . . . 5
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.1. Purchase . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2. Addition of Aggregate Addition Accounts . . . . . 7
Section 2.3. Addition of New Accounts . . . . . . . . . . . . . 9
Section 2.4. Representations and Warranties . . . . . . . . . . 9
Section 2.5. Delivery of Documents . . . . . . . . . . . . . . 10
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1. Purchase Price . . . . . . . . . . . . . . . . . . 10
Section 3.2. Adjustments to Purchase Price . . . . . . . . . . 11
Section 3.3. Settlement and Ongoing Payment of Purchase
Price . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Seller
Relating to the Seller . . . . . . . . . . . . . 12
Section 4.2. Representations and Warranties of the Seller
Relating to the Agreement and the Receivables . . 14
Section 4.3. Representations and Warranties of the
Purchaser . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Seller . . . . . . . . . . . . . 17
Section 5.2. Covenants of the Seller with Respect to
Receivables Purchase Agreements . . . . . . . . 18
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1. Reassignment of Ineligible Receivables . . . . . . 19
Section 6.2. Reassignment of Certificateholders'
Interest in Trust Portfolio . . . . . . . . . . 20
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to the Purchaser's Obligations
Regarding Initial Receivables . . . . . . . . . . 20
Section 7.2. Conditions Precedent to the Seller's
Obligations . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.1. Term . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.2. Purchase Termination . . . . . . . . . . . . . . . 22
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Amendment . . . . . . . . . . . . . . . . . . . . 22
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 the
Seller . . . . . . . . . . . . . . . . . . . . 24
Section 9.7. Further Assurances . . . . . . . . . . . . . . . . 24
Section 9.8. No Waiver; Cumulative Remedies . . . . . . . . . . 24
Section 9.9. Counterparts . . . . . . . . . . . . . . . . . . . 25
Section 9.10. Binding; Third-Party Beneficiaries . . . . . . . 25
Section 9.11. Merger and Integration . . . . . . . . . . . . . 25
Section 9.12. Headings . . . . . . . . . . . . . . . . . . . . 25
Section 9.13. Schedules and Exhibits . . . . . . . . . . . . . 25
Section 9.14. Survival of Representations and
Warranties . . . . . . . . . . . . . . . . . . 25
Section 9.15. Nonpetition Covenant . . . . . . . . . . . . . . 25
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of
May 13, 1998, by and between PARTNERS FIRST RECEIVABLES, LLC, a limited
liability company organized under the laws of the State of Delaware (the
"Seller"), and PARTNERS FIRST RECEIVABLES FUNDING, LLC, a limited liability
company organized under the laws of the State of Delaware (the
"Purchaser").
W I T N E S S E T H
WHEREAS, the Purchaser and the Seller have entered into a
Receivables Purchase Agreement, dated as of January 29, 1998 (the "Original
Receivables Purchase Agreement"), which provides for the purchase by the
Purchaser from the Seller, and the sale from the Seller to the Purchaser,
from time to time, of certain Receivables (as hereinafter defined)
purchased by the Seller in the ordinary course of its business from one or
more owners of consumer revolving credit card accounts; and
WHEREAS, the Purchaser and the Seller desire to amend and restate
the Original Receivables Purchase Agreement in its entirety as provided
herein.
NOW, THEREFORE, it is hereby agreed by and between the Purchaser
and the Seller that the Original Receivables Purchase Agreement be amended
and restated as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All capitalized terms used herein or
in any certificate, document, or Conveyance Paper made or delivered
pursuant hereto, and not defined herein or therein, shall have the meaning
ascribed thereto in the Pooling and Servicing Agreement; in addition, the
following words and phrases shall have the following meanings:
"Account" shall mean (a) each MasterCardregistered trademark1/
and VISAregistered trademark1/ account established pursuant to a Credit
Card Agreement between an Account Originator and any Person, which account
is identified by account number and by the receivables balance in the
computer file, microfiche list or printed list delivered to the Purchaser
by the Seller on the Closing Date, (b) each Additional Account (but only
from and after the Addition Date with respect thereto), (c) each Related
Account, and (d) each Transferred Account, but shall exclude (e) any
Account that (i) after the Removal Date, the newly generated Receivables in
which shall not be assigned to the Purchaser hereunder, (ii) as to which
the right, title and interest of the Purchaser in the related Receivables
are reassigned to the Seller pursuant to Section 6.1 or (iii) as to which
the right, title and interest of the Trust in the related Receivables are
assigned and transferred to the Servicer pursuant to Section 3.3 of the
Pooling and Servicing Agreement.
--------------------
1/
MasterCard and VISA are registered trademarks of
International Incorporated and of VISA USA, Inc.,
respectively.
"Account Originator" shall mean the original issuer of the credit
card relating to an Account pursuant to a Credit Card Agreement or a
purchaser of such Account.
"Account Owner" shall mean with respect to any Account, the
related Account Originator, or if the Account Originator has assigned its
interest in the Account, the entity which has acquired such Account.
"Additional Account" shall mean each New Account and each
Aggregate Addition Account.
"Additional Cut-Off Date" shall mean (i) with respect to
Aggregate Addition Accounts, the date specified as such in the notice
delivered with respect thereto pursuant to Section 2.2, and (ii) with
respect to New Accounts, the later of the dates on which such New Accounts
are originated or designated pursuant to Section 2.3.
"Addition Date" shall mean (a) with respect to Aggregate Addition
Accounts, the date from and after which such Aggregate Addition Accounts
are to be included as Accounts pursuant to Section 2.2 and (b) with respect
to New Accounts, the first Distribution Date following the calendar month
in which such New Accounts are originated.
"Addition Notice Date" shall have the meaning specified in
Section 2.2 of this Agreement.
"Aggregate Addition Account" shall mean each Eligible Account
that is designated pursuant to Section 2.2 to be included as an Account and
is identified in the computer file or microfiche list delivered to the
Purchaser by the Seller pursuant to Sections 2.1 and 2.5.
"Agreement" shall mean this Receivables Purchase Agreement and
all amendments hereof and supplements hereto.
"Capital Ratio" shall mean, as of any date, the ratio (expressed
as a percentage) computed by dividing (a) shareholder's equity in the
Purchaser by (b) total assets (as shown on the Purchaser's balance sheet
prepared in accordance with GAAP) plus the aggregate Invested Amount of
Certificates which have not been retained by the Purchaser as of such date.
"Closing Date" shall mean January 29, 1998.
"Conveyance" shall have the meaning specified in subsection
2.1(a).
"Conveyance Papers" shall have the meaning specified in
subsection 4.1(c).
"Credit Adjustment" shall have the meaning specified in Section
3.2.
"Debtor Relief Laws" shall mean (i) the Bankruptcy Code of the
United States of America and (ii) all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments, readjustment of debt,
marshalling of assets or similar debtor relief laws of the United States,
any state or any foreign country from time to time in effect affecting the
rights of creditors generally.
"Finance Charge Receivables" shall mean all Receivables in the
Accounts which would be treated as "Finance Charge Receivables" in
accordance with the definition for such term in the Pooling and Servicing
Agreement.
"Initial Account" shall mean any Account designated as an
"Account" hereunder and as an "Initial Account" under the Pooling and
Servicing Agreement on the Closing Date.
"Insolvency Event" shall have the meaning specified in Section
8.2.
"Interchange" shall mean interchange fees payable to an Account
Owner in its capacity as credit card issuer, through VISA or MasterCard in
connection with cardholder charges for goods and services with respect to
the Accounts.
"Investor Certificate" shall have the meaning specified in the
Pooling and Serving Agreement.
"Minimum Capital Ratio" shall mean a percentage designated from
time to time by the Transferor.
"Monthly Period" shall mean the period from and including the
first day of a calendar month to and including the last day of such
calendar month.
"New Account" shall mean each MasterCard and VISA consumer
revolving credit card account established pursuant to a Credit Card
Agreement, which account is designated pursuant to Section 2.3 to be
included as an Account and is identified in the computer file or microfiche
list delivered to the Purchaser by the Seller pursuant to Sections 2.1 and
2.5.
"New Principal Receivables" shall have the meaning set forth in
Section 3.1.
"Obligor" shall mean, with respect to each Account, each person
that would be treated as an "Obligor" in accordance with the definition for
such term in the Pooling and Servicing Agreement.
"Original Receivables Purchase Agreement" shall mean the
Receivables Purchase Agreement, dated as of January 29, 1998, by and
between Partners First Receivables, LLC, as Seller, and PFRF, as Purchaser.
"PFRF" shall mean Partners First Receivables Funding, LLC, a
Delaware limited liability company, and its permitted successors and
assigns.
"Pooling and Servicing Agreement" shall mean the Pooling and
Servicing Agreement, dated as of January 29, 1998, among Holdings, as
Servicer, PFRF, as Transferor, and the Trustee, and all amendments and
supplements thereto.
"Portfolio Reassignment Price" shall mean the portion of the
amount payable by PFRF to the Trustee pursuant to Section 2.6 of the
Pooling and Servicing Agreement with respect to the Receivables.
"Principal Receivables" shall mean all Receivables in the
Accounts that would be treated as "Principal Receivables" in accordance
with the definition for such term in the Pooling and Servicing Agreement.
"Receivables Purchase Agreements" shall have the meaning set
forth in Section 5.2.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Purchased Assets" shall have the meaning set forth in Section
2.1.
"Receivables" shall mean all amounts shown on the Servicer's
records as amounts payable by Obligors on any Account from time to time,
including amounts payable for Principal Receivables and Finance Charge
Receivables. Receivables that become Defaulted Receivables will cease to
be included as Receivables as of the day on which they become Defaulted
Receivables. A Receivable shall be deemed to have been created at the end
of the Date of Processing of such Receivable.
"Removed Account" shall mean an Account hereunder that is a
"Removed Account" (as such term is defined in the Pooling and Servicing
Agreement) that is designated for removal pursuant to Section 2.10 of the
Pooling and Servicing Agreement.
"Repurchase Price" shall have the meaning set forth in Section
6.1(b).
"Seller" shall mean Partners First Receivables, LLC, a limited
liability company organized under the laws of the State of Delaware, and
its successor and assigns.
"Servicer" shall have the meaning set forth in the Pooling and
Services Agreement.
"Settlement Statement" shall have the meaning set forth in
Section 3.3.
"Supplemental Conveyance" shall have the meaning set forth in
Section 2.5.
"Transaction Documents" shall mean, the Pooling and Servicing
Agreement, the Series 1998-1 Supplement, this Agreement and each
Receivables Purchase Agreement.
"Transferred Account" shall mean each account into which an
Account shall be transferred provided that (i) such transfer was made in
accordance with the Credit Card Guidelines and (ii) such account can be
traced or identified as an account into which an Account has been
transferred.
"Trust" shall mean the trust created by the Pooling and Servicing
Agreement.
"Trustee" shall mean The Bank of New York, a New York banking
corporation, the institution executing the Pooling and Servicing Agreement
as, and acting in the capacity of Trustee thereunder, or its successor in
interest, or any successor trustee appointed as provided in the Pooling and
Servicing Agreement.
Section 1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate, other document or Conveyance Paper
made or delivered pursuant hereto unless otherwise defined therein.
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement or any Conveyance Paper shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Section, Subsection, Schedule and Exhibit references
contained in this Agreement are references to Sections, Subsections,
Schedules and Exhibits in or to this Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge
balance of Receivables, and of any collections thereof, shall be made in
accordance with the Pooling and Servicing Agreement and all applicable
Supplements.
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.1. Purchase.
(a) By execution of this Agreement, the Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Purchaser
(collectively, the "Conveyance"), without recourse except as provided
herein, all its right, title and interest in, to and under (i) all of the
Receivables in the Accounts and all of the Receivables created in such
Accounts following the Closing Date and the Receivables in each Additional
Account designated from time to time for inclusion as an Account as of the
date of such designation, whether such Receivables shall then be existing
or shall thereafter be created and all monies due and or to become due and
all amounts received with respect thereto and all proceeds (including,
without limitation, "proceeds" as defined in the UCC) thereof, (ii) the
right to receive Interchange and Recoveries with respect to such
Receivables and (iii) to the extent applicable to the Receivables, each
Account Owner Purchase Agreement (the "Purchased Assets").
(b) In connection with such Conveyance, the Seller agrees (i) to
record and file, at its own expense, any financing statements (and
continuation statements with respect to such financing statements when
applicable) with respect to the Receivables now existing and hereafter
created, meeting the requirements of applicable state law in such manner
and in such jurisdictions as are necessary to perfect, and maintain
perfection of, the Conveyance of such Purchased Assets from the Seller to
the Purchaser, (ii) that such financing statements shall name the Seller,
as seller, and the Purchaser, as purchaser, of the Receivables and (iii) to
deliver a file-stamped copy of such financing statements or other evidence
of such filings (excluding such continuation statements, which shall be
delivered as filed) to the Purchaser as soon as is practicable after
filing.
(c) In connection with such Conveyance, the Seller further
agrees that it will, at its own expense, (i) on or prior to (x) the Closing
Date, in the case of Initial Accounts, (y) the applicable Addition Date, in
the case of Additional Accounts, and (z) the applicable Removal Date, in
the case of Removed Accounts, to indicate in its computer files that, in
the case of the Initial Accounts or the Additional Accounts, Receivables
created in connection with such Accounts have been conveyed to the
Purchaser in accordance with this Agreement and have been conveyed by the
Purchaser to the Trustee pursuant to the Pooling and Servicing Agreement
for the benefit of the Certificateholders by including (or deleting, in the
case of newly originated Receivables in Removed Accounts) in such computer
files the code identifying each such Account and (ii) on or prior to (w)
the Closing Date, in the case of the Initial Accounts, (x) the date that is
five Business Days after the applicable Addition Date, in the case of
designation of Aggregate Addition Accounts, (y) the date that is 30 days
after the applicable Addition Date, in the case of New Accounts, and (z)
the date that is five Business Days after the applicable Removal Date, in
the case of Removed Accounts, to deliver to the Purchaser a computer file
or microfiche list containing a true and complete list of all such Accounts
specifying for each such Account, as of the Closing Date, in the case of
the Initial Accounts, the applicable Additional Cut-off Date, in the case
of Additional Accounts, and the applicable Removal Date, in the case of
Removed Accounts, (A) its account number, (B) the aggregate amount
outstanding in such Account and (C) the aggregate amount of Principal
Receivables in such Account. Each such file or list, as supplemented from
time to time to reflect Additional Accounts or Removed Accounts, shall be
marked as Schedule I to this Agreement, shall be delivered to the
Purchaser, and is hereby incorporated into and made a part of this
Agreement. The Seller further agrees not to alter the code referenced in
clause (i) of this paragraph with respect to any Account during the term of
this Agreement unless and until such Account becomes a Removed Account.
(d) The parties hereto intend that the conveyance of the
Seller's right, title and interest in and to the Receivables shall
constitute an absolute sale, conveying good title free and clear of any
liens, claims, encumbrances or rights of others from the Seller to the
Purchaser. It is the intention of the parties hereto that the arrangements
with respect to the Receivables shall constitute a purchase and sale of
such Receivables and not a loan. In the event, however, that it were to be
determined that the transactions evidenced hereby constitute a loan and not
a purchase and sale, it is the intention of the parties hereto that this
Agreement shall constitute a security agreement under applicable law, and
that the Seller shall be deemed to have granted and does hereby grant to
the Purchaser a first priority perfected security interest, in all of the
Seller's right, title and interest, whether now owned or hereafter
acquired, in, to and under the Receivables and other Purchased Assets to
secure the rights of the Purchaser hereunder and the obligations of the
Seller hereunder.
Section 2.2. Addition of Aggregate Addition Accounts.
(a) If, from time to time, the Purchaser becomes obligated to
designate Aggregate Addition Accounts (as such term is defined in the
Pooling and Servicing Agreement) pursuant to subsection 2.9(a) of the
Pooling and Servicing Agreement, then the Purchaser may, at its option,
give the Seller written notice thereof on or before the eighth Business Day
(the "Addition Notice Date") prior to the Addition Date therefor, and upon
receipt of such notice the Seller shall on or before the Addition Date,
designate sufficient Eligible Accounts to be included as Additional
Accounts so that after the inclusion thereof the Purchaser will be in
compliance with the requirements of said subsection 2.9(a). Additionally,
subject to subsections 2.9(b) and (c) of the Pooling and Servicing
Agreement and subsection 2.2(b), from time to time Eligible Accounts may be
designated to be included as Aggregate Addition Accounts, upon the mutual
agreement of the Purchaser and the Seller. In either event, the Seller
shall have sole responsibility for selecting the Aggregate Addition
Accounts; provided, that the selection method employed by the Seller shall
not have an Adverse Effect.
(b) On the Addition Date with respect to any designation of
Aggregate Addition Accounts, the Purchaser shall purchase the Seller's
right, title and interest in, to and under the Receivables in Aggregate
Addition Accounts (and such Aggregate Addition Accounts shall be deemed to
be Accounts for purposes of this Agreement), subject to the satisfaction of
the following conditions:
(i) any Aggregate Addition Accounts shall all be Eligible
Accounts;
(ii) the Seller shall have delivered to the Purchaser copies of
UCC-1 financing statements covering such Aggregate Addition Accounts,
if necessary to perfect the Purchaser's undivided interest in the
Receivables arising therein;
(iii) to the extent required of the Purchaser by Section 4.3 of
the Pooling and Servicing Agreement, the Seller shall have deposited
in the Collection Account all Collections with respect to such
Aggregate Addition Accounts since the Additional Cut-Off Date;
(iv) as of each of the Additional Cut-Off Date and the Addition
Date, no Insolvency Event with respect to the Seller or any Account
Owner shall have occurred nor shall the transfer of the Receivables
arising in the Aggregate Addition Accounts to the Purchaser have been
made in contemplation of the occurrence thereof;
(v) solely with respect to Aggregate Addition Accounts
designated pursuant to the second sentence of subsection 2.2(a), the
Rating Agency Condition shall have been satisfied;
(vi) the Seller shall have delivered to the Purchaser an
Officer's Certificate, dated the Addition Date, confirming, to the
extent applicable, the items set forth in clauses (i) through (v)
above; and
(vii) the transfer of the Receivables arising in the Aggregate
Addition Accounts to the Purchaser and by the Purchaser to the Trust
will not result in an Adverse Effect and, in the case of Aggregate
Addition Accounts, the Seller shall have delivered to the Purchaser an
Officer's Certificate, dated the Addition Date, stating that the
Seller reasonably believes that the addition of the Receivables
arising in the Aggregate Addition Accounts to the Purchaser and by the
Purchaser to the Trust will not have an Adverse Effect.
Section 2.3. Addition of New Accounts.
(a) Upon the mutual agreement of the Purchaser and the Seller, subject to
compliance by the Purchaser with the conditions specified in subsections
2.9(d) and (e) of the Pooling and Servicing Agreement and compliance by the
Seller with subsection 2.3(b), the Seller may designate newly originated
Eligible Accounts to be included as New Accounts. Upon such designation,
such New Accounts shall be deemed to be Accounts hereunder. The Seller
shall take all actions necessary to comply, or to enable the Purchaser to
comply, with the requirements of Section 2.9 of the Pooling and Servicing
Agreement and shall cooperate with the Purchaser to enable it to perform
with respect to the Receivables in such New Accounts all actions specified
in subsections 2.9(d) and (e) of the Pooling and Servicing Agreement.
(b) On the Addition Date with respect to any New Accounts, the
Purchaser shall purchase the Seller's right, title and interest in, to and
under the Receivables in New Accounts (and such New Accounts shall be
deemed to be Accounts for purposes of this Agreement) as of the close of
business on the applicable Additional Cut-Off Date, subject to the
satisfaction of the following conditions:
(i) the New Accounts shall all be Eligible Accounts;
(ii) the Seller shall have delivered to the Purchaser copies of
UCC-1 financing statements covering such New Accounts, if necessary to
perfect the Purchaser's interest in the Receivables arising therein;
(iii) to the extent required of the Purchaser by Section 4.3 of
the Pooling and Servicing Agreement, the Seller shall have deposited
in the Collection Account all Collections with respect to such New
Accounts since the Additional Cut-Off Date;
(iv) as of each of the Additional Cut-Off Date and the Addition
Date, no Insolvency Event with respect to the Seller or the related
Account Owner shall have occurred nor shall the transfer of the
Receivables arising in the New Accounts to the Purchaser have been
made in contemplation of the occurrence thereof; and
(v) the transfer of the Receivables arising in the New
Accounts to the Purchaser and by the Purchaser to the Trust will not
result in the occurrence of a Pay Out Event or a Reinvestment Event.
Section 2.4. Representations and Warranties. The Seller hereby
represents and warrants to the Purchaser as of the related Addition Date as
to the matters set forth in Sections 2.2(b)(iv) and (v) above and that, in
the case of Additional Accounts, the list delivered pursuant to Section 2.5
below is, as of the applicable Additional Cut-Off Date, true and complete
in all material respects.
Section 2.5. Delivery of Documents. In the case of the
designation of Additional Accounts, the Seller shall deliver to the
Purchaser (i) the computer file or microfiche list required to be delivered
pursuant to Section 2.1 with respect to such Additional Accounts on the
date such file or list is required to be delivered pursuant to Section 2.1
(the "Document Delivery Date") and (ii) a duly executed, written assignment
(including an acceptance by the Purchaser, substantially in the form of
Exhibit A (the "Supplemental Conveyance"), on the Document Delivery Date.
In addition, in the case of the designation of New Accounts, the Seller
shall deliver to the Purchaser on the Document Delivery Date an Officer's
Certificate confirming, to the extent applicable, the items set forth in
clause (i) through (v) of subsection 2.3(b) above.
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1. Purchase Price.
(a) The "Purchase Price" for the Receivables in the Initial
Accounts as of the Closing Date conveyed to the Purchaser under this
Agreement shall be payable on the Closing Date and shall be an amount equal
to 100% of the aggregate balance of Principal Receivables in those Accounts
as of the Closing Date, adjusted to reflect such factors as the Seller and
the Purchaser mutually agree will result in a Purchase Price determined to
be the fair market value of such Receivables. This computation of initial
purchase price should assume no reinvestment in new Receivables. The
Purchase Price for the Receivables (including Receivables in Additional
Accounts) to be conveyed to the Purchaser under this Agreement which come
into existence after the Closing Date, shall be payable on the Distribution
Date following the Monthly Period in which such Receivables are conveyed by
the Seller to the Purchaser in an amount equal to 100% of the aggregate
balance of the Principal Receivables so conveyed (the "New Principal
Receivables"), adjusted to reflect such factors as the Seller and the
Purchaser mutually agree will result in a Purchase Price determined to be
the fair market value of such New Principal Receivables.
(b) The Purchase Price to be paid by the Purchaser with respect
to the Receivables on the Closing Date and with respect to each Receivable
created thereafter shall be paid (i) in cash, (ii) with the consent of the
Purchaser, by means of capital contributed by the Seller to the Purchaser
in the form of a contribution of the Receivables, (iii) with the consent of
the Purchaser, by issuance to the Seller of a subordinated note in or
substantially in the form of Exhibit B (the "Subordinated Note") or by
increase in the amount outstanding thereunder, or (iv) any combination of
the foregoing, in each case in accordance with Section 3.3.
(c) To the extent that the Purchaser shall not have paid before,
or shall not have available to it, cash in U.S. dollars in same day funds
sufficient to pay (or cause to be paid) to the Seller the Purchase Price
for Receivables that have been newly created during any Monthly Period, the
remainder of the Purchase Price shall be paid on each Distribution Date by
increasing the principal amount of the Subordinated Note by an amount equal
to such insufficiency; provided, however, that to the extent that any such
increase in the principal amount of the Subordinated Note would cause the
Capital Ratio as of the end of the preceding Monthly Period to be less than
the Minimum Capital Ratio as of the end of the preceding Monthly Period,
Receivables having an outstanding balance of Principal Receivables
sufficient to avoid the Capital Ratio being less than the Minimum Capital
Ratio shall be deemed contributed to the capital of the Purchaser by the
Seller.
Section 3.2. Adjustments to Purchase Price. The Purchase Price
shall be adjusted on each Distribution Date (a "Credit Adjustment") with
respect to any Receivable previously conveyed to the Purchaser by the
Seller which has since been reversed by the Seller or the Servicer because
of a rebate, refund, unauthorized charge or billing error to a cardholder
because such Receivable was created in respect of merchandise which was
refused or returned by a cardholder or due to the occurrence of any other
event referred to in Section 3.9 of the Pooling and Servicing Agreement.
The amount of such adjustment shall equal (x) the reduction in the
principal balance of such Receivable resulting from the occurrence of such
event multiplied by (y) the quotient (expressed as a percentage) of (i) the
Purchase Price for Principal Receivables payable on such Distribution Date
computed in accordance with Section 3.1 divided by (ii) the Principal
Receivables paid for on such date pursuant to such Section. In the event
that an adjustment pursuant to this Section 3.2 causes the Purchase Price
to be a negative number, the Seller agrees that, not later than 1:00 P.M.
New York City time on such Distribution Date, the Seller shall pay to the
Purchaser an amount equal to the amount by which the Purchase Price minus
the Credit Adjustment would be a negative number.
Section 3.3. Settlement and Ongoing Payment of Purchase Price.
On each Distribution Date under the Pooling and Servicing Agreement, the
Seller shall deliver, or cause to be delivered, a settlement statement (the
"Settlement Statement") to the Purchaser, showing the aggregate Purchase
Price of Receivables conveyed to the Purchaser during the prior Monthly
Period, the portion thereof paid in cash, the portion represented by an
increase in the Subordinated Note and the portion represented by a capital
contribution, and the amount which remains unpaid as Credit Adjustments
made with respect to such prior Monthly Period pursuant to Section 3.2
hereof and any adjustment to the Purchase Price of Receivables with respect
to such Monthly Period pursuant to Section 6.1 hereof. Any cash balance
due from the Purchaser to the Seller shall be paid in cash in immediately
available funds to the Seller or the Seller shall convey such amount as a
capital contribution to the Purchaser or the outstanding balance of the
Subordinated Note shall be increased to reflect such unpaid balance or a
combination of the foregoing shall occur, and any balance due from the
Purchaser to the Seller be paid in immediately available funds to the
Purchaser. To the extent that the Seller has received an amount greater
than the Purchase Price of such Receivables, the Seller shall first apply
such amount to the payment of the unpaid principal of the Subordinated
Note, if any. If, after giving effect to any such payment in respect of
the Subordinated Note, the Seller has received an amount greater than the
Purchase Price, the Seller shall retain such amounts and, at the option of
the Purchaser (x) issue its note to the Purchaser with terms substantially
similar to the terms of the Subordinated Note or (y) subject to applicable
legal restrictions and the Minimum Capital Ratio, elect to treat such
amounts as a dividend or return of capital to the Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Seller
Relating to the Seller. The Seller hereby represents and warrants to, and
agrees with, the Purchaser as of the Closing Date and on each Addition
Date, that:
(a) Organization and Good Standing. The Seller is a limited
liability company duly organized and validly existing in good standing
under the laws of the State of Delaware and has, in all material respects,
full power and authority to own its properties and conduct its business as
presently owned or conducted as contemplated by the Transaction Documents,
and to execute, deliver and perform its obligations under this Agreement.
(b) Due Qualification. The Seller is duly qualified to do
business and is in good standing as a foreign limited liability company (or
is exempt from such requirements) and has obtained all necessary licenses
and approvals, in each jurisdiction which requires such qualification
except where the failure to so qualify or obtain licenses or approvals
would not render any credit card agreement relating to any Account or any
Receivables unenforceable by the Purchaser or the Trustee or (ii) have a
material adverse effect on the Purchaser or the Certificateholders.
(c) Due Authorization. The execution, delivery and performance
of this Agreement, each Receivables Purchase Agreement and any other
document or instrument delivered pursuant hereto, including any
Supplemental Conveyance (such other documents or instruments, collectively,
the "Conveyance Papers"), and the consummation of the transactions provided
for in this Agreement and the Conveyance Papers have been duly authorized
by the Seller by all necessary corporate action on the part of the Seller.
(d) No Conflict. The execution and delivery of this Agreement,
each Receivables Purchase Agreement and the Conveyance Papers by the
Seller, the performance of the transactions contemplated by this Agreement,
each Receivables Purchase Agreement and the Conveyance Papers, and the
fulfillment of the terms of this Agreement, each Receivables Purchase
Agreement and the Conveyance Papers will not conflict with, violate or
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, any
indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which the Seller is a party or by which it or any of its
properties are bound which would have an Adverse Effect.
(e) No Violation. The execution, delivery and performance of
this Agreement, each Receivables Purchase Agreement and the Conveyance
Papers by the Seller and the fulfillment of the terms contemplated herein
and therein applicable to the Seller will not conflict with or violate any
Requirements of Law applicable to the Seller in a manner which would have
an Adverse Effect.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Seller, threatened against the
Seller, before any Governmental Authority (i) asserting the invalidity of
this Agreement, any Receivables Purchase Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, any Receivables Purchase Agreement or the
Conveyance Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely affect
the performance by the Seller of its obligations under this Agreement, any
Receivables Purchase Agreement or the Conveyance Papers, (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement, any Receivables Purchase
Agreement or the Conveyance Papers or (v) seeking to affect adversely the
income tax attributes of the Trust under the United States federal or
Delaware income tax systems.
(g) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Seller in
connection with the execution and delivery by the Seller of this Agreement,
each Receivables Purchase Agreement and the Conveyance Papers and the
performance of the transactions contemplated by this Agreement, each
Receivables Purchase Agreement or the Conveyance Papers by the Seller have
been duly obtained, effected or given and are in full force and effect.
The representations and warranties set forth in this Section 4.1
shall survive the transfer and assignment of the Receivables to the
Purchaser. Upon discovery by the Seller or the Purchaser of a breach of
any of the foregoing representations and warranties, the party discovering
such breach shall give written notice to the other party and the Trustee
within three Business Days following such discovery.
Section 4.2. Representations and Warranties of the Seller
Relating to the Agreement and the Receivables.
(a) Representations and Warranties. The Seller hereby
represents and warrants to the Purchaser as of the date of this Agreement,
as of the Closing Date and, with respect to Additional Accounts, as of the
related Addition Date that:
(i) this Agreement and, in the case of Additional Accounts, the
related Supplemental Conveyance, each constitutes a legal, valid and
binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally from time to time in
effect or general principles of equity;
(ii) as of the Closing Date, and as of the related Additional
Cut-Off Date with respect to Additional Accounts, Schedule I to this
Agreement, as supplemented to such date, is an accurate and complete
listing in all material respects of all the Accounts as of the Closing Date
or such Additional Cut-Off Date, as the case may be, and the information
contained therein with respect to the identity of such Accounts and the
Receivables existing thereunder is true and correct in all material
respects as of the Closing Date or such applicable Additional Cut-Off Date,
as the case may be, and as of the December 31, 1997, the aggregate amount
of Receivables in all the Initial Accounts was $1,914,820,647, of which
$1,884,184,263 were Principal Receivables;
(iii) each Receivable has been conveyed to the Purchaser free
and clear of any Lien of any Person (other than Liens permitted under
subsection 2.7(b) of the Pooling and Servicing Agreement);
(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to
be obtained, effected or given by the Seller in connection with the
conveyance of Receivables to the Purchaser have been duly obtained,
effected or given and are in full force and effect;
(v) this Agreement or, in the case of Additional Accounts, the
related Supplemental Conveyance constitutes a valid sale, transfer and
assignment to the Purchaser of all right, title and interest of the Seller
in the Receivables and the proceeds thereof and the Interchange payable
pursuant to this Agreement and the Recoveries payable pursuant to this
Agreement or, if this Agreement or, in the case of Additional Accounts, the
related Supplemental Conveyance, does not constitute a sale of such
property, it constitutes a grant of a first priority perfected "security
interest" (as defined in the UCC) in such property to the Purchaser, which,
in the case of existing Receivables and the proceeds thereof and said
Recoveries and Interchange, is enforceable upon execution and delivery of
this Agreement, or, with respect to then existing Receivables in Additional
Accounts, as of the applicable Addition Date, and which will be enforceable
with respect to such Receivables hereafter and thereafter created and the
proceeds thereof upon such creation. Upon the filing of the financing
statements and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Purchaser shall have a
first priority perfected security or ownership interest in such property
and proceeds;
(vi) on the Closing Date, each Account is an Eligible Account
and, in the case of Additional Accounts, on the Additional Cut-Off Date,
each related Additional Account is an Eligible Account;
(vii) on the Closing Date, each Receivable then existing is an
Eligible Receivable, and in the case of Additional Accounts, on the
applicable Additional Cut-Off Date, each Receivable generated thereunder is
an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable,
such Receivable is an Eligible Receivable;
(ix) no selection procedures believed by the Seller to be
materially adverse to the interests of the Purchaser or the Investor
Certificateholders have been used in selecting such Accounts; and
(x) each Receivable is an "account" or a "general intangible"
for the purposes of the UCC.
(b) Notice of Breach. The representations and warranties set
forth in this Section 4.2 shall survive the transfer and assignment of the
Receivables to the Purchaser. Upon discovery by either the Seller or the
Purchaser of a breach of any of the representations and warranties set
forth in this Section 4.2, the party discovering such breach shall give
written notice to the other party, the Trustee and to the Rating Agency
within three Business Days following such discovery; provided that the
failure to give notice within three Business Days does not preclude
subsequent notice. The Seller hereby acknowledges that the Purchaser
intends to rely on the representations hereunder in connection with
representations made by the Purchaser to secured parties, assignees or
subsequent transferees including but not limited to transfers made by the
Purchaser to the Trust pursuant to the Pooling and Servicing Agreement and
that the Trustee may enforce such representations directly against the
Seller.
Section 4.3. Representations and Warranties of the Purchaser.
As of the Closing Date, and on each Addition Date the Purchaser hereby
represents and warrants to, and agrees with, the Seller that:
(a) Organization and Good Standing. The Purchaser is a limited
liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware and has, in all material respects,
full power and authority to own its properties and conduct its business as
presently owned or conducted and to execute, deliver and perform its
obligations under this Agreement and the Conveyance Papers.
(b) Due Authorization. The execution and delivery of this
Agreement and the Conveyance Papers and the consummation of the
transactions provided for in this Agreement and the Conveyance Papers have
been duly authorized by the Purchaser by all necessary corporate action on
the part of the Purchaser.
(c) No Conflict. The execution and delivery of this Agreement
and the Conveyance Papers by the Purchaser, the performance of the
transactions contemplated by this Agreement and the Conveyance Papers, and
the fulfillment of the terms of this Agreement and the Conveyance Papers
applicable to the Purchaser, 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 the Purchaser is a party or by which it or any of its properties
are bound.
(d) No Violation. The execution, delivery and performance of
this Agreement and the Conveyance Papers by the Purchaser and the
fulfillment of the terms contemplated herein and therein applicable to the
Purchaser will not conflict with or violate any Requirements of Law
applicable to the Purchaser.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Purchaser, threatened against the
Purchaser, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the invalidity
of this Agreement or the Conveyance Papers, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
the Conveyance Papers, (iii) seeking any determination or ruling that, in
the reasonable judgment of the Purchaser, would materially and adversely
affect the performance by the Purchaser of its obligations under this
Agreement or the Conveyance Papers or (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement or the Conveyance Papers.
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Purchaser in
connection with the execution and delivery by the Purchaser of this
Agreement and the Conveyance Papers and the performance of the transactions
contemplated by this Agreement and the Conveyance Papers have been duly
obtained, effected or given and are in full force and effect.
The representations and warranties set forth in this Section 4.3
shall survive the Conveyance of the Receivables to the Purchaser. Upon
discovery by the Purchaser or the Seller of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other party.
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Seller. The Seller hereby
covenants and agrees with the Purchaser as follows:
(a) Receivables Not To Be Evidenced by Promissory Notes. Except
in connection with its enforcement or collection of an Account, the Seller
will take no action to cause any Receivable to be evidenced by any
instrument other than an instrument that, taken together with one or more
other writings, constitutes chattel paper (as such terms are defined in the
UCC) and if any Receivable (or underlying receivable) is so evidenced as a
result of any action by the Seller it shall be deemed to be an Ineligible
Receivable in accordance with Section 6.1(a) and shall be reassigned to the
Seller in accordance with Section 6.1(b)
(b) Security Interests. Except for the conveyances hereunder,
the Seller will not sell, pledge, assign or transfer to any other Person,
or take any other action inconsistent with the Purchaser's ownership of the
Receivables or grant, create, incur, assume or suffer to exist any Lien on,
any Receivable, whether now existing or hereafter created, or any interest
therein, and the Seller shall not claim any ownership interest in the
Receivables and shall defend the right, title and interest of the Purchaser
in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Seller; provided, however, that nothing in this section shall prevent or be
deemed to prohibit the Seller from suffering to exist upon any of the
Receivables or Participation Interests any Liens for taxes if such taxes
shall not at the time be due and payable or if the Seller shall currently
be contesting the validity thereof in good faith by appropriate proceedings
and shall have set aside on its books adequate reserves with respect
thereto. Notwithstanding the foregoing, nothing in this section shall be
construed to prevent or be deemed to prohibit the transfer of the
Transferor Certificate and certain other rights of Purchaser as the
Transferor under the Pooling and Servicing Agreement in accordance with the
terms of this Agreement and any related Supplement.
(c) Account Allocations. In the event that the Seller is unable
for any reason to transfer Receivables to the Purchaser in accordance with
the provisions of this Agreement (including, without limitation, by reason
of the application of the provisions of Section 8.2 or any order of any
Governmental Authority), then, in any such event, the Seller agrees (except
as prohibited by any such order) to allocate and pay to the Purchaser,
after the date of such inability, all amounts which the Purchaser is
required to allocate and pay to the Trust pursuant to Section 2.11 of the
Pooling and Servicing Agreement, and in the same as the Purchaser is
required to allocate pay such amounts to the Trust.
(d) Notice of Liens. The Seller shall notify the Purchaser
promptly after becoming aware of any Lien on any Receivable other than the
conveyances hereunder and under the Pooling and Servicing Agreement.
(e) Interchange. Not later than 1:00 p.m., New York City time,
on each Business Day, the Seller shall deposit or cause to be deposited
into the Collection Account, in immediately available funds, (i) the amount
of Interchange to be included as Collections of Finance Charge Receivables
with respect to the preceding Business Day or (ii) if at any time the
Seller cannot identify or cause to be identified the amount of such
Interchange, the amount reasonably estimated by the Seller as the amount of
such Interchange.
(f) Documentation of Transfer. The Seller shall undertake to
file the documents which would be necessary to perfect and maintain the
transfer of the Purchased Assets to the Purchaser.
(g) Segregation of Accounts. The records of the Seller will be
marked to evidence the sale or transfer of the Receivables to the Purchaser
and the transfer of the Receivables by the Purchaser to the Trust;
provided, however, that the Seller need not segregate the documents or
agreements relating to the Accounts and the Receivables from documents or
agreements relating to other credit card accounts and receivables.
Section 5.2. Covenants of the Seller with Respect to Receivables
Purchase Agreements. The Seller, in its capacity as purchaser of
Receivables from any Account Owner pursuant to a receivables purchase
agreement in, or substantially in, the form of this agreement (each a
"Receivables Purchase Agreement") hereby covenants that the Seller will at
all times enforce the covenants and agreements of the applicable Account
Owner in such Receivables Purchase Agreement, including covenants
substantially to the effect set forth below:
(a) Periodic Rate Finance Charges. Except (x) as otherwise
required by any Requirements of Law or (y) as is deemed by the related
Account Owner to be necessary in order for it to maintain its credit card
business or a program operated by such credit card business on a
competitive basis based on a good faith assessment by it of the nature of
the competition with respect to the credit card business or such program,
it shall not at any time take any action which would have the effect of
reducing the Portfolio Yield to a level that could be reasonably expected
to cause any Series to experience any Pay Out Event or Reinvestment Event
based on the insufficiency of the Portfolio Yield or any similar test and
except as otherwise required by any Requirements of Law, it shall not take
any action which would have the effect of reducing the Portfolio Yield to
be less than the highest Average Rate for any Group.
(b) Credit Card Agreements and Guidelines. Subject to compliance
with all Requirements of Law and Sections 5.2(a), the related Account Owner
may change the terms and provisions of the applicable Credit Card
Agreements or the applicable Credit Card Guidelines in any respect
(including the calculation of the amount or the timing of charge-offs and
the Periodic Rate Finance Charges to be assessed thereon). Notwithstanding
the above, unless required by Requirements of Law or as permitted by
Section 5.2(a), no Account Owner will take action with respect to the
applicable Credit Card Agreements or the applicable Credit Card Guidelines,
which, at the time of such action, such Account Owner reasonably believes
will have a material adverse effect on the Investor Certificateholders.
The Seller further covenants that it will not enter into any
amendments to the Receivables Purchase Agreements or enter into a new
Receivables Purchase Agreement unless the Rating Agency Condition has been
satisfied. The Seller also further covenants that it will provide prompt
written notice to the Rating Agency of any amendment to a Receivables
Purchase Agreement to which it is a party.
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1. Reassignment of Ineligible Receivables
(a) In the event any representation or warranty under Section
4.2(a)(ii), (iii), (iv), (vi), (vii), (viii) or (x) is not true and correct
in any material respect as of the date specified therein with respect to
any Receivable or the related Account and as a result of such breach the
Purchaser is required to accept reassignment of Ineligible Receivables
previously sold by the Seller to the Purchaser pursuant to Section 2.5(a)
of the Pooling and Servicing Agreement, the Seller shall accept
reassignment of the Purchaser's interest in such Ineligible Receivables on
the terms and conditions set forth in Section 6.1(b).
(b) The Seller shall accept reassignment of any Ineligible
Receivables previously sold by the Seller to the Purchaser from the
Purchaser on the date on which such reassignment obligation arises, and
shall pay for such reassigned Ineligible Receivables by paying to the
Purchaser not later than 3:00 p.m., New York City time on such date, an
amount equal to the unpaid principal balance of such Ineligible Receivables
plus accrued and unpaid finance charges at the annual percentage rate
applicable to such Receivables from the last date billed through the end of
the Monthly Period in which such reassignment obligation arises. Upon
reassignment of such Ineligible Receivables, the Purchaser shall
automatically and without further action be deemed to sell, transfer,
assign, set-over and otherwise convey to the Seller, without recourse,
representation or warranty, all the right, title and interest of the
Purchaser in and to such Ineligible Receivables, all monies due or to
become due with respect thereto and all proceeds thereof; and such
reassigned Ineligible Receivables shall be treated by the Purchaser as
collected in full as of the date on which they were transferred. The
Purchaser shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by
the Seller to effect the conveyance of such Ineligible Receivables pursuant
to this subsection.
Section 6.2. Reassignment of Certificateholders' Interest in
Trust Portfolio. In the event any representation or warranty set forth in
Section 4.1(a) or (c) or Section 4.2(a)(i) or (a)(v) is not true and
correct in any material respect and as a result of such breach the
Purchaser is required to accept a reassignment of the Certificateholders'
Interest in the Receivables previously sold by the Seller to the Purchaser
pursuant to Section 2.6 of the Pooling and Servicing Agreement, the Seller
shall be obligated to accept a reassignment of the Purchaser's interest in
such Receivables on the terms set forth below.
The Seller shall pay to the Purchaser by depositing in the
Collection Account in immediately available funds, not later than 1:00 P.M.
New York City time, on the first Transfer Date following the Monthly Period
in which such reassignment obligation arises, in payment for such
reassignment, an amount equal to the amount specified in Section 2.6 of the
Pooling and Servicing Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to the Purchaser's Obligations Regarding
Initial Receivables. The obligations of the Purchaser to purchase the
Receivables in the Initial Accounts on the Closing Date shall be subject to
the satisfaction of the following conditions:
(a) All representations and warranties of the Seller contained
in this Agreement shall be true and correct on the Closing Date with the
same effect as though such representations and warranties had been made on
such date;
(b) All information concerning the Initial Accounts provided to
the Purchaser shall be true and correct as of the Closing Date in all
material respects;
(c) The Seller shall have (i) delivered to the Purchaser a
computer file or microfiche list containing a true and complete list of all
Initial Accounts identified by account number and by the Receivables
balance as of the Closing Date and (ii) substantially performed all other
obligations required to be performed by the provisions of this Agreement;
(d) The 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 and general intangibles (each as defined in
Section 9-106 of the UCC) meeting the requirements of applicable state law
in such manner and in such jurisdiction as would be necessary to perfect
the sale of and security interest in the Receivables from the Seller to the
Purchaser, and shall deliver a file-stamped copy of such financing
statements or other evidence of such filings to the Purchaser;
(e) On or before the Closing Date, the Purchaser and the Trustee
shall have entered into the Pooling and Servicing Agreement and the closing
under the Pooling and 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 the Purchaser, and the Purchaser
shall have received from the Seller copies of all documents (including,
without limitation, records of corporate proceedings) relevant to the
transactions herein contemplated as the Purchaser may reasonably have
requested.
Section 7.2. Conditions Precedent to the Seller's Obligations.
The obligations of the Seller to sell Receivables in the Initial Accounts
on the Closing Date shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of the Purchaser
contained in this Agreement shall be true and correct on the Closing Date
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 in
accordance with the provision of Section 3.1 hereof shall have been made;
and
(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 Seller, and the Seller shall have
received from the Purchaser copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Seller may reasonably have requested.
ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.1. Term. This Agreement shall commence as of the date
of execution and delivery hereof and shall continue until the termination
of the Trust as provided in Article XII of the Pooling and Servicing
Agreement.
Section 8.2. Purchase Termination. If the Seller shall fail
generally to, or admit in writing its inability to, pay its debts as they
become due; or if a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in
respect of the Seller in an involuntary case under any Debtor Relief Law,
or for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of the
Seller or for any substantial part of the Seller's property, or for the
winding-up or liquidation of the Seller's affairs and, if instituted
against the Seller, any such proceeding shall continue undismissed or
unstayed and in effect, for a period of 60 consecutive days, or any of the
actions sought in such proceeding shall occur; or if the Seller shall
commence a voluntary case under any Debtor Relief Law, or if the Seller
shall consent to the entry of an order for relief in an involuntary case
under any Debtor Relief Law, or consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of, or for, any
substantial part of its property, or any general assignment for the benefit
of its creditors; or the Seller or any subsidiary of the Seller shall have
taken any corporate action in furtherance of any of the foregoing actions
(each an "Insolvency Event"); then the Seller shall immediately cease to
transfer Principal Receivables to the Purchaser and shall promptly give
notice to the Purchaser and the Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to the Purchaser of
additional Principal Receivables, Principal Receivables transferred to the
Purchaser prior to the occurrence of such Insolvency Event and Collections
in respect of such Principal Receivables and Finance Charge Receivables
whenever created, accrued in respect of such Principal Receivables, shall
continue to be property of the Purchaser available for transfer by the
Purchaser the Trust pursuant to the Pooling and Servicing Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Amendment. This Agreement and any 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 the
Purchaser and the Seller in accordance with this Section 9.1. This
Agreement and any Conveyance Papers may be amended from time to time by the
Purchaser and the Seller (i) to cure any ambiguity, (ii) to correct or
supplement any provisions herein which may be inconsistent with any other
provisions herein or in any such other Conveyance Papers, (iii) to add any
other provisions with respect to matters or questions arising under this
Agreement or any Conveyance Papers which shall not be inconsistent with the
provisions of this Agreement or any Conveyance Papers, (iv) to change or
modify the Purchase Price and (v) to change, modify, delete or add any
other obligation of the Seller or the Purchaser; provided, however, that no
amendment pursuant to clause (iv) or (v) of this Section 9.1 shall be
effective unless the Seller and the Purchaser have been notified in writing
that the Rating Agency Condition has been satisfied; provided, further,
that such action shall not (as evidenced by an Opinion of Counsel delivered
to the Trustee) adversely affect in any material respect the interests of
the Trustee or the Investor Certificateholders, unless the Trustee shall
consent thereto. Any reconveyance executed in accordance with the
provisions hereof shall not be considered to be an amendment to this
Agreement. A copy of any amendment to this Agreement shall be sent to the
Rating Agency.
Section 9.2. Governing Law. THIS AGREEMENT AND THE CONVEYANCE
PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, 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 the Seller, to Partners First Receivables,
LLC, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), (b) in the
case of the Purchaser, to Partners First Receivables, LLC, at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ (facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), (c) in the case of the Trustee,
to The Bank of New York at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Department (facsimile no. (212) [815-5544]); (d)
in the case of the Rating Agency, (i) to ▇▇▇▇▇'▇, at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ABS ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), (ii) to Standard & Poor's, at ▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Group, 15th Floor
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), or (iii) to Fitch, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention: Structured Finance Department
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), 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
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, and terms of this
Agreement or any Conveyance Paper and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of any
Conveyance Paper.
Section 9.5. Assignment. Notwithstanding anything to the
contrary contained herein, other than the Purchaser's assignment of its
rights, title, and interests in, to, and under this Agreement to the
Trustee for the benefit of the beneficiaries of the Trust, including the
Certificateholders as contemplated by the Pooling and Servicing Agreement
and Section 9.6 hereof, this Agreement and all other Conveyance Papers may
not be assigned by the parties hereto; provided, however, the Seller shall
have the right to assign its rights, title and interests, in, to and under
this Agreement to (i) any successor by merger assuming this Agreement, or
(ii) to any other entity, provided that in either case the Rating Agency
Condition shall have been satisfied.
Section 9.6. Acknowledgment and Agreement of the Seller. By
execution below, the Seller expressly acknowledges and agrees that all of
the Purchaser's right, title, and interest in, to, and under this
Agreement, including, without limitation, all of the Purchaser's right,
title, and interest in and to the Receivables purchased pursuant to this
Agreement, shall be assigned by the Purchaser to the Trustee for the
benefit of the beneficiaries of the Trust, including the
Certificateholders, and the Seller consents to such assignment. The Seller
further agrees that notwithstanding any claim, counterclaim, right or
setoff or defense which it may have against the Purchaser, due to a breach
by the Purchaser of this Agreement or for any other reason, and
notwithstanding the bankruptcy of the Purchaser or any other event
whatsoever, the Seller's sole remedy shall be a claim against the Purchaser
for money damages and, then only to the extent of funds received by the
Purchaser pursuant to the Pooling and Servicing Agreement, and in no event
shall the Seller assert any claim on or any interest in the Receivables or
any proceeds thereof or take any action which would reduce or delay receipt
by Certificateholders of collections with respect to the Receivables.
Additionally, the Seller agrees for the benefit of the Trustee that any
amounts payable by the Seller to the Purchaser hereunder which are to be
paid by the Purchaser to the Trustee for the benefit of the
Certificateholders shall be paid by the Seller on behalf of the Purchaser,
directly to the Trustee.
Section 9.7. Further Assurances. The Purchaser and the Seller
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 or the Trustee more fully to effect the purposes of this
Agreement, the Conveyance Papers and the Pooling and Servicing Agreement,
including, without limitation, 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 the Purchaser or the
Seller, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
Subject to Section 9.6, 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 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; Third-Party Beneficiaries. This
Agreement and the 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 the Conveyance Papers set forth
the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by
this Agreement and the Conveyance Papers. This Agreement and the
Conveyance Papers may not be modified, amended, waived or supplemented
except as provided herein.
Section 9.12. Headings. The headings 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. Survival of Representations and Warranties. All
representations, warranties and agreements contained in this Agreement or
contained in any Supplemental Conveyance, shall remain operative and in
full force and effect and shall survive conveyance of the Receivables by
the Purchaser to the Trustee pursuant to the Pooling and Servicing
Agreement.
Section 9.15. Nonpetition Covenant. The Seller hereby covenants
and agrees that prior to the date which is one year and one day after the
payment in full of all Investor Certificates of all Series, it will not
institute against or join any other Person in instituting against the
Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.
IN WITNESS WHEREOF, the undersigned have caused this Amended and
Restated Receivables Purchase Agreement to be duly executed by their
respective officers as of the day and year first above written.
PARTNERS FIRST RECEIVABLES, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
PARTNERS FIRST RECEIVABLES FUNDING, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
EXHIBIT A
FORM OF SUPPLEMENTAL CONVEYANCE
As required by Section 2.5 of
the Receivables Purchase Agreement
SUPPLEMENTAL CONVEYANCE No. dated as of , 19 , by
and between PARTNERS FIRST RECEIVABLES, LLC, as Seller (the "Seller"), and
PARTNERS FIRST RECEIVABLES FUNDING, LLC (the "Purchaser"), pursuant to the
Receivables Purchase Agreement referred to below.
WITNESSETH
WHEREAS, the Seller and the Purchaser are parties to a
Receivables Purchase Agreement, dated as of January 29, 1998 (hereinafter
as such agreement may have been, or may from time to time be, amended,
supplemented or otherwise modified, the "Receivables Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the
Seller wishes to designate Additional Accounts to be included as Accounts
and the Seller wishes to convey its right, title and interest in the
Receivables of such Additional Accounts, whether now existing or hereafter
created, to the Purchaser pursuant to the Receivables Purchase Agreement
(as each such term is defined in the Receivables Purchase Agreement or if
not defined therein, as defined in the Pooling and Servicing Agreement);
and
WHEREAS, the Purchaser is willing to accept such designation and
conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the Seller and the Purchaser hereby agree as
follows:
1. Defined Terms. All capitalized terms used herein shall have
the meanings ascribed to them in the Receivables Purchase Agreement unless
otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional
Accounts designated hereby, , 19 .
"Additional Cut-Off Date" shall mean, with respect to the
Additional Accounts designated hereby, _________ __, 19__.
2. Designation of Additional Accounts. The Seller delivers
herewith a computer file or microfiche list containing a true and complete
schedule identifying all such Additional Accounts and specifying for each
such Account, as of the Additional Cut-Off Date, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables in such Account. Such computer file, microfiche list
or other documentation shall be as of the date of this Supplemental
Conveyance incorporated into and made part of this Supplemental Conveyance
and is marked as Schedule I to this Supplemental Conveyance.
3. Conveyance of Receivables.
(a) The Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse except as provided in
the Receivables Purchase Agreement, all its right, title and interest in,
to and under (i) the Receivables generated by such Additional Accounts, now
existing at the close of business on the Additional Cut-Off Date and
hereafter created until termination of the Receivables Purchase Agreement,
all monies due or to become due and all amounts received with respect
thereto and all "proceeds" (including, without limitation, "proceeds" as
defined in Article 9 of the UCC) thereof and (ii) the right to receive
Interchange and Recoveries with respect to such Receivables.
(b) In connection with such sale, the Seller agrees to record
and file, at its own expense, one or more financing statements (and
continuation statements with respect to such financing statements when
applicable) with respect to the Receivables, now existing and hereafter
created, for the transfer of accounts and general intangibles meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale and assignment of and
the security interest in the Receivables to the Purchaser, and to deliver a
file-stamped copy of such financing statement or other evidence of such
filing to the Purchaser.
(c) In connection with such sale, the Seller further agrees, at
its own expense, on or prior to the date of this Supplemental Conveyance,
to indicate in the appropriate computer files or microfiche list that all
Receivables created in connection with the Additional Accounts designated
hereby have been conveyed to the Purchaser pursuant to this Supplemental
Conveyance.
4. Acceptance by the Purchaser. The Purchaser hereby
acknowledges its acceptance of all right, title and interest to the
property, now existing and hereafter created, conveyed to the Purchaser
pursuant to Section 3(a) of this Supplemental Conveyance, and declares that
it shall maintain such right, title and interest. The Purchaser further
acknowledges that, prior to or simultaneously with the execution and
delivery of this Supplemental Conveyance, the Seller delivered to the
Purchaser the computer file or microfiche list described in Section 2 of
this Supplemental Conveyance.
5. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Purchaser as of the date of this
Supplemental Conveyance and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Supplemental
Conveyance constitutes a legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect or general principles of
equity;
(b) Eligibility of Accounts. On the Additional Cut-Off Date,
each Additional Account designated hereby is an Eligible Account;
(c) No Liens. Each Receivable in an Additional Account
designated hereby has been conveyed to the Purchaser free and clear of any
Lien (other than Liens permitted under subsection 2.7(b) of the Pooling and
Servicing Agreement);
(d) Eligibility of Receivables. On the Additional Cut-Off Date,
each Receivable existing in an Additional Account designated hereby is an
Eligible Receivable and as of the date of creation of any Receivable in an
Additional Account designated hereby, such Receivable is an Eligible
Receivable;
(e) Selection Procedures. No selection procedure believed by
the Seller to be adverse to the interests of the Purchaser or the Investor
Certificateholders was utilized in selecting the Additional Accounts;
(f) Transfer of Receivables. This Supplemental Conveyance
constitutes a valid sale, transfer and assignment to the Seller of all
right, title and interest of the Seller in the Receivables arising in the
Additional Accounts designated hereby now existing or hereafter created,
all monies due or to become due and all amounts received with respect
thereto and the "proceeds" (including, without limitation, "proceeds" as
defined in Article 9 of the UCC) thereof and the Interchange and the
Recoveries with respect thereto;
(g) No Conflict. The execution and delivery of this
Supplemental Conveyance, the performance of the transactions contemplated
by this Supplemental Conveyance and the fulfillment of the terms hereof,
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 the Seller is a party
or by which it or its properties are bound;
(h) No Violation. The execution and delivery of this
Supplemental Conveyance by the Seller, the performance of the transactions
contemplated by this Supplemental Conveyance and the fulfillment of the
terms hereof applicable to the Seller will not conflict with or violate any
Requirements of Law applicable to the Seller;
(i) No Proceedings. There are no proceedings or investigations,
pending or, to the best knowledge of the Seller, threatened against the
Seller before any Governmental Authority (i) asserting the invalidity of
this Supplemental Conveyance, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Supplemental Conveyance, (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Seller, would materially and adversely affect the performance by the Seller
of its obligations under this Supplemental Conveyance or (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Supplemental Conveyance; and
(j) All Consents. All authorizations, consents, orders or
approvals of any court or other governmental authority required to be
obtained by the Seller in connection with the execution and delivery of
this Supplemental Conveyance by the Seller and the performance of the
transactions contemplated by this Supplemental Conveyance by the Seller,
have been obtained.
6. Ratification of the Receivables Purchase Agreement. The
Receivables Purchase Agreement is hereby ratified, and all references to
the "Receivables Purchase Agreement", to "this Agreement" and "herein"
shall be deemed from and after the Addition Date to be a reference to the
Receivables Purchase Agreement as supplemented by this Supplemental
Conveyance. Except as expressly amended hereby, all the representations,
warranties, terms, covenants and conditions of the Receivables 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 or consent to non-compliance with any term or
provision of the Receivables Purchase Agreement.
7. Counterparts. This Supplemental Conveyance may be executed
in any number of counterparts, all of which taken together shall constitute
one and the same instrument.
8. Headings. The headings are for purposes of reference only
and shall not otherwise affect the meaning or interpretation of any
provision hereof.
9. Nonpetition Covenant. The Seller hereby covenants and
agrees that prior to the date which is one year and one day after the
payment in full of all Investor Certificates of all Series, it will not
institute against or join any other Person in instituting against the
Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.
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 the year first above written.
PARTNERS FIRST RECEIVABLES, LLC
By:_________________________________
Name:_____________________________
Title:____________________________
PARTNERS FIRST RECEIVABLES FUNDING, LLC
By:_________________________________
Name:____________________________
Title:___________________________
Schedule I to
Supplemental
Conveyance
Additional Accounts
EXHIBIT B
FORM OF REVOLVING NOTE
REVOLVING NOTE
This Revolving Note, dated as of January 29, 1998, by PARTNERS FIRST
RECEIVABLES FUNDING, LLC, a Delaware limited liability company (the
"Borrower") to PARTNERS FIRST RECEIVABLES, LLC, a Delaware limited
liability company (the "Lender").
The Lender and the Borrower have entered into a Receivables Purchase
Agreement (the "Receivables Purchase Agreement") dated as of January 29,
1998 providing for the purchase from time to time by the Borrower of
certain receivables generated from time to time in a portfolio of consumer
open end credit card accounts (the "Receivables"). Except as otherwise
expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Receivables Purchase Agreement.
1. The Note. For value received, the Borrower hereby promises to pay
to the order of the Lender at its offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, the principal amount of all Loans (as
hereinafter defined) made by the Lender to the Borrower from time to time
under the terms of this Note as remains unpaid, as shown in the schedule
attached hereto and any continuations thereof, on the day which is one year
and a day after the payment in full of the Transferor Amount and all
Invested Amounts of each Series issued pursuant to the Pooling and
Servicing Agreement (the "Maturity Date"). The Borrower shall pay interest
on the unpaid principal amount of the Loans as provided herein.
2. The Loans. a From time to time between the date of this Note
and the Maturity Date, and subject to the restrictions on lending under
this Note contained in the Receivables Purchase Agreement, the Lender may
lend to the Borrower additional sums (each a "Loan" and, together with the
Initial Loan, the "Loans"), as provided herein.
3. The obligation of the Borrower to repay the aggregate unpaid
principal amount of the Loans outstanding shall be evidenced by this Note
and the schedule attached hereto. The Lender is hereby authorized to
endorse on the schedule or on a continuation of such schedule, appropriate
notations regarding each Loan evidenced by this Note; provided, however,
that the failure to make, or error in making, any notation shall not limit
or otherwise affect the obligation of the Borrower hereunder. When the
Borrower requests a Loan in connection with the acquisition of any
Receivables, the Borrower shall notify the Lender by telephone specifying
the amount and the date on which such Loan is requested. Unless otherwise
specified, the maturity of each such Loan shall be the Maturity Date.
4. The Lender agrees that on each Distribution Date, the Lender shall
determine whether the Capital Ratio as of the end of the preceding Monthly
Period equaled or exceeded the Minimum Capital Ratio. If, as of any such
date, the Capital Ratio was less than the Minimum Capital Ratio, from and
after the date of such determination the Lender shall not increase the
principal amount of this Revolving Note until the Capital Ratio is at least
equal to the Minimum Capital Ratio.
5. Interest. Each Loan shall bear interest which shall be calculated
as the arithmetic mean of the beginning and ending principal balances for
such month, from the date hereof until this Revolving Note is fully paid,
at a monthly rate equal to one-twelfth of the Federal Funds rate near
closing bid as published in the Wall Street Journal on the 15th of that
month, or the next Business Day if the fifteenth is not a Business Day.
Interest shall be due and payable semi-annually on the last day of June and
December of each year (each, an "Interest Payment Date"), commencing on
June 30, 1998. Interest is based on twelve 30-day months.
6. Payment. The Lender shall be entitled to and may require the
Borrower to, make a payment of the loans, in whole or in part, on any day
upon providing one Business Day's written notice to the Borrower.
7. Subordination of Obligations. The Lender irrevocably agrees that
the obligations of the Borrower under this Note with respect to the payment
of principal and interest are and shall be fully and irrevocably
subordinate in right of payment and subject to the prior payment or
provision for payment in full of all Senior Indebtedness, that such
obligations may only be satisfied to the extent of cash or other assets of
the Borrower then available for such purpose after giving effect to all
required payments in respect of Senior Indebtedness, and that such
obligations shall not constitute a claim against the Borrower at any time
that, and for so long as, cash or such other assets available therefor are
insufficient. "Senior Indebtedness" means the principal of and interest,
including post-default interest, on any indebtedness of or guaranteed by
the Borrower, whether outstanding or guaranteed on the date hereof or
thereafter created, incurred, assumed or guaranteed for money borrowed or
for the deferred purchase price of property purchased by any person
including, for this purpose, all obligations of the Borrower under
capitalized leases or purchase money mortgages, and, in each such case, all
renewals, extensions and refundings thereof including, without limitation,
all obligations of the Borrower arising under or in respect of the Pooling
and Servicing Agreement; provided, however, that Senior Indebtedness shall
not include any obligation of or guarantee by the Borrower, whether
outstanding or guaranteed on the date hereof of thereafter created,
incurred, assumed or guaranteed that by agreement, operation of law or by
its terms is subordinate in right of payment to this Note. In the event of
the appointment of a receiver or trustee of the Borrower or in the event of
its insolvency, bankruptcy, assignment for the benefit of creditors or
reorganization, whether or not pursuant to the bankruptcy laws, or any
other marshalling of the assets and liabilities of the Borrower, the Lender
shall not be entitled to participate or share, ratably or otherwise, in the
distribution of the assets of the Borrower until all claims of all other
present and future creditors of the Borrower, whose claims are senior
hereto, have been fully satisfied, or provisions have been made therefor.
8. Acceleration Upon Certain Events. The Borrower's obligation to
pay the unpaid principal amount hereof shall forthwith mature, together
with interest accrued thereon, in the event of any receivership,
insolvency, liquidation, bankruptcy, assignment for the benefit of
creditors, reorganization whether or not pursuant to bankruptcy laws, or
any other marshalling of the assets and liabilities of the Borrower, but
payment of the same shall remain subordinate as hereinabove set forth.
9. Effect of Default. Default in any payment hereunder, including
the payment of interest, shall not accelerate the maturity hereof except as
herein specifically provided, and the obligation to make payments shall
remain subordinated as hereinabove set forth.
10. Upon Whom Binding. The provisions of this Note shall be binding
upon the Lender, its successors and assigns and upon the Borrower.
11. GOVERNING LAW. THIS NOTE SHALL BE DEEMED TO HAVE BEEN MADE
UNDER, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE IN ALL
RESPECTS.
12. Cancellation. This Note shall not be subject to cancellation by
either party.
13. No Security. The Lender agrees that it is not taking and will
not take or assert as security for the payment of this Note any security
interest in or lien upon, whether created by contract, statute or
otherwise, any property of the Borrower or any property in which the
Borrower may have an interest, which is or at any time may be in possession
or subject to the control of the Lender. The Lender hereby waives, and
further agrees that it will not seek to obtain payment of this Note in
whole or in any part by exercising any right of set-off it may assert or
possess whether created by contract, statute or otherwise. Any agreement
between the Borrower and the Lender (whether in the nature of a general
loan and collateral agreement, a security or pledge agreement or
otherwise), shall be deemed amended hereby to the extent necessary so as
not to be inconsistent with the provisions of this Note.
14. Assignment. This Note shall inure to the benefit of and be
binding upon the parties hereto and each of their respective successors and
assigns. The Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Lender.
15. No Bankruptcy Petition Against the Borrower. The Lender (in its
capacity as Lender, but in no other capacity), by its acceptance of this
Note, hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of the Transferor Amount and all
Invested Amounts of all Series issued pursuant to the Pooling and Servicing
Agreement, it will not institute against or join any other Person in
instituting against the Borrower any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar
proceeding under the laws of the United States or any state of the United
States.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by
its officers or employees thereunto duly authorized and directed by
appropriate corporate authority.
PARTNERS FIRST RECEIVABLES FUNDING, LLC
By:____________________________
Title:_________________________
THE TERMS AND CONDITIONS HEREOF
ARE HEREBY ACKNOWLEDGED AND ACCEPTED:
PARTNER FIRST RECEIVABLES, LLC
By:____________________________
Title:_________________________
SCHEDULE
Principal Amount of Loan Date
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Schedule I
LIST OF ACCOUNTS
DEEMED INCORPORATED BY REFERENCE