Exhibit 10.20
[EXECUTION COPY]
CLASS B CERTIFICATE PURCHASE AGREEMENT
Dated as of November 6, 2002
among
PRIME II RECEIVABLES CORPORATION,
as Transferor,
FDS BANK,
as Servicer,
THE CLASS B PURCHASERS PARTIES HERETO,
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent and Administrative Agent
SECTION 1. DEFINITIONS................................................ 1
1.1 DEFINITIONS................................................... 1
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................ 10
2.1 PURCHASES..................................................... 10
2.2 REDUCTIONS AND INCREASES OF COMMITMENTS....................... 13
2.3 FEES, EXPENSES, PAYMENTS, Etc................................. 15
2.4 REQUIREMENTS OF LAW........................................... 16
2.5 TAXES......................................................... 18
2.6 NON-RECOURSE.................................................. 20
2.7 INDEMNIFICATION............................................... 22
2.8 TERMINATION EVENTS............................................ 23
SECTION 3. CONDITIONS PRECEDENT....................................... 24
3.1 CONDITION TO INITIAL PURCHASE................................. 24
3.2 CONDITION TO ADDITIONAL PURCHASES............................. 25
SECTION 4. REPRESENTATIONS AND WARRANTIES............................. 26
4.1 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR.............. 26
4.2 REPRESENTATIONS AND WARRANTIES OF FDSB........................ 28
4.3 REPRESENTATIONS AND WARRANTIES OF THE AGENT AND THE COMMITTED
CLASS B PURCHASERS............................................ 30
SECTION 5. COVENANTS.................................................. 30
5.1 COVENANTS OF THE TRANSFEROR AND FDSB.......................... 30
SECTION 6. MUTUAL COVENANTS REGARDING CONFIDENTIALITY................. 34
6.1 COVENANTS OF TRANSFEROR, ETC.................................. 34
6.2 COVENANTS OF CLASS B PURCHASERS............................... 34
SECTION 7. THE AGENTS................................................. 35
7.1 APPOINTMENT................................................... 35
7.2 DELEGATION OF DUTIES.......................................... 36
7.3 EXCULPATORY PROVISIONS........................................ 36
7.4 RELIANCE BY AGENT............................................. 37
7.5 NOTICES....................................................... 37
7.6 NON-RELIANCE ON AGENT AND OTHER CLASS B PURCHASERS............ 37
7.7 INDEMNIFICATION............................................... 38
7.8 AGENTS IN THEIR INDIVIDUAL CAPACITIES......................... 38
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7.9 SUCCESSOR AGENT............................................... 39
SECTION 8. SECURITIES LAWS; TRANSFERS; TAX TREATMENT.................. 39
8.1 TRANSFERS OF CLASS B CERTIFICATES............................. 39
8.2 TAX CHARACTERIZATION OF THE CLASS B CERTIFICATES.............. 45
SECTION 9. MISCELLANEOUS.............................................. 45
9.1 AMENDMENTS AND WAIVERS........................................ 45
9.2 NOTICES....................................................... 45
9.3 NO WAIVER; CUMULATIVE REMEDIES................................ 47
9.4 SUCCESSORS AND ASSIGNS........................................ 47
9.5 SUCCESSORS TO SERVICER........................................ 48
9.6 COUNTERPARTS.................................................. 49
9.7 SEVERABILITY.................................................. 49
9.8 INTEGRATION................................................... 49
9.9 GOVERNING LAW................................................. 49
9.10 TERMINATION................................................... 49
9.11 ACTION BY SERVICER............................................ 49
9.12 LIMITED RECOURSE; NO PROCEEDINGS.............................. 50
9.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................... 51
9.14 SUBMISSION TO JURISDICTION; WAIVERS........................... 51
9.15 WAIVERS OF JURY TRIAL......................................... 51
9.16 EXCULPATION OF STRUCTURED PURCHASER, THE AGENT AND THE
ADMINISTRATIVE AGENT.......................................... 52
9.17 FURTHER ASSURANCES............................................ 52
LIST OF EXHIBITS
EXHIBIT A............ Form of Investment Letter
EXHIBIT B............ Form of Joinder Supplement
EXHIBIT C............ Form of Transfer Supplement
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CLASS B CERTIFICATE PURCHASE AGREEMENT, dated as of November 6,
2002, by and among PRIME II RECEIVABLES CORPORATION, a Delaware corporation
("PRIME II RECEIVABLES CORPORATION"), as Transferor (the "TRANSFEROR"), FDS BANK
("FDSB"), a federal thrift institution organized and existing under the federal
laws of the United States, successor in interest to FDS National Bank, as
Servicer (the "SERVICER"), the CLASS B PURCHASERS from time to time parties
hereto and BANK ONE, NA (MAIN OFFICE CHICAGO), a banking corporation organized
under the federal laws of the United States of America, as Agent for the Class B
Purchasers (in such capacity, the "AGENT") and as Administrative Agent for the
Class A Purchasers and the Class B Purchasers (in such capacity, the
"ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, Prime II Receivables Corporation, as Transferor, FDSB, as
Servicer, and the Trustee are parties to a certain Pooling and Servicing
Agreement, dated as of January 22, 1997 (as the same may from time to time be
amended or otherwise modified, the "MASTER POOLING AND SERVICING AGREEMENT"),
and a Series 2002-1 Variable Funding Supplement thereto, dated as of November 6,
2002 (as the same may from time to time be amended or otherwise modified, the
"SUPPLEMENT" and, together with the Master Pooling and Servicing Agreement, the
"POOLING AND SERVICING AGREEMENT");
WHEREAS, the Trust proposes to issue its Class A Variable Funding
Certificates, Series 2002-1 (the "CLASS A CERTIFICATES") and its Class B
Variable Funding Certificates, Series 2002-1 (the "CLASS B CERTIFICATES" and,
together with the Class A Certificates, the "SERIES 2002-1 VARIABLE FUNDING
CERTIFICATES") pursuant to the Pooling and Servicing Agreement;
WHEREAS, the Trust also proposes to issue its Class C Certificates,
Series 2002-1 (the "CLASS C CERTIFICATES" and, together with the Series 2002-1
Variable Funding Certificates, the "SERIES 2002-1 CERTIFICATES") pursuant to the
Pooling and Servicing Agreement; and
WHEREAS, the Class B Purchasers are willing to purchase the Class B
Certificates on the Closing Date and are willing (but, in the case of each
Noncommitted Class B Purchaser, are not obligated) from time to time thereafter
to purchase VFC Additional Class B Invested Amounts thereunder on the terms and
conditions provided for herein;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby expressly acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINITIONS. All capitalized terms used herein as defined terms
and not defined herein shall have the meanings given to them in the Pooling and
Servicing Agreement. Each capitalized term defined herein shall relate only to
the Series 2002-1 Certificates and to no other Series of Certificates issued by
the Trust.
"ACCRUAL PERIOD" means each period from (and including) each
Distribution Date to (but excluding) the following Distribution Date, provided
that the initial Accrual Period hereunder means the period from (and including)
the date of the purchase of the Class B Certificate hereunder to (but excluding)
the following Distribution Date.
"ACT" has the meaning specified in subsection 2.7(a) of this
Agreement.
"ADJUSTED EURODOLLAR RATE" for any Fixed Period shall mean the rate
per annum equal to the sum of (i) (a) the applicable British Bankers'
Association Interest Settlement Rate for deposits in United States dollars
appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two Business
Days prior to the first day of the relevant Fixed Period, and having a maturity
equal to such Fixed Period, provided that, (i) if Reuters Screen FRBD is not
available to the Agent for any reason, the applicable Adjusted Eurodollar Rate
for the relevant Fixed Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in United States dollars as
reported by any other generally recognized financial information service as of
11:00 a.m. (London time) two Business Days prior to the first day of such Fixed
Period, and having a maturity equal to such Fixed Period, and (ii) if no such
British Bankers' Association Interest Settlement Rate is available to the Agent,
the applicable Adjusted Eurodollar Rate for the relevant Fixed Period shall
instead be the rate determined by the Agent to be the rate at which Bank One
offers to place deposits in United States dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Fixed Period, in the approximate amount to
be funded at the Adjusted Eurodollar Rate and having a maturity equal to such
Fixed Period, divided by (b) one minus the maximum aggregate reserve requirement
(including all basic, supplemental, marginal or other reserves) which is imposed
against the Agent in respect of Eurocurrency liabilities, as defined in
Regulation D of the Board of Governors of the Federal Reserve System as in
effect from time to time (expressed as a decimal), applicable to such Fixed
Period. The Adjusted Eurodollar Rate shall be rounded, if necessary, to the next
higher 1/16 of 1%.
"AFFECTED PARTY" shall mean, with respect to any Structured
Purchaser, any Support Bank of such Structured Purchaser.
"AGENT" shall mean Bank One, in its capacity as Agent for the Class
B Purchasers, or any successor agent hereunder.
"AGENT BASE RATE" shall mean, for any day, the rate per annum equal
to the prime rate of interest announced from time to time by Bank One or its
parent (which is not necessarily the lowest rate charged to any customer),
changing when and as said prime rate changes.
"AGREEMENT" shall mean this Class B Certificate Purchase Agreement,
as amended, modified or otherwise supplemented from time to time.
"ALTERNATE RATE" shall mean, for any Fixed Period with respect to
the portion of the Class B Investor Principal Balance owed to a Committed Class
B Purchaser or Support Bank, an interest rate per annum equal to 0.75% per annum
above the Adjusted
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Eurodollar Rate for such Fixed Period; PROVIDED, HOWEVER, that in the case of
(i) any Fixed Period on or prior to the date on which such Committed Class B
Purchaser or Support Bank shall have notified the Agent that the introduction of
or any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other Governmental Authority asserts that it is
unlawful for such Committed Class B Purchaser (or, in the case of a Structured
Purchaser, for any Support Bank or other entity providing funds to such
Structured Purchaser at an interest rate determined by reference to the Adjusted
Eurodollar Rate or a similar rate) to fund such portion of the Class B Investor
Principal Balance at the Alternate Rate described above (and such Committed
Class B Purchaser or Support Bank shall not have subsequently notified the Agent
that such circumstances no longer exist), (ii) any Fixed Period of less than 30
days, or (iii) any Fixed Period applicable to a portion of the Class B Investor
Principal Balance of less than $100,000 in the aggregate owed to all Class B
Purchasers, the "ALTERNATE RATE" for such Fixed Period for such Committed Class
B Purchaser or Support Bank shall be a variable interest rate per annum equal to
the Agent Base Rate from time to time in effect during such Fixed Period.
"ASSIGNEE" and "ASSIGNMENT" have the respective meanings specified
in subsection 8.1(e) of this Agreement.
"BANK ONE" shall mean Bank One, NA (Main Office Chicago), a banking
corporation organized under the federal laws of the United States of America.
"BUSINESS DAY" means any day on which (i) banks are not authorized
or required to close in New York City or Chicago, Illinois and The Depository
Trust Company of New York is open for business and (ii) if such term is used in
connection with the Adjusted Eurodollar Rate, dealings in dollar deposits are
carried out in the London interbank market.
"CLASS B CERTIFICATES" has the meaning specified in the recitals to
this Agreement.
"CLASS B FEE LETTER" shall mean that certain letter agreement,
designated therein as the Series 2002-1 Class B Fee Letter and dated as of the
date hereof, among the Agent, the Transferor and the Servicer, as such letter
agreement may be amended or otherwise modified from time to time.
"CLASS B INVESTOR PRINCIPAL BALANCE" shall mean, when used with
respect to any Business Day, an aggregate amount equal to (a) the Class B
Initial Invested Amount, PLUS (b) the aggregate VFC Additional Class B Invested
Amounts purchased by the Class B Certificateholders through the end of the
preceding Business Day pursuant to Section 6.15 of the Pooling and Servicing
Agreement, MINUS (c) the aggregate amount of principal payments made to the
Class B Certificateholders prior to such Business Day.
"CLASS B OWNERS" shall mean, with respect to any Class B Certificate
held by the Agent hereunder for the benefit of Class B Purchasers, the owners of
the Class B Invested Amount represented by such Class B Certificate as reflected
on the books of the Agent in accordance with this Agreement.
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"CLASS B PROGRAM FEE" shall mean the ongoing fees payable to the
Agent or the Class B Purchasers in the amounts and on the dates set forth in the
Class B Fee Letter.
"CLASS B REPAYMENT AMOUNT" shall mean the sum of all amounts payable
with respect to the principal amount of the Class B Certificates and interest on
the Class B Certificates and all other amounts (other than amounts payable
pursuant to subsection 2.3(b) or (c), the last sentence of subsection 2.6(a) and
Section 2.7 hereof unless such amounts are not paid by the Servicer pursuant to
this Agreement) owing to the Class B Purchasers hereunder.
"CLASS C CERTIFICATES" has the meaning specified in the recitals to
this Agreement.
"CLOSING DATE" shall mean November 6, 2002.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor law.
"COMMERCIAL PAPER" means promissory notes of a Structured Purchaser
issued by the Structured Purchaser in the commercial paper market.
"COMMERCIAL PAPER COSTS" means, for each day, the sum of (i) the
discount or yield accrued on Pooled Commercial Paper on such day, plus (ii) any
and all accrued commissions in respect of placement agents and Commercial Paper
dealers, and issuing and paying agent fees incurred, in respect of such Pooled
Commercial Paper for such day, plus (iii) other costs associated with funding
small or odd-lot amounts with respect to all receivable purchase facilities
which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual
of income net of expenses received on such day from investment of collections
received under all receivable purchase facilities funded substantially with
Pooled Commercial Paper, minus (v) any payment received on such day net of
expenses in respect of breakage funding costs payable to the Structured
Purchaser pursuant to the terms of any receivable purchase facilities funded
substantially with Pooled Commercial Paper. In addition to the foregoing costs,
if the Transferor shall request any VFC Additional Class B Invested Amount
during any period of time determined by the Agent in its sole discretion to
result in incrementally higher Commercial Paper Costs applicable to such VFC
Additional Class B Invested Amount, the principal of any such VFC Additional
Class B Invested Amount shall, during such period, be deemed to be funded by the
Structured Purchaser in a special pool (which may include capital associated
with other receivable purchase facilities) for purposes of determining such
additional Commercial Paper Costs applicable only to such special pool and
charged each day during such period against such VFC Additional Class B Invested
Amount.
"COMMITTED CLASS B PURCHASER" shall mean (i) Bank One, (ii) any
other Class B Purchaser which has a Commitment, as set forth, in the case of any
initial Class B Purchaser, on its signature page hereto, and otherwise, in its
respective Joinder Supplement and (iii) any Assignee of such Class B Purchaser
to the extent of the portion of such Commitment assumed by such Assignee
pursuant to its respective Transfer Supplement.
"COMMITMENT" shall mean, for any Committed Class B Purchaser, the
maximum amount of such Committed Class B Purchaser's commitment to purchase a
portion the
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Class B Invested Amount, as set forth, in the case of any initial Class B
Purchaser, on its signature page hereto, and otherwise, in the Joinder
Supplement or the Transfer Supplement by which such Committed Class B Purchaser
became a party to this Agreement or assumed the Commitment (or a portion
thereof) of another Committed Class B Purchaser, as such amount may be adjusted
from time to time pursuant to Transfer Supplement(s) executed by such Committed
Class B Purchaser and its Assignee and delivered pursuant to Section 8.1 of this
Agreement or pursuant to Section 2.2 of this Agreement.
"COMMITMENT EXPIRATION DATE" shall mean, for a Committed Class B
Purchaser, the date set forth, in the case of any initial Class B Purchaser, on
its signature page hereto, and otherwise, in the Joinder Supplement or the
Transfer Supplement by which such Committed Class B Purchaser became a party to
this Agreement or assumed the Commitment (or a portion thereof) of another
Committed Class B Purchaser, as such date may be extended from time to time by
mutual agreement of all Class B Purchasers, the Agent and the Transferor.
"COMMITMENT PERCENTAGE" shall mean, for a Committed Class B
Purchaser, such Class B Purchaser's Commitment as a percentage of the aggregate
Commitments of all Committed Class B Purchasers.
"DEFAULTING PURCHASER" has the meaning specified in subsection
2.1(e) of this Agreement.
"DISCOUNT RATE" shall mean the Alternate Rate or the Agent Base
Rate, as applicable.
"DOWNGRADED PURCHASER" has the meaning specified in subsection
8.1(k) of this Agreement.
"DUE PERIOD" shall mean, with respect to a Distribution Date, (i) as
to a Structured Purchaser, the Accrual Period immediately preceding such
Distribution Date and (ii) as to a Support Bank, the entire Fixed Period in
which such Distribution Date occurs.
"ELIGIBLE ASSIGNEE" shall mean Bank One and, with the consent of the
Agent and the Transferor (such consent not to be unreasonably withheld), each
other liquidity provider or any entity organized for the purpose of purchasing,
or making loans secured by, financial assets for which Bank One acts as the
administrative agent.
"EXCLUDED TAXES" has the meaning specified in subsection 2.5(a) of
this Agreement.
"FDSB" has the meaning specified in the preamble to this Agreement.
"FIXED PERIOD" shall mean with respect to any Class B Purchaser and
any portion of the Class B Investor Principal Balance owed to such Class B
Purchaser:
(a) if Yield for such Class B Investor Principal Balance is
calculated on the basis of the Adjusted Eurodollar Rate, a period of one, two,
three or six months, or such other period as may be mutually agreeable to the
Agent and Transferor, commencing on a Business
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Day selected by the Transferor or the Agent pursuant to this Agreement. Such
Fixed Period shall end on the day in the applicable succeeding calendar month
which corresponds numerically to the beginning day of such Fixed Period,
provided, however, that if there is no such numerically corresponding day in
such succeeding month, such Fixed Period shall end on the last Business Day of
such succeeding month; or
(b) if Yield for such Class B Investor Principal Balance is
calculated on the basis of the Agent Base Rate, a period commencing on a
Business Day selected by the Transferor and agreed to by the Agent, provided no
such period shall exceed one month.
If any Fixed Period would end on a day which is not a Business Day,
such Fixed Period shall end on the next succeeding Business Day, provided,
however, that in the case of Fixed Periods corresponding to the Adjusted
Eurodollar Rate, if such next succeeding Business Day falls in a new month, such
Fixed Period shall end on the immediately preceding Business Day. In the case of
any Fixed Period for any Class B Investor Principal Balance which commences
before the Termination Date and would otherwise end on a date occurring after
the Termination Date, such Fixed Period shall end on the Termination Date. The
duration of each Fixed Period which commences after the Termination Date shall
be of such duration as selected by the Agent.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"INDEMNITEE" has the meaning specified in subsection 2.7(a) of this
Agreement.
"INDEMNIFYING PARTY" has the meaning specified in subsection 2.7(b)
of this Agreement.
"INVESTING OFFICE" shall mean for Bank One and Jupiter, the office
designated for Bank One in Section 9.2 of this Agreement, and, for any other
Class B Purchaser, the office of any Class B Purchaser (if any) designated as
such, in the case of any other initial Class B Purchaser, in its Joinder
Supplement and, in the case of any Assignee, in the related Transfer Supplement,
and thereafter, such other office of such Class B Purchaser or such Assignee
which shall be a beneficial holder of a portion of the Class B Certificate as
may be designated in writing to the Agent, the Transferor, the Servicer and the
Trustee by such Class B Purchaser or Assignee.
"INVESTMENT LETTER" has the meaning specified in subsection 8.1(a)
of this Agreement.
"JOINDER SUPPLEMENT" has the meaning specified in subsection 2.2(d)
of this Agreement.
"JUPITER" shall mean Jupiter Securitization Corporation, a
corporation organized under the laws of the State of Delaware.
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"LIQUIDITY AGREEMENT" shall mean any agreement entered into by any
Support Bank providing for the issuance of one or more letters of credit for the
account of any Structured Purchaser, the issuance of one or more surety bonds
for which any Structured Purchaser is obligated to reimburse the applicable
Support Bank for any drawings thereunder, the sale by any Structured Purchaser
to any Support Bank of an interest in any Class B Certificate and/or the making
of loans and/or other extensions of credit to any Structured Purchaser in
connection with such Structured Purchaser's securitization program (whether for
liquidity or credit enhancement support), together with any letter of credit,
surety bond or other instrument issued thereunder.
"LIQUIDATION DAY" shall mean, for any Class B Purchaser and any
portion of the Class B Investor Principal Balance owed to such Purchaser, any
day other than the last day of such Class B Purchaser's Fixed Period applicable
to such portion of the Class B Investor Principal Balance (without taking into
account any shortened duration of such Fixed Period pursuant to clause (iv) of
the definition thereof), on which a reduction of such portion of the Class B
Investor Principal Balance occurs.
"LIQUIDATION FEE" shall mean, for any Class B Purchaser and for any
Liquidation Day, the amount, if any, by which (i) the additional Yield
(calculated without taking into account any Liquidation Fee) which would have
accrued during the current Fixed Period on the portion of the Class B Investor
Principal Balance owed to such Purchaser which is reduced on such day, exceeds
(ii) the income, if any, received by such Class B Purchaser from investing the
proceeds of such reduction of the Class B Investor Principal Balance.
"LIQUIDITY PUT" shall mean, with respect to a Structured Purchaser,
that such Structured Purchaser, pursuant to its Liquidity Agreement, has sold to
one or more Support Banks an interest in such Structured Purchaser's interest in
the Class B Certificates funded or maintained by such Structured Purchaser at
the time of such sale.
"MASTER POOLING AND SERVICING AGREEMENT" has the meaning specified
in the recitals to this Agreement.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"NONCOMMITTED CLASS B PURCHASER" shall mean Jupiter and any other
Class B Purchaser which is not a Committed Class B Purchaser.
"NONCOMMITTED PURCHASER PERCENTAGE" shall mean for each Class B
Purchaser which is not a Committed Class B Purchaser, the percentage set forth,
in the case of the initial Noncommitted Class B Purchaser, on its signature page
hereto, and otherwise in its Joinder Supplement or the Transfer Supplement by
which such Class B Purchaser became a party to this Agreement, as such
percentage may be adjusted from time to time pursuant to Transfer Supplement(s)
executed by such Class B Purchaser and any Assignee and delivered pursuant to
Section 8.1 of this Agreement.
"NONDEFAULTING PURCHASER" has the meaning specified in subsection
2.1(e) of this Agreement.
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"PARTICIPANT" has the meaning specified in subsection 8.1(d) of this
Agreement.
"PARTICIPATION" has the meaning specified in subsection 8.1(d) of
the Agreement.
"PERCENTAGE INTEREST" shall mean, for a Class B Purchaser, (a) the
sum of (i) the portion of the Class B Initial Invested Amount (if any) purchased
by such Class B Purchaser, PLUS (ii) the aggregate VFC Additional Class B
Invested Amounts (if any) purchased by such Class B Purchaser through the end of
the preceding Business Day pursuant to Section 6.15 of the Pooling and Servicing
Agreement, PLUS (iii) any portion of the Class B Investor Principal Balance
acquired by such Class B Purchaser as an Assignee from another Class B Purchaser
pursuant to a Transfer Supplement executed and delivered pursuant to Section 8.1
of this Agreement, MINUS (iv) the aggregate amount of principal payments made to
such Class B Purchaser prior to such Business Day, MINUS (v) any portion of the
Class B Investor Principal Balance assigned by such Class B Purchaser to an
Assignee pursuant to a Transfer Supplement executed and delivered pursuant to
Section 8.1 of this Agreement, as a percentage of (b) the aggregate Class B
Investor Principal Balance.
"POOLED COMMERCIAL PAPER" means Commercial Paper notes of the
Structured Purchaser subject to any particular pooling arrangement by such
Structured Purchaser, but excluding Commercial Paper issued by such Structured
Purchaser for a tenor and in an amount specifically requested by any Person in
connection with any agreement effected by such Structured Purchaser.
"POOLING AND SERVICING AGREEMENT" has the meaning specified in the
recitals to this Agreement.
"PURCHASE DATE" shall mean the Closing Date and each date on which a
purchase of a VFC Additional Class B Invested Amount is to occur in accordance
with Section 6.15 of the Pooling and Servicing Agreement and Section 2.1 hereof.
"RATING AGENCY" shall mean each of Moody's and Standard & Poor's.
"REDUCTION AMOUNT" has the meaning specified in subsection 2.6(a) of
this Agreement.
"REGULATORY CHANGE" shall mean, as to each Class B Purchaser, any
change occurring after, in the case of Bank One and Jupiter, the Closing Date,
and in the case of any other Class B Purchaser, the date of the execution and
delivery of the Joinder Supplement or the Transfer Supplement by which it became
party to this Agreement; in the case of a Participant, the date on which its
Participation became effective or, in the case of an Affected Party, the date it
became such an Affected Party, in any (or the adoption after such date of any
new):
(i) United States Federal or state law or foreign law applicable
to such Class B Purchaser, Affected Party or Participant; or
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(ii) regulation, interpretation, directive, guideline or request
(whether or not having the force of law) applicable to such Class B Purchaser,
Affected Party or Participant of any court or other judicial authority or any
Governmental Authority charged with the interpretation or administration of any
law referred to in clause (i) or of any fiscal, monetary or other authority or
central bank having jurisdiction over such Class B Purchaser, Affected Party or
Participant.
"RELATED DOCUMENTS" shall mean, collectively, this Agreement
(including the Class B Fee Letter and all Joinder Supplements and Transfer
Supplements), the Master Pooling and Servicing Agreement, the Supplement, the
Series 2002-1 Certificates and the Receivables Purchase Agreement.
"REPLACEMENT PURCHASER" has the meaning specified in subsection
2.4(c) of this Agreement.
"REQUIRED CLASS B OWNERS" shall mean, at any time, Class B
Purchasers having Percentage Interests aggregating at least 50.1%.
"REQUIRED CLASS B PURCHASERS" shall mean, at any time, Committed
Class B Purchasers having Commitments aggregating at least 50.1% of the
aggregate Commitments of all Committed Class B Purchasers.
"REQUIREMENT OF LAW" shall mean, as to any Person, any law, treaty,
rule, directive or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System).
"RESERVE ACCOUNT INCREASE NOTICE" shall mean a notice delivered by
the Administrative Agent in accordance with Section 2.8 hereof.
"SERIES 2002-1 VARIABLE FUNDING CERTIFICATES" has the meaning
specified in the recitals to this Agreement.
"SERVICER" has the meaning specified in the preamble to this
Agreement.
"STANDARD & POOR'S" shall mean Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.
"STRUCTURED PURCHASER" shall mean Jupiter and any other Class B
Purchaser whose principal business consists of issuing commercial paper, medium
term notes or other securities to fund its acquisition and maintenance of
receivables, accounts, instruments, chattel paper, general intangibles and other
similar assets or interests therein and which is required by any nationally
recognized rating agency which is rating such securities to obtain from its
principal debtors an agreement such as that set forth in subsection 9.12(b) of
this Agreement in order to maintain such rating.
"SUPPLEMENT" has the meaning specified in the recitals to this
Agreement.
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"SUPPORT BANK" shall mean Bank One and any other bank or other
financial institution in its respective capacity as an institution extending or
having a commitment to extend funds to or for the account of any Structured
Purchaser (including by agreement to purchase an assignment of, or participation
in Class B Certificates) under a liquidity or credit support agreement which
relates to this Agreement.
"TAXES" has the meaning specified in subsection 2.5(a) of this
Agreement.
"TERMINATION DATE" shall mean the Amortization Period Commencement
Date.
"TERMINATION EVENT" has the meaning specified in Section 2.8 hereof.
"TRANSFER" has the meaning specified in subsection 8.1(c) of this
Agreement.
"TRANSFER SUPPLEMENT" has the meaning specified in subsection 8.1(e)
of this Agreement.
"TRANSFEROR" has the meaning specified in the preamble to this
Agreement.
"TRUST" shall mean the Prime Credit Card Master Trust II.
"TRUSTEE" shall mean JPMorgan Chase Bank, a banking corporation
organized and existing under the laws of the State of New York, successor in
interest to The Chase Manhattan Bank, in its capacity as Trustee under the
Pooling and Servicing Agreement, together with its successors in such capacity.
"WRITTEN" or "IN WRITING" (and other variations thereof) shall mean
any form of written communication or a communication by means of telex,
telecopier device, telegraph or cable.
"YIELD" shall mean, for each Due Period, an amount equal to the
product of the applicable Discount Rate multiplied by the Class B Invested
Amount owing to the Committed Class B Purchasers for each day elapsed during
such Due Period, on a basis of 360 days if the Discount Rate is the Adjusted
Eurodollar Rate or 365 days or 366 days, as applicable, if the Discount Rate is
the Agent Base Rate.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 PURCHASES. (a) On and subject to the terms and conditions of
this Agreement, each Noncommitted Class B Purchaser which is a party hereto on
the Closing Date, severally, agrees to acquire its Noncommitted Purchaser
Percentage of the Class B Certificates on the Closing Date for a purchase price
equal to its Noncommitted Purchaser Percentage of the Initial Class B Invested
Amount, which shall not be less than $62,500, and each Committed Class B
Purchaser which is a party hereto on the Closing Date, severally, agrees to
acquire its Commitment Percentage of the Class B Certificates not so acquired by
Noncommitted Class B Purchasers on the Closing Date for a purchase price equal
to the portion of the Initial Class B Invested Amount represented thereby on the
Closing Date. Such purchase price shall be made
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available to the Transferor, subject to the satisfaction of the conditions
specified in Section 3 hereof, at or prior to 12:00 noon Chicago time on the
Closing Date, at an account of the Transferor specified in writing by the
Transferor to the Agent in funds immediately available to the Transferor. The
Class B Purchasers hereby direct that the Class B Certificates be registered in
the name of the Agent, on behalf of the Class B Owners from time to time
hereunder.
(b) On and subject to the terms and conditions of this
Agreement and prior to the Termination Date, (i) each Noncommitted Class B
Purchaser may purchase its Noncommitted Purchaser Percentage of any VFC
Additional Class B Invested Amount offered for purchase by the Transferor
pursuant to Section 6.15 of the Pooling and Servicing Agreement in an amount of
not less than $62,500, and (ii) each Committed Class B Purchaser, severally,
agrees to purchase a portion of such VFC Additional Class B Invested Amount
which is not purchased by Noncommitted Class B Purchasers pursuant to clause (i)
in an amount equal to the lesser of (A) its Commitment Percentage thereof, or
(B) the excess of its Commitment over its Percentage Interest of the Class B
Investor Principal Balance (determined prior to giving effect to such purchase),
in either case for a purchase price equal to the VFC Additional Class B Invested
Amount so purchased. Such purchase price shall be made available to the Trustee
in immediately available funds, for the account of the Transferor, subject to
the satisfaction of the conditions specified in Section 3 hereof, at or prior to
12:00 noon Chicago time on the applicable Purchase Date specified pursuant to
subsection 2.1(c), for deposit in the Proceeds Account held by the Trustee
pursuant to the Supplement. Each Noncommitted Class B Purchaser which is a
Structured Purchaser confirms by becoming a party to this Agreement that,
subject to the terms and conditions of this Agreement, it currently intends (but
is under no obligation) to purchase its Noncommitted Purchaser Percentage of any
VFC Additional Class B Invested Amount offered for purchase by the Transferor
pursuant to Section 6.15 of the Pooling and Servicing Agreement to the extent
that, at the time of such purchase, it is permitted and able in the ordinary
course of its business to issue commercial paper which is rated not lower than
the respective ratings assigned by Moody's and Standard & Poor's on the date on
which such Structured Purchaser became a Class B Purchaser (without increasing
or otherwise modifying any letter of credit or other enhancement provided to
such Structured Purchaser or any liquidity support provided to such Structured
Purchaser by Affected Parties) in sufficient amounts fully to fund such
purchase.
(c) (i) The purchase of the Initial Class B Invested Amount
shall be made on prior notice from the Transferor to the Agent received by the
Agent not later than 6:00 a.m. Chicago time on the Closing Date, and each
purchase of any VFC Additional Class B Invested Amount on the applicable
Purchase Date shall be made on prior notice from the Transferor to the Agent
received by the Agent not later than 3:00 p.m. Chicago time on the Business Day
immediately preceding such Purchase Date. Each such notice shall be irrevocable
and shall specify (A) the aggregate VFC Additional Class B Invested Amount to be
purchased, (B) the applicable Purchase Date (which shall be a Business Day), and
(C) the desired duration of the initial Fixed Period, if applicable, for the
Class B Investor Principal Balance of each applicable Purchaser. The Agent shall
promptly forward a copy of such notice to each Class B Purchaser. In the case of
the purchase of a VFC Additional Class B Invested Amount, each Noncommitted
Class B Purchaser shall notify the Agent by 4:00 p.m., Chicago time, on the
Business Day immediately preceding the applicable Purchase Date whether it has
determined to make such purchase and, if so, whether all of the terms specified
by the Transferor are acceptable to such Noncommitted Class B Purchaser. In the
event that a Noncommitted Class B Purchaser
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shall not have timely provided such notice, it shall be deemed to have
determined not to make such purchase. The Agent shall notify the Transferor and
each Committed Class B Purchaser on or prior to 6:00 a.m., Chicago time, on the
applicable Purchase Date of whether each Noncommitted Class B Purchaser has so
determined to purchase its share of such VFC Additional Class B Invested Amount
and, in the event that Noncommitted Class B Purchasers have not determined to
purchase the entire VFC Additional Class B Invested Amount, the Agent shall
specify in such notice (A) the portion of the VFC Additional Class B Invested
Amount to be purchased by each Committed Class B Purchaser, (B) the applicable
Purchase Date (which shall be a Business Day), and (C) the duration of the
initial Fixed Period for the Class B Investor Principal Balance of each
Committed Class B Purchaser.
(ii) The Discount Rate and related Fixed Periods for the
Class B Invested Amounts funded or maintained by the Support Bank
shall be selected as follows: Transferor shall by 11:00 a.m.
(Chicago time), at least three (3) Business Days prior to the
commencement of any Fixed Period with respect to which the Alternate
Rate is applicable as a new Discount Rate and, at least one (1)
Business Day prior to the commencement of any Fixed Period with
respect to which the Agent Base Rate is applicable as a new Discount
Rate, give the Agent irrevocable notice of the new Discount Rate and
the length of the associated Fixed Period. Until Transferor gives
notice to the Agent of another Discount Rate, the initial Discount
Rate for any Class B Invested Amount transferred to the Support Bank
shall be the Agent Base Rate. If the Support Bank acquires by
assignment from Jupiter any Class B Invested Amount, such Class B
Invested Amount shall be deemed to be allocated to a new Fixed
Period commencing on the date of any such assignment.
(iii) Commercial Paper Costs will accrue each day on a
pro rata basis, based upon the percentage share the Class B Investor
Principal Balance represents in relation to all assets held by the
Structured Purchaser and funded substantially with Pooled Commercial
Paper.
(d) In no event may the Transferor offer any VFC Additional
Class B Invested Amount for purchase hereunder or under Section 6.15 of the
Pooling and Servicing Agreement, nor shall any Committed Class B Purchaser be
obligated to purchase any VFC Additional Class B Invested Amount, to the extent
that such VFC Additional Class B Invested Amount, when aggregated with the Class
B Investor Principal Balance determined prior to giving effect to the issuance
thereof, would exceed the aggregate Commitments.
(e) In the event that one or more Committed Class B Purchasers
(the "DEFAULTING PURCHASERS") fails to fund its Committed Percentage of any
purchase of a VFC Additional Class B Invested Amount by 12:00 p.m. noon, Chicago
time, on the applicable Purchase Date and the Servicer shall have notified the
Agent of such failure by not later than 12:30 p.m., Chicago time, on such
Purchase Date, the Agent shall so notify each of the other Committed Class B
Purchasers (the "NONDEFAULTING PURCHASERS") not later than 1:30 p.m., Chicago
time, on such Purchase Date, and each Nondefaulting Purchaser shall, subject to
the satisfaction of the conditions specified in Section 3 hereof, purchase a
portion of the aggregate VFC Additional Class B Invested Amount which was to be
purchased by the
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Defaulting Purchasers equal to the lesser of (i) its Commitment Percentage
thereof as a percentage of the aggregate Commitment Percentages of all
Nondefaulting Purchasers, and (ii) the excess of its Commitment over its
Percentage Interest of the Class B Investor Principal Balance (determined prior
to giving effect to such purchase), in either case for a purchase price equal to
the VFC Additional Class B Invested Amount so purchased, by making such purchase
price available to the Trustee for the account of the Transferor at or prior to
4:00 p.m., Chicago time, on such Purchase Date for deposit in the Proceeds
Account in immediately available funds. No such purchase by Nondefaulting
Purchasers shall relieve any Defaulting Purchaser of its obligations to make
purchases hereunder, and each Defaulting Purchaser shall from and after the
applicable Purchase Date be obligated to purchase the portion of any VFC
Additional Class B Invested Amount which such Defaulting Purchaser was required
to purchase hereunder and which was purchased by a Nondefaulting Purchaser from
such Nondefaulting Purchaser at a purchase price equal to (i) the portion of the
Class B Investor Principal Balance represented thereby, plus (ii) accrued and
unpaid interest thereon at the applicable Class B Certificate Rate, plus (iii)
an amount calculated at the rate of 1.0% per annum from the applicable Purchase
Date for such VFC Additional Class B Invested Amount through the date of such
purchase by the Defaulting Purchaser. The Transferor shall have the right to
replace any Defaulting Purchaser hereunder with a Replacement Purchaser, and the
Agent, acting at the request of the Required Class B Purchasers, shall have the
right to replace such Defaulting Purchaser with a Replacement Purchaser which is
an Eligible Assignee or is otherwise reasonably acceptable to the Transferor;
PROVIDED, that (x) such replacement shall not affect the Defaulting Purchaser's
right to receive any amounts otherwise owed to it hereunder, when and as the
same would have been due and payable without regard to such replacement (subject
to the rights of the other parties hereto with respect to such Defaulting
Purchaser), and (y) such Replacement Purchaser shall, concurrently with its
becoming a Committed Class B Purchaser hereunder, purchase the portion of any
VFC Additional Class B Invested Amount at the time required to be purchased by
the Defaulting Purchaser pursuant to the preceding sentence for a purchase price
equal to (i) the portion of the Class B Investor Principal Balance represented
thereby, plus (ii) accrued and unpaid interest thereon at the applicable Class B
Certificate Rate; PROVIDED FURTHER, that upon any such replacement and purchase
by a Replacement Purchaser, any amounts owing to Nondefaulting Purchasers by
such Defaulting Purchaser under clause (iii) of the preceding sentence shall
remain an obligation of such Defaulting Purchaser.
(f) The Class B Certificates shall be paid as provided in the
Pooling and Servicing Agreement. The Agent shall allocate each payment in
reduction of the Class B Investor Principal Balance to the Class B Owners pro
rata based on their respective Percentage Interests, and shall allocate each
payment of Class B Interest for any Business Day to the Class B Owners pro rata
based on the Yield or Commercial Paper Costs, as applicable, on such Class B
Owner's portion of the Class B Investor Principal Balance for such Business Day.
Amounts so allocated by the Agent shall be distributed by the Agent to the
respective Class B Owners when and as received by the Agent from the Trust.
2.2 REDUCTIONS AND INCREASES OF COMMITMENTS. (a) At any time the
Transferor may, upon at least five Business Days' prior written notice to the
Agent, terminate in whole or reduce in part the portion of the Commitments which
exceed the then outstanding Class B Investor Principal Balance (after
adjustments thereto occurring on the date of such termination or reduction).
Each such partial reduction shall be in an aggregate amount of
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$1,250,000 or integral multiples thereof. On the Termination Date, the aggregate
Commitments shall automatically reduce to an amount equal to the Class B
Investor Principal Balance on such day, and on each Business Day thereafter
shall be further reduced by an amount equal to the reduction in the Class B
Investor Principal Balance (if any) on such day. Reductions of the aggregate
Commitments pursuant to this subsection 2.2(a) shall be allocated to the pro
rata to the Commitments of each Committed Class B Purchaser based on its
respective Commitment Percentage.
(b) The Transferor may, upon at least two Business Days' prior
written notice to the Agent, terminate in whole or reduce in part the Commitment
of any Defaulting Purchaser or Downgraded Purchaser to an amount not less than
such Class A Purchaser's Percentage Interest of the Class A Investor Principal
Balance. Each such partial reduction shall be in an aggregate amount of $125,000
or integral multiples thereof. No such termination of reduction shall relieve
such Defaulting Purchaser of its obligations to Nondefaulting Purchasers
pursuant to subsection 2.1(e) hereof.
(c) The aggregate Commitments of the Committed Class B
Purchasers may be increased from time to time through the increase of the
Commitment of one or more Committed Class B Purchasers; PROVIDED, HOWEVER, that
no such increase shall have become effective unless (i) the Agent and the
Transferor shall have given their written consent thereto, (ii) such increasing
Committed Class B Purchaser shall have entered into an appropriate amendment or
supplement to this Agreement reflecting such increased Commitment and (iii) such
conditions, if any, as the Agent shall have required in connection with its
consent (including, without limitation, the delivery of legal opinions with
respect to such Committed Class B Purchaser, the agreement of such Committed
Class B Purchaser to become a Support Bank for one or more Structured Purchasers
having a support commitment corresponding to its Commitment hereunder and
approvals from the Rating Agency) shall have been satisfied. The Transferor may
also increase the aggregate Commitments of the Committed Class B Purchasers from
time to time by adding additional Committed Class B Purchasers in accordance
with subsection 2.2(d).
(d) Subject to the provisions of subsections 8.1(a) and 8.1(b)
applicable to initial purchasers of Class B Certificates, a Person having
short-term credit ratings of not lower than P-1 from Moody's and A-1 from
Standard & Poor's may from time to time with the written consent of the Agent
and the Transferor become a party to this Agreement as an initial or an
additional Noncommitted Class B Purchaser or an initial or an additional
Committed Class B Purchaser by (i) delivering to the Transferor an Investment
Letter and (ii) entering into an agreement substantially in the form attached
hereto as EXHIBIT B hereto (a "JOINDER SUPPLEMENT"), with the Agent and the
Transferor, acknowledged by the Servicer, which shall specify (A) the name and
address of such Person for purposes of Section 9.2 hereof, (B) whether such
Person will be a Noncommitted Class B Purchaser or Committed Class B Purchaser
and, if such Person will be a Committed Class B Purchaser, its Commitment, and
(C) the other information provided for in such form of Joinder Supplement. Upon
its receipt of a duly executed Joinder Supplement, the Agent shall on the
effective date determined pursuant thereto give notice of such effectiveness to
the Transferor, the Servicer and the Trustee, and the Servicer will provide
notice thereof to each Rating Agency (if required). If, at the time the
effectiveness of the Joinder Supplement for an additional Committed Class B
Purchaser, the other Committed
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Class B Purchasers are Class B Owners, it shall be a condition to such
effectiveness that such additional Committed Class B Purchaser purchase from
each other Class B Purchaser an interest in the Class B Certificates in an
amount equal to (i) such other Class B Purchaser's Percentage Interest of the
Class B Investor Principal Balance, times (ii) a fraction, the numerator of
which equals the Commitment of such additional Class B Purchaser, and the
denominator of which equals the aggregate Commitments of the Class B Purchasers
(determined after giving effect to the additional Commitment of the additional
Class B Purchaser as set forth in such Joinder Supplement), for a purchase price
equal to the portion of the Class B Investor Principal Balance purchased.
2.3 FEES, EXPENSES, PAYMENTS, ETC. (a) Subject to the provisions
of subsection 9.12(a) hereof, the Transferor agrees to pay to the Agent for the
account of the Class B Purchasers the fees set forth in the Class B Fee Letter
at the times specified therein.
(b) Subject to the provisions of subsection 9.12(a) hereof in
the case of the Transferor, the Transferor and FDSB, jointly and severally,
shall be obligated to pay on demand to (i) the Agent and the initial Class B
Purchasers all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including any requested amendments,
waivers or consents of any of the Related Documents) of this Agreement, and the
other documents to be delivered hereunder or in connection herewith, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent and each of the initial Class B Purchasers with respect thereto
and (ii) the Agent and each Class B Purchaser, all reasonable costs and
expenses, if any, in connection with the enforcement of any of the Related
Documents, and the other documents delivered thereunder or in connection
therewith.
(c) Subject to the provisions of subsection 9.12(a) hereof in
the case of the Transferor, the Transferor and FDSB, jointly and severally,
shall be obligated to pay on demand any and all stamp and other taxes (other
than Taxes covered by Section 2.5 and Excluded Taxes) and fees payable in
connection with the execution, delivery, filing and recording of this Agreement,
the Class B Certificates, any of the other Related Documents or the other
documents and agreements to be delivered hereunder and thereunder, and agree to
save each Class B Purchaser and the Agent harmless from and against any
liabilities with respect to or resulting from any delay by the Transferor or
FDSB in paying or omission to pay such taxes and fees.
(d) Yield calculated by reference to the Adjusted Eurodollar
Rate shall be calculated on the basis of a 360-day year for the actual days
elapsed. Any Yield or interest accruing at the Agent Base Rate shall be
calculated on the basis of a 365- or 366-day year, as applicable, for the actual
days elapsed. Fees or other periodic amounts payable hereunder shall be
calculated, unless otherwise specified in the Class B Fee Letter, on the basis
of a 360-day year and for the actual days elapsed.
(e) Each determination of Yield and Commercial Paper Costs by
the Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Class B Purchasers, the Transferor, the Servicer and the Trustee
in the absence of manifest error.
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(f) All payments to be made hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without setoff or
counterclaim and shall be made prior to 1:30 p.m., Chicago time, on the due date
thereof to the Agent's account specified in subsection 9.2(b) hereof, in United
States dollars and in immediately available funds. Notwithstanding anything
herein to the contrary, if any payment due hereunder becomes due and payable on
a day other than a Business Day, the payment date thereof shall be extended to
the next succeeding Business Day and interest shall accrue thereon at the
applicable rate during such extension. To the extent that (i) the Trustee, FDSB,
the Transferor or the Servicer makes a payment to the Agent or a Class B
Purchaser or (ii) the Agent or a Class B Purchaser receives or is deemed to have
received any payment or proceeds for application to an obligation, which payment
or proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy or insolvency law, state or
Federal law, common law, or for equitable cause, then, to the extent such
payment or proceeds are set aside, the obligation or part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received or deemed received by the Agent or the
Class B Purchaser, as the case may be.
(g) Subject to the terms and conditions of this Agreement and
the Supplement, the Transferor may decrease the Class B Investor Principal
Balance in whole or in part on any Business Day by giving the Agent prior
written notice of such decrease no later than 3:00 p.m. (Chicago time) on (i)
the Business Day immediately preceding the Business Day on which such decrease
shall occur with respect to decreases of less than $25,000,000 and (ii) the
second Business Day immediately preceding the Business Day on which such
decrease shall occur with respect to decreases equal to or greater than
$25,000,000.
2.4 REQUIREMENTS OF LAW. (a) In the event that any Class B Purchaser
shall have reasonably determined that any Regulatory Change shall:
(i) subject such Class B Purchaser to any tax of any
kind whatsoever with respect to this Agreement, its Commitment or
its beneficial interest in the Class B Certificates, or change the
basis of taxation of payments in respect thereof (except for Taxes
covered by Section 2.5 and taxes included in the definition of
Excluded Taxes in subsection 2.5(a) and changes in the rate of tax
on the overall net income of such Class B Purchaser); or
(ii) impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, such Class B Purchaser;
and the result of any of the foregoing is to increase the cost to such Class B
Purchaser, by an amount which such Class B Purchaser, in its reasonable
judgment, deems to be material, of maintaining its Commitment or its beneficial
interest in the Class B Certificates or to reduce any amount receivable in
respect thereof, THEN, in any such case, after submission by such Class B
Purchaser to the Agent of a written request therefor and the submission by the
Agent to the Transferor, the Trustee and the Servicer of such written request
therefor, (subject to subsection
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9.12(a) hereof) the Transferor shall pay to the Agent for the account of such
Class B Purchaser any additional amounts necessary to compensate such Class B
Purchaser for such increased cost or reduced amount receivable, together with
interest on each such amount from the day which is ten Business Days after the
date such request for compensation under this subsection 2.4(a) is received by
the Transferor until payment in full thereof (after as well as before judgment)
at the Agent Base Rate in effect from time to time.
(b) In the event that any Class B Purchaser shall have
reasonably determined that any Regulatory Change regarding capital adequacy has
the effect of reducing the rate of return on such Class B Purchaser's capital or
on the capital of any corporation controlling such Class B Purchaser as a
consequence of its obligations hereunder or its maintenance of its Commitment or
its beneficial interest in the Class B Certificates to a level below that which
such Class B Purchaser or such corporation could have achieved but for such
Regulatory Change (taking into consideration such Class B Purchaser's or such
corporation's policies with respect to capital adequacy) by an amount reasonably
deemed by such Class B Purchaser to be material, THEN, from time to time, after
submission by such Class B Purchaser to the Agent of a written request therefor
and submission by the Agent to the Transferor and the Servicer of such written
request therefor, (subject to subsection 9.12(a) hereof) the Transferor shall
pay to the Agent for the account of such Class B Purchaser such additional
amount or amounts as will compensate such Class B Purchaser for such reduction,
together with interest on each such amount from the day which is ten Business
Days after the date such request for compensation under this subsection 2.4(b)
is received by the Transferor until payment in full thereof (after as well as
before judgment) at the Agent Base Rate in effect from time to time.
(c) Each Class B Purchaser agrees that it shall use its
reasonable efforts to reduce or eliminate any claim for compensation pursuant to
subsections 2.4(a) and 2.4(b), including but not limited to designating a
different Investing Office for its Class B Certificates (or any interest
therein) if such designation will avoid the need for, or reduce the amount of,
any increased amounts referred to in subsection 2.4(a) or 2.4(b) and will not,
in the reasonable opinion of such Class B Purchaser, be disadvantageous to such
Class B Purchaser or inconsistent with its policies or result in an unreimbursed
cost or expense to such Class B Purchaser or in an increase in the aggregate
amount payable under both subsections 2.4(a) and 2.4(b). If any increased
amounts referred to in subsection 2.4(a) or 2.4(b) shall not be eliminated or
reduced by the designation of a different Investing Office and payment thereof
hereunder shall not be waived by such Class B Purchaser, the Transferor shall
have the right to replace such Class B Purchaser hereunder with a new purchaser
reasonably acceptable to the Agent ("REPLACEMENT PURCHASER") that shall succeed
to the rights of such Class B Purchaser under this Agreement and such Class B
Purchaser shall assign its beneficial interest in the Class B Certificates to
such Replacement Purchaser in accordance with the provisions of Section 8.1,
PROVIDED, that (i) such Class B Purchaser shall not be replaced hereunder with a
new investor until such Class B Purchaser has been paid in full its Percentage
Interest of the Class B Investor Principal Balance and all accrued and unpaid
Yield (including any Liquidation Fee determined for the replacement date)
thereon by such new investor and all other amounts (including all amounts owing
under this Section 2.4) owed to it pursuant to this Agreement and (ii) if the
Class B Purchaser to be replaced is the Agent or the Administrative Agent or,
unless the Agent and the Administrative Agent otherwise agree, a Structured
Purchaser sponsored or administered by the Administrative Agent or the Agent (in
its individual capacity), a replacement Agent or
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Administrative Agent, as the case may be, shall have been appointed in
accordance with Section 7.9 and the Agent or Administrative Agent, as the case
may be, to be replaced shall have been paid all amounts owing to it as Agent or
Administrative Agent, as the case may be, pursuant to this Agreement; PROVIDED,
FURTHER, that the Transferor shall provide such Class B Purchaser with an
Officer's Certificate stating that such new investor is not subject to, or has
agreed not to seek, such increased amount.
(d) Each Class B Purchaser claiming increased amounts
described in subsection 2.4(a) or 2.4(b) will furnish to the Agent (together
with its request for compensation) a certificate setting forth any actions taken
by such Class B Purchaser to reduce or eliminate such increased amounts pursuant
to subsection 2.4(c) and the basis and the calculation of the amount (in
reasonable detail) of each request by such Class B Purchaser for any such
increased amounts referred to in subsection 2.4(a) or 2.4(b), such certificate
to be conclusive as to the factual information set forth therein absent manifest
error.
2.5 TAXES. (a) All payments made to the Class B Purchasers or the
Agent under this Agreement and the Pooling and Servicing Agreement (including
all amounts payable with respect to the Class B Certificates) shall, to the
extent allowed by law, be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (collectively, "TAXES"), excluding (i) income taxes
(including, without limitation, branch profit taxes, minimum taxes and taxes
computed under alternative methods, at least one of which is based on or
measured by net income), franchise taxes (to the extent imposed in lieu of net
income taxes), or any other taxes based on or measured by the net income of the
Class B Purchaser, in each case imposed on the Class B Purchaser or the Agent as
a result of a present or former connection between the Class B Purchaser or the
Agent and the jurisdiction of the governmental authority imposing such tax or
any political subdivision or taxing authority therein or thereof (other than a
connection that arises solely from the Class B Purchaser's or the Agent's
receipt of a payment under or enforcement of its rights under this Agreement or
the Pooling and Servicing Agreement, or the Agent's execution, delivery and
performance of this Agreement or the Pooling and Servicing Agreement); (ii) any
Taxes that would not have been imposed but for the failure of such Class B
Purchaser or the Agent, as applicable, to comply with subsection 2.5(c) hereof;
(iii) any Taxes imposed as a result of a change by any Class B Purchaser of the
Investing Office (other than changes mandated by this Agreement, including
subsection 2.4(c) hereof, or required by law); and (iv) any Taxes imposed as a
result of the Transfer by any Class B Purchaser of its interest hereunder other
than in accordance with Section 8.1 (all such excluded taxes being hereinafter
called "EXCLUDED TAXES"). If any Taxes, other than Excluded Taxes, are required
to be withheld from any amounts payable to a Class B Purchaser or the Agent
hereunder or under the Pooling and Servicing Agreement, THEN: (i) the amounts
payable to the Class B Purchaser or the Agent under this Agreement or the
Pooling and Servicing Agreement shall be increased by the amount necessary so
that after making all required withholdings (including withholdings applicable
to additional amounts payable under this subsection 2.5(a)), the Class B
Purchaser or the Agent receives interest or any other amounts payable under this
Agreement or the Pooling and Servicing Agreement at the rates or in the amounts
specified in this Agreement and the Pooling and Servicing Agreement; (ii) the
Servicer shall direct the Trustee to, and the Trustee shall, make such
withholdings; and (iii) the Servicer shall direct the
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Trustee to, and the Trustee shall, pay the full amount withheld to the relevant
taxing authority in accordance with applicable law. Whenever any Taxes are
payable on or with respect to amounts distributed to a Class B Purchaser or the
Agent, as promptly as possible thereafter the Servicer shall send to the Agent,
on behalf of such Class B Purchaser (if applicable), a certified copy of an
original official receipt showing payment thereof or if a certified copy cannot
be obtained, other evidence of payment reasonably acceptable to the Class B
Purchaser or the Agent. If the Trustee, upon the direction of the Servicer,
fails to pay any Taxes when due to the appropriate taxing authority or fails to
remit to the Agent, on behalf of such Class B Purchaser (if applicable), the
required receipts or other required documentary evidence, subject to subsection
9.12(a), the Transferor shall pay to the Agent on behalf of such Class B
Purchaser or for its own account, as applicable, any incremental Taxes, interest
or penalties that may become payable by such Class B Purchaser or the Agent, as
applicable, as a result of any such failure. If any increased amounts payable
under this subsection 2.5(a) shall not be waived by the applicable Class B
Purchaser, the Transferor shall have the right to replace the Class B Purchaser
hereunder with a Replacement Purchaser that will succeed to the rights of such
Class B Purchaser under this Agreement; PROVIDED, that (i) such Class B
Purchaser shall not be replaced hereunder with a new investor until such Class B
Purchaser has been paid in full its Percentage Interest of the Class B Investor
Principal Balance and all accrued and unpaid Yield (including any Liquidation
Fee determined for the replacement date) thereon and all other amounts
(including all amounts owing under this Section 2.5) owed to it pursuant to this
Agreement and (ii) if the Class B Purchaser to be replaced is the Agent or
Administrative Agent, or, unless the Agent and the Administrative Agent
otherwise agree, a Structured Purchaser sponsored or administered by the
Administrative Agent or the Agent (in its individual capacity), a replacement
Agent or Administrative Agent, as the case may be, shall have been appointed in
accordance with Section 7.9 and the Agent or Administrative Agent, as the case
may be, to be replaced shall have been paid all amounts owing to it as Agent or
Administrative Agent, as the case may be, pursuant to this Agreement; PROVIDED,
FURTHER, that the Transferor shall provide such Class B Purchaser with an
Officer's Certificate stating that such new investor is not subject to such
Taxes or that such new investor is subject to a lesser amount of Taxes than the
Class B Purchaser.
(b) A Class B Purchaser claiming increased amounts under
subsection 2.5(a) for Taxes paid or payable by such Class B Purchaser (or the
Agent for its own account) will furnish to the Agent who will furnish to the
Transferor and the Servicer a certificate, setting forth the basis and amount of
each request by such Class B Purchaser for such Taxes, such certificate to be
conclusive as to the factual information set forth therein absent manifest
error. All such amounts shall be due and payable to the Agent on behalf of such
Class B Purchaser or for its own account, as the case may be, on the succeeding
Distribution Date following receipt by the Transferor or the Servicer of such
certificate at least 10 days prior to such Distribution Date, in each case if
then incurred by such Class B Purchaser and otherwise shall be due and payable
on the following Distribution Date (or, if earlier, on the Series 2002-1
Termination Date).
(c) Each Class B Purchaser and each Participant holding an
interest in Class B Certificates agrees that prior to the date on which the
first interest payment hereunder is due thereto, it will deliver to the Agent,
the Servicer and the Trustee (i) if such Class B Purchaser or Participant is not
organized under the laws of the United States or any State thereof, two duly
completed copies of the U.S. Internal Revenue Service Form W-8ECI or successor
applicable forms required to evidence that the Class B Purchaser's or
Participant's income from this
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Agreement or the Class B Certificates is "effectively connected" with the
conduct of a trade or business in the United States as the case may be or (ii)
if such Class B Purchaser or Participant is organized under the laws of the
United States or any State thereof and is not an "exempt recipient" as defined
in Treasury Regulations section 1.6049-4(c), a U.S. Internal Revenue Service
Form W-9 or successor applicable form required to evidence such Class B
Purchaser's or Participant's entitlement to an exemption from United States
backup withholding tax. Each Class B Purchaser or Participant holding an
interest in Class B Certificates also agrees to deliver to the Agent, the
Servicer and the Trustee two further copies of said Form W-8ECI or W-9, or such
successor applicable forms or other manner of certification, as the case may be,
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Agent, the Servicer and the Trustee, and such
extensions or renewals thereof as may reasonably be requested by the Agent or
the Servicer, unless in any such case, solely as a result of a change in treaty,
law or regulation occurring prior to the date on which any such delivery would
otherwise be required, and assuming that Section 1446 of the Code does not
apply, the Class B Purchaser or the Participant is no longer eligible to deliver
the then-applicable form set forth above. Each Class B Purchaser certifies,
represents and warrants and each Participant acquiring an interest in a Class B
Certificate or Class B Purchaser which is an Assignee shall certify, represent
and warrant as a condition of acquiring its Participation or beneficial interest
in the Class B Certificates (x) that its income from this Agreement or the Class
B Certificates is effectively connected with a United States trade or business
and (y) that it is entitled to an exemption from United States backup
withholding tax. Further, each Class B Purchaser covenants and each Participant
acquiring an interest in a Class B Certificate shall covenant that for so long
as it shall hold such Participation or Class B Certificates it shall be held in
such manner that the income therefrom shall be effectively connected with the
conduct of a United States trade or business. The Agent, the Servicer and the
Trustee shall be entitled to withhold or cause such withholding, and additional
amounts in respect of Taxes need not be paid to a Class B Purchaser or
Participant in the event of a breach of the certifications, representations,
warranties or covenants set forth in this subsection 2.5(c) by such Class B
Purchaser or Participant.
(d) In the event that any Class B Purchaser or Participant
holding an interest in Class B Certificates shall breach the certifications,
representations, warranties or covenants set forth in this Section 2.5, the
Transferor shall have the right to replace such Class B Purchaser or such
Participant's lead Class B Purchaser hereunder with a Replacement Purchaser that
shall succeed to the rights of such Class B Purchaser under this Agreement and,
subject to compliance with the provisos to the last sentence of subsection
2.5(a), such Class B Purchaser shall assign its interest in this Agent and any
Class B Certificates owned by it to such Replacement Purchaser in accordance
with the provisions of Section 8.1.
2.6 NON-RECOURSE. (a) Except to the extent provided in this Section
2.6, the obligation to repay the Class B Repayment Amount shall be without
recourse to the Transferor, the Servicer (or any Person acting on behalf of any
of them), the Holder of the Exchangeable Transferor Certificate, the Trust
(except to the extent specifically provided for herein or in the Pooling and
Servicing Agreement), the Trustee, the Certificateholders or any Affiliate of
any of them, and shall be limited solely to amounts payable to the Series 2002-1
Certificateholders under the Pooling and Servicing Agreement. To the extent that
such amounts are insufficient to pay the Class B
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Repayment Amount, the obligation to pay the Class B Repayment Amount shall not
constitute a claim against the Transferor, the Servicer (or any Person acting on
behalf of any of them), the Holder of the Exchangeable Transferor Certificate,
the Trust (except to the extent specifically provided for herein or in the
Pooling and Servicing Agreement), the Trustee, the Certificateholders or any
Affiliate of any of them. Notwithstanding anything to the contrary contained
herein, if the Transferor or the Servicer shall fail to make any payment,
deposit or transfer relating to the Series 2002-1 Certificates required to be
made pursuant to the Pooling and Servicing Agreement and, as a result of such
failure, the amount available to be applied to the Class B Certificates pursuant
to the Pooling and Servicing Agreement is reduced to an amount which is less
than the amount which otherwise would have been available had such payment,
deposit or transfer been made (the amount of any such reduction hereinafter
referred to as a "REDUCTION AMOUNT"), the Transferor or the Servicer, as the
case may be, shall repay the Class B Investor Principal Balance, together with
interest due thereon in accordance with the Pooling and Servicing Agreement, to
the extent of (i) such Reduction Amount and (ii) interest on the portion of the
Class B Investor Charge-Offs, if any, which results from the existence of any
Reduction Amount at the Agent Base Rate plus 2.00% per annum.
(b) Subject to and without limiting the foregoing provisions
of this Section 2.6, the obligations of the Transferor and the Servicer under
this Agreement shall be absolute, unconditional and irrevocable and shall be
performed strictly in accordance with the terms of this Agreement, irrespective
of any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, the Pooling and Servicing Agreement, the Series 2002-1
Certificates or the Supplement;
(ii) any amendment to or waiver of, or consent to or
departure from, this Agreement, the Series 2002-1 Certificates, the
Pooling and Servicing Agreement or the Supplement, unless agreed to
by the Required Class B Owners and the Required Class B Purchasers
or all the Class B Owners and the Required Class B Purchasers if
required hereunder;
(iii) the existence of any claim, setoff, defense or
other right which the Transferor, the Servicer or the Trustee may
have at any time against each other, the Agent, the Administrative
Agent or any Class B Purchaser, as the case may be, or any other
Person, whether in connection with this Agreement, the Class B
Certificates, the Pooling and Servicing Agreement or any unrelated
transactions;
(iv) the bankruptcy or insolvency of the Trust or with
respect to any party jointly and severally liable with another party
hereto, of such other party; or
(v) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing; PROVIDED, that, with
respect to obligations owing to any Class B Purchaser, the same
shall not have constituted gross negligence or willful misconduct of
such Class B Purchaser.
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2.7 INDEMNIFICATION. (a) Subject to subsection 9.12(a) hereof in the
case of the Transferor, the Transferor and FDSB, jointly and severally, agree to
indemnify and hold harmless the Agent, the Administrative Agent and each Class B
Purchaser and any directors, officers, employees, attorneys, auditors or
accountants of such Agent, the Administrative Agent or Class B Purchaser (each
such person being referred to as an "INDEMNITEE") from and against any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which such
Indemnitee may incur (or which may be claimed against such Indemnitee) by reason
of or in connection with the execution and delivery of, or payment under, this
Agreement, the Pooling and Servicing Agreement, the Series 2002-1 Certificates,
except (i) to the extent that any such claim, damage, loss, liability, cost or
expense shall be caused by the willful misconduct or gross negligence of such
Indemnitee, (ii) to the extent that any such claim, damage, loss, liability,
cost or expense relates to any Excluded Taxes, (iii) to the extent that any such
claim, damage, loss, liability, cost or expense relates to disclosure made by
the Agent or a Class B Purchaser in connection with an Assignment or
Participation pursuant to Section 8.1 of this Agreement which disclosure is not
based on information given to the Agent by or on behalf of the Transferor, the
Servicer or the Trustee or (iv) to the extent that such claim, damage, loss,
liability, cost or expense includes losses in respect of Receivables that are
uncollectible on account of the insolvency, bankruptcy, or lack of
creditworthiness of the related Obligor. The foregoing indemnity shall include
any claims, damages, losses, liabilities, costs or expenses to which any such
Indemnitee may become subject under the Securities Act of 1933, as amended (the
"ACT"), the Securities Exchange Act of 1934, as amended, the Investment Company
Act of 1940, as amended, or other federal or state law or regulation arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact in any disclosure document relating to the Class B Certificates or the
Class A Certificates, or any amendments thereof or supplements thereto or
arising out of, or based upon, the omission or the alleged omission to state a
material fact necessary to make the statements therein or any amendment thereof
or supplement thereto, in light of the circumstances in which they were made,
not misleading.
(b) Promptly after the receipt by an Indemnitee of a notice of
the commencement of any action against an Indemnitee, such Indemnitee will
notify the Agent and the Agent will, if a claim in respect thereof is to be made
against the Transferor pursuant to subsection 2.7(a) (the "INDEMNIFYING PARTY"),
notify the Indemnifying Party in writing of the commencement thereof; but the
omission so to notify such party will not relieve such party from any liability
which it may have to such Indemnitee pursuant to subsection 2.7(a). Upon receipt
of such notice, the Indemnifying Party shall assume the defense of such action
or proceeding, including the employment of counsel satisfactory to the
Indemnitee in its reasonable judgment and the payment of all related expenses.
Each Indemnitee shall have the right to employ separate counsel in any such
action or proceeding and to participate in (but not control) the defense
thereof, but the fees and expenses of such counsel shall be at its own expense
unless (a) the Indemnifying Party shall have failed to assume or continue to
defend such action or proceeding, (b) the named parties to any such action or
proceeding (including any impleaded parties) include both such Indemnitee and
either the Transferor or another person or entity that may be entitled to
indemnification from the Transferor (by virtue of this Agreement or otherwise)
and such Indemnitee shall have been advised by counsel that there may be one or
more legal defenses available to such Indemnitee which are different from or
additional to those available to the Transferor or such other party or shall
otherwise have reasonably determined that the co-representation would present
such counsel with a conflict of interest, or (c) the
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Indemnifying Party and the Indemnitee shall have mutually agreed to the
retention of separate counsel. Anything contained in this Agreement to the
contrary notwithstanding, the Transferor shall not be entitled to assume the
defense of any part of a Third Party Claim that specifically seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnitee.
2.8 TERMINATION EVENTS. In the event that any one or more of the
following (each, a "TERMINATION EVENT") shall have occurred:
(a) the failure of the Transferor, the Servicer or the Trustee
to make a deposit, payment or withdrawal required hereunder or under any
Related Document (determined without regard to the failure of the Servicer
to deliver any statement or certificate required hereunder or under the
Supplement in order for such deposit, payment or withdrawal to be made)
when and as required and such failure continues for five Business Days;
PROVIDED that the failure of the Transferor to make additional payments
pursuant to subsection 2.4(a) or 2.4(b) or Section 2.5 hereof shall not
constitute a Termination Event unless such failure continues after the
last Business Day of the Monthly Period which follows the Monthly Period
in which the Transferor received a request for such payment pursuant to
such subsection;
(b) any representation or warranty made herein, in any Related
Document or in connection with this Agreement by the Transferor, the
Servicer or the Trustee shall prove to have been incorrect in any material
respect when made, and continues to be incorrect in any material respect
for a period of sixty (60) days after receipt of written notice thereof,
requiring the same to be remedied, by the Transferors and the Servicer
from the Agent and as a result the interests of the Class B Purchasers or
any other them are and continue to be materially and adversely affected;
(c) the failure by the Transferor or the Servicer or, if such
failure is reasonably expected to have a material adverse effect on the
Class B Investors, by the Trustee, to duly observe or perform any term or
provision of this Agreement or in any Related Document (except as
described in clause (a) above) which is not cured within 60 days after
written notice of such failure is given to the defaulting party by the
Agent;
(d) the occurrence (whether occurring before or after the
commencement of an Amortization Period) of a Trust Pay Out Event, a Series
2002-1 Pay Out Event or a Servicer Default, or the occurrence of an event
or condition which would be a Trust Pay Out Event, a Series 2002-1 Pay Out
Event or a Servicer Default but for a waiver of or failure to declare or
determine such event by the Certificateholders or the Trustee; or
(e) the Commitment Expiration Date;
THEN, in the event of a Termination Event described in any of clauses (a)
through (d) above, in addition to any other rights or remedies of the Class B
Purchasers hereunder or under any Related Documents, (A) the Administrative
Agent, at the direction of the Required Class B Owners and of the Required Class
B Purchasers (and without regard to whether a similar
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direction shall have been given pursuant to the Class A Certificate Purchase
Agreement) in their discretion, shall deliver a Reserve Account Increase Notice
to the Servicer as contemplated by the Supplement, and/or (B) the Administrative
Agent, at the direction of the Required Class B Owners and of the Required Class
B Purchasers (and without regard to whether a similar direction shall have been
given pursuant to the Class A Certificate Purchase Agreement) in their
discretion, shall deliver a notice to the Trustee and the Servicer that such
Termination Event has occurred and directing that such Termination Event
constitute a Series 2002-1 Pay Out Event under subsection 10(g) of the
Supplement. In the event that a Termination Event described in clause (e) above
shall have occurred, the Agent shall give notice thereof to the Administrative
Agent, which shall, without further direction, deliver prompt notice to the
Trustee and the Servicer that such Termination Event has occurred and directing
that such Termination Event constitute a Series 2002-1 Pay Out Event under
subsection 10(g) of the Supplement.
SECTION 3. CONDITIONS PRECEDENT
3.1 CONDITION TO INITIAL PURCHASE. As a condition precedent to the
initial purchase by any Class B Purchasers of the Class B Certificates, (i) the
Agent on behalf of the Class B Purchasers shall have received on the Closing
Date the following items, each of which shall be in form and substance
satisfactory to the Agent:
(a) the favorable written opinion of counsel for each of
Prime II Receivables Corporation and FDSB addressed to the Agent and the Class B
Purchasers and dated the Closing Date, covering general corporate matters and
the due execution and delivery of, and the enforceability of, each of the
Related Documents to which it is party and such other matters as the Agent may
request;
(b) a copy of (i) the corporate charter of each of Prime
II Receivables Corporation and FDSB, certified by the Secretary of State or
other governmental authority of its jurisdiction of incorporation on or within
thirty days of the Closing Date, and (ii) by-laws of, and an incumbency
certificate with respect to its officers executing any of the Related Documents
on the Closing Date on behalf of, each of Prime II Receivables Corporation and
FDSB, certified by an authorized officer of each such entity, (iii) good
standing certificates from the appropriate Governmental Authority as of a recent
date with respect to each of Prime II Receivables Corporation and FDSB and (iv)
resolutions of the Board of Director (or an authorized committee thereof) of
each of Prime II Receivables Corporation and FDSB with respect to the Related
Documents to which it is party, certified by an authorized officer of each such
entity;
(c) the representations and warranties of the Transferor
set forth or referred to in Section 4.1 hereof and the representations and
warranties of FDSB set forth or referred to in Section 4.2 hereof shall be true
and correct in all material respects on Closing Date as though made on and as of
the Closing Date, and the Agent shall have received an Officer's Certificate of
the Transferor and of FDSB, respectively, confirming the satisfaction of the
condition set forth in this clause (c);
(d) customary sale/security interest, tax, bankruptcy
and non-consolidation opinions, addressed to the Agent and the Class B
Purchasers;
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(e) a certificate of an authorized officer of FDSB with
respect to the accuracy of data previously furnished to the Agent with respect
to the Receivables in the Trust, in form and scope satisfactory to the Agent;
(f) an executed copy of this Agreement, the Pooling and
Servicing Agreement, the Class B Fee Letter, the Receivables Purchase Agreement
and the Supplement;
(g) evidence satisfactory to the Agent that the Class C
Certificates having a Class C Initial Invested Amount at least equal to the
Required Class C Invested Amount shall have been duly issued;
(h) evidence satisfactory to the Agent that the initial
deposit (if any) in the Reserve Account required by Section 4.9(a) of the
Pooling and Servicing Agreement shall have been made;
(i) evidence satisfactory to the Agent of the due
execution and delivery of the Related Documents to which it is party by the
Trustee;
(j) state and federal tax lien, judgment lien and
Uniform Commercial Code lien searches against FDSB and the Transferor from
Delaware, Ohio and any relevant local jurisdictions;
(k) time stamped receipt copies of proper financing
statements and continuation statements, duly filed under the Uniform Commercial
Code in all jurisdictions as may be necessary or desirable in order to perfect
the ownership interests contemplated by the Pooling and Servicing Agreement; and
(l) all up front fees and expenses agreed and specified
in the Class B Fee Letter shall have been paid by the Transferor on the Closing
Date.
(ii) all representations and warranties of the Transferor and the Servicer
contained herein shall be true and correct in all material respects on the
Closing Date (and after giving effect to the transactions contemplated hereby)
and no event which of itself or with the giving of notice or lapse of time, or
both, would permit the furnishing of a Reserve Account Increase Notice has
occurred and is continuing and the Agent shall have received an Officer's
Certificate of each of the Transferor and the Servicer to such effect.
3.2 CONDITION TO ADDITIONAL PURCHASES. The following shall be
conditions precedent to each purchase by any Class B Purchasers of VFC
Additional Class B Invested Amounts hereunder:
(a) the Transferor shall have timely delivered a notice
of purchase pursuant to subsection 2.1(c) of this Agreement;
(b) no Termination Event shall have occurred;
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(c) after giving effect to such purchase of VFC
Additional Class B Invested Amount, the aggregate Class B Investor
Principal Balance shall not exceed the aggregate Commitments of the
Committed Class B Purchasers minus the aggregate Commitments of all
Defaulting Purchasers;
(d) the Servicer shall have delivered to the Agent on or
prior to the date of such purchase, the most recent monthly statement
required to be delivered under Section 5.2 of the Pooling and Servicing
Agreement; PROVIDED, HOWEVER, that if the Servicer has failed to deliver
such monthly statement on the relevant Determination Date, until such
failure constitutes a Pay Out Event the Servicer may deliver on the date
of such purchase the Daily Report delivered to the Trustee under
subsection 3.4(b) of the Pooling and Servicing Agreement for the Business
Day immediately preceding the date of such purchase in lieu of such
monthly statement;
(e) the conditions set forth in Section 6.15 of the
Pooling and Servicing Agreement to the issuance of such VFC Additional
Class B Invested Amount shall have been satisfied; and
(f) the representations and warranties of the Transferor
contained in Section 4.1 and of FDSB contained in Section 4.2 shall be
true and correct in all material respects on and as of the applicable
Purchase Date, as though made on and as of such date, other than the
representations and warranties of FDSB contained in the last sentence of
subsection 4.2(f) or in subsection 4.2(h), which shall have been true and
correct in all material respects when made and as of the Closing Date, and
other than the representations and warranties of the Transferor and of
FDSB set forth in subsection 4.1(l) and subsection 4.2(g), respectively,
which shall have been true and correct on all material respects on or as
of the respective dates specified therein.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR. The Transferor
repeats and reaffirms to the Class B Purchasers and the Agent the
representations and warranties of the Transferor set forth in Sections 2.3 and
2.4 of the Pooling and Servicing Agreement and represents and warrants that such
representations and warranties are true and correct as of the date hereof. The
Transferor further represents and warrants to, and agrees with, the Agent and
each Class B Purchaser that, as of the date hereof:
(a) The Transferor has been duly organized and is
validly existing and in good standing as a corporation under the laws of the
State of Delaware, with corporate power and authority to own its properties and
to transact the business in which it is now engaged, and the Transferor is duly
qualified to do business, is in good standing and holds all governmental
licenses, authorizations, consents and approvals in each State of the United
States where the nature of its business requires it to be so qualified.
(b) The Transferor has the full corporate power,
authority and legal right to make, execute, deliver and perform the Related
Documents to which it is party and all of the transactions contemplated thereby
and to issue the Series 2002-1 Certificates from the
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Trust and has taken all necessary corporate action to authorize the execution,
delivery and performance of the Related Documents to which it is party and such
issuance. This Agreement and each other Related Document to which the Transferor
is a party has been duly executed and delivered by the Transferor. Each of the
Related Documents to which it is party constitutes the legal, valid and binding
agreement of the Transferor enforceable in accordance with its terms (subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of the rights of creditors generally and except
as such enforceability may be limited by general principles of equity, whether
considered in a proceeding at law or in equity).
(c) The Transferor is not required to obtain the consent
of any other party or any consent, license, approval or authorization of, or
registration with, notice to or other action by any Governmental Authority in
connection with the execution, delivery or performance of each of the Related
Documents to which it is party that has not been duly obtained and which is not
and will not be in full force and effect on the Closing Date and no transaction
contemplated hereby requires compliance with any bulk sales act or similar law.
(d) The execution, delivery and performance of the
Related Documents to which it is party by the Transferor do not violate or
conflict with any provision of any existing law or regulation applicable to the
Transferor or any order or decree of any court to which the Transferor is
subject or the Certificate of Incorporation or Bylaws of the Transferor, or any
mortgage, security agreement, indenture, contract or other agreement to which
the Transferor is a party or by which the Transferor or any significant portion
of its properties is bound.
(e) There is no litigation, investigation or
administrative proceeding before any court, tribunal, regulatory body or
governmental body presently pending, or, to the knowledge of the Transferor,
threatened, with respect to any of the Related Documents, the transactions
contemplated thereby, or the issuance of the Series 2002-1 Certificates and
there is no such litigation or proceeding against the Transferor or any
significant portion of its properties which would, individually or in the
aggregate, have a material adverse effect on the transactions contemplated by
any of the Related Documents or the ability of the Transferor to perform its
obligations thereunder.
(f) The Transferor is not insolvent or the subject of
any voluntary or involuntary bankruptcy proceedings.
(g) No Pay Out Event, Servicer Default, Termination
Event or event permitting the furnishing of a Reserve Account Increase Notice
has occurred and is continuing, and no event, act or omission has occurred and
is continuing which, with the lapse of time, the giving of notice, or both,
would constitute such an event or default.
(h) The Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as amended, and neither
the Trust nor the Transferor is required to be registered under the Investment
Company Act of 1940, as amended.
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(i) The Receivables conveyed by the Transferor to the
Trust under the Pooling and Servicing Agreement are in an aggregate amount,
determined as of November 4, 2002, of $650, 844,748.52. The Receivables Purchase
Agreement is in full force and effect on the date hereof and no material default
by any party exists thereunder.
(j) The Trust is duly created and existing under the
laws of the State of New York. Simultaneous with the closing hereunder, all
conditions to the issuance and sale of the Series 2002-1 Certificates set forth
in the Pooling and Servicing Agreement have been satisfied and the Series 2002-1
Certificates have been duly issued by the Trust.
(k) Neither the Transferor nor any of its Affiliates has
directly, or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any "security" (as defined in the
Act) that is or will be integrated with the sale of the any Series 2002-1
Certificates in a manner that would require the registration under the Act of
the offering of the Series 2002-1 Certificates or (ii) engaged in any form of
general solicitation or general advertising in connection with the offering of
the Series 2002-1 Certificates (as those terms are used in Regulation D under
the Act) or in any manner involving a public offering within the meaning of
Section 4(2) of the Act. Assuming the accuracy of the representations and
warranties of each Class B Purchaser in its Investment Letter and of each
purchaser of Class A Certificates and Class C Certificate in their respective
investment letters, the offer and sale of the Series 2002-1 Certificates are
transactions which are exempt from the registration requirements of the Act.
(l) All written factual information heretofore furnished
by the Transferor or any of its Affiliates to, or for delivery to, the Agent for
purposes of or in connection with this Agreement, each other Related Document or
any transaction contemplated hereby or thereby, including, without limitation,
information relating to the Accounts and Receivables and the Transferor's and
FDSB's credit card businesses, was true and correct in all material respects on
the date as of which such information was stated or certified and remains true
and correct in all material respects (unless such information specifically
relates to an earlier date in which case such information shall have been true
and correct in all material respects on such earlier date).
4.2 REPRESENTATIONS AND WARRANTIES OF FDSB. FDSB repeats and
reaffirms to the Class B Purchasers and the Agent the representations and
warranties of the Servicer set forth in Section 3.3 of the Pooling and Servicing
Agreement and represents and warrants that such representations and warranties
are true and correct as of the date hereof. FDSB further represents and warrants
to, and agrees with, the Agent and each Class B Purchaser that, as of the date
hereof:
(a) FDSB has been duly organized and is validly existing
and in good standing as a federal thrift institution under the laws of the
United States of America, with corporate power and authority to own its
properties and to transact the business in which it is now engaged, and FDSB is
duly qualified to do business (or is exempt from such qualification), is in good
standing and holds all governmental licenses, authorizations, consents and
approvals in each State of the United States where the nature of its business
requires it to be
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so qualified. FDSB is an insured depository institution under Section 4(a) of
the Federal Deposit Insurance Act.
(b) FDSB has the full corporate power, authority and
legal right to make, execute, deliver and perform the Related Documents to which
it is party and all the transactions contemplated thereby and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Related Documents to which it is party. This Agreement and each other
Related Document to which FDSB is a party has been duly executed and delivered
by FDSB. Each of the Related Documents to which it is party constitutes the
legal, valid and binding agreement of FDSB enforceable in accordance with its
terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of the rights of creditors
generally and the rights of creditors of national banking associations and
except as such enforceability may be limited by general principles of equity,
whether considered in a proceeding at law or in equity).
(c) FDSB is not required to obtain the consent of any
other party or any consent, license, approval or authorization of, or
registration with, notice to or other action by any Governmental Authority in
connection with the execution, delivery or performance of each of the Related
Documents to which it is party that has not been duly obtained and which is not
and will not be in full force and effect on the Closing Date.
(d) The execution, delivery and performance of each of
the Related Documents to which it is party by FDSB do not violate or conflict
with any provision of any existing law or regulation applicable to FDSB or any
order or decree of any court to which FDSB is subject or the Articles of
Association or Bylaws of FDSB, or any mortgage, security agreement, indenture,
contract or other agreement to which FDSB is a party or by which FDSB or any
significant portion of FDSB's properties is bound.
(e) There is no litigation, investigation or
administrative proceeding before any court, tribunal, regulatory body or
governmental body presently pending, or, to the knowledge of FDSB, threatened,
with respect to the Related Documents, the transactions contemplated thereby, or
the issuance of the Series 2002-1 Certificates, and there is no such litigation
or proceeding against FDSB or any significant portion of its properties which
would, individually or in the aggregate, have a material adverse effect on the
transactions contemplated by any of the Related Documents or the ability of
FDSB, in its capacity as Servicer or otherwise, to perform its obligations
thereunder.
(f) FDSB is not insolvent or the subject of any
insolvency or liquidation proceeding. The financial statements of FDSB delivered
to the Agent are complete and correct in all material respects and fairly
present the financial condition of FDSB as of date of such statements and the
results of operations of FDSB for the period then ended, all in accordance with
regulatory accounting principles consistently applied. Since the date of the
most recent audited financial statements of FDSB delivered to the Agent, there
has not been any material adverse change in the condition (financial or
otherwise) of FDSB.
(g) All written factual information heretofore furnished
by FDSB or any of its Affiliates to, or for delivery to, the Agent for purposes
of or in connection
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with this Agreement, each other Related Document or any transaction contemplated
hereby or thereby including, without limitation, information relating to the
Accounts and Receivables and the Transferor's and FDSB's VISA(R) credit card
businesses, was true and correct in all material respects on the date as of
which such information was stated or certified and remains true and correct in
all material respects (unless such information specifically relates to an
earlier date in which case such information shall have been true and correct in
all material respects on such earlier date).
(h) There are no outstanding comments from the most
recent report prepared by FDSB's (in its capacity as Servicer) independent
public accountants in connection with its VISA(R) credit card receivables.
(i) No Pay Out Event, Servicer Default, Termination
Event or event permitting the furnishing of a Reserve Account Increase Notice
has occurred and is continuing, and no event, act or omission has occurred and
is continuing which, with the lapse of time, the giving of notice, or both,
would constitute such an event or default.
4.3 REPRESENTATIONS AND WARRANTIES OF THE AGENT AND THE COMMITTED
CLASS B PURCHASERS. Each of the Agent and the Committed Class B Purchasers
represents and warrants to, and agrees with, the Transferor and the Servicer,
that:
(a) It is duly authorized to enter into and perform this
Agreement and to purchase its Commitment Percentage (if any) of the Class B
Certificates, and has duly executed and delivered this Agreement; and the person
signing this Agreement on behalf of such Committed Class B Purchaser has been
duly authorized by such Committed Class B Purchaser to do so.
(b) This Agreement constitutes the legal, valid and
binding obligation of such Committed Class B Purchaser, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, conservatorship
or other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general, and except as such enforceability may be limited
by general principles of equity (whether considered in a proceeding at law or in
equity).
(c) No registration with or consent or approval of or
other action by any state or local governmental authority or regulatory body
having jurisdiction over such Committed Class B Purchaser is required in
connection with the execution, delivery or performance by such Committed Class B
Purchaser of this Agreement other than as may be required under the blue sky
laws of any state.
SECTION 5. COVENANTS
5.1 COVENANTS OF THE TRANSFEROR AND FDSB. Each of the Transferor and
FDSB (individually or, as set forth below, as the Servicer) covenants and
agrees, so long as any amount of the Class B Investor Principal Balance shall
remain outstanding or any monetary obligation arising hereunder shall remain
unpaid, unless the Required Class B Owners and the Required Class B Purchasers
shall otherwise consent in writing, that:
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(a) each of the Transferor and the Servicer shall
perform in all material respects each of the respective agreements, warranties
and indemnities applicable to it and comply in all material respects with each
of the respective terms and provisions applicable to it hereunder and under the
other Related Documents to which it is party, which agreements are hereby
incorporated by reference into this Agreement as if set forth herein in full;
and each of the Transferor and the Servicer shall take all reasonable action to
enforce the obligations of each of the other parties to such Related Documents
which are contained therein;
(b) the Transferor and the Servicer shall furnish to the
Agent (i) a copy of each opinion, certificate, report, statement, notice or
other communication (other than investment instructions) relating to the Series
2002-1 Certificates which is furnished by or on behalf of either of them to
Certificateholders, to any Rating Agency or to the Trustee and furnish to the
Agent after receipt thereof, a copy of each notice, demand or other
communication relating to the Series 2002-1 Certificates, this Agreement or the
Pooling and Servicing Agreement received by the Transferor or the Servicer from
the Trustee, any Rating Agency or 15% or more of the Series 2002-1
Certificateholders (to the extent such notice, demand or communication relates
to the Accounts, the Receivables, any Servicer Default or any Pay Out Event);
and (ii) such other information, documents records or reports respecting the
Trust, the Receivables, the Transferor, FDSB or the Servicer as the Agent may
from time to time reasonably request without unreasonable expense to the
Transferor or the Servicer;
(c) the Servicer shall furnish to the Agent on or before
the date such reports are due under the Pooling and Servicing Agreement copies
of each of the reports and certificates required by subsection 3.4(b) and
Sections 3.5 and 3.6 of the Pooling and Servicing Agreement;
(d) the Servicer shall promptly furnish to the Agent a
copy, addressed to the Agent, of each opinion of counsel delivered to the
Trustee pursuant to Section 13.2(d) of the Pooling and Servicing Agreement;
(e) FDSB shall furnish to the Agent (i) a copy of its
annual Call Report promptly after it becomes available, (ii) an annual
certificate dated within 90 days after the end each of its fiscal years stating
its compliance (or failure to comply) with each minimum ratio of total capital
and core capital to risk-weighted assets required by Governmental Authorities in
accordance with the implementation of the Basle Accord;
(f) the Servicer shall furnish to the Agent a
certificate concurrently with its delivery of its annual certificate pursuant to
Section 3.5 of the Pooling and Servicing Agreement stating that no Termination
Event (other than a Termination Event described in clause (e) of subsection 2.8)
or event or condition which with the passage of time or the giving of notice, or
both, would constitute such a Termination Event or, if such Termination Event,
event or condition has occurred, identifying the same in reasonable detail;
(g) Each of the Servicer and the Transferor will not
change its name, identity or corporate structure (within the meaning of Section
9-402(7) of any applicable enactment of the Uniform Commercial Code) or relocate
its chief executive office or any office where records are kept unless it shall
have: (i) given the Agent at least thirty (30) days' prior
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written notice thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with such
change or relocation;
(h) the Transferor shall not exercise its right to
accept optional reassignment of the Receivables or repurchase the Series 2002-1
Certificates pursuant to Sections 10.2 or 12.2 of the Pooling and Servicing
Agreement or Section 3 of the Supplement, unless the Class B Purchasers have
been paid, or will be paid upon such repurchase or in connection with such
optional reassignment, the Class B Investor Principal Balance, all interest
thereon and all other amounts owing hereunder in full;
(i) the Transferor and the Servicer shall at any time
from time to time during regular business hours, on reasonable notice to the
Transferor or the Servicer, as the case may be, permit the Agent, or its agents
or representatives to:
(i) examine all books, records and documents
(including computer tapes and disks) in its possession or under its control
relating to the Receivables, and
(ii) visit its offices and property for the
purpose of examining such materials described in clause (i) above.
The information obtained by the Agent or any Class B Purchaser pursuant to this
subsection shall be held in confidence in accordance with Section 6.2 hereof;
(j) the Servicer shall furnish to the Agent, promptly
after the occurrence of any Servicer Default, Termination Event, Pay Out Event
or any event which would permit the furnishing of a Reserve Account Increase
Notice, a certificate of an appropriate officer of the Servicer setting forth
the circumstances of such Servicer Default, Pay Out Event, Termination Event or
event and any action taken or proposed to be taken by the Servicer or the
Transferor with respect thereto;
(k) the Transferor and the Servicer shall timely make
all payments, deposits or transfers and give all instructions to transfer
required by this Agreement and the Pooling and Servicing Agreement;
(l) the Transferor shall not terminate (except in
accordance with the terms thereof), amend, waive or otherwise modify the Pooling
and Servicing Agreement or the Supplement unless (i) such amendment, waiver or
modification shall not, as evidenced by an Officer's Certificate of the
Transferor delivered to the Agent, adversely affect in any material respect the
interests of the Agent or the Class B Purchasers under this Agreement or the
Pooling and Servicing Agreement, and will not result in a reduction or
withdrawal of the then current rating by any Rating Agency of any commercial
paper notes issued by any Structured Purchaser; (ii) all of the provisions of
Section 13.1 of the Pooling and Servicing Agreement have been complied with and
(iii) in the case of any amendment of the Supplement, any amendment to be
effected pursuant to subsection 13.1(b) of the Pooling and Servicing Agreement
or any amendment to the interest rate to be borne by the Class A Certificates or
the Class C Certificates, the prior written consent thereto shall have been
provided by the Required Class B Owners and the Required Class B Purchasers;
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(m) the Transferor and the Servicer shall execute and
deliver to the Agent all such documents and instruments and do all such other
acts and things as may be necessary or reasonably required by the Agent or the
Trustee to enable the Trustee or the Agent to exercise and enforce their
respective rights under this Agreement and the Pooling and Servicing Agreement
and to realize thereon, and record and file and rerecord and refile all such
documents and instruments, at such time or times, in such manner and at such
place or places, all as may be necessary or required by the Trustee or the Agent
to validate, preserve, perfect and protect the position of the Trustee under the
Pooling and Servicing Agreement;
(n) without the prior written consent of the Required
Class B Owners and the Required Class B Purchasers, the Transferor will not
appoint (or cause to be appointed) a successor Trustee;
(o) neither the Transferor nor the Servicer will
consolidate with or merge into any other Person or convey or transfer its
properties and assets substantially as an entirety to any Person, except (i) in
accordance with Section 7.2 or 8.2 of the Pooling and Servicing Agreement, with
respect to the Transferor or the Servicer, respectively, and (ii) so long as (A)
the obligations of the Transferor or the Servicer, as the case may be, under
this Agreement and any other document executed and delivered in connection
herewith shall be expressly assumed in writing by the transferee, purchaser or
successor corporation, (B) the Transferor or the Servicer, as the case may be,
has delivered to the Agent an Officer's Certificate of the Transferor or the
Servicer and an Opinion of Counsel addressed to the Agent and each Class B
Purchaser meeting the requirements of subsection 7.2(a)(ii) or 8.2(ii) of the
Pooling and Servicing Agreement, as appropriate, as provided in such agreement,
(C) the Transferor or the Servicer, as the case may be, has delivered to the
Agent a copy of the notice to the Rating Agencies delivered pursuant to
subsection 7.2(a)(iii) or 8.2(iii) of the Pooling and Servicing Agreement, and
(D) such consolidation, merger or transfer, in the reasonable judgment of the
Transferor and the Servicer, will not have a material adverse effect on the
interests of the Class B Purchasers hereunder or under the Pooling and Servicing
Agreement;
(p) the Transferor shall not reduce or withdraw any
Discount Percentage then in effect unless such reduction or withdrawal (i) would
not in the reasonable belief of the Transferor cause a Pay Out Event with
respect to the Series 2002-1 Certificates or an event which, with notice or
lapse of time or both, would constitute such a Pay Out Event to occur or (ii) is
consented to by the Required Class B Owners and the Required Class B Purchasers;
(q) the Transferor and FDSB will not make any material
amendment, modification or change to, or provide any waiver under, the
Receivables Purchase Agreement without the prior written consent of the Required
Class B Owners and the Required Class B Purchasers;
(r) the Transferor will not incur, permit or suffer to
exist any lien, charge or other adverse claim on the Minimum Transferor Amount
in the Trust;
(s) the Transferor will not engage in any business other
than the transactions contemplated by this Agreement and the Related Documents;
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(t) the Transferor will not (i) incur any liabilities or
indebtedness, other than pursuant to this Agreement and the Related Documents or
reasonably related thereto, (ii) incur or permit or suffer to exist any lien,
charge or encumbrance on any of its properties or assets, other than as provided
for in the Pooling and Servicing Agreement, (iii) make any investments other
than in Cash Equivalents or (iv) make any capital expenditures other than those
reasonably required for its performance of its obligations hereunder and under
the Related Documents; and
(u) the Transferor will not amend, modify or otherwise
make any change to its Certificate of Incorporation if such amendment,
modification or other change would have a material adverse effect on the
interests of the Class B Purchasers, would affect any provisions thereof
relating to the commencement of a voluntary bankruptcy proceeding or which is
inconsistent with the assumptions set forth in the legal opinion of Jones, Day,
Reavis & Pogue, counsel to FDSB and the Transferor, issued in connection with
this Agreement and the transactions contemplated hereby and relating to the
issues of substantive consolidation.
(v) The Transferor shall, without limiting the
requirements of Section 5.1(m) hereof and Section 2.1 of the Pooling and
Servicing Agreement, at its expense, preserve, continue, and maintain or cause
to be preserved, continued, and maintained the Trust's valid and properly
protected security interest in each Receivable transferred under the Pooling and
Servicing Agreement, including, without limitation, filing or recording Uniform
Commercial Code financing statements and continuation statements in each
relevant jurisdiction.
SECTION 6. MUTUAL COVENANTS REGARDING CONFIDENTIALITY
6.1 COVENANTS OF TRANSFEROR, ETC. The Transferor and the Servicer
shall hold in confidence, and not disclose to any Person, the terms of any fees
payable in connection with this Agreement except they may disclose such
information (i) to their officers, directors, employees, agents, counsel,
accountants, auditors, advisors or representatives, (ii) with the consent of the
Required Class B Purchasers and Agent, or (iii) to the extent the Transferor or
the Servicer or any Affiliate of either of them should be required by any law or
regulation applicable to it or requested by any Governmental Authority to
disclose such information; PROVIDED, that, in the case of clause (iii), the
Transferor or the Servicer, as the case may be, will use all reasonable efforts
to maintain confidentiality and will (unless otherwise prohibited by law) notify
the Agent of its intention to make any such disclosure prior to making such
disclosure.
6.2 COVENANTS OF CLASS B PURCHASERS. The Agent and each Class B
Purchaser covenants and agrees that any information obtained by the Agent or
such Class B Purchaser pursuant to this Agreement shall be held in confidence
(it being understood that documents provided to the Agent hereunder may in all
cases be distributed by the Agent to the Class B Purchasers) except that the
Agent or such Class B Purchaser may disclose such information (i) to its
officers, directors, employees, agents, counsel, accountants, auditors, advisors
or representatives, (ii) to the extent such information has become available to
the public other than as a result of a disclosure by or through the Agent or
such Class B Purchaser, (iii) to the extent such information was available to
the Agent or such Class B Purchaser on a nonconfidential basis prior to its
disclosure to the Agent or such Class B Purchaser hereunder,
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(iv) with the consent of the Transferor, (v) to the extent permitted by Section
8.1, (vi) to the extent the Agent or such Class B Purchaser should be (A)
required in connection with any legal or regulatory proceeding or (B) requested
by any Governmental Authority to disclose such information or (vii) in the case
of any Class B Purchaser that is a Structured Lender, to rating agencies,
placement agents and providers of liquidity and credit support who agree to hold
such information in confidence; PROVIDED, that, in the case of clause (vi)
above, the Agent or such Class B Purchaser, as applicable, will use all
reasonable efforts to maintain confidentiality and, in the case of clause
(vi)(A) above, will (unless otherwise prohibited by law) notify the Transferor
of its intention to make any such disclosure prior to making any such
disclosure. The parties hereto acknowledge that, notwithstanding the provisions
set forth in this Section 6.2, any Structured Purchaser (and any liquidity
provider to any Structured Purchaser which would be a prospective assignee) will
not be obligated to obtain any consent hereunder, and no provision of this
Section 6.2 or of any other agreement executed or delivered in connection
herewith or any confidentiality agreement signed by any person or entity will
restrict the delivery of information received in connection herewith or with any
agreement executed or delivered in connection herewith (or the disclosure of any
terms or conditions contained in any such agreement) to any rating agency,
commercial paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to such Structured Purchaser or any entity organized for the purpose
of purchasing, or making loans secured by, financial assets for which Bank One,
NA acts as the administrative agent and to any officers, directors, employees,
outside accountants and attorneys of the foregoing who need to know such
information in connection herewith or any agreement executed or delivered in
connection herewith, any liquidity arrangements in connection therewith, the
transactions consummated in connection therewith, any transfer by such
Structured Purchaser or the transfer of any of such Structured Purchaser's
rights or interests thereunder.
SECTION 7. THE AGENTS
7.1 APPOINTMENT. (a) Each Class B Purchaser hereby irrevocably
designates and appoints the Agent as the agent of such Class B Purchaser under
this Agreement, and each such Class B Purchaser irrevocably authorizes the
Agent, as the agent for such Class B Purchaser, to take such action on its
behalf under the provisions of the Related Documents and to exercise such powers
and perform such duties thereunder as are expressly delegated to the Agent by
the terms of this Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Class B
Purchaser, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Agent. In performing its functions and duties hereunder and under
the other Related Documents, the Agent shall act solely as agent for the Class B
Purchasers and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for either of the
Transferor or FDSB or any of the Transferor's or FDSB's successors or assigns.
The Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Related
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all amounts payable
hereunder and under each Related Document. Each Class B Purchaser hereby
authorizes the Agent to execute and deliver each of the Uniform Commercial
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Code financing statements on behalf of such Class B Purchaser (the terms of
which shall be binding on such Class B Purchaser).
(b) Each Class B Purchaser hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Class B Purchaser under
the Pooling and Servicing Agreement, and each such Class B Purchaser irrevocably
authorizes the Administrative Agent, as the agent for such Class B Purchaser, to
take such action on its behalf under the provisions of the Pooling and Servicing
Agreement and to exercise such powers thereunder as are expressly granted to the
Administrative Agent by the terms of the Pooling and Servicing Agreement,
subject to the terms and conditions of this Agreement, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the Pooling and Servicing Agreement, or any fiduciary relationship with any
Class B Purchaser, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or
otherwise exist against the Administrative Agent. In performing its functions
and duties hereunder and under the other Related Documents, the Administrative
Agent shall act solely as agent for the Class B Purchasers and the Class B
Purchasers and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for either of the
Transferor or FDSB or any of the Transferor's or FDSB's successors or assigns.
The Administrative Agent shall not be required to take any action that exposes
the Administrative Agent to personal liability or that is contrary to this
Agreement, any other Related Document or applicable law. The appointment and
authority of the Administrative Agent hereunder shall terminate upon the
indefeasible payment in full of all amounts payable hereunder and under each
Related Document. Each Class B Purchaser and each Class B Purchaser hereby
authorizes the Administrative Agent to execute and deliver each of the Uniform
Commercial Code financing statements on behalf of such Class B Purchaser and
Class B Purchaser (the terms of which shall be binding on such Class B Purchaser
and Class B Purchaser).
7.2 DELEGATION OF DUTIES. The Agent and the Administrative Agent may
execute any of its duties under this Agreement or any of the other Related
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. Neither the
Agent nor the Administrative Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
7.3 EXCULPATORY PROVISIONS. Neither the Agent nor the Administrative
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable to any of the Class B
Purchasers for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any of the other Related
Documents (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Class B Purchasers
for any recitals, statements, representations or warranties made by the
Transferor, the Servicer or the Trustee or any officer thereof contained in this
Agreement or any of the other Related Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent or the Administrative Agent under or in connection with, this Agreement or
any of the other Related Documents or for the value, validity,
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effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any of the other Related Documents or for any failure of the Transferor, the
Servicer or the Trustee to perform its obligations hereunder or thereunder, or
for the satisfaction of any condition specified in Section 3 hereof, or for the
perfection, priority, condition, value or sufficiency of any collateral pledged
in connection herewith. Neither the Agent nor the Administrative Agent shall be
under any obligation to any Class B Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any of the other Related Documents, or
to inspect the properties, books or records of the Transferor, the Servicer, the
Trustee or the Trust.
7.4 RELIANCE BY AGENT. The Agent and the Administrative Agent shall
in all cases be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, written statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Transferor, the Agent or the Administrative Agent), independent
accountants and other experts selected by the Agent or the Administrative Agent.
The Agent and the Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any of the other Related
Documents unless it shall first receive such advice or concurrence of the
Required Class B Purchasers as it deems appropriate or it shall first be
indemnified to its satisfaction by the Class B Purchasers or of the Committed
Class B Purchasers against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent and the Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any of the other
Related Documents in accordance with a request of the Required Class B Owners
and the Required Class B Purchasers and such request and any action taken or
failure to act pursuant thereto shall be binding upon all present and future
Class B Purchasers.
7.5 NOTICES. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any breach of this Agreement or the occurrence of
any Pay Out Event or any Termination Event unless the Agent has received notice
from the Transferor, the Servicer, the Trustee or any Class B Purchaser
referring to this Agreement, describing such event. In the event that the Agent
receives such a notice, the Agent promptly shall give notice thereof to the
Class B Owners and the Required Class B Purchasers. The Agent shall take such
action with respect to such event as shall be reasonably directed by the
Required Class B Owners and the Required Class B Purchasers; PROVIDED that
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such event as it shall deem advisable in the best
interests of the Class B Purchasers.
7.6 NON-RELIANCE ON AGENT AND OTHER CLASS B PURCHASERS. Each Class B
Purchaser expressly acknowledges that neither the Agent nor the Administrative
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent or the Administrative Agent hereafter taken,
including any review of the affairs of the Transferor, the Servicer, the Trustee
or the Trust shall be deemed to constitute any representation
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or warranty by the Agent or the Administrative Agent to any Class B Purchaser.
Each Class B Purchaser represents to the Agent and the Administrative Agent that
it has, independently and without reliance upon the Agent or any other Class B
Purchaser, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Trust, the Trustee, the Transferor and the Servicer and made its own decision to
purchase its Class B Certificate hereunder and enter into this Agreement. Each
Class B Purchaser also represents that it will, independently and without
reliance upon the Agent or the Administrative Agent or any other Class B
Purchaser, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis, appraisals and
decisions in taking or not taking action under this Agreement or any of the
other Related Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Trust, the Trustee, the Transferor and the
Servicer. Except for notices, reports and other documents received by the Agent
under Section 5 hereof, the Agent shall not have any duty or responsibility to
provide any Class B Purchaser with any credit or other information concerning
the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of the Trust, the Trustee, the Transferor or the
Servicer which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
7.7 INDEMNIFICATION. The Committed Class B Purchasers agree to
reimburse and indemnify the Agent and the Administrative Agent in its capacity
as such (without limiting the obligation of the Transferor, the Trust or the
Servicer to reimburse the Agent or the Administrative Agent for any such
amounts), ratably according to their respective Commitment Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the obligations under this Agreement, including the
Class B Invested Amount) be imposed on, incurred by or asserted against the
Agent or the Administrative Agent in any way relating to or arising out of this
Agreement, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the Agent or
the Administrative Agent under or in connection with any of the foregoing;
PROVIDED that no Class B Purchaser shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of the Agent or the
Administrative Agent resulting from its own gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
obligations under this Agreement, including the Class B Invested Amount.
7.8 AGENTS IN THEIR INDIVIDUAL CAPACITIES. The Agent, the
Administrative Agent and their Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Trust, the Trustee,
the Servicer and the Transferor as though the Agent and the Administrative Agent
were not the agents hereunder. Each Class B Purchaser acknowledges that Bank One
may act (i) as administrator and agent for one or more Structured Purchasers and
in such capacity acts and may continue to act on behalf of each such Structured
Purchaser in connection with its business and (ii) as the agent for certain
financial institutions under the liquidity and credit enhancement agreements
relating to this Agreement to which any such Structured Purchaser is party and
in various other capacities relating to the
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business of any such Structured Purchaser under various agreements. Bank One in
its capacity as the Agent shall not, by virtue of its acting in any such other
capacities, be deemed to have duties or responsibilities hereunder or be held to
a standard of care in connection with the performance of its duties as the Agent
or the Administrative Agent other than as expressly provided in this Agreement.
Bank One may act as the Agent and the Administrative Agent without regard to and
without additional duties or liabilities arising from its role as such
administrator or agent or arising from its acting in any such other capacity.
7.9 SUCCESSOR AGENT. (a) The Agent may resign as Agent upon ten
days' notice to the Class B Purchasers, the Trustee, the Transferor and the
Servicer with such resignation becoming effective upon a successor agent
succeeding to the rights, powers and duties of the Agent pursuant to this
subsection 7.9(a). If the Agent shall resign as Agent under this Agreement, then
the Required Class B Purchasers and the Required Class B Owners shall appoint
from among the Committed Class B Purchasers a successor agent for the Class B
Purchasers. The successor agent shall succeed to the rights, powers and duties
of the Agent, and the term "Agent" shall mean such successor agent effective
upon its appointment, and the former Agent's rights, powers and duties as Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After the retiring
Agent's resignation as Agent, the provisions of this Section 7 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
(b) The Administrative Agent may resign as Administrative
Agent upon ten days' notice to the Class B Purchasers, the Class A Purchasers
(as defined in the Class A Certificate Purchase Agreement), the Trustee, the
Transferor and the Servicer with such resignation becoming effective upon a
successor agent succeeding to the rights, powers and duties of the
Administrative Agent pursuant to this subsection 7.9(b). If the Administrative
Agent shall resign as Administrative Agent under this Agreement, then the
Required Class B Purchasers and the Required Class B Owners shall appoint from
among the Committed Class B Purchasers hereunder or under the Class B
Certificate Purchase Agreement a successor Administrative Agent of the Class B
Certificateholders and Class A Certificateholders as provided in the Supplement;
PROVIDED that no such appointment shall be effective unless such successor is
also appointed as successor Administrative Agent under the Class A Certificate
Purchase Agreement. The successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon its appointment, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement. After the
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 7 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
SECTION 8. SECURITIES LAWS; TRANSFERS; TAX TREATMENT
8.1 TRANSFERS OF CLASS B CERTIFICATES. (a) Each Class B Owner agrees
that the beneficial interest in the Class B Certificates purchased by it will be
acquired for investment only and not with a view to any public distribution
thereof, and that such Class B Owner will not offer to sell or otherwise dispose
of any Class B Certificate acquired by it (or any
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interest therein) in violation of any of the registration requirements of the
Act or any applicable state or other securities laws. Each Class B Owner
acknowledges that it has no right to require the Transferor to register, under
the Act or any other securities law, the Class B Certificates (or the beneficial
interest therein) acquired by it pursuant to this Agreement or any Transfer
Supplement. Each Class B Owner hereby confirms and agrees that in connection
with any transfer or syndication by it of an interest in the Class B
Certificates, such Class B Owner has not engaged and will not engage in a
general solicitation or general advertising including advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media or broadcast over radio or television, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
Each initial Class B Owner agrees with the Transferor that it will execute and
deliver to the Transferor, the Servicer and the Trustee on or before the Closing
Date a letter in the form attached hereto as EXHIBIT A (an "INVESTMENT LETTER")
with respect to the purchase by such Class B Owner of a beneficial interest in
the Class B Certificates.
(b) Each initial purchaser of a Class B Certificate or
any interest therein and any Assignee thereof or Participant therein shall
certify to the Transferor, the Servicer and the Trustee that it is either (A)(i)
a citizen or resident of the United States, (ii) a corporation or partnership
organized in or under the laws of the United States or any political subdivision
thereof which, if such entity is a tax-exempt corporation, recognizes that
payments with respect to the Class B Certificates may constitute unrelated
business taxable income or (iii) a Person not described in clause (i) or (ii)
whose income from the Class B Certificates is effectively connected with the
conduct of a trade or business within the United States (within the meaning of
the Code) and whose ownership of any interest in a Class B Certificate will not,
under United States federal tax laws in effect at the time of the making of such
certification, result in any withholding obligation with respect to any payments
with respect to the Class B Certificates by any Person (other than withholding,
if any, under Section 1446 of the Code) and who will furnish to the Agent, the
Servicer and the Trustee, and to the Class B Owner making the Transfer, a
properly executed U.S. Internal Revenue Service Form W-8ECI (and will agree (to
the extent legally able) to provide a new Form W-8ECI upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable United States laws) or (B) an estate or trust the
income of which is includible in gross income for United States federal income
tax purposes.
(c) Any sale, transfer, assignment, participation,
pledge, hypothecation or other disposition (a "TRANSFER") of a Class B
Certificate or any interest therein may be made only in accordance with this
Section 8.1 and in accordance with and subject to the applicable limitations set
forth in Section 6.18 of the Pooling and Servicing Agreement. Any Transfer of an
interest in a Class B Certificate, a Commitment or any Noncommitted Purchaser
Percentage, when combined with any substantially concurrent Transfers hereunder
between the same parties and any substantially concurrent Transfer of an
interest in a Class A Certificate or a Commitment or Noncommitted Purchaser
Percentage (as such terms are defined for purposes of the Class A Certificate
Purchase Agreement) between the same parties, shall be in respect of (i) in the
case of a Committed Class B Purchaser, at least $5,000,000 in the aggregate,
which may be composed of any one or more of (A) Class B Invested Amount, (B) to
the extent in excess of the Class B Invested Amount subject to such Transfer,
Commitment hereunder, (C) Class A Invested Amount, and (D) to the extent in
excess of the Class A Invested
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Amount subject to such concurrent Transfer, Commitment under the Class A
Certificate Purchase Agreement, or (ii) in the case of a Noncommitted Class B
Purchaser, at least $5,000,000 in the aggregate, which may be composed of any
one or more of (A) Class B Invested Amount, (B) to the extent in excess of the
Class B Invested Amount subject to such Transfer, the product of the
Noncommitted Purchaser Percentage subject to such Transfer times the aggregate
Commitments hereunder, (C) Class A Invested Amount and (D) to the extent in
excess of the Class A Invested Amount subject to such concurrent Transfer, the
product of the Noncommitted Purchaser Percentage under the Class A Certificate
Purchase Agreement subject to such Transfer times the aggregate Commitments
under the Class A Certificate Purchase Agreement. Any Transfer of an interest in
a Class B Certificate otherwise permitted by this Section 8.1 will be permitted
only if it consists of a pro rata percentage interest in all payments made with
respect to the Class B Purchaser's beneficial interest in such Class B
Certificate. No Class B Certificate or any interest therein may be Transferred
by assignment or Participation to any Person (each, a "TRANSFEREE") unless prior
to the transfer the Transferee shall have executed and delivered to the Agent
and the Transferor an Investment Letter and, except for any Transfer to an
Eligible Transferee, each of the Transferor and the Servicer shall have granted
its prior consent thereto; PROVIDED that in the event of a Transfer from a Class
B Purchaser to one of its Affiliates or to a Person which, prior to such
Transfer, is a Class B Purchaser of all of its interest in the Class B
Certificates the transferring Class B Purchaser shall provide the Transferor and
the Servicer with five (5) Business Days prior written notice thereof and the
prior consent of the Transferor and the Servicer shall not be required for such
Transfer AND PROVIDED FURTHER that the consent of the Transferor and the
Servicer shall not be required in connection with any transfer to a Support Bank
or any liquidity provider.
Each of the Transferor and the Servicer authorizes each Class B
Purchaser to disclose to any Transferee and Support Bank and any prospective
Transferee or Support Bank any and all financial information in the Class B
Purchaser's possession concerning the Trust, the Transferor or the Servicer
which has been delivered to the Agent or such Class B Purchaser by or on behalf
of the Trust or the Transferor or the Servicer pursuant to this Agreement
(including information obtained pursuant to rights of inspection granted
hereunder) or the other Related Documents or which has been delivered to such
Class B Purchaser by or on behalf of the Trust, the Transferor or the Servicer
in connection with such Class B Purchaser's credit evaluation of the Trust, the
Transferor or the Servicer prior to becoming a party to, or purchasing an
interest in this Agreement or the Class B Certificates; PROVIDED that prior to
any such disclosure, such Transferee or Support Bank or prospective Transferee
or Support Bank shall have executed an agreement agreeing to be bound by the
provisions of Section 6.2 hereof.
(d) Each Class B Purchaser may, in accordance with
applicable law, at any time grant participations in all or part of its interest
in its Commitment or in the Class B Certificates including the payments due to
it under this Agreement and the Pooling and Servicing Agreement (each, a
"PARTICIPATION") to any Person (each, a "PARTICIPANT"); PROVIDED, HOWEVER, that
no Participation shall be granted to any Person unless and until the conditions
to Transfer specified in this Agreement and the Pooling and Servicing Agreement,
including in subsection 8.1(c) hereof and Section 6.18 of the Pooling and
Servicing Agreement, shall have been satisfied and that such Participation
consists of a pro rata percentage interest in all payments made with respect to
such Class B Purchaser's beneficial interest (if any) in the Class B
Certificates. In connection with any such Participation, the Agent
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shall maintain a register of each Participant and the amount of each
Participation. Each Class B Purchaser hereby acknowledges and agrees that (A)
any such Participation will not alter or affect such Class B Purchaser's direct
obligations hereunder, and (B) neither the Trustee, the Transferor nor the
Servicer shall have any obligation to have any communication or relationship
with any Participant. Each Class B Purchaser and each Participant shall comply
with the provisions of subsection 2.5(c). No Participant shall be entitled to
Transfer all or any portion of its Participation, without the prior written
consent of the Agent. The Transferor shall be obligated to indemnify a
Participant for all amounts owing to it under Sections 2.4, 2.5 and 2.7 as if
such Participant were a Class B Purchaser hereunder, but, in the case of
Sections 2.4 and 2.5, only in an amount not in excess of the amounts which would
have been owing thereunder had such Participation not been granted and, in the
case of Section 2.5, provided that such Participant has complied with the
provisions of subsection 2.5(c) as if it were a Class B Purchaser. Each Class B
Purchaser shall give the Agent notice of the consummation of any sale by it of a
Participation and the Agent (upon receipt of notice from the related Class B
Purchaser) shall promptly notify the Transferor, the Servicer and the Trustee.
(e) Each Class B Purchaser may, with the consent of the
Agent and in accordance with applicable law, sell or assign (each, an
"ASSIGNMENT"), to any Person (each, an "ASSIGNEE") which is an Eligible Assignee
(or is otherwise consented to in writing by the Transferor and the Servicer) all
or any part of its interest in its Commitment or in the Class B Certificates and
its rights and obligations under this Agreement and the Pooling and Servicing
Agreement pursuant to an agreement substantially in the form attached hereto as
EXHIBIT C hereto (a "TRANSFER SUPPLEMENT"), executed by such Assignee and the
Class B Purchaser and delivered to the Agent for its acceptance and consent;
PROVIDED, HOWEVER, that no such assignment or sale shall be effective unless and
until the conditions to Transfer specified in this Agreement and the Pooling and
Servicing Agreement, including in subsection 8.1(c) hereof and Section 6.18 of
the Pooling and Servicing Agreement, shall have been satisfied; and PROVIDED
FURTHER, HOWEVER, that no such assignment or sale to an Assignee which would
become a Committed Class B Purchaser shall be effective unless either (i) the
commercial paper notes or the short-term obligations of such Assignee are rated
at least A-1 by Standard & Poor's and P-1 by Moody's or (ii) such assignment or
sale shall have been consented to by all Class B Purchasers. From and after the
effective date determined pursuant to such Transfer Supplement, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such Transfer
Supplement, have the rights and obligations of a Class B Purchaser hereunder as
set forth therein and (y) the transferor Class B Purchaser shall, to the extent
provided in such Transfer Supplement, be released from its Commitment and other
obligations under this Agreement; PROVIDED, HOWEVER, that after giving effect to
each such Assignment, the obligations released by any such Class B Purchaser
shall not exceed the obligations assumed by an Assignee or Assignees. Such
Transfer Supplement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Assignee and the
resulting adjustment of Percentage Interests, Noncommitted Purchaser Percentages
or Commitment Percentages arising from the Assignment. Upon its receipt of a
duly executed Transfer Supplement, the Agent shall on the effective date
determined pursuant thereto give notice of such acceptance to the Transferor,
the Servicer and the Trustee and the Servicer will provide notice thereof to
each Rating Agency (if required).
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Upon surrender for registration of transfer of a Class B Purchaser's
beneficial interest in the Class B Certificates (or portion thereof) and
delivery to the Transferor and the Trustee of an Investment Letter, executed by
the registered owner (and the beneficial owner if it is a Person other than the
registered owner), and receipt by the Trustee of a copy of the duly executed
related Transfer Supplement and such other documents as may be required under
this Agreement, such beneficial interest in the Class B Certificates (or portion
thereof) shall be transferred in the records of the Trustee and the Agent and,
if requested by the Assignee, new Class B Certificates shall be issued to the
Assignee and, if applicable, the transferor Class B Purchaser in amounts
reflecting such Transfer as provided in the Pooling and Servicing Agreement.
Such Transfers of Class B Certificates (and interests therein) shall be subject
to this Section 8.1 in lieu of any regulations which may be prescribed under
Section 6.3 of the Pooling and Servicing Agreement. Successive registrations of
Transfers as aforesaid may be made from time to time as desired, and each such
registration of a transfer to a new registered owner shall be noted on the
Certificate Register.
(f) Each Class B Purchaser may pledge its interest in the Class B
Certificates to any Federal Reserve Bank as collateral in accordance with
applicable law.
(g) Any Class B Purchaser shall have the option to change its
Investing Office, PROVIDED that such Class B Purchaser shall have prior to such
change in office complied with the provisions of subsection 2.5(c) and PROVIDED
FURTHER that such Class B Purchaser shall not be entitled to any amounts
otherwise payable under Section 2.4 or 2.5 resulting solely from such change in
office unless such change in office was mandated by applicable law or by such
Class B Purchaser's compliance with the provisions of this Agreement.
(h) Each Affected Party which, on the date it became an Affected
Party, was an Eligible Assignee or was consented to by the Transferor and the
Servicer shall be entitled to receive additional payments pursuant to Sections
2.4, 2.5 and 2.7 hereof as though it were a Class B Purchaser and such Section
applied to its interest in or commitment to acquire an interest in the Class B
Certificates; PROVIDED that such Affected Party shall not be entitled to
additional payments pursuant to (i) Section 2.4 by reason of Regulatory Changes
which occurred prior to the date it became an Affected Party or (ii) Section 2.5
attributable to its failure to satisfy the requirements of subsection 2.5(c) as
if it were a Class B Purchaser.
(i) If any increased amounts referred to in Sections 2.4 or 2.5
owing to any Affected Party are not eliminated or reduced by the designation of
a different Investing Office or other actions taken pursuant to subsection
2.4(c) and payment thereof hereunder is not waived by such Affected Party within
45 days after the Transferor or the Servicer shall have given notice to such
Affected Party, its related Class B Purchaser and the Agent of the intent of the
Transferor to exercise its rights under this sentence, the Transferor shall have
the right to replace such related Class B Purchaser hereunder with a Replacement
Purchaser; PROVIDED, that (x) such related Class B Purchaser shall not be
replaced hereunder until such related Class B Purchaser has been paid in full
all amounts owed to it hereunder and with respect to its interest in the Class B
Certificates and (y) if the related Class B Purchaser is the Agent or the
Administrative Agent or, unless otherwise agreed by the Agent and the
Administrative Agent, a Structured Purchaser sponsored or administered by the
Administrative Agent or the Agent (in its individual capacity), a replacement
Agent and Administrative Agent
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shall have been appointed in accordance with Section 7.9 and the Agent and the
Administrative Agent to be replaced shall have been paid in full all amounts
owed to it hereunder.
(j) Each Affected Party claiming increased amounts described in
Sections 2.4 or 2.5 shall furnish, through its related Structured Purchaser, to
the Trustee, the Agent, the Servicer and the Transferor a certificate setting
forth any action taken by such Affected Party to reduce or eliminate such
increased amounts pursuant to subsection 2.4(c) and the basis and amount of each
request by such Affected Party for any such amounts referred to in Sections 2.4
or 2.5, such certificate to be conclusive with respect to the factual
information set forth therein absent manifest error.
(k) In the event that a Committed Class B Purchaser was at any time
a Defaulting Purchaser or is a Downgraded Purchaser, the Transferor shall have
the right and to replace such Class B Purchaser hereunder with a Replacement
Purchaser, and the Agent, acting at the request of the Required Class B
Purchasers or the Required Class A Owners, shall have the right to replace such
Committed Class B Purchaser with a Replacement Purchaser which is an Eligible
Assignee or is otherwise reasonably acceptable to the Transferor, which
Replacement Purchaser shall succeed to the rights of such Committed Class B
Purchaser under this Agreement, and such Committed Class B Purchaser shall
assign its beneficial interest in the Class B Certificates to such Replacement
Purchaser in accordance with the provisions of this Section 8.1; PROVIDED, that
(A) such Committed Class B Purchaser shall not be replaced hereunder with a new
investor until such Committed Class B Purchaser has been paid in full its
Percentage Interest of the Class B Investor Principal Balance and all accrued
and unpaid Yield (including any Liquidation Fee determined for the replacement
date) thereon by such new investor and all other amounts (including all amounts
owing under Sections 2.4 and 2.5) owed to it and to all Participants and
Affected Parties with respect to such Class B Purchaser pursuant to this
Agreement and (ii) if the Class B Purchaser to be replaced is the Agent or the
Administrative Agent or, unless the Agent and the Administrative Agent otherwise
agree, a Structured Purchaser sponsored or administered by the Administrative
Agent or the Agent (in its individual capacity), a replacement Agent or
Administrative Agent, as the case may be, shall have been appointed in
accordance with Section 7.9 and the Agent or Administrative Agent, as the case
may be, to be replaced shall have been paid all amounts owing to it as Agent or
Administrative Agent, as the case may be, pursuant to this Agreement. For
purposes of this subsection, a Committed Class B Purchaser shall be a
"DOWNGRADED PURCHASER" if and so long as the credit rating assigned to its
short-term obligations by Moody's or Standard & Poor's on the date on which it
became a party to this Agreement shall have been reduced or withdrawn.
(l) Notwithstanding any provision of this Section 8.1 or any other
provision in this Agreement or any Related Document to the contrary other than
the limitations set forth in Section 6.18 of the Pooling and Servicing
Agreement, each of the parties hereto agrees and acknowledges that (i) no
provision of this Agreement, the Pooling and Servicing Agreement or of any other
Related Document shall limit in any manner the ability of any Structured
Purchaser to sell, assign, pledge, dispose of or otherwise transfer the Class B
Certificates or any interest therein under any Liquidity Agreement or to
consummate a Liquidity Put and (ii) any sale, assignment, pledge, disposition or
transfer by any Structured Purchaser under any Liquidity Agreement or any
Liquidity Put shall not be subject to any of the requirements or limitations set
forth in this Agreement, the Pooling and Servicing Agreement or
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any other Related Document that would be applicable to such sale, assignment,
pledge, disposition or transfer or Liquidity Put but for this sentence.
8.2 TAX CHARACTERIZATION OF THE CLASS B CERTIFICATES. It is the intention
of the parties hereto that the Class B Certificates be treated for tax purposes
as indebtedness. In the event that the Class B Certificates are not so treated,
it is the intention of the parties that such Class B Certificates be treated as
an interest in a partnership that owns the Receivables. In the event that the
Class B Certificates are treated as an interest in a partnership, it is the
intention of the parties that interest payable on such Class B Certificates be
treated as guaranteed payment and, if for any reason it is not so treated, that
the holders of such Class B Certificates be specially allocated gross interest
income equal to the interest accrued during each applicable accrual period on
such Class B Certificates.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. This Agreement may not be amended,
supplemented or modified nor may any provision hereof be waived except in
accordance with the provisions of this Section 9.1. With the written consent of
the Required Class B Owners and the Required Class B Purchasers, the Agent, the
Transferor and the Servicer may, from time to time, enter into written
amendments, supplements, waivers or modifications hereto for the purpose of
adding any provisions to this Agreement or changing in any manner the rights of
any party hereto or waiving, on such terms and conditions as may be specified in
such instrument, any of the requirements of this Agreement; PROVIDED, HOWEVER,
that no such amendment, supplement, waiver or modification shall (i) reduce the
amount of or extend the maturity of any Class B Certificate or reduce the rate
or extend the time of payment of interest thereon, or reduce or alter the timing
of any other amount payable to any Class B Purchaser hereunder or under the
Supplement, in each case without the consent of the Class B Purchaser affected
thereby, (ii) amend, modify or waive any provision of this Section 9.1, or, if
such amendment would have a material adverse effect on the Class B Purchasers,
the definition of "Class B Invested Amount", or reduce the percentage specified
in the definition of Required Class B Owners or Required Class B Purchasers, in
each case without the written consent of all Class B Purchasers or (iii) amend,
modify or waive any provision of Section 7 of this Agreement without the written
consent of the Agent, the Administrative Agent, the Required Class B Owners and
Required Class B Purchasers. Any waiver of any provision of this Agreement shall
be limited to the provisions specifically set forth therein for the period of
time set forth therein and shall not be construed to be a waiver of any other
provision of this Agreement.
The Administrative Agent may cast any vote or give any direction under the
Pooling and Servicing Agreement on behalf of the Class B Certificateholders if
it has been directed to do so by (i) the Required Class B Owners, (ii) the
Required Class B Purchasers, and (iii) by the Class A Purchasers (as defined in
the Class A Certificate Purchase Agreement) required under the terms of Section
9.1 of the Class A Certificate Purchase Agreement.
9.2 NOTICES. (a) All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or, in
the case of mail or telecopy notice, when received, or, in
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the case of telegraphic notice, when delivered to the telegraph company, or, in
the case of telex notice, when sent, answer back received, addressed as follows
or, with respect to a Class B Purchaser, as set forth in its respective Joinder
Supplement or Transfer Supplement, or to such other address as may be hereafter
notified by the respective parties hereto:
The Transferor: Prime II Receivables Corporation
7 West Seventh Street
Cincinnati, Ohio 45202
Attention: President
Telephone: (513) 579-7580
Telefax: (513) 579-7393
The Servicer: FDS Bank
9111 Duke Boulevard
Mason, Ohio 45040
Attention: Chief Financial Officer
Telephone: (513) 573-2659
Telefax: (513) 573-2720
With a copy to:
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, Ohio 45202
Attention: General Counsel
Telephone: (513) 579-7000
Telefax: (513) 579-7462
The Trustee: JPMorgan Chase Bank
4 New York Plaza, 6(th) Floor
New York, New York 10004-2413
Attention: Structured Finance Administration
Telephone: (212) 623-5430
Telefax: (212) 623-5933
The Agent or the Bank One, NA (Main Office Chicago)
Administrative 1 Bank One Plaza, Suite IL1-0596, 1-21
Agent: Chicago, Illinois 60670-0596
Attention: Asset-Backed Finance Division
Telephone: (312) 732-9747
Telefax: (312) 732-4487
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Jupiter: Jupiter Securitization Corporation
c/o Bank One, NA (Main Office Chicago), as Agent
Asset Backed Finance
Suite IL 1-0079, 1-19
1 Bank One Plaza
Chicago, Illinois 60670-0079
Moody's: Moody's Investors Service, Inc.
99 Church Street, 4th Floor
New York, New York 10007
Attention: ABS Monitoring Department
Telephone: (212) 553-3610
Telefax: (212) 553-4773
(212) 553-7811
Standard Standard & Poor's Ratings Services
& Poor's: 55 Water Street, 40(th) Floor
New York, New York 10041
Attention: Structured Finance Surveillance Group
Telephone: (212) 438-6216
Telefax: (212) 438-2647
(b) All payments to be made to the Agent or any Class B Purchaser
hereunder shall be made in United States dollars and in immediately available
funds not later than 1:30 p.m. Chicago time on the date payment is due, and,
unless otherwise specifically provided herein, shall be made to the Agent, for
the account of one or more of the Class B Purchasers or for its own account, as
the case may be. Unless otherwise directed by the Agent, all payments to it
shall be made by federal wire (ABA #071000013), to account number 48118, with
telephone notice (including federal wire number) to (312) 732-2722.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in
exercising, on the part of the Agent or any Class B Purchaser, any right,
remedy, power or privilege hereunder or under any of the other Related Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder or under any of the other
Related Documents preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided herein and in the other Related Documents are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the Transferor, the Servicer, the Agent, the Administrative
Agent, the Class B Purchasers, any Assignee and their respective successors and
assigns, except that the Transferor and the Servicer may not assign or transfer
any of their respective rights or obligations under this Agreement except as
provided herein and in the Pooling and Servicing Agreement, without the prior
written consent of the Required Class B Owners and the Required Class B
Purchasers. Upon any assignment by any Structured Purchaser to any Support Bank,
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such Support Bank shall be deemed to be a "Class B Purchaser" party hereto and
shall have all of the rights and obligations of a Class B Purchaser under this
Agreement, the Class B Fee Letter and the Pooling and Servicing Agreement.
9.5 SUCCESSORS TO SERVICER. (a) In the event that a transfer of servicing
occurs under Article VIII or Article X of the Pooling and Servicing Agreement,
(i) from and after the effective date of such transfer, the Successor Servicer
shall be the successor in all respects to the Servicer and shall be responsible
for the performance of all functions to be performed by the Servicer from and
after such date, except as provided in the Pooling and Servicing Agreement, and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions hereof, and all
references in this Agreement to the Servicer shall be deemed to refer to the
Successor Servicer, and (ii) as of the date of such transfer, the Successor
Servicer shall be deemed to have made with respect to itself the representations
and warranties made by the Servicer in Section 4.2 (in the case of subsection
4.2(a) with appropriate factual changes); PROVIDED, HOWEVER, that the references
to the Servicer contained in Section 5.1 of this Agreement shall be deemed to
refer to the Servicer with respect to responsibilities, duties and liabilities
arising out of an act or acts, or omission, or an event or events giving rise to
such responsibilities, duties and liabilities and occurring during such time
that the Servicer was Servicer under this Agreement and shall be deemed to refer
to the Successor Servicer with respect to responsibilities, duties and
liabilities arising out of an act or acts, or omission, or an event or events
giving rise to such responsibilities, duties and liabilities and occurring
during such time that the Successor Servicer acts as Servicer under this
Agreement; PROVIDED, HOWEVER, to the extent that an obligation to indemnify the
Class B Purchasers under Section 2.7 arises as a result of any act or failure to
act of any Successor Servicer in the performance of servicing obligations under
the Pooling and Servicing Agreement or the Supplement, such indemnification
obligation shall be of the Successor Servicer and not FDSB. Upon the transfer of
servicing to a Successor Servicer, such Successor Servicer shall furnish to the
Agent copies of its audited annual financial statements for each of the three
preceding fiscal years or if the Trustee or any other banking institution
becomes the Successor Servicer, such Successor Servicer shall provide, in lieu
of the audited financial statements required in the immediately preceding
clause, complete and correct copies of the publicly available portions of its
Consolidated Reports of Condition and Income as submitted to the Federal Deposit
Insurance Corporation for the two most recent year end periods.
(b) In the event that any Person becomes the successor to the Transferor
pursuant to Article VII of the Pooling and Servicing Agreement, from and after
the effective date of such transfer, such successor to the Transferor shall be
the successor in all respects to the Transferor and shall be responsible for the
performance of all functions to be performed by the Transferor from and after
such date, except as provided in the Pooling and Servicing Agreement, and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Transferor by the terms and provisions hereof, and all references
in this Agreement to the Transferor shall be deemed to refer to the successor to
the Transferor; PROVIDED, HOWEVER, that the references to the Transferor
contained in Sections 2.5, 2.7 and 5.1 of this Agreement shall be deemed to
refer to Prime II Receivables Corporation with respect to responsibilities,
duties and liabilities arising out of an act or acts, or omission, or an event
or events giving rise to such responsibilities, duties and liabilities and
occurring during such time that Prime II Receivables Corporation was Transferor
under this Agreement and shall
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be deemed to refer to the successor to Prime II Receivables Corporation as
Transferor with respect to responsibilities, duties and liabilities arising out
of an act or acts, or omission, or an event or events giving rise to such
responsibilities, duties and liabilities and occurring during such time that the
successor to Prime II Receivables Corporation acts as Transferor under this
Agreement.
9.6 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
9.7 SEVERABILITY. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
9.8 INTEGRATION. This Agreement and the Class B Fee Letter represent the
agreement of the Agent, the Administrative Agent, the Transferor, the Servicer
and the Class B Purchasers with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the Class B
Purchasers, the Agent or the Administrative Agent relative to subject matter
hereof not expressly set forth or referred to herein or therein. FDSB shall
retain a copy of each of the above-referenced agreements as part of its official
records.
9.9 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.10 TERMINATION. This Agreement shall remain in full force and effect
until the earlier to occur of (a) payment in full of the Class B Repayment
Amount and all other amounts payable to the Class B Purchasers, the Agent and
the Administrative Agent hereunder and the termination of all Commitments and
(b) the Series 2002-1 Termination Date; PROVIDED, HOWEVER, that if the Class B
Repayment Amount and all other amounts payable to the Class B Purchasers
hereunder are paid in full and all Commitments have terminated prior to the
Series 2002-1 Termination Date, the Agent shall notify the Trustee that
thereafter all amounts otherwise payable to the Class B Purchasers hereunder
shall be payable to the Transferor or any Person designated thereby; and
PROVIDED, FURTHER, that the provisions of Sections 2.4, 2.5, 2.6, 2.7, 7.7 and
9.13 and subsections 9.12(a), 9.12(b) and 9.12(c) shall survive termination of
this Agreement and amounts payable to the Class B Purchasers thereunder shall
remain payable to the Class B Purchasers.
9.11 ACTION BY SERVICER. Wherever the Trustee or the Trust is authorized
or required to take an action or give a notice pursuant to this Agreement and if
the Trustee fails timely to take such action or give such notice pursuant to
this Agreement after being requested to do so by the Servicer, the Servicer
shall take such action or give such notice on behalf of the Trustee or the
Trust.
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9.12 LIMITED RECOURSE; NO PROCEEDINGS. (a) The obligations of the
Transferor and the Servicer under this Agreement are several (except as
specifically provided herein) and are solely the corporate obligations of the
Transferor and the Servicer. No recourse shall be had for the payment of any fee
or other obligation or claim arising out of or relating to this Agreement or any
other agreement, instrument, document or certificate executed and delivered or
issued by the Transferor and the Servicer or any officer of any of them in
connection therewith, against any stockholder, employee, officer, director or
incorporator of the Transferor or the Servicer, and neither the Agent nor any
Class B Purchaser shall look to any property or assets of the Transferor, other
than to (a) amounts payable to the Transferor under the Receivables Purchase
Agreement, any Supplement or the Pooling and Servicing Agreement and (b) any
other assets of the Transferor not pledged to third parties or otherwise
encumbered in any manner permitted by the Transferor's Certificate of
Incorporation. Each Class B Purchaser and the Agent hereby agrees that to the
extent such funds are insufficient or unavailable to pay any amounts owing to it
by the Transferor pursuant to this Agreement, prior to the earlier of the Trust
Termination Date or the commencement of a bankruptcy or insolvency proceeding by
or against the Transferor, it shall not constitute a claim against the
Transferor. Nothing in this paragraph shall limit or otherwise affect the
liability of the Servicer with respect to any amounts owing by it hereunder or
the right of the Agent or any Class B Purchaser to enforce such liability
against the Servicer or any of its assets. The obligations of the Agent and the
Administrative Agent under this Agreement, or any other agreement, instrument,
document or certificate executed and delivered by or issued by the Agent, the
Administrative Agent or any Class B Purchaser or any officer thereof are solely
the corporate obligations of the Agent, the Administrative Agent or such Class B
Purchaser. No recourse shall be had for payment of any fee or other obligation
or claim arising out of or relating to this Agreement or any other agreement,
instrument, document or certificate executed and delivered or issued by the
Agent, the Administrative Agent or any Class B Purchaser or any officer thereof
in connection therewith, against any stockholder, employee, officer, director or
incorporator of the Agent, the Administrative Agent or such Class B Purchaser.
(b) Each of the Transferor, the Servicer and the Trustee hereby
agrees that it shall not institute or join against any Structured Lender any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and a day after the latest maturing commercial paper note, medium term
note or other debt security issued by such Structured Lender is paid.
(c) No claim may be made by the Transferor, the Servicer, the
Trustee or any other Person against such Class B Purchaser, Administrative Agent
or Agent or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and each of the
Transferor, the Servicer and the Trustee hereby waives, releases, and agrees not
to sue upon any claim for any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
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9.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the purchase of the Class B Certificates
hereunder and the termination of this Agreement.
9.14 SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE TRANSFEROR, THE
ADMINISTRATIVE AGENT, THE SERVICER, THE TRUST, THE TRUSTEE, THE AGENT AND EACH
CLASS B PURCHASER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT
TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH PARTY AT ITS
ADDRESS SET FORTH IN SECTION 9.2 OR AT SUCH OTHER ADDRESS OF WHICH THE
AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO
SUE IN ANY OTHER JURISDICTION.
9.15 WAIVERS OF JURY TRIAL. THE TRANSFEROR, THE SERVICER, THE TRUST, THE
TRUSTEE, THE AGENT AND THE CLASS B PURCHASERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT RELATED HERETO AND FOR ANY
COUNTERCLAIM THEREIN.
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9.16 EXCULPATION OF STRUCTURED PURCHASER, THE AGENT AND THE ADMINISTRATIVE
AGENT. None of any Structured Purchaser, the Agent or the Administrative Agent
undertakes or assumes any responsibility or duty to the Transferor, the Seller,
the Trustee, any Indemnified Party or any other party to any document executed
or delivered in connection herewith or any other Person to select, review,
inspect, examine, supervise, pass judgment upon or inform the Transferor, the
Seller, the Trustee, any Indemnified Party or any other party to any document
executed or delivered in connection herewith or any other Person of (a) the
existence, quality, adequacy or suitability of appraisals of any Receivables or
related assets or (b) any other matters or items (including, but not limited to,
the condition and credit quality of the Receivables or related assets and the
validity or enforceability of any of the Receivables or related assets) that are
contemplated in the Pooling and Servicing Agreement, herein, or in any document
executed or delivered in connection herewith. Any such selection, review,
inspection, examination and the like, and any other due diligence conducted by
the Agent, the Administrative Agent, and/or any Structured Purchaser, is solely
for the purpose of protecting the Agent's, the Administrative Agent's, and such
Structured Purchaser's rights hereunder and under the Pooling and Servicing
Agreement, and shall not render the Agent, the Administrative Agent, and/or any
Structured Purchaser liable to the Transferor, the Seller, the Trustee, any
Indemnified Party or any other party to any document executed or delivered in
connection herewith or any other Person for the existence, sufficiency,
accuracy, completeness or legality thereof. Notwithstanding any provision to the
contrary contained in this Agreement or any other document executed or delivered
in connection herewith, each of the Transferor, the Seller, the Trustee, any
Indemnified Party or any other party to any document executed or delivered in
connection herewith or any other Person which is or becomes a party to this
Agreement or any other document executed or delivered in connection herewith
hereby acknowledges and agrees that no Structured Purchaser has any express or
implied obligations, duties or liabilities (including, without limitation, the
incurrence of any cost or expense or of any payment or other performance
undertaking) arising under or in connection with this Agreement or any other
document executed or delivered in connection herewith and shall not be liable or
responsible to any Person to act or for the failure to act in connection with
this Agreement or any other document executed or delivered in connection
herewith (it being agreed that any Structured Purchaser's failure to take any
action shall not result in liability to the Administrative Agent or the Agent).
For the avoidance of doubt, each party hereto acknowledges and agrees to be
bound by this Section.
9.17 FURTHER ASSURANCES. (a) Each party hereto agrees, at the request of
the Agent from time to time to enter into or to consent to, as applicable, any
amendments or other modifications to this Agreement or the Related Documents,
other than those requiring the consent of all Class B Purchasers as provided
above in Section 9.1, and the Transferor agrees to cause its Certificate of
Incorporation and Bylaws to be amended or otherwise modified, as shall
reasonably be determined by the Agent to be required for any initial Class B
Purchaser which is a Structured Purchaser to obtain or maintain an informal
rating of the Class B Certificates which will permit such Structured Purchaser's
commercial paper notes to maintain at least the rating from Standard & Poor's
and Moody's as in effect immediately prior to such Structured Purchaser's
becoming a Class B Purchaser after giving effect to its initial purchase of the
Class B Certificates and to purchases from time to time by such Structured
Purchaser of VFC Additional Class B Invested Amounts as contemplated by this
Agreement, without giving effect to any
-52-
increase in any letter of credit or other enhancement provided to such
Structured Purchaser (other than liquidity support provided to such Structured
Purchaser by Affected Parties).
(b) FDSB agrees to do such further acts and things and to execute
and deliver to each Class B Purchaser, the Agent or the Administrative Agent
such additional assignments, agreements, powers and instruments as are required
by such Class B Purchaser to carry into effect the purposes of this Agreement or
to better assure and confirm unto Class B Purchaser, the Agent or the
Administrative Agent its rights, powers and remedies hereunder.
-53-
IN WITNESS WHEREOF, the parties hereto have caused this Certificate
Purchase Agreement to be duly executed by their respective officers as of the
day and year first above written.
PRIME II RECEIVABLES CORPORATION,
as Transferor
By:
/s/ Susan P. Storer
-------------------------
Name: Susan P. Storer
Title: President
FDS BANK
By:
/s/ Susan R. Robinson
-------------------------
Name: Susan R. Robinson
Title: Treasurer
Commitment $22,222,222.00 BANK ONE, NA (MAIN OFFICE CHICAGO),
as a Committed Class B Purchaser,
as Agent and as Administrative Agent
Commitment By:
Expiration /s/ William Hendricks
Date November 5 , 2003 -------------------------
Name: William Hendricks
Title: Director, Capital Markets
JUPITER SECURITIZATION
CORPORATION, as a Noncommitted
Class B Purchaser
By:
/s/ William Hendricks
---------------------
Name: William Hendricks
Title: Authorized Signer
EXHIBIT A
FORM OF INVESTMENT LETTER
[Date]
Prime II Receivables Corporation
7 West Seventh Street
Cincinnati, Ohio 45202
Attention: President
Re Prime Credit Card Master Trust II Class B
Variable Funding Certificates, Series 2002-1
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by the
undersigned (the "Purchaser") pursuant to subsection 8.1(a) of the Class B
Certificate Purchase Agreement dated as of November 6, 2002 (as in effect, the
"Certificate Purchase Agreement"), among the Transferor, FDS Bank, as Servicer,
the Class B Purchasers parties thereto and Bank One, NA (Main Office Chicago),
as Agent and Administrative Agent. Capitalized terms used herein without
definition shall have the meanings set forth in the Certificate Purchase
Agreement. The Purchaser represents to and agrees with the Transferor as
follows:
(a) The Purchaser is authorized [to enter into the Certificate
Purchase Agreement and to perform its obligations thereunder and to
consummate the transactions contemplated thereby] [to purchase a
participation in obligations under the Certificate Purchase Agreement].
(b) The Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
its investment in the Class B Certificates and is able to bear the
economic risk of such investment. The Purchaser has been afforded the
opportunity to ask such questions as it deems necessary to make an
investment decision, and has received all information it has requested in
connection with making such investment decision. The Purchaser has,
independently and without reliance upon the Agent, the Administrative
Agent or any other Class B Purchaser, and based on such documents and
information as it has deemed appropriate, made is own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Trust, the Transferor and the
Servicer and made its own decision to purchase its interest in the Class B
Certificates, and will, independently and without reliance upon the Agent,
the Administrative Agent or any other Class B Purchaser, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own analysis, appraisals and decisions in taking or
not taking action under the Certificate Purchase Agreement, and to make
such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Trust, the Transferor and the Servicer.
(c) The Purchaser is an "accredited investor", as defined in Rule
501, promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), or is a sophisticated institutional investor. The
Purchaser understands that the offering and sale of the Class B
Certificates has not been and will not be registered under the Securities
Act and has not and will not be registered or qualified under any
applicable "blue sky" law, and that the offering and sale of the Class B
Certificate has not been reviewed by, passed on or submitted to any
federal or state agency or commission, securities exchange or other
regulatory body.
(d) The Purchaser is acquiring an interest in Class B Certificates
without a view to any distribution, resale or other transfer thereof
except, with respect to any Class B Purchaser Interest or any interest or
participation therein, as contemplated in the following sentence. The
Purchaser will not resell or otherwise transfer any interest or
participation in the Class B Purchaser Interest, except in accordance with
Sections 8.1 of the Certificate Purchase Agreement and (i) in a
transaction exempt from the registration requirements of the Securities
Act of 1933, as amended, and applicable state securities or "blue sky"
laws; (ii) to the Transferor or any affiliate of the Transferor; or (iii)
to a person who the Purchaser reasonably believes is a qualified
institutional buyer (within the meaning thereof in Rule 144A under the
Securities Act) that is aware that the resale or other transfer is being
made in reliance upon Rule 144A. In connection therewith, the Purchaser
hereby agrees that it will not resell or otherwise transfer the Class B
Certificates or any interest therein unless the purchaser thereof provides
to the addressee hereof a letter substantially in the form hereof.
[(e) The Purchaser hereby certifies to the Transferor, the Servicer
and the Trustee that it has neither acquired nor will it sell, trade or
transfer any interest in a Class B Certificate or cause an interest in a
Class B Certificate to be marketed on or through an "established
securities market" within the meaning of Section 7704(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") and any proposed,
temporary or final treasury regulation thereunder, including, without
limitation, an over-the-counter-market or an interdealer quotation system
that regularly disseminates firm buy or sell quotations. In addition, the
Purchaser hereby certifies that it is not and, for so long as it holds any
interest in a Class B Certificate will not become a partnership,
Subchapter S corporation or grantor trust for U.S. federal income tax
purposes. The Purchaser acknowledges that the opinion of counsel to the
effect that the Trust will not be treated as a publicly traded partnership
taxable as a corporation is dependent in part on the accuracy of the
certifications described in this paragraph.][To be included only if
required by Section 6.18 of the Pooling and Servicing Agreement.]
A-2
[(e)][(f)] This Investment Letter has been duly executed and
delivered and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
affecting the enforcement of creditors' rights generally and general
principles of equity.
Very truly yours,
[NAME OF PURCHASER]
By: ____________________________
Name: ______________________
Title: _______________________
A-3
EXHIBIT B
FORM OF JOINDER SUPPLEMENT
JOINDER SUPPLEMENT, dated as of the date set forth in Item 1 of
Schedule I hereto, among Prime II Receivables Corporation (the "TRANSFEROR"),
the Class B Purchaser set forth in Item 2 of Schedule I hereto (the "ADDITIONAL
CLASS B PURCHASER"), and Bank One, NA (Main Office Chicago), as Agent for the
Class B Purchasers under, and as defined in, the Certificate Purchase Agreement
described below (in such capacity, the "AGENT").
W I T N E S S E T H:
WHEREAS, this Supplement is being executed and delivered in
accordance with subsection 2.2(d) of the Class B Certificate Purchase Agreement,
dated as of November 6, 2002, among the Transferor, FDS Bank, as Servicer, the
Class B Purchasers parties thereto, the Agent and Bank One, NA (Main Office
Chicago), as Administrative Agent (as from time to time amended, supplemented or
otherwise modified in accordance with the terms thereof, the "CERTIFICATE
PURCHASE AGREEMENT"; unless otherwise defined herein, terms defined in the
Certificate Purchase Agreement are used herein as therein defined); and
WHEREAS, the Additional Class B Purchaser (if it is not already a
Class B Purchaser party to the Certificate Purchase Agreement) wishes to become
a Class B Purchaser party to the Certificate Purchase Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
(a) Upon receipt by the Agent of five counterparts of this
Supplement, to each of which is attached a fully completed Schedule I and
Schedule II, each of which has been executed by the Additional Class B
Purchaser, the Transferor and the Agent, the Agent will transmit to the
Servicer, the Transferor, the Trustee, the Administrative Agent and the
Additional Class B Purchaser a Joinder Effective Notice, substantially in the
form of Schedule III to this Supplement (a "JOINDER EFFECTIVE NOTICE"). Such
Joinder Effective Notice shall be executed by the Agent and shall set forth,
INTER ALIA, the date on which the transfer effected by this Supplement shall
become effective (the "JOINDER EFFECTIVE DATE"). From and after the Joinder
Effective Date, the Additional Class B Purchaser shall be a Class B Purchaser
party to the Certificate Purchase Agreement for all purposes thereof and shall
be a Noncommitted Class B Purchaser or Committed Class B Purchaser, as the case
may be, as set forth in Schedule II hereto, having an initial Noncommitted
Purchaser Percentage or Committed Purchaser Percentage, as applicable, and a
Commitment, if applicable, as set forth in such Schedule II.
(b) Concurrently with the execution and delivery hereof, the
Additional Class B Purchaser will deliver to the Transferor and the Trustee an
executed Investment Letter in the form of Exhibit A to the Certificate Purchase
Agreement.
(c) Each of the parties to this Supplement agrees and acknowledges
that at any time and from time to time upon the written request of any other
party, it will execute and deliver
such further documents and do such further acts and things as such other party
may reasonably request in order to effect the purposes of this Supplement.
(d) By executing and delivering this Supplement, the Additional
Class B Purchaser confirms to and agrees with the Agent, the Administrative
Agent and the Class B Purchasers as follows: (i) neither the Agent, the
Administrative Agent nor any other Class B Purchaser makes any representation or
warranty or assumes any responsibility with respect to any statements,
warranties or representations made in or in connection with the Certificate
Purchase Agreement (other then representations or warranties made by such
respective parties) or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Certificate Purchase Agreement or any
other instrument or document furnished pursuant thereto, or with respect to the
Trust, the financial condition of the Servicer, the Transferor or the Trustee,
or the performance or observance by the Servicer, the Transferor or the Trustee
of any of their respective obligations under the Certificate Purchase Agreement
or the Pooling and Servicing Agreement or any other instrument or document
furnished pursuant hereto; (ii) the Additional Class B Purchaser confirms that
it has received a copy of such documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Supplement; (iii) the Additional Class B Purchaser will, independently and
without reliance upon the Agent, the Administrative Agent or any other Class B
Purchaser and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Certificate Purchase Agreement; (iv) each Purchasing
Class B Purchaser appoints and authorizes the Agent and the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under the
Certificate Purchase Agreement and the Supplement as are delegated to the Agent
or the Administrative Agent, as applicable, by the terms thereof, together with
such powers as are reasonably incidental thereto, all in accordance with Section
7 of the Certificate Purchase Agreement; and (vi) the Additional Class B
Purchaser agrees (for the benefit of the Agent, the Administrative Agent, the
other Class B Purchasers, the Trustee, the Servicer and the Transferor) that it
will perform in accordance with their terms all of the obligations which by the
terms of the Certificate Purchase Agreement are required to be performed by it
as a Class B Purchaser which is a Noncommitted Class B Purchaser or Committed
Class B Purchaser, as the case may be, as specified in Schedule II hereto.
(e) Schedule II hereto sets forth the Commitment and the Commitment
Expiration Date, if applicable, and the initial Investing Office of the
Additional Class B Purchaser, as well as administrative information with respect
to the Additional Class B Purchaser.
(f) This Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement
to be executed by their respective duly authorized officers on Schedule I hereto
as of the date set forth in Item 1 of Schedule I hereto.
B-2
SCHEDULE I TO
JOINDER SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR JOINDER SUPPLEMENT
Re: Class B Certificate Purchase Agreement, dated as of November 6,
2002, among Prime II Receivables Corporation, as Transferor, FDS
Bank, as Servicer, the Class B Purchasers party thereto and Bank
One, NA, as Agent and as Administrative Agent.
Item 1: Date of Joinder Supplement:
Item 2: Additional Class B Purchaser:
Item 3: Signatures of Parties to Agreement:
_______________________________,
as Additional Class B Purchaser
By: ________________________
Name:
Title:
[By: ________________________
Name:
Title:]
PRIME II RECEIVABLES CORPORATION,
as Transferor
By: ________________________
Name:
Title:
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent
By: ________________________
Name:
Title:
B-3
ACCEPTED BY:
BANK ONE, NA (MAIN OFFICE
CHICAGO),
as Administrative Agent
By: _____________________
Name:
Title:
FDS BANK, as Servicer
By: _____________________
Name:
Title:
B-4
SCHEDULE II TO
JOINDER SUPPLEMENT
LIST OF INVESTING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT
[Additional Class B Purchaser]
Noncommitted Class B Purchaser: Yes/No
_______
Initial Noncommitted Purchaser Percentage: _______%
(if applicable)
Committed Class B Purchaser: Yes/No
_______
Initial Committed Purchaser Percentage: _______%
(if applicable)
Commitment: $___________
Commitment Expiration Date: ____________
Address for Notices:
______________________
Investing Office:
______________________
B-5
SCHEDULE III TO
JOINDER SUPPLEMENT
FORM OF
JOINDER EFFECTIVE NOTICE
To: [Name and address of
Transferor, Servicer, Trustee, Administrative
Agent and Additional Class B Purchaser]
The undersigned, as Agent under the Class B Certificate Purchase
Agreement, dated as of November 6, 2002, among Prime II Receivables Corporation,
as Transferor, FDS Bank, as Servicer, the Class B Purchasers parties thereto and
Bank One, NA (Main Office Chicago), as Agent for the Class B Purchasers and as
Administrative Agent thereunder, acknowledges receipt of five executed
counterparts of a completed Joinder Supplement. [Note: attach copies of
Schedules I and II from such Agreement.] Terms defined in such Supplement are
used herein as therein defined.
Pursuant to such Supplement, you are advised that the Joinder
Effective Date will be _____________, 20__.
Very truly yours,
BANK ONE, NA
(MAIN OFFICE CHICAGO), as Agent
By: ________________________
Name:
Title:
B-6
EXHIBIT C
FORM OF TRANSFER SUPPLEMENT
TRANSFER SUPPLEMENT, dated as of the date set forth in Item 1 of
Schedule I hereto, among the Transferor Class B Purchaser set forth in Item 2 of
Schedule I hereto (the "TRANSFEROR CLASS B PURCHASER"), the Purchasing Class B
Purchaser set forth in Item 3 of Schedule I hereto (the "PURCHASING CLASS B
PURCHASER"), and Bank One, NA (Main Office Chicago), as Agent for the Class B
Purchasers under, and as defined in, the Certificate Purchase Agreement
described below (in such capacity, the "AGENT").
W I T N E S S E T H:
WHEREAS, this Supplement is being executed and delivered in
accordance with subsection 8.1(e) of the Class B Certificate Purchase Agreement,
dated as of November 6, 2002, among Prime II Receivables Corporation, as
Transferor, FDS Bank, as Servicer, the Class B Purchasers parties thereto, the
Agent and Bank One, NA (Main Office Chicago), as Administrative Agent (as from
time to time amended, supplemented or otherwise modified in accordance with the
terms thereof, the "CERTIFICATE PURCHASE AGREEMENT"; unless otherwise defined
herein, terms defined in the Certificate Purchase Agreement are used herein as
therein defined);
WHEREAS, the Purchasing Class B Purchaser (if it is not already a
Class B Purchaser party to the Certificate Purchase Agreement) wishes to become
a Class B Purchaser party to the Certificate Purchase Agreement and the
Purchasing Class B Purchaser wishes to acquire and assume from the Transferor
Class B Purchaser, certain of the rights, obligations and commitments under the
Certificate Purchase Agreement; and
WHEREAS, the Transferor Class B Purchaser wishes to sell and assign
to the Purchasing Class B Purchaser, certain of its rights, obligations and
commitments under the Certificate Purchase Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
(a) Upon receipt by the Agent of five counterparts of this
Supplement, to each of which is attached a fully completed Schedule I and
Schedule II, each of which has been executed by the Transferor Class B
Purchaser, the Purchasing Class B Purchaser and the Agent, the Agent will
transmit to the Servicer, the Transferor, the Trustee, the Transferor Class B
Purchaser and the Purchasing Class B Purchaser a Transfer Effective Notice,
substantially in the form of Schedule III to this Supplement (a "TRANSFER
EFFECTIVE NOTICE"). Such Transfer Effective Notice shall be executed by the
Agent and shall set forth, inter alia, the date on which the transfer effected
by this Supplement shall become effective (the "TRANSFER EFFECTIVE DATE").
Subject to the prior written consent, if applicable, of the Transferor and the
Servicer to such transfer in the form of Schedule IV to this Supplement, from
and after the Transfer Effective Date the Purchasing Class B Purchaser shall be
a Class B Purchaser party to the Certificate Purchase Agreement for all purposes
thereof as a Noncommitted Class B Purchaser or Committed Class B Purchaser, as
specified on Schedule II to this Supplement.
(b) At or before 12:00 Noon, local time of the Transferor Class B
Purchaser, on the Transfer Effective Date, the Purchasing Class B Purchaser
shall pay to the Transferor Class B Purchaser, in immediately available funds,
an amount equal to the purchase price, as agreed between the Transferor Class B
Purchaser and such Purchasing Class B Purchaser (the "PURCHASE PRICE"), of the
portion set forth on Schedule II hereto being purchased by such Purchasing Class
B Purchaser of the outstanding Class B Invested Amount under the Class B
Variable Funding Certificate owned by the Transferor Class B Purchaser (such
Purchasing Class B Purchaser's "PURCHASE PERCENTAGE") and other amounts owing to
the Transferor Class B Purchaser under the Certificate Purchase Agreement or
otherwise in respect of the Class B Variable Funding Certificates. Effective
upon receipt by the Transferor Class B Purchaser of the Purchase Price from the
Purchasing Class B Purchaser, the Transferor Class B Purchaser hereby
irrevocably sells, assigns and transfers to the Purchasing Class B Purchaser,
without recourse, representation or warranty, and the Purchasing Class B
Purchaser hereby irrevocably purchases, takes and assumes from the Transferor
Class B Purchaser, the Purchasing Class B Purchaser's Purchase Percentage of (i)
the presently outstanding Class B Invested Amount under the Class B Variable
Funding Certificates owned by the Transferor Class B Purchaser and other amounts
owing to the Transferor Class B Purchaser in respect of the Class B Variable
Funding Certificates, together with all instruments, documents and collateral
security pertaining thereto, and (ii) the Purchasing Purchaser's Purchase
Percentage of (A) if the Transferor Class B Purchaser is a Noncommitted Class B
Purchaser, the Noncommitted Purchaser Percentage of the Transferor Class B
Purchaser and the other rights and duties of the Transferor Class B Purchaser
under the Certificate Purchase Agreement, or (B) if the Transferor Class B
Purchaser is a Committed Class B Purchaser, the Committed Purchaser Percentage
and the Commitment of the Transferor Class B Purchaser and other rights, duties
and obligations of the Transferor Class B Purchaser under the Certificate
Purchase Agreement. This Supplement is intended by the parties hereto to effect
a purchase by the Purchasing Class B Purchaser and sale by the Transferor Class
B Purchaser of interests in the Class B Variable Funding Certificates, and it is
not to be construed as a loan or a commitment to make a loan by the Purchasing
Class B Purchaser to the Transferor Class B Purchaser. The Transferor Class B
Purchaser hereby confirms that the amount of the Class B Invested Amount is
$______________ and its Percentage Interest thereof is ___%, which equals
$____________ as of _______ , 20__. Upon and after the Transfer Effective Date
(until further modified in accordance with the Certificate Purchase Agreement),
the Noncommitted Purchaser Percentage or Committed Purchaser Percentage, as
applicable of the Transferor Class B Purchaser and the Purchasing Class B
Purchaser and the Commitment, if any, of the Transferor Class B Purchaser and
the Purchasing Class B Purchaser shall be as set forth in Schedule II to this
Supplement.
(c) The Transferor Class B Purchaser has made arrangements with the
Purchasing Class B Purchaser with respect to (i) the portion, if any, to be
paid, and the date or dates for payment, by the Transferor Class B Purchaser to
the Purchasing Class B Purchaser of any fees heretofore received by the
Transferor Class B Purchaser pursuant to the Certificate Purchase Agreement
prior to the Transfer Effective Date and (ii) the portion, if any, to be paid,
and the date or dates for payment, by the Purchasing Class B Purchaser to the
Transferor Class B Purchaser of fees or interest received by the Purchasing
Class B Purchaser pursuant to the Certificate Purchase Agreement or otherwise in
respect of the Class B Variable Funding Certificates from and after the Transfer
Effective Date.
C-2
(d) (i) All principal payments that would otherwise be payable from
and after the Transfer Effective Date to or for the account of the Transferor
Class B Purchaser in respect of the Class B Variable Funding Certificates shall,
instead, be payable to or for the account of the Transferor Class B Purchaser
and the Purchasing Class B Purchaser, as the case may be, in accordance with
their respective interests as reflected in this Supplement.
(ii) All interest, fees and other amounts that would otherwise
accrue for the account of the Transferor Class B Purchaser from and after the
Transfer Effective Date pursuant to the Certificate Purchase Agreement or in
respect of the Class B Variable Funding Certificates shall, instead, accrue for
the account of, and be payable to or for the account of, the Transferor Class B
Purchaser and the Purchasing Class B Purchaser, as the case may be, in
accordance with their respective interests as reflected in this Supplement. In
the event that any amount of interest, fees or other amounts accruing prior to
the Transfer Effective Date was included in the Purchase Price paid by the
Purchasing Class B Purchaser, the Transferor Class B Purchaser and the
Purchasing Class B Purchaser will make appropriate arrangements for payment by
the Transferor Class B Purchaser to the Purchasing Class B Purchaser of such
amount upon receipt thereof from the Agent.
(e) Concurrently with the execution and delivery hereof, the
Purchasing Class B Purchaser will deliver to the Transferor and the Trustee an
executed Investment Letter in the form of Exhibit A to the Certificate Purchase
Agreement.
(f) Each of the parties to this Supplement agrees and acknowledges
that (i) at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Supplement, and (ii) the Agent shall apply each payment
made to it under the Certificate Purchase Agreement, whether in its individual
capacity or as Agent, in accordance with the provisions of the Certificate
Purchase Agreement, as appropriate.
(g) By executing and delivering this Supplement, the Transferor
Class B Purchaser and the Purchasing Class B Purchaser confirm to and agree with
each other, the Administrative Agent and the Agent and the Class B Purchasers as
follows: (i) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned hereby free and clear of any
adverse claim, the Transferor Class B Purchaser makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Certificate
Purchase Agreement or the Pooling and Servicing Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Certificate Purchase Agreement or any other instrument or document furnished
pursuant thereto; (ii) the Transferor Class B Purchaser makes no representation
or warranty and assumes no responsibility with respect to the Trust, the
financial condition of the Servicer, the Transferor or the Trustee, or the
performance or observance by the Servicer, the Transferor or the Trustee of any
of their respective obligations under the Certificate Purchase Agreement, the
Pooling and Servicing Agreement or any other instrument or document furnished
pursuant hereto; (iii) each Purchasing Class B Purchaser confirms that it has
received a copy of such documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Supplement; (iv)
each Purchasing Class B Purchaser will,
C-3
independently and without reliance upon the Agent, the Transferor Class B
Purchaser or any other Class B Purchaser and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Certificate Purchase
Agreement or the Pooling and Servicing Agreement; (v) each Purchasing Class B
Purchaser appoints and authorizes the Agent and the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the
Certificate Purchase Agreement and the Pooling and Servicing Agreement as are
delegated to the Agent or the Administrative Agent, as the case may be, by the
terms thereof, together with such powers as are reasonably incidental thereto,
all in accordance with Section 7 of the Certificate Purchase Agreement; and (vi)
each Purchasing Class B Purchaser agrees (for the benefit of the Transferor
Class B Purchaser, the Agent, the Administrative Agent, the Class B Purchasers,
the Trustee, the Servicer and the Transferor) that it will perform in accordance
with their terms all of the obligations which by the terms of the Certificate
Purchase Agreement are required to be performed by it as a Class B Purchaser.
(h) Schedule II hereto sets forth the revised Noncommitted Purchaser
Percentage or the revised Committed Purchaser Percentage and Commitment of the
Transferor Class B Purchaser, as applicable, the Noncommitted Purchaser
Percentage or the Committed Purchaser Percentage, Commitment and Commitment
Expiration Date of the Purchasing Class B Purchaser, as applicable, and the
initial Investing Office of the Purchasing Class B Purchaser, as well as
administrative information with respect to the Purchasing Class B Purchaser.
(i) This Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement
to be executed by their respective duly authorized officers on Schedule I hereto
as of the date set forth in Item 1 of Schedule I hereto.
C-4
SCHEDULE I TO
TRANSFER SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR TRANSFER SUPPLEMENT
Re: Class B Certificate Purchase Agreement, dated as of November 6,
2002, among Prime II Receivables Corporation, as Transferor, FDS
Bank, as Servicer, the Class B Purchasers party thereto and Bank
One, NA (Main Office Chicago), as Agent and as Administrative Agent.
Item 1: Date of Transfer Supplement:
Item 2: Transferor Class B Purchaser:
Item 3: Purchasing Class B Purchaser:
Item 4: Signatures of Parties to Agreement:
_______________________________
as Transferor Class B Purchaser
By: ______________________
Name:
Title:
By: ______________________
Name:
Title:
as Purchasing Class B Purchaser
By: ______________________
Name:
Title:
By: ______________________
Name:
Title:
ACCEPTED BY:
BANK ONE, NA (MAIN OFFICE
CHICAGO), as Agent
By: _____________________
Name:
Title:
C-5
SCHEDULE II TO
TRANSFER SUPPLEMENT
LIST OF INVESTING OFFICES, ADDRESSES
FOR NOTICES, ASSIGNED INTEREST,
PURCHASE PERCENTAGE AND PURCHASE PRICE
[Transferor Class B Purchaser]
A. Noncommitted Class B Purchaser: Yes/No
_______
If applicable:
Noncommitted Purchaser Percentage:
Transferor Class B Purchaser
Noncommitted Purchaser Percentage
Prior to Sale: _____%
Noncommitted Purchaser Percentage Sold: _____%
Noncommitted Purchaser Percentage Retained: _____%
B. Committed Class B Purchaser: Yes/No
_______
If applicable:
Committed Purchaser Percentage:
Transferor Class B Purchaser
Committed Purchaser Percentage
Prior to Sale: _____%
Committed Purchaser Percentage Sold: _____%
Committed Purchaser Percentage Retained: _____%
Commitment:
Transferor Class B Purchaser Commitment
Prior to Sale: $________
Commitment Sold: $________
Commitment Retained: $________
C. Class B Invested Amount:
Transferor Class B Purchaser
Class B Invested Amount Prior to Sale: $________
Class B Invested Amount Sold: $________
Class B Invested Amount Retained: $________
C-6
D. Purchase Percentage: --------%
[Purchasing Class B Purchaser] ________
A. Noncommitted Class B Purchaser: Yes/No
_______
If applicable:
Initial Noncommitted Purchaser Percentage: _____%
B. Committed Class B Purchaser: Yes/No
_______
If applicable:
Committed Purchaser Percentage: _____%
Commitment: $________
Commitment Expiration Date: _________
C. Class B Invested Amount Owned Immediately
After Sale: $________
Address for Notices:
______________________
Investing Office:
______________________
C-7
SCHEDULE III TO
TRANSFER SUPPLEMENT
Form of
TRANSFER EFFECTIVE NOTICE
To: [Name and address of
Transferor, Servicer, Trustee, the Transferor Class B
Purchaser and the Purchasing Class B Purchaser]
The undersigned, as Agent under the Class B Certificate Purchase
Agreement, dated as of November 6, 2002, among Prime II Receivables Corporation,
as Transferor, FDS Bank, as Servicer, the Class B Purchasers parties thereto and
Bank One, NA (Main Office Chicago), as Agent for the Class B Purchasers and as
Administrative Agent thereunder, acknowledges receipt of five executed
counterparts of a completed Transfer Supplement. [Note: attach copies of
Schedules I and II from such Agreement.] Terms defined in such Supplement are
used herein as therein defined.
Pursuant to such Supplement, you are advised that the Transfer
Effective Date will be _____________, 20__.
Very truly yours,
BANK ONE, NA
(MAIN OFFICE CHICAGO),
as Agent
By: ________________________
Name:
Title:
C-8
SCHEDULE IV TO
TRANSFER SUPPLEMENT
Form of
CONSENT OF TRANSFEROR
To: JPMorgan Chase Bank, as Trustee
Bank One, NA (Main Office Chicago), as Agent
The undersigned hereby consents to the transfer, as of the Transfer
Effective Date, of a [Noncommitted Purchaser Percentage/Committed Purchaser
Percentage] equal to ____% [representing a Commitment in the amount of
$__________] and a Class B Invested Amount under the Prime Credit Card Master
Trust II Class B Variable Funding Certificates, Series 2002-1, in the amount of
$_________, by _______________ to _______________, pursuant to the Class B
Certificate Purchase Agreement, dated as of November 6, 2002, among Prime II
Receivables Corporation, FDS Bank, as Servicer, the Class B Purchasers parties
thereto and Bank One, NA (Main Office Chicago), as Agent and as Administrative
Agent.
Very truly yours,
PRIME II RECEIVABLES
CORPORATION, as Transferor
By: __________________________
Name:
Title:
FDS BANK, as Servicer
By: __________________________
Name:
Title:
Dated:___________________________
cc: Purchasing Class B Purchaser
C-9