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Exhibit 10.19
RECEIVABLES PURCHASE AGREEMENT
BETWEEN
FDS NATIONAL BANK, A NATIONAL BANKING
ASSOCIATION, AS ORIGINATOR
AND
PRIME II RECEIVABLES CORPORATION,
A DELAWARE CORPORATION,
AS PURCHASER
DATED AS OF JANUARY 22, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS ...................................................................................... 1
Section 1.01. Certain Defined Terms.............................................................. 1
Section 1.02. Accounting and UCC Terms........................................................... 6
ARTICLE II. AMOUNTS AND TERMS OF THE PURCHASES ............................................................... 6
Section 2.01. The Purchases...................................................................... 6
Section 2.02. Delivery of Receivables and Payments............................................... 6
Section 2.03. Payments and Computations.......................................................... 7
Section 2.04. Repurchase of Receivables.......................................................... 9
Section 2.05. Customer Service Adjustments....................................................... 9
Section 2.06. Addition of Originators............................................................ 9
Section 2.07. Application of Collections......................................................... 10
ARTICLE III CONDITIONS TO PURCHASES .......................................................................... 10
Section 3.01. Conditions Precedent to the Purchaser's Initial Purchase........................... 10
Section 3.02. Conditions Precedent to the Originator's Initial Sale.............................. 11
Section 3.03. Conditions Precedent to All Sales.................................................. 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES ................................................................... 11
Section 4.01. Representations and Warranties of the Purchaser.................................... 11
Section 4.02. Representations and Warranties of the Originator................................... 13
Section 4.03. Representations and Warranties of the Originator
Relating to this Agreement and the Receivables................................. 15
ARTICLE V GENERAL COVENANTS ................................................................................ 18
Section 5.01. Covenants of the Originator........................................................ 18
ARTICLE VI PURCHASE TERMINATION EVENTS ...................................................................... 22
Section 6.01. Purchase Termination Events........................................................ 22
ARTICLE VII INDEMNIFICATION .................................................................................. 23
Section 7.01. Indemnities by the Originator...................................................... 23
Section 7.02. Indemnities by the Purchaser....................................................... 24
ARTICLE VIII MISCELLANEOUS .................................................................................... 24
Section 8.01. Amendment.......................................................................... 24
Section 8.02. Notices, Etc....................................................................... 26
Section 8.03. No Waiver; Remedies................................................................ 26
Section 8.04. Binding Effect..................................................................... 26
Section 8.05. Governing Law...................................................................... 26
Section 8.06. Costs, Expenses and Taxes.......................................................... 27
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Section 8.07. Acknowledgment of Assignments...................................................... 27
Section 8.08. No Petition in Bankruptcy.......................................................... 27
EXHIBIT A Form of Settlement Statement
SCHEDULE I Authorized Officers
SCHEDULE II Offices Where Books, Records, Etc.
Evidencing Receivables Are Kept
SCHEDULE III Discount Factor Formula
ANNEX 1 Form of Lock-Box Agreement
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RECEIVABLES PURCHASE AGREEMENT
This RECEIVABLES PURCHASE AGREEMENT dated as of January 22,
1997 (this "AGREEMENT"), is between FDS NATIONAL BANK, a national banking
association (the "ORIGINATOR") and PRIME II RECEIVABLES CORPORATION, a Delaware
corporation (the "PURCHASER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Originator intends to sell Receivables to the
Purchaser on the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, the Purchaser desires to purchase Receivables from
the Originator on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, to obtain the necessary funds to purchase such
Receivables, the Purchaser has entered into the Pooling and Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"ADDITIONAL ORIGINATOR" has the meaning specified in SECTION
2.06.
"AUTHORIZED OFFICERS" means those officers of the Persons
designated in SCHEDULE I hereto (or in such other Schedule as may be delivered
to the parties hereto from time to time) as duly authorized to execute and
deliver this Agreement and any instruments or documents in connection herewith
on behalf of such Persons and to take, from time to time, all other actions on
behalf of the Originator in connection herewith.
"BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which banking institutions in New York, New York (or, with respect
to any Series, any additional city specified in the related Supplement) are
authorized or obligated by law or executive order to be closed.
"CHARGE ACCOUNT AGREEMENT" means an agreement, which shall
comply with the Federal Truth In Lending Act, for Visa and Mastercard credit
card accounts between
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any Obligor and the Originator, as such agreements may be amended, modified or
otherwise changed from time to time.
"CLOSING DATE" means the date of the initial issuance of the
Certificates.
"COMPANY" means Federated Department Stores, Inc., a Delaware
corporation.
"CREDIT AND COLLECTION POLICY" means the credit, collection,
customer relations and service policies that apply to Eligible Accounts, as such
policies currently exist and as such policies may be amended, modified or
supplemented from time to time subject to SECTION 5.01(C).
"CUSTODIAN" means the bailee of the Trustee.
"DEFAULTED RECEIVABLE" means a Receivable in a Defaulted
Account.
"DISCOUNT FACTOR" means the discount factor determined in
accordance with SCHEDULE III hereto.
"ELIGIBLE RECEIVABLE" means a Receivable that satisfies each
of the following criteria:
(a) it arises under an Eligible Account;
(b) except as permitted in the Pooling and Servicing
Agreement, it is not sold or pledged to any other party;
(c) it constitutes an "account" or a "general intangible" as
each is defined in Article 9 of the UCC as then in effect in each
Relevant UCC State;
(d) it is the legal, valid and binding obligation of a Person
who (i) is living, (ii) is not a minor under the laws of his/her state
of residence and (iii) is competent to enter into a contract and incur
debt;
(e) neither it nor the underlying Charge Account Agreement
contravenes in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, rules and
regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) that could reasonably be expected to have an
adverse impact on the amount of Collections thereunder, and the
Originator is not in violation of any such laws, rules or regulations
in any respect material to such Charge Account Agreement;
(f) all material consents, licenses, or authorizations of, or
registrations with, any governmental authority required to be obtained
or given in connection with the creation of such Receivable or the
execution, delivery, creation and performance
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of the underlying Charge Account Agreement have been duly obtained or
given and are in full force and effect as the date of the creation of
such Receivable;
(g) at the time of its transfer to the Trust, the Purchaser or
the Trust will have good and marketable title free and clear of all
liens and security interests arising under or through the Purchaser
(other than Permitted Liens);
(h) it is not a Defaulted Receivable; and
(i) it arises under a Charge Account Agreement that has been
duly authorized and which, together with such Receivable, is in full
force and effect and constitutes the legal, valid and binding
obligation of the Obligor enforceable against such Obligor in
accordance with its terms and is not subject to any dispute, offset,
counterclaim or defense whatsoever (except the discharge in bankruptcy
of the Obligor).
"INCIPIENT PURCHASE TERMINATION EVENT" means any condition,
act or event specified in SECTION 6.01 that, with the giving of notice or the
lapse of time, or both, would become a Purchase Termination Event.
"INITIAL OUTSTANDING BALANCE" of a Receivable means the
Outstanding Balance of such Receivable on the Initiation Date of such
Receivable.
"INITIATION DATE" means, with respect to any Receivable, the
date of the transaction that gave rise to the original Outstanding Balance of
such Receivable.
"IN-STORE PAYMENT" means any payment made by an Obligor with
respect to a Receivable by delivery of cash, a check or money order, or any
other form of payment to a cashier or other employee of any Federated retail
operating subsidiary.
"INTERCHANGE" means interchange fees payable to the
Originator in its capacity as credit card issuer through VISA U.S.A., Inc. and
Mastercard International Incorporated.
"LATE FEES" has, with respect to any Account, the meaning
specified in the Charge Account Agreement applicable to such Account for late
fees or similar charges.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any financing statement under
the UCC (other than any such financing statement filed for informational
purposes only) or comparable law of any jurisdiction to evidence any of the
foregoing; PROVIDED, HOWEVER, that any assignment pursuant to Section 7.2 of the
Pooling and Servicing Agreement shall not be deemed to constitute a Lien.
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"LOCK-BOX ACCOUNT" means an account in the name of the Trustee
with a Lock-Box Bank.
"LOCK-BOX AGREEMENT" has the meaning specified in SECTION
3.01.
"LOCK-BOX BANK" means any bank that holds one or more Lock-Box
Accounts for receiving Collections, pursuant to a Lock-Box Agreement.
"NET OWNERSHIP INTEREST" means, with respect to any
Receivable, an amount equal to the aggregate Initial Outstanding Balance of such
Receivable, plus interest or finance charges accrued on such Receivable to such
time less the cumulative amount of Collections with respect to such Receivable
actually received by the Purchaser or the Originator prior to such time, as such
Net Ownership Interest may be adjusted pursuant to SECTION 2.05.
"OBLIGOR" means a Person obligated to make payments with
respect to a Receivable arising under an Account pursuant to a Charge Account
Agreement.
"OUTSTANDING BALANCE" means, with respect to a Receivable on
any day, the aggregate amount owed by the Obligor thereunder as of the close of
business on the prior Business Day (net of returns and adjustments).
"PERIODIC FINANCE CHARGES" has, with respect to any Account,
the meaning specified in the Charge Account Agreement applicable to such Account
for finance charges (due to periodic rate) or any similar term.
"PERSON" means any legal person, including an individual,
corporation, partnership, association, joint venture, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of a
similar nature.
"POOLING AND SERVICING AGREEMENT" means the Pooling and
Servicing Agreement dated as of January 22, 1997, among the Purchaser, the
Servicer, and the Trustee, as such agreement may be amended, supplemented,
waived, or otherwise modified from time to time.
"PURCHASE CONSIDERATION" means, with respect to each purchase
of newly created Receivables from the Originator on the Initiation Date of such
Receivables, the aggregate consideration payable by the Purchaser to the
Originator equal to the Purchase Price of such Receivables, which shall be paid
pursuant to SECTION 2.03, either in cash, by Subordinated Purchase Note, or by a
combination thereof.
"PURCHASE DATE" has the meaning specified in SECTION 2.01(a).
"PURCHASE PRICE" means the product of (i) the Outstanding
Balance of each Receivable tendered to the Purchaser pursuant to SECTION 2.02(a)
and (ii) a percentage equal to 100% minus the Discount Factor for the purchase
of such Receivable.
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"PURCHASE TERMINATION DATE" means the date on which the
Purchaser's obligation to purchase Receivables shall terminate pursuant to
SECTION 6.01.
"PURCHASE TERMINATION EVENT" has the meaning specified in
SECTION 6.01.
"PURCHASES" has the meaning specified in SECTION 2.01(a).
"RECEIVABLE" means any amount owing by any Obligor, including,
without limitation, amounts owing for the payment of goods and services, annual
membership fees, Periodic Finance Charges, Late Fees, cash advances, access
checks, cash advance fees and Special Fees, if any, including credit insurance
premiums.
"RECEIVABLES TRANSMITTAL" has the meaning specified in SECTION
2.02(a).
"RELEVANT UCC STATE" means each jurisdiction in which the
filing of a UCC financing statement is necessary to perfect the ownership
interest and security interest of the Originator pursuant to this Agreement.
"SETTLEMENT DATE" means the date upon which the Purchaser and
the Originator shall reconcile any amounts owed to each other, except amounts
payable in respect of Purchases of Receivables, which date shall occur at least
once each fiscal month.
"SETTLEMENT PERIOD" means a period from and including a
Settlement Date to but excluding the next following Settlement Date.
"SETTLEMENT STATEMENT" means a statement, dated the last day
of each Settlement Period, reflecting the adjustments and credits pursuant to
SECTION 2.05 for such Settlement Period and for any Receivables being sold or
repurchased by the Originator on the date thereof, substantially in the form of
EXHIBIT A hereto, signed by an Authorized Officer of the Purchaser.
"SPECIAL FEES" means any fees which are not now but from time
to time may be assessed on the Accounts.
"SUBORDINATED PURCHASE NOTE" has the meaning specified in
SECTION 2.03(a).
"UCC" means the Uniform Commercial Code, as amended from time
to time, as in effect in the applicable jurisdiction.
"U.S. GAAP" has the meaning specified in SECTION 1.02.
All capitalized terms used herein and not otherwise defined
have the meanings assigned such terms in the Pooling and Servicing Agreement.
The definitions contained in this SECTION 1.01 are applicable to the singular as
well as the plural forms of such terms.
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SECTION 1.02. ACCOUNTING AND UCC TERMS. All accounting terms
not specifically defined herein shall be construed in accordance with United
States generally accepted accounting principles ("U.S. GAAP"); and all terms
used in Article 9 of the UCC that are used but not specifically defined herein
are used herein as defined therein.
ARTICLE II.
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. THE PURCHASES.
(a) The Originator does hereby sell, transfer,
assign, and otherwise convey to the Purchaser, without recourse, all of
its right, title and interest in, to and under (i) the Receivables now
existing and hereafter created and arising in connection with the
Accounts, including, without limitation, all accounts, general
intangibles, contract rights, and other obligations of any Obligor with
respect to the Receivables, now or hereafter existing, (ii) all monies
and investments due or to become due with respect thereto (including,
without limitation, the right to any Finance Charge Receivables,
including any Recoveries), (iii) all Interchange arising upon the
creation of such Receivables, (iv) all proceeds of such Receivables and
(v) the Charge Account Agreements relating to such Accounts
(collectively, the "PURCHASES") on the Closing Date and on the
Initiation Date of any such subsequently created Receivable during the
period from the Closing Date until the Purchase Termination Date (each
such date, including the Closing Date, being a "PURCHASE DATE").
(b) The parties to this Agreement intend that the
transactions contemplated hereby shall be, and shall be treated as, a
purchase by the Purchaser and a sale by the Originator of the
Receivables and not as a lending transaction. The sale of Receivables
by the Originator hereunder shall be without recourse to, or
representation or warranty of any kind (express or implied) by, the
Originator, except as otherwise specifically provided herein. If this
Agreement does not constitute a valid sale, transfer and assignment of
all right, title and interest of the Originator in such property
despite the intent of the parties hereto, the Originator hereby grants
the Purchaser a "security interest" (as defined in the UCC as in effect
in the Relevant UCC State) in such property to the Purchaser and the
parties agree that this Agreement shall constitute a security agreement
under the UCC in effect in the Relevant UCC State.
SECTION 2.02. DELIVERY OF RECEIVABLES AND PAYMENTS.
(a) On each Business Day prior to the Purchase
Termination Date, the Originator shall deliver all of its Receivables
to the Purchaser by delivering to the Purchaser a receivables
transmittal (a "RECEIVABLES TRANSMITTAL") specifying to the Purchaser
the aggregate Outstanding Balance of such Receivables and the portion
of the Purchase Price of such Receivables the Originator desires to
receive in cash
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(it being understood that any portion of the Purchase Price that the
Originator does not elect to receive in cash shall be reflected as a
subordinated loan from the Originator to the Purchaser and evidenced by
a Subordinated Purchase Note). Notwithstanding the foregoing or any
other provision of this Agreement, the Originator may not sell any
Receivables or any portion of any thereof to the Purchaser for cash on
any Business Day on which the Originator has requested the Purchaser to
repay any outstanding principal amount of any Subordinated Purchase
Note unless and until the Purchaser has tendered the amount of such
requested repayment to the Originator.
(b) Upon the fulfillment of the conditions set forth
in ARTICLE III and the receipt by the Originator on any Purchase Date
of the Purchase Consideration for the Receivables to be sold by the
Originator on such date, all of the Originator's right, title and
interest in and to such Receivables shall have been sold, assigned,
transferred, conveyed and set over to the Purchaser. Each such sale
shall be evidenced by the Originator's delivery to the Purchaser of a
Receivables Transmittal and the receipt by the Originator of the
Purchase Consideration for the Receivables represented thereby.
SECTION 2.03. PAYMENTS AND COMPUTATIONS.
(a) The Purchase Price for Receivables shall be paid
or provided for on the Purchase Date of such Receivables in either of
the following ways, at the election of the Originator: (i) by payment
in cash in immediately available funds; or (ii) in the event that the
total Purchase Price is not paid in full in cash by the Purchaser on
the date of Purchase, the Originator shall receive a subordinated
unsecured promissory note (each such note, a "SUBORDINATED PURCHASE
NOTE") from the Purchaser in an original principal amount equal to the
portion of such cash shortfall owed to the Originator. The
characteristics of each Subordinated Purchase Note shall be as follows:
(i) interest shall accrue on the outstanding
principal amount of each Subordinated Purchase Note at a per
annum rate of interest (calculated on the basis of a 360-day
year of twelve 30-day months) equal to the equivalent of the
rate for commercial paper having a maturity of 30 days
reported on such day by the Board of Governors of the Federal
Reserve System in "Statistical Release H.15 (519), Selected
Interest Rates", or any successor thereto, under the heading
"Commercial Paper", converted to a money market yield, or, if
no such rate for commercial paper is reported on such date,
the applicable rate in effect with respect to the most recent
day on which such rate was reported, plus 1.5%;
(ii) the outstanding principal of and
accrued interest on each Subordinated Purchase Note shall be
payable as, if and when the Purchaser receives any of the
following amounts (net of expenses of the Purchaser) from the
Trustee or the Servicer: (i) payments with respect to
Principal Receivables
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allocable to the Exchangeable Transferor Certificate; (ii)
payments of any portion of the Finance Charge Receivables paid
with respect to the Exchangeable Transferor Certificate,
representing an amount equal to any Default Amount allocable
to the Exchangeable Transferor Certificate; and (iii) the
proceeds arising from the sale by the Purchaser of any
Investor Certificates, including proceeds received upon an
exchange of the Exchangeable Transferor Certificate;
(iii) all amounts paid with respect to an
outstanding Subordinated Purchase Note shall be allocated
first to accrued interest until all such interest is paid, and
then to outstanding principal;
(iv) the obligation of the Purchaser to
repay Subordinated Purchase Notes issued to the Originator
from the amounts paid to such Purchaser with respect to
Finance Charge Receivables, Principal Receivables, and other
sources of funds described in clause (ii) of this SECTION 2.03
in the manner prescribed herein, together with any capital or
surplus of the Transferor remaining after all Secured
Obligations under the Pooling and Servicing Agreement are
repaid in full and the Trust Termination Date has occurred,
shall be the sole and exclusive remedy available to the
Originator, and to the extent that such payments are
insufficient to pay such amounts, the Originator shall not
have any claim against the Purchaser for such amounts and no
further or additional recourse shall be available against the
Purchaser and any such Subordinated Purchase Note shall be
fully subordinated to any rights of Certificateholders under
the Pooling and Servicing Agreement, shall not evidence any
rights in the Receivables or the Exchangeable Transferor
Certificate, shall be an obligation of the Purchaser solely by
its execution hereof and need not be evidenced by any separate
instrument of the Purchaser;
(v) no Subordinated Purchase Note may be
sold, transferred, assigned, pledged, hypothecated,
participated or otherwise conveyed, nor may the Originator
grant any security interest in any Subordinated Purchase Note;
and
(vi) the Purchaser may offset any amount due
and owing by the Originator against any amount due and owing
by the Purchaser to the Originator under the terms of the
Subordinated Purchase Note.
The Purchaser, at its option, may repay all or any portion of the accrued
interest on and principal of any Subordinated Purchase Note at any time.
(b) The Purchaser shall pay all amounts to be paid in
cash with respect to the Purchases to the Originator on the date of the
Purchase thereof and shall pay all amounts in respect of principal of
and interest on any Subordinated Purchase Note in accordance with the
terms thereof.
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(c) All payments hereunder shall be made not later
than the close of business (New York City time) on the date specified
therefor in lawful money of the United States of America in same day
funds to the bank account designated in writing by the Originator to
the Purchaser from time to time.
(d) Whenever any payment to be made hereunder shall
be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
SECTION 2.04. REPURCHASE OF RECEIVABLES.
(a) If any of the representations or warranties of
the Originator contained in SECTIONS 4.02 or 4.03 hereof was not true
with respect to the Originator or any Receivable, as applicable, at the
time such representation or warranty was made, and as a result thereof
(i) the Purchaser is required to repurchase any Receivable from the
Trust pursuant to Section 2.4(d) of the Pooling and Servicing Agreement
or (ii) any Receivable is designated an "Ineligible Receivable"
pursuant to Section 2.4(c) of the Pooling and Servicing Agreement, then
the Originator shall be obligated to pay to the Purchaser immediately
upon the Purchaser's demand therefor an amount equal to the amount of
all losses, damages and liabilities of the Purchaser that result from
such breach, including but not limited to the cost of the Purchaser's
repurchase obligations pursuant to Section 2.4(d) of the Pooling and
Servicing Agreement.
(b) Upon any exercise by the Purchaser of its right
to designate Removed Accounts pursuant to Section 2.7(d) of the Pooling
and Servicing Agreement and the removal of any Receivables from the
Trust pursuant thereto, the Originator will immediately repurchase such
Receivables from the Purchaser by tendering to the Purchaser an amount
in immediately available funds equal to the amount the Purchaser
remitted to the Trust (calculated as set forth in Section 2.7 of the
Pooling and Servicing Agreement) in consideration of the transfer of
the removed Receivables from the Trust to the Purchaser.
SECTION 2.05. CUSTOMER SERVICE ADJUSTMENTS. The Originator
may make an adjustment in the principal amount or finance or other charges
accrued or payable with respect to the account of a customer who has obtained
credit under a Charge Account Agreement, PROVIDED that such adjustment is
permitted under the Originator's Credit and Collection Policy. The aggregate
amount of all such adjustments made by the Originator during any Settlement
Period shall be payable to the Purchaser by the Originator and shall be due no
later than the Settlement Date that occurs at the end of such Settlement Period.
SECTION 2.06. ADDITION OF ORIGINATORS. Notwithstanding
anything to the contrary in this Agreement, any direct or indirect wholly owned
subsidiary of the Company (whether now in existence or acquired or created after
the date hereof) may at any time become an Originator hereunder, whether in
addition to or in substitution for one or more
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then existing Originators (each such additional or substitute Originator, an
"ADDITIONAL ORIGINATOR"), PROVIDED that, (i) at the time such direct or indirect
wholly owned subsidiary becomes an Additional Originator, such direct or
indirect wholly owned subsidiary (a) agrees in writing to sell Receivables to
the Purchaser on terms and subject to the conditions set forth in this
Agreement, (b) complies with the conditions set forth in SECTION 3.01(b), (c)
makes the representations and warranties set forth in SECTIONS 4.02 and 4.03 and
(d) agrees in writing to comply with the covenants set forth in ARTICLE V and
(ii) the Purchaser shall have received notice from each Rating Agency that the
inclusion of the Additional Originator pursuant to this SECTION 2.06 will not
result in a reduction or withdrawal of its then existing rating of any Class of
Investor Certificates then issued and outstanding. Following the addition or
substitution of any Additional Originator, the term "ORIGINATOR" as used in this
Agreement shall include for all purposes such Additional Originator.
SECTION 2.07. APPLICATION OF COLLECTIONS. For purposes of
determining the Outstanding Balances of Receivables, upon receipt by the
Servicer of Collections with respect to any Receivable, such Collections shall
be applied to the Outstanding Balances of Receivables in order of their
Initiation Dates, beginning with the Receivables having the earliest Initiation
Date.
ARTICLE III.
CONDITIONS TO PURCHASES
SECTION 3.01. CONDITIONS PRECEDENT TO THE PURCHASER'S
INITIAL PURCHASE. The obligation of the Purchaser to purchase Receivables
hereunder on the Initiation Date from the Originator is subject to the
conditions precedent that (a) the Pooling and Servicing Agreement shall be in
full force and effect, (b) the Servicer shall have delivered a letter signed by
it to each Lock-Box Bank of the Servicer, such letter to be in substantially the
form of ANNEX L to this Agreement (each, a "LOCK-BOX AGREEMENT"), and (c) the
Purchaser shall have received on or before the date of such Purchase the
following, each (unless otherwise indicated) dated the day of such sale and in
form and substance satisfactory to the Purchaser:
(i) a copy of duly adopted resolutions of
the Board of Directors of the Originator authorizing this
Agreement, the documents to be delivered by the Originator
hereunder and the transactions contemplated hereby, certified
by the Secretary or Assistant Secretary of the Originator;
(ii) a duly executed certificate of the
Secretary or an Assistant Secretary of the Originator
certifying the names and true signatures of the Authorized
Officers authorized on behalf of the Originator to sign this
Agreement or any instruments or documents in connection with
this Agreement; and
(iii) (A) executed Financing Statements
(Forms UCC-1) with respect to the Receivables, naming the
Originator as seller and the Purchaser
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as purchaser, in proper form for filing in each jurisdiction
in which the Purchaser deems it necessary or desirable to
perfect the Purchaser's ownership thereof under the Uniform
Commercial Code or comparable law of such jurisdiction and (B)
evidence that all other actions necessary or, in the opinion
of the Purchaser, desirable or required to perfect the
Purchaser's ownership of the Receivables sold hereunder have
been duly taken.
SECTION 3.02. CONDITIONS PRECEDENT TO THE ORIGINATOR'S
INITIAL SALE. The obligation of the Originator to make its initial sale of
Receivables hereunder is subject to the condition precedent that the Originator
shall have received on or before the date of such sale the following, each
(unless otherwise indicated) dated the day of such initial sale and in form and
substance satisfactory to the Originator:
(a) a copy of duly adopted resolutions of the Board
of Directors of the Purchaser authorizing this Agreement, the documents
to be delivered by the Purchaser hereunder and the transactions
contemplated hereby, certified by the Secretary or Assistant Secretary
of the Purchaser; and
(b) a duly executed certificate of the Secretary or
Assistant Secretary of the Purchaser certifying the names and true
signatures of the officers authorized on its behalf to sign this
Agreement and the other documents to be delivered by it hereunder.
SECTION 3.03. CONDITIONS PRECEDENT TO ALL SALES. The
obligation of the Originator to make any sale (including the initial sale) of
Receivables hereunder shall be subject to the further condition precedent that
on the date for such sale the following statements shall be true (and the
payment by the Purchaser of the Purchase Price shall constitute a representation
and warranty by the Purchaser that on such date such statements are true):
(a) the representations and warranties of the
Purchaser contained in SECTION 4.01 are correct on and as of such
Purchase Date as though made on and as of such date; and
(b) no event has occurred and is continuing that
constitutes a Trust Pay Out Event.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER. The Purchaser represents and warrants as to itself as follows:
(a) It (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and is duly qualified
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as a foreign corporation and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect
on its condition (financial or otherwise), operations, properties or
prospects, (ii) has the requisite corporate power and authority to
effect the transactions contemplated hereby, and (iii) has all
requisite corporate power and authority and the legal right to own,
pledge, mortgage and operate its properties, and to conduct its
business as now or currently proposed to be conducted.
(b) The execution, delivery and performance by the
Purchaser of this Agreement and all instruments and documents to be
delivered hereunder by it, and the transactions contemplated hereby and
thereby, (i) are within its corporate powers, have been duly authorized
by all necessary corporate action, including the consent of
shareholders where required, and do not (A) contravene its charter or
by-laws, (B) violate any law or regulation or any order or decree of
any court or governmental instrumentality, (C) conflict with or result
in the breach of, or constitute a default under, any indenture,
mortgage or deed of trust or any material lease, agreement or other
instrument binding on or affecting it or any of its subsidiaries or any
of its properties or (D) result in or require the creation or
imposition of any Lien as created or imposed hereunder or under the
Pooling and Servicing Agreement, and no transaction contemplated hereby
requires compliance on its part with any bulk sales act or similar law,
and (ii) do not require the consent, authorization by or approval of or
notice to or filing or registration with, any governmental body,
agency, authority, regulatory body or any other Person other than those
which have been obtained EXCEPT for the filing of the Financing
Statements referred to in SECTION 3.01 hereof, which filing the
Originator hereby represents shall have been duly made prior to or
substantially contemporaneously with any Purchases and shall at all
times be in full force and effect (except as they may be terminated by
the Purchaser).
(c) This Agreement has been duly executed and
delivered by the Purchaser and constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except (i) as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general, and (ii) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(d) There is no pending or, to its knowledge after
due inquiry, threatened action or proceeding affecting it or any of its
subsidiaries before any court, governmental agency or arbitrator that
may reasonably be expected to materially and adversely affect its
condition (financial or otherwise), operations, properties or
prospects, or that purports to affect the legality, validity or
enforceability of this Agreement, and none of the transactions
contemplated hereby is or to its knowledge is threatened to be
restrained or enjoined (temporarily, preliminarily or permanently).
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SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE
ORIGINATOR. The Originator hereby represents and warrants to the Purchaser that,
as of the Initial Closing Date and as to matters involving (x) Supplemental
Accounts, as of the applicable Addition Date and (y) Automatic Additional
Accounts, as of the date the Receivables of such Accounts are designated for
inclusion in the Trust:
(a) ORGANIZATION AND GOOD STANDING. The Originator is
a national banking association duly organized and validly existing in
good standing under the laws of the United States and has full
corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform
its obligations under this Agreement.
(b) DUE QUALIFICATION. The Originator is duly
qualified to do business and is in good standing (or is exempt from
such requirement) in any state required in order to conduct business,
and has obtained all necessary licenses and approvals with respect to
the Originator required under federal and applicable state law.
(c) DUE AUTHORIZATION. The execution and delivery of
this Agreement and the consummation of the transactions provided for in
this Agreement have been duly authorized by the Originator by all
necessary corporate action on its part and this Agreement will remain,
from the time of its execution, an official record of the Originator.
(d) BINDING OBLIGATION. This Agreement, and the
consummation of the transactions provided for herein, constitutes a
legal, valid and binding obligation of the Originator, enforceable in
accordance with its terms, except as (i) enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect, affecting the
enforcement of creditors' rights in general and (ii) as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) NO CONFLICTS. The execution, delivery and
performance of this Agreement, the performance of the transactions
contemplated by this Agreement, and the fulfillment of the terms hereof
by the Originator, do not (i) contravene its charter or By-Laws, (ii)
violate any provision of, or require any filing (except for the filings
under the UCC required by this Agreement, each of which has been duly
made and is in full force and effect), registration, consent or
approval under, any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Originator, except for such filings,
registrations, consents or approvals as have already been obtained and
are in full force and effect, (iii) result in a breach of or constitute
a default or require any consent under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which the
Originator is a party or by which it or its properties
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may be bound or affected except those as to which a consent or waiver
has been obtained and is in full force and effect and an executed copy
of which has been delivered to the Purchaser, or (iv) result in, or
require, the creation or imposition of any lien upon or with respect to
any of the properties now owned or hereafter acquired by the Originator
other than as specifically contemplated by this Agreement.
(f) TAXES. The Originator has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges due from the Originator or is contesting any such
tax, assessment or other governmental charge in good faith through
appropriate proceedings. The Originator knows of no basis for any
material additional tax assessment for any fiscal year for which
adequate reserves have not been established.
(g) NO VIOLATION. The execution and delivery of this
Agreement, the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will not conflict
with or violate any Requirements of Law applicable to the Originator.
(h) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the knowledge of the Originator,
threatened against the Originator before any court, regulatory body,
administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination or
ruling that, in the reasonable judgment of the Originator, would
materially and adversely affect the performance by the Originator of
its obligations under this Agreement or (iv) seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Agreement.
(i) ALL CONSENTS REQUIRED. All approvals,
authorizations, consents, orders or other actions of any Person or of
any governmental body or official required in connection with the
execution and delivery of this Agreement, the performance of the
transactions contemplated by this Agreement and the fulfillment of the
terms hereof, have been obtained.
(j) BONA FIDE RECEIVABLES. Each Receivable is or will
be an account receivable arising out of the Originator's performance in
accordance with the terms of the Charge Account Agreement giving rise
to such Receivable. The Originator has no knowledge of any fact which
should have led it to expect at the time of the initial creation of an
interest in any Eligible Receivable hereunder that such Eligible
Receivable would not be paid in full when due. Each Receivable
classified as an "Eligible Receivable" by the Originator in any
document or report delivered hereunder satisfies the requirements of
eligibility contained in the definition of Eligible Receivable.
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(k) PLACE OF BUSINESS. The principal place of
business of the Originator is as indicated in SECTION 8.02, and the
offices where the Originator keeps its records concerning the
Receivables and related contracts are as indicated on SCHEDULE II
hereto.
(l) USE OF PROCEEDS. No proceeds of the sale of
any Receivables will be used by the Originator to purchase or carry any
margin security.
(m) PURCHASE TERMINATION EVENT. As of the Initial
Closing Date, no Purchase Termination Event or Incipient Purchase
Termination Event has occurred and is continuing.
(n) NOT AN INVESTMENT COMPANY. The Originator is
not an "investment company" within the meaning of the Investment
Company Act, or is exempt from all provisions of such Act.
(o) SOLVENCY. The Originator is not insolvent and
will not be rendered insolvent upon the transfer of the Receivables to
the Purchaser.
The representations and warranties set forth in this
SECTION 4.02 shall survive the transfer and assignment of the
respective Receivables to the Purchaser pursuant to this Agreement.
Upon discovery by the Originator or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the other.
SECTION 4.03. REPRESENTATIONS AND WARRANTIES OF THE
ORIGINATOR RELATING TO THIS AGREEMENT AND THE RECEIVABLES.
(a) BINDING OBLIGATION; VALID TRANSFER AND
ASSIGNMENT. The Originator hereby represents and warrants to the
Purchaser that, as of the Initial Closing Date and with respect to any
Series of Certificates, as of the date of its related Supplement and
Closing Date, and, with respect to any Series and matters involving (x)
Supplemental Accounts, as of the applicable Addition Date and (y)
Automatic Additional Accounts, as of the date the Receivables of such
Accounts are designated for inclusion in the Trust:
(i) This Agreement constitutes the legal,
valid and binding obligation of the Originator, enforceable
against the Originator in accordance with its terms, except
(A) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(ii) This Agreement constitutes either (A) a
valid transfer, assignment, set-over and conveyance to the
Purchaser of all right, title and
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interest of the Originator in and to the Purchases, and such
Purchases will be held by the Purchaser free and clear of any
Lien of any Person claiming through or under the Originator or
any of its Affiliates except for Permitted Liens or (B) a
grant of a security interest (as defined in the UCC as in
effect in the Relevant UCC State) in, to and under the
Purchases, which grant is enforceable with respect to the
existing Receivables and the proceeds thereof upon execution
and delivery of this Agreement, and which will be enforceable
with respect to such Receivables hereafter created and the
proceeds thereof, upon such creation. If this Agreement
constitutes the grant of a security interest to the Purchaser
in such property, upon the filing of the financing statement
described in SECTION 3.01(c) and in the case of the
Receivables hereafter created and proceeds thereof, upon such
creation, the Purchaser shall have a first priority perfected
security interest in such property, except for Permitted
Liens.
(iii) The Originator is not insolvent.
(iv) The Originator is the legal and
beneficial owner of all right, title and interest in and to
each Receivable and each Receivable has been or will be
transferred to the Purchaser free and clear of any Lien other
than Permitted Liens.
(v) All consents, licenses, approvals or
authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or
given by the Originator in connection with the transfer of
Purchases to the Purchaser have been duly obtained, effected
or given and are in full force and effect.
(vi) The Originator has clearly and
unambiguously marked all its computer records and all its
microfiche storage files regarding the Receivables as the
property of the Purchaser and shall maintain such records in a
manner such that the Purchaser shall have a perfected security
interest in such Receivables.
(vii) As of the Initial Closing Date, on
the Business Day following the date the Servicer receives a
Termination Notice pursuant to Section 10.1 of the Pooling and
Servicing Agreement and on the Business Day following any
Amortization Period Commencement Date, Schedule 1 to the
Pooling and Servicing Agreement is and will be an accurate and
complete listing of all Accounts in all material respects as
of such day and the information contained therein with respect
to the identity of each Account and the aggregate unpaid
balance of the Receivables existing thereunder is and will be
true and correct in all material respects as of such day.
(viii) Each Account classified as an
"Eligible Account" by the Originator in any document or report
delivered hereunder will satisfy the
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requirements contained in the definition of Eligible Account
and each Receivable classified as an "Eligible Receivable" by
the Originator in any document or report delivered hereunder
will satisfy the requirements contained in the definition of
Eligible Receivable.
(ix) All material information with respect
to the Accounts and the Receivables provided to the Purchaser
by the Originator was true and correct as of the Closing Date,
or as of the day Receivables arising under each such Account
are designated for inclusion in the Purchases, as the case may
be.
(x) Each Receivable then existing has been
conveyed to the Purchaser free and clear of any Lien of any
Person claiming through or under the Originator or any of its
Affiliates (other than Permitted Liens) and in compliance in
all material respects, with all Requirements of Law applicable
to the Originator.
(xi) With respect to each Receivable then
existing, all consents, licenses, approvals or authorizations
of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the
Originator in connection with the conveyance of such
Receivable to the Purchaser have been duly obtained, effected
or given and are in full force and effect.
(xii) On each day on which any new
Receivable arises and is transferred to the Purchaser pursuant
to this Agreement, the Originator shall be deemed to represent
and warrant to the Purchaser that (A) each Receivable
transferred to the Purchaser on such day has been conveyed to
the Purchaser in compliance, in all material respects, with
all Requirements of Law applicable to the Originator and free
and clear of any Lien of any Person claiming through or under
the Originator or any of its Affiliates (other than Permitted
Liens) and (B) with respect to each such Receivable, all
consents, licenses, approvals or authorizations of or
registrations or declarations with, any Governmental Authority
required to be obtained, effected or given by the Originator
in connection with the conveyance of such Receivable to the
Purchaser have been duly obtained, effected or given and are
in full force and effect.
(b) NOTICE OF BREACH. The representations and
warranties set forth in this SECTION 4.03 shall survive the transfer
and assignment of the respective Receivables to the Purchaser. Upon
discovery by the Originator or the Purchaser of a breach of any of the
representations and warranties set forth in this SECTION 4.03, the
party discovering such breach shall give prompt written notice to the
other party mentioned above. The Originator agrees to cooperate with
the Purchaser in attempting to cure any such breach.
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ARTICLE V.
GENERAL COVENANTS
SECTION 5.01. COVENANTS OF THE ORIGINATOR. So long as the
Purchaser shall have any Net Ownership Interest in any Receivables sold by the
Originator or until the Purchase Termination Date shall have occurred, whichever
is later, the Originator covenants that:
(a) RECEIVABLES TO BE ACCOUNTS OR GENERAL
INTANGIBLES. The Originator will take no action to cause any Receivable
to be evidenced by any instrument (as defined in the UCC as in effect
in the Relevant UCC State). The Originator will take no action to cause
any Receivable to be anything other than an "account" or a "general
intangible" (each as defined in the UCC as in effect in the Relevant
UCC State).
(b) SECURITY INTERESTS. Except for the conveyances
hereunder, the Originator will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Receivable, whether now existing or hereafter created,
or any interest therein; the Originator will immediately notify the
Purchaser of the existence of any Lien on any Receivable; and the
Originator shall defend the right, title and interest of the Purchaser
in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under
the Originator; PROVIDED, HOWEVER, that nothing in this SECTION 5.01(b)
shall prevent or be deemed to prohibit the Originator from suffering to
exist upon any of the Receivables any Permitted Lien.
(c) CHARGE ACCOUNT AGREEMENTS AND CREDIT AND
COLLECTION POLICIES. The Originator shall comply with and perform its
obligations under the Charge Account Agreements relating to the
Accounts and the Credit and Collection Policy except insofar as any
failure to comply or perform would not materially and adversely affect
the rights of the Trust or the Certificateholders under the Pooling and
Servicing Agreement or under the Certificates. The Originator may
change the terms and provisions of the Charge Account Agreements or the
Credit and Collection Policy in any respect (including, without
limitation, the reduction of the required minimum monthly payment, the
calculation of the amount, or the timing, of charge-offs and the
Periodic Finance Charges and other fees to be assessed thereon) only if
such change (i) would not, in the reasonable belief of the Originator,
cause, immediately or with the passage of time, a Pay Out Event to
occur and (ii) (A) if it owns a comparable segment of charge card
accounts, such change is made applicable to the comparable segment of
the revolving credit card accounts owned by the Originator, if any,
which have characteristics, the same as, or substantially similar to,
the Accounts that are the subject of such change and (B) if it does not
own such a comparable segment, it will not make any such change with
the intent to materially benefit the Originator over the Investor
Certificateholders, except as otherwise restricted by an endorsement,
sponsorship, or other agreement between the
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Originator and an unrelated third party or by the terms of the Charge
Account Agreements.
(d) DELIVERY OF COLLECTIONS. If the Originator
receives Collections, the Originator agrees to pay to the Servicer all
payments received by the Originator in respect of the Receivables as
soon as practicable after receipt thereof by the Originator.
(e) CONVEYANCE OF ACCOUNTS. The Originator covenants
and agrees that it will not convey, assign, exchange or otherwise
transfer any Account to any Person prior to the termination of this
Agreement; PROVIDED, HOWEVER, that the Originator shall not be
prohibited hereby from conveying, assigning, exchanging or otherwise
transferring an Account of the Originator in connection with a
transaction contemplated by, or in which the Originator and its
successor agree to comply with provisions substantially similar to the
provisions of, either Section 2.7 or Section 7.2 of the Pooling and
Servicing Agreement.
(f) NOTICE OF LIENS. The Originator shall notify the
Purchaser promptly after becoming aware of any Lien on any Receivable
other than Permitted Liens.
(g) COMPLIANCE WITH LAWS, ETC. The Originator shall
comply in all material respects with all applicable laws, rules,
regulations and orders applicable to the Receivables, including,
without limitation, rules and regulations relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy, where failure so to comply
could reasonably be expected to have an adverse impact on the amount of
Collections thereunder.
(h) PRESERVATION OF CORPORATE EXISTENCE. Except in
connection with a transaction contemplated by either Section 2.7 or
Section 7.2 of the Pooling and Servicing Agreement or as a result of a
transaction that effects a merger of the Originator into or with
another Affiliate of the Company or a consolidation among two or more
Affiliates of the Company, the Originator shall preserve and maintain
in all material respects its corporate existence, corporate rights
(charter and statutory) and corporate franchises.
(i) VISITATION RIGHTS. At any reasonable time during
normal business hours and from time to time, the Originator shall
permit (i) the Purchaser, or any of its agents or representatives, to
examine and make copies of and abstracts from the records, books of
account and documents (including, without limitation, computer tapes
and disks) of the Originator relating to Receivables owned or to be
purchased by the Purchaser hereunder and to the underlying Charge
Account Agreements and (ii) the Purchaser, or any of its agents or
representatives, or the Trustee (upon the giving of appropriate notice
to the Purchaser) to visit the properties of the Originator for the
purpose of examining such records, books of account and documents,
and to discuss the affairs, finances and accounts of the Originator
relating to the Receivables
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or to the Originator's performance hereunder with any of its
officers or directors and with its independent certified public
accountants.
(j) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The
Originator shall maintain and implement, or cause to be maintained or
implemented, administrative and operating procedures reasonably
necessary or advisable for the collection of all such Receivables, and,
until the delivery to the Purchaser, keep and maintain, or cause to be
kept and maintained, all documents, books, records and other
information reasonably necessary or advisable for the collection of all
such Receivables.
(k) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND
CHARGE ACCOUNT AGREEMENTS. The Originator shall at its expense take all
actions on its part reasonably necessary to maintain in full force and
effect its rights under all Charge Account Agreements to which the
Originator is a party.
(l) LOCATION OF RECORDS. The Originator shall keep
its chief place of business and chief executive office, and the offices
where it keeps the records concerning the Receivables and all
underlying Charge Account Agreements (and all original documents
relating thereto), at the address or addresses of the Originator
specified in SCHEDULE II hereto or upon written notice to the
Purchaser, at such other locations in a jurisdiction where all action
required by SECTION 5.01(o) shall have been taken and completed and be
in full force and effect.
(m) FURNISHING COPIES. ETC. The Originator shall
furnish to the Purchaser: (i) upon the Purchaser's request, a
certificate of the chief financial officer of the Originator
certifying, as of the date thereof, that no Purchase Termination Event
has occurred and is continuing and setting forth the computations used
by the chief financial officer of the Originator in making such
determination; (ii) as soon as possible and in any event within five
(5) days after the occurrence of any Purchase Termination Event or
Incipient Purchase Termination Event, a statement of the chief
financial officer of the Originator setting forth details of such
Purchase Termination Event or Incipient Purchase Termination Event and
the action that the Originator proposes to take or has taken with
respect thereto; (iii) promptly after obtaining knowledge that a
Receivable was, at the time of the Purchaser's purchase thereof, not an
Eligible Receivable, notice thereof; and (iv) promptly following the
Purchaser's request therefor, such other information, documents,
records or reports with respect to the Receivables or the underlying
Charge Account Agreements or the conditions or operations, financial or
otherwise, of the Originator, as the Purchaser may from time to time
reasonably request.
(n) OBLIGATION TO RECORD AND REPORT. The Originator
shall, to the fullest extent permitted by U.S. GAAP and by applicable
law, record each Purchase as a sale on its books and records, reflect
each Purchase in its financial statements and tax returns as a sale and
recognize gain or loss, as the case may be, on each Purchase.
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(o) CONTINUING COMPLIANCE WITH THE UNIFORM COMMERCIAL
CODE. The Originator shall, without limiting the requirements of
SECTION 5.01(r), at its expense, preserve, continue, and maintain or
cause to be preserved, continued, and maintained the Purchaser's valid
and properly protected title to each Receivable purchased hereunder,
including, without limitation, filing or recording Uniform Commercial
Code financing statements in each relevant jurisdiction.
(p) PROCEEDS OF RECEIVABLES. The Originator shall
cause all payments (other than In-Store Payments) made by Obligors in
respect of purchased Receivables to be made to (i) a Lock-Box Account
or (ii) a post office box under the control of employees of the
Servicer, provided that payments may be made to such a post office box
only if employees of the Servicer (A) handle the processing of all
amounts so received and (B) deposit or otherwise credit, or cause to be
deposited or otherwise credited, as soon as reasonably practicable but
in any event not later than the close of business in New York City on
the third Business Day following the date of such receipt, to a
Lock-Box Account, the entire amount so received.
(q) LOCK-BOX AGREEMENTS. The Originator shall, within
60 days of the date of this Agreement, deliver to the Purchaser a
Lock-Box Agreement, duly countersigned and agreed to by each bank
holding a lock-box account of the Originator or, if any such bank fails
to agree to the terms thereof, by such other bank as shall agree to
become a Lock-Box Bank for the Originator on the terms and conditions
set forth in such Lock-Box Agreement.
(r) FURTHER ACTION EVIDENCING PURCHASES.
(i) The Originator agrees that from time to
time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further
action, that may be necessary or desirable or that the
Purchaser may reasonably request, to protect or more fully
evidence the Purchaser's ownership, right, title and interest
in the Receivables sold by the Originator and its rights under
the Charge Account Agreements with respect thereto, or to
enable the Purchaser to exercise or enforce any such rights.
Without limiting the generality of the foregoing, the
Originator will upon the request of the Purchaser (A) execute
and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as
may be necessary or, in the opinion of the Purchaser,
desirable, (B) indicate on its books and records (including,
without limitation, originals and copies of sales slips and
billing statements, to the extent practicable) that
Receivables have been sold and assigned to the Purchaser, and
provide to the Purchaser, upon request, copies of any such
records and (C) contact customers to confirm and verify
Receivables.
(ii) The Originator hereby irrevocably
authorizes the Purchaser to file one or more financing or
continuation statements, and amendments thereto, relative to
all or any part of the Receivables sold by the Originator,
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or the underlying Charge Account Agreements with respect
thereto, without the signature of the Originator where
permitted by law.
(iii) If the Originator fails to perform any
of its agreements or obligations under this Agreement, the
Purchaser may (but shall not be required to) perform, or cause
performance of, such agreements or obligations, and the
expenses of the Purchaser incurred in connection therewith
shall be payable by the Originator as provided in SECTION
8.06.
(s) CHANGE IN BUSINESS. The Originator shall not make
any change in the nature of its business as conducted on the date
hereof that could reasonably be expected to have a material adverse
effect on the value or collectibility of the Receivables.
(t) IN-STORE PAYMENTS. In the event that the
Originator or any Federated retail operating subsidiary receives any
amounts in respect of collections of Receivables, including, without
limitation, all In-Store Payments, such Originator or Federated retail
operating subsidiary shall deposit or otherwise credit, or cause to be
deposited or otherwise credited, as soon as reasonably practicable but
in any event not later than the close of business in New York City on
the second Business Day following the Date of Processing of such
Collections, to a Lock-Box Account or the Collection Account, the
entire amount so received and hold such amount in trust for the
Servicer pending such remittance.
ARTICLE VI.
PURCHASE TERMINATION EVENTS
SECTION 6.01. PURCHASE TERMINATION EVENTS. If any of the
following events (each, a "PURCHASE TERMINATION EVENT") shall occur and be
continuing:
(a) The Originator shall consent to the appointment
of a bankruptcy trustee or receiver or liquidator in any bankruptcy
proceeding or any other insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to all
or substantially all of its property, or a decree or order of a court
or agency or supervisory authority having jurisdiction in the premises
for the appointment of a bankruptcy trustee or receiver or liquidator
in any bankruptcy proceeding or any other insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceeding, or
for the winding-up or liquidation of its affairs, shall have been
entered against the Originator and such decree or order shall have
remained in force discharged or unstayed for a period of 60 days, or
the Originator shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligation or the Originator shall become unable for any reason to
22
26
transfer Receivables to the Purchaser in accordance with the provisions
of this Agreement; or
(b) a Trust Pay Out Event occurs;
then the Purchaser's obligation to purchase Receivables from the Originator
shall automatically be terminated.
ARTICLE VII.
INDEMNIFICATION
SECTION 7.01. INDEMNITIES BY THE ORIGINATOR. Without
limiting any other rights that the Purchaser may have hereunder or under
applicable law, the Originator hereby agrees to indemnify the Purchaser from and
against any and all claims, losses and liabilities (including reasonable
attorneys' fees) (all the foregoing being collectively referred to as
"INDEMNIFIED AMOUNTS") arising out of or resulting from this Agreement or in
respect of any Receivable or any Charge Account Agreement, excluding, however,
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of the Purchaser; PROVIDED, HOWEVER, that, except as
expressly provided in subparagraph (a) of this SECTION 7.01, in no event will
the Originator have any indemnity or other obligation hereunder or otherwise
with respect to any loss suffered in respect of any Eligible Receivable
transferred to the Purchaser in accordance with this Agreement, the parties
hereby acknowledging that such transfers are to be without recourse. Without
limiting or being limited by the foregoing but subject to the proviso in the
immediately proceeding sentence, the Originator shall pay on demand to the
Purchaser any and all amounts necessary to indemnify the Purchaser from and
against any and all Indemnified Amounts relating to or resulting from:
(a) reliance on any representation or warranty or
statement made or deemed made by the Originator (or any of its
officers) under or in connection with this Agreement or in any
certificate delivered pursuant hereto that, in either case, shall have
been false or incorrect in any material respect when made or deemed
made;
(b) the failure by the Originator to comply with any
applicable law, rule or regulation of any governmental authority with
respect to any Receivable or the related Charge Account Agreement of
the Originator, or the nonconformity of any Receivable or the related
Charge Account Agreement of the Originator with any such applicable
law, rule or regulation;
(c) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or documents
under the Uniform Commercial Code of any applicable jurisdiction or
other applicable laws with respect to any Receivables of the
Originator;
23
27
(d) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable of the Originator (including, without limitation, a
defense based on such Receivable or the related Charge Account
Agreement not being a legal, valid and binding obligation of such
Obligor enforceable against such Obligor in accordance with its terms),
or any other claim resulting from the sale of the merchandise or
services related to any such Receivable or the furnishing or failure to
furnish such merchandise or services;
(e) any failure of the Originator to perform its
duties or obligations under this Agreement or the applicable Charge
Account Agreement;
(f) any products liability claim arising out of or in
connection with merchandise, insurance or services that are the subject
of any charge pursuant to any Charge Account Agreement of the
Originator;
(g) the commingling of Collections of Receivables
at any time with other funds of the Originator; or
(h) any investigation, litigation or proceeding
related to this Agreement or in respect of any Receivable or any Charge
Account Agreement of the Originator.
Notwithstanding the foregoing, the Originator shall
in no circumstances be required to indemnify the Purchaser for any
Indemnified Amounts that result from any delay in the collection of any
Receivables or any default by an Obligor with respect to any
Receivables.
SECTION 7.02. INDEMNITIES BY THE PURCHASER. Without limiting
any other rights that the Originator may have hereunder or under applicable law,
the Purchaser hereby agrees to indemnify the Originator from and against any and
all claims, losses and liabilities (including reasonable attorneys' fees)
arising out of or resulting from the Originator's reliance on any representation
or warranty made by the Purchaser in this Agreement or in any certificate
delivered pursuant hereto that, in either case, shall have been false or
incorrect in any material respect when made or deemed made.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01. AMENDMENT.
(a) This Agreement may be amended from time to time
by the Originator and the Purchaser to cure any ambiguity, to revise
any exhibits or schedules, to correct or supplement any provisions
herein or thereon that may be inconsistent with any other provisions
herein or thereon or to add any other provisions with respect to
matters or questions raised under this Agreement that shall
24
28
not be inconsistent with the provisions of this Agreement; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Officer's
Certificate of the Servicer delivered to the Trustee, adversely affect
in any material respect the interests of any of the Investor
Certificateholders.
This Agreement, including any schedule or exhibit
thereto, may also be amended from time to time by the Originator and
the Purchaser for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement;
provided that (i) the Servicer shall have provided an Officer's
Certificate to the Trustee to the effect that such amendment will not
materially and adversely affect the interests of the Investor
Certificateholders, (ii) such amendment shall not, as evidenced by an
Opinion of Counsel, cause the Trust to be characterized for U.S.
federal income tax purposes as an association taxable as a corporation
or otherwise have any material adverse impact on the U.S. federal
income taxation of any outstanding Series of Investor Certificates or
any Certificateholder and (iii) the Servicer shall have provided at
least ten Business Days prior written notice to each Rating Agency of
such amendment and shall not have received notice from any Rating
Agency to the effect that the current rating of any Series or any class
of any Series would be reduced as a result of such amendment.
(b) This Agreement may also be amended from time to
time by the Originator and the Purchaser with the consent of the
Holders of Investor Certificates evidencing undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of each and
every Series adversely affected, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights
herein of the Investor Certificateholders of any Series then issued and
outstanding; PROVIDED, HOWEVER, that no such amendment under this
subsection shall (i) reduce in any manner the amount of, or delay the
timing of, distributions that are required to be made on any Investor
Certificate of such Series without the consent of all of the related
Investor Certificateholders; or (ii) reduce the aforesaid percentage
required to consent to any such amendment, in each case without the
consent of all such Investor Certificateholders.
(c) Promptly after the execution of any such
amendment (other than an amendment pursuant to paragraph (a)), the
Trustee shall furnish notification of the substance of such amendment
to each Investor Certificateholder of each Series adversely affected
and ten Business Days prior to the proposed effective date for such
amendment the Servicer shall furnish notification of the substance of
such amendment to each Rating Agency providing a rating for such
Series.
(d) It shall not be necessary to obtain the consent
of Investor Certificateholders under this SECTION 8.01 to approve the
particular form of any proposed amendment, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the
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29
authorization of the execution thereof by Investor Certificateholders
shall be subject to such reasonable requirements as the Trustee may
prescribe.
SECTION 8.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile or cable communication) and mailed, telegraphed,
telexed, transmitted, cabled or delivered, if to the Originator, at 9111 Duke
Boulevard, Mason, Ohio 45040 Attention: President, if to the Purchaser, at its
address at 9111 Duke Boulevard, Mason, Ohio 45040 Attention: President (with a
copy to the Servicer as hereinafter provided); and if to the Servicer, at 9111
Duke Boulevard, Mason, Ohio 45040 Attention: President, or, as to each party, at
such other address as shall be designated by such party in a written notice to
the other parties. All such notices and communications shall when mailed,
telegraphed, telexed, transmitted or cabled be effective when deposited in the
mails, delivered to the telegraph company, confirmed by telex answerback,
transmitted by telecopier or delivered to the cable company, respectively,
except that notices to the Purchaser pursuant to ARTICLE II shall not be
effective until received by the Purchaser.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part
of the Purchaser to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of the Originator and the Purchaser and
their respective successors and assigns, except that the Originator shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Purchaser. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect as between the Purchaser
and the Originator until such time, after the Purchase Termination Date
applicable to the Originator, as the Purchaser shall not have any net ownership
interest in any Receivables; PROVIDED, HOWEVER, that the indemnification
provisions of ARTICLE VII shall be continuing and shall survive any termination
of this Agreement.
SECTION 8.05. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PROTECTION OF THE PURCHASER'S OWNERSHIP OF THE
PURCHASED RECEIVABLES, OR REMEDIES HEREUNDER IN RESPECT THEREOF, MAY BE GOVERNED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
26
30
SECTION 8.06. COSTS, EXPENSES AND TAXES. In addition to the
limited rights of indemnification granted to the Purchaser under ARTICLE VII
hereof, the Originator agrees to pay on demand all costs and expenses of the
Purchaser in connection with the preparation, execution and delivery of this
Agreement and the documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Purchaser with respect thereto and with respect to advising the Purchaser as to
its rights and remedies under this Agreement, and all costs and expenses
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement and the documents to be delivered hereunder. In
addition, the Originator agrees to pay any and all stamp and other taxes and
fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement or the other documents to be
delivered hereunder, and agree to hold the Purchaser harmless from and against
any and all liabilities with respect to or resulting from any delay in paying or
omitting to pay such taxes and fees.
SECTION 8.07. ACKNOWLEDGMENT OF ASSIGNMENTS. The Originator
hereby acknowledges and consents to the assignment by the Purchaser of
Receivables and the rights of the Purchaser under this Agreement pursuant to the
Pooling and Servicing Agreement.
SECTION 8.08. NO PETITION IN BANKRUPTCY. The Originator
covenants and agrees that prior to the date that is one year and a day after the
Purchase Termination Date, it will not institute against or join any other
Person in instituting against the Purchaser any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any State of the United States.
[The remainder of this page is intentionally left blank.]
27
31
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE ORIGINATOR:
FDS NATIONAL BANK, a national
banking association
By: /s/ Susan R. Robinson
-----------------------------
Name: Susan R. Robinson
Title: Treasurer
THE PURCHASER:
PRIME II RECEIVABLES
CORPORATION, a Delaware
corporation
By: /s/ Karen M. Hoguet
------------------------------
Name: Karen M. Hoguet
Title: Chairman of the Board
24
32
EXHIBIT A
FORM OF SETTLEMENT STATEMENT
----------------------------
33
PRIME CREDIT CARD
MASTER TRUST II
SERIES 1997-1 MONTHLY CERTIFICATEHOLDERS STATEMENT
Distribution Date: 01-Jan-97
Monthly Period: January
01-Jan-97
01-Jan-97
(i) Net Principal Collections/Allocation 0.00
Class A Allocation 0.00
Class B Allocation 0.00
Class C Allocation 0.00
(ii) Total Finance Charge Collections/Allocation 0.00
Of Which Interchange 0.00
Class A Allocation 0.00
Class B Allocation 0.00
Class C Allocation 0.00
(iii) Principal Receivables 01-Jan-97 0.00
Invested Amount 0.00
Class A 0.00
Class B 0.00
Class C 0.00
Transferor Amount 0.00
Percentage 0.00%
Fixed/Floating Allocation Percentage 0.00
Class A 0.00%
Class B 0.00%
Class C 0.00%
(iv) Delinquency
Current 0.00 0.00%
30 Days 0.00 0.00%
60 Days 0.00 0.00%
90 Days 0.00 0.00%
120 Days 0.00 0.00%
150 Days 0.00 0.00%
180 Days + 0.00 0.00%
Total 0.00 0.00%
(v) Aggregate Investor Default Amount 0.00
Percentage of Average Invested Amount 0.00%
(vi) Aggregate Investor Uncovered Dilution 0.00
(vii) Investor Charge Offs/Recoveries 0.00
Class A Charge Offs 0.00
Class A Charge Off Recoveries 0.00
Class B Charge Offs 0.00
Class B Charge Off Recoveries 0.00
Class C Charge Offs 0.00
Class C Charge Off Recoveries 0.00
(viii) Monthly Servicing Fee 0.00
Average of 6 Months Average of 3 Months Current Month
(ix) Payment Rate Percentage 0.00% 0.00% 0.00%
Excess Spread Percentage 0.00% 0.00% 0.00%
(x) Reserve Account:
Required Reserve Account Percentage 0.00%
Opening Balance 0.00
Deposits 0.00
Disbursement 0.00
Closing Balance 0.00
(xi) Portfolio Yield 0.00%
Average Base Rate 0.00%
34
PRIME CREDIT CARD
MASTER TRUST II
SETTLEMENT STATEMENT
Distribution Date: 15-Jan-97
Monthly Period: December 1996
1-Dec-96
4-Jan-97
(i) Collections 0.00
Finance Charge 0.00
Interchange 0.00
Principal 0.00
(ii) Investor Percentage - Principal Collections
Series 1997-1 0.00%
A 0.00%
B 0.00%
C 0.00%
Investor Percentage - Finance Charge Collections
and Receivables in Defaulted Accounts
Series 1997-1 0.00%
A 0.00%
B 0.00%
C 0.00%
(iii) Distribution Amount per $1,000
Series 1997-1
A 0.00
B 0.00
C 0.00
Total $'s Distributed
Series 1997-1 0.00
(iv) Allocation to Principal per $1,000
Series 1997-1
A 0.00
B 0.00
C 0.00
Total $'s Distributed
Series 1997-1 0.00
(v) Allocation to Interest per $1,000
Series 1997-1
A 0.00
B 0.00
C 0.00
Page 1
35
PRIME CREDIT CARD
MASTER TRUST II
SETTLEMENT STATEMENT
Total $'s Distributed
Series 1997-1 0.00
(vi) Investor Default Amount
Series 1997-1 0.00
A 0.00
B 0.00
C 0.00
(vii) Investor Charge Offs and Reinbursements
Series 1997-1 Charge Offs 0.00
A 0.00
B 0.00
C 0.00
Series 1997-1 Reimbusements 0.00
A 0.00
B 0.00
C 0.00
(viii) Servicing Fees
Series 1997-1 0.00
A 0.00
B 0.00
C 0.00
(ix) Deficit Controlled Amortization Amount
Series 1997-1 0.00
A 0.00
B 0.00
C 0.00
(x) Receivables in Trust 0.00
(xi) Invested Amount
Series 1997-1 0.00
A 0.00
B 0.00
C 0.00
(xii) Enhancement 0.00
(xiii) Pool Factor 0.00
(xiv) Yield Factor 0.00
Finance Charge Receivables Factor 0.00
(xv) Payout Event NO
Page 2
36
SCHEDULE I
AUTHORIZED OFFICERS OF ORIGINATOR
---------------------------------
Name Title
---- -----
James J. Amann Chairman and Chief Executive Officer
John E. Brown President
Stephen C. Baldridge Chief Financial Officer
Susan R. Robinson Treasurer
David L. Faulk Vice President
37
SCHEDULE II
Offices Where Books, Records, Etc.
----------------------------------
Evidencing Receivables Are Kept
-------------------------------
9111 Duke Boulevard
Mason, Ohio 45040
First Data Resources, Inc.
10815 South Old Mill Road
Omaha, Nebraska 61854-2607
Attention: Federated Services Team
9
38
SCHEDULE III
Discount Factor Formula
-----------------------
For any Monthly Period, the "DISCOUNT FACTOR" is defined as the sum of the
Series Discount Factor (as defined below) for each Series whose Series Discount
Factor is greater than zero.
The "SERIES DISCOUNT FACTOR"
for each Series is defined as: ((A + B - C)/D) * E
WHERE:
- ------
A = Base Rate for such Series
B = 1%
C = Net Finance Charge Portfolio Yield for such Series
D = Annual Portfolio Turnover Rate
E = Investor Percentage for such Series applicable to Finance Charge
Collections
39
ANNEX 1
Form of Lock-Box Agreement
--------------------------
40
PRIME II RECEIVABLES CORPORATION
9111 Duke Boulevard
Mason, OH 45040
January 22, 1997
Star Bank, N.A.
P.O. Box 1038
Location 9125
Cincinnati, OH 45201
Attn: Ms. Jayne Ross
Re: ACCOUNT OWNERSHIP MODIFICATION
Prime II Receivables Corporation
Tax I.D.: Unassigned
Account #: N/A
Premier Visa Lockbox Account
Acting under the authority granted by the Board of Directors of Prime II
Receivables Corporation (the "Company") on January 21, 1997, Star Bank, N.A. is
hereby authorized to act as a bank of the Company. You are instructed to operate
the account in accordance with the following instructions. Any previous
instructions on file are superseded by the following:
NAME CHANGE
Effective the close of business January 22, 1997, the name on this account
should be changed to "The Chase Manhattan Bank as Trustee of Prime Credit Card
Master Trust II."
SIGNATORY AUTHORIZATION
I hereby designate the following as authorized signatories with respect to the
above account:
No signatories
WIRE TRANSFERS
The only disbursements on this account shall be made by wire transfer to the
following trustee account:
ACCOUNT # BANK NAME ABA ROUTING #
--------- ------------------ -------------
N/A Chase Manhattan Bank N/A
AUTOMATED CLEARING HOUSE TRANSACTIONS (ACH)/DEPOSITORY TRANSFER CHECKS (DTC)
The use of any form of automated clearing house transactions or depository
transfer check, whether or not initiated, signed or approved by an authorized
signatory, is expressly prohibited.
41
MAILING INSTRUCTIONS
Monthly bank statements and bank analysis statements should be mailed as
follows:
Prime II Receivables Corporation
9111 Duke Boulevard
Mason, OH 45040
Attn: David W. Dawson
STATEMENT CUT-OFF DATES
Please cut off monthly bank statements at the end of each calendar month.
SPECIAL INSTRUCTIONS
All rights and privileges of FDS National Bank pertaining to the
above-referenced account are terminated.
The tax I.D. number of Prime II Receivables Corporation will be provided when
assigned.
Please direct any inquiries regarding this communication to Jason Bruewer at
(513) 579-7364.
Please acknowledge receipt of this letter by signing and returning to the
undersigned the enclosed copy. A self addressed, stamped envelope is enclosed
for your convenience. Thank you for your assistance in this matter.
Sincerely,
/s/ Susan P. Storer
-------------------------
Susan P. Storer
President
Acknowledged By: /s/ Jayne M. Ross Date: 1/22/97
--------------------------- -------------------