EXHIBIT 1
November __, 2000
Prime Credit Card Master Trust
$________ ___% Class A Asset Backed Certificates,
Series 2000-__
$________ ___% Class B Asset Backed Certificates,
Series 2000-__
PRIME RECEIVABLES CORPORATION
(TRANSFEROR)
FDS BANK
(SERVICER)
UNDERWRITING AGREEMENT
=========================
As Representatives (the "Representatives")
of the Several Underwriters,
c/o _____________________
=========================
Ladies and Gentlemen:
1. Introductory. Prime Receivables Corporation, a Delaware
corporation (the "Transferor"), proposes to cause Prime Credit Card Master
Trust (the "Trust") to issue: (i) $____________ in aggregate principal
amount of ____% Class A Asset Backed Certificates, Series 2000-__ (the
"Class A Certificates") and (ii) $__________ in aggregate principal amount
of ____% Class B Asset Backed Certificates, Series 2000-__ (the "Class B
Certificates," and together with the Class A Certificates, the
"Certificates"). The Certificates are to be issued pursuant to the Pooling
and Servicing Agreement, dated as of December 15, 1992, among the
Transferor, Federated Department Stores, Inc. ("Federated") and The Chase
Manhattan Bank, as Trustee (the "Trustee"), as supplemented or amended in
accordance with its terms (the "Pooling and Servicing Agreement"), and the
Series 2000-__ Supplement (the "Series Supplement") to be entered into
among the Transferor, FDS Bank ("FDS"), as Servicer, and the Trustee. In
addition, concurrently with the issuance of the Certificates, the
Transferor shall cause the Trust to issue pursuant to the Pooling and
Servicing Agreement and the Series Supplement, $__________ in aggregate
principal amount of Class C Asset Backed Certificates, Series 2000-__ (the
"Class C Certificates," and, together with the Certificates, the "Investor
Certificates"). Each Certificate represents a specified percentage of an
undivided interest in the Trust. The assets of the Trust will include
receivables (the "Receivables") generated from time to time in the credit
card accounts (the "Accounts") originated by FDS and certain other
subsidiaries identified on Annex __ (each, an "Originator") of Federated
and sold to the Transferor, all monies due or to become due in respect of
the Receivables, including Receivables resulting from certain fees billed
to obligors on the Accounts, any Receivables in the Accounts added to the
Trust from time to time, moneys on deposit in certain accounts of the
Trust, all of the Transferor's right, title and interest in the Receivables
Purchase Agreement, and payments made in respect of Enhancements issued
with respect to any other Series of certificates issued by the Trust
pursuant to the Pooling and Servicing Agreement, other than the Investor
Certificates (which Enhancements will not be available for the benefit of
the Certificates). To the extent not defined herein, capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement.
The Transferor hereby agrees with _____________________ and
_________________ (in such capacity the "Representatives") as
representatives of the several underwriters named in Annex __ (the
"Underwriters") as follows:
2. Representations and Warranties of the Transferor. The
Transferor represents and warrants to, and agrees with, the Underwriters
that:
(a) A registration statement on Form S-3 (No. 333-45760)
relating to the Certificates (the "Registration Statement"), including a
form of prospectus and prospectus supplement, has been filed with the
Securities and Exchange Commission (the "Commission") and either (i) has
been declared effective by the Commission and is not proposed to be amended
or (ii) is proposed to be amended by amendment or post-effective amendment.
For purposes of this Agreement, "Effective Date" means the date as of which
such Registration Statement or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission. Any prospectus
supplement relating to the Certificates ("Prospectus Supplement"), as first
filed with the Commission pursuant to and in accordance with Rule 424(b)
("Rule 424(b)") under the Securities Act of 1933, as amended (the "Act")
is, together with the base prospectus (such base, in the form it appears in
the Registration Statement or in the form filed with the Commission
pursuant to Rule 424(b) together with the Prospectus Supplement) or (if no
such filing is required) as included in a Registration Statement, including
all material incorporated by reference in such prospectus and prospectus
supplement, is hereinafter referred to as the "Prospectus." No document has
been or will be prepared or distributed in reliance on Rule 434 under the
Act.
(b) (i) On the Effective Date of the Registration
Statement, the Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the Commission
promulgated thereunder (the "Rules and Regulations") and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and (ii) the Prospectus, as amended or supplemented as of
its date and the Registration Statement as of such date, each conformed, or
will conform, in all material respects to the requirements of the Act and
the Rules and Regulations, and neither of such documents includes, or will
include, any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading. The representations contained in the
preceding sentence do not apply to statements in or omissions from the
Registration Statement or the Prospectus, as the case may be, based upon
written information furnished to the Transferor by the Underwriters
specifically for use therein.
(c) As of the Closing Date (as hereinafter defined), (i)
the representations and warranties of the Transferor and FDS, as Servicer,
in the Pooling and Servicing Agreement, will be true and correct in all
material respects and (ii) the Certificates, the Pooling and Servicing
Agreement, the Series Supplement, the Receivables Purchase Agreement, and
this Underwriting Agreement will conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
3. Purchase, Sale, Payment and Delivery of Certificates. On the
basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, (i) the
Transferor agrees to sell to ______________ and _______________ (the "Class
A Underwriters"), and the Class A Underwriters agree to purchase from the
Transferor at a purchase price of __________% of the principal amount
thereof, $__________ aggregate principal amount of the Class A Certificates
in the principal amounts shown on Schedule A hereto and (ii) the Transferor
agrees to sell to ______________ (the "Class B Underwriter"), and the Class
B Underwriter agrees to purchase from the Transferor at a purchase price of
_________% of the principal amount thereof, $__________ aggregate principal
amount of the Class B Certificates.
The Transferor will deliver against payment of the purchase
price the Certificates in the form of one or more permanent global
securities in definitive form (the "Global Certificates") deposited with
the Trustee as custodian for The Depository Trust Company ("DTC") and
registered in the name of Cede & Co., as nominee for DTC. Interests in any
permanent global securities will be held only in book-entry form through
DTC, except in the limited circumstances described in the Prospectus.
Payment for the Certificates shall be made by the Underwriter or the
Representatives on behalf of the Underwriters in Federal (same day) funds
by official check or checks or wire transfer to an account in New York
previously designated to _______________ by the Transferor at the office of
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New
York at 10:00 a.m. (New York time), on ________, or at such other time not
later than seven full business days thereafter as the Underwriters or the
Representatives on behalf of the Underwriter and the Transferor determine,
such time being herein referred to as the "Closing Date," against delivery
to the Trustee as custodian for DTC of the Global Certificates representing
all of the Certificates. For purposes of Rule 15c6-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Closing Date (if
later than the otherwise applicable settlement date) shall be the
settlement date for payment of funds and delivery of the Certificates. The
Global Certificates will be made available for checking at the above office
of Skadden, Arps, Slate, Meagher & Flom LLP no later than 12:00 noon (New
York time) on the day prior to the Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Certificates for sale to the public
(which may include selected dealers) as set forth in the Prospectus.
5. Certain Agreements of the Transferor. The Transferor agrees
with the Underwriters that:
(a) The Transferor will file the Prospectus required to
be filed with the Commission pursuant to Rule 424(b)(l) (or, if applicable,
and if consented to by the Underwriters, pursuant to Rule 424(b)(4)) not
later than the Commission's close of business on the second business day
following the earlier of (A) the date of determination of the offering
price or (B) the date the Prospectus is first used after effectiveness in
connection with a public offering or sale. The Transferor will advise the
Representatives promptly of any such filing pursuant to Rule 424(b).
(b) The Transferor will advise the Representatives
promptly of any proposal to amend or supplement the Registration Statement
as filed or the related Prospectus, and will not effect such amendment or
supplementation without the consent of the Representatives (which consent
shall not be unreasonably withheld); and the Transferor will also advise
the Representatives promptly of the effectiveness of any amendment or
supplementation of the Registration Statement or the Prospectus, of any
request by the Commission for any amendment or supplementation of the
Registration Statement or the Prospectus or for any additional information,
of the receipt by the Transferor of any notification with respect to the
suspension of qualification of any of the Certificates for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purposes and of the institution by the Commission of any stop order
proceeding in respect of the Registration Statement, and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Act, any event occurs as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Transferor promptly will prepare and file with the Commission (subject to
the prior review of the Representatives pursuant to paragraph (b) of this
Section 5) an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the
consent of the Representatives to, nor the Representatives' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(d) As soon as practicable, but not later than
______________, the Transferor will cause the Trust to make generally
available to the Certificateholders an earnings statement or statements of
the Trust covering a period of at least 12 months beginning after the date
of this Agreement which will satisfy the provisions of Section 11(a) of the
Act.
(e) The Transferor will furnish to the Underwriters
copies of the Registration Statement (one of which will be signed and will
include all exhibits), each related preliminary prospectus, the Prospectus
and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Underwriters reasonably request.
The Prospectus shall be so furnished on or prior to 3:00 p.m., New York
time, on the business day following the later of the execution and delivery
of this Agreement or the Effective Date of the Registration Statement. All
other such documents shall be so furnished as soon as available. The
Transferor will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Transferor will take such action (other than
qualifying to do business as a foreign corporation or filing a general
consent to service of process in any jurisdiction or taking any action that
would subject it to general taxation in any jurisdiction) as the
Representatives may reasonably request to qualify the Certificates for sale
under the securities laws of such jurisdictions as the Representatives may
request and will comply with such laws so as to permit the continuance of
sales in such jurisdictions for as long as may be necessary to complete the
distribution of the Certificates.
(g) For a period from the date of this Agreement until
the retirement of the Certificates, or such earlier time at which the
Representatives shall have notified the Transferor that the Representatives
have ceased to make a secondary market in the Certificates (which notice,
if any, shall be given with reasonable promptness), FDS, as Servicer, will
furnish to the Representatives copies of each officer's certificate and the
annual statements of compliance delivered to the Trustee pursuant to
Section 3.06 of the Pooling and Servicing Agreement and the annual
independent certified public accountant's servicing reports furnished to
the Trustee pursuant to Section 3.06 of the Pooling and Servicing
Agreement, by first-class mail as soon as practicable after such officer's
certificates and independent public accountant's reports are furnished to
the Trustee.
(h) So long as any of the Certificates is outstanding,
the Transferor will furnish to the Representatives, by first-class mail as
soon as practicable, all documents (i) distributed by the Transferor to
Certificateholders, or (ii) filed by or on behalf of the Trust or the
Transferor as the originator of the Trust with the Commission pursuant to
the Exchange Act, or any order of the Commission or "no-action" letter
obtained from the staff of the Commission by or on behalf of the Trust or
the Transferor as originator of the Trust, and (iii) from time to time,
such other information (other than any material nonpublic information)
concerning the Trust as the Underwriters may reasonably request.
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated for any reason,
except a default by the Underwriters hereunder, the Transferor will pay all
expenses incident to the performance of its obligations under this
Agreement and will reimburse the Underwriters for (i) any reasonable
expenses (including the reasonable and documented fees and disbursements of
their counsel) incurred by them in connection with qualification of the
Certificates for sale and determination of the eligibility of the
Certificates for investment under the laws of such jurisdictions as the
Representatives designate and the printing of memoranda relating thereto,
(ii) any fees charged by investment rating agencies for the rating of the
Investor Certificates, (iii) any filing fee of the National Association of
Securities Dealers, Inc. relating to the Investor Certificates, and (iv)
expenses incurred in printing and distributing preliminary prospectuses and
the Prospectus (including any amendments and supplements thereto).
(j) To the extent, if any, that the ratings provided with
respect to the Certificates by Moody's Investors Service, Inc. and Standard
& Poor's Ratings Services are conditional upon the furnishing of documents
or the taking of any other actions by the Transferor, the Transferor and
FDS shall furnish such documents and take any such other actions.
(k) The Transferor or Federated shall not, until after
the later of (i) the Closing Date and (ii) the termination of the
underwriting syndicate, offer, sell or contract to sell, directly or
indirectly, or file with the Commission a registration statement under the
Act relating to securities substantially similar to the Certificates;
provided, however, that such restriction shall not apply to any private
placement by the Transferor of the Class C Certificates or any interest
therein.
6. Conditions of the Obligations of the Underwriters. The
obligation of the Underwriters to purchase and pay for the Certificates
will be subject to the accuracy in all material respects of the
representations and warranties on the part of the Transferor herein, to the
accuracy of the officer's certificates to be delivered pursuant to Section
6(j), to the performance by the Transferor and FDS of their obligations
hereunder and to the following additional conditions precedent:
(a) The Representatives shall have received a letter,
dated the date of the Prospectus and addressed to the Underwriters, of
independent certified public accountants for FDS and the Transferor, in
form and substance satisfactory to the Representatives and their counsel,
(i) confirming that they are independent certified public accountants
within the meaning of the Act and the applicable Rules and Regulations
thereunder and (ii) stating in effect that they have performed certain
specified procedures as a result of which they have determined that certain
information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived from
the general accounting records of the Trust, FDS and the Transferor set
forth in the Registration Statements and the Prospectus (and any
supplements thereto)), under the captions "Federated Department Stores,
Inc.," "Trust Credit Card Portfolio," "Maturity Considerations," and
"Receivable Yield Considerations" in the Prospectus, agrees with the
accounting records and/or computer reports or microfiche lists or analyses
prepared by FDS or an affiliate thereof made available to them by the
Transferor or FDS, excluding any questions of legal interpretation. On the
Closing Date, the Representatives shall have received such letter (which
may be in a bring-down format) dated the Closing Date.
(b) The Prospectus and any supplements thereto shall have
been filed (if required) with the Commission in accordance with the Rules
and Regulations and Section 5(a) hereof, and prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Transferor, shall be contemplated by
the Commission or by any authority administering any state securities or
blue sky laws.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business
or properties of the Transferor, FDS, Federated or any other affiliate of
Federated which, in the judgment of the Underwriters, materially impairs
the investment quality of the Certificates; (ii) any downgrading in the
rating of any debt securities of the Transferor, FDS, Federated or any
other affiliate of Federated by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of any such debt securities (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Transferor,
FDS, Federated or any other affiliate of Federated on any exchange or in
the over-the-counter market; (iv) any banking moratorium declared by
Federal or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the
Underwriters, including the Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Certificates.
(d) The Representatives shall have received an opinion,
dated the Closing Date, addressed to the Underwriters, of Jones, Day,
Reavis & Pogue, to the effect that:
(i) Each of the Transferor and Federated has been
duly incorporated and is validly existing and in good standing under
the laws of the State of Delaware;
(ii) FDS has been duly organized as a federally
chartered savings bank and is validly existing under the laws of the
United States of America;
(iii) Each of the Transferor, Federated, and FDS,
as applicable, has the corporate power and authority to execute and
deliver this Agreement, the Series Supplement, and the Certificates,
and to consummate the transactions contemplated herein and therein;
(iv) Each of the Transferor and Federated had the
corporate power and authority to execute and deliver the Pooling and
Servicing Agreement, and FDS had the corporate power and authority to
execute and deliver the Assumption Agreement, dated as of September
15, 1993 (the "Assumption Agreement"), relating to the assumption by
FDS of Federated's obligations as Servicer thereunder;
(v) Each of the Transferor and each Originator
other than FDS, Macy's East, Inc. and Broadway Stores, Inc. had the
corporate power and authority to execute and deliver the Receivables
Purchase Agreement, each of FDS, Macy's East, Inc. and Broadway
Stores, Inc. had the corporate power and authority to execute and
deliver the Supplement to Receivables Purchase Agreement to which
it is a party (each such Supplement, a "Supplement"), relating to it
becoming an "Additional Originator" thereunder, and each of the
Originators has the corporate power and authority to consummate the
transactions contemplated in the Receivables Purchase Agreement;
(vi) Each of the Pooling and Servicing Agreement,
the Assumption Agreement, and the Series Supplement has been duly
authorized, executed and delivered by the Transferor, Federated, and
FDS, as applicable, and, assuming the due authorization, execution
and delivery thereof by the Trustee, each of the Pooling and
Servicing Agreement, the Assumption Agreement, and the Series
Supplement constitutes a legal, valid and binding obligation of each
of the Transferor, Federated, and FDS, as applicable, enforceable
against each of them, as applicable, in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally and except as the enforceability of
remedies may be limited by general principles of equity, including
the possible unavailability of specific performance or injunctive
relief, regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except as the enforceability of
the indemnities in Section 3.04 of the Pooling and Servicing
Agreement may be subject to limitations based on public policy
considerations;
(vii) Each of the Receivables Purchase Agreement
and each of the Supplements has been duly authorized, executed and
delivered by the Transferor and each Originator, as applicable, and
constitutes the legal, valid and binding obligation of the Transferor
and each Originator, as applicable, enforceable against each of them,
as applicable, in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally and except as the enforceability of remedies may be limited
by general principles of equity, including the possible
unavailability of specific performance or injunctive relief,
regardless of whether such enforceability is considered in a
proceeding in equity or at law and except as the enforceability of
the indemnities in Sections 7.01 and 7.02 of the Receivables Purchase
Agreement may be subject to limitations based on public policy
considerations;
(viii) The certificates representing the
Certificates have been duly authorized and executed by the Transferor
and, assuming due authentication thereof by the Trustee in accordance
with the Pooling and Servicing Agreement, were validly issued to or
upon the order of the Transferor by the Trust, are entitled to the
benefits of the Pooling and Servicing Agreement and the Series
Supplement and are enforceable in accordance with their terms except
as the enforceability thereof may be limited by bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally and except as the enforceability of
remedies may be limited by general principles of equity, including
the possible unavailability of specific performance or injunctive
relief, regardless of whether such enforceability is considered in a
proceeding in equity or at law. Upon delivery of the Certificates to
the Underwriters by the Transferor against payment therefor in
accordance with this Agreement, the Underwriters will acquire the
Certificates free and clear of any "adverse claim" (as defined in
Section 8-302(c) of the Uniform Commercial Code as in effect in the
State of New York);
(ix) This Agreement has been duly authorized,
executed and delivered by the Transferor and Federated;
(x) The Registration Statement was filed and
declared effective under the Act and, to the extent required
thereunder, the Prospectus was filed with the Commission pursuant to
Rule 424(b); to such counsel's knowledge, no stop order suspending
the effectiveness of a Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened under
the Act; the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (other than the financial and
statistical information contained therein, as to which such counsel
need not express any opinion) on their respective effective dates or
dates of issuance comply as to form in all material respects to the
applicable requirements of the Act and the Rules and Regulations;
(xi) No consent, approval, authorization or order
of, or filing with, any court or governmental agency or body having
jurisdiction over the Transferor, Federated, FDS, or any Originator
is required for the consummation on the Closing Date of the
transactions contemplated by this Agreement, the Pooling and
Servicing Agreement, the Series Supplement, or the Receivables
Purchase Agreement, as applicable, except for (i) such consents,
approvals, authorizations, orders or filings as have been obtained
under the Act; (ii) such consents, approvals, authorizations, orders
or filings as may be required under blue sky laws of any
jurisdiction; and (iii) such other consents, approvals,
authorizations, orders or filings that have been previously obtained
or made;
(xii) The Pooling and Servicing Agreement and the
Series Supplement are not required to be qualified under the Trust
Indenture Act of 1939; and
(xiii) The Trust is not required to register as an
investment company under the Investment Company Act of 1940, as
amended.
The Representatives shall also have received a written
statement, dated the Closing Date, addressed to the Underwriters, of Jones,
Day, Reavis & Pogue to the effect that such counsel has participated in the
preparation of the Registration Statement , and the Prospectus and, based
on such participation, no facts have come to the attention of such counsel
which cause it to believe that the Registration Statement (other than the
statistical and financial information contained therein, as to which such
counsel need not express any belief), as of the Closing Date, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus (other than the statistical
and financial information contained therein, as to which such counsel need
not express any belief) at such time contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that
such counsel has not independently verified and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in a Registration Statement or the Prospectus.
(e) The Representatives shall have received an opinion of
Jones, Day, Reavis & Pogue, special counsel for the Transferor, addressed
to the Underwriters, substantially to the effect that (i) the Pooling and
Servicing Agreement creates a valid security interest (as defined in the
UCC) (the "Transferor Security Interest") in favor of the Trustee in all
right, title and interest of the Transferor in and to all Receivables of
the Transferor, (ii) the Transferor's UCC-1 financing statements in
connection with the execution and delivery of the Pooling and Servicing
Agreement were in appropriate form and were duly filed in the filing
offices specified in such opinion pursuant to the UCC, which filings
resulted in the perfection of the Transferor Security Interest, and (iii)
based solely upon such counsel's examination of the search reports
specified in such opinion and the Transferor's UCC-1 financing statements,
the Transferor Security Interest continues to have priority over any other
lien or security interest in the Transferor's right, title and interest in
and to the Receivables, the perfection of which requires the filing of a
financing statement under the UCC.
(f) Each Underwriter shall be an addressee of, or the
Underwriters shall have received a letter, dated the Closing Date, from
Jones, Day, Reavis & Pogue specifically authorizing the Underwriters to
rely on, each opinion, dated the Closing Date, of Jones, Day, Reavis &
Pogue addressed to either or both of the Rating Agencies, which opinion or
opinions will be to the effect, in addition to any other matters that may
be addressed therein, that the transfers of the Receivables by FDS and the
other Originators to the Transferor would be treated as a true sale of
assets and not as pledges thereof as security for borrowings and that the
assets of the Transferor would not be substantively consolidated with those
of FDS or the other Originators.
(g) The Representatives shall have received an opinion
dated the Closing Date addressed to the Underwriters, of Jones, Day, Reavis
& Pogue, and satisfactory in form and substance to the Underwriters and
counsel for the Underwriters, to the effect that the statements set forth
in the Prospectus under the headings "Structural Summary -- Income Tax
Status of Class A and Class B Certificates and the Prime Credit Card Master
Trust" and "Tax Matters" to the extent that they constitute descriptions of
matters of law or legal conclusions with respect thereto, have been
reviewed by such counsel and are correct in all material respects and to
the effect that the Certificates will be treated as indebtedness of the
Transferor for Federal income tax purposes and for Ohio and New York income
or franchise tax purposes.
(h) The Representatives shall have received an opinion,
dated the Closing Date, addressed to the Underwriters, of Dennis J.
Broderick, the General Counsel of Federated, to the effect that:
(i) Each of the Transferor, Federated, and FDS has
the corporate power and authority to own its properties and to
conduct its business as now conducted, except where the failure to
have such corporate power and authority would not have a material
adverse effect upon the Certificateholders; and each of the
Transferor, Federated, and FDS is duly qualified to do business as a
foreign corporation or licensed to transact business as a foreign
corporation in all states in which it conducts its credit card
business, except where the failure to so qualify or obtain a license
would not have a material adverse effect upon the Certificateholders;
(ii) The Transferor and each Originator has the
corporate power and authority to acquire and own the Receivables;
(iii) Each Originator has the corporate power
and authority to create and own the Accounts;
(iv) Neither the execution and delivery by the
Transferor, Federated, or FDS of this Agreement and the Series
Supplement, as applicable, nor the issuance and sale of the
Certificates and the consummation on the Closing Date of the other
transactions contemplated in this Agreement, the Pooling and
Servicing Agreement or the Series Supplement will conflict with or
result in a default under or in the violation of (a) the Transferor's
Restated Certificate of Incorporation or By-Laws, as applicable, (b)
any statute, rule, regulation or order known to such counsel of any
court or governmental authority having jurisdiction over the
Transferor, Federated, or FDS, or (c) any material agreement or other
instrument, known to such counsel, by which the Transferor,
Federated, or FDS is bound; and
(v) To such counsel's knowledge, except as
disclosed in the Prospectus, there are no actions, proceedings or
investigations pending before any court, administrative agency, or
other tribunal (a) asserting the invalidity of this Agreement, the
Pooling and Servicing Agreement, the Series Supplement, the
Receivables Purchase Agreement, or the Certificates, (b) regarding or
relating to a party seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Pooling and Servicing Agreement,
the Series Supplement, or the Receivables Purchase Agreement, (c)
which could be reasonably expected materially and adversely to affect
the performance by the Transferor, Federated, FDS, or any Originator,
as applicable, of their respective obligations under, or the validity
or enforceability of this Agreement, the Pooling and Servicing
Agreement, the Series Supplement, the Receivables Purchase Agreement,
or the Certificates, or (d) regarding or relating to a party seeking
adversely to affect the federal income tax attributes of the
Certificates as described in each Prospectus under the headings
"Structural Summary -- Income Tax Status of Class A and Class B
Certificates and the Prime Credit Card Master Trust" and "Tax
Matters."
(i) The Representatives shall have received from Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, such opinion
or opinions, dated the Closing Date and addressed to the Underwriters, with
respect to the organization of the Transferor, the validity of the
Certificates, the Registration Statement, the Prospectus and other related
matters as the Underwriters may require, and the Transferor shall have
furnished to such counsel such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters. In rendering the
opinion with respect to the organization of the Transferor, Skadden, Arps,
Slate, Meagher & Flom LLP may rely on the opinion of Jones, Day, Reavis &
Pogue referred to above.
(j) The Representatives shall have received a
certificate, dated the Closing Date, of two Vice Presidents or more senior
officers of the Transferor in which such officers, to their knowledge after
reasonable investigation, shall state that (i) the representations and
warranties of the Transferor in this Agreement are true and correct in all
material respects on and as of the Closing Date, (ii) the Transferor has
complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date, (iii) the representations and warranties of the
Transferor and FDS, as Servicer, in the Pooling and Servicing Agreement are
true and correct in all material respects as of the dates specified in the
Pooling and Servicing Agreement, (iv) no stop order suspending the
effectiveness of a Registration Statement has been issued and no
proceedings for that purpose have been instituted or are threatened by the
Commission, (v) nothing has come to such officers' attention that would
lead such officers to believe that a Registration Statement or the
Prospectus, and any amendment or supplement thereto, as of their dates and
as of the Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and (vi) subsequent to the date of the Prospectus, there has
been no material adverse change in the financial position or results of
operation of the Transferor's or FDS's credit card business or other
business except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(k) The Representatives shall have received an opinion,
dated the Closing Date, addressed to the Underwriters, of Pryor, Cashman,
Sherman & Flynn, counsel to the Trustee, addressed to the Underwriters,
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters and substantially to the effect that:
(i) The Trustee is a corporation duly organized and
validly existing under the laws of the State of New York, and has the
corporate power and authority to act generally as a trustee and as
Trustee under the Pooling and Servicing Agreement;
(ii) The Pooling and Servicing Agreement and the
Series Supplement have been duly authorized, executed and delivered
by the Trustee and, assuming the due authorization, execution and
delivery by the Transferor and FDS are valid and binding agreements
of the Trustee;
(iii) The Certificates have been duly executed
by the Transferor and authenticated by the Trustee; and
(iv) Neither the execution nor the delivery by
the Trustee of the Pooling and Servicing Agreement and the Series
Supplement nor the performance of any of the transactions by the
Trustee contemplated thereby requires the approval, authorization or
other action by, or filing with, any governmental authority or agency
under any existing Federal or State law governing the banking or
trust powers of the Trustee.
(l) The Representatives shall have received a letter,
dated the Closing Date, of KPMG Peat Marwick LLP which meets the
requirements of subsection (a) of this Section.
(m) The Representatives shall have received evidence
satisfactory to the Underwriters that the Class A Certificates shall be
rated "Aaa" by Moody's Investors Service, Inc. and "AAA" by Standard &
Poor's Ratings Services and the Class B Certificates shall have been rated
at least "A" or its equivalent by Moody's Investors Service, Inc. and at
least "A" by Standard & Poor's Ratings Services.
(n) On the Closing Date, $____________ aggregate
principal amount of the Class C Certificates shall have been issued to the
Transferor.
(o) The Representatives shall have received evidence
satisfactory to the Underwriters that, on or before the Closing Date, UCC
Financing Statements have been or will be filed in all public offices
necessary to perfect the interest of the Trust in the Receivables now
existing and hereafter created in the Accounts, all monies due and to
become due with respect thereto, all proceeds thereof, and all of the
Transferor's rights, remedies, powers and privileges with respect to such
Receivables under the Receivables Purchase Agreement.
The Transferor will furnish the Underwriters with such
conformed copies of such opinions, certificates, letters and documents as
the Underwriters reasonably request.
7. Indemnification and Contribution. (a) The Transferor and
Federated will jointly and severally indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal
or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Transferor and Federated will not be liable in any such case to the extent
that any such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information
furnished to the Transferor or Federated by the Underwriters specifically
for use therein; and provided, further, that, with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, the indemnity provided for in this subsection (a)
shall not inure to the benefit of any Underwriter from whom the person
asserting any such loss, claim, damage or liability purchased the
Certificates concerned, to the extent that any such loss, claim, damage or
liability of such Underwriter arises out of or is based upon the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Certificates to such person, a copy of the
Prospectus if the Transferor had previously furnished copies thereof to
such Underwriter.
(b) Each Underwriter, severally, and not jointly, agrees
to indemnify and hold harmless the Transferor and Federated against any
losses, claims, damages or liabilities to which the Transferor and
Federated may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Transferor or Federated by such Underwriter specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Transferor or Federated in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified party
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Transferor and Federated on the one hand and the
respective Underwriter on the other from the offering of the Certificates
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Transferor and Federated on the one hand and the respective
Underwriter on the other in connection with the statements or omissions or
alleged statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Transferor and
Federated on the one hand and each Underwriter on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Transferor and Federated bear
to the total underwriting discounts and commissions received by the
respective Underwriter. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Transferor or Federated or the
respective Underwriter and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement
or omission. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subdivision (d),
each Underwriter shall not be required to contribute any amount in excess
of the amount by which the total price at which the Certificates
underwritten by such Underwriter and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Transferor or Federated under
this Section shall be joint and several and shall be in addition to any
liability which the Transferor or Federated may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls either Underwriter within the meaning of the Act; and the
obligations of each Underwriter under this Section shall be in addition to
any liability which such Underwriter may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Transferor who has signed a Registration Statement and to each person, if
any, who controls the Transferor within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Certificates hereunder and the
aggregate principal amount of the Certificates that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed
10% of the total principal amount of the Certificates, the Underwriters may
make arrangements satisfactory to the Transferor for the purchase of such
Certificates by other persons, including any of the Underwriters, but if no
such arrangements are made by the Closing Date, the nondefaulting
Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Certificates that such
defaulting Underwriters agreed but failed to purchase. If the Underwriter
or Underwriters so default and the aggregate principal amount of the
Certificates with respect to such default or defaults exceeds 10% of the
total principal amount of the Certificates and arrangements satisfactory to
the Underwriters and the Transferor for the purchase of such Certificates
by other persons are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any nondefaulting
Underwriter, the Transferor or Federated, except as provided in Section 9.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties of the
Transferor or Federated and of each Underwriter set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, each Originator, the Transferor or Federated or
any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the
Certificates. If this Agreement is terminated or if for any reason other
than default by the Underwriters the purchase of the Certificates by the
Underwriter is not consummated, the Transferor shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Section 5 and the
respective obligations of the Transferor, Federated and the Underwriters
pursuant to Section 7 shall remain in effect. If for any reason the
purchase of the Certificates by the Underwriters is not consummated other
than solely because of the termination of this Agreement pursuant to
Section 8 or the occurrence of any event specified in clause (iii), (iv) or
(v) of Section 6(c), the Transferor will reimburse the Underwriters for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) reasonably incurred by it in connection with the offering of the
Certificates.
10. Notices. In all dealings hereunder, the Representatives
will act on behalf of each of the Underwriters, and the parties hereto will
be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by the Representatives
jointly or by _________________ on behalf of the Representatives.
All statements, requests, notices and agreements hereunder will
be in writing and will be delivered or sent by mail, telex or facsimile
transmission, and, if to the Underwriters, will be sufficient in all
respects if addressed to the Representatives in care of __________________,
______________________, Attention: ___________, and, if to the Transferor
will be sufficient in all respects if addressed to Prime Receivables
Corporation, 7 West Seventh Street, Cincinatti, Ohio 45202, Attention:
General Counsel, with a copy to Federated Department Stores, Inc., 7 West
Seventh Street, Cincinnati, Ohio 45202, Attention: General Counsel and
if to Federated, will be sufficient in all respects if addressed to the
address provided above; provided, however, that any notice to any
Underwriter pursuant to Section 7(c) hereof will be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at the following
address: ___________________________ _________________ _________________.
11. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7,
and no other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will
act for the several Underwriters in connection with this financing, and any
action under this Agreement taken by the Representatives jointly or by
______________________ will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
14. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
If you are in agreement with the foregoing, please sign three
counterparts hereof and return one to the Transferor and one to Federated
whereupon this letter and your acceptance shall become a binding agreement
among the Transferor, Federated and the several Underwriters.
Very truly yours,
PRIME RECEIVABLES CORPORATION
By
--------------------------------------
Name:
Title:
FEDERATED DEPARTMENT STORES, INC.
By
--------------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof
----------------------------]
By
-------------------------------
Name:
Title:
For itself and for the several Underwriters named in Annex __ hereto.
SCHEDULE A
Principal Amount
Class A Underwriters Class A Certificates
$
$
-------
$
Principal Amount
Class B Underwriter
Class B Certificates
$
