1
Exhibit 10(a)(vii)
EXECUTION COPY
================================================================================
PURCHASE AGREEMENT
Dated as of December 30, 1997
Among
THE EL-BEE CHARGIT CORP.
AS SELLER
and
THE EL-BEE RECEIVABLES CORPORATION
AS PURCHASER
================================================================================
CHARGIT PURCHASE AGREEMENT
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.................................................................... 1
SECTION 1.02. Other Definitional Provisions.................................................. 3
SECTION 1.03. Computation of Time Periods.................................................... 4
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. Purchase and Sale of Receivables............................................... 4
SECTION 2.02. Payment of Purchase Price...................................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Seller................................... 6
SECTION 3.02. Representations and Warranties of the Purchaser................................ 12
SECTION 3.03. Obligations Unaffected......................................................... 13
ARTICLE IV
COVENANTS
SECTION 4.01. Affirmative Covenants of the Seller............................................ 14
SECTION 4.02. Reporting Requirements of the Seller........................................... 17
SECTION 4.03. Negative Covenants of the Seller............................................... 18
SECTION 4.04. Affirmative Mutual Covenant.................................................... 20
ARTICLE V
EVENTS OF TERMINATION
SECTION 5.01. Termination.................................................................... 21
CHARGIT PURCHASE AGREEMENT
3
ii
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. Indemnification................................................................ 22
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Further Assurances............................................................. 25
SECTION 7.02. Payments....................................................................... 26
SECTION 7.03. Costs, Expenses and Taxes...................................................... 26
SECTION 7.04. Binding Effect; Assignability.................................................. 26
SECTION 7.05. No Waiver; Cumulative Remedies................................................. 27
SECTION 7.06. Amendment...................................................................... 27
SECTION 7.07. Severability................................................................... 28
SECTION 7.08. Notices........................................................................ 28
SECTION 7.09. Counterparts................................................................... 29
SECTION 7.10. Construction of Agreement as Security Agreement................................ 29
SECTION 7.11. Third-Party Beneficiaries...................................................... 29
SECTION 7.12. The Seller's Obligations....................................................... 29
SECTION 7.13. Governing Law, Jurisdiction, Consent to Service of Process..................... 30
EXHIBIT
Exhibit A Form of Subordinated Note
7
CHARGIT PURCHASE AGREEMENT
4
PURCHASE AGREEMENT dated as of December 30, 1997 among THE EL-
BEE CHARGIT CORP., an Ohio corporation ("CHARGIT"), as seller hereunder (the
"SELLER" or the "ORIGINATOR"), and THE EL-BEE RECEIVABLES CORPORATION, a
Delaware corporation, as purchaser hereunder (the "PURCHASER").
PRELIMINARY STATEMENTS
1. The Seller has right, title and interest in, to and under
the Receivables (as defined in the Pooling and Servicing Agreement referred to
below) and other Transferred Assets (as defined below) existing on the date
hereof or hereafter created and has acquired such right, title and interest
pursuant to the Purchase Agreement dated as of the date hereof between The
Xxxxx-Xxxxxxx Stores Corp., an Ohio corporation ("XXXXX-XXXXXXX"), and the
Seller (as amended, supplemented or otherwise modified from time to time, the
"FIRST PURCHASE AGREEMENT").
2. The Seller desires to sell to the Purchaser, and the
Purchaser desires to buy from the Seller, on the date hereof and from time to
time hereafter, all of the Seller's right, title and interest in, to and under
the Receivables and other Transferred Assets.
3. All of the outstanding capital stock of the Purchaser is
owned, directly or indirectly, by Xxxxx-Xxxxxxx.
4. Pursuant to that certain Pooling and Servicing Agreement
dated as of the date hereof (as amended, supplemented or otherwise modified from
time to time, the "POOLING AND SERVICING AGREEMENT") among the Purchaser,
Chargit, as servicer, and Bankers Trust Company, a New York banking corporation,
as trustee, the Purchaser has agreed to transfer to the Trust created pursuant
to the Pooling and Servicing Agreement all of the Purchaser's right, title and
interest in, to and under the Receivables and other Transferred Assets.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein but
not otherwise defined herein shall have the meanings set forth in the Pooling
and Servicing Agreement. In addition, the term "AGREEMENT" shall mean this
Purchase Agreement, as the same may from time to time be amended, supplemented
or otherwise modified. The following capitalized terms shall have the following
meanings:
CHARGIT PURCHASE AGREEMENT
5
2
"EARLY TERMINATION" has the meaning specified in Section 5.01.
"EFFECTIVE PERIOD" means the period beginning on the Initial
Cut Off Date and terminating on (i) the earliest of (a) the close of business on
the Business Day on which a Termination Event occurs, (b) the close of business
on the Business Day immediately following the day on which any Early
Amortization Event occurs and (c) the close of business on the Business Day
immediately preceding the day on which the Amortization Period for the last
outstanding Series begins or (ii) such other date as is specified in a written
notice from either the Seller or the Purchaser to the other and to the Trustee.
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of the Seller, or under common
control with the Seller, within the meaning of Section 414 of the Internal
Revenue Code and the regulations promulgated thereunder.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 4001(a)(3) of ERISA, to which the Seller or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a "single employer plan", as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Seller or any ERISA Affiliate and at least one Person other than the Seller
and the ERISA Affiliates or (b) was so maintained and in respect of which the
Seller or any ERISA Affiliate could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"ORIGINATOR INDEMNIFIED AMOUNTS" has the meaning specified in
Section 6.01.
"ORIGINATOR INDEMNIFIED PARTY" has the meaning specified in
Section 6.01.
"PLAN" means a Single Employer Plan or Multiple Employer Plan.
"PLAN EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been waived
by the PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of
ERISA (without regard to subsection (2) of such Section) are met with respect to
a contributing sponsor, as defined in Section 4001(a)(13) or ERISA, of a Plan,
and an event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan;
CHARGIT PURCHASE AGREEMENT
6
3
(c) the provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of the Seller or any ERISA
Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by the Seller or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, such Plan.
"PURCHASE DATE" has the meaning specified in Section 2.02(b).
"PURCHASE PERCENTAGE" means (a) for the period from the
Effective Date until the third Distribution Date on which payment is made by
Purchaser after the Effective Date, 97.5% and (b) for each day on and after such
third Distribution Date an amount (expressed as a percentage) equal to (i) 100%
MINUS (ii) the aggregate sum of the Series Discount Factors (as defined in each
Supplement) for all outstanding Series, so long as such Series Discount Factor
is greater than zero; PROVIDED, HOWEVER, that such "Purchase Percentage" shall
not be less than 96%.
"PURCHASE PRICE" has the meaning specified in Section 2.02(c).
"SINGLE EMPLOYER PLAN" means a "single employer plan", as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Seller or any ERISA Affiliate or (b) was so maintained and in respect of
which the Seller or any ERISA Affiliate could have liability under Section 4069
of ERISA in the event such plan has been or were to be terminated.
"SUBORDINATED LOAN" has the meaning specified in Section
2.02(d).
"TERMINATION EVENT" has the meaning specified in Section 5.01.
"TRANSFER" has the meaning specified in Section 2.01.
"TRANSFERRED ASSETS" has the meaning specified in Section
2.01.
CHARGIT PURCHASE AGREEMENT
7
4
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. (a) All
accounting terms not defined in this Agreement, and accounting terms partly
defined in this Agreement to the extent not completely defined, shall have the
respective meanings given to them under generally accepted accounting principles
or regulatory accounting principles, as applicable and in effect from time to
time. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under generally accepted accounting
principals or regulatory accounting principles, the definitions contained herein
shall control.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section, Schedule
and Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; and
the term "including" shall mean "including without limitation".
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
SECTION 1.03. 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" shall mean "from and
including" and the words "to" and "until" shall mean "to but excluding".
CHARGIT PURCHASE AGREEMENT
8
5
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 2.01. PURCHASE AND SALE OF RECEIVABLES. By execution
of this Agreement, the Seller does hereby transfer, assign, set-over and
otherwise convey (the making of such transfer, assignment, set-over and
conveyance being a "TRANSFER", and so to transfer, assign, set-over and
otherwise convey being to "TRANSFER") without recourse, except as expressly
provided herein, to the Purchaser, in each case whether now existing or
hereafter created, (a) all of the Seller's right, title and interest in, to and
under all of the Receivables existing on the Initial Cut Off Date and thereafter
arising from time to time in connection with the Accounts, (b) all monies due or
to become due with respect thereto, (c) all Recoveries and Insurance Proceeds
relating to such Receivables, (d) all Collections and all other amounts received
or receivable from time to time with respect to such Receivables, (e) all
rights, remedies, powers and privileges with respect to the Receivables, (f) all
of the Seller's rights, remedies, powers and privileges under the First Purchase
Agreement and (g) all proceeds (including "proceeds" as defined in the UCC of
the State of New York and of the jurisdiction the law of which governs the
perfection of the interest in the Receivables Transferred hereunder) of the
foregoing. Such property described in the preceding sentence shall constitute
the property transferred by the Seller (collectively, the "TRANSFERRED ASSETS").
SECTION 2.02. PAYMENT OF PURCHASE PRICE. (a) On the Initial
Cut Off Date, the Purchaser shall pay to the Seller, with respect to all of the
Seller's right, title and interest in, to and under all Receivables and other
Transferred Assets existing at the close of business on the Initial Cut Off
Date, a payment consisting of $162,377,744.49 multiplied by the Purchase
Percentage.
(b) On each Business Day during the Effective Period (each, a
"PURCHASE DATE"), the Seller shall determine the Receivables and other
Transferred Assets with respect thereto arising since the close of business on
the preceding Business Day, which Receivables and other Transferred Assets shall
be deemed available for purchase by the Purchaser on such Purchase Date. To the
extent that any sale of Receivables is not reflected in the Daily Report, such
Receivables and other Transferred Assets with respect thereto will nevertheless
be deemed sold to such Purchaser in every respect and all of the Seller's
rights, title and interest in, to and under such Receivables and other
Transferred Assets will be deemed to have been sold to the Purchaser.
CHARGIT PURCHASE AGREEMENT
9
6
(c) The purchase price payable to the Seller for the
Receivables and other Transferred Assets to be purchased on any Purchase Date
shall be an amount equal to the product of (i) the aggregate outstanding
principal balance of all Receivables deemed available for purchase pursuant to
paragraph (b) above and (ii) the Purchase Percentage for such Purchase Date
(such amount, the "PURCHASE PRICE"), PROVIDED, HOWEVER, that such Purchase Price
shall not be less than the reasonably equivalent value of the Receivables to
which such Purchase Price relates, and in the event that, in the reasonable
judgment of either the Seller or the Purchaser, such Purchase Price is less than
such reasonably equivalent value or does not reflect the fair market value of
such Receivables, within five Business Days after such Purchase Date, each of
the Seller and the Purchaser (after notice to the other party) shall appoint a
Person (other than an Affiliate of the Purchaser or Seller) in the business of
purchasing proprietary credit card receivables, and such Persons shall appoint a
third Person (other than an Affiliate of the Purchaser or Seller) in such
business, and such Persons shall make an independent appraisal of the value of
such Receivables and shall determine a Purchase Price which reasonably reflects
the fair market value of such Receivables. The Purchase Percentage with respect
to each Determination Date shall be calculated in the Monthly Servicer's Report
with respect to such Determination Date and such calculation shall be used in
the calculation of the Purchase Price owed under this Agreement for all
Purchases occurring from and including such Determination Date to but excluding
the next Determination Date.
(d) The Purchase Price shall be paid to the Seller on the
applicable Purchase Date in immediately available funds to the extent of funds
available to the Purchaser. The excess, if any, of the Purchase Price over the
payment therefor set forth in clauses (a) and (c) above shall be deemed to be
either (i) a loan by the Seller to the Purchaser (a "SUBORDINATED LOAN")
evidenced by the Subordinated Note of the Purchaser substantially in the form
attached hereto as Exhibit A or (ii) to the extent such loan would cause the
unpaid principal amount of the Subordinated Loan, together with all accrued and
unpaid interest thereon, to exceed ten percent (10%) of the Transferor Invested
Amount, a contribution by the Seller to the Purchaser's capital, and the
Purchase Price shall be considered paid in full by reflecting such contribution
as an addition to the surplus of the Purchaser at an appropriate value. In
addition, the Seller may otherwise make capital contributions to the Purchaser.
CHARGIT PURCHASE AGREEMENT
10
7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to the Purchaser as of the Initial Cut Off
Date and each Purchase Date that:
(a) DUE ORGANIZATION, QUALIFICATION AND AUTHORIZATION. The
Seller (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
(ii) is duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be licensed
and (iii) has all requisite corporate power and authority (including
all governmental licenses, permits and other approvals) to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) CORPORATE POWERS AND NO CONFLICTS. The execution, delivery
and performance by the Seller of the Transaction Documents to which it
is or is to be a party, the making of each Transfer hereunder and the
consummation of the transactions contemplated hereby are within the
Seller's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene or violate any Requirement
of Law, (ii) conflict with or result in the breach of, or constitute a
default under, any contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument binding on or affecting the Seller
or any of its properties or (iii) except for the Liens created under
the Transaction Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of
the Seller, and no transaction contemplated hereby requires compliance
on its part with any bulk sales act or similar law. The Seller is not
in violation of any Requirement of Law or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument.
(c) GOVERNMENT AUTHORIZATION AND APPROVAL. No authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is
required with respect to the Seller for (i) the due execution, delivery
or performance by the Seller of any of the Transaction Documents to
which it is or is to be a party, any Transfer or the consummation of
the other transactions contemplated hereby or thereby, (ii) the grant
by the Seller of the
CHARGIT PURCHASE AGREEMENT
11
8
transfers made or Liens granted by it pursuant to this Agreement, (iii)
the perfection or maintenance of the transfers made or Liens created by
this Agreement (including the first priority nature thereof) or (iv)
the exercise by the Purchaser and its assigns of its rights under this
Agreement or its remedies granted under the Transaction Documents,
except for (A) the financing statements and other documents required to
have been filed on or prior to the Initial Cut Off Date pursuant to the
Certificate Purchase Agreement for the initial Series issued pursuant
to the Pooling and Servicing Agreement, all of which have already been
duly filed and are in full force and effect, (B) the filing from time
to time of any amendments, assignments, continuation statements or
other documents which may become required or applicable pursuant to
Section 7.01 hereof or Sections 2.05(i) or 3.03(b)(viii) of the Pooling
and Servicing Agreement and (C) any properly completed and executed
UCC-3 termination statements which shall have been delivered to the
Program Agent on or before the Initial Cut Off Date.
(d) ENFORCEABILITY. Each Transaction Document to which the
Seller is or is to be a party constitutes a legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by Debtor
Relief Laws. Each Transaction Document is in full force and effect, and
is not subject, as to the Seller, to any specific dispute, offset,
counterclaim or defense of the Seller.
(e) NO LITIGATION. There is no action, suit, investigation,
litigation or proceeding affecting the Seller, pending or threatened
before any Governmental Authority or arbitrator that (i) could have a
Material Adverse Effect, (ii) purports to affect the legality, validity
or enforceability of any Transaction Document or the consummation of
the transactions contemplated hereby, including the prevention of the
issuance of the Certificates or (iii) could have an adverse effect on
the income tax attributes of the Trust.
(f) LIENS ON PROPERTIES. Except for Liens that will be
terminated prior to the Initial Cut Off Date, there are no Liens of any
nature whatsoever on any Account or Receivable. The Seller is not a
party to any contract, agreement, lease or instrument (other than this
Agreement or as contemplated by this Agreement) the performance of
which, either unconditionally or upon the happening of an event, will
result in or require the creation of any Lien on any Account or
Receivable, or otherwise result in a violation of any Transaction
Document.
(g) CONTRACTUAL OBLIGATIONS. (i) The Seller is not a party to
any indenture, loan or credit agreement or any lease or other agreement
or instrument, or subject to
CHARGIT PURCHASE AGREEMENT
12
9
any Requirement of Law, that would have an adverse effect on the
ability of the Seller to carry out its obligations under this Agreement
or any other Transaction Document to which it is a party, and (ii)
neither the Seller nor any other party is in default in any respect
under or with respect to any Transaction Document or any other
contract, agreement, lease or instrument to which the Seller is a
party.
(h) INVESTMENT COMPANY ACT, ETC. The Seller is not an
"investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, or a company controlled by, an "investment
company" within the meaning of and as such terms are defined in the
Investment Company Act. Each Transfer of Receivables to the Purchaser
hereunder constitutes a purchase or other acquisition of notes, drafts,
acceptances, open accounts receivable or other obligations representing
part or all of the sales price of merchandise, insurance or services
within the meaning of Section 3(c)(5) of the Investment Company Act.
The acquisition by the Purchaser of each Receivable constitutes a
"current transaction" within the meaning of Section 3(a)(3) of such
Act.
(i) LOCATIONS. The chief place of business and chief executive
office of the Seller, and the office where the Seller keeps the
originals of its books, records and documents regarding the Receivables
and other Transferred Assets are located at the address of the Seller
specified in Section 7.08. During the four months prior to the Transfer
Date and prior to any Purchase Date, the chief place of business and
chief executive office of the Seller, and the offices where the Seller
kept the originals of its books, records and documents regarding the
Receivables and the other Transferred Assets were located at the
address of the Seller specified in Section 7.08.
(j) TRADENAMES. The legal name of the Seller is as set forth
on the signature page of this Agreement and the Seller has no
tradenames, fictitious names, assumed names or "doing business as"
names.
(k) ACCURACY OF INFORMATION. Each certificate, information,
exhibit, financial statement, document, book, record or report
furnished by a Responsible Officer of the Seller to any Originator
Indemnified Party in connection with this Agreement is accurate in all
material respects as of its date and no such document contains any
misstatement of material fact.
(l) SOLVENCY. The Seller is Solvent and will be Solvent after
giving effect to the transactions contemplated by the Transaction
Documents.
CHARGIT PURCHASE AGREEMENT
13
10
(m) COLLECTION ACCOUNTS. Schedule 3.03(a)(vi) to the Pooling
and Servicing Agreement (as such Schedule may be amended from time to
time pursuant thereto) is a complete and accurate list of each
Collection Account as of each Purchase Date. The Collection Account
Banks are the only institutions holding Collection Accounts for the
receipt of payments in respect of Receivables (subject to such changes
as may be made from time to time in accordance with Section 4.02(c) of
the Pooling and Servicing Agreement), and all Obligors, and only such
Obligors, have been instructed or, upon the creation of Receivables,
will be instructed to make payments only to the Collection Accounts in
accordance with Section 4.03 of the Pooling and Servicing Agreement and
such instructions have not been modified or revoked by the Seller
(except as permitted under Section 4.02 of the Pooling and Servicing
Agreement) and such instructions that have been given are in full force
and effect.
(n) COMPLIANCE. The Seller has complied, and will comply on
each Purchase Date, with each Requirement of Law with respect to all
Receivables and other Transferred Assets Transferred to the Purchaser
hereunder and the Cardholder Agreements related thereto and with
respect to its business or properties. The Seller has performed and
complied with its obligations under the Cardholder Agreements and
invoices giving rise to the Receivables.
(o) TAXES. The Seller has filed all tax returns (federal,
state and local) which it reasonably believes are required to be filed
and has paid or made adequate provision for the payment of all taxes,
assessments and other governmental charges due from the Seller or is
contesting any such tax, assessment or other governmental charge in
good faith through appropriate proceedings as to which adequate
reserves are being maintained and no Lien with respect thereto has
attached to its property and become enforceable against its other
creditors. The Seller knows of no reasonable basis for any additional
tax assessment for any year for which adequate reserves have not been
established.
(p) USE OF PROCEEDS. The proceeds of each Purchase will be
used by the Seller solely to pay to Xxxxx-Xxxxxxx the purchase price of
Transferred Assets the Seller purchases from Xxxxx-Xxxxxxx. No proceeds
of any Purchase will be used by the Seller to acquire any security in a
transaction that is subject to Sections 13 and 14 of the Exchange Act,
as amended, or to purchase or carry any margin security in violation of
any applicable law or regulation.
(q) NO RESCISSION. No Cardholder Agreement giving rise to any
Receivable Transferred hereunder has been amended, satisfied,
subordinated or rescinded, except
CHARGIT PURCHASE AGREEMENT
14
11
as disclosed in writing to the Purchaser on or before the date of
Transfer of such Receivable or as otherwise permitted under the Pooling
and Servicing Agreement. Subsequent to such Transfer no such Receivable
has been compromised, adjusted, extended, satisfied, subordinated,
rescinded or modified, except as permitted under the Pooling and
Servicing Agreement.
(r) NO PAYMENT. The Seller has no Knowledge of any fact which
would lead it to reasonably expect that, when billed, any Receivable
Transferred hereunder would not be paid in accordance with its terms
when due.
(s) FRAUDULENT CONVEYANCE. The Seller is not entering into the
transactions contemplated hereby with the intent of hindering, delaying
or defrauding creditors.
(t) VALID SALE AND TRANSFER. This Agreement creates a valid
sale, transfer and assignment to the Purchaser of, and, subject to the
interest of the Trust under the Pooling and Servicing Agreement, the
Purchaser is the legal and beneficial owner of, in each case whether
now existing or hereafter created, (A) all of the Originators' right,
title and interest in and to all of the Receivables existing on the
Initial Cut Off Date and thereafter arising from time to time in
connection with the Accounts until the termination of the Trust, (B)
all monies due or to become due with respect thereto, (C) all
Recoveries and Insurance Proceeds relating to such Receivables, (D) all
Collections and all other amounts received or receivable from time to
time with respect to such Receivables, and (E) all rights, remedies,
powers and privileges with respect to such Receivables, (F) all of the
Originators' rights, remedies, powers and privileges under each
Interest Rate Protection Agreement and (G) all proceeds (including
"proceeds" as defined in the UCC of the State of New York and of the
jurisdiction the law of which governs the perfection of the interest in
the Receivables Transferred hereunder) of the foregoing. This Agreement
constitutes a valid Transfer and assignment to the Purchaser of all
right, title and interest of the Seller in and to the Transferred
Assets, which is enforceable with respect to the Receivables now
existing in connection with the Accounts and the other existing
Transferred Assets and the proceeds thereof, and which will be
enforceable by the Purchaser, in the case of Receivables hereafter
created and arising from time to time in connection with the Accounts
and all other Transferred Assets and the proceeds thereof hereafter
created, upon such creation. Upon the filing of the appropriate
financing statements, the Purchaser shall have a first priority
perfected ownership interest in Transferred Assets and proceeds
thereof. Except as otherwise provided in the Pooling and Servicing
Agreement, the Seller has clearly and unambiguously marked all of its
computer records and all of its microfiche storage files, if any, in a
manner reasonably calculated to indicate that the Transferred Assets
CHARGIT PURCHASE AGREEMENT
15
12
are the property of the Purchaser and shall cause the Purchaser to
maintain such records in a manner such that the Purchaser's perfected
first priority interest in the Receivables shall not be adversely
affected.
(u) NO CLAIM OR INTEREST. (i) Except as otherwise provided in
this Agreement or any applicable Supplement, neither the Seller nor any
Person claiming through or under the Seller has any claim to or
interest in the Concentration Account, the Collection Accounts (other
than the Store Accounts), the Excess Funding Account or any Series
Account. (ii) Each Receivable and other Transferred Asset has been or
will be Transferred to the Purchaser free and clear of any Lien or
interest of any other Person not holding through the Trust, and in
compliance with all Requirements of Law applicable to the Transferor.
(v) ELIGIBILITY. Each Account that was classified as an
"Eligible Account" by the Seller, the Purchaser or the Servicer in any
document or report delivered hereunder or under the Pooling and
Servicing Agreement satisfied, at the time of such classification, the
requirements for eligibility contained in the definition of Eligible
Account. Each Receivable as of the date of its Transfer is an Eligible
Receivable. The computer file or microfiche or written list delivered
by the Servicer pursuant to Section 3.03(b)(viii)(E) of the Pooling and
Servicing Agreement is a true and complete listing of all Accounts and
the information contained therein with respect to the identity of each
Account and the aggregate unpaid balance of the Receivables existing
thereunder is true and correct.
(w) ERISA. No Plan has any accumulated funding deficiency, as
defined in Section 302(a) of ERISA, whether or not waived. The Seller
and each ERISA Affiliate has timely made all contributions required to
be made by it to any Plan, except where a failure to contribute could
not reasonably be expected to give rise to a Lien under Section 302(f)
of ERISA. No Plan Event with respect to any Plan has occurred or could
reasonably be expected to occur that could result, directly or
indirectly, in any Lien being imposed on the property of the Seller.
Neither the Seller nor any ERISA Affiliate has incurred, or could
reasonably be expected to incur, withdrawal liability to, or liability
in connection with, the reorganization, termination or insolvency of
any Multiemployer Plan.
(x) TERMINATION EVENT. No event or condition has occurred and
is continuing that is, or with the giving of notice or the passage of
time or both would constitute, a Termination Event.
CHARGIT PURCHASE AGREEMENT
16
13
(y) REASSIGNMENT OF PORTFOLIO. Upon the occurrence of an event
or condition for which a Receivable shall be removed from the Trust under
Section 2.04(e) of the Pooling and Servicing Agreement, the Seller shall accept
reassignment of an amount of Principal Receivables (as specified below) to the
extent the Purchaser is obligated to accept reassignment under Section 2.04(e)
of the Pooling and Servicing Agreement. The Seller (on behalf of the Purchaser)
shall deposit on such Reassignment Date an amount equal to the reassignment
deposit amount (as specified in Section 2.04(e) of the Pooling and Servicing
Agreement) for such Receivables in the Concentration Account. On the
Distribution Date on which such amount has been deposited in full into the
Concentration Account, Transferred Assets which have been released to the
Purchaser under Section 2.04(e) of the Pooling and Servicing Agreement shall be
released to the Seller after payment of all amounts otherwise due hereunder on
or prior to such dates, and the Purchaser shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are reasonably
requested by the Seller to vest in the Seller, all right, title and interest of
the Purchaser in and to such Transferred Assets. If the Purchaser or the Trustee
gives notice directing the Seller to accept reassignment as provided above, the
obligation of the Seller to accept reassignment of the Receivables and pay the
reassignment deposit amount pursuant to this Section 3.01(y) shall constitute
the sole remedy respecting a breach of the representations and warranties
contained in Sections 3.01(d) and 3.01(t) hereof available to the Purchaser.
(z) SURVIVAL. The representations and warranties set forth in
Section 3.01 hereof shall survive the Transfer of any of the respective
Receivables to the Purchaser and the termination of the rights and obligations
of the Servicer pursuant to Section 10.01 of the Pooling and Servicing
Agreement.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants to the Seller as of the Initial Cut Off
Date and each Purchase Date that:
(a) DUE ORGANIZATION, QUALIFICATION AND AUTHORIZATION. The
Purchaser (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
(ii) is duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be licensed
and (iii) has all requisite corporate power and authority (including
all governmental licenses, permits and other approvals) to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
CHARGIT PURCHASE AGREEMENT
17
14
(b) CORPORATE POWERS AND NO CONFLICTS. The execution, delivery
and performance by the Purchaser of the Transaction Documents to which
it is or is to be a party, the Transfer of the Receivables and other
Transferred Assets pursuant to this Agreement and the consummation of
the transactions contemplated hereby are within the Purchaser's
corporate powers, have been duly authorized by all necessary corporate
action, and do not (i) contravene the Purchaser's charter or bylaws,
(ii) violate any Requirement of Law, (iii) conflict with or result in
the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Purchaser or any of its
properties or (iv) except for the Liens created under the Transaction
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of the Purchaser. The
Purchaser is not in violation of any Requirement of Law or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument.
(c) GOVERNMENT AUTHORIZATION AND APPROVAL. No authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is
required for the due execution, delivery, recordation, filing or
performance by the Purchaser of any of the Transaction Documents to
which it is or is to be a party, the making of each purchase and sale
of Receivables hereunder or the consummation of the other transactions
contemplated hereby or thereby.
(d) ENFORCEABILITY. Each Transaction Document to which the
Purchaser is or is to be a party constitutes a legal, valid and binding
obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms (except as such enforceability may be limited
by Debtor Relief Laws). Each Transaction Document is in full force and
effect, and is not subject, as to the Purchaser, to any specific
dispute, offset, counterclaim or defense of the Purchaser.
SECTION 3.03. OBLIGATIONS UNAFFECTED. The obligations of the
Seller to the Purchaser under this Agreement shall not be affected by reason of
any invalidity, illegality or irregularity of any Receivable or other
Transferred Asset or the sale of any Receivable or other Transferred Asset.
CHARGIT PURCHASE AGREEMENT
18
15
ARTICLE IV
COVENANTS
SECTION 4.01. AFFIRMATIVE COVENANTS OF THE SELLER. The Seller
hereby covenants that, until the Trust Termination Date:
(a) COMPLIANCE WITH LAW. The Seller shall duly satisfy all
obligations on its part to be fulfilled under or in connection with the
Receivables and the Seller Related Security, will maintain in effect
all qualifications required under any Requirement of Law in order to
properly convey the Receivables and other Transferred Assets to the
Purchaser and will comply in all respects with all Requirements of Law
applicable to the Seller, its business and properties and the
Receivables and other Transferred Assets.
(b) PRESERVATION OF LEGAL EXISTENCE. The Seller will preserve
and maintain its existence, legal structure, legal name and its rights
(charter and statutory), permits, licenses, approvals, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in each jurisdiction where the failure to maintain such
qualification could have a Material Adverse Effect.
(c) AUDITS. At any time during the Seller's regular business
hours and on reasonable prior notice and for a purpose reasonably
related to this Agreement, the Seller shall, at its expense and in
response to any reasonable request of the Purchaser or the Trustee,
permit the Purchaser or the Trustee, or their respective agents or
representatives, (i) to examine and make copies of and abstracts from
all books, records and documents (including computer tapes, microfiche
and disks) in the possession or under the control of the Seller
relating to the Receivables, other Transferred Assets and related
Cardholder Agreements and (ii) to visit the offices and properties of
the Seller for the purpose of examining such materials and to discuss
matters relating to the Receivables, other Transferred Assets, and
related Cardholder Agreements or the Seller's performance hereunder
with any of the officers or employees of the Seller having knowledge
thereof.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Seller will
(i) keep proper books of record and account, which shall be maintained
or caused to be maintained by the Seller and shall be separate and
apart from those of any Affiliate of the Seller, in which full and
correct entries shall be made of all financial transactions and the
assets and business of the Seller in accordance with generally accepted
CHARGIT PURCHASE AGREEMENT
19
16
accounting principles consistently applied, (ii) maintain and implement
administrative and operating procedures (including the ability to
recreate records evidencing the Receivables and other Transferred
Assets in the event of the destruction of the originals thereof) and
(iii) keep and maintain all documents, books, records and other
information necessary or reasonably advisable for the collection of all
Receivables and other Transferred Assets (including records adequate to
permit the daily identification of each new Receivable and all
Collections of and adjustments to each existing Receivable).
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES. The Seller
will, at its expense, timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it
hereunder including complying with its material obligations under all
Cardholder Agreements and invoices giving rise to the Receivables. The
Seller shall enforce the covenant in the First Purchase Agreement
requiring Xxxxx-Xxxxxxx to comply with and perform its obligations
under the Cardholder Agreements relating to the Accounts and the
Cardholder Guidelines. The Seller may not change or permit
Xxxxx-Xxxxxxx to change the terms and provisions of the Cardholder
Agreements or the Cardholder Guidelines in any respect except in
accordance with Section 2.05(t) of the Pooling and Servicing Agreement.
The Seller will not rescind or cancel, or permit the rescission or
cancellation of, any Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority.
(f) PAYMENT OF TAXES, ETC. The Seller will pay promptly when
due all taxes, assessments and governmental charges or levies imposed
upon it, or any Transferred Asset, or in respect of its receipts,
income or profits therefrom, and any and all claims of any kind, except
that no such amount, so long as such amount is not material, need be
paid if the charge or levy is being contested in good faith through
appropriate proceedings as to which adequate reserves are being
maintained and no Lien with respect thereto has attached to its
property and become enforceable against its creditors.
(g) CARDHOLDER GUIDELINES. The Seller shall comply with the
Cardholder Guidelines.
(h) COLLECTIONS. (i) The Seller will instruct all Obligors to
pay all Collections of Receivables directly into a Collection Account
or to the Servicer, and the Seller shall deposit any Collections
received by it directly into a Collection Account in
CHARGIT PURCHASE AGREEMENT
20
17
the manner and within the time period required by Section 4.03(a) of
the Pooling and Servicing Agreement.
(ii) If the Seller accepts payment of a Receivable
from any Obligor in a currency other than U.S. Dollars, then the Seller
will, on the date of such acceptance, deposit directly into a
Collection Account in U.S. Dollars an amount equal to the outstanding
principal amount of such Receivable.
(iii) In the event that the Seller receives any
Collections, the Seller agrees to hold all such Collections in trust
and to deposit such Collections to the appropriate Collection Account
as soon as practicable, but in no event later than when required under
Section 4.03(a) of the Pooling and Servicing Agreement.
(iv) In the event that any Affiliate of the Seller
receives any Store Payment, the Seller agrees to cause such Affiliate
to hold all such Collections in trust and to cause such Affiliate to
deposit such Collections to the appropriate Collection Account within
two Business Days after such payments are deposited into Store
Accounts.
(i) MERGER. The Seller will not (i) sell any shares of any
class of its capital stock to any Person (other than Xxxxx-Xxxxxxx or
any of its Affiliates that are Subsidiaries of Xxxxx-Xxxxxxx), or enter
into any transaction of merger or consolidation, or convey or otherwise
dispose of all or substantially all of its assets (except as
contemplated herein), or (ii) terminate, liquidate or dissolve itself
(or suffer any termination, liquidation or dissolution), or (ii)
acquire or be acquired by any Person.
(j) MAINTENANCE OF SEPARATE EXISTENCE AND DIRECTORS. Seller
shall take all actions as are necessary to comply with, and to cause
the Purchaser to comply with, Section 2.05(d) and Section 2.05(r) of
the Pooling and Servicing Agreement.
(k) MODIFICATION OF SYSTEMS. The Seller agrees, promptly after
the replacement or any material modification of any computer,
automation or other operating systems (in respect of hardware or
software) used to make any calculations or reports hereunder, to give
written notice of any such replacement or modification to the Purchaser
and the Trustee.
(l) MAINTENANCE OF INSURANCE. The Seller shall use its best
efforts to maintain with a responsible company, and at its own expense,
its current commercial
CHARGIT PURCHASE AGREEMENT
21
18
crime insurance (including commercial fraud insurance) as is
commercially available at a cost that is not generally regarded as
excessive by industry standards, with coverage on all officers,
employees or other Persons acting in any capacity requiring such
Persons to handle funds, money, documents or papers relating to the
Receivables and the related Accounts.
(m) FIRST PURCHASE AGREEMENTS. The Seller (i) will, at its
expense, timely perform and comply with all provisions, covenants and
other promises required to be observed by it under the First Purchase
Agreement, maintain the First Purchase Agreement in full force and
effect, enforce its rights under the First Purchase Agreement
substantially in accordance with the terms thereof and comply with its
obligations under all Cardholder Agreements giving rise to the
Receivables, and (ii) will not amend or otherwise modify any term or
condition of any Purchase Agreement or give any consent, waiver or
approval thereunder. The Seller shall, within one Business Day after a
Responsible Officer obtains Knowledge of the occurrence of any
Termination Event or any event which, with the giving of notice or
lapse of time or both, would constitute a Termination Event, notify the
Purchaser and the Trustee in writing of such occurrence. The Seller
shall promptly furnish to the Purchaser and the Trustee copies of any
notices, reports or certificates given or delivered to the Seller under
the Purchase Agreements.
SECTION 4.02. REPORTING REQUIREMENTS OF THE SELLER. The Seller
hereby covenants that, until the Trust Termination Date:
(a) TERMINATION EVENTS, ETC. The Seller shall
(i) within one Business Day after a Responsible
Officer of the Seller obtains Knowledge of the occurrence of
any Termination Event or any event which, with the giving of
notice or lapse of time or both, would constitute a
Termination Event, notify the Purchaser and the Trustee of
such occurrence;
(ii) as soon as possible and in any event (A) within
three Business Days after a Responsible Officer of the Seller
obtains Knowledge of the occurrence of any Termination Event
or event which, with the giving of notice or lapse of time or
both, would constitute a Termination Event, deliver to the
Purchaser and the Trustee a written statement of a Responsible
Officer of the Seller setting forth details of such
Termination Event or such event and the action that the Seller
has taken and proposes to take with respect thereto; and (B)
within three Business Days after a Responsible Officer of the
Seller makes a
CHARGIT PURCHASE AGREEMENT
22
19
determination that any other event, development or information
is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect, give written notice thereof to
the Purchaser and the Trustee.
(b) LITIGATION. As soon as possible and in any event within 10
Business Days after a Responsible Officer of the Seller obtains
Knowledge thereof, the Seller shall notify the Purchaser of any
litigation, investigation or proceeding which could be expected to
impair the ability of the Seller to perform its obligations under this
Agreement.
(c) ERISA. As soon as possible and in any event within 30 days
after a Responsible Officer of the Seller obtains Knowledge that one of
the following events has occurred or is reasonably expected to occur,
furnish to the Trustee a written statement of a Responsible Officer of
the Seller setting forth the details of: (i) the occurrence of any Plan
Event with respect to any Plan or (ii) the withdrawal by the Seller or
any of its ERISA Affiliates from, or the termination, reorganization or
insolvency of, any Multiemployer Plan.
(d) LIENS. The Seller will advise the Purchaser and the
Trustee promptly, in reasonable detail, (A) of any Lien or claim
asserted against any of the Receivables or other Transferred Asset, and
(B) of the occurrence of any event which in the case of clause (A)
would have an adverse effect on the value of the Receivables or other
Transferred Assets.
(e) OTHER INFORMATION. The Seller shall promptly, from time to
time, furnish to the Purchaser such other information, documents,
records or reports regarding the Receivables, the other Transferred
Assets or the condition or operations, financial or otherwise, of the
Seller, as the Purchaser may from time to time reasonably request.
SECTION 4.03. NEGATIVE COVENANTS OF THE SELLER. The Seller
hereby covenants that, until the Trust Termination Date, it will not:
(a) SALES, LIENS, ETC. Except for the Transfers contemplated
herein, or pursuant to or as contemplated by the Pooling and Servicing
Agreement or First Purchase Agreement, sell, pledge, assign or transfer
any Receivable, any other Transferred Asset or any interest therein to
any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Receivable or other Transferred Asset or any other
property or asset of the Seller, whether now existing or hereafter
created, or any
CHARGIT PURCHASE AGREEMENT
23
20
interest therein, and the Seller shall defend the right, title and
interest of the Purchaser in and to the Receivables and other
Transferred Assets, whether now existing or hereafter created, against
all claims of third parties claiming through or under the Seller or any
other Originator.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Extend, amend or
otherwise modify (or consent or fail to object to any such extension,
amendment or modification), except as permitted under the Cardholder
Agreements, the Cardholder Guidelines or Section 2.05(t) of the Pooling
and Servicing Agreement, the terms of any Receivable and the related
Account, or amend, modify or waive (or consent or fail to object to any
such extension, amendment or modification) any payment term or
condition of any invoice related thereto (other than as provided in the
Cardholder Agreements, Cardholder Guidelines or Section 2.05(t) of the
Pooling and Servicing Agreement). The Seller will not rescind or
cancel, or permit the rescission or cancellation of, any Receivable or
the related Account except as ordered by a court of competent
jurisdiction or other Governmental Authority.
(c) CHANGE IN BUSINESS OR CARDHOLDER GUIDELINES. Make any
change in the nature of its business as carried out on the date hereof
or in the Cardholder Guidelines, which change would, in either case,
materially impair the collectibility of the Receivables, except as
permitted under the terms of the Pooling and Servicing Agreement.
(d) CHANGE IN LEGAL NAME. (i) Make any change to its legal
name, identity or business structure in any manner or chief executive
office (including the address thereof) or use any trade names,
fictitious names, assumed names or "doing business as" names or (ii)
change its jurisdiction of organization UNLESS, prior to the effective
date of any such name change, change in chief executive office, use or
change of jurisdiction, the Seller delivers to the Purchaser (A)
written notice of such change at least 30 days prior to the effective
date thereof, (B) such financing statements (Forms UCC-1 and UCC-3)
executed by the Seller required to reflect such name change, change in
chief executive office, use or change of jurisdiction, together with
such other documents and instruments required in connection therewith
to maintain the continued perfection of the interests of the Purchaser
in the Transferred Assets and (C) prior to the effective date thereof,
an Opinion of Counsel, in form and substance satisfactory to the
Purchaser, as to the Seller's due organization, valid existence and
good standing and the continued perfection after the effective date
thereof of the interests of the Purchaser in and to the Receivables and
other Transferred Assets Transferred hereby (to the same extent as such
interest was perfected on the Initial Cut Off Date with
CHARGIT PURCHASE AGREEMENT
24
21
respect to the Receivables then owned by the Seller). Furthermore, the
Seller shall give 30 days prior written notice to the Purchaser of any
change in the location of the office where it keeps the books, records
and documents regarding the Receivables and the other Transferred
Assets from the address of the Seller referred to in Section 7.08.
(e) DEPOSITS TO COLLECTION ACCOUNTS. Deposit or otherwise
credit, or cause to be so deposited or credited, or consent or fail to
object to any such deposit or credit Known to it, cash or cash proceeds
other than Collections to the Concentration Account, any Collection
Account (other than the Store Accounts), the Excess Funding Account or
any Series Account.
(f) NO ACTIONS AGAINST OBLIGORS. Except in accordance with the
Cardholder Guidelines and Pooling and Servicing Agreement, commence or
settle any legal action to enforce collection of any Receivable.
(g) NO BANKRUPTCY FILING AGAINST THE PURCHASER OR THE TRUST.
Commence, institute or cause to be commenced or instituted any
proceeding of the type referred to in the definition of "Insolvency
Event" against the Purchaser or the Trust.
(h) LOCATIONS OF SUBSIDIARIES. Permit any of the Originators
to have or maintain its jurisdiction of organization or principal place
of business in any of the States of Colorado, Kansas, New Mexico,
Oklahoma, Utah or Wyoming.
(i) SUBORDINATED NOTE. Transfer or pledge the Subordinated
Note to any Person, other than as permitted under the Intercreditor
Agreement or First Purchase Agreement.
(j) PROTECTION OF CERTIFICATEHOLDERS' RIGHTS. Take action
which would impair the rights of any Beneficiary in any Receivable or
other Trust Asset or any proceeds thereof, except as provided in the
Pooling and Servicing Agreement.
(k) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Take
action to cause any Receivable to be evidenced by any "instrument" (as
defined in the UCC of the jurisdiction the law of which governs the
perfection of the interest in such Receivable created hereunder),
except in connection with its enforcement, in which event the Seller
shall deliver such instrument to the Purchaser as soon as reasonably
practicable but in no event more than three Business Days after
execution thereof.
CHARGIT PURCHASE AGREEMENT
25
22
(l) INFORMATION PROVIDED TO RATING AGENCIES. The Seller will
use its best efforts to cause all information provided to any Rating
Agency pursuant to this Agreement or the Pooling and Servicing
Agreement or in connection with any action required or permitted to be
taken under this Agreement or the Pooling and Servicing Agreement to be
complete and accurate in all material respects.
SECTION 4.04. AFFIRMATIVE MUTUAL COVENANT. The Purchaser and
Seller shall record each Purchase as a purchase and sale, respectively, on its
books and records and reflect each Purchase in its financial statements as a
purchase and sale, respectively.
ARTICLE V
EVENTS OF TERMINATION
SECTION 5.01. TERMINATION. If any of the following events
(each, a "TERMINATION EVENT") shall have occurred:
(a) any failure by the Seller to make any payment, transfer or
deposit required to be paid, effected or made by it hereunder within
two Business Days after the same shall become due; or
(b) any representation or warranty, certification or written
statement made or deemed made by the Seller under or in connection with
this Agreement or in any statement, record, certificate, financial
statement or other document delivered pursuant hereto or in connection
herewith shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) the Seller shall fail to observe or perform any covenant
or agreement applicable to it contained herein (other than as specified
in clause (a) above) which has a material adverse effect on any
Beneficiary of any Series if such failure shall remain unremedied for
ten days after the first date on which any Responsible Officer of the
Seller knew or should have known of such failure; or
(d) any Receivables transferred hereunder whose aggregate
outstanding principal balance constitute more than 1% of the aggregate
outstanding principal balance of all Eligible Receivables shall for any
reason cease to be the subject of the valid and perfected first
priority ownership interest created by this Agreement; or any
Receivables transferred hereunder whose aggregate outstanding principal
balance
CHARGIT PURCHASE AGREEMENT
26
23
constitute more than 1% of the aggregate outstanding principal balance
of all Eligible Receivables shall cease to be free and clear of any
Lien except as provided for herein; or
(e) an Insolvency Event shall occur with respect to the
Seller; or
(f) the Internal Revenue Service shall file notice of a Lien
pursuant to Section 6323 of the Internal Revenue Code with regard to
any of the Receivables or the PBGC shall file notice of a Lien pursuant
to Section 4068 of ERISA with regard to any of the Receivables; or
(g) there shall have occurred a Trust Early Amortization
Event;
then, if any of the events set forth in paragraph (e) above shall have occurred,
a "Termination Event" shall occur without any notice, demand, protest or other
requirement of any kind immediately upon the occurrence of such event and, if
any of the events set forth in any other paragraph above shall have occurred,
the Purchaser may, by notice to the Seller, declare that a "Termination Event"
shall occur as of the date set forth in such notice. Upon the occurrence of a
Termination Event, the Effective Period shall terminate (any termination of the
Effective Period pursuant to this Section 5.01 is herein referred to as an
"EARLY TERMINATION"). Upon any Early Termination the Purchaser shall have, in
addition to all other rights and remedies under this Agreement or otherwise, all
other rights and remedies with respect to the Receivables provided under the UCC
of the applicable jurisdiction and under other applicable laws, which rights and
remedies shall be cumulative.
The Purchaser may, with the prior written consent of a
Majority in Interest of each outstanding Series (or, if so specified in the
related supplement, each Enhancement Provider for such Series) on behalf of all
Certificateholders, waive any default (other than a default described in
paragraph (e) above) by the Seller in the performance of its obligations
hereunder and its consequences, except the failure to make any distributions or
payments required to be made to the Purchaser or to make any required deposits
of any amounts to be so distributed or paid. The Purchaser with the consent of
the Certificateholders of Certificates evidencing 67% or more of the Aggregate
Invested Amount of each outstanding Series (or, if so specified in the related
Supplement, each Enhancement Provider for such Series) may, on behalf of all
Certificateholders, waive any default described in paragraph (e) above and its
consequences. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
CHARGIT PURCHASE AGREEMENT
27
24
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. INDEMNIFICATION. Without limiting any other
rights which the Purchaser, the Trustee, any Program Agent, any Enhancement
Provider and their respective assignees (which shall not be deemed to include
any of the Certificateholders as such) and their respective officers, directors,
employees, agents and affiliates (each, an "ORIGINATOR INDEMNIFIED PARTY" and
collectively the "ORIGINATOR INDEMNIFIED PARTIES") may have hereunder or under
applicable law, the Seller hereby agrees to indemnify the Purchaser and any of
its assignees hereunder (including each other Originator Indemnified Party) from
and against any and all claims, damages, losses and liabilities and related
costs and expenses (including reasonable attorneys' fees and disbursements) (all
of the foregoing being collectively referred to as "ORIGINATOR INDEMNIFIED
AMOUNTS") awarded against or incurred by any of them arising out of or resulting
from this Agreement, the activities of the Seller in connection herewith or with
any Transaction Document to which the Seller is a party in its capacity as
Seller or the use of proceeds of purchases hereunder or the ownership of any
Receivable or other Transferred Asset (excluding however (a) Originator
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Originator Indemnified Party, (b) recourse
(except as otherwise specifically provided in any Transaction Document) for
uncollectible Receivables or (c) EXCEPT with respect to clause (x) below, any
federal, state, foreign or local income or franchise taxes or any other tax
imposed on or measured by income (or any interest, penalty, or addition to tax
with respect thereto or arising from a failure to comply therewith) incurred by
such Originator Indemnified Party arising out of or as a result of this
Agreement or the interest conveyed hereunder in Receivables and other
Transferred Asset or Account. Without limiting or being limited by the
foregoing, the Seller shall pay on demand to the Purchaser or any of its
assignees (including each other Originator Indemnified Party) any and all
amounts necessary to indemnify the Purchaser or any such assignee from and
against any and all Originator Indemnified Amounts relating to or resulting
from:
(i) reliance on any representation, warranty or covenant made
or statement made or deemed made by the Seller (or any of its
Responsible Officers) under or in connection with any Transaction
Document which shall have been incorrect in any material respect when
made or deemed made or which the Seller shall have failed to perform;
(ii) the failure by the Seller to comply with any Transaction
Document or any applicable Requirement of Law with respect to any
Receivable, any other
CHARGIT PURCHASE AGREEMENT
28
25
Transferred Asset or Account, or the failure of any Receivable, any
other Transferred Asset or Account to conform to any requirement with
respect thereto under any Transaction Document or any Requirement of
Law;
(iii) the failure to vest in the Purchaser a perfected first
priority 100% ownership interest in the Receivables free and clear of
any Lien;
(iv) the failure to have filed, or any delay in filing, any
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws that
are necessary for perfection or first priority of the ownership
interests created by this Agreement;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable (including a defense based on such Receivable, any
other Transferred Asset or Account not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with
its terms), or any other claim resulting from the sale of the
merchandise, insurance or services related to such Receivable or the
furnishing or failure to furnish such merchandise, insurance or
services;
(vi) any products liability claim or other claim allegedly
arising out of or in connection with merchandise, insurance or services
which gave rise to any Receivable or any credit, administration or
other activity in connection with any Cardholder Agreement;
(vii) any failure by the Seller or any Affiliate of the Seller
(other than the Purchaser) to perform its duties or obligations in
accordance with the provisions of any Transaction Document, including
any failure to so perform in connection with servicing, administering
or collecting any Receivable;
(viii) any commingling by an act or omission of the Seller of
Collections at any time with other funds (other than in the Store
Accounts);
(ix) any investigation, litigation or proceeding related to
any Receivable, this Agreement or any other Transaction Document to
which the Seller is or is to be a party or the use of proceeds of
purchases hereunder or the ownership of Receivables, any other
Transferred Assets or related Accounts or in respect of any Receivable,
Account or Cardholder Agreement;
CHARGIT PURCHASE AGREEMENT
29
26
(x) any taxes, including sales, excise, intangibles, value
added, personal property and similar taxes, payable with respect to the
Receivables or the Accounts;
(xi) any reduction in the outstanding principal balance of a
Receivable by reason of any defective, rejected, returned, repossessed
or foreclosed merchandise, insurance or services or any cash discount
or other adjustment made by the Seller;
(xii) any breach by the Seller of any obligation under any
Receivable or any Cardholder Agreement;
(xiii) Any Receivable classified as an "Eligible Receivable"
by the Seller in any document or report delivered hereunder failing to
satisfy, at the time of such classification, the requirements of
eligibility contained in the definition of Eligible Receivable; or
(xiv) Any Account classified as an "Eligible Account" by the
Seller in any document or report delivered hereunder failing to
satisfy, at the time of such classification, the requirements of
eligibility contained in the definition of "Eligible Account."
Any Originator Indemnified Amounts due hereunder shall be
payable within fifteen Business Days of submission of a claim by the Originator
Indemnified Party which describes in reasonable detail the basis for such claim.
The rights of the Originator Indemnified Parties under this Section 6.01 shall
survive the collection of all Receivables, the termination of this Agreement and
the Trust and the payment of all amounts otherwise payable hereunder.
CHARGIT PURCHASE AGREEMENT
30
27
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. FURTHER ASSURANCES. (a) The Seller agrees that
from time to time, at its own expense, the Seller will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Purchaser may reasonably request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Purchaser to exercise and
enforce its rights and remedies hereunder with respect to any Receivable and
other Transferred Assets and to enable the Trustee to exercise its rights and
remedies under the Transaction Documents with respect to any of the Trust
Assets. Without limiting the generality of the foregoing, the Seller will: (i)
xxxx its master data processing and computer records in a manner reasonably
calculated to indicate that the Transferred Assets have been sold to the
Purchaser in accordance with this Agreement and the other Transaction Documents;
(ii) clearly and unambiguously identify each Account in its computer or other
records and all its micro fiche storage files, if any, to reflect that an
interest in the Receivables arising in such account has been Transferred
pursuant to this Agreement; (iii) if any Receivable or other Transferred Asset
shall be evidenced by a promissory note, other instrument or chattel paper,
deliver and pledge to the Purchaser such note, instrument or chattel paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Purchaser; and (iv) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as the
Purchaser may reasonably request, in order to perfect and preserve the valid and
perfected first priority ownership or security interests granted or purported to
be granted hereunder or under any Transaction Document.
(b) The Seller hereby authorizes the Purchaser to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Transferred Assets without the signature of the Seller
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Transferred Assets or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) The Seller will furnish to the Purchaser from time to time
statements and schedules further identifying and describing the Transferred
Assets and such other reports in connection with the Transferred Assets as the
Purchaser may reasonably request, all in reasonable detail.
CHARGIT PURCHASE AGREEMENT
31
28
(d) The Seller shall, from time to time, execute and deliver
to the Obligors any bills, statements and letters or other writings necessary to
carry out the terms and provisions of any Transaction Document and to facilitate
the collection of the Receivables in a manner consistent with the Cardholder
Guidelines.
SECTION 7.02. PAYMENTS. Each payment to be made by either of
the Purchaser or the Seller hereunder shall be made on the required payment
date, or on the next succeeding Business Day if the required payment date is not
a Business Day, in U.S. Dollars and in immediately available funds at the office
of the payee set forth in Section 7.08 below or to such other office as may be
specified by either party in a written notice to the other party hereto.
SECTION 7.03. COSTS, EXPENSES AND TAXES. (a) In addition to
the rights of indemnification granted to the Purchaser pursuant to Article VI
hereof, the Seller agrees to pay on demand (i) all reasonable costs and expenses
of the Purchaser in connection with the preparation, execution, delivery,
modification and amendment of this Agreement and the other documents to be
delivered by the Seller in connection with this Agreement, including the
reasonable fees and expenses of counsel for the Purchaser with respect thereto
and with respect to advising the Purchaser as to its rights and remedies under
this Agreement, and (ii) all reasonable costs and expenses (including reasonable
counsel fees and expenses) of the Purchaser in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this Agreement
and the other documents to be delivered by the Seller in connection herewith,
including reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 7.03, EXCLUDING, HOWEVER, any costs of
enforcement or collection of any Receivables.
(b) In addition, the Seller agrees to pay any present or
future stamp, documentary, excise, property or similar taxes, charges or levies
that arise from any payment or deposit made hereunder or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement, and the Seller agrees to indemnify the Purchaser against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes, charges or levies.
SECTION 7.04. BINDING EFFECT; ASSIGNABILITY. (a) This
Agreement shall be binding upon and inure to the benefit of the Seller and the
Purchaser and their respective successors (whether by merger, consolidation or
otherwise) and assigns. Except as otherwise permitted herein, the Seller agrees
that it will not assign or transfer all or any portion of its rights or
obligations hereunder to any Person without the prior written consent of the
Parent, the Purchaser and a Majority in Interest of each outstanding Series. In
connection with any
CHARGIT PURCHASE AGREEMENT
32
29
sale or assignment by the Purchaser of all or a portion of the Receivables or
other Transferred Assets, the buyer or assignee, as the case may be, shall, to
the extent of its purchase or assignment, have all rights of the Purchaser under
this Agreement (as if such buyer or assignee, as the case may be, were the
Purchaser hereunder) except to the extent specifically provided in the agreement
between the Purchaser and such buyer or assignee.
(b) The Seller acknowledges that the Purchaser shall assign to
the Trust, as collateral security for the Purchaser's obligations under the
Pooling and Servicing Agreement, all of the Purchaser's rights, remedies, powers
and privileges hereunder (including the right to give any notice which the
Purchaser may provide to the Seller hereunder), PROVIDED that the Purchaser
shall not assign or delegate any of its duties or obligations hereunder to the
Trust.
(c) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time, after the last Termination Date of any
Series; PROVIDED, HOWEVER, that rights and remedies with respect to any breach
of any representation and warranty made by the Seller pursuant to Article III
and the provisions of Article VI and Sections 4.03(h), 7.03, 7.04 and 7.12 shall
be continuing and shall survive any termination of this Agreement; and PROVIDED
FURTHER that the Purchaser shall remain entitled to receive any collections on
Receivables sold hereunder which have been charged off as uncollectible after it
shall have completed its collection efforts in respect thereof.
SECTION 7.05. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part 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 privileges provided by law.
SECTION 7.06. AMENDMENT. (a) This Agreement may be amended
from time to time by the Seller and the Purchaser without the consent of any
Beneficiary (i) to cure any ambiguity, (ii) to correct or supplement any
provision herein which may be inconsistent with any other provision herein or
(iii) to add any other provisions with respect to matters or questions arising
under this Agreement which are not inconsistent with the provisions of this
Agreement; PROVIDED that any amendment pursuant to this clause (a) shall
not, as evidenced by a certificate of a Responsible Officer of the Seller,
adversely affect in any material respect the interests of any Beneficiary.
CHARGIT PURCHASE AGREEMENT
33
30
(b) This Agreement may be amended from time to time by the
Seller and the Purchaser, so long as the Rating Agency Condition is satisfied,
with the consent of the Xxxxx-Xxxxxxx and a Majority in Interest of each
adversely affected Series for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Certificateholders; PROVIDED,
HOWEVER, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, any payment to be made hereunder without the consent of
each such Certificateholder or (ii) reduce the aforesaid percentage required to
consent to any such amendment without the consent of each Investor
Certificateholder. The Trustee may request an Officer's Certificate and Opinion
of Counsel in each case to the effect that such amendment does not adversely
affect any Series and is otherwise in compliance with the requirements of this
Agreement. Any amendment to be effected pursuant to this paragraph shall be
deemed to adversely affect all outstanding Series, other than any Series with
respect to which such action shall not, as evidenced by an Opinion of Counsel
(which counsel shall not be an employee of, or counsel for, the Seller or the
Purchaser), addressed and delivered to the Trustee, adversely affect the
interests of such Series.
SECTION 7.07. SEVERABILITY. If any provision hereof is deemed
void or unenforceable in any jurisdiction, such voiding or unenforceability
shall not affect the validity or enforceability of such provision in any other
jurisdiction or any other provision hereof in such or any other jurisdiction.
SECTION 7.08. NOTICES. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex and facsimile communication) and shall be personally delivered
or sent by certified mail, postage prepaid, or overnight courier or facsimile,
to the intended party at the address or facsimile number of such party set forth
below or at such other address or facsimile number as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective (a) if personally delivered, when received,
(b) if sent by certified mail, four Business Days after having been deposited in
the mail, postage prepaid, (c) if sent by overnight courier, two Business Days
after having been given to such courier, unless sooner received by the addressee
and (d) if transmitted by facsimile, when sent, upon receipt confirmed by
telephone or electronic means. Notices and communications sent hereunder on a
day that is not a Business Day shall be deemed to have been sent on the
following Business Day.
CHARGIT PURCHASE AGREEMENT
34
31
(a) If to the Seller,
0000 Xx-Xxx Xxxx
Xxxxxx, Xxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
Attn.: President
(b) If to the Purchaser,
0000 Xx-Xxx Xxxx
Xxxxxx, Xxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
Attn.: President
SECTION 7.09. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 7.10. CONSTRUCTION OF AGREEMENT AS SECURITY AGREEMENT.
It is the intent of the parties that the transactions contemplated herein
constitute sales of the Receivables and other Transferred Assets to the
Purchaser. If, however, such transactions are deemed to be loans, (a) the Seller
hereby grants to the Purchaser a first priority perfected security interest in
all of the Seller's right, title and interest in and to the Transferred Assets
to secure all of the Seller's obligations hereunder, including the Seller's
obligations to sell or transfer to the Purchaser all Receivables existing on the
date hereof or hereafter created and (b) this Agreement shall constitute a
security agreement under applicable law.
SECTION 7.11. THIRD-PARTY BENEFICIARIES. The Originator
Indemnified Parties are third-party beneficiaries of all provisions of this
Agreement and are entitled to enforce the provisions of Section 6.01 of this
Agreement to the extent any Originator Indemnified Amounts are due such parties.
CHARGIT PURCHASE AGREEMENT
35
32
SECTION 7.12. THE SELLER'S OBLIGATIONS. It is expressly agreed
that, anything contained in this Agreement to the contrary notwithstanding, the
Seller shall be obligated to perform all of its obligations under the
Receivables to the same extent as if the Purchaser had no interest therein and
the Purchaser shall have no obligations or liability under Receivables to any
Obligor thereunder by reason of or arising out of this Agreement, nor shall the
Purchaser be required or obligated in any manner to perform or fulfill any of
the obligations of the Seller under or pursuant to any Receivable.
SECTION 7.13. GOVERNING LAW, JURISDICTION, CONSENT TO SERVICE
OF PROCESS.
(a) GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE INTERESTS OF THE PURCHASER IN THE TRANSFERRED ASSETS IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) JURISDICTION. (i) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Transaction Documents to which it is a party, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Transaction Documents
in the courts of any jurisdiction.
(ii) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Transaction Documents to which it is a party in any New York
State or federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
CHARGIT PURCHASE AGREEMENT
36
33
(c) CONSENT TO SERVICE OF PROCESS. Each party to this
Agreement irrevocably consents to service of process by personal delivery,
certified mail (postage prepaid) or overnight courier. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
CHARGIT PURCHASE AGREEMENT
37
(d) WAIVER OF JURY TRIAL. Each party to this Agreement waives
any right to a trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this
Agreement or any other Transaction Document or any amendment, instrument,
document or agreement delivered or which may in the future be delivered in
connection herewith or therewith or arising from any course of conduct, course
of dealing, statements (whether oral or written), actions of any of the parties
hereto or any Beneficiary or any other relationship existing in connection with
this Agreement or any other Transaction Document, and agrees that any such
action or proceeding shall be tried before a court and not before a jury.
IN WITNESS WHEREOF, the parties hereto have caused this
Purchase Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
THE EL-BEE CHARGIT CORP.,
as Seller
By:_______________________________________
Name:
Title:
THE EL-BEE RECEIVABLES
CORPORATION,
as Purchaser
By:_______________________________________
Name:
Title:
CHARGIT PURCHASE AGREEMENT
38
EXHIBIT A
THE EL-BEE RECEIVABLES CORPORATION
SUBORDINATED NOTE
Due: December ___, 2017 No. 1
THE EL-BEE RECEIVABLES CORPORATION (the "ISSUER"), for value
received, hereby promises to pay to THE EL-BEE CHARGIT CORP. (the "HOLDER"), or
its registered assigns, at its address for payments set forth in Section 7.08 of
the Purchase Agreement hereinafter referred to, all principal sums owing from
time to time under Section 2.02(d) of the Purchase Agreement, upon the earlier
to occur of (i) December ___, 2017, and (ii) the first date following the end of
the Effective Period (as defined in the Purchase Agreement) upon which the
aggregate Invested Amount for each Series is zero (the "STATED MATURITY"),
unless earlier prepaid pursuant to the provisions for repayment referred to
herein, and to pay interest (computed on the basis of a 360-day year and the
actual number of days in each calendar year) on the unpaid principal sum from
the date such principal sum is advanced, such interest being payable on (i) the
first day of the month immediately following the initial advance and the first
day of each month thereafter, (ii) each date of prepayment (with respect to the
amount prepaid) and (iii) the Stated Maturity at a rate per annum equal to the
equivalent of the rate for commercial paper having a maturity of 30 days
reported on such day by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15 (519), Selected Interest Rates" or any successor
thereto, under the heading "Commercial Paper", converted to a money marked
yield, or if no such rate for commercial paper is reported on such date, the
applicable rate in effect with respect to the most recent day on which such rate
was reported, plus 1.5%, until the principal hereof is paid in full. Prior to
any transfer hereof, the Holder shall enter on Schedule A information reflecting
the date and amount of each advance and the amount of any payments made hereon.
Notwithstanding anything contained herein to the contrary, the principal sum
hereof and all accrued interest thereon shall not exceed ten percent (10%) of
the excess of the Net Receivables Balance over the Trust Invested Amount at any
given time.
Payments of the principal of and interest on this Subordinated
Note (this "NOTE") will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts by check mailed to, or wire transfer in federal funds to the
account of, the Holder as directed by the Holder. All amounts
CHARGIT PURCHASE AGREEMENT
39
A-2
paid with respect to this Note shall be allocated first to accrued interest
until all such interest is paid, and then to outstanding principal. If any
payment on this Note shall remain unpaid on the due date thereof, the same
shall thereafter be payable with interest thereon (to the extent permitted by
law) at the Certificate Rate for the then most recently issued Series, from
such due date to the date of payment thereof.
This Note is issued under the Purchase Agreement dated as of
December __, 1997 between the Issuer and the Holder (as amended, supplemented or
otherwise modified from time to time, the "PURCHASE AGREEMENT"). This Note
represents all or a portion of the Purchase Price for Receivables purchased by
the Issuer pursuant to the terms of the Purchase Agreement. Each capitalized
term used herein which is defined in the December __, 1997 Purchase Agreement or
the Pooling and Servicing Agreement dated as of December __, 1997 among the
Issuer, as Transferor, the Holder, as Servicer and Bankers Trust Company, as
Trustee (as amended, supplemented or otherwise modified from time to time, the
"POOLING AND SERVICING AGREEMENT"), shall have the meaning ascribed to it in the
Purchase Agreement or the Pooling and Servicing Agreement, as the case may be.
This Note may be prepaid in whole or in part at the option of
the Issuer at any time without a premium or penalty. The Issuer shall be
entitled to borrow, prepay and reborrow hereunder.
The payment of this Note is hereby expressly subordinated in
right of payment to the extent and in the manner set forth below to the prior
payment and performance by the Issuer of the following obligations ("SENIOR
DEBT") of the Issuer: (i) all obligations of the Issuer under the Pooling and
Servicing Agreement, the Purchase Agreement, any Supplement or any other
Transaction Document to which the Issuer is a party and (ii) all renewals,
extensions, refinancings or refundings of any such obligations (and, in the case
of each such indebtedness or obligation, whether for principal, interest
(including but not limited to any interest accruing after the filing of a
petition initiating any Bankruptcy Proceeding (as defined below) whether or not
such interest is allowed in such Bankruptcy Proceeding), fees, indemnities,
repurchase price, expenses or otherwise).
(a) In the event of any dissolution, winding up, liquidation,
arrangement, adjustment, reorganization, composition or other similar
event relating to the Issuer or its debts, whether voluntary or
involuntary, partial or complete, and whether in bankruptcy,
insolvency, arrangement, reorganization, liquidation, receivership or
other similar proceedings, or upon an assignment for the benefit of
creditors, or any other marshalling of the assets and liabilities of
the Issuer or any sale of all or substantially all of the assets of the
Issuer except pursuant to the Pooling and Servicing Agreement
CHARGIT PURCHASE AGREEMENT
40
A-3
(such proceedings being herein collectively called "BANKRUPTCY
PROCEEDINGS" and individually called a "BANKRUPTCY PROCEEDING"), the
Senior Debt shall first be indefeasibly paid and performed in full and
in cash before the holder of this Note shall be entitled to receive and
to retain any payment or distribution (whether in cash, property or
securities) in respect of this Note. In order to implement the
foregoing: (x) all payments and distributions of any kind or character
in respect of this Note to which the holder of this Note would be
entitled except for this clause (a) shall be made directly to the
Trustee (for the benefit of the holders of the Senior Debt); (y) if a
Bankruptcy Proceeding has been commenced, the holder of this Note shall
promptly file a claim or claims, in the form required in such
Bankruptcy Proceeding, for the full outstanding amount of this Note,
and shall use reasonable efforts to cause said claim or claims to be
approved and all payments and other distributions in respect thereof to
be made directly to the Trustee (for the benefit of the holders of the
Senior Debt) until the Senior Debt shall have been paid and performed
in full and in cash; and (z) the holder of this Note hereby irrevocably
agrees that the Trust (or the Trustee acting on the Trust's behalf), in
the name of the holder of this Note or otherwise, may, if the holder of
this Note does not take the actions required pursuant to the preceding
clause (y) and upon notice to the holder of this Note, demand, xxx for,
collect, receive and give receipt for any and all such payments or
distributions, and file, prove and vote or consent in any such
Bankruptcy Proceedings with respect to any and all claims of the holder
of this Note relating to this Note, in each case until the Senior Debt
shall have been paid and performed in full and in cash.
(b) In the event that any Termination Event or Early
Amortization Event or event which with the giving of notice or lapse of
time, or both, would become a Termination Event or an Early
Amortization Event shall have occurred and be continuing, which
Termination Event or Early Amortization Event has not been waived (a
"BLOCKING EVENT"), then no payment shall be made by or on behalf of the
Issuer for or on account of any amounts owing in respect of this Note,
unless and until the Senior Debt shall first be indefeasibly paid and
performed in full and in cash.
(c) In the event that the holder of this Note receives any
payment or other distribution of any kind or character from the Issuer
or from any other source whatsoever in respect of this Note after the
commencement of any Bankruptcy Proceeding or while any Blocking Event
has occurred and is continuing, such payment or other distribution
shall be received in trust for the holders of the Senior Debt and shall
be turned over by the holder of this Note to the Trustee (for the
benefit of the holders of the Senior Debt) forthwith, until all Senior
Debt shall have been paid and performed in full and in cash. All
payments and distributions received by the Trustee
CHARGIT PURCHASE AGREEMENT
41
A-4
in respect of this Note, to the extent received in or converted into
cash, may be applied by the Trustee (for the benefit of the holders of
the Senior Debt) first to the payment of any and all reasonable
expenses (including reasonable attorneys fees and legal expenses) paid
or incurred by the Trustee or the holders of the Senior Debt in
enforcing these subordination provisions, or in endeavoring to collect
or realize upon this Note, and any balance thereof shall, solely as
between the holder of this Note and the holders of the Senior Debt, be
applied by the Trustee toward the payment of the Senior Debt in a
manner determined by the Trustee to be in accordance with the
Transaction Documents; but as between the Issuer and its creditors no
such payments or distributions of any kind or character shall be deemed
to be payments or distributions in respect of the Senior Debt.
(d) Upon the indefeasible payment in full and in cash of all
Senior Debt, the holder of this Note shall be subrogated to the rights
of the holders of the Senior Debt to receive payments or distributions
from the Issuer that are applicable to the Senior Debt until this Note
is paid in full.
(e) These subordination provisions are intended solely for the
purpose of defining the relative rights of the holder of this Note, on
the one hand, and the holders of the Senior Debt, on the other hand.
Nothing contained in these subordination provisions or elsewhere in
this Note is intended to or shall impair, as between the Issuer, its
creditors (other than the holders of the Senior Debt) and the holder of
this Note, the Issuer's obligation, which is unconditional and
absolute, to pay this Note as and when the same shall become due and
payable in accordance with the terms hereof and of the Purchase
Agreement or to affect the relative rights of the holder of this Note
and creditors of the Issuer (other than the holders of the Senior
Debt).
(f) The holder of this Note shall not, until the Senior Debt
has been finally paid and performed in full and in cash, (i) cancel,
waive, amend, forgive, sell, pledge, transfer or assign or otherwise
encumber or dispose of or commence legal proceedings to enforce or
collect this Note or any obligation of the Issuer; PROVIDED, HOWEVER,
that the holder may endorse this Note to The Xxxxx-Xxxxxxx Stores Corp.
and The Xxxxx-Xxxxxxx Stores Corp. may pledge this Note to Citicorp
USA, Inc. as security for its Obligations under and as defined in the
Credit Agreement (as defined in the Pooling and Servicing Agreement),
(ii) subordinate this Note to any obligation of the Issuer, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, or now or hereafter existing, or due or to become due,
other than to the Senior Debt or any rights in respect hereof or (iii)
convert this Note into an equity
CHARGIT PURCHASE AGREEMENT
42
A-5
interest in the Issuer, unless, in the case of each of clauses (i) and
(ii) above, the holder of this Note shall have received the prior
written consent of the Trustee in each case.
(g) The holder of this Note shall not, without the prior
written consent of the Trustee, commence, or join with any other Person
in commencing, any Bankruptcy Proceeding with respect to the Issuer
until at least one year and one day shall have passed since the Senior
Debt shall have been indefeasibly paid and performed in full and in
cash.
(h) If, at any time, any payment (in whole or in part) made
with respect to the Senior Debt is rescinded or must be restored or
returned by a holder of the Senior Debt (whether in connection with any
Bankruptcy Proceeding or otherwise), these subordination provisions
shall continue to be effective or shall be reinstated, as the case may
be, as though such payment had not been made.
(i) As between the holder of this Note and the holders of the
Senior Debt, each of the holders of the Senior Debt may, from time to
time, at its sole discretion, without notice to the holder of this
Note, and without waiving any of its rights under these subordination
provisions, take any or all of the following actions: (i) retain or
obtain an interest in any property to secure any of the Senior Debt;
(ii) retain or obtain the primary or secondary obligations of any other
obligor or obligors with respect to any of the Senior Debt; (iii)
extend or renew for one or more periods (whether or not longer than the
original period), alter, increase or exchange any of the Senior Debt,
or release or compromise any obligation of any nature with respect to
any of the Senior Debt; (iv) amend, supplement, amend and restate, or
otherwise modify any Transaction Document; and (v) release its
ownership or security interest in, or surrender, release or permit any
substitution or exchange for all or any part of any rights or property,
securing any of the Senior Debt, or extend or renew for one or more
periods (whether or not longer than the original period), or release,
compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such rights or property.
(j) By its acceptance hereof, the holder of this Note hereby
waives to the maximum extent permitted by applicable law, (i) notice of
acceptance of these subordination provisions by any of the holders of
the Senior Debt; (ii) notice of the existence, creation, nonpayment or
nonperformance of all or any of the Senior Debt; and (iii) all
diligence in enforcement, collection or protection of, or realization
upon, the Senior Debt, or any thereof, or any security therefor.
CHARGIT PURCHASE AGREEMENT
43
A-6
(k) These subordination provisions constitute a continuing
offer from the Issuer to all Persons who become the holders of, or who
continue to hold, Senior Debt and these subordination provisions are
made for the benefit of the holders of the Senior Debt, and the Trustee
may proceed to enforce such provisions on behalf of each of such
Persons.
The obligation of the Issuer to repay this Note from the
amounts paid to the Issuer with respect to Finance Charge Receivables, Principal
Receivables, and other sources of funds described in the Pooling and Servicing
Agreement, together with any capital or surplus of the Issuer remaining after
all of its obligations under the Pooling and Servicing Agreement are repaid in
full and the Trust Termination Date has occurred, shall be the sole and
exclusive remedy available to the holder, and to the extent that such payments
are insufficient to pay such amounts, the holder shall not have any claim
against the Issuer for such amounts and no further or additional recourse shall
be available against the Issuer. This Note shall not evidence any rights in the
Receivables or the Exchangeable Transferor Certificate and need not be evidenced
by any separate instrument of the holder.
CHARGIT PURCHASE AGREEMENT
44
A-7
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
CHARGIT PURCHASE AGREEMENT
45
A-8
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed manually by its undersigned officer duly authorized thereunto.
Dated: December ___ , 1997.
THE EL-BEE RECEIVABLES CORPORATION
By:__________________________________________
Name:
Title:
ENDORSEMENT
Pay to the order of The Xxxxx-Xxxxxxx Stores Corp.
THE EL-BEE CHARGIT CORP.
By:__________________________________________
Name:
Title:
ENDORSEMENT
Pay to the order of Citicorp USA, Inc., as Agent.
THE XXXXX-XXXXXXX STORES CORP.
By:__________________________________________
Name:
Title:
CHARGIT PURCHASE AGREEMENT
46
SCHEDULE A
Principal Interest Principal Interest
Date Advanced Paid Paid Rate
---- -------- -------- --------- --------
CHARGIT PURCHASE AGREEMENT
