RECEIVABLES PURCHASE AGREEMENT
among
NATIONAL BANK OF THE GREAT LAKES,
as Seller
and
XXXXXXXX'X CREDIT CORPORATION,
as Purchaser
and
XXXXXXXX'X, INC.
as Servicer
Dated as of February 2, 1998
CONTENTS
ARTICLE I - DEFINITIONS..................................................... 2
SECTION 1.1. Definitions.............................................. 2
SECTION 1.2. Other Terms.............................................. 6
SECTION 1.3. Computation of Time Periods.............................. 6
ARTICLE II - PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES.............. 6
SECTION 2.1. Sale..................................................... 6
SECTION 2.2. Servicing of Receivables................................. 8
ARTICLE III - CONSIDERATION AND PAYMENT; RECEIVABLES........................ 9
SECTION 3.1. Purchase Price........................................... 9
SECTION 3.2. Payment of Purchase Price................................ 9
SECTION 3.3. Monthly Report........................................... 10
ARTICLE IV - REPRESENTATIONS AND WARRANTIES................................. 10
SECTION 4.1. Seller's Representations and Warranties.................. 10
SECTION 4.2. Reaffirmation of Representations and
Warranties by the Seller; Notice of Breach............... 13
SECTION 4.3. Repurchase of Ineligible Receivables..................... 14
SECTION 4.4. Repurchase After Cure Period............................. 14
SECTION 4.5. Repurchase of All Receivables............................ 15
ARTICLE V - COVENANTS OF THE SELLER......................................... 15
SECTION 5.1. Covenants of the Seller.................................. 15
SECTION 5.2. Negative Covenants of the Seller......................... 17
SECTION 5.3. Indemnification.......................................... 18
ARTICLE VI - REPURCHASE OBLIGATION.......................................... 19
SECTION 6.1. Mandatory Repurchase..................................... 19
SECTION 6.2. Dilutions, etc........................................... 19
ARTICLE VII - CONDITIONS PRECEDENT.......................................... 20
SECTION 7.1. Conditions to the Purchaser's Obligations
Regarding Receivables.................................... 20
ARTICLE VIII - TERM AND TERMINATION......................................... 21
SECTION 8.1. Term..................................................... 21
SECTION 8.2. Effect of Termination.................................... 21
ARTICLE IX - MISCELLANEOUS PROVISIONS....................................... 22
SECTION 9.1. Amendment................................................ 22
SECTION 9.2. Governing Law............................................ 22
SECTION 9.3. Notices.................................................. 22
SECTION 9.4. Severability of Provisions............................... 23
SECTION 9.5. Assignment............................................... 23
SECTION 9.6. Further Assurances....................................... 24
SECTION 9.7. No Waiver; Cumulative Remedies........................... 24
-i-
SECTION 9.8. No Bankruptcy Petition Against the Purchaser
or Trust............................................. 24
SECTION 9.9. Counterparts......................................... 24
SECTION 9.10. Binding Effect; Third-Party Beneficiaries............ 25
SECTION 9.11. Merger and Integration............................... 25
SECTION 9.12. Headings............................................. 25
SECTION 9.13. Exhibits............................................. 25
EXHIBITS
Exhibit A: Form of Subordinated Note
Exhibit B: Location of Records, Principal Place of Business, etc.
Exhibit C: Subsidiaries, Divisions, Trade Names, Bankruptcy Proceedings
-ii-
RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of February 2, 1998 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), between NATIONAL BANK OF THE GREAT LAKES, a national banking
association, as seller (the "Seller"), XXXXXXXX'X CREDIT CORPORATION, a Nevada
------
corporation, as purchaser (the "Purchaser"), and XXXXXXXX'X, INC., a Tennessee
---------
corporation, as servicer (the "Servicer").
--------
W I T N E S S E T H :
WHEREAS, the Purchaser desires to purchase from time to time certain
accounts receivable existing on the Closing Date and acquired or generated
thereafter in the normal course of the Seller's business pursuant to certain
revolving consumer credit card accounts;
WHEREAS, the Seller desires to sell and assign from time to time such
certain receivables to the Purchaser upon the terms and conditions hereinafter
set forth;
WHEREAS, the Servicer has agreed to service the accounts receivable
sold to the Purchaser by the Seller hereunder;
WHEREAS, the rights and obligations contained in the Amended and
Restated Receivables Purchase Agreements, dated as of August 21, 1997, by and
among each of Xxxxxxxx'x, Inc. (excluding Receivables originated by or on behalf
of the Younkers Division of Xxxxxxxx'x, Inc.), Parisian, Inc., XxXxx'x, Inc. and
X.X. Xxxxxxxxx'x, Inc. as "Sellers" thereunder, the Seller and the Servicer, are
being assigned and assumed pursuant to an Assumption Agreement by and among such
Sellers, the Bank and the Purchaser, as of the date hereof;
WHEREAS, the Purchaser, as transferor (the "Transferor"), Xxxxxxxx'x,
----------
Inc., as Servicer, and Norwest Bank Minnesota, National Association, as trustee
(together with its successors, the "Trustee") entered into a Master Pooling and
-------
Servicing Agreement dated as of August 21, 1997 (as amended, supplemented or
otherwise modified and in effect from time to time, the "Pooling and Servicing
---------------------
Agreement"), and thereby created a trust on behalf of the holders of
---------
certificates in such trust;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Purchaser and the Seller,
intending to be legally bound, agree as follows:
-1-
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used herein
-----------
shall have the meanings specified herein or, if not so specified, the meaning
specified in, or incorporated by reference into, the Pooling and Servicing
Agreement:
"Account" shall mean each consumer revolving credit card
-------
account, originated or acquired by the Seller, which account has been
established or exists pursuant to an Account Agreement between an Obligor and
any Person, including all Accounts of the Department Stores contributed to the
Bank. "Account Agreement," "Obligor" and "Person" shall have the respective
meanings specified in the Pooling and Servicing Agreement.
"Additional Accounts" shall have the meaning specified in the Pooling and
-------------------
Servicing Agreement.
"Advance" shall have the meaning specified in Section 3.2(a)
-------
hereof.
"Automatic Additional Accounts" shall have the meaning
-----------------------------
specified in the Pooling and Servicing Agreement.
"Benefit Plan" shall mean any employee benefit plan as defined
------------
in Section 3(3) of ERISA which the Seller maintains.
"Certificateholders" shall have the meaning specified in the
------------------
Pooling and Servicing Agreement.
"Closing Date" shall mean the beginning of business on
------------
February 2, 1998.
"CPS" shall mean Xxxxxx Xxxxx Xxxxx & Co.
---
"Creation Date" shall have the meaning specified in the
-------------
Pooling and Servicing Agreement.
"Cut-Off Date" shall mean the close of business on
------------
January 28, 1998.
"Department Stores" shall mean Xxxxxxxx'x, Inc. (excluding
-----------------
stores operated by its Younkers Division), Parisian, Inc., XxXxx'x, Inc.,
X.X. Xxxxxxxxx'x, Inc., Xxxxxx Xxxxx Xxxxx & Co., and CPS Department Stores,
Inc. and each department store currently or hereafter owned or operated by
Xxxxxxxx'x, Inc. or a subsidiary of Xxxxxxxx'x, Inc. or a division of any of
Xxxxxxxx'x, Inc. owning such subsidiary, where the Bank holds, originates or
acquires Accounts and Receivables for customers of such stores.
-2-
"Eligible Account" shall have the meaning specified in the
----------------
Pooling and Servicing Agreement.
"Eligible Receivable" shall have the meaning specified in
-------------------
the Pooling and Servicing Agreement.
"ERISA Affiliate" shall mean, with respect to any Person, (i)
---------------
any corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Internal Revenue Code) as such
Person; (ii) a trade or business (whether or not incorporated) under common
control (within the meaning of Section 414(c) of the Internal Revenue Code) with
such Person; or (iii) for purposes of Code Section 412, a member of the same
affiliated service group (within the meaning of Section 414(m) of the Internal
Revenue Code) as such Person, any corporation described in clause (i) above or
any trade or business described in clause (ii) above.
"Event of Bankruptcy" shall have the meaning specified in the
-------------------
Pooling and Servicing Agreement.
"Finance Charges" shall have the meaning specified in the
---------------
Pooling and Servicing Agreement.
"Insurance Charges" shall have the meaning specified in the
-----------------
Pooling and Servicing Agreement.
"XxXxx'x" shall mean XxXxx'x, Inc., a Mississippi corporation,
-------
and its successors and assigns.
"Multiemployer Plan" shall mean a "multiemployer plan" as
------------------
defined in Section 4001(a)(3) of ERISA which is or was at any time during the
current year or the immediately preceding five years contributed to by the
Seller or Eligible Originator or any ERISA Affiliate of the Seller or Eligible
Originator on behalf of its employees.
"Purchase Date" shall have the meaning assigned in Section
-------------
3.2(b) hereof.
"Purchase Rate" shall mean the percentage equivalent of the
-------------
decimal representation of the following expression:
(1.00 + APY) minus (BDA + SF + PCF + OE + RF) where:
APY = average portfolio yield of the Seller (expressed as
the decimal equivalent of a percentage) as reasonably
determined over the preceding twelve (12) months (or
such other period mutually agreed upon by the Purchaser
and the Seller);
-0-
XXX = an allowance for bad debts (expressed as the decimal
equivalent of a percentage), based on, among other
relevant factors, historical rates for the previous
twelve (12) months (or such other period mutually
agreed upon by the Purchaser and the Seller);
SF = a Servicer fee equal to 2.00% (expressed as the decimal
equivalent of a percentage) per annum;
PCF = the Purchaser's cost of funds, as calculated from time
to time, equal to the sum (expressed as the decimal
equivalent of a percentage) of (i) the product of a
fraction equal to the adjusted investor amount of all
classes of Certificates issued by the Trust (other than
those held by the Purchaser) divided by the Aggregate
Principal Receivables multiplied by the prime rate (as
published in the Money Rates Section of The Wall
Street Journal) plus (ii) the product of (x) 20% (to
be adjusted from time to time based on changes to the
Purchaser's reasonably estimated marginal cost of
capital) multiplied by (y) a fraction equal to the sum
of the Transferor Amount plus the investor amount of
any class of Certificates held by the Purchaser
divided by the Aggregate Principal Receivables;
OE = the fraction (expressed as the decimal equivalent of
a percentage), the numerator of which is the
Purchaser's annualized estimate of projected operating
expenses for the next twelve (12) months and the
denominator of which is the estimated outstanding
principal balance of Receivables expected to be sold
by the Seller to the Purchaser in the next twelve (12)
months; and
RF = a contingency risk factor (expressed as the decimal
equivalent of a percentage) based on industry and
economic considerations, as determined by the
Purchaser in its reasonable discretion and as agreed
upon between the Purchaser and the Seller.
"Purchase Period" shall mean, with respect to Receivables sold
---------------
by the Seller to the Purchaser after the Closing Date, the Monthly Period
reported upon in the most recent Monthly Servicer Report delivered after the
Closing Date.
"Purchase Price" shall have the meaning set forth in
--------------
Section 3.1.
"Purchaser" shall mean Xxxxxxxx'x Credit Corporation, a Nevada
---------
corporation, and its successors and assigns.
-4-
"Receivable" shall mean any amount owing by an Obligor under
----------
an Account with the Seller, including any Additional Account and/or Automatic
Additional Account, from time to time, including, without limitation, amounts
owing for the payment of merchandise and services, Insurance Charges, service
contract charges, Finance Charges and all other fees and charges. In calculating
the aggregate amount of Receivables on any day, the amount of Receivables shall
be reduced by the aggregate amount of adjustments stated in Section 3.8 of the
Pooling and Servicing Agreement, in the Accounts on such day. Any Receivables
which the Seller is unable to transfer under circumstances similar to those
described in Section 2.5(d) of the Pooling and Servicing Agreement shall not be
included for the period in which such Receivables cannot be transferred under
conditions similar to those described in such Section 2.5(d) in calculating the
aggregate amount of Receivables.
"Records" shall mean all Account Agreements and other
-------
documents, books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to Receivables and the
related Obligors.
"Related Security" means, with respect to any Receivable, all
----------------
of the Seller's rights, title and interest in, to and under the following, as
and to the extent applicable:
(i) all of the Seller's interest, if any, in the merchandise
(including returned or repossessed merchandise), if any, the sale of
which gave rise to such Receivable;
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Account related to such
Receivable or otherwise, together with all financing statements signed
by an Obligor describing any collateral securing such Receivable;
(iii) all guarantees, indemnities, warranties, insurance (and
proceeds and premium refunds thereof) or other agreements or
arrangements of any kind from time to time supporting or securing
payment of such Receivable whether pursuant to the Account related to
such Receivable or otherwise;
(iv) all records related to such Receivable; and
(v) all Proceeds of any of the foregoing.
"Relevant UCC" shall mean the Uniform Commercial Code as in
------------
effect in the State of Illinois.
"Secured Obligations" shall have the meaning set forth in
-------------------
Section 2.1(d) hereof.
"Subservicers" shall mean initially XxXxx'x and CPS, and any
------------
Person thereafter appointed by the Servicer as a Subservicer of the Receivables.
-5-
"Subordinated Note" shall have the meaning specified in
-----------------
Section 3.2(b) hereof.
"Termination Date" shall have the meaning specified in
----------------
Section 8.1 hereof.
SECTION 1.2. Other Terms. All accounting terms not
-----------
specifically defined herein shall be construed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the Relevant UCC,
and not specifically defined herein, are used herein as defined in such Article
9. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained herein shall control. The definitions of
all terms defined herein shall include the singular as well as the plural form
of such terms and the masculine of such terms as well as the feminine and neuter
genders of such terms. The terms "include", "including" or "includes" shall mean
including without limitation by way of enumeration or otherwise.
SECTION 1.3. Computation of Time Periods. Unless otherwise
---------------------------
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES
SECTION 2.1. Sale. (a) Upon the terms and subject to the
conditions set forth herein, the Seller hereby sells, assigns, transfers,
sets-over and conveys to the Purchaser, without recourse, and the Purchaser
hereby purchases from the Seller, on the terms and subject to the conditions
specifically set forth herein, all of the Seller's right, title and interest,
whether now owned or hereafter acquired, in, to and under the Receivables now
existing or hereafter created, and owned by the Seller, through any Termination
Date (but not thereafter), together with all Related Security, if any, and all
Collections and other monies due or to become due with respect thereto
(including all Finance Charges, Recoveries and Interchange, if any) and all
proceeds of the foregoing, including Insurance Proceeds. The foregoing sale,
assignment, transfer and conveyance does not constitute an assumption by the
Purchaser of any obligations of the Seller or any other Person to Obligors or
to any other Person in connection with the Receivables or under any Related
Security, Account Agreement or other agreement and instrument relating to the
Receivables. With respect to Receivables sold by the Seller on the Closing Date,
such Receivables shall be deemed to be all the Receivables of the Seller that
exist as of the close of business on the Cut-Off Date together with any
Receivables created thereafter prior to the Closing Date. With respect to
Receivables to be sold pursuant to this Agreement by the Seller after the
Closing Date, such Receivables shall be deemed to be all the Receivables created
after the close of business on the Cut-Off Date.
-6-
(b) In connection with the foregoing sale, the Seller agrees
to record and file on or prior to the Closing Date, at its own expense, a
financing statement or statements with respect to the Receivables and the other
property described in Section 2.1(a) sold by the Seller hereunder meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect and protect the interests of the Purchaser created
hereby under the Relevant UCC (subject, in the case of Related Security
constituting returned inventory and proceeds, to the applicable provisions of
Section 9-306 of the Relevant UCC) against all creditors of and purchasers from
the Seller, and to deliver either the originals of such financing statements or
a file-stamped copy of such financing statements or other evidence of such
filings to the Purchaser on the Closing Date.
(c) The Seller agrees that from time to time, at its expense,
it will promptly execute and deliver all instruments and documents and take all
actions as may be necessary or as the Purchaser may reasonably request in order
to perfect or protect the interest of the Purchaser in the Receivables purchased
hereunder or to enable the Purchaser to exercise or enforce any of its rights
hereunder. Without limiting the foregoing, the Seller will, in order to
accurately reflect this purchase and sale transaction, execute and file such
financing or continuation statements or amendments thereto or assignments
thereof (as permitted pursuant hereto) as may be requested by the Purchaser, and
shall indicate clearly and unambiguously in the Seller's computer files and
other Records that the Receivables transferred hereby have been sold to the
Purchaser pursuant to this Agreement and subsequently transferred to the Trustee
pursuant to the Pooling and Servicing Agreement. The Seller shall, upon request
of the Purchaser, obtain such additional search reports as the Purchaser shall
request. To the fullest extent permitted by applicable law, the Purchaser shall
be permitted to sign and file continuation statements and amendments thereto and
assignments thereof without the Seller's signature. Carbon, photographic or
other reproduction of this Agreement or any financing statement shall be
sufficient as a financing statement.
(d) It is the express intent of the Seller and the Purchaser
that the conveyance of the Receivables, all Related Security, if any, and all
Collections and proceeds thereof by the Seller to the Purchaser pursuant to this
Agreement be construed as a sale of such Receivables and other property by the
Seller to the Purchaser, which sale is absolute and irrevocable (except as
expressly provided otherwise herein) and provides the Purchaser with the full
benefits of ownership of such Receivables and other property. Further, it is not
the intention of the Seller and the Purchaser that such conveyance be deemed a
grant of a security interest in the Receivables and such other property by the
Seller to the Purchaser to secure a debt or other obligation of the Seller.
However, in the event that, notwithstanding the express intent of the parties,
the Receivables and such other property are construed to constitute property of
the Seller, then (i) this Agreement also shall be deemed to be, and hereby is, a
security agreement within the meaning of the Relevant UCC; and (ii) the
conveyance by the Seller provided for in this Agreement shall be deemed to be,
and the Seller hereby grants to the Purchaser, a security interest in, to and
under all of the Seller's right, title and interest in, to and under the
Receivables and such other property outstanding on the Closing Date and
thereafter owned by the Seller, together with all Related Security, if any, and
all Collections and other monies due or to become due with respect thereto
(including all Finance Charges, Recoveries and Interchange, if any) and all
proceeds of the foregoing, including
-7-
Insurance Proceeds, to secure the rights of the Purchaser set forth in this
Agreement or as may be determined in connection therewith by applicable law
(collectively, the "Secured Obligations"). The Seller and the Purchaser shall,
-------------------
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Receivables and such other property, such security interest
would be deemed to be a perfected first priority security interest in favor of
the Purchaser under applicable law and will be maintained as such throughout
the term of this Agreement.
SECTION 2.2. Servicing of Receivables. (a) The servicing,
------------------------
administering and collection of the Receivables shall be conducted by the
Servicer, which hereby agrees to perform, take or cause to be taken all such
action as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations and with the
care and diligence which the Servicer employs in servicing similar receivables
for its own account, in accordance with the Credit Card Guidelines. With the
consent of the Trustee and the Purchaser, the Servicer may delegate certain
functions to the Subservicers; provided, however, no such delegation shall
relieve the Servicer of its obligations hereunder. The Purchaser hereby appoints
the Servicer as its agent to enforce the Purchaser's rights and interests in, to
and under the Receivables, the Related Security, if any, and the Collections
with respect thereto, and the Seller agrees to cooperate with and assist the
Purchaser and the Servicer in connection with any such efforts, including acting
as agent for and on behalf of the Purchaser and the Servicer in connection
therewith. The Servicer shall hold in trust for the Purchaser, in accordance
with its interests, all records which evidence or relate to the Receivables or
Related Security, if any, Collections and proceeds with respect thereto.
Notwithstanding anything to the contrary contained herein, from and after a
Servicer Default (as defined in the Pooling and Servicing Agreement), a
Successor Servicer shall be appointed as provided in Article X of the Pooling
and Servicing Agreement. The Purchaser agrees to pay the Servicer a Servicing
Fee for the Servicer's performance of the duties and obligations described in
this Section 2.2 and in Article III of the Pooling and Servicing Agreement.
(b) The Seller hereby grants to each of the Purchaser and the Servicer
an irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by the Seller to account for the Receivables, to the
extent necessary to administer the Receivables, whether such software is owned
by the Seller or is owned by others and used by the Seller under license
agreements with respect thereto, provided, however, should the consent of any
licensor of the Seller to such grant of the license described herein be
required, the Seller hereby agrees that upon the request of the Purchaser (or
the Trustee as the Purchaser's assignee), the Seller will use its reasonable
efforts to obtain the consent of such third-party licensor. The license granted
hereby shall be irrevocable, and shall terminate on the date this Agreement
terminates in accordance with its terms.
-8-
ARTICLE III
CONSIDERATION AND PAYMENT; RECEIVABLES
SECTION 3.1. Purchase Price. (a) The purchase price
--------------
("Purchase Price") for the Receivables and related property conveyed on the
Closing Date to the Purchaser by the Seller under this Agreement shall be a
dollar amount equal to the product of (i) the Aggregate Principal Receivables
as of the Cut-Off Date, and (ii) the Purchase Rate then in effect.
The Purchase Price for the Receivables and related property
conveyed on any date after the Closing Date shall be the dollar amount equal to
the product of (i) the aggregate outstanding principal balance of the
Receivables sold during the applicable Purchase Period as reflected in the
applicable Monthly Servicer's Certificate or any other certificate delivered
pursuant thereto or pursuant to this Agreement as in effect prior to the date
hereof and (ii) the Purchase Rate on such date.
SECTION 3.2. Payment of Purchase Price. (a) The Purchase Price
-------------------------
for the Receivables sold on the Closing Date shall be paid or has been paid by
payment of cash in immediately available funds. The Purchaser may obtain the
cash to pay the Purchase Price from the sale of Eligible Receivables to the
Trust, and pursuant to advances pursuant to a Subordinated Note between
Xxxxxxxx'x, Inc. and the Purchaser (such advance and any advance thereunder as
contemplated by Section 3.2(b), each an "Advance") and contributions to the
-------
capital of the Purchaser by Xxxxxxxx'x, Inc.
(b) The Purchase Price for the Receivables sold by the Seller
on any date after the initial date of the Receivables Purchase Agreement (each,
a "Purchase Date") shall be paid in cash to the Seller from proceeds from (i)
-------------
the sale by the Purchaser of the Receivables to the Trust or (ii) as the
Purchaser may elect, in its sole discretion, from proceeds of (A) an Advance
under the Subordinated Note or (iii) a capital contribution by Xxxxxxxx'x, Inc.
to the Purchaser or (iv) any combination of the foregoing. In the event the
Purchaser does not have sufficient cash to pay the Purchase Price due on any
Purchase Date, or Xxxxxxxx'x determines, in its sole discretion not to make a
capital contribution to the Purchaser, Xxxxxxxx'x, Inc., subject to the terms
hereof, irrevocably agrees to make an Advance on such Purchase Date in an
original principal amount equal to such cash insufficiency; provided, however,
that no Advance shall be made if immediately thereafter the Net Worth of the
Purchaser would be less than 10% of the highest Aggregate Principal Receivables
outstanding during the immediately preceding twelve (12) calendar month period.
All Advances made by the Seller to the Purchaser shall be evidenced by a single
subordinated note, duly executed on behalf of the Purchaser, in substantially
the form of Exhibit A annexed hereto, delivered and payable to the Seller
(c) The terms and conditions of the Subordinated Note and
all Advances thereunder shall be as follows:
-9-
(i) Repayment of Advances. All amounts paid by the
---------------------
Purchaser with respect to the Advances shall be allocated first to the
repayment of accrued interest until all such interest is paid, and then to the
outstanding principal amount of the Advances. Subject to the provisions of this
Agreement, the Purchaser may borrow, repay and reborrow Advances on and after
the date hereof and prior to the termination of this Agreement, subject to the
terms, provisions and limitations set forth herein.
(ii) Interest. The Subordinated Note shall bear
--------
interest from its date on the outstanding principal balance thereof at a rate
per annum equal to one month LIBOR as published in the Money Rates Section of
The Wall Street Journal. Interest on each Advance shall be computed based on
the actual number of days elapsed based upon a year of 360 days.
(iii) Sole and Exclusive Remedy; Subordination. The
----------------------------------------
Subordinated Note shall be fully subordinated to any rights of the Trustee,
the Certificateholders and their permitted assigns pursuant to the Pooling and
Servicing Agreement, all on the terms and conditions set forth in the
Subordinated Note, and shall not evidence any rights in the Receivables.
SECTION 3.3. Monthly Report. On each Determination Date, the
--------------
Seller shall deliver or cause to be delivered to the Purchaser a report
covering the preceding Monthly Period, substantially in the form of the Monthly
Servicer's Certificate attached as Exhibit E to the Pooling and Servicing
Agreement, showing (i) the aggregate Purchase Price of Receivables acquired or
generated by the Seller in the preceding Monthly Period and (ii) the aggregate
outstanding principal balance of such Receivables that are Eligible Receivables
as of the last day of such preceding Monthly Period.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Seller's Representations and Warranties. The
---------------------------------------
Seller represents and warrants to the Purchaser as of the Closing Date and
shall be deemed to represent and warrant as of the date of any sale of any
interest in Receivables, including Receivables in Additional Accounts and
Automatic Additional Accounts to the Purchaser pursuant to this Agreement that:
(a) Corporate Existence and Power. The Seller is a national
-----------------------------
banking association, duly incorporated, validly existing and in good standing
under the laws of the United States of America, and has full power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement. The Seller is
duly qualified to do business and is in good standing (or is exempt from such
requirements) and has obtained all necessary licenses and approvals with respect
to the Seller, in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would render any Account Agreement relating
-10-
to an Account or any Receivable unenforceable by it, the Purchaser or the Trust
and would have a material adverse effect on the Certificateholders or on the
Purchaser's or the Servicer's ability to perform their respective obligations
under this Agreement, the Pooling and Servicing Agreement or any Supplement
thereto.
(b) Corporate and Governmental Authorization; Contravention.
-------------------------------------------------------
The execution, delivery and performance by the Seller of this Agreement are
within the Seller's corporate powers, have been duly authorized by all necessary
corporate action, and require no action by or in respect of, or filing with, any
Governmental Authority or official thereof (except for the filing of UCC
financing and continuation statements, and amendments thereto, as required by
this Agreement). The execution and delivery of this Agreement by the Seller, the
performance by the Seller of the transactions contemplated by this Agreement and
the fulfillment by the Seller of the terms hereof and thereof will not conflict
with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the Seller or any indenture,
contract, agreement, mortgage, deed of trust or other instrument to which the
Seller is a party or by which it or any of its properties are bound and which
conflict, violation, breach or default would have a material adverse effect on
the Purchaser or the Certificateholders or on the Purchaser's or the Servicer's
ability to perform their respective obligations under the Pooling and Servicing
Agreement.
(c) Binding Effect. This Agreement will constitute the legal,
--------------
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, subject to applicable bankruptcy, insolvency,
receivership, conservatorship, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general principles
of equity (whether considered in a proceeding at law or in equity).
(d) Perfection. Immediately preceding the sale, transfer and
----------
assignment of the Receivables and the related property pursuant to this
Agreement, the Seller had good and marketable title to all of the Receivables
and such related property, free and clear of all Liens (except those Liens
permitted by the Pooling and Servicing Agreement). On or prior to the date of
each sale of Receivables and such related property pursuant to this Agreement,
all financing statements and other documents required to be recorded or filed in
order to perfect and protect the ownership interest of the Purchaser in and to
the Receivables and such related property against all creditors of and
purchasers from the Seller will have been duly filed in each filing office
necessary for such purpose and all filing fees and taxes, if any, payable in
connection with such filings shall have been paid in full.
(e) Tax Status. The Seller has filed all material tax returns
----------
(federal, state and local) required to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges.
(f) Action, Suits. There are no proceedings or investigations
-------------
pending or, to the knowledge of the Seller, threatened against the Seller before
any Governmental Authority (i)
-11-
asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement, (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Seller, would materially and adversely affect the performance by the Seller of
its obligations under this Agreement, (iv) seeking any determination or ruling
that would materially and adversely affect the validity or enforceability of
this Agreement (v) seeking to affect adversely the federal income tax
attributes of the Trust.
(g) Place of Business. The principal place of business and
-----------------
chief executive office of the Seller is located at 000 Xxxxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx 00000, and the offices where the Seller keeps all its records
with respect to its Accounts and Receivables, are located at the address(es)
described on Exhibit B hereto or such other locations notified to the Purchaser
in accordance with this Agreement in jurisdictions where all action required by
the terms of this Agreement has been taken and completed.
(h) True Sale. This Agreement constitutes a valid sale,
---------
transfer and assignment to the Purchaser of all right, title and interest of the
Seller in and to the Receivables and related property to be transferred hereby,
whether existing on the date of this Agreement or hereafter created in the
Accounts and the proceeds thereof which is effective as to each Receivable upon
the creation thereof, and upon such transfer to the Purchaser hereunder, the
Purchaser shall obtain good and marketable title to such Receivables and related
property, free and clear of all Liens (except those Liens permitted by the
Pooling and Servicing Agreement).
(i) Trade Names, Etc. As of the date hereof: (i) the Seller's
----------------
chief executive office is located at the address for notices set forth in
Section 9.3; (ii) the Seller has only the subsidiaries and divisions listed on
Exhibit C hereto; and (iii) the Seller has, within the last five (5) years,
operated only under the trade names identified in Exhibit C hereto, and, within
the last five (5) years, has not changed its name, merged with or into or
consolidated with any other corporation or been the subject of any proceeding
under Xxxxx 00, Xxxxxx Xxxxxx Code (Bankruptcy), except as disclosed in Exhibit
C hereto.
(j) Nature of Receivables. As of the Cut-Off Date or Creation
---------------------
Date, as applicable, and in the case of Receivables in Additional Accounts, as
of the related Additional Account Cut-Off Date, (i) each Receivable then
existing is an Eligible Receivable, and (ii) as of the applicable Additional
Account Cut-Off Date with respect to Additional Accounts, and as of the
applicable Distribution Date on which a computer file, microfiche or written
list is delivered pursuant to Section 2.1(b) of the Pooling and Servicing
Agreement with respect to Automatic Additional Accounts included automatically
pursuant to Section 2.6(d) of the Pooling and Servicing Agreement, Schedule 1 to
the Pooling and Servicing Agreement is in all material respects an accurate and
complete listing of all the Accounts of the Seller the Receivables of which have
been sold, transferred and assigned to the Purchaser as of the Cut-Off Date or
the applicable Additional Account Cut-Off Date, the applicable Creation Date and
the date of such Schedule 1, as the case may be, and the information contained
therein with respect to the identity of such Accounts and the Receivables
existing thereunder is true and correct in all material respects as of the dates
thereof, including the applicable Cut-Off Date, Additional Account Cut-Off Date
or Creation
-12-
Date. On each day on which any new Receivable is created, the Seller shall be
deemed to represent and warrant to the Purchaser that each Receivable created
on such day is an Eligible Receivable.
(k) Eligibility of Accounts. As of the applicable Cut-Off
-----------------------
Date, Additional Account Cut-Off Date or Creation Date, each Account was an
Eligible Account and no selection procedures adverse to the Purchaser or the
Certificateholders have been employed in selecting the Accounts.
(l) Amount of Receivables. As of the Cut-Off Date, the
---------------------
aggregate outstanding principal balance of the Receivables of the Seller in
existence was approximately $280,000,000.
(m) Not an Investment Company. The Seller is not, and is not
-------------------------
controlled by, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions of such Act.
(n) ERISA. The Seller and each of its ERISA Affiliates is in
-----
compliance in all material respects with ERISA and no lien exists in favor of
the Pension Benefit Guaranty Corporation on any of the Receivables.
(o) Bulk Sales. No transaction contemplated by this Agreement
----------
requires compliance with any bulk sales act or similar law.
(p) No Insolvency. The Seller is not insolvent immediately
-------------
prior to any transfer of Receivables hereunder, and will not be rendered
insolvent immediately following such transfer.
(q) Reasonably Equivalent Value. The Purchaser has given
---------------------------
reasonably equivalent value to the Seller in consideration for the transfer and
sale to the Purchaser of the applicable Receivables and other property from such
Seller, and each such transfer shall not have been made for or on account of an
antecedent debt owed by such Seller to the Purchaser. The Seller acknowledges
that it will receive reasonably equivalent value in consideration for the
transfer to the Purchaser of all Receivables and other property now or hereafter
to be transferred and sold hereunder.
The Purchaser and the Servicer may rely upon any of these
representations and warranties, and any of the covenants and agreements of the
Seller contained herein in connection with any transactions pursuant to the
Pooling and Servicing Agreement.
SECTION 4.2. Reaffirmation of Representations and Warranties
-----------------------------------------------
by the Seller; Notice of Breach. On each sale date, the Seller, by accepting the
-------------------------------
proceeds of such sale, shall be deemed to have certified that all
representations and warranties described in Section 4.1 are true and correct on
and as of such day as though made on and as of such day and that all the
covenants to be performed by the Seller have been performed. The representations
and warranties set forth in Section 4.1 shall survive the conveyance of the
Receivables to the
-13-
Purchaser, and termination of the rights and obligations of the Purchaser and
the Seller under this Agreement. Upon discovery by the Purchaser or the Seller
of a breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other within
three (3) Business Days of such discovery.
SECTION 4.3. Automatic Repurchase of Ineligible Receivables.
----------------------------------------------
In the event that a Receivable is not an Eligible Receivable as a result of the
failure to satisfy the conditions set forth in clause (iii) of the definition of
Eligible Receivable, and either of the following two conditions is met:
(i) the Lien on the subject Receivable (1) ranks
prior to the Lien created pursuant to this Agreement, (2) arises in
favor of the United States of America or any state or any agency or
instrumentality thereof or involves taxes or liens arising under Title
IV of ERISA, or (3) has been consented to by the Seller; or
(ii) the Lien on the subject Receivable is not of the
types described in clause (i) above, but, as a result of such breach or
event, such Receivable becomes a Receivable in a Defaulted Account or
the Purchaser's rights in, to or under such Receivable or its proceeds
are materially impaired or the proceeds of such Receivable are not
available for any reason to the Purchaser free and clear of any Lien
except Liens permitted hereby;
then, upon the earlier to occur of the discovery of such breach or event by the
Seller or receipt by the Seller of written notice of such breach or event given
by the Purchaser, the Servicer or the Trustee, each such Receivable or, at the
option of the Seller, all such Receivables with respect to the related Account,
automatically shall be repurchased by the Seller on the terms and conditions set
forth in Article VI hereof.
SECTION 4.4. Repurchase After Cure Period. In the event of a
----------------------------
breach of any of the representations and warranties set forth in Section 4.1(j)
or (k) with respect to a Receivable (other than in the event that a Receivable
is not an Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (iii) of the definition of Eligible Receivable),
and as a result of such breach or event such Receivable becomes a Receivable in
a Defaulted Account or the Purchaser's rights in, to or under such Receivable or
its proceeds are materially impaired or the proceeds of such Receivable are not
available for any reason to the Purchaser free and clear of any Lien except
Liens permitted hereby, then, upon the expiration of 90 days or any longer
period specified by the Servicer (not to exceed an additional 90 days) from the
earlier to occur of (x) the discovery of any such event by the Transferor or the
Servicer or (y) receipt by the Purchaser or the Servicer of written notice of
any such event given by the Trustee, each such Receivable or, at the option of
the Purchaser, all such Receivables with respect to the related Account, shall
be repurchased by the Seller on the terms and conditions set forth in Article VI
hereof; provided, however, that no such repurchase shall be required to be made
if, on any day within such applicable period, (A) such representation and
warranty with respect to such Receivable shall then be true and correct in all
material respects as if such Receivable had been transferred to the Trust
-14-
on such day, and (B) the related Account is no longer a Defaulted Account as the
result of the breach of such representation and warranty, and the Trust's rights
in, to or under such Receivable or its proceeds are no longer materially
impaired as a result of a breach of such representation and warranty, and the
proceeds of such Receivable are available to the Trust free and clear of all
Liens resulting in the breach of such representation and warranty, as
applicable.
SECTION 4.5 Repurchase of All Receivables. In the event that
-----------------------------
any of the representations or warranties set forth in Sections 4.1(a), 4.1(b),
4.1(c), 4.1(d) or 4.1(j) are breached and such breach results in a requirement
that the Purchaser repurchase such Receivable under the Pooling and Servicing
Agreement or a material amount of Receivables are deemed not to be Eligible
Receivables, and such event has a materially adverse effect on the Purchaser or
the Certificateholders, and the Transferor is required to accept reassignment of
all Receivables at the order of the Trustee or the Certificateholders, then the
Seller shall repurchase all Receivables on the terms and conditions set forth in
Article VI hereof.
ARTICLE V
COVENANTS OF THE SELLER
SECTION 5.1. Covenants of the Seller. The Seller hereby
-----------------------
covenants and agrees with the Purchaser that, for so long as this Agreement and
the Pooling and Servicing Agreement are in effect, and until all Receivables,
an interest in which has been sold to the Purchaser pursuant hereto, shall have
been paid in full or charged off, and all amounts owed by the Seller pursuant
to this Agreement have been paid in full, unless the Purchaser otherwise
consents in writing, the Seller covenants and agrees as follows:
(a) Conduct of Business. The Seller will carry on and conduct
-------------------
its credit card business in substantially the same manner as is presently
conducted and do all things necessary to remain duly organized, validly existing
and in good standing as a national banking association. The Seller will maintain
all authority required to conduct its business in each jurisdiction in which its
business is conducted, the failure of which would render any Account Agreement
relating to an Account or any Receivable unenforceable by it, the Purchaser or
the Trustee and would have a material adverse effect on the Certificateholders
or on the Purchaser's or the Servicer's ability to perform their respective
obligations under this Agreement, the Pooling and Servicing Agreement or any
Supplement thereto.
(b) Compliance with Laws. The Seller will comply in all
--------------------
material respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it or its properties may be subject.
(c) Furnishing of Information and Inspection of Records. The
---------------------------------------------------
Seller will furnish or cause to be furnished to the Purchaser from time to time
such information with respect to the Receivables as the Purchaser may reasonably
request, including, without limitation, a computer
-15-
file, microfiche or written list showing each Account, identified by account
number, and Receivable balance and any information which the Purchaser may be
required to deliver pursuant to the Pooling and Servicing Agreement, any
Supplement thereto and any related Certificate Purchase Agreement. The Seller
will at any time and from time to time during regular business hours and upon
reasonable prior notice permit the Purchaser, or its agents or representatives
(which may include any purchasers of certificates not sold to the public), (i)
to examine and make copies of and abstracts from all records and (ii) to visit
the offices and properties of the Seller for the purpose of examining such
records, and to discuss matters relating to Receivables or the Seller's
performance hereunder with any of the officers, directors, employees or
independent public accountants of the Seller having knowledge of such matters.
(d) Keeping of Records and Books of Account. The Seller will
---------------------------------------
maintain a system of accounting established and administered in accordance with
generally accepted accounting principles except to the extent required otherwise
by applicable regulatory authorities and then consistent with regulatory
accounting principles, consistently applied, and will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to produce or recreate records evidencing Receivables in the event of
the destruction of the originals thereof), and keep and maintain, all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable). The Seller will give the Purchaser
and the Trustee notice of any material change in the administrative and
operating procedures of the Seller referred to in the previous sentence.
(e) Account Agreements and Credit Card Guidelines. The Seller
---------------------------------------------
shall comply with and perform, its obligations under the applicable Account
Agreements relating to the Accounts and the Credit Card Guidelines, except
insofar as any failure so to comply or perform would not materially and
adversely affect the rights of the Purchaser, the Trust or the
Certificateholders, the ability of the Servicer to collect the Receivables, the
validity or enforceability of this Agreement, the Pooling and Servicing
Agreement, or any documents or agreements related thereto, or the performance by
any party of its obligations hereunder or thereunder.
(f) Reduction of Charges. Except as required by law or as the
--------------------
Seller shall deem advisable for its credit card program based on a good faith
assessment by the Seller, in its sole discretion, of the various factors
affecting the use of its credit card accounts, the Seller will not reduce the
finance charges or other fees on the Accounts if, as a result of such reduction,
its reasonable expectation of Portfolio Yield as of the time of such reduction
would be less than the weighted average base rates of all outstanding Series. In
addition, the Seller covenants that, unless required by law, it will not reduce
the annual percentage rate, if its reasonable expectation of Portfolio Yield
would be less than the highest Certificate Rate for any outstanding Series.
(g) Collections Received. The Seller shall direct or cause all
--------------------
Collections of Receivables to be remitted as directed by the Purchaser. In the
event that the Seller receives any
-16-
such Collection, the Seller shall hold in trust for and on behalf of the
Purchaser and the Trust, as their interests may appear, and remit, immediately,
but in any event not later than the close of business on the second Business Day
following its receipt thereof, to the Servicer, all Collections received from
time to time by the Seller.
(h) Sale Treatment. The Seller agrees to treat this conveyance
--------------
for all purposes (including, without limitation, tax and financial accounting
purposes) as a sale and, to the extent any such reporting is required, shall
report the transactions contemplated by this Agreement on all relevant books,
records, tax returns, financial statements and other applicable documents as a
sale of the Receivables to the Purchaser.
(i) ERISA. The Seller shall promptly give the Purchaser
-----
written notice upon becoming aware that (i) the Seller or any of its ERISA
Affiliates is not in compliance in all material respects with ERISA and to the
extent required of the Purchaser and its ERISA Affiliates in the Certificate
Purchase Agreement or that (ii) any ERISA Lien on any of the Receivables exists.
SECTION 5.2. Negative Covenants of the Seller. During the
--------------------------------
term of this Agreement, unless the Trustee and the Purchaser shall otherwise
consent in writing:
(a) No Sales, Liens, Etc. Except for the conveyances
--------------------
hereunder, the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on (or the
filing of any financing statement with respect to) any Receivable, whether now
existing or hereafter created, or any interest therein; the Seller will notify
the Purchaser and the Trustee of the existence of any Lien on any Receivable
transferred and sold by the Seller to Purchaser hereby; and immediately upon
discovery thereof, the Seller will defend the right, title and interest of the
Purchaser and the Trust in, to and under the Receivables, whether now existing
or hereafter created, against all claims of third parties claiming through or
under the Seller; provided, however, that nothing in this Section 5.2(a) shall
prevent or be deemed to prohibit the Seller from suffering to exist upon any of
the Receivables any Liens for, municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Transferor shall currently be contesting the
validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves under generally accepted accounting
principles with respect thereto.
(b) Account Agreements and Credit Card Guidelines. Subject to
---------------------------------------------
compliance with all Requirements of Law, the failure to comply with which would
have a material adverse effect on the Purchaser or the Certificateholders, the
Seller or the Servicer may change the terms and provisions of the Account
Agreements or the Credit Card Guidelines in any respect (including, without
limitation, the calculation of the amount, or the timing, of charge offs of
Receivables) as follows: (i) if the Seller owns a comparable segment of
accounts, then such change shall be made applicable to such comparable segment
of the accounts owned and serviced by the Seller that have characteristics the
same as, or substantially similar to, the Accounts that are the subject of such
change, and (ii) if the Seller does not own such a comparable segment, then the
Seller will not
-17-
make or cause to be made any such change with the intent to materially benefit
the Seller over the Purchaser or the Certificateholders.
(c) Change of Name, Etc. The Seller shall not change its name,
-------------------
identity or structure or location of its chief executive office, unless at least
ten (10) Business Days prior to the effective date of any such change the Seller
delivers to the Purchaser such documents, instruments or agreements, including,
without limitation, appropriate financing statements under the Relevant UCC,
executed by the Seller necessary to reflect such change and to continue the
perfection of the Purchaser's and any assignee's first priority interest in the
Receivables.
(d) No Change in Business or Credit Card Guidelines. The
-----------------------------------------------
Seller will not make any change in the Credit Card Guidelines or any change in
the character of its business, which change would, in either case, impair the
collectibility of any substantial portion of the Receivables or otherwise
materially and adversely affect the rights of the Purchaser, the Trust or the
Certificateholders, the ability of the Servicer to collect the Receivables, the
validity or enforceability of this Agreement, the Pooling and Servicing
Agreement, or any documents or agreements related thereto, or the performance by
any party of its obligations hereunder or thereunder.
(e) ERISA Matters. The Seller will not (i) engage in any
-------------
prohibited transaction (as defined in Section 4975 of the Code and Section 406
of ERISA) for which an exemption is not available or has not previously been
obtained from the U.S. Department of Labor; (ii) permit to exist any accumulated
funding deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of
the Code) or funding deficiency with respect to any Defined Benefit Plan other
than a Multiemployer Plan that could reasonably result in the PBGC or IRS filing
a lien; (iii) fail to make any payments to any Multiemployer Plan that the
Seller or any ERISA Affiliate of the Seller is required to make under the
agreement relating to such Multiemployer Plan or any law pertaining thereto;
(iv) terminate any Defined Benefit Plan so as to result in any liability; or (v)
permit to exist any occurrence of any Reportable Event which represents a
material risk of a liability to the Seller or any ERISA Affiliate of the Seller
under ERISA or the Code.
(f) Transfers of Accounts. The Seller will not convey,
---------------------
transfer or assign any Accounts to any Person, except for Removed Accounts,
unless the Rating Agency Condition is satisfied.
SECTION 5.3. Indemnification. The Seller agrees to indemnify,
---------------
defend and hold the Purchaser harmless from and against any and all loss,
liability, damage, judgment, claim, deficiency, or expense (including interest,
penalties, reasonable attorneys' fees and amounts paid in settlement)
(collectively, "Indemnified Amounts") to which the Purchaser or any assignee
thereof may become subject insofar as such loss, liability, damage, judgment,
claim, deficiency, or expense arises out of or is based upon a breach by the
Seller of its representations, warranties and covenants contained herein, or any
information certified in any written schedule or certificate delivered by the
Seller hereunder being untrue in any material respect at the time so certified;
provided, however, neither the Purchaser nor any of its assignees shall be
entitled to
-18-
indemnification hereunder for any Indemnified Amount to the extent the same
resulted from the gross negligence or willful misconduct of the Purchaser or any
of its assignees. The obligations of the Seller under this Section 5.3 shall be
considered to have been relied upon by the Purchaser and shall survive the
execution, delivery, performance and termination of this Agreement and any sale
or transfer of the Receivables or any interest therein by the Purchaser,
regardless of any investigation made by the Purchaser or on its behalf.
ARTICLE VI
REPURCHASE OBLIGATION
SECTION 6.1. Mandatory Repurchase.
--------------------
(a) Breach of Warranty. If on any day the repurchase of any
------------------
Receivable which has been sold by the Seller hereunder shall be required
pursuant to Sections 4.3 or 4.4 hereof, the Seller shall be deemed to have
received on such day a Collection of such Receivable in full and shall on such
day pay to the Purchaser an amount equal to the aggregate outstanding principal
balance of such Receivable, plus outstanding Finance Charges accrued thereon
through the date of such repurchase; provided that, prior to the Termination
Date, such amount may be paid, at the election of the Purchaser, by a reduction
in or an offset to the Purchase Price paid to the Seller on the next occurring
Purchase Date, unless the Purchaser is required to make a payment in respect of
such breach pursuant to the Pooling and Servicing Agreement; provided, however,
in all events at least the amount of any cash deposit required to be made by the
Purchaser under the Pooling and Servicing Agreement in respect of the retransfer
of such Ineligible Receivable shall be paid in immediately available funds by
the Seller.
(b) Repurchase of All Receivables. If on any day the
-----------------------------
repurchase of all Receivables which have been sold by the Seller hereunder shall
be required pursuant to Section 4.5 hereof, the Seller shall be deemed to have
received on such day a Collection of such Receivables in full and shall on such
day pay to the Purchaser an amount equal to the aggregate outstanding principal
balance of such Receivable, plus Finance Charges accrued thereon through the
date of such repurchase; provided, however, in all events at least the amount of
any cash deposit required to be made by the Purchaser under the Pooling and
Servicing Agreement in respect of the retransfer of such Ineligible Receivable
shall be paid in immediately available funds by the Seller.
SECTION 6.2. Dilutions, etc. If the Servicer or the Seller
--------------
adjusts downward the amount of any Receivable without receiving Collections
therefor or without charging off such amount as uncollectible, because of a
rebate, refund, unauthorized charge or billing error to an Obligor, or because
such Receivable was created in respect of merchandise or services which were
refused, returned or not received by an Obligor, then the Seller shall be deemed
to have received on such day a Collection of such Receivable in the amount of
such reduction, cancellation or payment made by the Obligor and shall on such
day pay to the Purchaser an amount equal to such reduction or cancellation;
provided that, prior to the Termination Date,
-19-
such amount may be paid by a reduction in the Purchase Price paid to the Seller
on the next occurring Purchase Date, unless the Purchaser is required to make a
payment in respect of such breach sooner pursuant to the Pooling and Servicing
Agreement. Similarly, if the Servicer or the Seller adjusts downward the amount
of any Receivable because such Receivable was discovered as having been created
through a fraudulent or counterfeit charge or with respect to which the covenant
contained in Section 5.2(a) hereof was breached, then the Seller shall be deemed
to have received on such day a Collection of such Receivable in the amount of
such reduction, cancellation or payment made by the Obligor and shall on such
day pay to the Purchaser an amount equal to such reduction or cancellation;
provided that, prior to the Termination Date, such amount may be paid by a
reduction in the Purchase Price paid to the Seller on the next occurring
Purchase Date; provided, however, in all events at least the amount of any cash
deposit required to be made by the Purchaser under the Pooling and Servicing
Agreement in respect of any such adjustment shall be paid in immediately
available funds by the Seller. Any adjustment ("Adjustment Payment Obligation"),
required pursuant to either of the two preceding sentences shall be made within
two (2) Business Days of the making of the Adjustment Payment Obligation, and in
no event later than the end of the Monthly Period in which such adjustment
obligation arises.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. Conditions to the Purchaser's Obligations
-----------------------------------------
Regarding Receivables. The obligations of the Purchaser to purchase the
---------------------
Receivables on the Closing Date and any Purchase Date shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Seller contained
in this Agreement shall be true and correct on the Closing Date and on each
Purchase Date thereafter with the same effect as though such representations and
warranties had been made on such date (except to the extent any such
representation or warranty specifically related to an earlier date, in which
case such representation or warranty shall have been true as of such earlier
date);
(b) All information concerning the Receivables provided to the
Purchaser shall be true and correct in all material respects as of the Closing
Date, in the case of any Receivables existing on the Closing Date, or the
Purchase Date, in the case of any Receivables created after the Closing Date,
and in each Schedule of Accounts delivered to the Purchaser hereunder for
inclusion in Schedule 1 to the Pooling and Servicing Agreement;
(c) The Seller shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement;
(d) The Seller shall have filed or caused to be filed the
financing and continuation statement(s) and all amendments thereto required to
be filed pursuant to Section 2.1(b); and
-20-
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Purchaser, and the Purchaser shall
have received from the Seller copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Purchaser may reasonably have requested.
ARTICLE VIII
TERM AND TERMINATION
SECTION 8.1. Term. This Agreement shall commence as of the
----
date of execution and delivery hereof and shall continue in full force and
effect until the date following the earlier of (i) the date on which the Trustee
declares a Pay Out Event with respect to all outstanding Series of the Trust
pursuant to the Pooling and Servicing Agreement and any Supplements, (ii) the
date on which the Trust terminates, (iii) the date on which an event described
in the first sentence of Section 9.2(a) of the Pooling and Servicing Agreement
occurs with respect to the Seller and the Trust, (iv) the close of business on
the third Business Day following a conveyance of Receivables to the Purchaser
for which the Purchaser does not pay the Purchase Price in accordance with the
provisions hereof, or (vi) the date on which either the Purchaser or the Seller
becomes unable for any reason to purchase or repurchase any Receivable in
accordance with the provisions of this Agreement or defaults on its obligations
hereunder, which default continues unremedied for more than thirty (30) days
after written notice (any such date being a "Termination Date"); provided,
----------------
however, that the termination of this Agreement pursuant to this Section 8.1
hereof shall not discharge any Person from any obligations incurred prior to
such termination, including, without limitation, any obligations to make any
payments with respect to the interest of the Purchaser in any Receivable sold
prior to such termination.
SECTION 8.2. Effect of Termination. Following the termination
---------------------
of this Agreement pursuant to Section 8.1, the Seller shall not sell, and the
Purchaser shall not purchase, any Receivables. No termination or rejection or
failure to assume the executory obligations of this Agreement in any proceeding
regarding an event described in the first sentence of Section 9.2(a) of the
Pooling and Servicing Agreement with respect to the Seller or the Purchaser
shall be deemed to impair or affect the obligations pertaining to any executed
sale or executed obligations, including, without limitation, pre-termination
breaches of representations and warranties by the Seller or the Purchaser.
Without limiting the foregoing, prior to termination, the failure of the Seller
to deliver or cause to be delivered computer records of Receivables or any
reports regarding the Receivables shall not render such transfer or obligation
executory, nor shall the continued duties of the parties pursuant to Article V
or Section 9.1 of this Agreement render an executed sale executory.
-21-
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendment. This Agreement and the rights and
---------
obligations of the parties hereunder may not be changed orally, but only by an
instrument in writing signed by the Purchaser and the Seller. Any reconveyance
executed in accordance with the provisions hereof shall not be considered an
amendment to this Agreement.
SECTION 9.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
-------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ALABAMA.
SECTION 9.3. Notices. Except as provided below, all
-------
communications and notices provided for hereunder shall be in writing (including
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other party at its address or telecopy number set forth below or at
such other address or telecopy number as such party may hereafter specify for
the purposes of notice to such party. Each such notice or other communication
shall be effective (i) if given by telecopy, when such telecopy is transmitted
to the telecopy number specified in this Section 9.3 and confirmation is
received, (ii) if given by mail three (3) Business Days following such posting,
postage prepaid, U.S. first class or overnight mail, (iii) if given by overnight
courier, such as FedEx, one Business Day after deposit thereof with a national
overnight courier service, or (iv) if given by any other means, when received at
the address specified in this Section 9.3.
(a) in the case of the Purchaser:
Xxxxxxxx'x Credit Corporation
Bank of America Center
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-22-
with a copy to:
Xxxxxxxx'x, Inc.
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx
Executive Vice President and
Chief Financial Officer
(b) in the case of the Seller:
National Bank of the Great Lakes
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx Xxxxx
Vice President
(c) in the case of the Servicer:
Xxxxxxxx'x, Inc.
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx
Executive Vice President and
Chief Financial Officer
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
SECTION 9.4. Severability of Provisions. If any one or more of
--------------------------
the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
-23-
SECTION 9.5. Assignment and Designation of Selling
-------------------------------------
Subsidiaries.
------------
(a) This Agreement may not be assigned by the parties hereto,
except that the Purchaser may assign its rights hereunder pursuant to the
Pooling and Servicing Agreement to the Trustee, for the benefit of the
Certificateholders. The Purchaser hereby notifies (and the Seller hereby
acknowledges that) the Purchaser, pursuant to the Pooling and Servicing
Agreement, has assigned all its rights hereunder to the Trustee. All rights of
the Purchaser hereunder may be exercised by the Trustee or its assignees, to the
extent of their respective rights pursuant to such assignments.
(b) Xxxxxxxx'x, Inc. may from time to time designate its
subsidiaries, divisions or department stores as "Selling Subsidiaries." To
--------------------
become a Selling Subsidiary, (i) the Purchaser, the Seller and the proposed
Selling Subsidiary must execute an assumption agreement pursuant to which the
Selling Subsidiary assumes certain of the Seller's obligations under this
Agreement and is granted the right to sell Receivables to the Purchaser upon the
terms and conditions set forth herein, (ii) such proposed Selling Subsidiary
must deliver certain other documents (including UCC-1 financing statements) to
the Transferor, the Trustee and the Rating Agencies, (iii) certain
representations and warranties made by such Selling Subsidiary must be true as
of the date it first sells Receivables to the Purchaser, and (iv) each Rating
Agency must confirm that the Rating Agency Condition has been met. In the event
any Selling Subsidiary is designated and approved hereunder, each reference to
the Seller herein shall be deemed to include each Selling Subsidiary.
SECTION 9.6. Further Assurances. The Purchaser and the Seller
------------------
agree to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the other party
more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any financing statements or continuation statements
or equivalent documents relating to the Receivables for filing under the
provisions of the Relevant UCC or other laws of any applicable jurisdiction.
SECTION 9.7. No Waiver; Cumulative Remedies. No failure to
------------------------------
exercise and no delay in exercising, on the part of the Purchaser, the Seller or
the Trustee (as assignee of the Purchaser), any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exhaustive of any rights, remedies, powers and privilege
provided by law.
SECTION 9.8. No Bankruptcy Petition Against the Purchaser or
-----------------------------------------------
Trust. Each of the Seller and the Servicer hereby covenants and agrees that,
-----
prior to the date which is one year and one day after the payment in full of all
Certificates, it will not institute against, or join any other Person in
instituting against, the Purchaser or the Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
-24-
SECTION 9.9. Counterparts. This Agreement may be executed in
------------
two or more counterparts including telecopy transmission thereof (and by
different parties on separate counterparts), each of which shall be an original,
but all of which together shall constitute one and the same instrument.
SECTION 9.10. Binding Effect; Third-Party Beneficiaries.
-----------------------------------------
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. The Trustee on
behalf of the Certificateholders is intended by the parties hereto to be a third
party beneficiary of this Agreement, but otherwise no Person not a party is
intended to or shall have any rights hereunder, whether as a third party
beneficiary or otherwise.
SECTION 9.11. Merger and Integration. Except as specifically
----------------------
stated otherwise herein or incorporated hereby, this Agreement sets forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived or supplemented except in
writing executed by the parties as provided herein.
SECTION 9.12. Headings. The cover page, table of contents, and
--------
article and section headings hereof are for purposes of convenience of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 9.13. Exhibits. The schedules and exhibits referred to
--------
herein shall constitute a part of this Agreement and are incorporated into this
Agreement for all purposes.
-25-
IN WITNESS WHEREOF, the Seller, the Purchaser and the Servicer
each have caused this Receivables Purchase Agreement to be duly executed by
their respective officers as of the day and year first above written.
NATIONAL BANK OF THE GREAT LAKES,
as Seller
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
XXXXXXXX'X CREDIT CORPORATION,
as Purchaser
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Treasurer
XXXXXXXX'X, INC.,
as Servicer
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Treasurer
-26-
EXHIBIT A
to the
RECEIVABLES PURCHASE AGREEMENT
FORM OF SUBORDINATED NOTE
$500,000,000
February 2, 1998
FOR VALUE RECEIVED, the undersigned, XXXXXXXX'X CREDIT CORPORATION, a
Nevada corporation (the "Maker"), hereby unconditionally promises to pay to the
-----
order of XXXXXXXX'X, INC. (the "Payee"), on December 31, 2005 or earlier as
-----
provided for in the Amended and Restated Receivables Purchase Agreement dated as
of the date hereof between the Maker and the Payee (as such agreement may from
time to time be amended, supplemented or otherwise modified and in effect, the
"Receivables Purchase Agreement"), the lesser of the principal sum of up to Five
-------------------------------
Hundred Million Dollars and No/100 ($500,000,000) or the aggregate unpaid
principal amount of all Advances to the Maker from the Payee pursuant to Section
3.2, and the other terms, of the Receivables Purchase Agreement, in lawful money
of the United States of America in immediately available funds, and to pay
interest from the date thereof on the principal amount hereof from time to time
outstanding, in like funds, at said office, at the rate per annum set forth in
Section 3.2(c)(iii) of the Receivables Purchase Agreement and shall be payable
in arrears on the first day of each calendar month (or if any such day is not a
Business Day, on the succeeding Business Day).
The Maker hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The non-exercise by the holder hereof of any of
its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Subordinated Note and all payments
and prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder hereof on the schedule attached
hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, or otherwise recorded by such holder in
its internal records; provided, however, that (a) the failure of the holder
hereof to make such a notation or record or (b) any error in such a notation,
shall not in any manner affect the obligation of the Maker to make payments of
principal and interest in accordance with the terms of this Subordinated Note
and the Receivables Purchase Agreement. Any such notation or record shall be
conclusive and binding as to the date and amount of such Advance, or payment of
principal or interest thereon, absent manifest error.
The Maker shall have the right to borrow, repay and, subject to the
limitations set forth in the Receivables Purchase Agreement, reborrow Advances
made to it without penalty, premium or charge. The Maker shall be obligated to
repay Advances to the Payee only to the extent of funds available to the
Purchaser from Collections on the Receivables and, to the extent that such
payments are insufficient to pay all amounts owing to the Seller under the
Subordinated
A-1
Note, the Seller shall not have any claim against the Purchaser for such amounts
and no further or additional recourse shall be available against Purchaser.
This Subordinated Note is the Subordinated Note referred to in the
Receivables Purchase Agreement. The indebtedness evidenced by this Subordinated
Note is subordinated to the prior payment in full of all of the Maker's recourse
obligations under the Pooling and Servicing Agreement. The subordination
provisions contained herein are for the direct benefit of, and may be enforced
by, the Trustee, the Certificateholders and/or any of their respective permitted
assignees pursuant to the Pooling and Servicing Agreement (collectively, the
"Senior Claimants") under the Pooling and Servicing Agreement. Until the date
-----------------
on which all obligations of the Maker and/or the Servicer under the Pooling and
Servicing Agreement (all such obligations, collectively, the "Senior Claims")
-------------
have been indefeasibly paid and satisfied in full, the Payee shall not demand,
accelerate, xxx for, take, receive or accept from the Maker, directly or
indirectly, in cash or other property or by set-off or any other manner
(including, without limitation, from or by way of collateral) any payment or
security of all or any of the indebtedness under this Subordinated Note or
exercise any remedies or take any action or proceeding to enforce the same;
provided, however, that nothing in this paragraph shall restrict the Maker from
paying, or the Payee from requesting, any payments under this Subordinated Note
so long as the Maker is not required under the Pooling and Servicing Agreement
to set aside for the benefit of, or otherwise pay over to, the funds used for
such payments to any of the Senior Claimants and further provided that the
making of such payment would not otherwise violate the terms and provisions of
the Pooling and Servicing Agreement. Should any payment, distribution or
security or proceeds thereof be received by the Payee in violation of the
immediately preceding sentence, the Payee agrees that such payment shall be
segregated, received and held in trust for the benefit of, and deemed to be the
property of, and shall be immediately paid over and delivered to the Trustee for
the benefit of the Senior Claimants.
Upon the occurrence of any event described in the first sentence of
Section 9.2(a) of the Pooling and Servicing Agreement with respect to the Maker,
then and in any such event the Senior Claimants shall receive payment in full of
all amounts due or to become due on or in respect of the Senior Claims before
the Payee is entitled to receive payment on account of this Subordinated Note,
and to that end, any payment or distribution of assets of the Maker of any kind
or character, whether in cash, securities or other property, in any applicable
insolvency proceeding, which would otherwise be payable to or deliverable upon
or with respect to any or all indebtedness under this Subordinated Note, is
hereby assigned to and shall be paid or delivered by the Person making such
payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or
liquidating trustee or otherwise) directly to the Trustee for application to, or
as collateral for the payment of, the Senior Claims until such Senior Claims
shall have been paid in full and satisfied.
Capitalized terms not otherwise defined herein are used herein with
the respective meanings given them in the Receivables Purchase Agreement.
A-2
This Note shall be governed by, and construed in accordance with, the
laws of the State of Alabama.
XXXXXXXX'X CREDIT CORPORATION
By:
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
A-3
ADVANCES AND PAYMENTS
Date and Payments Unpaid Principal Name of Person
Amount of Advance Principal/Interest Balance of Note Making Notation
----------------- ------------------ --------------- ---------------
A-4
EXHIBIT B
to the
RECEIVABLES PURCHASE AGREEMENT
LOCATION OF RECORDS
1. Purchaser
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxx 00000
2. Seller
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
0000 Xxxxxxx 00 Xxxx
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxxxxx 39289-0080
B-1
EXHIBIT C
to the
RECEIVABLES PURCHASE AGREEMENT
SUBSIDIARIES, DIVISIONS, TRADE NAMES, BANKRUPTCY PROCEEDINGS
Great Lakes Credit Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
C-1
