EXHIBIT 4.3
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JCP RECEIVABLES, INC.
Buyer
and
X. X. XXXXXX COMPANY, INC.
Seller
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RECEIVABLES PURCHASE AGREEMENT
Dated as of September 5, 1988
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RECEIVABLES PURCHASE
AGREEMENT
RECEIVABLES PURCHASE AGREEMENT, dated as of September 5, 1988, by and
between X. X. PENNEY COMPANY, INC., a Delaware corporation ("Seller"), and JCP
RECEIVABLES, INC., a Delaware corporation ("Buyer").
W I T N E S S E T H;
WHEREAS, Buyer desires to purchase from time to time certain Receivables
(hereinafter defined) due or to become due to Seller under certain specified
credit card accounts of Seller; and
WHEREAS, Seller desires to sell from time to time and assign certain
Receivables to Buyer upon the terms and conditions hereinafter set forth; and
WHEREAS, Buyer is a subsidiary of Seller and a portion of the Receivables
will be transferred to Buyer by Seller as part of the initial capitalization of
Buyer; and
WHEREAS, it is contemplated that the Receivables purchased hereunder will
be transferred by Buyer to the Trust (hereinafter defined) in connection with
the issuance of certain Certificates (hereinafter defined); and
WHEREAS, Buyer will grant to the Trustee (hereinafter defined) a security
interest in Buyer's rights relating to the Receivables under this Agreement, and
Seller agrees that all covenants and agreements made by Seller herein with
respect to the Accounts and Receivables shall also be for the benefit of the
Trustee and all holders of the Certificates;
NOW, THEREFORE, it is hereby agreed by and between Buyer and Seller as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"Account" shall mean each Seller credit card account in one of Seller' s
Cycles which is an Eligible Account on the Cut Off Date, which is established
pursuant to a Credit Card Agreement and which is identified by account number
and by Receivable balance as of the Cut Off Date and shall also include
Additional Accounts (which may be in the same or different Cycles) as of each
Addition Date identified in each computer file or microfiche list delivered to
Buyer by Seller pursuant to Section 2.2. The term "Account" shall also be
deemed to refer to an Additional Account, but only from and after the Addition
Date with respect thereto, and the term "Account" shall be deemed to refer to
any Removed Account prior to but not after the Repurchase Date with respect
thereto.
"Addition Date" shall mean, with respect to any Additional Accounts, the
date five Business Days after the period or date when such Additional Accounts
are required or permitted to be designated hereunder pursuant to Section 2.2(a)
hereof or the date such Additional Account is added as an Account pursuant to
Section 2.2(b) hereof.
"Additional Accounts" shall mean the Eligible Accounts designated after the
Initial Closing Date in accordance with Section 2.2.
"Agreement" shall mean this Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"Business Day" shall mean each day which is neither a Saturday, a Sunday
nor any other day on which banking institutions or trust companies in the State
or City of New York or the State of Texas are authorized or obligated by law or
required by executive order or government decree to be closed.
"Buyer" shall mean JCP Receivables, Inc., a Delaware corporation.
"Certificate" shall mean any one of any Series of Investor Certificates or
the Exchangeable Certificate.
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"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.3 of the Servicing Agreement, providing for the registration of the
Certificates and transfers and exchanges thereof.
"Conveyance Papers" shall have the meaning specified in Section 4.1(b).
"Credit Adjustment" shall have the meaning specified in Section 3.4 hereof.
"Credit Card Agreement" shall mean the Seller Retail Installment Credit
Agreement (Revolving Credit Agreement), Seller form 2218, attached as Exhibit D,
or a variant thereof reflecting a particular state's usury and retail
installment sales laws, as such agreement may be amended, modified or otherwise
changed from time to time by Seller.
"Credit Card Guidelines" shall mean Seller's policies and procedures
relating to the operation of its credit card business, including, without
limitation, the policies and procedures for determining the creditworthiness of
credit card customers, the extension of credit to credit card customers, the
terms on which repayments are required to be made, and relating to the
maintenance of credit card accounts and collection of credit card receivables,
as such policies and procedures may be amended from time to time by Seller.
"Credit Insurance" shall mean life, accident, health, disability or other
insurance of an Obligor to Seller to insure payment of any amount owing by such
Obligor under an Account and which proceeds of such insurance are payable to
Seller upon such Obligor's death or disability.
"Cut Off Date" shall mean September 5, 1988.
"Cycle" shall mean, with respect to any Account, the monthly billing cycle
for such Account as determined in accordance with the Credit Card Guidelines as
in effect on the date of this Agreement.
"Date of Processing" shall mean, with respect to any transaction, the date
on which such transaction is first recorded on the Seller's computer master file
of accounts (without regard to the effective date of such recordation).
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"Debtor Relief Laws" shall mean the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar debtor relief laws from time to time in effect affecting
the rights of creditors generally.
"Defaulted Account" shall have the meaning set forth in the Servicing
Agreement.
"Eligible Account" shall mean, as of the Cut Off Date (or, with respect to
Additional Accounts, as of the relevant Notice Date in respect of Additional
Accounts added pursuant to subsection 2.2(a) or as of the date such Account is
added to a Cycle in respect of Additional Accounts added pursuant to subsection
2.2(b)) each Account:
(a) which is payable in United States dollars; and
(b) which is serviced in any credit service center of Seller which
is located in the United States.
"Eligible Receivable" shall mean each Receivable:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance, in all material
respects, with all Requirements of Law applicable to Seller and Buyer and
pursuant to a Credit Card Agreement which complies, in all material respects,
with all Requirements of Law applicable to Seller and Buyer;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by Seller and Buyer in
connection with the creation of such Receivable or the execution, delivery and
performance by Seller and Buyer of the Credit Card Agreement pursuant to which
such Receivable was created, have been duly obtained, effected or given and are
in full force and effect as of such date of creation;
(d) as to which, at the time of the creation of such Receivable,
Seller, Buyer or the Trust had good and marketable title thereto free and clear
of all Liens
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arising under or through Seller or Buyer (other than Liens permitted pursuant to
subsection 5. l(d));
(e) which is the legal, valid and binding payment obligation of the
Obligor thereon, enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by applicable Debtor Relief Laws,
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity); and
(f) which constitutes an "account" under and as defined in Article 9
of the UCC as then in effect in any state where the Seller's chief executive
office or books and records relating to the Receivables are located.
"Exchangeable Certificate" shall mean the certificate designated the
"Exchangeable Certificate" under the Servicing Agreement executed by Buyer and
authenticated by the Trustee and exchangeable for one or more Series of Investor
Certificates and a reissued Exchangeable Certificate issued pursuant to the
Servicing Agreement.
"Finance Charge Receivables" shall have the meaning set forth in the
Servicing Agreement.
"Governmental Authority" shall mean the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Ineligible Receivable" shall have the meaning specified in Section 6.1.
"Initial Accounts" shall have the meaning specified in Section 2.1.
"Initial Closing Date" shall mean September 21, 1988.
"Insurance Proceeds" shall mean any amounts paid to Seller pursuant to any
Credit Insurance policies covering any Obligor with respect to Receivables under
such Obligor's Account.
"Insurance Receivables" shall mean all Receivables payable by Obligors for
purchase of insurance, other than Receivables for Credit Insurance.
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"Investor Certificates" shall mean any one of the certificates executed by
Buyer and authenticated by the Trustee pursuant to the Servicing Agreement.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of
any financing statement under the Uniform Commercial Code (other than any such
financing statement filed for informational purposes only) or comparable law of
any jurisdiction to evidence any of the foregoing.
"Monthly Period" shall mean the period from and including the first day of
the calendar month preceding a related Settlement Date to and including the last
day of such calendar month, or, in the case of the first Monthly Period, the
period from the Initial Closing Date to the last day of the calendar month in
which such closing occurs.
"Notice Date" shall have the meaning specified in Section 2.2.
"Obligor" shall mean, with respect to any Account, the Person or Persons
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Periodic Finance Charges" shall mean the finance charges specified in the
Credit Card Agreements.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Principal Receivable" shall have the meaning set forth in the Servicing
Agreement.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Receivable" shall mean any amount owing by the Obligors under an Account
(including amounts in Defaulted Accounts) from time to time, including,
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without limitation, amounts owing for the payment of goods and services,
Periodic Finance Charges, late charges, returned check fees, Special Fees and
premiums for Credit Insurance, if any, but shall exclude therefrom for all
purposes Insurance Receivables unless provided to the contrary in any
Supplement.
"Reconveyance" shall mean an instrument substantially in the form and upon
the terms of Exhibit B hereto.
"Recoveries" shall have the meaning set forth in the Servicing Agreement.
"Removed Accounts" shall have the meaning set forth in Section 6.2.
"Requirements of Law" for any Person shall mean the certificate of incorpo-
ration or articles of association and bylaws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act and retail installment sales acts).
"Repurchase Date" shall have the meaning set forth in Section 6.2.
"Repurchase Notice Date" shall have the meaning set forth in Section 6.2.
"Repurchase Price" shall mean the Repurchase Price specified in subsection
6.1(c) or 6.2(a), as the case may be.
"Seller" shall mean X. X. Xxxxxx Company, Inc., a Delaware corporation.
"Series" shall mean any Series of Investor Certificates issued pursuant to
the Servicing Agreement.
"Servicer" shall mean initially Seller in such capacity and thereafter any
Person appointed as successor under the Servicing Agreement to service the
Receivables.
"Servicing Agreement" shall mean the Master Pooling and Servicing Agree
ment dated as of the date hereof among Seller, Buyer, and The Fuji Bank and
Trust
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Company, a New York banking corporation, as Trustee, and all amendments and
supplements thereto.
"Settlement Date" shall have the meaning specified in Section 3.5.
"Settlement Statement" shall mean a document substantially in the form of
Exhibit C hereto.
"Special Fees" shall mean Receivables which are fees which are not now but
may from time to time be assessed on the Accounts.
"Supplemental Conveyance" shall mean an instrument substantially in the
form and upon the terms of Exhibit A hereto.
"Trust" shall mean the trust created by the Servicing Agreement.
"Trustee" shall mean the institution executing the Servicing Agreement as
Trustee, or its successor in interest, or any successor or additional trustee
appointed as provided in the Servicing Agreement.
"UCC" shall mean the Uniform Commercial Code, as amended from time to time,
as in effect in any specified jurisdiction.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate, other document, or Conveyance Paper made
or delivered pursuant hereto unless otherwise defined therein.
(b) All terms defined in the Servicing Agreement shall have the
defined meanings when used in this Agreement or in any certificate, document, or
Conveyance Paper made or delivered pursuant hereto, unless otherwise defined
herein or therein.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
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are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(d) All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
Section 1.3 of the Servicing Agreement.
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.1 Purchase. (a) Subject to and upon the terms and conditions
hereinafter set forth, Seller (i) hereby sells, transfers, conveys, and assigns
to Buyer, without recourse, all of Seller's right, title, and interest in, to,
and under the Receivables now existing and hereafter created in respect of
each Account listed on Schedule One hereto identified by account number and by
Receivable balance as of the Cut Off Date (the "Initial Accounts"), together
with all monies due or to become due with respect thereto (including all Finance
Charge Receivables), all proceeds thereof (including, without limitation,
"proceeds" as defined in the UCC in any state where Seller's or Servicer's chief
executive offices or books and records relating to Receivables are located),
and Insurance Proceeds relating thereto, and (ii) subject to the provisions of
Section 2.2, on each Addition Date, Seller shall sell, transfer, convey, and
assign to Buyer, without recourse, all of Seller's rights, titles, and interests
in, to, and under the Receivables then existing or thereafter created in respect
of each Additional Account designated in a Supplemental Conveyance effective on
the Addition Date therefor, together with all monies due or to become due with
respect thereto (including all Finance Charge Receivables), all proceeds thereof
(including, without limitation, "proceeds" as defined in the UCC in any state
where Seller's or Servicer's chief executive offices or books and records
relating to Receivables are located), and Insurance Proceeds relating thereto.
(b) In connection with such sale and conveyance, Seller shall, at its
own expense, on or prior to the Initial Closing Date (i) indicate in its
computer files that Receivables created in connection with the Initial Accounts
have been sold to Buyer in accordance with this Agreement and transferred to the
Trust pursuant to the Servicing Agreement for the benefit of the
Certificateholders and (ii) deliver to Buyer (or to the Trustee, if Buyer so
directs) a computer file or microfiche list
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containing a true and complete list of all such Accounts, identified by account
number and by the Receivables balance as of the Cut Off Date.
(c) In connection with such sale and conveyance, Seller agrees (i) to
record and file, at its own expense, any financing statement for the purchase of
accounts (as defined in Section 9-106 of the UCC as in effect in any state where
the Seller's or Servicer's chief executive offices or books and records relating
to the Receivables are located), with respect to the Receivables now existing
and hereafter created in respect of each Account (other than Receivables in
Additional Accounts), meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the sale of the
Receivables from Seller to Buyer, and (ii) to deliver a file-stamped copy of
such financing statements or other evidence of such filings (which may, for
purposes of this Section 2.1, consist of telephone confirmations of such
filings) to Buyer (or to the Trustee, if Buyer so directs) on or prior to the
Initial Closing Date.
Section 2.2 Addition of Additional Accounts. (a) If from time to time,
Buyer becomes obligated to require Seller to designate Additional Accounts
pursuant to Section 2.6(a) of the Servicing Agreement, then Buyer shall give
Seller written notice thereof on or before the fifth Business Day (the "Notice
Date") prior to the Addition Date therefor and Seller shall on or before the
Addition Date designate sufficient Eligible Accounts to be included as
Additional Accounts so that after the inclusion thereof Buyer will be in
compliance with the requirements of said Section 2.6(a). Additionally, subject
to the limitations, if any, on Buyer's ability to add Additional Accounts under
Section 2.6(b) of the Servicing Agreement, from time to time Eligible Accounts
may be designated to be included as Additional Accounts, upon the mutual
agreement of Buyer and Seller. In either event, Seller shall have sole
responsibility for selecting the Additional Accounts and shall on or prior to
the Addition Date therefor execute and deliver a Supplemental Conveyance
identifying the Additional Accounts by account number and Receivables balance as
of the Addition Date, which Supplemental Conveyance shall be effective upon
receipt by Buyer.
(b) At any time that Receivables in substantially all Eligible Ac
counts of any Cycle have been transferred to the Trust, then, in accordance with
Section 2.6(c) of the Servicing Agreement, on each day that an Eligible Account
is added to such Cycle, such Eligible Account shall, until notice from either
party hereto to the other to the contrary, automatically be designated to be
included as an Additional Account effective as of such date of inclusion in such
Cycle. Seller shall
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on or before five Business Days after the first day of each calendar month next
succeeding the Monthly Period of such conveyance execute a Supplemental
Conveyance identifying all such Additional Accounts so designated during the
preceding Monthly Period, identifying such Additional Accounts by account number
and the aggregate amount of the Receivables in such Additional Accounts as of
such fifth Business Day of the month.
(c) On or before each Addition Date with respect to Additional
Accounts added pursuant to Section 2.2(a) and on or before five Business Days
after the first day of the Monthly Period next succeeding the calendar month in
which Additional Accounts were added pursuant to Section 2.2(b), Seller (i)
shall indicate in its computer files that the Receivables created in connection
with such Additional Accounts have been sold by Seller to Buyer in accordance
with this Agreement and transferred by Buyer to the Trust pursuant to the
Servicing Agreement, and (ii) shall deliver to Buyer a computer file or
microfiche list containing a true and complete list of all Additional Accounts
designated in the respective Supplemental Conveyance, or, if Buyer shall so
direct, such computer file or microfiche list shall be delivered to the Trustee
pursuant to the Servicing Agreement. Seller's failure to deliver the list prior
to termination shall not be deemed to render such transfer executory or
uncompleted.
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price. Except as provided in Section 3.2, the
Purchase Price for the Receivables (including Receivables in Additional
Accounts) conveyed to the Buyer under this Agreement shall be a dollar amount
equal to the total recorded unpaid balance of the Principal Receivables on the
Cut Off Date in respect of the Initial Accounts and on each day thereafter that
additional Receivables are thereafter created in the Initial Accounts or in
Additional Accounts on or after the Addition Date in respect thereof.
Section 3.2 Capital Contribution. $5,250,000 of the Receivables conveyed
as of the Initial Closing Date are to be transferred by Seller to Buyer as a
capital contribution to Buyer.
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Section 3.3 Payment of Purchase Price. The Purchase Price for
Receivables, other than those contributed to capital as set forth in Section
3.2, shall be paid or provided for on the Initial Closing Date, each Addition
Date (other than Addition Dates arising under Section 2.2(b)), and each
Settlement Date, as the case may be, in either of the following ways (or any
combination thereof) as Buyer and Seller may mutually agree from time to time:
(i) by payment in cash in immediately available funds; or (ii) in the event that
the total Purchase Price is not paid in full in cash as aforesaid, by the sale,
transfer, and assignment by Buyer to Seller on the Initial Closing Date, each
Addition Date (other than Addition Dates arising under Section 2.2 (b)) and each
Settlement Date, as the case may be, of a participation interest in and to
Buyer's interest in the Trust, including, without limitation, Buyer's interest
in the Exchangeable Certificate, in the principal amount of such cash shortfall,
as such principal amount may be adjusted from time to time hereunder. The
characteristics of such participation interest shall be as follows:
(a) the principal amount of the participation interest
outstanding from time to time shall accrue interest from the initial date
of purchase until payment thereof, payable monthly on each Settlement Date
in respect of the number of days unpaid during the preceding Monthly
Period, at a monthly rate of interest (calculated on the basis of a 30-day
month) equal to the lesser of (A) 0.75% or (B) the monthly percentage
return equivalent to the amount paid to Buyer as holder of the Exchangeable
Certificate pursuant to subsection 4.3(c)(iii) of the Servicing Agreement
in respect of collections of Finance Charge Receivables during the Monthly
Period prior to such Settlement Date, after deducting from such payments
the amount of Servicing Fee paid or payable by Buyer with respect to such
Monthly Period pursuant to Section 3.2 of the Servicing Agreement, the
amount of the Default Amount allocated to the Exchangeable Certificate with
respect to such Monthly Period, and the amount of any fees or other amounts
payable by Buyer to any Letter of Credit Bank or Repurchase Letter of
Credit Bank with respect to such Monthly Period;
(b) the accrued interest payable with respect to any Monthly
Period shall be paid in cash on the Settlement Date next following the end
of such Monthly Period;
(c) the outstanding principal amount of such participation
interest shall be payable as, if and when the Buyer receives any of the
following amounts from the Trustee or the Servicer: (i) payments with
respect to
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Principal Receivables allocable to the Exchangeable Certificate; (ii)
payments of any portion of the Finance Charge Receivables paid with respect
to the Exchangeable Certificate, representing an amount equal to any
Default Amount allocable to the Exchangeable Certificate; (iii) payments of
any amounts paid to Buyer pursuant to subsections 4.3(c)(i)(B), 4.5(b), or
4.5(c) of the Servicing Agreement; and (iv) the proceeds arising from the
sale by Buyer of any Investor Certificates received upon an exchange of the
Exchangeable Certificate;
(d) unless otherwise agreed by Buyer and Seller, all additions
to, subtractions from and other adjustments to the principal balance of the
participation interest shall be deemed for all purposes hereof to be
effective as of the Settlement Date in the Monthly period during which the
event giving rise to such addition, subtraction or adjustment occurs; and
(e) the obligation of Buyer to repay the holder of the
participation interest from the amounts paid to Buyer in respect of Finance
Charge Receivables, Principal Receivables, and other sources of funds
described in items (a) and (c) immediately preceding in the manner
prescribed in this Section 3.3 shall be the sole and exclusive remedy
available to Seller or any holder of the participation interest and no
further or additional recourse shall be available against Buyer.
Buyer, at its option, may prepay all or any portion of the principal balance of
the participation interest at any time.
Section 3.4 Adjustments to Purchase Price. The Purchase Price shall be
adjusted on a monthly basis (a "Credit Adjustment") with respect to any
Receivable (i) which was created in respect of merchandise refused or returned
by the Obligor thereunder or as to which the Obligor thereunder has asserted a
counterclaim or defense, (ii) which is reduced by Seller by any rebate, refund,
chargeback, or adjustment, or (iii) which was created through a fraudulent or
counterfeit charge, as determined and allocated to the Accounts in the good
faith judgment of Servicer, or (iv) which was removed from an Account and
transferred to another Seller account which is not an Account by reason of a
request by the Obligor to change Cycles.
Section 3.5 Settlement. On each "Distribution Date" under the Servicing
Agreement (herein, a "Settlement Date"), Seller shall deliver to Buyer a
Settlement Statement in substantially the form of Exhibit C, showing the
aggregate Purchase
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Price of Receivables conveyed to Buyer during the previous Monthly Period, the
aggregate Repurchase Price of Receivables repurchased during such Monthly
Period, the amount of interest due on such Settlement Date with respect to such
Monthly Period, the amount of principal payments due with respect to such
Monthly Period and the amount which remained unpaid as of the end of such
Monthly Period, any Credit Adjustments made with respect to such Monthly Period
pursuant to Section 3.4 hereof and the amounts of any adjustments to the
principal balance of the participation interest during such Monthly Period. Any
balance due from Buyer to Seller or from Seller to Buyer as reflected on such
Settlement Statement which is not payable in immediately available funds
pursuant to Section 3.3 shall, unless otherwise agreed, automatically be
reflected as an adjustment to the principal balance of the participation
interest from Buyer to Seller maintained in accordance with Section 3.3.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties. Seller hereby
represents and warrants to, and agrees with, Buyer as of the Initial Closing
Date that:
(a) Organization, Good Standing, and Qualification. Seller is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware, and has full corporate power, authority, and right to
own its properties and to conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver, and
perform its obligations under this Agreement. Seller is duly qualified to do
business and is in good standing in each State of the United States where the
nature of its business requires it to be so qualified.
(b) Due Authorization. The execution and delivery of this Agreement,
any Supplemental Conveyance, the Servicing Agreement, or any other document or
instrument delivered pursuant hereto or thereto (the "Conveyance Papers") and
the consummation of the transactions provided for in this Agreement or any other
Conveyance Paper have been duly authorized by all necessary corporate action on
the part of Seller.
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(c) No Conflict. The execution and delivery of the Conveyance
Papers, the performance of the transactions contemplated by the Conveyance
Papers, and the fulfillment of the terms of the Conveyance Papers will not
conflict with, result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a material
default under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which Seller is a party or by which it or any of its
properties are bound.
(d) No Violation. The execution and delivery of the Conveyance
Papers, the performance of the transactions contemplated by the Conveyance
Papers, and the fulfillment of the terms of the Conveyance Papers will not
conflict with or violate any material Requirements of Law applicable to Seller.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Seller, threatened against Seller, before
any Governmental Authority (i) asserting the invalidity of the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated by the Conveyance Papers, (iii) seeking any determination or ruling
that, in the reasonable judgment of Seller, would materially and adversely
affect the performance by Seller of its obligations under the Conveyance Papers,
or (iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of the Conveyance Papers.
(f) All Consents Required. All approvals, licenses, authorizations,
consents, orders, or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery of the
Conveyance Papers, the performance of the transactions contemplated by the
Conveyance Papers, and the fulfillment of the terms of the Conveyance Papers
have been obtained.
(g) Identification of Accounts and Receivables. As of the Initial
Closing Date, Seller has (i) indicated in its computer files that Receivables
created in respect of the Initial Accounts have been sold to Buyer in accordance
with this Agreement and transferred to the Trust pursuant to the Servicing
Agreement for the benefit of Certificateholders and (ii) has delivered to Buyer
(or to the Trustee, if so directed by Buyer) a computer file or microfiche list
containing a true and complete list of all such Accounts, identified by account
number and by the Receivable balance as of the Cut Off Date.
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(h) Existing Financing Statements. There is no financing statement
or similar statement or instrument of registration under the law of any
jurisdiction now on file or registered in any public office covering any
interest of any kind in the Accounts or Receivables, or intended so to be, and
Seller will not execute or authorize there to be on file in any public office
any financing statement or similar statement or instrument of registration under
the laws of any jurisdiction relating to the Accounts or Receivables, except any
financing statements or assignments to be filed in respect of and covering any
security or other interest of Buyer or the Trustee pursuant to this Agreement or
the Servicing Agreement.
(i) Filings. All filings and recordings required to perfect the
title of Buyer to the Receivables purchased hereunder have been or will have
been accomplished prior to the Initial Closing Date and each Addition Date and
are in full force and effect, and Seller shall at its expense perform all acts
and execute all documents reasonably requested by Buyer at any time to evidence,
perfect, maintain, and enforce the title of Buyer in such Receivables and the
transfer thereof to the Trust. Seller will, at the reasonable request of
Borrower, execute and file additional financing statements reasonably
satisfactory in form and substance to Buyer.
(j) Binding Obligation. The Conveyance Papers constitute legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms, except as such enforceability may be limited by
Debtor Relief Laws and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
(k) Valid Conveyance. As of the Initial Closing Date, the Convey
ance Papers then in existence constitute a valid sale, assignment, and
conveyance to Buyer of all right, title, and interest of Seller in, to, and
under the Receivables then existing and thereafter created in the Accounts
(other than Receivables in the Additional Accounts), all monies due or to become
due with respect thereto (including all Finance Charge Receivables), together
with all proceeds (including, without limitation, "proceeds" as defined in the
UCC in any state where Seller' s or Servicer's chief executive offices or books
and records relating to Receivables are located) of such Receivables and
Insurance Proceeds relating thereto, and such property will be held free and
clear of any Lien of any Person claiming through or under Seller, except for
Liens permitted under subsection 5.1(d).
(l) Eligibility of Receivables. Seller hereby represents and
warrants to Buyer as of the Initial Closing Date that (i) each Receivable then
existing is an
16
Eligible Receivable, (ii) each Receivable then existing has been conveyed to
Buyer free and clear of any Lien of any Person claiming through or under Seller
and in compliance, in all material respects, with all Requirements of Law
applicable to Seller and (iii) with respect to each Receivable then existing,
all consents, licenses, approvals, or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained, effected
or given by Seller in connection with the transfer of such Receivable to Buyer
have been duly obtained, effected, or given and are in full force and effect. On
each day on which any new Receivable is conveyed by Seller to Buyer hereunder,
Seller shall be deemed to represent and warrant to Buyer that (i) each
Receivable conveyed on such day is an Eligible Receivable, (ii) each Receivable
conveyed on such day has been conveyed to Buyer free and clear of any Lien of
any Person claiming through or under Seller and in compliance, in all material
respects, with all Requirements of Law applicable to Seller, (iii) with respect
to each such Receivable, all consents, licenses, approvals or authorizations of
or registrations or declarations with, any Governmental Authority required to be
obtained, effected, or given by Seller in connection with the conveyance of
such Receivable to the Trust have been duly obtained, effected or given and are
in full force and effect, and (iv) the representations and warranties set forth
in Subsections 4.1(j) and (k) are true and correct with respect to each
Receivable transferred on such day as if made on such day.
(m) Eligible Accounts. As of the Cut Off Date, each Account (other
than Additional Accounts) is an Eligible Account.
Section 4.2 Seller's Representations and Warranties Regarding Additional
Accounts. Seller represents and warrants, and agrees with Buyer, as of each
Addition Date, that:
(a) Reconfirmation of Representations and Warranties. All
representations and warranties made by Seller pursuant to Section 4.1 hereof
remain true and correct in all respects as of such Addition Date as if made on
such date.
(b) Identification of Accounts and Receivables. Seller has, as of
the Addition Date with respect to Additional Accounts added pursuant to
subsection 2.2(a), and will have, as of the fifth Business Day after the first
day of the calendar month occurring after any Addition Date occurring under
subsection 2.2(b), (i) indicated in its computer files that Receivables created
in respect of the Additional Accounts have been sold to Buyer in accordance with
this Agreement and transferred to the Trust pursuant to the Servicing Agreement
for the benefit of the
17
Certificateholders and (ii) delivered to Buyer (or to the Trustee, if so
directed by Buyer) a computer file or microfiche list containing a true and
correct list of all such Additional Accounts, identified by account number and
by the Receivable balance as of the Addition Date for Additional Accounts added
pursuant to subsection 2.2(a) hereof and as of such fifth Business Day of a
calendar month with respect to Additional Accounts added pursuant to subsection
2.2(b) hereof.
(c) Eligibility of Accounts. Each Additional Account is, as of the
Addition Date, an Eligible Account.
(d) Selection Procedures. No selection procedures believed by Seller
to be materially adverse to the interests of Buyer or its successors and assigns
were utilized by Seller in selecting the Additional Accounts from Seller's
available Eligible Accounts.
(e) Insolvency. Seller is not insolvent as of the Addition Date.
(f) Bankruptcy Proceeding. Seller has not filed a voluntary proceed-
ing under the federal bankruptcy laws and has no knowledge of the filing of any
involuntary proceeding against it under such laws.
(g) Valid Conveyance. As of each Addition Date, a valid sale,
assignment, and conveyance to Buyer of all right, title, and interest of Seller
in, to, and under the Receivables then existing and thereafter created in
respect of the Additional Accounts, all monies due or to become due with respect
thereto (including all Finance Charge Receivables), together with all proceeds
(including, without limitation, "proceeds" as defined in the UCC in any state
where Seller's or Servicer's chief executive offices or books and records
relating to the Receivables are located) of such Receivables and Insurance
Proceeds relating thereto, has been consummated, and such property will be held
free and clear of any Lien of any Person claiming through or under Seller,
except for Liens permitted under Section 5.1(d).
Section 4.3 Representations and Warranties of Buyer. As of the Initial
Closing Date, and each Addition Date, Buyer hereby represents and warrants to,
and agrees with, Seller that:
(a) Organization and Good Standing. Buyer is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware and has full corporate power, authority, and right to own its
properties and
18
to conduct its business as such properties are presently owned and such business
is presently conducted, and to execute, deliver, and perform its obligations
under the Conveyance Papers.
(b) Due Qualification. Buyer is neither required to qualify, nor to
register, as a foreign corporation in any state other than the State of Texas,
in order to conduct its business, and has obtained all necessary licenses and
approvals with respect to Buyer required under federal and Delaware law.
(c) Due Authorization. The execution and delivery of the Conveyance
Papers and the consummation of the transactions provided for in the Conveyance
Papers have been duly authorized by Buyer by all necessary corporate action on
the part of Buyer.
(d) No Conflict. The execution and delivery of the Conveyance
Papers, the performance of the transactions contemplated by the Conveyance
Papers and the fulfillment of the terms of the Conveyance Papers will not
conflict with, result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a material
default under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which Buyer is a party or by which it or any of its
properties are bound.
(e) No Violation. The execution and delivery of the Conveyance
Papers, the performance of the transactions contemplated by the Conveyance
Papers, and the fulfillment of the terms of the Conveyance Papers will not
conflict with or violate any Requirements of Law applicable to Buyer.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Buyer, threatened against Buyer, before any
Governmental Authority (i) asserting the invalidity of the Conveyance Papers,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by the Conveyance Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of Buyer, would materially and adversely affect the
performance by Buyer of its obligations under the Conveyance Papers, or (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of the Conveyance Papers.
(g) All Consents Required. All approvals, authorizations, licenses,
consents, orders, or other actions of any Person or of any Governmental
Authority
19
required in connection with the execution and delivery of the Conveyance Papers,
the performance of the transactions contemplated by the Conveyance Papers, and
the fulfillment of the terms of the Conveyance Papers have been obtained.
The representations and warranties set forth in this Article IV shall
survive the conveyance of the Receivables to Buyer, and termination of the
rights and obligations of the Buyer and Seller under this Agreement. Upon
discovery by Buyer or Seller of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the other.
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants. Seller hereby covenants and agrees with
Buyer as follows:
(a) Credit Card Agreements and Guidelines. Seller shall comply with
and perform its obligations under the Credit Card Agreements relating to the Ac-
counts and the Credit Card Guidelines, except insofar as any failure so to
comply or conform would not materially and adversely affect the rights of the
Trust or the Certificateholders under the Servicing Agreement or under the
Certificates. In that regard, except as aforesaid, and so long as such changes
are made applicable to comparable segments of the revolving credit card accounts
owned and serviced by Seller which have characteristics the same as, or
substantially similar to, the Accounts pursuant to which the Receivables were
created, Seller shall be free to change the terms and provisions of such Credit
Card Agreements or the Credit Card Guidelines in any respect (including, without
limitation, the calculation of the amount, the timing, or charge-offs).
(b) Periodic Finance Charges and Other Fees. Except as otherwise
required by any Requirements of Law or as is deemed by Seller to be necessary in
order for Seller to maintain its business on a competitive basis based on a good
faith assessment by Seller of the nature of its competition in its business,
Seller shall not reduce at any time (x) the Periodic Finance Charges assessed in
respect of any Accounts, or (y) any other fees charged on any of the Accounts,
if as a result of such reduction, Seller's reasonable expectation of the
Portfolio Yield (as defined in the
20
Servicing Agreement) as of such date would be less, than the highest of the Base
Rates (as defined in the Servicing Agreement) for the Series then outstanding.
(c) Receivables Not to be Evidenced by Promissory Notes or Chattel
Paper. Seller will take no action to cause any Receivable to be evidenced by
any "instrument" (as defined in the UCC as in effect in any state where Seller's
or Servicer's chief executive offices or books and records relating to such
Receivable are located). Each Receivable shall be payable pursuant to a
contract which does not create a Lien on any goods purchased thereunder;
provided, however, that any such contract which shall be governed by Florida law
may provide for the retention of a security interest in any goods purchased by
the Obligor, except those goods that are goods that are considered real property
under Florida law.
(d) Security Interests. Except for the conveyances hereunder, Seller
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Receivable, whether now
existing or hereafter created, or any interest therein; Seller will immediately
notify Buyer and the Trustee of the existence of any Lien on any Receivable; and
Seller shall defend the right, title, and interest of Buyer and its successors
and assigns in, to, and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under Seller;
provided, however, that nothing in this Section 5.l(d) shall prevent or be
deemed to prohibit Seller from suffering to exist upon any of the Accounts or
Receivables any Liens for state, municipal or other local taxes if such taxes
shall not at the time be due and payable or if Seller shall concurrently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
(e) Location of Books and Records. Seller's copies of originals or
duplicates of all documents evidencing all Credit Card Agreements and Accounts
are kept by Seller at, and only at, the locations specified on Schedule Two
hereto, and Seller will not relocate such offices, its chief executive office,
or such documents or related records and books unless Seller shall have given to
Buyer not less than 15 days' written notice of its intention to do so, clearly
describing the new location. If as a result of such relocation, the applicable
provisions of the UCC or any other applicable law require the filing of any
amendment to any previously-filed financing or continuation statement or the
filing of a new financing statement, Seller shall file such financing statement
or amendment as may be necessary with respect to the transfer of Accounts (as
defined in Section 9-106 of the UCC in effect in any state where Seller's chief
executive office or books and records relating to the Receivables
21
are located). Seller shall at all times maintain each office in which it
maintains records with respect to Receivables and its chief executive office
within the United States of America. Additionally, Seller shall clearly and
unambiguously identify each Account (including any Additional Account designated
pursuant to Section 2.2 hereof) in its computer or other records to reflect that
the Receivables arising in such Account have been sold to Buyer and transferred
by Buyer to the Trust pursuant to the Servicing Agreement. Seller shall, prior
to the sale or transfer to a third party of any receivable owned by Seller or
held in its custody, examine its computer and other records to determine that
such receivable is not a Receivable.
(f) Change of Name or Corporate Structure. Within 30 days after
Seller makes any change in its name, identity, or corporate structure which
would make any financing statement or continuation statement filed in accordance
with Section 2.1 above seriously misleading within the meaning of Section
9-402(7) of the UCC as in effect in the state where such financing statement or
continuation statement was filed, Seller shall file such financing statements or
amendments as may be necessary with respect to the transfer of Accounts.
(g) Servicing Agreement. On or before the Initial Closing Date,
Seller shall enter into the Servicing Agreement with Buyer and the Trustee.
(h) Further Assurances. Seller will make, execute or endorse,
acknowledge, and file or deliver to Buyer from time to time such schedules,
confirmatory assignments, conveyances, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Receivables and other rights covered by this
Agreement, as Buyer may request and reasonably require.
(i) Indemnification. Seller agrees to indemnify, defend and hold
Buyer harmless from and against any and all loss, liability, damage, judgment,
claim, deficiency, or expense (including interest, penalties, reasonable
attorneys' fees and amounts paid in settlement) to which Buyer may become
subject insofar as such loss, liability, damage, judgment, claim, deficiency, or
expense arises out of or is based upon (i) a breach by Seller of its warranties
and covenants contained in Section 4. 1 or (ii) the representations of Seller
contained in Section 4.2, or any information certified in any Schedule delivered
by Seller hereunder, being untrue in any material respect at any time. The
obligations of Seller under this Section 5.1(i) shall be considered to have been
relied upon by Buyer and shall survive the execution,
22
delivery, and performance of this Agreement regardless of any investigation made
by Buyer or on its behalf.
(j) Municipal and Local Taxes. Seller shall be responsible for
collecting all state, local, and municipal taxes associated with the Accounts
and Receivables and for remitting the same to the appropriate Governmental
Authority, together with all tax returns, reports, or affidavits required by
such Governmental Authority in connection therewith.
(k) Conveyance of Accounts. Seller shall not convey, assign,
exchange, or otherwise transfer the Accounts to any Person prior to termination
of this Agreement and the Servicing Agreement.
(l) Purchase of Additional Participation in Exchangeable Certificate.
If Buyer shall become obligated to purchase any Series of Investor Certificates
pursuant to Section 12.2(a) of the Servicing Agreement, all conditions precedent
to such purchase have been satisfied other than the deposit into the
Distribution Account as required thereby and Buyer does not have sufficient cash
to make such deposit, Seller shall purchase an participation interest in the
Exchangeable Certificate in an amount equal to the amount of the deposit into
the Distribution Account which Buyer is required to make pursuant to subsection
12.2(a) of the Servicing Agreement; the purchase of such participation
interest shall be effected on or prior to the date Buyer is required to make
such deposit into the Distribution Account. The participation interest
purchased pursuant hereto shall increase and be in addition to any participation
interest purchased by Seller from Buyer pursuant to Section 3.3 hereof, and
shall have the same characteristics as the participation interest described in
such Section 3.3, accruing interest from the date of purchase until repaid at
the rate specified in Section 3.3.
Section 5.2 Buyer Covenants Regarding Nondisclosure; Inspection. Buyer
hereby covenants and agrees with Seller (and agrees to cause the Trustee) not to
disclose to any Person any of the account numbers or other information contained
in the computer files or microfiche lists delivered to Buyer (or to Trustee if
Buyer so directs) pursuant to Sections 2.1, 2.2, 7.1(c), and 7.2(c) hereof,
except as is required in connection with the performance of the Trustee's duties
under the Servicing Agreement or in enforcing the rights of the
Certificateholders and except such disclosures as are required upon appointment
of a successor Servicer under the Servicing Agreement. Buyer agrees (and shall
cause the Trustee) to take such measures as shall be reasonably requested by
Seller to protect and maintain the
23
security and confidentiality of such information, and in connection therewith,
shall allow Seller to inspect the applicable security and confidentiality
arrangements from time to time in normal business hours. Buyer shall (and shall
cause the Trustee) to give Seller five days prior written notice of any
disclosure pursuant to this Section 5.2.
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Mandatory Repurchase.
(a) Ineligible Receivables. In the event of a breach of any
representation and warranty set forth in subsection 4.1(1) hereof, within 60
days (or with the prior written consent of Buyer, such longer period specified
in such consent) of the earlier to occur of the discovery of such breach by
Seller, or receipt by Seller of written notice of such breach given by Buyer,
Seller shall repurchase and Buyer shall convey, without recourse,
representation, or warranty, all of Buyer's right, title, and interest in each
Principal Receivable to which such breach relates (an "Ineligible Receivable")
on the terms and conditions set forth below; provided, however, that no such
repurchase shall be required to be made with respect to such Ineligible Receiv-
able if, on any day within such 60-day period (or such longer period as may be
specified in the consent), either (i) the representations and warranties in the
second sentence of subsection 4.l(l) with respect to such Ineligible Receivable
shall then be true and correct in all material respects with respect to such
Ineligible Receivable as if such Ineligible Receivable had been conveyed to
Buyer on such day, or (ii) the aggregate amount of Ineligible Receivables
outstanding at any time and with respect to which such representations and
warranties continue to be incorrect in any material respect does not in the sole
reasonable judgment of an officer of Buyer have a material adverse effect on the
interest of the Trust in the Receivables as a whole, including the ability of
the Servicer in its sole reasonable judgment to collect the Receivables.
(b) In the event of a breach of the representations and warranties
set forth in subsections 4.1(j) and (k) hereof, Buyer may give Seller written
notice directing Seller to repurchase all of the Principal Receivables after 45
days of such notice (or within such longer period as may be specified in such
notice); whereupon, Seller shall repurchase and Buyer shall convey, without
recourse, representation, or
24
warranty, all of Buyer's right, title, and interest in all of the Principal
Receivables on a Settlement Date first occurring after such applicable period on
the terms and conditions set forth below; provided, however, that no such
repurchase shall be required to be made if, at any time during such applicable
period the representations and warranties contained in subsections 4.1(j) and
(k) shall then be true and correct in all material respects.
(c) The Repurchase Price for the Principal Receivables shall be an
amount equal to: (i) for Ineligible Receivables repurchased pursuant to
subsection 6.l(a) hereof, the aggregate face amount of each such Ineligible
Receivables on the date of repurchase, and (ii) for Principal Receivables
repurchased pursuant to subsection 6.l(b) hereof, an amount equal to the
"deposit amount" paid pursuant to subsection 2.4(e) of the Servicing Agreement.
Payment of the Repurchase Price may be made, at the option of Seller: (i) in
immediately available funds; (ii) as a reduction in the Seller's interest in and
to any participation interest in the Buyer's interest in the Trust, including,
without limitation, Buyer's interest in the Exchangeable Certificate held by
Seller pursuant to Sections 3.3 and 5.1(1) hereof in an amount equal to the
unpaid portion of the Repurchase Price; or (iii) any combination of the
foregoing; provided, however, that Seller must make payment of a sufficient
portion of the Repurchase Price in immediately available funds to enable Buyer
to make any cash payment to the Trust then required under the Servicing
Agreement.
Section 6.2 Optional Repurchases. (a) Buyer shall have the option to
require Seller to repurchase all of Buyer's rights, titles, and interests in,
to, and under all Receivables created pursuant to certain Accounts designated by
Buyer (the "Removed Accounts"); provided that, Buyer shall only be entitled to
require such repurchase (i) if Buyer is able to effect a retransfer of such
Receivables from the Trust in compliance with Sections 2.7 or 10.2 of the
Servicing Agreement, and (ii) if Buyer and Seller mutually agree as to the
designation of the Removed Accounts. On or before the fifth Business Day (the
"Repurchase Notice Date") prior to the date on which the Removed Accounts will
be designated by Buyer, Buyer shall give Seller written notice of its election
to require Seller to so repurchase the Receivables of the Removed Accounts on
the date specified in such notice (the "Repurchase Date"). The Repurchase Price
for an optional repurchase effected pursuant to this Section 6.2(a) shall be:
(i) for Receivables purchased pursuant to Section 2.7 of the Servicing
Agreement, an amount equal to the unpaid Principal Receivables repurchased on
the Repurchase Date and (ii) for Receivables purchased pursuant to Section 10.2
of the Servicing Agreement, an amount equal to the "deposit amount" paid in
compliance with Section 10.2 of the Servicing Agreement. Upon execution
25
and delivery of any Reconveyance effecting any repurchase as contemplated in
this Section 6.2(a), Buyer shall have no further right, title, or interest in
any Receivables from the Removed Accounts.
(b) Payment of the Repurchase Price as specified in Section 6. 2(a)
above shall be made in any manner provided for in Section 6. 1 hereof; provided,
however, that Seller must make payment of a sufficient portion of the Repurchase
Price in immediately available funds to enable Buyer to make any cash payment to
the Trust then required under the Servicing Agreement.
Section 6.3 Conveyance of Repurchased Receivables. On or prior to the
date that Seller is required to repurchase Receivables under Section 6.1, or on
the date Seller is permitted to purchase any Receivables under Section 6.2, or
on any Repurchase Date, as the case may be, Buyer shall execute and deliver to
Seller a Reconveyance substantially in the form and upon the terms of Exhibit B
hereto, pursuant to which Buyer conveys to Seller all of Buyer's right, title,
and interest in the repurchased Receivables and, with respect to repurchases
effected pursuant to Section 6.2 hereof, within three Business Days thereafter,
a computer file or microfiche list containing a true and complete list of all
Removed Accounts identified by account number and the aggregate amount of the
Receivables in such Removed Accounts as of the Repurchase Notice Date. Buyer
shall (and shall cause the Trustee to) execute such other documents or
instruments of conveyance or take such other actions as Seller may reasonably
require to effect any repurchase of Receivables pursuant to this Article VI.
Section 6.4 Sole Remedy. The obligation of Seller to repurchase the
Ineligible Receivables pursuant to Section 6.1 hereof shall constitute the sole
remedy available to Buyer, the Trustee, any Certificateholder, any Letter of
Credit Bank, or any other Person respecting any breach of the representations
and warranties set forth in subsections 4.1(j), (k), and (1) with respect to
such Receivables.
Section 6.5 Selection of Removed Accounts. By giving the written notice
on the Repurchase Notice Date as required in Section 6.2 and by acceptance of
the Reconveyance, Seller represents and warrants that no selection procedures
believed by Seller to be materially adverse to the interests of Buyer or the
holders of the Certificates were utilized in selecting the Removed Accounts.
26
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Buyer's Obligations Regarding Initial
Receivables. The obligations of Buyer to purchase the Receivables in Initial
Accounts on the Initial Closing Date shall be subject to the satisfaction of the
following conditions:
(a) All representations and warranties of Seller contained in this
Agreement shall be true and correct on the Initial Closing Date with the same
effect as though such representations and warranties had been made on such date;
(b) All information concerning the Initial Accounts provided to Buyer
shall be true and correct as of the Cut Off Date in all material respects;
(c) Seller shall have delivered to Buyer a computer file or
microfiche list containing a true and complete list of all Initial Accounts
identified by account number and by the Receivables balance as of the Cut Off
Date and shall have substantially performed all other obligations required to be
performed by the provisions of this Agreement;
(d) Seller shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables (other than Receivables in
Additional Accounts) now existing and hereafter created for the transfer of
accounts (as defined in Section 9-106 of the UCC as in effect in any state where
the Seller's or Servicer's chief executive offices or books and records relating
to the Receivables are located) meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary to perfect the sale of
the Receivables from Seller to Buyer, and shall deliver a file-stamped copy of
such financing statements or other evidence of such filings (which may, for
purposes of this paragraph, consist of telephone confirmations of such filings)
to Buyer;
(e) On or before the Initial Closing Date, Seller, Buyer, and the
Trustee shall have entered into the Servicing Agreement and the initial closing
under the Servicing Agreement shall take place simultaneously with the initial
closing hereunder; and
(f) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Buyer, and Buyer shall have received
from Seller
27
copies of all documents (including, without limitation, records of corporate
proceedings) relevant to the transactions herein contemplated as Buyer may
reasonably have requested.
Section 7.2 Conditions to Buyer's Obligations Regarding Supplemental
Conveyances. The obligations of Buyer to purchase any Receivables created under
any Additional Accounts shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of Seller contained in this
Agreement shall be true and correct on the Addition Date with the same effect as
though such representations and warranties had been made on such date;
(b) All information concerning the Additional Accounts provided or to
be provided to Buyer shall be true and correct in all material respects as of
the Addition Date with respect to Additional Accounts added pursuant to
subsection 2.2(a) and as of the fifth Business Day after the first day of the
calendar month occurring after any Addition Date arising under subsection
2.2(b);
(c) Seller shall have, on or before each Addition Date with respect
to Additional Accounts added pursuant to subsection 2. 2(a) and on or before the
fifth Business Day after the first day of the Monthly Period occurring after any
Addition Date arising under subsection 2.2(b): (i) indicated in its computer
files that Receivables created in respect of the Additional Accounts have been
sold to Buyer in accordance with this Agreement and transferred to the Trust
pursuant to the Servicing Agreement for the benefit of the Certificateholders,
(ii) delivered to Buyer (or to the Trustee, if so directed by Buyer) a computer
file or microfiche list containing a true and correct list of all such
Additional Accounts, identified by account number and by the Receivable balance
as of the Addition Date for Additional Accounts added pursuant to subsection
2.2(a) or as of such fifth Business Day of a Monthly Period with respect to
Additional Accounts added pursuant to subsection 2.2(b) hereof; and (iii)
substantially performed all other obligations required to be performed by the
provisions of this Agreement;
(d) Seller shall have executed and delivered a Supplemental Convey-
ance in conformity with the requirements of Section 2.2 hereof; and
(e) Seller shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables in such Additional Accounts
now existing
28
and hereafter created in connection with the transfer of accounts (as defined in
Section 9-106 of the UCC as in effect in any state where Seller's or Servicer' s
chief executive offices or books and records relating to the Receivables are
located) meeting the requirements of applicable state law in such manner and in
such jurisdictions as are necessary to perfect the sale of the Receivables from
Seller to Buyer, and shall deliver a file-stamped copy of such financing
statements or other evidence of such filings (which may, for purposes of this
paragraph, consist of telephone confirmations of such filings) to Buyer.
Section 7.3 Conditions Precedent to Seller's Obligations. The obligations
of Seller to sell Receivables on the Initial Closing Data and on any Addition
Date shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of Buyer contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date;
(b) Payment or provision for payment of the Purchase Price in
accordance with the provisions of Section 3.3 and 3.4 hereof.
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Seller, and Seller shall have received
from Buyer copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein contemplated as
Seller may reasonably have requested.
ARTICLE VIII
TERM & TERMINATION
Section 8.1 Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue in full force and effect until:
(a) the Trust terminates; or (b) upon the occurrence of any of the following
events: Buyer or Seller shall (i) become insolvent, (ii) fail to pay its debts
generally as they become due, (iii) voluntarily seek, consent to, or acquiesce
in the benefit or benefits of any Debtor Relief Law, (iv) become a party to (or
be made the subject of) any proceeding provided for by any Debtor Relief Law,
other than as a creditor or claimant, and,
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in the event such proceeding is involuntary, the petition instituting same is
not dismissed within 90 days after its filing; provided, however, that Buyer
shall have no duty to continue to purchase Receivables or accept designation of
Additional Accounts from and after the filing of an involuntary petition but
prior to dismissal; or (v) become unable for any reason to convey or reconvey
Receivables in accordance with the provisions of this Agreement; provided,
however, that the termination of this Agreement pursuant to this subsection
8.1(b) hereof shall not discharge any Person from any obligations incurred prior
to such termination, including, without limitation, any obligations with respect
to Receivables sold prior to such termination.
Section 8.2 Effect of Termination. No termination nor rejection or
failure to assume the executory obligations of this Agreement in the bankruptcy
of Seller or Buyer shall be deemed to impair or affect the obligations
pertaining to any executed sale or executed obligations, including, without
limitation, pretermination breaches of representations and warranties by Seller
or Buyer. Without limiting the foregoing, prior to termination, neither the
failure of Seller to deliver computer records of Additional Accounts or
Settlement Statements, nor the failure of Buyer to pay a Settlement Statement
shall render such transfer or obligation executory, nor shall the continued
duties of the parties pursuant to Section 5 or Section 9.1 of this Agreement
render an executed sale executory.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment. This Agreement and any other Conveyance Papers and
the rights and obligations of the parties hereunder may not be changed orally,
but only by an instrument in writing signed by Buyer and Seller in accordance
with this Section 9.1. This Agreement and any other Conveyance Papers may be
amended from time to time by Buyer and Seller to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein or
in any other Conveyance Papers or to add any other provisions with respect to
matters or questions arising under this Agreement or any other Conveyance Papers
which shall not be inconsistent with the provisions of this Agreement or any
other Conveyance Papers; provided, however, that such action shall not (as
evidenced by an Opinion of Counsel delivered to the Trustee) adversely affect in
any material respect the interests of the Trustee for the benefit of the
Certificates, unless the Trustee shall consent thereto. Any Supplemental
Conveyance or Reconveyance executed in accordance with the provisions hereof
shall not be considered amendments to this Agreement.
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Section 9.2 Governing Law. This Agreement and the other Conveyance Papers
shall be construed in accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
Section 9.3 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to (a) in
the case of Seller, 0000 Xxxx Xxxxx Xxxxxxx, Xxxxx, Xxxxx 00000, Attention:
President, (b) in the case of Buyer, 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx
00000, Attention: Treasurer; or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party.
Section 9.4 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any other
Conveyance Paper shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions, or terms shall be deemed severable from the
remaining covenants, agreements, provisions, or terms of this Agreement or any
other Conveyance Paper and shall in no way affect the validity or enforceability
of the other provisions of this Agreement or of any other Conveyance Paper.
Section 9.5 Assignment. Notwithstanding anything to the contrary
contained herein, other than Buyer's assignment of its rights, title, and
interests in, to, and under this Agreement to the Trustee for the benefit of the
Certificateholders as contemplated by the Servicing Agreement and Section 9.6
hereof, this Agreement and all other Conveyance Papers may not be assigned by
the parties hereto.
Section 9.6 Acknowledgment and Agreement of Seller. By execution below,
Seller expressly acknowledges and agrees that all of Buyer's rights, titles, and
interests in, to, and under this Agreement, including, without limitation, all
of Buyer's rights, titles, and interests in and to Receivables purchased
pursuant to this Agreement, shall be assigned by Buyer to the Trustee for the
benefit of the Certificateholders, and Seller consents to such assignment.
Additionally, Seller agrees fox the benefit of Trustee and the Letter of Credit
Banks that any amounts payable by Seller to Buyer hereunder which are to be paid
by Buyer to the Trustee for the benefit of the Certificateholders, including,
without limitation, payments to be made under subsections 5.1(1), 6.1(b), and
6.2 hereof, shall be paid by Seller, on behalf of Buyer, directly to the
Trustee.
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Section 9.7 Further Assurances. Buyer and Seller agree to do and perform,
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party more fully to
effect the purposes of this Agreement and the other Conveyance Papers,
including, without limitation, the execution of any financing statements or
continuation statements or equivalent documents relating to the Receivables for
filing under the provisions of the UCC or other law of any applicable
jurisdiction.
Section 9.8 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of Buyer or Seller, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exhaustive of any rights, remedies, powers and privilege
provided by law.
Section 9.9 Counterparts. This Agreement and all other Conveyance Papers
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 9.10 Binding Effect; Third-Party Beneficiaries. This Agreement and
the other Conveyance Papers will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The
Trustee shall be considered a third-party beneficiary of this Agreement.
Section 9.11 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the other Conveyance Papers set forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement
and the other Conveyance Papers. This Agreement and the other Conveyance Papers
may not be modified, amended, waived or supplemented except as provided herein.
Section 9.12 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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Section 9.13 Schedules and Exhibits. The schedules and exhibits attached
hereto and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.
Section 9.14 Estimation and Calculation of Finance Charge Receivables. At
all times and for all purposes of this Agreement, the amount of Finance Charge
Receivables outstanding at any point in time shall be determined in the manner
described in Section 1.3 of the Servicing Agreement.
IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
JCP RECEIVABLES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title: President
X. X. PENNEY COMPANY, INC.
By: /s/ Xxxxxx X. XxXxx
--------------------------------
Title: Vice President
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