1
Exhibit 10(a)(ix)
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 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
2
2
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 30, 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 30, 1997 Purchase Agreement or
the Pooling and Servicing Agreement dated as of December 30, 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 (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,
3
3
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, sue 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 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
4
4
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 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.
5
5
(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.
(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
6
6
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.
7
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed manually by its undersigned officer duly authorized thereunto.
Dated: December 30, 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:
8
SCHEDULE A
Principal Interest Principal Interest
Date Advanced Paid Paid Rate
---- --------- -------- --------- --------
