EXECUTION COPY
EXHIBIT 10.48
Second amendment
TO
TRANSFER AND SERVICING AGREEMENT
This SECOND AMENDMENT (this "Amendment") TO TRANSFER AND SERVICING
AGREEMENT is made as of October 31, 2002 by and among SPIEGEL CREDIT CORPORATION
III, as Seller, FIRST CONSUMERS NATIONAL BANK, as Servicer and SPIEGEL CREDIT
CARD MASTER NOTE TRUST, as Issuer.
W I T N E S S E T H
WHEREAS, the parties hereto have entered into the Transfer and Servicing
Agreement, dated as of December 1, 2000, as amended (the "Transfer and Servicing
Agreement");
WHEREAS, MBIA Insurance Corporation ("MBIA"), Spiegel Credit Corporation
III, Spiegel, Inc. ("Spiegel"), Spiegel Acceptance Corporation and First
Consumers National Bank ("FCNB"), have entered into the letter agreement dated
May 16, 2002, (together with all exhibits and supplements thereto the "Letter
Agreement"); and
WHEREAS, in accordance with the terms of the Letter Agreement, the parties
have agreed to amend the Transfer and Servicing Agreement as hereinafter
provided.
NOW THEREFORE, in consideration of the Letter Agreement and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Transfer and Servicing Agreement.
Section 1. Amendments.
(a) Article VII shall be amended by changing the caption thereof to
read in its entirety "SERVICER DEFAULTS AND SERVICER TERMINATION EVENTS"
(b) The heading and the phrase preceding clause (a) of Section 7.1
shall be amended to read in its entirety as follows:
"Section 7.1. Servicer Defaults and Servicer Termination Events.
(X) If any one of the following events (a "Servicer Default") shall
occur and be continuing:".
(c) A new Section 7.1(Y) shall be added following clause (d) of
Section 7.1(X) as follows:
"(Y). If any one of the following events (a "Servicer
Termination Event" shall occur and be continuing:
(a) FCNB is not sold, disposed of, or otherwise liquidated
(whether by sale of its ownership interests or substantially
all of its assets) on or before December 15, 2002 (the
"Disposition Date") in a manner that is acceptable to MBIA
Insurance Corporation ("MBIA"); provided that if the Office
of the Comptroller of the Currency extends the date by which
FCNB must be sold, disposed of, or otherwise liquidated to a
date beyond December 31, 2002, the Disposition Date shall be
fifteen (15) days prior to the date of such extension; or
(b) FCNB shall be dissolved, liquidated or cease to be 100%
owned by Spiegel except (i) pursuant to a sale, disposition
or liquidation meeting the requirements of clause (a) above
or (ii) with the prior written consent of MBIA; or
(c) the ratio of Tangible Equity to total assets of FCNB is less
than 20%; where Tangible Equity means the remainder of total
equity less intangible assets (in each case as shown on the
monthly financial statements of FCNB and calculated in
accordance with US Generally Accepted Accounting
Principles); or
(d) managed assets (i.e., assets owned or serviced by FCNB) of
FCNB in excess of 10% in the aggregate of FCNB's total
managed assets are sold, transferred or otherwise disposed
of, including, without limitation, to any affiliate of FCNB,
without the prior written consent of MBIA, excluding the
transfer of receivables in the ordinary course of business
pursuant to the Receivables Purchase Agreement; or
(e) the Servicer shall change or amend the Charge Account
Agreements or Charge Account Guidelines with respect to the
private label portfolio in any material respect without the
prior written consent of MBIA, which consent shall not be
unreasonably withheld, conditioned or delayed; or
(f) any quarterly servicing audit conducted by or on behalf of
MBIA shall reveal that the Servicer has failed to comply in
any material respect with the Charge Account Guidelines or
the Conditions Precedent Documents and such failure shall
not be cured within 30 days of such audit as determined by
MBIA by means
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of a follow up audit and is not otherwise deemed cured by
MBIA; or
(g) FCNB shall have Liquid Assets in an amount less than the
greatest of (i) 12% of its Total Assets, (ii) $15,000,000
and (iii) 35% of the sum of (a) Deposit Liabilities, (b)
Operating Expenses, (c) Accounts Payable, (d) Accrued and
Other Liabilities, and (e) Debt or other Borrowings, in each
case maturing in less than 90 days; where "Liquid Assets"
for the purpose of clause (i) above means as of the end of
any calendar month, the sum of (a) cash, (b) cash
equivalents, and (c) repurchase agreements (in each case as
shown on the monthly financial statements of FCNB and
calculated in accordance with US Generally Accepted
Accounting Principles); for the purpose of clause (ii) above
means as of the end of any calendar month, the sum of (a)
cash and (b) cash equivalents (in each case as shown on the
monthly financial statements of FCNB and calculated in
accordance with US Generally Accepted Accounting Principles)
and for the purpose of clause (iii) means the sum of (a)
bank deposits (excluding deposits in transit and outstanding
checks) and (b) for purposes of this calculation only, the
amount of cash on deposit at Deutsche Bank Trust Company
Americas being held pursuant to Article I, Section 7(i) of
the Consent Order dated May 14, 2002 between FCNB and the
Office of the Comptroller of the Currency to the extent such
amount relates to Deposit Liabilities maturing in less than
90 days; or
(h) FCNB shall assign or delegate its duties or obligations as
Servicer under the Transaction Documents without the prior
written consent of MBIA;
(d) The first sentence of the undesignated paragraph concluding
Article VII and now following Section 7.1(Y) shall be amended to read as
follows:
"then, so long as any such Servicer Default or Servicer
Termination Event shall not have been remedied, either the
Indenture Trustee, or the Noteholders holding more than 50% of
the aggregate outstanding principal amount of the Notes, by
notice then given in writing to the Servicer (and to the
Indenture Trustee if given by the Noteholders) (a "Termination
Notice"), may terminate all of the rights and except as
otherwise provided herein, the obligations of the Servicer as
Servicer under this
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Agreement and in and to the Receivables and the proceeds
thereof."
(e) The first parenthetical in the second sentence of Section 7.2(a)
shall be amended to read as follows:
"(with the consent of the Noteholders holding more than 50% of
the aggregate outstanding principal amount of the Notes, and with
prior written notice to the Rating Agencies)"
Section 2. Conditions Precedent. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:
(a) Officer's Certificate. The Seller shall have delivered to the
Indenture Trustee and the Owner Trustee an Officer's Certificate, dated the
date hereof, stating that the Seller reasonably believes that this
Amendment will not have an Adverse Effect.
(b) Rating Agency Condition. The Rating Agency Condition shall have
been satisfied.
Section 3. References. On and after the effective date of this Amendment,
each reference in the Transaction Documents to the "Transfer and Servicing
Agreement" shall mean and be a reference to the Transfer and Servicing Agreement
as amended hereby.
Section 4. Full Force and Effect. Except as specifically amended above, the
Transfer and Servicing Agreement and the other Transaction Documents are and
shall continue to be in full force and effect. This Amendment shall not have the
effect of restating the representations and warranties contained in the
Transaction Documents nor shall this Amendment have the effect of waiving or
otherwise modifying such representations and warranties or any provisions
relating thereto,
Section 5. Counterparts; Governing Law. This Amendment may be executed in
any number of counterparts and by any combination of the parties hereto in
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS
(WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES WHICH WOULD REQUIRE THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).
Section 6. Effectiveness. This Amendment shall become effective as of the
date first written above when counterparts of this Amendment shall have been
accepted and agreed to by each of the parties hereto and the conditions
precedent set forth in Section 2 hereof shall be satisfied.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on this
31st day of October, 2002.
SPIEGEL CREDIT CORPORATION III, as Seller
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
FIRST CONSUMERS NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
SPIEGEL CREDIT CARD MASTER NOTE TRUST
By: Deutsche Bank Trust Company Americas,
not in its individual capacity but solely as Owner Trustee
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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