EXHIBIT 4.3
PARTNERS FIRST RECEIVABLES, LLC
and
PARTNERS FIRST RECEIVABLES FUNDING CORPORATION
RECEIVABLES PURCHASE AGREEMENT
Dated as of , 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions . . . . . . . . . . . . . . . . . 1
Section 1.2. Other Definitional Provisions . . . . . . . . 5
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.1. Purchase . . . . . . . . . . . . . . . . . . . . 6
Section 2.2. Addition of Aggregate Addition Accounts . . . . 7
Section 2.3. Addition of New Accounts . . . . . . . . . . . . 8
Section 2.4. Representations and Warranties . . . . . . . . . 9
Section 2.5. Delivery of Documents . . . . . . . . . . . . . 9
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1. Purchase Price . . . . . . . . . . . . . . . . 10
Section 3.2. Adjustments to Purchase Price . . . . . . . . 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the
Bank Relating to the Bank . . . . . . . . 11
Section 4.2. Representations and Warranties of the
Bank Relating to the Agreement
and the Receivables . . . . . . . . . . . 12
Section 4.3. Representations and Warranties of the
Purchaser . . . . . . . . . . . . . . . . 14
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Bank . . . . . . . . . . . . 15
Section 5.2. Covenants of the Purchaser with Respect to
Receivables Purchase Agreements . . . . . 17
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1. Reassignment of Ineligible Receivables . . . . 18
Section 6.2. Reassignment of Certificateholders'
Interest in Trust Portfolio . . . . . . . 19
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to the Purchaser's Obligations
Regarding Initial Receivables . . . . . . 19
Section 7.2. Conditions Precedent to the Bank's
Obligations . . . . . . . . . . . . . . . 20
ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.1. Term . . . . . . . . . . . . . . . . . . . . . 20
Section 8.2. Purchase Termination . . . . . . . . . . . . . 20
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Amendment . . . . . . . . . . . . . . . . . . 21
Section 9.2. Governing Law . . . . . . . . . . . . . . . . 22
Section 9.3. Notices . . . . . . . . . . . . . . . . . . . 22
Section 9.4. Severability of Provisions . . . . . . . . . . 22
Section 9.5. Assignment . . . . . . . . . . . . . . . . . . 22
Section 9.6. Acknowledgement and Agreement of the Bank . . 22
Section 9.7. Further Assurances . . . . . . . . . . . . . . 23
Section 9.8. No Waiver; Cumulative Remedies . . . . . . . . 23
Section 9.9. Counterparts . . . . . . . . . . . . . . . . . 23
Section 9.10. Binding; Third-Party Beneficiaries . . . . . . 23
Section 9.11. Merger and Integration . . . . . . . . . . . . 24
Section 9.12. Headings . . . . . . . . . . . . . . . . . . . 24
Section 9.13. Schedules and Exhibits . . . . . . . . . . . . 24
Section 9.14. Survival of Representations and Warranties . . 24
Section 9.15. Nonpetition Covenant . . . . . . . . . . . . . 24
RECEIVABLES PURCHASE AGREEMENT, dated as of , 1997,
by and between PARTNERS FIRST RECEIVABLES, LLC, a limited liability
company organized under the laws of the State of Delaware (the
"Seller"), and PARTNERS FIRST RECEIVABLES FUNDING CORPORATION, a
Delaware corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser desires to purchase, from time to
time, certain Receivables (hereinafter defined) purchased by the
Seller and arising under certain credit card accounts originated or
purchased by the Partners First National Bank;
WHEREAS, the Seller desires to sell from time to time
certain Receivables purchased by the Seller to the Purchaser upon
the terms and conditions hereinafter set forth;
WHEREAS, it is contemplated that the Receivables
purchased hereunder will be transferred by the Purchaser to the
Trust (hereinafter defined) in connection with the issuance of
certain Certificates (hereinafter defined); and
WHEREAS, the Seller agrees that all covenants and
agreements made by the Seller herein with respect to the Accounts
(hereinafter defined) and Receivables shall also be for the benefit
of the Trustee (hereinafter defined) and all beneficiaries of the
Trust, including the holders of the Certificates.
NOW, THEREFORE, it is hereby agreed by and between the
Purchaser and the Seller as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All capitalized terms used
herein or in any certificate, document, or Conveyance Paper made or
delivered pursuant hereto, and not defined herein or therein, shall
have the meaning ascribed thereto in the Pooling and Servicing
Agreement; in addition, the following words and phrases shall have
the following meanings:
"Account" shall mean (a) each MasterCard 1/ and VISA 1/
account established pursuant to a Credit Card Agreement between an
Account Originator and any Person, which account is identified by
account number and by the receivables balance in the computer file,
microfiche list or printed list delivered to the Purchaser by the
Seller on the Closing Date, (b) each Additional Account (but only
from and after the Addition Date with respect thereto), (c) each
Related Account, and (d) each Transferred Account, but shall
exclude (e) any Account that (i) after the Removal Date, the newly
generated Receivables in which shall not be assigned to the
Purchaser hereunder, (ii) the right, title and interest of the
Purchaser in the Receivables in which are reassigned to the Seller
pursuant to Section 6.1 or (iii) the right, title and interest of
the Trust in the Receivables in which are assigned and transferred
to the Servicer pursuant to Section 3.3 of the Pooling and
Servicing Agreement.
------------------
1/ MasterCard and VISA are registered trademarks of MasterCard
International Incorporated and of VISA USA, Inc.,
respectively.
"Account Originator" shall mean the original issuer of
the credit card relating to an Account, including the Bank,
pursuant to a Credit Card Agreement or a purchaser of such Account,
in either case which has sold such Account to the Bank.
"Account Owner" shall mean, the Bank or another entity
which is either the original issuer of the credit card relating to
an Account pursuant to a Credit Card Agreement or an entity which
has acquired such Account, and in either case has sold the related
Receivables pursuant to a Receivables Purchase Agreement.
"Additional Account" shall mean each New Account and each
Aggregate Addition Account.
"Additional Cut-Off Date" shall mean (i) with respect to
Aggregate Addition Accounts, the date specified as such in the
notice delivered with respect thereto pursuant to Section 2.2, and
(ii) with respect to New Accounts, the later of the dates on which
such New Accounts are originated or designated pursuant to Section
2.3.
"Addition Date" shall mean (a) with respect to Aggregate
Addition Accounts, the date from and after which such Aggregate
Addition Accounts are to be included as Accounts pursuant to
Section 2.2 and (b) with respect to New Accounts, the first
Distribution Date following the calendar month in which such New
Accounts are originated.
"Addition Notice Date" shall have the meaning specified
in Section 2.2 of this Agreement.
"Aggregate Addition Account" shall mean each Eligible
Account that is designated pursuant to Section 2.2 to be included
as an Account and is identified in the computer file or microfiche
list delivered to the Purchaser by the Seller pursuant to Sections
2.1 and 2.5.
"Agreement" shall mean this Receivables Purchase
Agreement and all amendments hereof and supplements hereto.
"Bank" shall mean Partners First National Bank, a
national banking association incorporated under the laws of the
United States.
"Capital Ratio" shall mean, as of any date, the ratio
(expressed as a percentage) computed by dividing (a) shareholder's
equity in the Purchaser by (b) total assets (as shown on the
Purchaser's balance sheet prepared in accordance with GAAP) plus
the aggregate Invested Amount of Certificates which have not been
retained by the Purchaser as of such date.
"Closing Date" shall mean , 1997.
"Conveyance" shall have the meaning specified in
subsection 2.1(a).
"Conveyance Papers" shall have the meaning specified in
subsection 4.1(c).
"Credit Adjustment" shall have the meaning specified in
Section 3.2.
"Debtor Relief Laws" shall mean (i) the Bankruptcy Code
of the United States of America and (ii) all other applicable
liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension
of payments, readjustment of debt, marshalling of assets or similar
debtor relief laws of the United States, any state or any foreign
country from time to time in effect affecting the rights of
creditors generally.
"Finance Charge Receivables" shall mean all Receivables
in the Accounts which would be treated as "Finance Charge
Receivables" in accordance with the definition for such term in the
Pooling and Servicing Agreement.
"Initial Account" shall mean any Account designated as an
"Account" hereunder and as an "Initial Account" under the Pooling
and Servicing Agreement on the Closing Date.
"Initial Cut-Off Date" shall mean , 1997.
"Insolvency Event" shall have the meaning specified in
Section 8.2.
"Interchange" shall mean interchange fees payable to an
Account Owner in its capacity as credit card issuer, through VISA
or MasterCard in connection with cardholder charges for goods and
services with respect to the Accounts.
"Investor Certificate" shall have the meaning specified
in the Pooling and Serving Agreement.
"Minimum Capital Ratio" shall mean ___%, which percentage
may be adjusted from time to time at the option of the Purchaser if
the Rating Agency Condition has been satisfied.
"Monthly Period" shall mean the period from and including
the first day of a calendar month to and including the last day of
such calendar month.
"New Account" shall mean each MasterCard and VISA
consumer revolving credit card account established pursuant to a
Credit Card Agreement, which account is designated pursuant to
Section 2.3 to be included as an Account and is identified in the
computer file or microfiche list delivered to the Purchaser by the
Seller pursuant to Sections 2.1 and 2.5.
"New Principal Receivables" shall have the meaning set
forth in Section 3.1.
"Obligor" shall mean, with respect to each Account, each
person that would be treated as an "Obligor" in accordance with the
definition for such term in the Pooling and Servicing Agreement.
"PFRFC" shall mean Partners First Receivables Financing
Corporation, a Delaware corporation, and its permitted successors
and assigns.
"Pooling and Servicing Agreement" shall mean the Pooling
and Servicing Agreement, dated as of , 1997, among the
Bank, as Servicer, PFRFC, as Transferor, and the Trustee, and all
amendments and supplements thereto.
"Portfolio Reassignment Price" shall mean the portion of
the amount payable by PFRFC to the Trustee pursuant to Section 2.6
of the Pooling and Servicing Agreement with respect to the
Receivables.
"Principal Receivables" shall mean all Receivables in the
Accounts that would be treated as "Principal Receivables" in
accordance with the definition for such term in the Pooling and
Servicing Agreement.
"Receivables Purchase Agreements" shall have the meaning
set forth in Section 5.2.
"Purchase Price" shall have the meaning set forth in
Section 3.1.
"Purchased Assets" shall have the meaning set forth in
Section 2.1.
"Receivables" shall mean all amounts shown on the
Servicer's records as amounts payable by Obligors on any Account
from time to time, including amounts payable for Principal
Receivables and Finance Charge Receivables. Receivables that
become Defaulted Receivables will cease to be included as
Receivables as of the day on which they become Defaulted
Receivables. A Receivable shall be deemed to have been created at
the end of the Date of Processing of such Receivable.
"Removed Account" shall mean an Account hereunder that is
a "Removed Account" (as such term is defined in the Pooling and
Servicing Agreement) that is designated for removal pursuant to
Section 2.10 of the Pooling and Servicing Agreement.
"Repurchase Price" shall have the meaning set forth in
Section 6.1(b).
"Seller" shall mean Partners First Receivables, LLC, a
limited liability company organized under the laws of the State of
Delaware, and its successor and assigns.
"Servicer" shall have the meaning set forth in the
Pooling and Services Agreement.
"Settlement Statement" shall have the meaning set forth
in Section 3.3.
"Supplemental Conveyance" shall have the meaning set
forth in Section 2.5.
"Transferred Account" shall mean each account into which
an Account shall be transferred provided that (i) such transfer was
made in accordance with the Credit Card Guidelines and (ii) such
account can be traced or identified as an account into which an
Account has been transferred.
"Trust" shall mean the trust created by the Pooling and
Servicing Agreement.
"Trustee" shall mean The Bank of New York, a New York
banking corporation, the institution executing the Pooling and
Servicing Agreement as, and acting in the capacity of Trustee
thereunder, or its successor in interest, or any successor trustee
appointed as provided in the Pooling and Servicing Agreement.
Section 1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificate, other document, or
Conveyance Paper made or delivered pursuant hereto unless otherwise
defined therein.
(b) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement or any
Conveyance Paper shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; and Section,
Subsection, Schedule and Exhibit references contained in this
Agreement are references to Sections, Subsections, Schedules and
Exhibits in or to this Agreement unless otherwise specified.
(c) All determinations of the principal or finance
charge balance of Receivables, and of any collections thereof,
shall be made in accordance with the Pooling and Servicing
Agreement and all applicable Supplements.
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.1. Purchase.
(a) By execution of this Agreement, the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the
Purchaser (collectively, the "Conveyance"), without recourse except
as provided herein, all its right, title and interest in, to and
under (i) all of the Receivables in the Accounts and all of the
Receivables created in such Accounts following the initial Series
Closing Date and upon origination or acquisition of Accounts by the
Bank and the Receivables in each Additional Account owned by the
Bank designated from time to time for inclusion as an Account as of
the date of such designation, whether such Receivables shall then
be existing or shall thereafter be created and all monies due and
or to become due and all amounts received with respect thereto and
all proceeds (including, without limitation, "proceeds" as defined
in the UCC) thereof and (ii) the right to receive Interchange and
Recoveries with respect to such Receivables (the "Purchased
Assets").
(b) In connection with such Conveyance, the Seller
agrees (i) to record and file, at its own expense, any financing
statements (and continuation statements with respect to such
financing statements when applicable) with respect to the
Receivables now existing and hereafter created, meeting the
requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect, and maintain perfection
of, the Conveyance of such Purchased Assets from the Seller to the
Purchaser, (ii) that such financing statements shall name the
Seller, as seller, and the Purchaser, as purchaser, of the
Receivables and (iii) to deliver a file-stamped copy of such
financing statements or other evidence of such filings (excluding
such continuation statements, which shall be delivered as filed) to
the Purchaser as soon as is practicable after filing.
(c) In connection with such Conveyance, the Seller
further agrees that it will, at its own expense, (i) on or prior to
(x) the Closing Date, in the case of Initial Accounts, (y) the
applicable Addition Date, in the case of Additional Accounts, and
(z) the applicable Removal Date, in the case of Removed Accounts,
to indicate in its computer files that, in the case of the Initial
Accounts or the Additional Accounts, Receivables created in
connection with such Accounts have been conveyed to the Purchaser
in accordance with this Agreement and have been conveyed by the
Purchaser to the Trustee pursuant to the Pooling and Servicing
Agreement for the benefit of the Certificateholders by including
(or deleting, in the case of newly originated Receivables in
Removed Accounts) in such computer files the code identifying each
such Account and (ii) on or prior to (w) the Closing Date, in the
case of the Initial Accounts, (x) the date that is five Business
Days after the applicable Addition Date, in the case of designation
of Aggregate Addition Accounts, (y) the date that is [30] days
after the applicable Addition Date, in the case of New Accounts,
and (z) the date that is five Business Days after the applicable
Removal Date, in the case of Removed Accounts, to deliver to the
Purchaser a computer file or microfiche list containing a true and
complete list of all such Accounts specifying for each such
Account, as of the Initial Cut-Off Date, in the case of the Initial
Accounts, the applicable Additional Cut-off Date, in the case of
Additional Accounts, and the applicable Removal Date, in the case
of Removed Accounts, (A) its account number, (B) the aggregate
amount outstanding in such Account and (C) the aggregate amount of
Principal Receivables in such Account. Each such file or list, as
supplemented from time to time to reflect Additional Accounts or
Removed Accounts, shall be marked as Schedule I to this Agreement,
shall be delivered to the Purchaser, and is hereby incorporated
into and made a part of this Agreement. The Seller further agrees
not to alter the code referenced in clause (i) of this paragraph
with respect to any Account during the term of this Agreement
unless and until such Account becomes a Removed Account.
(d) The parties hereto intend that the conveyance of the
Seller's right, title and interest in and to the Receivables shall
constitute an absolute sale, conveying good title free and clear of
any liens, claims, encumbrances or rights of others from the Seller
to the Purchaser. It is the intention of the parties hereto that
the arrangements with respect to the Receivables shall constitute a
purchase and sale of such Receivables and not a loan. In the
event, however, that it were to be determined that the transactions
evidenced hereby constitute a loan and not a purchase and sale, it
is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law, and that the
Seller shall be deemed to have granted and does hereby grant to the
Purchaser a first priority perfected security interest, in all of
the Seller's right, title and interest, whether now owned or
hereafter acquired, in, to and under the Receivables and other
Purchased Assets to secure the rights of the Purchaser hereunder
and the obligations of the Seller hereunder.
Section 2.2. Addition of Aggregate Addition Accounts.
(a) If, from time to time, the Purchaser becomes
obligated to designate Aggregate Addition Accounts (as such term is
defined in the Pooling and Servicing Agreement) pursuant to
subsection 2.9(a) of the Pooling and Servicing Agreement, then the
Purchaser may, at its option, give the Seller written notice
thereof on or before the eighth Business Day (the "Addition Notice
Date") prior to the Addition Date therefor, and upon receipt of
such notice the Seller shall on or before the Addition Date,
designate sufficient Eligible Accounts to be included as Additional
Accounts so that after the inclusion thereof the Purchaser will be
in compliance with the requirements of said subsection 2.9(a).
Additionally, subject to subsections 2.9(b) and (c) of the Pooling
and Servicing Agreement and subsection 2.2(b), from time to time
Eligible Accounts may be designated to be included as Aggregate
Addition Accounts, upon the mutual agreement of the Purchaser and
the Seller. In either event, the Seller shall have sole
responsibility for selecting the Aggregate Addition Accounts.
(b) On the Addition Date with respect to any designation
of Aggregate Addition Accounts, the Purchaser shall purchase the
Seller's right, title and interest in, to and under the Receivables
in Aggregate Addition Accounts (and such Aggregate Addition
Accounts shall be deemed to be Accounts for purposes of this
Agreement), subject to the satisfaction of the following
conditions:
(i) any Aggregate Addition Accounts shall all be
Eligible Accounts;
(ii) the Seller shall have delivered to the Purchaser
copies of UCC-1 financing statements covering such Aggregate
Addition Accounts, if necessary to perfect the Purchaser's
undivided interest in the Receivables arising therein;
(iii) to the extent required of the Purchaser by Section
4.3 of the Pooling and Servicing Agreement, the Seller shall
have deposited in the Collection Account all Collections with
respect to such Aggregate Addition Accounts since the
Additional Cut-Off Date;
(iv) as of each of the Additional Cut-Off Date and the
Addition Date, no Insolvency Event with respect to the Seller
shall have occurred nor shall the transfer of the Receivables
arising in the Aggregate Addition Accounts to the Purchaser
have been made in contemplation of the occurrence thereof;
(v) solely with respect to Aggregate Addition Accounts
designated pursuant to the second sentence of subsection
2.2(a), the Rating Agency Condition shall have been satisfied;
(vi) the Bank shall have delivered to the Purchaser an
Officer's Certificate, dated the Addition Date, confirming, to
the extent applicable, the items set forth in clauses (i)
through (v) above; and
(vii) the transfer of the Receivables arising in the
Aggregate Addition Accounts to the Purchaser and by the
Purchaser to the Trust will not result in an Adverse Effect
and, in the case of Aggregate Addition Accounts, the Seller
shall have delivered to the Purchaser an Officer's
Certificate, dated the Addition Date, stating that the Seller
reasonably believes that the addition of the Receivables
arising in the Aggregate Addition Accounts to the Purchaser
and by the Purchaser to the Trust will not have an Adverse
Effect.
Section 2.3. Addition of New Accounts.
(a) Upon the mutual agreement of the Purchaser and the
Bank, subject to compliance by the Purchaser with the conditions
specified in subsections 2.9(d) and (e) of the Pooling and
Servicing Agreement and compliance by the Seller with subsection
2.3(b), the Seller may designate newly originated Eligible Accounts
to be included as New Accounts. Upon such designation, such New
Accounts shall be deemed to be Accounts hereunder. The Seller
shall take all actions necessary to comply, or to enable the
Purchaser to comply, with the requirements of Section 2.9 of the
Pooling and Servicing Agreement and shall cooperate with the
Purchaser to enable it to perform with respect to the Receivables
in such New Accounts all actions specified in subsections 2.9(d)
and (e) of the Pooling and Servicing Agreement.
(b) On the Addition Date with respect to any New
Accounts, the Purchaser shall purchase the Seller's right, title
and interest in, to and under the Receivables in New Accounts (and
such New Accounts shall be deemed to be Accounts for purposes of
this Agreement) as of the close of business on the applicable
Additional Cut-Off Date, subject to the satisfaction of the
following conditions:
(i) the New Accounts shall all be Eligible Accounts;
(ii) the Seller shall have delivered to the Purchaser
copies of UCC-1 financing statements covering such New
Accounts, if necessary to perfect the Purchaser's interest in
the Receivables arising therein;
(iii) to the extent required of the Purchaser by Section
4.3 of the Pooling and Servicing Agreement, the Seller shall
have deposited in the Collection Account all Collections with
respect to such New Accounts since the Additional Cut-Off
Date;
(iv) as of each of the Additional Cut-Off Date and the
Addition Date, no Insolvency Event with respect to the related
Account Owner shall have occurred nor shall the transfer of
the Receivables arising in the New Accounts to the Purchaser
have been made in contemplation of the occurrence thereof; and
(v) the transfer of the Receivables arising in the New
Accounts to the Purchaser and by the Purchaser to the Trust
will not result in the occurrence of a Pay Out Event or a
Reinvestment Event.
Section 2.4. Representations and Warranties. The Seller
hereby represents and warrants to the Purchaser as of the related
Addition Date as to the matters set forth in Sections 2.2(b)(v) and
(vi) above and that, in the case of Additional Accounts, the list
delivered pursuant to Section 2.5 below is, as of the applicable
Additional Cut-Off Date, true and complete in all material
respects.
Section 2.5. Delivery of Documents. In the case of the
designation of Additional Accounts, the Seller shall deliver to the
Purchaser (i) the computer file or microfiche list required to be
delivered pursuant to Section 2.1 with respect to such Additional
Accounts on the date such file or list is required to be delivered
pursuant to Section 2.1 (the "Document Delivery Date") and (ii) a
duly executed, written assignment (including an acceptance by the
Purchaser, substantially in the form of Exhibit A (the
"Supplemental Conveyance"), on the Document Delivery Date. In
addition, in the case of the designation of New Accounts, the
Seller shall deliver to the Purchaser on the Document Delivery Date
an Officer's Certificate confirming, to the extent applicable, the
items set forth in clause (i) through (v) of subsection 2.3(b)
above.
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1. Purchase Price.
(a) The "Purchase Price" for the Receivables in the
Initial Accounts as of the Initial Cut-Off Date conveyed to the
Purchaser under this Agreement shall be payable on the Closing Date
and shall be an amount equal to 100% of the aggregate balance of
Principal Receivables in those Accounts as of the Initial Cut-Off
Date, adjusted to reflect such factors as the Seller and the
Purchaser mutually agree will result in a Purchase Price determined
to be the fair market value of such Receivables. This computation
of initial purchase price should assume no reinvestment in new
Receivables. The Purchase Price for the Receivables (including
Receivables in Additional Accounts) to be conveyed to the Purchaser
under this Agreement which come into existence after the Closing
Date, shall be payable on the Distribution Date following the
Monthly Period in which such Receivables are conveyed by the Seller
to the Purchaser in an amount equal to 100% of the aggregate
balance of the Principal Receivables so conveyed (the "New
Principal Receivables"), adjusted to reflect such factors as the
Seller and the Purchaser mutually agree will result in a Purchase
Price determined to be the fair market value of such New Principal
Receivables.
(b) The Purchase Price to be paid by the Purchaser with
respect to the Receivables on the Closing Date and with respect to
each Receivable created thereafter shall be paid (i) in cash, (ii)
with the consent of the Purchaser, by means of capital contributed
by the Seller to the Purchaser in the form of a contribution of the
Receivables, (iii) with the consent of the Purchaser, by issuance
to the Seller of a subordinated note in or substantially in the
form of Exhibit B (the "Subordinated Note") or by increase in the
amount outstanding thereunder, or (iv) any combination of the
foregoing, in each case in accordance with Section 3.3.
(c) To the extent that the Purchaser shall not have paid
before, or shall not have available to it, cash in U.S. dollars in
same day funds sufficient to pay (or cause to be paid) to the
Seller the Purchase Price for Receivables that have been newly
created during any Monthly Period, the remainder of the Purchase
Price shall be paid on each Distribution Date by increasing the
principal amount of the Subordinated Note by an amount equal to
such insufficiency; provided, however, that to the extent that any
such increase in the principal amount of the Subordinated Note
would cause the Capital Ratio as of the end of the preceding
Monthly Period to be less than the Minimum Capital Ratio as of the
end of the preceding Monthly Period, Receivables having an
outstanding balance of Principal Receivables sufficient to avoid
the Capital Ratio being less than the Minimum Capital Ratio shall
be deemed contributed to the capital of the Purchaser by the
Seller; provided, further, that the portion of the Purchase Price
paid on such Distribution Date with a Subordinated Note as of the
end of the preceding Monthly Period shall not cause (a) the sum of
(i) the principal amount of the Subordinated Note and (ii) the
outstanding principal amount of all certificates issued by the
Trust that are or may be classified as debt for federal income tax
purposes to exceed (b) 80% of (x) the aggregate amount of Principal
Receivables and amounts on deposit in the Special Funding Account
minus (y) the principal amount of any Supplemental Certificate,
Participation Interest and any other interest in the Transferor's
Interest not held by the Purchaser
Section 3.2. Adjustments to Purchase Price. The
Purchase Price shall be adjusted on each Distribution Date (a
"Credit Adjustment") with respect to any Receivable previously
conveyed to the Purchaser by the Seller which has since been
reversed by the Seller or the Servicer because of a rebate, refund,
unauthorized charge or billing error to a cardholder because such
Receivable was created in respect of merchandise which was refused
or returned by a cardholder or due to the occurrence of any other
event referred to in Section 3.9 of the Pooling and Servicing
Agreement. The amount of such adjustment shall equal (x) the
reduction in the principal balance of such Receivable resulting
from the occurrence of such event multiplied by (y) the quotient
(expressed as a percentage) of (i) the Purchase Price for Principal
Receivables payable on such Distribution Date computed in
accordance with Section 3.1 divided by (ii) the Principal
Receivables paid for on such date pursuant to such Section. In the
event that an adjustment pursuant to this Section 3.2 causes the
Purchase Price to be a negative number, the Seller agrees that, not
later than 1:00 P.M. New York City time on such Distribution Date,
the Seller shall pay to the Purchaser an amount equal to the amount
by which the Purchase Price minus the Credit Adjustment would be a
negative number.
Section 3.3. Settlement and Ongoing Payment of Purchase
Price. On each Distribution Date under the Pooling and Servicing
Agreement, the Seller shall deliver, or cause to be delivered, a
settlement statement (the "Settlement Statement") to the Purchaser,
showing the aggregate Purchase Price of Receivables conveyed to the
Purchaser during the prior Monthly Period, the portion thereof paid
in cash, the portion represented by an increase in the Subordinated
Note and the portion represented by a capital contribution, and the
amount which remains unpaid as Credit Adjustments made with respect
to such prior Monthly Period pursuant to Section 3.2 hereof and any
adjustment to the Purchase Price of Receivables with respect to
such Monthly Period pursuant to Section 6.1 hereof. Any cash
balance due from the Purchaser to the Seller shall be paid in cash
in immediately available funds to the Seller or the Seller shall
convey such amount as a capital contribution to the Purchaser or
the outstanding balance of the Subordinated Note shall be increased
to reflect such unpaid balance or a combination of the foregoing
shall occur, and any balance due from the Purchaser to the Seller
be paid in immediately available funds to the Purchaser. To the
extent that the Seller has received an amount greater than the
Purchase Price of such Receivables, the Seller shall first apply
such amount to the payment of the unpaid principal of the
Subordinated Note, if any. If, after giving effect to any such
payment in respect of the Subordinated Note, the Seller has
received an amount greater than the Purchase Price, the Seller
shall retain such amounts and, at the option of the Purchaser (x)
issue its note to the Purchaser with terms substantially similar to
the terms of the Subordinated Note or (y) subject to applicable
legal restrictions and the Minimum Capital Ratio, elect to treat
such amounts as a dividend or return of capital to the Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Bank
Relating to the Bank. The Seller hereby represents and warrants
to, and agrees with, the Purchaser as of the Closing Date and on
each Addition Date, that:
(a) Organization and Good Standing. The Seller is a
limited liability company duly organized and validly existing in
good standing under the laws of the State of Delaware and has, in
all material respects, full power and authority to own its
properties and conduct its business as presently owned or
conducted, and to execute, deliver and perform its obligations
under this Agreement.
(b) Due Qualification. The Seller is duly qualified to
do business and is in good standing as a foreign limited liability
company (or is exempt from such requirements) and has obtained all
necessary licenses and approvals, in each jurisdiction which
requires such qualification except where the failure to so qualify
or obtain licenses or approvals would not have a material adverse
effect on its ability to perform its obligations as Seller under
this Agreement.
(c) Due Authorization. The execution, delivery and
performance of this Agreement and any other document or instrument
delivered pursuant hereto, including any Supplemental Conveyance
(such other documents or instruments, collectively, the "Conveyance
Papers"), and the consummation of the transactions provided for in
this Agreement and the Conveyance Papers have been duly authorized
by the Seller by all necessary corporate action on the part of the
Seller.
(d) No Conflict. The execution and delivery of this
Agreement and the Conveyance Papers by the Seller, the performance
of the transactions contemplated by this Agreement and the
Conveyance Papers, and the fulfillment of the terms of this
Agreement and the Conveyance Papers will not conflict with, violate
or result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a
default under, any indenture, contract, agreement, mortgage, deed
of trust, or other instrument to which the Seller is a party or by
which it or any of its properties are bound which would have an
Adverse Effect.
(e) No Violation. The execution, delivery and
performance of this Agreement and the Conveyance Papers by the
Seller and the fulfillment of the terms contemplated herein and
therein applicable to the Seller will not conflict with or violate
any Requirements of Law applicable to the Bank in a manner which
would have an Adverse Effect.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Seller,
threatened against the Seller, before any Governmental Authority
(i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Conveyance
Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely
affect the performance by the Seller of its obligations under this
Agreement or the Conveyance Papers, (iv) seeking any determination
or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or the Conveyance Papers or (v)
seeking to affect adversely the income tax attributes of the Trust
under the United States federal or Delaware income tax systems.
(g) All Consents. All authorizations, consents, orders
or approvals of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given
by the Seller in connection with the execution and delivery by the
Seller of this Agreement and the Conveyance Papers and the
performance of the transactions contemplated by this Agreement or
the Conveyance Papers by the Seller have been duly obtained,
effected or given and are in full force and effect.
The representations and warranties set forth in this
Section 4.1 shall survive the transfer and assignment of the
Receivables to the Purchaser. Upon discovery by the Seller or the
Purchaser of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give written
notice to the other party and the Trustee within three Business
Days following such discovery.
Section 4.2. Representations and Warranties of the
Seller Relating to the Agreement and the Receivables.
(a) Representations and Warranties. The Seller hereby
represents and warrants to the Purchaser as of the date of this
Agreement, as of the Closing Date and, with respect to Additional
Accounts, as of the related Addition Date that:
(i) this Agreement and, in the case of Additional
Accounts, the related Supplemental Conveyance, each constitutes a
legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect or general
principles of equity;
(ii) as of the Initial Cut-Off Date, and as of the
related Additional Cut-Off Date with respect to Additional
Accounts, Schedule I to this Agreement, as supplemented to such
date, is an accurate and complete listing in all material respects
of all the Accounts as of the Initial Cut-Off Date or such
Additional Cut-Off Date, as the case may be, and the information
contained therein with respect to the identity of such Accounts and
the Receivables existing thereunder is true and correct in all
material respects as of the Initial Cut-Off Date or such applicable
Additional Cut-Off Date, as the case may be, and as of the Initial
Cut-Off Date, the aggregate amount of Receivables in all the
Initial Accounts was $ , of which $
were Principal Receivables;
(iii) each Receivable has been conveyed to the Purchaser
free and clear of any Lien of any Person claiming through or under
the Seller or any of its other affiliates (other than Liens
permitted under subsection 2.7(b) of the Pooling and Servicing
Agreement);
(iv) all authorizations, consents, orders or approvals
of or registrations or declarations with any Governmental Authority
required to be obtained, effected or given by the Bank in
connection with the conveyance of Receivables to the Purchaser have
been duly obtained, effected or given and are in full force and
effect;
(v) this Agreement or, in the case of Additional
Accounts, the related Supplemental Conveyance constitutes a valid
sale, transfer and assignment to the Purchaser of all right, title
and interest of the Seller in the Receivables and the proceeds
thereof and the Interchange payable pursuant to this Agreement and
the Recoveries payable pursuant to this Agreement or, if this
Agreement or, in the case of Additional Accounts, the related
Supplemental Conveyance, does not constitute a sale of such
property, it constitutes a grant of a first priority perfected
"security interest" (as defined in the UCC) in such property to the
Purchaser, which, in the case of existing Receivables and the
proceeds thereof and said Recoveries and Interchange, is
enforceable upon execution and delivery of this Agreement, or, with
respect to then existing Receivables in Additional Accounts, as of
the applicable Addition Date, and which will be enforceable with
respect to such Receivables hereafter and thereafter created and
the proceeds thereof upon such creation. Upon the filing of the
financing statements and, in the case of Receivables hereafter
created and the proceeds thereof, upon the creation thereof, the
Purchaser shall have a first priority perfected security or
ownership interest in such property and proceeds;
(vi) on the Initial Cut-Off Date, each Account is an
Eligible Account and, in the case of Additional Accounts, on the
Additional Cut-Off Date, each related Additional Account is an
Eligible Account;
(vii) on the Initial Cut-Off Date, each Receivable then
existing is an Eligible Receivable, and in the case of Additional
Accounts, on the applicable Additional Cut-Off Date, each
Receivable generated thereunder is an Eligible Receivable;
(viii) as of the date of the creation of any new
Receivable, such Receivable is an Eligible Receivable;
(ix) no selection procedures believed by the Seller to
be materially adverse to the interests of the Purchaser or the
Investor Certificateholders have been used in selecting such
Accounts; and
(x) the Receivables are "accounts" or "general
intangibles" for the purposes of the UCC.
(b) Notice of Breach. The representations and warranties
set forth in this Section 4.2 shall survive the transfer and
assignment of the Receivables to the Purchaser. Upon discovery by
either the Seller or the Purchaser of a breach of any of the
representations and warranties set forth in this Section 4.2, the
party discovering such breach shall give written notice to the
other party and the Trustee within three Business Days following
such discovery; provided that the failure to give notice within
three Business Days does not preclude subsequent notice. The
Seller hereby acknowledges that the Purchaser intends to rely on
the representations hereunder in connection with representations
made by the Purchaser to secured parties, assignees or subsequent
transferees including but not limited to transfers made by the
Purchaser to the Trust pursuant to the Pooling and Servicing
Agreement and that the Trustee may enforce such representations
directly against the Seller.
Section 4.3. Representations and Warranties of the
Purchaser. As of the Closing Date, the Purchaser hereby represents
and warrants to, and agrees with, the Seller that:
(a) Organization and Good Standing. The Purchaser is a
corporation duly organized and validly existing under the laws of
the State of Delaware and has, in all material respects, full power
and authority to own its properties and conduct its business as
presently owned or conducted and to execute, deliver and perform
its obligations under this Agreement and the Conveyance Papers.
(b) Due Authorization. The execution and delivery of
this Agreement and the Conveyance Papers and the consummation of
the transactions provided for in this Agreement and the Conveyance
Papers have been duly authorized by the Purchaser by all necessary
corporate action on the part of the Purchaser.
(c) No Conflict. The execution and delivery of this
Agreement and the Conveyance Papers by the Purchaser, the
performance of the transactions contemplated by this Agreement and
the Conveyance Papers, and the fulfillment of the terms of this
Agreement and the Conveyance Papers applicable to the Purchaser,
will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust or other instrument to
which the Purchaser is a party or by which it or any of its
properties are bound.
(d) No Violation. The execution, delivery and
performance of this Agreement and the Conveyance Papers by the
Purchaser and the fulfillment of the terms contemplated herein and
therein applicable to the Purchaser will not conflict with or
violate any Requirements of Law applicable to the Purchaser.
(e) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Purchaser,
threatened against the Purchaser, before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or
the Conveyance Papers, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or the
Conveyance Papers, (iii) seeking any determination or ruling that,
in the reasonable judgment of the Purchaser, would materially and
adversely affect the performance by the Purchaser of its
obligations under this Agreement or the Conveyance Papers or (iv)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement
or the Conveyance Papers.
(f) All Consents. All authorizations, consents, orders
or approvals of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given
by the Purchaser in connection with the execution and delivery by
the Purchaser of this Agreement and the Conveyance Papers and the
performance of the transactions contemplated by this Agreement and
the Conveyance Papers have been duly obtained, effected or given
and are in full force and effect.
The representations and warranties set forth in this
Section 4.3 shall survive the Conveyance of the Receivables to the
Purchaser. Upon discovery by the Purchaser or the Seller of a
breach of any of the foregoing representations and warranties, the
party discovering such breach shall give prompt written notice to
the other party.
ARTICLE V
COVENANTS
Section 5.1. Covenants of the Seller. The Seller hereby
covenants and agrees with the Purchaser as follows:
(a) Receivables Not To Be Evidenced by Promissory
Notes. Except in connection with its enforcement or collection of
an Account, the Seller will take no action to cause any Receivable
to be evidenced by any instrument other than an instrument that,
taken together with one or more other writings, constitutes chattel
paper (as such terms are defined in the UCC) and if any Receivable
(or underlying receivable) is so evidenced as a result of any
action by the Seller it shall be deemed to be an Ineligible
Receivable in accordance with Section 6.1(a) and shall be
reassigned to the Seller in accordance with Section 6.1(b)
(b) Security Interests. Except for the conveyances
hereunder, the Seller will not sell, pledge, assign or transfer to
any other Person, or take any other action inconsistent with the
Purchaser's ownership of the Receivables or grant, create, incur,
assume or suffer to exist any Lien on, any Receivable, whether now
existing or hereafter created, or any interest therein, and the
Seller shall not claim any ownership interest in the Receivables
and shall defend the right, title and interest of the Purchaser in,
to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or
under the Seller; provided, however, that nothing in this section
shall prevent or be deemed to prohibit the Seller from suffering to
exist upon any of the Receivables or Participation Interests any
Liens for taxes if such taxes shall not at the time be due and
payable or if the Seller shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
Notwithstanding the foregoing, nothing in this section shall be
construed to prevent or be deemed to prohibit the transfer of the
Transferor Certificate and certain other rights of Purchaser as the
Transferor under the Pooling and Servicng Agreement in accordance
with the terms of this Agreement and any related Supplement.
(c) Account Allocations. In the event that the Seller
is unable for any reason to transfer Receivables to the Purchaser
in accordance with the provisions of this Agreement (including,
without limitation, by reason of the application of the provisions
of Section 8.2 or any order of any Governmental Authority), then,
in any such event, the Seller agrees (except as prohibited by any
such order) to allocate and pay to the Purchaser, after the date of
such inability, all amounts in the manner by which the Purchaser
will allocate and pay to the Trust after such inability by the
Purchaser pursuant to Section 2.11 of the Pooling and Servicing
Agreement.
(d) Notice of Liens. The Seller shall notify the
Purchaser promptly after becoming aware of any Lien on any
Receivable (or on the underlying receivable) other than the
conveyances hereunder and under the Pooling and Servicing
Agreement.
(e) Interchange. Not later than 1:00 p.m., New York
City time, on each Transfer Date, the Seller shall deposit or cause
to be deposited into the Collection Account, in immediately
available funds, (i) the amount of Interchange to be included as
Collections of Finance Charge Receivables with respect to the
preceding Monthly Period or (ii) if at any time the Bank cannot
identify or cause to be identified the amount of such Interchange,
the amount reasonably estimated by the Seller as the amount of such
Interchange.
(f) Documentation of Transfer. The Seller shall
undertake to file the documents which would be necessary to perfect
and maintain the transfer of the Purchased Assets to the Purchaser.
(g) Segregation of Accounts. The records and agreements
relating to the Accounts and Receivables may not be segregated by
the applicable Account Owner from other documents and agreements
relating to other credit card accounts and receivables and may not
be stamped or marked to reflect the sale or transfer of the
Receivables to the Purchaser or the transfer of the Receivables by
the Purchaser to the Trust, but the records of the applicable
Account Owner will be marked to evidence such sale or transfer.
Section 5.2. Covenants of the Seller with Respect to
Receivables Purchase Agreements. The Seller, in its capacity as
purchaser of Receivables from any Account Owner pursuant to a
receivables purchase agreement in, or substantially in, the form of
this agreement (each a "Receivables Purchase Agreement") hereby
covenants that the Seller will at all times enforce the covenants
and agreements of the applicable Account Owner in such Receivables
Purchase Agreement, including covenants substantially to the effect
set forth below:
(a) Periodic Rate Finance Charges. (i) Except (x) as
otherwise required by any Requirements of Law or (y) as is deemed
by the related Account Owner to be necessary in order for it to
maintain its credit card business or a program operated by such
credit card business on a competitive basis based on a good faith
assessment by it of the nature of the competition with respect to
the credit card business or such program, it shall not at any time
take any action which would have the effect of reducing the
Portfolio Yield to a level that could be reasonably expected to
cause any Series to experience any Pay Out Event or Reinvestment
Event based on the insufficiency of the Portfolio Yield or any
similar test and (ii) except as otherwise required by any
Requirements of Law, it shall not take any action which would have
the effect of reducing the Portfolio Yield to be less than the
highest Average Rate for any Group.
(b) Credit Card Agreements and Guidelines. Subject to
compliance with all Requirements of Law and paragraph (a) above,
the related Account Owner, may change the terms and provisions of
the applicable Credit Card Agreements or the applicable Credit Card
Guidelines in any respect (including the calculation of the amount
or the timing of charge-offs and the Periodic Rate Finance Charges
to be assessed thereon). Notwithstanding the above, unless required
by Requirements of Law or as permitted by Section 5.2(a), no
Account Owner will take action with respect to the applicable
Credit Card Agreements or the applicable Credit Card Guidelines,
which, at the time of such action, such Account Owner reasonably
believes will have a material adverse effect on the Investor
Certificateholders.
The Seller further covenants that it will not enter into
any amendments to the Receivables Purchase Agreements or enter into
a new Receivables Purchase Agreement unless the Rating Agency
Condition has been satisfied.
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1. Reassignment of Ineligible Receivables
(a) In the event any representation or warranty under
Section 4.2(a)(ii), (iii), (iv), (vi), (vii) or (viii) is not true
and correct in any material respect as of the date specified
therein with respect to any Receivable or the related Account and
as a result of such breach the Purchaser is required to accept
reassignment of Ineligible Receivables previously sold by the
Seller to the Purchaser pursuant to Section 2.5(a) of the Pooling
and Servicing Agreement, the Seller shall accept reassignment of
the Purchaser's interest in such Ineligible Receivables on the
terms and conditions set forth in Section 6.1(b).
(b) The Seller shall accept reassignment of any
Ineligible Receivables previously sold by the Seller to the
Purchaser from the Purchaser on the date on which such reassignment
obligation arises, and shall pay for such reassigned Ineligible
Receivables by paying to the Purchaser not later than 3:00 p.m.,
New York City time on such date, an amount equal to the unpaid
principal balance of such Ineligible Receivables plus accrued and
unpaid finance charges at the annual percentage rate applicable to
such Receivables from the last date billed through the end of the
Monthly Period in which such reassignment obligation arises. Upon
reassignment of such Ineligible Receivables, the Purchaser shall
automatically and without further action be deemed to sell,
transfer, assign, set-over and otherwise convey to the Seller,
without recourse, representation or warranty, all the right, title
and interest of the Purchaser in and to such Ineligible
Receivables, all monies due or to become due with respect thereto
and all proceeds thereof; and such reassigned Ineligible
Receivables shall be treated by the Purchaser as collected in full
as of the date on which they were transferred. The Purchaser shall
execute such documents and instruments of transfer or assignment
and take such other actions as shall reasonably be requested by the
Seller to effect the conveyance of such Ineligible Receivables
pursuant to this subsection.
Section 6.2. Reassignment of Certificateholders'
Interest in Trust Portfolio. In the event any representation or
warranty set forth in Section 4.1(a) or (c) or Section 4.2(a)(i) or
(a)(v) is not true and correct in any material respect and as a
result of such breach the Purchaser is required to accept a
reassignment of the Certificateholders' Interest in the Receivables
previously sold by the Seller to the Purchaser pursuant to Section
2.6 of the Pooling and Servicing Agreement, the Seller shall be
obligated to accept a reassignment of the Purchaser's interest in
such Receivables on the terms set forth below.
The Seller shall pay to the Purchaser by depositing in
the Collection Account in immediately available funds, not later
than 1:00 P.M. New York City time, on the first Transfer Date
following the Monthly Period in which such reassignment obligation
arises, in payment for such reassignment, an amount equal to the
amount specified in Section 2.6 of the Pooling and Servicing
Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to the Purchaser's Obligations
Regarding Initial Receivables. The obligations of the Purchaser to
purchase the Receivables in the Initial Accounts on the Closing
Date shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of the Seller
contained in this Agreement shall be true and correct on the
Closing Date with the same effect as though such representations
and warranties had been made on such date;
(b) All information concerning the Initial Accounts
provided to the Purchaser shall be true and correct as of the
Initial Cut-Off Date in all material respects;
(c) The Seller shall have (i) delivered to the Purchaser
a computer file or microfiche list containing a true and complete
list of all Initial Accounts identified by account number and by
the Receivables balance as of the Initial Cut-Off Date and (ii)
substantially performed all other obligations required to be
performed by the provisions of this Agreement;
(d) The Seller shall have recorded and filed, at its
expense, any financing statement with respect to the Receivables
(other than Receivables in Additional Accounts) now existing and
hereafter created for the transfer of accounts and general
intangibles (each as defined in Section 9-106 of the UCC) meeting
the requirements of applicable state law in such manner and in such
jurisdiction as would be necessary to perfect the sale of and
security interest in the Receivables from the Seller to the
Purchaser, and shall deliver a file-stamped copy of such financing
statements or other evidence of such filings to the Purchaser;
(e) On or before the Closing Date, the Purchaser and the
Trustee shall have entered into the Pooling and Servicing Agreement
and the closing under the Pooling and Servicing Agreement shall
take place simultaneously with the initial closing hereunder; and
(f) All corporate and legal proceedings and all
instruments in connection with the transactions contemplated by
this Agreement shall be satisfactory in form and substance to the
Purchaser, and the Purchaser shall have received from the Seller
copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein
contemplated as the Purchaser may reasonably have requested.
Section 7.2. Conditions Precedent to the Bank's
Obligations. The obligations of the Seller to sell Receivables in
the Initial Accounts on the Closing Date shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Purchaser
contained in this Agreement shall be true and correct with the same
effect as though such representations and warranties had been made
on such date;
(b) Payment or provision for payment of the Purchase
Price in accordance with the provision of Section 3.1 hereof shall
have been made; and
(c) All corporate and legal proceedings and all
instruments in connection with the transactions contemplated by
this Agreement shall be satisfactory in form and substance to the
Seller, and the Seller shall have received from the Purchaser
copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein
contemplated as the Bank may reasonably have requested.
ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.1. Term. This Agreement shall commence as of
the date of execution and delivery hereof and shall continue until
the termination of the Trust as provided in Article XII of the
Pooling and Servicing Agreement.
Section 8.2. Purchase Termination. If the Seller shall
fail generally to, or admit in writing its inability to, pay its
debts as they become due; or if a proceeding shall have been
instituted in a court having jurisdiction in the premises seeking a
decree or order for relief in respect of the Seller in an
involuntary case under any Debtor Relief Law, or for the
appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of
the Seller or for any substantial part of the Seller's property, or
for the winding-up or liquidation of the Seller's affairs and, if
instituted against the Seller, any such proceeding shall continue
undismissed or unstayed and in effect, for a period of 60
consecutive days, or any of the actions sought in such proceeding
shall occur; or if the Seller shall commence a voluntary case under
any Debtor Relief Law, or if the Seller shall consent to the entry
of an order for relief in an involuntary case under any Debtor
Relief Law, or consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of, or for, any
substantial part of its property, or any general assignment for the
benefit of its creditors; or the Bank or any subsidiary of the
Seller shall have taken any corporate action in furtherance of any
of the foregoing actions (each an "Insolvency Event"); then the
Seller shall immediately cease to transfer Principal Receivables to
the Purchaser and shall promptly give notice to the Purchaser and
the Trustee of such Insolvency Event. Notwithstanding any
cessation of the transfer to the Purchaser of additional Principal
Receivables, Principal Receivables transferred to the Purchaser
prior to the occurrence of such Insolvency Event and Collections in
respect of such Principal Receivables and Finance Charge
Receivables whenever created, accrued in respect of such Principal
Receivables, shall continue to be property of the Purchaser
available for transfer by the Purchaser the Trust pursuant to the
Pooling and Servicing Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Amendment. This Agreement and any
Conveyance Papers and the rights and obligations of the parties
hereunder may not be changed orally, but only by an instrument in
writing signed by the Purchaser and the Seller in accordance with
this Section 9.1. This Agreement and any Conveyance Papers may be
amended from time to time by the Purchaser and the Seller (i) to
cure any ambiguity, (ii) to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein
or in any such other Conveyance Papers, (iii) to add any other
provisions with respect to matters or questions arising under this
Agreement or any Conveyance Papers which shall not be inconsistent
with the provisions of this Agreement or any Conveyance Papers,
(iv) to change or modify the Purchase Price and (v) to change,
modify, delete or add any other obligation of the Seller or the
Purchaser; provided, however, that no amendment pursuant to
clause (iv) or (v) of this Section 9.1 shall be effective unless
the Seller and the Purchaser have been notified in writing that the
Rating Agency Condition has been satisfied; provided, further, that
such action shall not (as evidenced by an Opinion of Counsel
delivered to the Trustee) adversely affect in any material respect
the interests of the Trustee or the Investor Certificateholders,
unless the Trustee shall consent thereto. Any reconveyance
executed in accordance with the provisions hereof shall not be
considered to be an amendment to this Agreement. A copy of any
amendment to this Agreement shall be sent to the Rating Agency.
Section 9.2. Governing Law. THIS AGREEMENT AND THE
CONVEYANCE PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF [DELAWARE], WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.3. Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed to
have been duly given if personally delivered at or mailed by
registered mail, return receipt requested, to (a) in the case of
the Seller, , Attention:
(facsimile no. ), (b) in the case of the
Purchaser, Attention:
(facsimile no. ), (c) in the case of the
Trustee, ,
Attention: (facsimile
no. ; or, as to each party, at such other address as
shall be designated by such party in a written notice to each other
party.
Section 9.4. Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement or any Conveyance Paper shall for any reason whatsoever
be held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants,
agreements, provisions, and terms of this Agreement or any
Conveyance Paper and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any
Conveyance Paper.
Section 9.5. Assignment. Notwithstanding anything to
the contrary contained herein, other than the Purchaser's
assignment of its rights, title, and interests in, to, and under
this Agreement to the Trustee for the benefit of the beneficiaries
of the Trust, including the Certificateholders as contemplated by
the Pooling and Servicing Agreement and Section 9.6 hereof, this
Agreement and all other Conveyance Papers may not be assigned by
the parties hereto; provided, however, that the Seller shall have
the right to assign its rights, title and interests, in, to and
under this Agreement to (i) any successor by merger assuming this
Agreement or (ii) any affiliate owned directly or indirectly by the
Purchaser to any entity provided that each Rating Agency has
advised the Purchaser and the Seller that the Rating Agency
Condition has been satisfied.
Section 9.6. Acknowledgement and Agreement of the
Seller. By execution below, the Seller expressly acknowledges and
agrees that all of the Purchaser's right, title, and interest in,
to, and under this Agreement, including, without limitation, all of
the Purchaser's right, title, and interest in and to the
Receivables purchased pursuant to this Agreement, shall be assigned
by the Purchaser to the Trustee for the benefit of the
beneficiaries of the Trust, including the Certificateholders, and
the Seller consents to such assignment. The Seller further agrees
that notwithstanding any claim, counterclaim, right or setoff or
defense which it may have against the Purchaser, due to a breach by
the Purchaser of this Agreement or for any other reason, and
notwithstanding the bankruptcy of the Purchaser or any other event
whatsoever, the Seller's sole remedy shall be a claim against the
Purchaser for money damages and, then only to the extent of funds
received by the Purchaser pursuant to the Pooling and Servicing
Agreement, and in no event shall the Seller assert any claim on or
any interest in the Receivables or any proceeds thereof or take any
action which would reduce or delay receipt by Certificateholders of
collections with respect to the Receivables. Additionally, the
Seller agrees for the benefit of the Trustee that any amounts
payable by the Seller to the Purchaser hereunder which are to be
paid by the Purchaser to the Trustee for the benefit of the
Certificateholders shall be paid by the Seller on behalf of the
Purchaser, directly to the Trustee.
Section 9.7. Further Assurances. The Purchaser and the
Seller agree to do and perform, from time to time, any and all acts
and to execute any and all further instruments required or
reasonably requested by the other party or the Trustee more fully
to effect the purposes of this Agreement, the Conveyance Papers and
the Pooling and Servicing Agreement, including, without limitation,
the execution of any financing statements or continuation
statements or equivalent documents relating to the Receivables for
filing under the provisions of the UCC or other law of any
applicable jurisdiction.
Section 9.8. No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of the
Purchaser or the Seller, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. Subject
to Section 9.6, the rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 9.9. Counterparts. This Agreement and all
Conveyance Papers may be executed in two or more counterparts (and
by different parties on separate counterparts), each of which shall
be an original, but all of which together shall constitute one and
the same instrument.
Section 9.10. Binding; Third-Party Beneficiaries. This
Agreement and the Conveyance Papers will inure to the benefit of
and be binding upon the parties hereto and their respective
successors and permitted assigns. The Trustee shall be considered
a third-party beneficiary of this Agreement.
Section 9.11. Merger and Integration. Except as
specifically stated otherwise herein, this Agreement and the
Conveyance Papers set forth the entire understanding of the parties
relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement
and the Conveyance Papers. This Agreement and the Conveyance
Papers may not be modified, amended, waived or supplemented except
as provided herein.
Section 9.12. Headings. The headings are for purposes
of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
Section 9.13. Schedules and Exhibits. The schedules and
exhibits attached hereto and referred to herein shall constitute a
part of this Agreement and are incorporated into this Agreement for
all purposes.
Section 9.14. Survival of Representations and
Warranties. All representations, warranties and agreements
contained in this Agreement or contained in any Supplemental
Conveyance, shall remain operative and in full force and effect and
shall survive conveyance of the Receivables by the Purchaser to the
Trustee pursuant to the Pooling and Servicing Agreement.
Section 9.15. Nonpetition Covenant. The Seller hereby
covenants and agrees that prior to the date which is one year and
one day after the payment in full of all Investor Certificates of
all Series, it will not institute against or join any other Person
in instituting against the Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or
any state of the United States.
IN WITNESS WHEREOF, the undersigned have caused this
Receivables Purchase Agreement to be duly executed by their
respective officers as of the day and year first above written.
PARTNERS FIRST RECEIVABLES, LLC
By: _____________________________
Title: __________________________
PARTNERS FIRST RECEIVABLES FUNDING
CORPORATION
By: _____________________________
Title: __________________________
EXHIBIT A
FORM OF SUPPLEMENTAL CONVEYANCE
(As required by Section 2.5 of the Receivables Purchase Agreement)
SUPPLEMENTAL CONVEYANCE No. dated as of , 19
, by and between PARTNERS FIRST RECEIVABLES, LLC, as Seller (the
"Seller"), and PARTNERS FIRST RECEIVABLES FUNDING (the
"Purchaser"), pursuant to the Receivables Purchase Agreement
referred to below.
WITNESSETH:
WHEREAS, the Seller and the Purchaser are parties to a
Receivables Purchase Agreement, dated as of , 1997
(hereinafter as such agreement may have been, or may from time to
time be, amended, supplemented or otherwise modified, the
"Receivables Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement,
the Seller wishes to designate Additional Accounts to be included
as Accounts and the Seller wishes to convey its right, title and
interest in the Receivables of such Additional Accounts, whether
now existing or hereafter created, to the Purchaser pursuant to the
Receivables Purchase Agreement (as each such term is defined in the
Receivables Purchase Agreement); and
WHEREAS, the Purchaser is willing to accept such
designation and conveyance subject to the terms and conditions
hereof.
NOW, THEREFORE, the Seller and the Purchaser hereby agree
as follows:
1. Defined Terms. All capitalized terms used herein
shall have the meanings ascribed to them in the Receivables
Purchase Agreement unless otherwise defined herein.
"Addition Date" shall mean, with respect to the
Additional Accounts designated hereby, , 19 .
"Additional Cut-Off Date" shall mean, with respect to the
Additional Accounts designated hereby, _________ __, 19__.
"Returned Check Fees" shall have the meaning specified in
the Credit Card Agreement applicable to each Account for fees for
returned checks or similar terms.
"Revolving Period" shall mean, with respect to any
Series, the period specified in the related Supplement.
"Series" shall mean any series of Investor Certificates
issued pursuant to Section 6.3.
"Series Account" shall mean any deposit, trust, escrow or
similar account maintained for the benefit of the Investor
Certificateholders of any Series or Class, as specified in any
Supplement.
"Series Adjusted Invested Amount" shall mean, with
respect to any Series and for any Monthly Period, the Series
Invested Amount of such Series, after subtracting therefrom the
excess, if any, of the cumulative amount (calculated in accordance
with the terms of the related Supplement) of investor charge-offs,
subordination of principal collections and funding the investor
default amount or another Series allocable to the Invested Amount
for such Series as of the last day of the immediately preceding
Monthly Period over the aggregate reimbursement of such investor
charge-offs, subordination of principal collections and funding the
investor default amount for any other Class of Investor
Certificates of such Series or another Series as of such last day,
or such lesser amount as may be provided in the Series Supplement
for such Series.
"Series Allocable Defaulted Amount" shall mean, with
respect to any Series and for any Monthly Period, the product of
the Series Allocation Percentage and the Defaulted Amount with
respect to such Monthly Period.
"Series Allocable Finance Charge Collections" shall mean,
with respect to any Series and for any Monthly Period, the product
of the Series Allocation Percentage and the amount of Collections
of Finance Charge Receivables deposited in the Collection Account
for such Monthly Period.
"Series Allocable Principal Collections" shall mean, with
respect to any Series and for any Monthly Period, the product of
the Series Allocation Percentage and the amount of Collections of
Principal Receivables deposited in the Collection Account for such
Monthly Period.
2. Designation of Additional Accounts. The Seller
delivers herewith a computer file or microfiche list containing a
true and complete schedule identifying all such Additional Accounts
and specifying for each such Account, as of the Additional Cut-Off
Date, its account number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables in such
Account. Such computer file, microfiche list or other
documentation shall be as of the date of this Supplemental
Conveyance incorporated into and made part of this Supplemental
Conveyance and is marked as Schedule I to this Supplemental
Conveyance.
3. Conveyance of Receivables.
(a) The Seller does hereby sell, transfer, assign, set
over and otherwise convey to the Purchaser, without recourse except
as provided in the Receivables Purchase Agreement, all its right,
title and interest in, to and under (i) the Receivables generated
by such Additional Accounts, now existing at the close of business
on the Additional Cut-Off Date and hereafter created until
termination of the Receivables Purchase Agreement, all monies due
or to become due and all amounts received with respect thereto and
all "proceeds" (including, without limitation, "proceeds" as
defined in Article 9 of the UCC) thereof and (ii) the right to
receive Interchange and Recoveries with respect to such
Receivables.
(b) In connection with such sale, the Seller agrees to
record and file, at its own expense, one or more financing
statements (and continuation statements with respect to such
financing statements when applicable) with respect to the
Receivables, now existing and hereafter created, for the transfer
of accounts and general intangibles meeting the requirements of
applicable state law in such manner and in such jurisdictions as
are necessary to perfect the sale and assignment of and the
security interest in the Receivables to the Purchaser, and to
deliver a file-stamped copy of such financing statement or other
evidence of such filing to the Purchaser.
(c) In connection with such sale, the Seller further
agrees, at its own expense, on or prior to the date of this
Supplemental Conveyance, to indicate in the appropriate computer
files or microfiche list that all Receivables created in connection
with the Additional Accounts designated hereby have been conveyed
to the Purchaser pursuant to this Supplemental Conveyance.
4. Acceptance by the Purchaser. The Purchaser hereby
acknowledges its acceptance of all right, title and interest to the
property, now existing and hereafter created, conveyed to the
Purchaser pursuant to Section 3(a) of this Supplemental Conveyance,
and declares that it shall maintain such right, title and interest.
The Purchaser further acknowledges that, prior to or simultaneously
with the execution and delivery of this Supplemental Conveyance,
the Seller delivered to the Purchaser the computer file or
microfiche list described in Section 2 of this Supplemental
Conveyance.
5. Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Purchaser as of the
date of this Supplemental Conveyance and as of the Addition Date
that:
(a) Legal, Valid and Binding Obligation. This
Supplemental Conveyance constitutes a legal, valid and binding
obligation of the Seller enforceable against the Seller in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect or general principles of
equity;
(b) Eligibility of Accounts. On the Additional Cut-Off
Date, each Additional Account designated hereby is an Eligible
Account;
(c) No Liens. Each Receivable in an Additional Account
designated hereby has been conveyed to the Purchaser free and clear
of any Lien of any Person claiming through or under the Bank or any
of its other affiliates (other than Liens permitted under
subsection 2.7(b) of the Pooling and Servicing Agreement);
(d) Eligibility of Receivables. On the Additional Cut-
Off Date, each Receivable existing in an Additional Account
designated hereby is an Eligible Receivable and as of the date of
creation of any Receivable in an Additional Account designated
hereby, such Receivable is an Eligible Receivable;
(e) Selection Procedures. No selection procedure
believed by the Seller to be adverse to the interests of the
Purchaser or the Investor Certificateholders was utilized in
selecting the Additional Accounts;
(f) Transfer of Receivables. This Supplemental
Conveyance constitutes a valid sale, transfer and assignment to the
Seller of all right, title and interest of the Seller in the
Receivables arising in the Additional Accounts designated hereby
now existing or hereafter created, all monies due or to become due
and all amounts received with respect thereto and the "proceeds"
(including, without limitation, "proceeds" as defined in Article 9
of the UCC) thereof and the Interchange and the Recoveries with
respect thereto;
(g) No Conflict. The execution and delivery of this
Supplemental Conveyance, the performance of the transactions
contemplated by this Supplemental Conveyance and the fulfillment of
the terms hereof, will not conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under,
any indenture, contract, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by which it or
its properties are bound;
(h) No Violation. The execution and delivery of this
Supplemental Conveyance by the Seller, the performance of the
transactions contemplated by this Supplemental Conveyance and the
fulfillment of the terms hereof applicable to the Seller will not
conflict with or violate any Requirements of Law applicable to the
Seller;
(i) No Proceedings. There are no proceedings or
investigations, pending or, to the best knowledge of the Seller,
threatened against the Seller before any Governmental Authority (i)
asserting the invalidity of this Supplemental Conveyance, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by this Supplemental Conveyance, (iii) seeking any
determination or ruling that, in the reasonable judgment of the
Bank, would materially and adversely affect the performance by the
Bank of its obligations under this Supplemental Conveyance or (iv)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this
Supplemental Conveyance; and
(j) All Consents. All authorizations, consents, orders
or approvals of any court or other governmental authority required
to be obtained by the Seller in connection with the execution and
delivery of this Supplemental Conveyance by the Seller and the
performance of the transactions contemplated by this Supplemental
Conveyance by the Seller, have been obtained.
6. Ratification of the Receivables Purchase Agreement.
The Receivables Purchase Agreement is hereby ratified, and all
references to the "Receivables Purchase Agreement", to "this
Agreement" and "herein" shall be deemed from and after the Addition
Date to be a reference to the Receivables Purchase Agreement as
supplemented by this Supplemental Conveyance. Except as expressly
amended hereby, all the representations, warranties, terms,
covenants and conditions of the Receivables Purchase Agreement
shall remain unamended and shall continue to be, and shall, remain,
in full force and effect in accordance with its terms and except as
expressly provided herein shall not constitute or be deemed to
constitute a waiver of compliance with or consent to non-compliance
with any term or provision of the Receivables Purchase Agreement.
7. Counterparts. This Supplemental Conveyance may be
executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument.
8. Headings. The headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
IN WITNESS WHEREOF, the undersigned have caused this
Supplemental Conveyance to be duly executed and delivered by their
respective duly authorized officers on the day and the year first
above written.
PARTNERS FIRST RECEIVABLES, LLC
By:
--------------------------------
Name:
Title:
PARTNERS FIRST RECEIVABLES FINANCING
CORPORATION
By:
--------------------------------
Name:
Title:
Schedule I to
Supplemental
Conveyance
Additional Accounts
EXHIBIT B
FORM OF REVOLVING NOTE
REVOLVING NOTE
This Revolving Note, dated as of December __, 1997, by
PARTNERS FIRST RECEIVABLES FUNDING CORPORATION, a Delaware
corporation (the "Borrower") to PARTNERS FIRST RECEIVABLES, LLC, a
Delaware limited liability company (the "Lender").
The Lender and the Borrower have entered into a Receivables
Purchase Agreement (the "Receivables Purchase Agreement") dated as
of December __, 1997 providing for the purchase from time to time
by the Borrower of certain receivables generated from time to time
in a portfolio of consumer open end credit card accounts (the
"Receivables"). Except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such
terms in the Receivables Purchase Agreement.
1. The Note. For value received, the Borrower hereby
promises to pay to the order of the Lender at its offices at
_________________________, the principal amount of $________ (the
"Initial Loan") or so much of the aggregate principal amount of all
Loans (as hereinafter defined) made by the Lender to the Borrower
under the terms of this Note as remains unpaid, as shown in the
schedule attached hereto and any continuations thereof, on the day
which is one year and a day after the payment in full of the
Transferor Amount and all Invested Amounts of each Series issued
pursuant to the Pooling and Servicing Agreement (the "Maturity
Date"). The Borrower shall pay interest on the unpaid principal
amount of the Loans as provided herein.
2. The Loans. a From time to time between the date of this
Note and the Maturity Date, and subject to the restrictions on
lending under this Note contained in the Receivables Purchase
Agreement, the Lender may lend to the Borrower additional sums
(each a "Loan" and, together with the Initial Loan, the "Loans"),
as provided herein.
3. The obligation of the Borrower to repay the aggregate
unpaid principal amount of the Loans outstanding shall be evidenced
by this Note and the schedule attached hereto. The Lender is
hereby authorized to endorse on the schedule or on a continuation
of such schedule, appropriate notations regarding each Loan
evidenced by this Note; provided, however, that the failure to
make, or error in making, any notation shall not limit or otherwise
affect the obligation of the Borrower hereunder.
4. When the Borrower requests a Loan in connection with the
acquisition of any Receivables, the Borrower shall notify the
Lender by telephone specifying the amount and the date on which
such Loan is requested. Unless otherwise specified, the maturity
of each such Loan shall be the Maturity Date.
5. The Lender agrees that on each Distribution Date, the
Lender shall determine whether the Capital Ratio as of the end of
the preceding Monthly Period equaled or exceeded the Minimum
Capital Ratio. If, as of any such date, the Capital Ratio was less
than the Minimum Capital Ratio, from and after the date of such
determination the Lender shall not increase the principal amount of
this Revolving Note until the Capital Ratio is at least equal to
the Minimum Capital Ratio.
6. The Lender agrees that the portion of the Purchase
Price paid with this Revolving Note shall not cause (a) the sum of
(i) the principal amount of this Revolving Note and (ii) the
outstanding principal amount of all certificates issued by the
Trust that are or may be classified as debt for federal income tax
purposes to exceed (b) 80% of (x) the aggregate amount of Principal
Receivables and amounts on deposit in the Special Funding Account
minus (y) the principal amount of any Supplemental Certificate,
Participation Interest and any other interest in the Transferor's
Interest not held by the Purchaser.
7. Interest. Each Loan shall bear interest which shall be
calculated as the arithmetic mean of the beginning and ending
principal balances for such month, from the date hereof until this
Revolving Note is fully paid, at a monthly rate equal to one-
twelfth of the Federal Funds rate near closing bid as published in
the Wall Street Journal on the ________th of that month, or the
next Business Day if the fifteenth is not a Business Day. Interest
shall be due and payable semi-annually on the last day of June and
December of each year (each, an "Interest Payment Date"),
commencing on June 30, 1997. Interest is based on twelve 30-day
months.
8. Payment. Subject to the limitations on payment set forth
in Section 5 hereof, the Lender shall be entitled to and may
require the Borrower to, make a payment of the loans, in whole or
in part, on any day upon providing one Business Day's written
notice to the Borrower.
9. Subordination of Obligations. The Lender irrevocably
agrees that the obligations of the Borrower under this Note with
respect to the payment of principal and interest are and shall be
fully and irrevocably subordinate in right of payment and subject
to the prior payment or provision for payment in full of all Senior
Indebtedness, that such obligations may only be satisfied to the
extent of cash or other assets of the Borrower then available for
such purpose after giving effect to all required payments in
respect of Senior Indebtedness, and that such obligations shall not
constitute a claim against the Borrower at any time that, and for
so long as, cash or such other assets available therefor are
insufficient. "Senior Indebtedness" means the principal of and
interest, including post-default interest, on any indebtedness of
or guaranteed by the Borrower, whether outstanding or guaranteed on
the date hereof or thereafter created, incurred, assumed or
guaranteed for money borrowed or for the deferred purchase price of
property purchased by any person including, for this purpose, all
obligations of the Borrower under capitalized leases or purchase
money mortgages, and, in each such case, all renewals, extensions
and refundings thereof including, without limitation, all
obligations of the Borrower arising under or in respect of the
Pooling and Servicing Agreement; provided, however, that Senior
Indebtedness shall not include any obligation of or guarantee by
the Borrower, whether outstanding or guaranteed on the date hereof
of thereafter created, incurred, assumed or guaranteed that by
agreement, operation of law or by its terms is subordinate in right
of payment to this Note. In the event of the appointment of a
receiver or trustee of the Borrower or in the event of its
insolvency, bankruptcy, assignment for the benefit of creditors or
reorganization, whether or not pursuant to the bankruptcy laws, or
any other marshalling of the assets and liabilities of the
Borrower, the Lender shall not be entitled to participate or share,
ratably or otherwise, in the distribution of the assets of the
Borrower until all claims of all other present and future creditors
of the Borrower, whose claims are senior hereto, have been fully
satisfied, or provisions have been made therefor.
10. Acceleration Upon Certain Events. The Borrower's
obligation to pay the unpaid principal amount hereof shall
forthwith mature, together with interest accrued thereon, in the
event of any receivership, insolvency, liquidation, bankruptcy,
assignment for the benefit of creditors, reorganization whether or
not pursuant to bankruptcy laws, or any other marshalling of the
assets and liabilities of the Borrower, but payment of the same
shall remain subordinate as hereinabove set forth.
11. Effect of Default. Default in any payment hereunder,
including the payment of interest, shall not accelerate the
maturity hereof except as herein specifically provided, and the
obligation to make payments shall remain subordinated as
hereinabove set forth.
12. Upon Whom Binding. The provisions of this Note shall be
binding upon the Lender, its successors and assigns and upon the
Borrower.
13. GOVERNING LAW. THIS NOTE SHALL BE DEEMED TO HAVE BEEN
MADE UNDER, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF
DELAWARE IN ALL RESPECTS.
14. Cancellation. This Note shall not be subject to
cancellation by either party.
15. No Security. The Lender agrees that it is not taking and
will not take or assert as security for the payment of this Note
any security interest in or lien upon, whether created by contract,
statute or otherwise, any property of the Borrower or any property
in which the Borrower may have an interest, which is or at any time
may be in possession or subject to the control of the Lender. The
Lender hereby waives, and further agrees that it will not seek to
obtain payment of this Note in whole or in any part by exercising
any right of set-off it may assert or possess whether created by
contract, statute or otherwise. Any agreement between the Borrower
and the Lender (whether in the nature of a general loan and
collateral agreement, a security or pledge agreement or otherwise),
shall be deemed amended hereby to the extent necessary so as not to
be inconsistent with the provisions of this Note.
16. Assignment. This Note shall inure to the benefit of and
be binding upon the parties hereto and each of their respective
successors and assigns. The Borrower may not assign or transfer
any of its rights or obligations hereunder without the prior
written consent of the Lender.
17. No Bankruptcy Petition Against the Borrower. The Lender
(in its capacity as Lender, but in no other capacity), by its
acceptance of this Note, hereby covenants and agrees that, prior to
the date which is one year and one day after the payment in full of
the Transferor Amount and all Invested Amounts of all Series issued
pursuant to the Pooling and Servicing Agreement, it will not
institute against or join any other Person in instituting against
the Borrower any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United
States.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed by its officers or employees thereunto duly authorized and
directed by appropriate corporate authority.
PARTNERS FIRST RECEIVABLES
FUNDING CORPORATION
By:________________________
Title:_____________________
THE TERMS AND CONDITIONS
HEREOF ARE HEREBY ACKNOWLEDGED
AND ACCEPTED:
PARTNER FIRST RECEIVABLES, LLC
By:____________________________
Title:_________________________
Schedule I
LIST OF ACCOUNTS
DEEMED INCORPORATED BY REFERENCE
