-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JRojDnEaTJ9UVXjzck1rtS+kmL8VEmBkY1cK8n4lRyi0H3nHZTSrqcOPXFOazVYT +dOKEoPgA4Efohzxq0QAHg== 0000950172-99-000363.txt : 19990403 0000950172-99-000363.hdr.sgml : 19990403 ACCESSION NUMBER: 0000950172-99-000363 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARTNERS FIRST RECEIVABLES FUNDING LLC CENTRAL INDEX KEY: 0001041094 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 043375894 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 333-29495 FILM NUMBER: 99583508 BUSINESS ADDRESS: STREET 1: 900 ELKRIDGE LANDING RD STREET 2: STE 301 CITY: LINTHICUM STATE: MD ZIP: 21090 BUSINESS PHONE: 4108658600 MAIL ADDRESS: STREET 1: 900 ELKRIDGE LANDING RD STREET 2: STE 301 CITY: LINTHICUM STATE: MD ZIP: 21090 FORMER COMPANY: FORMER CONFORMED NAME: CREDIT CARD RECEIVABLES FUNDING CORP DATE OF NAME CHANGE: 19970617 10-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year ended December 31, 1998 Commission File Nos. 333-29495 and 333-29495-01 PARTNERS FIRST RECEIVABLES FUNDING, LLC (Exact Name of Registrant as Specified in its Charter) PARTNERS FIRST CREDIT CARD MASTER TRUST (Issuer with respect to the Securities) Delaware 52-2072056 (State of Organization) (I.R.S. Employee Identification No.) 900 Elkridge Landing Road, Suite 301 21090 Linthicum, Maryland (Zip Code) (Address of Principal Executive Offices) Registrant's Telephone Number, including Area Code: (410) 855-8600 Securities Registered Pursuant to Section 12(b) of the Act: Title of each Class Name of Exchange on which each to be so Registered Class is to be Registered None Not Applicable Securities Registered Pursuant to Section 12(g) of the Act: None Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] This Annual Report of Form 10-K is filed in reliance on a series of no-action letters issued by the Office of Chief Counsel, Division of Corporate Finance of the Securities and Exchange Commission (the "Division"), stating that the Division would raise no objection if issuers of master trust asset-backed securities generally file a monthly Report on Form 8-K summarizing the performance of the assets of the master trust and file an Annual Report on Form 10-K in the manner set forth below in order to comply with Sections 13, 15(d) and 16 of the Securities Exchange Act of 1934, as amended. Accordingly, responses to certain Items have been omitted from or modified in this Annual Report on Form 10-K. PART I Item 1. Business The Partners First Credit Card Master Trust (the "Trust") was formed pursuant to the Pooling and Servicing Agreement, dated as of January 29, 1998 (as may have been amended, restated or supplemented, the "Pooling and Servicing Agreement") among Partners First Receivables Funding, LLC (the "Registrant" or the "Transferor"), as Transferor, Partners First Holdings, LLC (the "Servicer"), as Servicer, and The Bank of New York (the "Trustee"), as Trustee. The Trust's only business is to act as a passive conduit to permit investment in a pool of consumer credit card account receivables. Item 2. Properties The property of the Trust includes a portfolio of receivables (the "Receivables") arising under certain credit card accounts (the "Accounts") purchased by Partners First Receivables, LLC ("PFR") in the ordinary course of its business from BankBoston (NH), National Association and Harris Trust and Savings Bank. The Receivables consist of indebtedness owing from obligors under such Accounts. Pursuant to the Amended and Restated Purchase Agreement, dated June 26, 1998, between PFR and the Transferor, PFR sold to the Transferor the Receivables arising under the Accounts on such date, and has and will sell additional Receivables as they arise under the Accounts thereafter until the termination of the Trust. Pursuant to the Pooling and Servicing Agreement, the Transferor in turn transferred the Receivables arising under the Accounts to the Trust on such day, and has and will transfer additional Receivables as they arise under the Accounts thereafter until the termination of the Trust. Information related to the performance of the Receivables during 1998 is set forth in the Annual Reports filed as Exhibits 99.1, 99.2 and 99.3 to this Annual Report on Form 10-K. Year 2000 Compliance. The Servicer has informed the Transferor that it has (i) reviewed and assessed its computer applications which are related to or involved in the origination, collection, management or servicing of the Receivables that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications used by the Servicer may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan in accordance with that timetable. Based on the foregoing, the Transferor believes that all such computer applications that are material to the Servicer's business and operations are reasonably expected on a timely basis to be able to perform properly date-sensitive functions for all dates before and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so could not reasonably be expected to have a material adverse effect on the Trust or on the origination, collection, management or servicing activities of the Servicer with respect to the Receivables. Pursuant to agreements between the Servicer and certain third-party service providers, including First Data Resources Inc. ("FDR"), the Accounts and the Receivables are primarily serviced by such third-party service providers. The potential for the Year 2000 Problem to have any effect on the servicing of the Accounts and the Receivables would therefore most likely be based on a failure of such a third-party service provider, particularly FDR, to be Year 2000 Compliant. Any such failure could result in a delay in collecting Receivables, which in turn could result in a delay in making payments on the Securities. The Transferor and the Servicer have been monitoring and will continue to monitor the initiatives and efforts undertaken by such third-party service providers, including FDR, to become Year 2000 Compliant. Based on representations made by these companies, the Transferor expects these companies to be Year 2000 Compliant on a timely basis. FDR's parent company, First Data Corp., has additionally made public representations that, among other things, its management believes that its Year 2000 Compliance effort is on schedule overall and that its mission-critical systems, i.e., systems directly serving its clients or clients' customers and having a material impact on its client service in a normative mode of operation if not working properly, will be Year 2000 Compliant in a timely manner. All forward-looking statements regarding Year 2000 Compliance are inherently uncertain as they are based on various expectations and assumptions concerning future events and are subject to numerous risks and uncertainties which could cause actual events or results to differ materially from those projected. Important factors upon which the Transferor's and the Servicer's Year 2000 forward-looking statements are premised include: (a) retention of employees and contractors working on Year 2000 Compliance projects; (b) no material disruption of telecommunications, data transmission networks, payment networks, government services, utilities or other infrastructure services; (c) no unexpected failures on the part of third-party service providers; (d) no undiscovered sabotage of systems or program codes affecting the Servicer's systems; and (e) no undiscovered material flaws in the testing procedures undertaken by the Servicer in its efforts to become Year 2000 Compliant. Item 3. Legal Proceedings None Item 4. Submission of Matters to a Vote of Security Holders None PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters Investor Securities are held and delivered in book-entry form through the facilities of the Depository Trust Company("DTC"), a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. The only definitive Investor Securities are held by Cede & Co., the nominee of DTC. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None PART III Item 12. Security Ownership of Certain Beneficial Owners and Management As of March 26, 1999, 100% of the Investor Securities were held in the nominee name of Cede & Co. for beneficial owners As of March 26, 1999, Partners First Funding, LLC ("PFF") owned 100% of the Supplemental Security, issued pursuant to the Supplemental Security Supplement to the Pooling and Servicing Agreement, dated as of January 29, 1998, among the Transferor, the Servicer and the Trustee. The Supplemental Security was sold by the Transferor to PFF pursuant to the Supplemental Security Purchase Agreement, dated as of January 29, 1998, between the Transferor and PFF. The Supplemental Security represents certain beneficial ownership interests in the assets of the Trust as provided in the Pooling and Servicing Agreement. As of March 26, 1999, the Transferor owned 100% of the Transferor Security, which represents beneficial ownership of a residual interest in the assets of the Trust as provided in the Pooling and Servicing Agreement. Item 13. Certain Relationships and Related Transactions None PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K The following documents are filed as part of this Annual Report on Form 10-K: (a) Exhibits Exhibit Description 99.1 Annual Certificate of Servicer pursuant to Section 3.5 of the Pooling and Servicing Agreement 99.2 Annual Servicing Reports of Independent Accountants pursuant to Section 3.6(a) of the Pooling and Servicing Agreement 99.3 Annual Report of Independent Accountants on Applying Agreed-Upon Procedures pursuant to Section 3.6(b) of the Pooling and Servicing Agreement (b) Reports on Form 8-K Current Reports on Form 8-K are filed promptly, but in no event more than 15 days, after each distribution to Securityholders attaching as an exhibit thereto the related Monthly Servicing Report in response to Item 5 (Other Events). Such reports were filed on July 9, September 2, September 18, October 16, November 20 and December 30, 1998. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. PARTNERS FIRST RECEIVABLES FUNDING, LLC (REGISTRANT) DATED: March 30, 1999 By: /s/ MARK J. NORWICZ -------------------------------------- Name: Mark J. Norwicz Title: Treasurer PARTNERS FIRST CREDIT CARD MASTER TRUST (CO-REGISTRANT) DATED: March 30, 1999 By: PARTNERS FIRST RECEIVABLES FUNDING, LLC (Originator of the Co-Registrant) By: /s/ MARK J. NORWICZ -------------------------------------- Name: Mark J. Norwicz Title: Treasurer EXHIBIT INDEX Exhibit No. - ----------- 99.1 Annual Certificate of Servicer pursuant to Section 3.5 of the Pooling and Servicing Agreement 99.2 Annual Servicing Reports of Independent Accountants pursuant to Section 3.6(a) of the Pooling and Servicing Agreement 99.3 Annual Report of Independent Accountants on Applying Agreed-Upon Procedures pursuant to Section 3.6(b) of the Pooling and Servicing Agreement EX-99 2 EXHIBIT 99.1 - ANNUAL SERVICER'S CERTIFICATE [LETTERHEAD OF PARTNERS FIRST] ANNUAL SERVICER'S CERTIFICATE PARTNERS FIRST HOLDINGS, LLC PARTNERS FIRST CREDIT CARD MASTER TRUST The undersigned, a duly authorized representative of Partners First Holdings, LLC, as Servicer ("Holdings"), pursuant to the Amended and Restated Pooling and Servicing Agreement dated as of June 26, 1998 (as amended and supplemented, the "Agreement"), among Partners First Receivables Funding, LLC, as Transferor, Holdings, as Servicer, and The Bank of New York, as Trustee, does hereby certify that: 1. Holdings is, as of the date hereof, the Servicer under the Agreement. Capitalized terms used in this Certificate have their respective meanings as set forth in the Agreement. 2. The undersigned is a Servicing Officer who is duly authorized pursuant to the Agreement to execute and deliver this Certificate to the Trustee. 3. A review of the activities of the Servicer during the year ended December 31, 1998, and of its performance under the Agreement was conducted under my supervision. 4. Based on such review, the Servicer has, to the best of my knowledge, performed in all material respects its obligations under the Agreement throughout such year and no default in the performance of such obligations has occurred or is continuing except as set forth in paragraph 5 below. 5. The following is a description of each default in the performance of the Servicer's obligations under the provisions of the Agreement known to me to have been made by the Servicer during the year ended December 31, 1998 which sets forth in detail (i) the nature of each such default, (ii) the action taken by the Servicer, if any, to remedy each such default and (iii) the current status of each such default: None. IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this 30th day of March, 1999. PARTNERS FIRST HOLDINGS, LLC Servicer By: /s/ Mark Norwicz ------------------------- Name: Mark Norwicz Title: Treasurer EX-99 3 EXHIBIT 99.2 - REPORT OF INDEPENDENT ACCOUNTANTS [LETTERHEAD OF ERNST & YOUNG LLP] Report of Independent Accountants Partners First Holdings, LLC 900 Elkridge Landing Road, Suite 300 Linthicum, Maryland 21090-2925 and The Bank of New York 101 Barclay Street New York, New York 10286 Partners First Credit Card Master Trust We have examined management's assertion that Partners First Holdings, LLC's ("PFH") controls over the functions performed as servicer of the Partners First Credit Card Master Trust ("Trust"), including all Series of the Trust as specified in Attachment A, are effective, as of December 31, 1998, in providing reasonable assurance that Trust assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization in conformity with the Pooling and Servicing Agreement dated as of June 26, 1998, as amended and restated (the "Agreement"), and the applicable Pooling and Servicing Agreement Supplement for each Series, as specified in Attachment A (the "Agreement Supplements" together with the Agreement, the "Agreements"), between PFH as Servicer and The Bank of New York as Trustee, on behalf of the Securityholders of the Trust, and are recorded properly to permit the preparation of the required financial reports. This assertion is included in the accompanying report by management titled, "Report of Management on Credit Card Trust Internal Control and Pooling and Servicing Agreement Compliance" (the "Report"). Management is responsible for PFH's controls over the functions performed as servicer of the Trust. Our responsibility is to express an opinion on management's assertion based on our examination. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included obtaining an understanding of the controls over the functions performed by PFH as servicer of the Trust, testing and evaluating the design and operating effectiveness of those controls, and such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Because of inherent limitations in any control, errors or fraud may occur and not be detected. Also, projections of any evaluation of the controls over the functions performed by PFH as servicer of the Trust to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the controls may deteriorate. In our opinion, management's assertion, that PFH's controls over the functions performed as servicer of the Trust are effective, as of December 31, 1998, in providing reasonable assurance that Trust assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization in conformity with the Agreements, between PFH as Servicer and The Bank of New York, as Trustee on behalf of the Securityholders of the Trust, and are recorded properly to permit the preparation of the required financial reports, is fairly stated, in all material respects, based upon the following criteria specified in the Report: o The controls provide reasonable assurance that funds collected are remitted to the Trustee in accordance with the Agreements. o The controls provide reasonable assurance that Trust assets are segregated from those retained by PFH in accordance with the Agreements. o The controls provide reasonable assurance that expenses incurred by the Trust are calculated and remitted in accordance with the Agreements. o The controls provide reasonable assurance that the addition of accounts to the Trust are authorized in accordance with the Agreements. o The controls provide reasonable assurance that Trust assets amortizing out of the Trust are calculated in accordance with the Agreements. o The controls provide reasonable assurance that monthly Trust reports generated in the form of "Monthly Servicer Reports" and provided to the Trustee are reviewed by the Treasurer prior to distribution. o The controls provide reasonable assurance that monthly Trust reports generated in the form of "Monthly Servicer Reports" contain all required information per section 5.2 of the Agreements. This report is intended solely for the use of the management committee and management of PFH and should not be referred to or distributed for any purpose to anyone who is not authorized to receive such information as specified in the Agreements. However, this report is a matter of public record as a result of being included as an exhibit to the annual report on Form 10-K prepared by PFH and filed with the Securities and Exchange Commission on behalf of Partners First Master Credit Card Trust and its distribution is not limited. /s/ Ernst & Young LLP March 22, 1999 Attachment A Agreement Trust Supplement Date Servicing Period - ------------------------------------------------------------------------- Partners First Credit June 26, 1998 June 26, 1998 to Card Master Trust December 31, 1998 Series 1998-2 Partners First Credit June 26, 1998 June 26, 1998 to Card Master Trust December 31, 1998 Series 1998-3 Partners First Credit December 4, 1998, December 8, 1998 to Card Master Trust amended December 31, 1998 Series 1998-4 and restated January 12, 1999 [LETTERHEAD OF ERNST & YOUNG LLP] Report of Independent Accountants Partners First Holdings, LLC 900 Elkridge Landing Road, Suite 300 Linthicum, Maryland 21090-2925 and The Bank of New York 101 Barclay Street New York, New York 10286 Partners First Credit Card Master Trust We have examined management's assertion that Partners First Holdings, LLC ("PFH') was in material compliance with the covenants and conditions of sections 2.9, 2.10, 2.12, 2.13, 3.2, 3.4(a) and (b), 3.5, 3.6(a) and (b), 4.2, 4.3 and 4.4 of the Pooling and Servicing Agreement dated as of June 26, 1998, as amended and restated (the "Agreement"), and the applicable sections of the Series' Pooling and Servicing Agreement Supplements (the "Agreement Supplements" together with the Agreement, the "Agreements"), specified in Attachment A, between PFH as Servicer, Partners First Receivables Funding, LLC as Transferor and the Bank of New York as Trustee, during the compliance periods specified in Attachment A. Management's assertion is included in the accompanying report by management titled, "Report of Management on Credit Card Trust Internal Control and Pooling and Servicing Agreement Compliance" (the "Report"). Management is responsible for PFH's compliance with those requirements. Our responsibility is to express an opinion on management's assertion about PFH's compliance based on our examination. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about PFH's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination of PFH's compliance with specified requirements. In our opinion, management's assertion, that it believes that PFH was in material compliance with the covenants and conditions of the sections in the Agreement and the Agreement Supplements, referred to above, during the compliance periods specified in Attachment A, is fairly stated, in all material respects. This report is intended solely for the use of the management committee and management of PFH and should not be referred to or distributed for any purpose to anyone who is not authorized to receive such information as specified in the Agreements. However, this report is a matter of public record as a result of being included as an exhibit to the annual report on Form 10-K prepared by PFH and filed with the Securities and Exchange Commission on behalf of Partners First Credit Card Master Trust and its distribution is not limited. /s/ Ernst & Young LLP March 22, 1999 Attachment A
Agreement Servicing Agreement Supplement Trust Supplement Date Compliance Period Covenants and Conditions - ----------------------------------------------------------------------------------------------------------- Partners First June 26, 1998 June 26, 1998 to 3.1, 4.1c(i) and (ii), 4.2, Credit Card December 31, 1998 4.3(a)(i), 4.5, 4.6, 4.7, Master Trust 4.10, 4.12, 4.15(a) and (b), 5.1(a) Series 1998-2 - (e), 5.1(h), 5.2(b), 6.1(g) Partners First June 26, 1998 June 26, 1998 to 3.1, 4.1c(i) and (ii), 4.2, Credit Card December 31, 1998 4.3(a)(i), 4.5, 4.6, 4.7, Master Trust 4.10, 4.12, 4.15(a) and (b), 5.1(a) Series 1998-3 - (e), 5.1(h), 5.2(b), 6.1(g) Partners First December 4, 1998, December 8, 1998 to 3.1, 4.1c(i) and (ii), 4.2, Credit Card amended December 31, 1998 4.3(a)(i), 4.5, 4.6, 4.7, Master Trust and restated January 4.10, 4.12, 4.13, 5.1(a) - (c), Series 1998-4 12, 1999 5.1(f), 5.2(b), 6.1(g)
[LETTERHEAD OF PARTNERS FIRST] Report of Management of Credit Card Trust Internal Control and Pooling and Servicing Agreement Compliance Credit Card Trust Internal Control Partners First Holdings, LLC ("PFH" or the "Company") is responsible for establishing and maintaining effective controls over the functions performed as servicer of the Partners First Credit Card Master Trust (the "Trust"), Series 1998-2, 1998-3 and 1998-4. These controls are designed to provide reasonable assurance to the Company's management and management committee that Trust assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization in conformity with the Pooling and Servicing Agreements between PFH as Servicer and The Bank of New York as Trustee, and the applicable Pooling and Servicing Agreement Supplements (the "Agreement Supplements" together with the Agreement, "Agreements") as specified in Appendix I, and are recorded properly to permit the preparation of the required financial reports. There are inherent limitations in any control including the possibility of human error and circumvention or overriding of the control. Accordingly, even effective controls can provide only reasonable assurance with respect to the achievement of any objectives of controls. Further, because of changes in conditions, the effectiveness of controls may vary over time. The Company has determined that the objectives of controls with respect to servicing and reporting of sold loans are to provide reasonable, but not absolute assurance that: o Funds collected are remitted to the Trustee in accordance with the Agreements. o Trust assets are segregated from those retained by PFH in accordance with the Agreements. o Expenses incurred by the Trust are calculated and remitted in accordance with the Agreements. o The additions of accounts to the Trusts are authorized in accordance with the Agreements. o Monthly Trust reports generated in the form of "Monthly Servicer Reports" and provided to the Trustee are reviewed by the Treasurer prior to distribution. o Monthly Trust reports generated in the form of "Monthly Servicer Reports" contain all information required per section 5.2 of the Agreement Supplements. The Company has assessed its controls over the functions performed as servicer of the Trust in relation to these criteria. Based upon this assessment, the Company believes that, as of December 31, 1998, its controls over the functions performed as servicer of the Trust are effective in providing reasonable assurance that Trust assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization in conformity with the agreements between PFH and The Bank of New York and are recorded properly to permit the preparation of the required financial reports. Pooling and Servicing Agreement Compliance The Company is responsible for complying with the covenants and conditions of the Agreements listed in Appendix I to this report. The Company assessed its compliance with the relevant covenants and conditions identified in Appendix I for each of the Agreements. Based upon this assessment, PFH was in material compliance with the relevant covenants and conditions of the Agreements identified in Appendix I for each of the Agreements during the periods specified in Appendix I. March 22, 1999 Partners First Holdings, LLC by: /s/ Harry G. Pappas -------------------------------- Harry G. Pappas Chief Financial Officer /s/ Mark Norwicz -------------------------------- Mark Norwicz Treasurer Appendix I
Agreement Servicing Trust Supplement Date Compliance Period Covenants and Conditions - ------------------------------------------------------------------------------------------ Partners First June 26, 1998 June 26, 1998 to Agreement Sections: 2.9, 2.10, Credit Card December 31, 1998 2.12, 2.13, 3.2, 3.4(a) and (b), Master Trust 3.5, 3.6(a) and (b), 4.2, Series 1998-2 4.3 and 4.4 Agreement Supplement Sections: 3.1, 4.1c(i) and (ii), 4.2, 4.3(a)(i), 4.5, 4.6, 4.7, 4.10, 4.12, 4.15(a) and (b), 5.1(a) - (e), 5.1(h), 5.2(b), 6.1(g) Partners First June 26, 1998 June 26, 1998 to Agreement Sections: 2.9, 2.10, Credit Card December 31, 1998 2.12, 2.13, 3.2, 3.4(a) and Master Trust (b), 3.5, 3.6(a) and (b), 4.2, Series 1998-3 4.3 and 4.4 Agreement Supplement Sections: 3.1, 4.1c(i) and (ii), 4.2, 4.3(a)(i), 4.5, 4.6, 4.7, 4.10, 4.12, 4.15(a) and (b), 5.1(a) - (e), 5.1(h), 5.2(b), 6.1(g) Partners First December 4, 1998, December 8, 1998 to Agreement Sections: 2.9, 2.10, Credit Card amended and December 31, 1998 2.12, 2.13, 3.2, 3.4(a) and (b), Master Trust restated 3.5, 3.6(a) and (b), 4.2, 4.3 and 4.4 Series 1998-4 January 12, 1999 Agreement Supplement Sections: 3.1, 4.1c(i) and (ii), 4.2, 4.3(a)(i), 4.5, 4.6, 4.7, 4.10, 4.12, 4.13, 5.1(a) - (c), 5.1(f), 5.2(b), 6.1(g)
EX-99 4 EXHIBIT 99.3 - REPORT OF INDEPENDENT ACCOUNTANTS [LETTERHEAD OF ERNST & YOUNG LLP] Report of Independent Accountants on Applying Agreed-Upon Procedures Partners First Holdings, LLC 900 Elkridge Landing Road, Suite 300 Linthicum, Maryland 21090-2925 and The Bank of New York 101 Barclay Street New York, New York 10286 Partners First Credit Card Master Trust We have performed the procedures enumerated below, which were agreed to by Partners First Holdings, LLC ("PFH") and The Bank of New York, solely to assist you with respect to the amounts set forth in the "Monthly Servicer Reports" prepared for each Series of the Partners First Credit Card Master Trust by PFH pursuant to subsection 5.2(b) of the applicable Pooling and Servicing Agreement Supplements as defined in Attachment A, during the periods specified in Attachment A. This engagement to apply agreed-upon procedures was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of PFH and The Bank of New York. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Our procedures were as follows: We compared the amounts set forth in the "Monthly Servicer Reports" for each Series in the Trust, for the periods specified in Attachment A, prepared by PFH pursuant to subsection 5.2(b) of the applicable Pooling and Servicing Agreement Supplements (as defined in Attachment A) with reports prepared by PFH's bank card processor or PFH, which were the source of such amounts. We also recalculated the mathematical accuracy of amounts derived in such "Monthly Servicer Reports" for each Series in the Trust for the periods specified in Attachment A. As a result of the procedures performed we noted that in all instances the amounts set forth in the "Monthly Servicer Reports" for each series in the Trust, for the periods specified in Attachment A, were in agreement with reports prepared by PFH's bank card processor or PFH, and that all amounts derived in such "Monthly Servicer Reports" were mathematically accurate, except for following: The Principal Allocation and Floating Allocation Percentages used to allocate amounts between Series were incorrectly calculated and misstated on the "Monthly Servicer Reports" as follows: Percentage Percentage "Monthly Servicer Report" as Reported as Recalculated ------------------------- ----------- --------------- Dated September 15, 1998 ------------------------ Principal Allocation Percentage 89.16% 86.36% Floating Allocation Percentage 89.16% 86.36% Dated October 15, 1998 ---------------------- Principal Allocation Percentage 92.40% 89.16% Floating Allocation Percentage 92.40% 89.16% Dated November 16, 1998 ----------------------- Principal Allocation Percentage (10/1 - 10/14) 90.23% 92.40% Principal Allocation Percentage (10/15 - 10/31) 90.23% 86.67% Floating Allocation Percentage (10/1 - 10/14) 90.23% 92.40% Floating Allocation Percentage (10/15 - 10/31) 90.23% 86.67% The miscalculation of the Principal Allocation and Floating Allocation Percentages scheduled above, affected the amounts allocated to each Series as reported on the following line items of the "Monthly Trust Activity" section of the "Monthly Servicer Reports": Principal Collections Reallocation of Finance Charge Collection Finance Charge Collections Dollars of Excess Spread Interchange Collections Percentage of Excess Spread Investor Default Amount Reallocated Finance Charge Collection Total Amount Due The amounts reported for the above line items for each Series are used to derive amounts reported throughout the remainder of the applicable "Monthly Servicer Reports". The recomputed amounts are shown in Attachments B, C and D, respectively. We were not engaged to, and did not, perform an audit, the objective of which would be the expression of an opinion on the amounts set forth in the "Monthly Servicer Reports" for each Series in the Trust, prepared by PFH pursuant to subsection 5.2(b) of the applicable Pooling and Servicing Agreement Supplements as defined in Attachment A, or on the reports prepared by PFH's bank card processor or PFH. Accordingly, we do not express such an opinion. Had we performed additional procedures with respect to the "Monthly Servicer Reports" prepared by PFH pursuant to subsection 5.2(b) of the applicable Pooling and Servicing Agreement Supplements as defined in Attachment A and the reports prepared by PFH's bank card processor and PFH, which were the source of such amounts, other matters might have come to our attention that would have been reported to you. This report relates only to the comparison of the amounts, and the recalculation of the mathematical accuracy of such amounts specified above and does not extend to any financial statements of PFH taken as a whole. This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than those specified parties. However, this report is a matter of public record as a result of being included as an exhibit to the annual report on Form 10-K prepared by PFH and filed with the Securities and Exchange Commission on behalf of Partners First Credit Card Master Trust and its distribution is not limited. /s/ Ernst & Young LLP March 22, 1999 ATTACHMENT A POOLING AND SERVICING AGREEMENT MONTHLY SERVICING REPORTS TRUST SUPPLEMENT DATE COVERING THE PERIOD ----- ------------------- ------------------------- Partners First Credit June 26, 1998 June 26, 1998 to Card Master Trust December 31, 1998 Series 1998-2 Partners First Credit June 26, 1998 June 26, 1998 to Card Master Trust December 31, 1998 Series 1998-3 Partners First Credit December 4, 1998, December 8, 1998 to Card Master Trust amended and restated December 31, 1998 Series 1998-4 January 12, 1999 -----END PRIVACY-ENHANCED MESSAGE-----