EXHIBIT 10.18
RECEIVABLES PURCHASE AGREEMENT
among
NATIONAL BANK OF THE GREAT LAKES,
as Seller
and
SAKS CREDIT CORPORATION,
as Purchaser
and
SAKS INCORPORATED
(formerly named "Xxxxxxxx'x, Inc.")
as Servicer
Dated as of July 1, 1999
CONTENTS
ARTICLE I - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.2. Other Terms . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 1.3. Computation of Time Periods . . . . . . . . . . . . . . .6
ARTICLE II - PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES . . . . .6
SECTION 2.1. Sale......... . . . . . . . . . . . . . . . . . . . . . .6
SECTION 2.2. Servicing of Receivables. . . . . . . . . . . . . . . . .8
ARTICLE III - CONSIDERATION AND PAYMENT; RECEIVABLES . . . . . . . . . .9
SECTION 3.1. Purchase Price. . . . . . . . . . . . . . . . . . . . . .9
SECTION 3.2. Payment of Purchase Price . . . . . . . . . . . . . . . .9
SECTION 3.3. Monthly Report. . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV - REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 10
SECTION 4.1. Seller's Representations and Warranties . . . . . . . . 10
SECTION 4.2. Reaffirmation of Representations and Warranties by
the Seller; Notice of Breach. . . . . . . . . . . . . . 13
SECTION 4.3. Repurchase of Ineligible Receivables. . . . . . . . . . 14
SECTION 4.4. Repurchase After Cure Period. . . . . . . . . . . . . . 14
SECTION 4.5. Repurchase of All Receivables . . . . . . . . . . . . . 15
ARTICLE V - COVENANTS OF THE SELLER. . . . . . . . . . . . . . . . . . 15
SECTION 5.1. Covenants of the Seller . . . . . . . . . . . . . . . . 15
SECTION 5.2. Negative Covenants of the Seller. . . . . . . . . . . . 17
SECTION 5.3. Indemnification . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI - REPURCHASE OBLIGATION . . . . . . . . . . . . . . . . . . 19
SECTION 6.1. Mandatory Repurchase. . . . . . . . . . . . . . . . . . 19
SECTION 6.2. Dilutions, etc. . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII - CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 20
SECTION 7.1. Conditions to the Purchaser's Obligations
Regarding Receivables. . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII - TERM AND TERMINATION. . . . . . . . . . . . . . . . . . 21
SECTION 8.1. Term......... . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.2. Effect of Termination . . . . . . . . . . . . . . . . . 21
ARTICLE IX - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . 22
SECTION 9.1. Amendment . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.2. Governing Law . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.4. Severability of Provisions. . . . . . . . . . . . . . . 23
SECTION 9.5. Assignment. . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.6. Further Assurances. . . . . . . . . . . . . . . . . . . 24
SECTION 9.7. No Waiver; Cumulative Remedies. . . . . . . . . . . . . 24
SECTION 9.8. No Bankruptcy Petition Against the Purchaser or
Trust . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.9. Counterparts. . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.10. Binding Effect; Third-Party Beneficiaries . . . . . . . 25
SECTION 9.11. Merger and Integration. . . . . . . . . . . . . . . . . 25
SECTION 9.12. Headings. . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.13. Exhibits. . . . . . . . . . . . . . . . . . . . . . . . 25
EXHIBITS
Exhibit A: Form of Subordinated Note
Exhibit B: Location of Records, Principal Place of Business, etc.
Exhibit C: Subsidiaries, Divisions, Trade Names, Bankruptcy
Proceedings
RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of July 1,
1999 (as amended, supplemented or otherwise modified and in effect
from time to time, this "Agreement"), between NATIONAL BANK OF THE
GREAT LAKES, a national banking association, as seller (the
"Seller"), SAKS CREDIT CORPORATION, a Delaware corporation, as
purchaser (the "Purchaser"), and SAKS INCORPORATED (formerly named
"Xxxxxxxx'x, Inc."), a Tennessee corporation, as servicer (the
"Servicer").
W I T N E S S E T H :
WHEREAS, the Purchaser desires to purchase from time to
time accounts receivable existing on the Closing Date and acquired
or generated thereafter in the normal course of the Seller's
business pursuant to certain revolving consumer credit card
accounts;
WHEREAS, the Seller desires to sell and assign from time
to time these receivables to the Purchaser upon the terms and
conditions hereinafter set forth;
WHEREAS, the Servicer has agreed to service these
accounts receivable;
WHEREAS, Xxxxxxxx'x Credit Corporation, a Nevada
corporation, as transferor, the Servicer, and Norwest Bank
Minnesota, National Association, as trustee (together with its
successors, the "Trustee") entered into a Master Pooling and
Servicing Agreement dated as of August 21, 1997 (as amended,
supplemented or otherwise modified and in effect from time to time,
the "Pooling and Servicing Agreement"), and thereby created a trust
on behalf of the holders of certificates in such trust;
WHEREAS, Xxxxxxxx'x Credit Corporation has merged with
and into PCC Merger Corp. ("PCC Merger"), and PCC Merger and SFA
Finance Company have consolidated (the "Consolidation") to form the
Purchaser; and
WHEREAS, the Purchaser has become the Transferor under
the Pooling and Servicing Agreement and has succeeded to all
rights, benefits, obligations and duties as Transferor under the
Pooling and Servicing Agreement;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
Purchaser and the Seller, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used
herein shall have the meanings specified herein or, if not so
specified, the meaning specified in, or incorporated by reference
into, the Pooling and Servicing Agreement:
"Account" shall mean each consumer revolving credit card
account, originated or acquired by the Seller, which account has
been established or exists pursuant to an Account Agreement between
an Obligor and any Person, including all Accounts of the Department
Stores contributed to the Bank; provided, however, that this shall
not include an Account which as of the Cut-Off Date has been
identified on the Servicer's records as (a) "Xxxxxxx Facility
Vision 21 system, Organization 006, logo 200," (b) "Elmhurst
Facility Vision 21 system Organization 100, logos 191-196," or (c)
an Account with respect to which the related Receivables have been
charged-off, an intercompany account, or a corporate open-end
account.
"Additional Accounts" shall have the meaning specified in
the Pooling and Servicing Agreement.
"Advance" shall have the meaning specified in Section
3.2(a) hereof.
"Automatic Additional Accounts" shall have the meaning
specified in the Pooling and Servicing Agreement.
"Benefit Plan" shall mean any employee benefit plan as
defined in Section 3(3) of ERISA which the Seller maintains.
"Certificateholders" shall have the meaning specified in
the Pooling and Servicing Agreement.
"Closing Date" shall mean the beginning of business on
July 1, 1999.
"Creation Date" shall have the meaning specified in the
Pooling and Servicing Agreement.
"Cut-Off Date" shall mean the close of business on June
28, 1999.
"Department Stores" shall mean the Saks Fifth Avenue, Off
Fifth, Xxxxxxx & Jones, Proffitt's, Younkers, Parisian, McRae's,
Herberger's, Xxxxxx Xxxxx Xxxxx, Boston Store, and Xxxxxxx'x
department stores, and catalog businesses currently operated by
Saks Incorporated or its subsidiaries, and each department store or
related catalog business hereafter owned or operated by Saks
Incorporated or a subsidiary of Saks Incorporated or a division of
Saks Incorporated or any of its subsidiaries, where the Bank holds,
originates or acquires Accounts and Receivables for customers of
such stores.
"Eligible Account" shall have the meaning specified in
the Pooling and Servicing Agreement.
"Eligible Receivable" shall have the meaning specified in
the Pooling and Servicing Agreement.
"ERISA Affiliate" shall mean, with respect to any Person,
(i) any corporation which is a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as such Person; (ii) a trade or business
(whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with such
Person; or (iii) for purposes of Code Section 412, a member of the
same affiliated service group (within the meaning of Section 414(m)
of the Internal Revenue Code) as such Person, any corporation
described in clause (i) above or any trade or business described in
clause (ii) above.
"Event of Bankruptcy" shall have the meaning specified in
the Pooling and Servicing Agreement.
"Finance Charges" shall have the meaning specified in the
Pooling and Servicing Agreement.
"Insurance Charges" shall have the meaning specified in
the Pooling and Servicing Agreement.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA which is or was at any time
during the current year or the immediately preceding five years
contributed to by the Seller or Eligible Originator or any ERISA
Affiliate of the Seller or Eligible Originator on behalf of its
employees.
"Purchase Date" shall have the meaning assigned in
Section 3.2(b) hereof.
"Purchase Rate" shall mean the percentage equivalent of
the decimal representation of the following expression:
(1.00 + APY) minus (BDA + SF + PCF + OE + RF) where:
APY = average portfolio yield of the Seller (expressed
as the decimal equivalent of a percentage) as
reasonably determined over the preceding twelve
(12) months (or such other period mutually agreed
upon by the Purchaser and the Seller);
BDA = an allowance for bad debts (expressed as the
decimal equivalent of a percentage), based on,
among other relevant factors, historical rates
for the previous twelve (12) months (or such
other period mutually agreed upon by the
Purchaser and the Seller);
SF = a Servicer fee equal to 2.00% (expressed as the
decimal equivalent of a percentage) per annum;
PCF = the Purchaser's cost of funds, as calculated from
time to time, equal to the sum (expressed as the
decimal equivalent of a percentage) of (i) the
product of a fraction equal to the adjusted
investor amount of all classes of Certificates
issued by the Trust (other than those held by the
Purchaser) divided by the Aggregate Principal
Receivables multiplied by the prime rate (as
published in the Money Rates Section of The Wall
Street Journal) plus (ii) the product of (x) 20%
(to be adjusted from time to time based on
changes to the Purchaser's reasonably estimated
marginal cost of capital) multiplied by (y) a
fraction equal to the sum of the Transferor
Amount plus the investor amount of any class of
Certificates held by the Purchaser divided by the
Aggregate Principal Receivables;
OE = the fraction (expressed as the decimal equivalent
of a percentage), the numerator of which is the
Purchaser's annualized estimate of projected
operating expenses for the next twelve (12)
months and the denominator of which is the
estimated outstanding principal balance of
Receivables expected to be sold by the Seller to
the Purchaser in the next twelve (12) months; and
RF = a contingency risk factor (expressed as the
decimal equivalent of a percentage) based on
industry and economic considerations, as
determined by the Purchaser in its reasonable
discretion and as agreed upon between the
Purchaser and the Seller.
"Purchase Period" shall mean, with respect to Receivables
sold by the Seller to the Purchaser after the Closing Date, the
Monthly Period reported upon in the most recent Monthly Servicer
Report delivered after the Closing Date.
"Purchase Price" shall have the meaning set forth in
Section 3.1.
"Purchaser" shall mean Saks Credit Corporation, a
Delaware corporation, and its successors and assigns.
"Receivable" shall mean any amount owing by an Obligor
under an Account with the Seller, including any Additional Account
and/or Automatic Additional Account, from time to time, including,
without limitation, amounts owing for the payment of merchandise
and services, Insurance Charges, service contract charges, Finance
Charges and all other fees and charges. In calculating the
aggregate amount of Receivables on any day, the amount of
Receivables shall be reduced by the aggregate amount of adjustments
stated in Section 3.8 of the Pooling and Servicing Agreement in the
Accounts on such day. Any Receivables which the Seller is unable
to transfer under circumstances similar to those described in
Section 2.5(d) of the Pooling and Servicing Agreement shall not be
included for the period in which such Receivables cannot be
transferred under conditions similar to those described in such
Section 2.5(d) in calculating the aggregate amount of Receivables.
"Records" shall mean all Account Agreements and other
documents, books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data
processing software and related property and rights) maintained
with respect to Receivables and the related Obligors.
"Related Security" means, with respect to any
Receivable, all of the Seller's rights, title and interest in, to
and under the following, as and to the extent applicable:
(i) all of the Seller's interest, if any, in the
merchandise (including returned or repossessed merchandise),
if any, the sale of which gave rise to such Receivable;
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to
secure payment of such Receivable, whether pursuant to the
Account related to such Receivable or otherwise, together with
all financing statements signed by an Obligor describing any
collateral securing such Receivable;
(iii) all guarantees, indemnities, warranties,
insurance (and proceeds and premium refunds thereof) or other
agreements or arrangements of any kind from time to time
supporting or securing payment of such Receivable whether
pursuant to the Account related to such Receivable or
otherwise;
(iv) all records related to such Receivable; and
(v) all Proceeds of any of the foregoing.
"Relevant UCC" shall mean the Uniform Commercial Code as
in effect in the State of Illinois.
"Secured Obligations" shall have the meaning set forth in
Section 2.1(d) hereof.
"Subservicers" shall mean initially XxXxx'x, Inc. and any
Person thereafter appointed by the Servicer as a Subservicer of the
Receivables.
"Subordinated Note" shall mean the subordinated note in
the amount of $500,000,000 dated of even date herewith between Saks
Incorporated and Saks Credit Corporation which supersedes and
replaces a promissory note in the same amount and on the same terms
dated as of February 2, 1998 between Xxxxxxxx'x, Inc. and
Xxxxxxxx'x Credit Corporation.
"Termination Date" shall have the meaning specified in
Section 8.1 hereof.
SECTION 1.2. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in
Article 9 of the Relevant UCC, and not specifically defined herein,
are used herein as defined in such Article 9. To the extent that
the definitions of accounting terms herein are inconsistent with
the meanings of such terms under generally accepted accounting
principles, the definitions contained herein shall control. The
definitions of all terms defined herein shall include the singular
as well as the plural form of such terms and the masculine of such
terms as well as the feminine and neuter genders of such terms.
The terms "include", "including" or "includes" shall mean including
without limitation by way of enumeration or otherwise.
SECTION 1.3. Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a period
of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until"
each means "to but excluding."
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES
SECTION 2.1. Sale. (a) Upon the terms and subject to
the conditions set forth herein, the Seller hereby sells, assigns,
transfers, sets-over and conveys to the Purchaser, without
recourse, and the Purchaser hereby purchases from the Seller, on
the terms and subject to the conditions specifically set forth
herein, all of the Seller's right, title and interest, whether now
owned or hereafter acquired, in, to and under the Receivables now
existing or hereafter created, and owned by the Seller, through any
Termination Date (but not thereafter), together with all Related
Security, if any, and all Collections and other monies due or to
become due with respect thereto (including all Finance Charges,
Recoveries and Interchange, if any) and all proceeds of the
foregoing, including Insurance Proceeds. The foregoing sale,
assignment, transfer and conveyance does not constitute an
assumption by the Purchaser of any obligations of the Seller or any
other Person to Obligors or to any other Person in connection with
the Receivables or under any Related Security, Account Agreement or
other agreement and instrument relating to the Receivables. With
respect to Receivables sold by the Seller on the Closing Date, such
Receivables shall be deemed to be all the Receivables of the Seller
that exist as of the close of business on the Cut-Off Date together
with any Receivables created thereafter prior to the Closing Date.
With respect to Receivables to be sold pursuant to this Agreement
by the Seller after the Closing Date, such Receivables shall be
deemed to be all the Receivables created after the close of
business on the Cut-Off Date.
(b) In connection with the foregoing sale, the Seller
agrees to record and file on or prior to the Closing Date, at its
own expense, a financing statement or statements with respect to
the Receivables and the other property described in Section 2.1(a)
sold by the Seller hereunder meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary
to perfect and protect the interests of the Purchaser created
hereby under the Relevant UCC (subject, in the case of Related
Security constituting returned inventory and proceeds, to the
applicable provisions of Section 9-306 of the Relevant UCC) against
all creditors of and purchasers from the Seller, and to deliver
either the originals of such financing statements or a file-stamped
copy of such financing statements or other evidence of such filings
to the Purchaser on the Closing Date.
(c) The Seller agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and
documents and take all actions as may be necessary or as the
Purchaser may reasonably request in order to perfect or protect the
interest of the Purchaser in the Receivables purchased hereunder or
to enable the Purchaser to exercise or enforce any of its rights
hereunder. Without limiting the foregoing, the Seller will, in
order to accurately reflect this purchase and sale transaction,
execute and file such financing or continuation statements or
amendments thereto or assignments thereof (as permitted pursuant
hereto) as may be requested by the Purchaser, and shall indicate
clearly and unambiguously in the Seller's computer files and other
Records that the Receivables transferred hereby have been sold to
the Purchaser pursuant to this Agreement and subsequently
transferred to the Trustee pursuant to the Pooling and Servicing
Agreement. The Seller shall, upon request of the Purchaser,
obtain such additional search reports as the Purchaser shall
request. To the fullest extent permitted by applicable law, the
Purchaser shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without
the Seller's signature. Carbon, photographic or other reproduction
of this Agreement or any financing statement shall be sufficient as
a financing statement.
(d) It is the express intent of the Seller and the
Purchaser that the conveyance of the Receivables, all Related
Security, if any, and all Collections and proceeds thereof by the
Seller to the Purchaser pursuant to this Agreement be construed as
a sale of such Receivables and other property by the Seller to the
Purchaser, which sale is absolute and irrevocable (except as
expressly provided otherwise herein) and provides the Purchaser
with the full benefits of ownership of such Receivables and other
property. Further, it is not the intention of the Seller and the
Purchaser that such conveyance be deemed a grant of a security
interest in the Receivables and such other property by the Seller
to the Purchaser to secure a debt or other obligation of the
Seller. However, in the event that, notwithstanding the express
intent of the parties, the Receivables and such other property are
construed to constitute property of the Seller, then (i) this
Agreement also shall be deemed to be, and hereby is, a security
agreement within the meaning of the Relevant UCC; and (ii) the
conveyance by the Seller provided for in this Agreement shall be
deemed to be, and the Seller hereby grants to the Purchaser, a
security interest in, to and under all of the Seller's right, title
and interest in, to and under the Receivables and such other
property outstanding on the Closing Date and thereafter owned by
the Seller, together with all Related Security, if any, and all
Collections and other monies due or to become due with respect
thereto (including all Finance Charges, Recoveries and Interchange,
if any) and all proceeds of the foregoing, including Insurance
Proceeds, to secure the rights of the Purchaser set forth in this
Agreement or as may be determined in connection therewith by
applicable law (collectively, the "Secured Obligations"). The
Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the
Receivables and such other property, such security interest would
be deemed to be a perfected first priority security interest in
favor of the Purchaser under applicable law and will be maintained
as such throughout the term of this Agreement.
SECTION 2.2. Servicing of Receivables. (a) The
servicing, administering and collection of the Receivables shall be
conducted by the Servicer, which hereby agrees to perform, take or
cause to be taken all such action as may be necessary or advisable
to collect each Receivable from time to time, all in accordance
with applicable laws, rules and regulations and with the care and
diligence which the Servicer employs in servicing similar
receivables for its own account, in accordance with the Credit Card
Guidelines. With the consent of the Trustee and the Purchaser, the
Servicer may delegate certain functions to the Subservicers;
provided, however, no such delegation shall relieve the Servicer of
its obligations hereunder. The Purchaser hereby appoints the
Servicer as its agent to enforce the Purchaser's rights and
interests in, to and under the Receivables, the Related Security,
if any, and the Collections with respect thereto, and the Seller
agrees to cooperate with and assist the Purchaser and the Servicer
in connection with any such efforts, including acting as agent for
and on behalf of the Purchaser and the Servicer in connection
therewith. The Servicer shall hold in trust for the Purchaser, in
accordance with its interests, all records which evidence or relate
to the Receivables or Related Security, if any, Collections and
proceeds with respect thereto. Notwithstanding anything to the
contrary contained herein, from and after a Servicer Default (as
defined in the Pooling and Servicing Agreement), a Successor
Servicer shall be appointed as provided in Article X of the Pooling
and Servicing Agreement. The Purchaser agrees to pay the Servicer
a Servicing Fee for the Servicer's performance of the duties and
obligations described in this Section 2.2 and in Article III of the
Pooling and Servicing Agreement.
(b) The Seller hereby grants to each of the Purchaser
and the Servicer an irrevocable, non-exclusive license to use,
without royalty or payment of any kind, all software used by the
Seller to account for the Receivables, to the extent necessary to
administer the Receivables, whether such software is owned by the
Seller or is owned by others and used by the Seller under license
agreements with respect thereto, provided, however, should the
consent of any licensor of the Seller to such grant of the license
described herein be required, the Seller hereby agrees that upon
the request of the Purchaser (or the Trustee as the Purchaser's
assignee), the Seller will use its reasonable efforts to obtain the
consent of such third-party licensor. The license granted hereby
shall be irrevocable, and shall terminate on the date this
Agreement terminates in accordance with its terms.
ARTICLE III
CONSIDERATION AND PAYMENT; RECEIVABLES
SECTION 3.1. Purchase Price. (a) The purchase price
("Purchase Price") for the Receivables and related property
conveyed on the Closing Date to the Purchaser by the Seller under
this Agreement shall be a dollar amount equal to the product of (i)
the Aggregate Principal Receivables as of the Cut-Off Date, and
(ii) the Purchase Rate then in effect.
The Purchase Price for the Receivables and related
property conveyed on any date after the Closing Date shall be the
dollar amount equal to the product of (i) the aggregate outstanding
principal balance of the Receivables sold during the applicable
Purchase Period as reflected in the applicable Monthly Servicer's
Certificate or any other certificate delivered pursuant thereto or
pursuant to this Agreement as in effect prior to the date hereof
and (ii) the Purchase Rate on such date.
SECTION 3.2. Payment of Purchase Price. (a) The
Purchase Price for the Receivables sold on the Closing Date shall
be paid or has been paid by payment of cash in immediately
available funds. The Purchaser may obtain the cash to pay the
Purchase Price from the sale of Eligible Receivables to the Trust,
and pursuant to advances pursuant to the Subordinated Note (such
advance and any advance thereunder as contemplated by Section
3.2(b), each an "Advance") and contributions to the capital of the
Purchaser by Xxxxxxxx'x, Inc.
(b) The Purchase Price for the Receivables sold by the
Seller on any date after the initial date of the Receivables
Purchase Agreement (each, a "Purchase Date") shall be paid in cash
to the Seller from proceeds from (i) the sale by the Purchaser of
the Receivables to the Trust or (ii) as the Purchaser may elect, in
its sole discretion, from proceeds of (A) an Advance under the
Subordinated Note, or (iii) a capital contribution by Saks
Incorporated to the Purchaser or (iv) any combination of the
foregoing. In the event the Purchaser does not have sufficient
cash to pay the Purchase Price due on any Purchase Date, or Saks
Incorporated determines, in its sole discretion not to make a
capital contribution to the Purchaser, Saks Incorporated, subject
to the terms hereof, irrevocably agrees to make an Advance on such
Purchase Date in an original principal amount equal to such cash
insufficiency; provided, however, that no Advance shall be made if
immediately thereafter the Net Worth of the Purchaser would be less
than 10% of the highest Aggregate Principal Receivables outstanding
during the immediately preceding twelve (12) calendar month period.
All Advances made by the Seller to the Purchaser shall be evidenced
by the Subordinated Note.
(c) The terms and conditions of the Subordinated Note
and all Advances thereunder shall be as follows:
(i) Repayment of Advances. All amounts paid by the
Purchaser with respect to the Advances shall be allocated first to
the repayment of accrued interest until all such interest is paid,
and then to the outstanding principal amount of the Advances.
Subject to the provisions of this Agreement, the Purchaser may
borrow, repay and reborrow Advances on and after the date hereof
and prior to the termination of this Agreement, subject to the
terms, provisions and limitations set forth herein.
(ii) Interest. The Subordinated Note shall bear
interest from its date on the outstanding principal balance thereof
at a rate per annum equal to one month LIBOR as published in the
Money Rates Section of The Wall Street Journal. Interest on each
Advance shall be computed based on the actual number of days
elapsed based upon a year of 360 days.
(iii) Sole and Exclusive Remedy; Subordination.
The Subordinated Note shall be fully subordinated to any rights of
the Trustee, the Certificateholders and their permitted assigns
pursuant to the Pooling and Servicing Agreement, all on the terms
and conditions set forth in the Subordinated Note, and shall not
evidence any rights in the Receivables.
SECTION 3.3. Monthly Report. On each Determination
Date, the Seller shall deliver or cause to be delivered to the
Purchaser a report covering the preceding Monthly Period,
substantially in the form of the Monthly Servicer's Certificate
attached as Exhibit E to the Pooling and Servicing Agreement,
showing (i) the aggregate Purchase Price of Receivables acquired or
generated by the Seller in the preceding Monthly Period and (ii)
the aggregate outstanding principal balance of such Receivables
that are Eligible Receivables as of the last day of such preceding
Monthly Period.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Seller's Representations and Warranties'.
The Seller represents and warrants to the Purchaser as of the
Closing Date and shall be deemed to represent and warrant as of the
date of any sale of any interest in Receivables, including
Receivables in Additional Accounts and Automatic Additional
Accounts to the Purchaser pursuant to this Agreement that:
(a) Corporate Existence and Power. The Seller is a
national banking association, duly incorporated, validly existing
and in good standing under the laws of the United States of
America, and has full power, authority and legal right to own its
properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement.
The Seller is duly qualified to do business and is in good standing
(or is exempt from such requirements) and has obtained all
necessary licenses and approvals with respect to the Seller, in
each jurisdiction in which failure to so qualify or to obtain such
licenses and approvals would render any Account Agreement relating
to an Account or any Receivable unenforceable by it, the Purchaser
or the Trust and would have a material adverse effect on the
Certificateholders or on the Purchaser's or the Servicer's ability
to perform their respective obligations under this Agreement, the
Pooling and Servicing Agreement or any Supplement thereto.
(b) Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Seller of this Agreement are within the Seller's corporate powers,
have been duly authorized by all necessary corporate action, and
require no action by or in respect of, or filing with, any
Governmental Authority or official thereof (except for the filing
of UCC financing and continuation statements, and amendments
thereto, as required by this Agreement). The execution and
delivery of this Agreement by the Seller, the performance by the
Seller of the transactions contemplated by this Agreement and the
fulfillment by the Seller of the terms hereof and thereof will not
conflict with, violate or result in any breach of any of the
material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, any Requirement
of Law applicable to the Seller or any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the
Seller is a party or by which it or any of its properties are bound
and which conflict, violation, breach or default would have a
material adverse effect on the Purchaser or the Certificateholders
or on the Purchaser's or the Servicer's ability to perform their
respective obligations under the Pooling and Servicing Agreement.
(c) Binding Effect. This Agreement will constitute the
legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or other similar laws now or hereafter
in effect affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or
in equity).
(d) Perfection. Immediately preceding the sale,
transfer and assignment of the Receivables and the related property
pursuant to this Agreement, the Seller had good and marketable
title to all of the Receivables and such related property, free and
clear of all Liens (except those Liens permitted by the Pooling and
Servicing Agreement). On or prior to the date of each sale of
Receivables and such related property pursuant to this Agreement,
all financing statements and other documents required to be
recorded or filed in order to perfect and protect the ownership
interest of the Purchaser in and to the Receivables and such
related property against all creditors of and purchasers from the
Seller will have been duly filed in each filing office necessary
for such purpose and all filing fees and taxes, if any, payable in
connection with such filings shall have been paid in full.
(e) Tax Status. The Seller has filed all material tax
returns (federal, state and local) required to be filed and has
paid or made adequate provision for the payment of all taxes,
assessments and other governmental charges.
(f) Action, Suits. There are no proceedings or
investigations pending or, to the knowledge of the Seller,
threatened against the Seller before any Governmental Authority (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely
affect the performance by the Seller of its obligations under this
Agreement, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of
this Agreement (v) seeking to affect adversely the federal income
tax attributes of the Trust.
(g) Place of Business. The principal place of business
and chief executive office of the Seller is located at 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, and the offices where
the Seller keeps all its records with respect to its Accounts and
Receivables, are located at the address(es) described on Exhibit B
hereto or such other locations notified to the Purchaser in
accordance with this Agreement in jurisdictions where all action
required by the terms of this Agreement has been taken and
completed.
(h) True Sale. This Agreement constitutes a valid sale,
transfer and assignment to the Purchaser of all right, title and
interest of the Seller in and to the Receivables and related
property to be transferred hereby, whether existing on the date of
this Agreement or hereafter created in the Accounts and the
proceeds thereof which is effective as to each Receivable upon the
creation thereof, and upon such transfer to the Purchaser
hereunder, the Purchaser shall obtain good and marketable title to
such Receivables and related property, free and clear of all Liens
(except those Liens permitted by the Pooling and Servicing
Agreement).
(i) Trade Names, Etc. As of the date hereof: (i) the
Seller's chief executive office is located at the address for
notices set forth in Section 9.3; (ii) the Seller has only the
subsidiaries and divisions listed on Exhibit C hereto; and (iii)
the Seller has, within the last five (5) years, operated only under
the trade names identified in Exhibit C hereto, and, within the
last five (5) years, has not changed its name, merged with or into
or consolidated with any other corporation or been the subject of
any proceeding under Xxxxx 00, Xxxxxx Xxxxxx Code (Bankruptcy),
except as disclosed in Exhibit C hereto.
(j) Nature of Receivables. As of the Cut-Off Date or
Creation Date, as applicable, and in the case of Receivables in
Additional Accounts, as of the related Additional Account Cut-Off
Date, (i) each Receivable then existing is an Eligible Receivable,
and (ii) as of the applicable Additional Account Cut-Off Date with
respect to Additional Accounts, and as of the applicable
Distribution Date on which a computer file, microfiche or written
list is delivered pursuant to Section 2.1(b) of the Pooling and
Servicing Agreement with respect to Automatic Additional Accounts
included automatically pursuant to Section 2.6(d) of the Pooling
and Servicing Agreement, Schedule 1 to the Pooling and Servicing
Agreement is in all material respects an accurate and complete
listing of all the Accounts of the Seller the Receivables of which
have been sold, transferred and assigned to the Purchaser as of the
Cut-Off Date or the applicable Additional Account Cut-Off Date, the
applicable Creation Date and the date of such Schedule 1, as the
case may be, and the information contained therein with respect to
the identity of such Accounts and the Receivables existing
thereunder is true and correct in all material respects as of the
dates thereof, including the applicable Cut-Off Date, Additional
Account Cut-Off Date or Creation Date. On each day on which any
new Receivable is created, the Seller shall be deemed to represent
and warrant to the Purchaser that each Receivable created on such
day is an Eligible Receivable.
(k) Eligibility of Accounts. As of the applicable Cut-
Off Date, Additional Account Cut-Off Date or Creation Date, each
Account was an Eligible Account and no selection procedures adverse
to the Purchaser or the Certificateholders have been employed in
selecting the Accounts.
(l) Amount of Receivables. As of the Cut-Off Date, the
aggregate outstanding principal balance of the Receivables of the
Seller in existence was approximately $1,067,000,000.
(m) Not an Investment Company. The Seller is not, and
is not controlled by, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or is exempt from
all provisions of such Act.
(n) ERISA. The Seller and each of its ERISA Affiliates
is in compliance in all material respects with ERISA and no lien
exists in favor of the Pension Benefit Guaranty Corporation on any
of the Receivables.
(o) Bulk Sales. No transaction contemplated by this
Agreement requires compliance with any bulk sales act or similar
law.
(p) No Insolvency. The Seller is not insolvent
immediately prior to any transfer of Receivables hereunder, and
will not be rendered insolvent immediately following such transfer.
(q) Reasonably Equivalent Value. The Purchaser has
given reasonably equivalent value to the Seller in consideration
for the transfer and sale to the Purchaser of the applicable
Receivables and other property from such Seller, and each such
transfer shall not have been made for or on account of an
antecedent debt owed by such Seller to the Purchaser. The Seller
acknowledges that it will receive reasonably equivalent value in
consideration for the transfer to the Purchaser of all Receivables
and other property now or hereafter to be transferred and sold
hereunder.
The Purchaser and the Servicer may rely upon any of these
representations and warranties, and any of the covenants and
agreements of the Seller contained herein in connection with any
transactions pursuant to the Pooling and Servicing Agreement.
SECTION 4.2. Reaffirmation of Representations and
Warranties by the Seller; Notice of Breach. On each sale date, the
Seller, by accepting the proceeds of such sale, shall be deemed to
have certified that all representations and warranties described in
Section 4.1 are true and correct on and as of such day as though
made on and as of such day and that all the covenants to be
performed by the Seller have been performed. The representations
and warranties set forth in Section 4.1 shall survive the
conveyance of the Receivables to the Purchaser, and termination of
the rights and obligations of the Purchaser and the Seller under
this Agreement. Upon discovery by the Purchaser or the Seller of
a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice
to the other within three (3) Business Days of such discovery.
SECTION 4.3. Automatic Repurchase of Ineligible
Receivables. In the event that a Receivable is not an Eligible
Receivable as a result of the failure to satisfy the conditions set
forth in clause (iii) of the definition of Eligible Receivable, and
either of the following two conditions is met:
(i) the Lien on the subject Receivable (1) ranks
prior to the Lien created pursuant to this Agreement, (2)
arises in favor of the United States of America or any state
or any agency or instrumentality thereof or involves taxes or
liens arising under Title IV of ERISA, or (3) has been
consented to by the Seller; or
(ii) the Lien on the subject Receivable is not of
the types described in clause (i) above, but, as a result of
such breach or event, such Receivable becomes a Receivable in
a Defaulted Account or the Purchaser's rights in, to or under
such Receivable or its proceeds are materially impaired or the
proceeds of such Receivable are not available for any reason
to the Purchaser free and clear of any Lien except Liens
permitted hereby;
then, upon the earlier to occur of the discovery of such breach or
event by the Seller or receipt by the Seller of written notice of
such breach or event given by the Purchaser, the Servicer or the
Trustee, each such Receivable or, at the option of the Seller, all
such Receivables with respect to the related Account, automatically
shall be repurchased by the Seller on the terms and conditions set
forth in Article VI hereof.
SECTION 4.4. Repurchase After Cure Period. In the event
of a breach of any of the representations and warranties set forth
in Section 4.1(j) or (k) with respect to a Receivable (other than
in the event that a Receivable is not an Eligible Receivable as a
result of the failure to satisfy the conditions set forth in clause
(iii) of the definition of Eligible Receivable), and as a result of
such breach or event such Receivable becomes a Receivable in a
Defaulted Account or the Purchaser's rights in, to or under such
Receivable or its proceeds are materially impaired or the proceeds
of such Receivable are not available for any reason to the
Purchaser free and clear of any Lien except Liens permitted hereby,
then, upon the expiration of 90 days or any longer period specified
by the Servicer (not to exceed an additional 90 days) from the
earlier to occur of (x) the discovery of any such event by the
Transferor or the Servicer or (y) receipt by the Purchaser or the
Servicer of written notice of any such event given by the Trustee,
each such Receivable or, at the option of the Purchaser, all such
Receivables with respect to the related Account, shall be
repurchased by the Seller on the terms and conditions set forth in
Article VI hereof; provided, however, that no such repurchase shall
be required to be made if, on any day within such applicable
period, (A) such representation and warranty with respect to such
Receivable shall then be true and correct in all material respects
as if such Receivable had been transferred to the Trust on such
day, and (B) the related Account is no longer a Defaulted Account
as the result of the breach of such representation and warranty,
and the Trust's rights in, to or under such Receivable or its
proceeds are no longer materially impaired as a result of a breach
of such representation and warranty, and the proceeds of such
Receivable are available to the Trust free and clear of all Liens
resulting in the breach of such representation and warranty, as
applicable.
SECTION 4.5 Repurchase of All Receivables. In the event
that any of the representations or warranties set forth in Sections
4.1(a), 4.1(b), 4.1(c), 4.1(d) or 4.1(j) are breached and such
breach results in a requirement that the Purchaser repurchase such
Receivable under the Pooling and Servicing Agreement or a material
amount of Receivables are deemed not to be Eligible Receivables,
and such event has a materially adverse effect on the Purchaser or
the Certificateholders, and the Transferor is required to accept
reassignment of all Receivables at the order of the Trustee or the
Certificateholders, then the Seller shall repurchase all
Receivables on the terms and conditions set forth in Article VI
hereof.
ARTICLE V
COVENANTS OF THE SELLER
SECTION 5.1. Covenants of the Seller. The Seller hereby
covenants and agrees with the Purchaser that, for so long as this
Agreement and the Pooling and Servicing Agreement are in effect,
and until all Receivables, an interest in which has been sold to
the Purchaser pursuant hereto, shall have been paid in full or
charged off, and all amounts owed by the Seller pursuant to this
Agreement have been paid in full, unless the Purchaser otherwise
consents in writing, the Seller covenants and agrees as follows:
(a) Conduct of Business. The Seller will carry on and
conduct its credit card business in substantially the same manner
as is presently conducted and do all things necessary to remain
duly organized, validly existing and in good standing as a national
banking association. The Seller will maintain all authority
required to conduct its business in each jurisdiction in which its
business is conducted, the failure of which would render any
Account Agreement relating to an Account or any Receivable
unenforceable by it, the Purchaser or the Trustee and would have a
material adverse effect on the Certificateholders or on the
Purchaser's or the Servicer's ability to perform their respective
obligations under this Agreement, the Pooling and Servicing
Agreement or any Supplement thereto.
(b) Compliance with Laws. The Seller will comply in all
material respects with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it or its
properties may be subject.
(c) Furnishing of Information and Inspection of Records.
The Seller will furnish or cause to be furnished to the Purchaser
from time to time such information with respect to the Receivables
as the Purchaser may reasonably request, including, without
limitation, a computer file, microfiche or written list showing
each Account, identified by account number, and Receivable balance
and any information which the Purchaser may be required to deliver
pursuant to the Pooling and Servicing Agreement, any Supplement
thereto and any related Certificate Purchase Agreement. The Seller
will at any time and from time to time during regular business
hours and upon reasonable prior notice permit the Purchaser, or its
agents or representatives (which may include any purchasers of
certificates not sold to the public), (i) to examine and make
copies of and abstracts from all records and (ii) to visit the
offices and properties of the Seller for the purpose of examining
such records, and to discuss matters relating to Receivables or the
Seller's performance hereunder with any of the officers, directors,
employees or independent public accountants of the Seller having
knowledge of such matters.
(d) Keeping of Records and Books of Account. The Seller
will maintain a system of accounting established and administered
in accordance with generally accepted accounting principles except
to the extent required otherwise by applicable regulatory
authorities and then consistent with regulatory accounting
principles, consistently applied, and will maintain and implement
administrative and operating procedures (including, without
limitation, an ability to produce or recreate records evidencing
Receivables in the event of the destruction of the originals
thereof), and keep and maintain, all documents, books, records and
other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable). The Seller will give the Purchaser and the Trustee
notice of any material change in the administrative and operating
procedures of the Seller referred to in the previous sentence.
(e) Account Agreements and Credit Card Guidelines. The
Seller shall comply with and perform its obligations under the
applicable Account Agreements relating to the Accounts and the
Credit Card Guidelines, except insofar as any failure so to comply
or perform would not materially and adversely affect the rights of
the Purchaser, the Trust or the Certificateholders, the ability of
the Servicer to collect the Receivables, the validity or
enforceability of this Agreement, the Pooling and Servicing
Agreement, or any documents or agreements related thereto, or the
performance by any party of its obligations hereunder or
thereunder.
(f) Reduction of Charges. Except as required by law or
as the Seller shall deem advisable for its credit card program
based on a good faith assessment by the Seller, in its sole
discretion, of the various factors affecting the use of its credit
card accounts, the Seller will not reduce the finance charges or
other fees on the Accounts if, as a result of such reduction, its
reasonable expectation of Portfolio Yield as of the time of such
reduction would be less than the weighted average base rates of all
outstanding Series. In addition, the Seller covenants that, unless
required by law, it will not reduce the annual percentage rate if
its reasonable expectation of Portfolio Yield would be less than
the highest Certificate Rate for any outstanding Series.
(g) Collections Received. The Seller shall direct or
cause all Collections of Receivables to be remitted as directed by
the Purchaser. In the event that the Seller receives any such
Collection, the Seller shall hold in trust for and on behalf of the
Purchaser and the Trust, as their interests may appear, and remit,
immediately, but in any event not later than the close of business
on the second Business Day following its receipt thereof, to the
Servicer, all Collections received from time to time by the Seller.
(h) Sale Treatment. The Seller agrees to treat this
conveyance for all purposes (including, without limitation, tax and
financial accounting purposes) as a sale and, to the extent any
such reporting is required, shall report the transactions
contemplated by this Agreement on all relevant books, records, tax
returns, financial statements and other applicable documents as a
sale of the Receivables to the Purchaser.
(i) ERISA. The Seller shall promptly give the Purchaser
written notice upon becoming aware that (i) the Seller or any of
its ERISA Affiliates is not in compliance in all material respects
with ERISA and to the extent required of the Purchaser and its
ERISA Affiliates in the Certificate Purchase Agreement or that (ii)
any ERISA Lien on any of the Receivables exists.
SECTION 5.2. Negative Covenants of the Seller. During
the term of this Agreement, unless the Trustee and the Purchaser
shall otherwise consent in writing:
(a) No Sales, Liens, Etc. Except for the conveyances
hereunder, the Seller will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to
exist any Lien on (or the filing of any financing statement with
respect to) any Receivable, whether now existing or hereafter
created, or any interest therein; the Seller will notify the
Purchaser and the Trustee of the existence of any Lien on any
Receivable transferred and sold by the Seller to Purchaser hereby;
and immediately upon discovery thereof, the Seller will defend the
right, title and interest of the Purchaser and the Trust in, to and
under the Receivables, whether now existing or hereafter created,
against all claims of third parties claiming through or under the
Seller; provided, however, that nothing in this Section 5.2(a)
shall prevent or be deemed to prohibit the Seller from suffering to
exist upon any of the Receivables any Liens for, municipal or other
local taxes and other governmental charges if such taxes or
governmental charges shall not at the time be due and payable or if
the Transferor shall currently be contesting the validity thereof
in good faith by appropriate proceedings and shall have set aside
on its books adequate reserves under generally accepted accounting
principles with respect thereto.
(b) Account Agreements and Credit Card Guidelines.
Subject to compliance with all Requirements of Law, the failure to
comply with which would have a material adverse effect on the
Purchaser or the Certificateholders, the Seller or the Servicer may
change the terms and provisions of the Account Agreements or the
Credit Card Guidelines in any respect (including, without
limitation, the calculation of the amount, or the timing, of charge
offs of Receivables) as follows: (i) if the Seller owns a
comparable segment of accounts, then such change shall be made
applicable to such comparable segment of the accounts owned and
serviced by the Seller that have characteristics the same as, or
substantially similar to, the Accounts that are the subject of such
change, and (ii) if the Seller does not own such a comparable
segment, then the Seller will not make or cause to be made any
such change with the intent to materially benefit the Seller over
the Purchaser or the Certificateholders.
(c) Change of Name, Etc. The Seller shall not change
its name, identity or structure or location of its chief executive
office, unless at least ten (10) Business Days prior to the
effective date of any such change the Seller delivers to the
Purchaser such documents, instruments or agreements, including,
without limitation, appropriate financing statements under the
Relevant UCC, executed by the Seller necessary to reflect such
change and to continue the perfection of the Purchaser's and any
assignee's first priority interest in the Receivables.
(d) No Change in Business or Credit Card Guidelines.
The Seller will not make any change in the Credit Card Guidelines
or any change in the character of its business, which change would,
in either case, impair the collectibility of any substantial
portion of the Receivables or otherwise materially and adversely
affect the rights of the Purchaser, the Trust or the
Certificateholders, the ability of the Servicer to collect the
Receivables, the validity or enforceability of this Agreement, the
Pooling and Servicing Agreement, or any documents or agreements
related thereto, or the performance by any party of its obligations
hereunder or thereunder.
(e) ERISA Matters. The Seller will not (i) engage in
any prohibited transaction (as defined in Section 4975 of the Code
and Section 406 of ERISA) for which an exemption is not available
or has not previously been obtained from the U.S. Department of
Labor; (ii) permit to exist any accumulated funding deficiency (as
defined in Section 302(a) of ERISA and Section 412(a) of the Code)
or funding deficiency with respect to any Defined Benefit Plan
other than a Multiemployer Plan that could reasonably result in the
PBGC or IRS filing a lien; (iii) fail to make any payments to any
Multiemployer Plan that the Seller or any ERISA Affiliate of the
Seller is required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (iv) terminate
any Defined Benefit Plan so as to result in any liability; or (v)
permit to exist any occurrence of any Reportable Event which
represents a material risk of a liability to the Seller or any
ERISA Affiliate of the Seller under ERISA or the Code.
(f) Transfers of Accounts. The Seller will not convey,
transfer or assign any Accounts to any Person, except for Removed
Accounts, unless the Rating Agency Condition is satisfied.
SECTION 5.3. Indemnification. The Seller agrees to
indemnify, defend and hold the Purchaser harmless from and against
any and all loss, liability, damage, judgment, claim, deficiency,
or expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) (collectively, "Indemnified
Amounts") to which the Purchaser or any assignee thereof may become
subject insofar as such loss, liability, damage, judgment, claim,
deficiency, or expense arises out of or is based upon a breach by
the Seller of its representations, warranties and covenants
contained herein, or any information certified in any written
schedule or certificate delivered by the Seller hereunder being
untrue in any material respect at the time so certified; provided,
however, neither the Purchaser nor any of its assignees shall be
entitled to indemnification hereunder for any Indemnified Amount to
the extent the same resulted from the gross negligence or willful
misconduct of the Purchaser or any of its assignees. The
obligations of the Seller under this Section 5.3 shall be
considered to have been relied upon by the Purchaser and shall
survive the execution, delivery, performance and termination of
this Agreement and any sale or transfer of the Receivables or any
interest therein by the Purchaser, regardless of any investigation
made by the Purchaser or on its behalf.
ARTICLE VI
REPURCHASE OBLIGATION
SECTION 6.1. Mandatory Repurchase.
(a) Breach of Warranty. If on any day the repurchase of
any Receivable which has been sold by the Seller hereunder shall be
required pursuant to Sections 4.3 or 4.4 hereof, the Seller shall
be deemed to have received on such day a Collection of such
Receivable in full and shall on such day pay to the Purchaser an
amount equal to the aggregate outstanding principal balance of such
Receivable, plus outstanding Finance Charges accrued thereon
through the date of such repurchase; provided that, prior to the
Termination Date, such amount may be paid, at the election of the
Purchaser, by a reduction in or an offset to the Purchase Price
paid to the Seller on the next occurring Purchase Date, unless the
Purchaser is required to make a payment in respect of such breach
pursuant to the Pooling and Servicing Agreement; provided, however,
in all events at least the amount of any cash deposit required to
be made by the Purchaser under the Pooling and Servicing Agreement
in respect of the retransfer of such Ineligible Receivable shall be
paid in immediately available funds by the Seller.
(b) Repurchase of All Receivables. If on any day the
repurchase of all Receivables which have been sold by the Seller
hereunder shall be required pursuant to Section 4.5 hereof, the
Seller shall be deemed to have received on such day a Collection of
such Receivables in full and shall on such day pay to the Purchaser
an amount equal to the aggregate outstanding principal balance of
such Receivable, plus Finance Charges accrued thereon through the
date of such repurchase; provided, however, in all events at least
the amount of any cash deposit required to be made by the Purchaser
under the Pooling and Servicing Agreement in respect of the
retransfer of such Ineligible Receivable shall be paid in
immediately available funds by the Seller.
SECTION 6.2. Dilutions, etc. If the Servicer or the
Seller adjusts downward the amount of any Receivable without
receiving Collections therefor or without charging off such amount
as uncollectible, because of a rebate, refund, unauthorized charge
or billing error to an Obligor, or because such Receivable was
created in respect of merchandise or services which were refused,
returned or not received by an Obligor, then the Seller shall be
deemed to have received on such day a Collection of such Receivable
in the amount of such reduction, cancellation or payment made by
the Obligor and shall on such day pay to the Purchaser an amount
equal to such reduction or cancellation; provided that, prior to
the Termination Date, such amount may be paid by a reduction in the
Purchase Price paid to the Seller on the next occurring Purchase
Date, unless the Purchaser is required to make a payment in respect
of such breach sooner pursuant to the Pooling and Servicing
Agreement. Similarly, if the Servicer or the Seller adjusts
downward the amount of any Receivable because such Receivable was
discovered as having been created through a fraudulent or
counterfeit charge or with respect to which the covenant contained
in Section 5.2(a) hereof was breached, then the Seller shall be
deemed to have received on such day a Collection of such Receivable
in the amount of such reduction, cancellation or payment made by
the Obligor and shall on such day pay to the Purchaser an amount
equal to such reduction or cancellation; provided that, prior to
the Termination Date, such amount may be paid by a reduction in the
Purchase Price paid to the Seller on the next occurring Purchase
Date; provided, however, in all events at least the amount of any
cash deposit required to be made by the Purchaser under the Pooling
and Servicing Agreement in respect of any such adjustment shall be
paid in immediately available funds by the Seller. Any adjustment
("Adjustment Payment Obligation"), required pursuant to either of
the two preceding sentences shall be made within two (2) Business
Days of the making of the Adjustment Payment Obligation, and in no
event later than the end of the Monthly Period in which such
adjustment obligation arises.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. Conditions to the Purchaser's Obligations
Regarding Receivables. The obligations of the Purchaser to
purchase the Receivables on the Closing Date and any Purchase Date
shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of the Seller
contained in this Agreement shall be true and correct on the
Closing Date and on each Purchase Date thereafter with the same
effect as though such representations and warranties had been made
on such date (except to the extent any such representation or
warranty specifically related to an earlier date, in which case
such representation or warranty shall have been true as of such
earlier date);
(b) All information concerning the Receivables provided
to the Purchaser shall be true and correct in all material respects
as of the Closing Date, in the case of any Receivables existing on
the Closing Date, or the Purchase Date, in the case of any
Receivables created after the Closing Date, and in each Schedule of
Accounts delivered to the Purchaser hereunder for inclusion in
Schedule 1 to the Pooling and Servicing Agreement;
(c) The Seller shall have substantially performed all
other obligations required to be performed by the provisions of
this Agreement;
(d) The Seller shall have filed or caused to be filed
the financing and continuation statement(s) and all amendments
thereto required to be filed pursuant to Section 2.1(b); and
(e) All corporate and legal proceedings and all
instruments in connection with the transactions contemplated by
this Agreement shall be satisfactory in form and substance to the
Purchaser, and the Purchaser shall have received from the Seller
copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein
contemplated as the Purchaser may reasonably have requested.
ARTICLE VIII
TERM AND TERMINATION
SECTION 8.1. Term. This Agreement shall commence as of
the date of execution and delivery hereof and shall continue in
full force and effect until the date following the earlier of (i)
the date on which the Trustee declares a Pay Out Event with respect
to all outstanding Series of the Trust pursuant to the Pooling and
Servicing Agreement and any Supplements, (ii) the date on which the
Trust terminates, (iii) the date on which an event described in the
first sentence of Section 9.2(a) of the Pooling and Servicing
Agreement occurs with respect to the Seller and the Trust, (iv) the
close of business on the third Business Day following a conveyance
of Receivables to the Purchaser for which the Purchaser does not
pay the Purchase Price in accordance with the provisions hereof, or
(vi) the date on which either the Purchaser or the Seller becomes
unable for any reason to purchase or repurchase any Receivable in
accordance with the provisions of this Agreement or defaults on its
obligations hereunder, which default continues unremedied for more
than thirty (30) days after written notice (any such date being a
"Termination Date"); provided, however, that the termination of
this Agreement pursuant to this Section 8.1 hereof shall not
discharge any Person from any obligations incurred prior to such
termination, including, without limitation, any obligations to make
any payments with respect to the interest of the Purchaser in any
Receivable sold prior to such termination.
SECTION 8.2. Effect of Termination. Following the
termination of this Agreement pursuant to Section 8.1, the Seller
shall not sell, and the Purchaser shall not purchase, any
Receivables. No termination or rejection or failure to assume the
executory obligations of this Agreement in any proceeding regarding
an event described in the first sentence of Section 9.2(a) of the
Pooling and Servicing Agreement with respect to the Seller or the
Purchaser shall be deemed to impair or affect the obligations
pertaining to any executed sale or executed obligations, including,
without limitation, pre-termination breaches of representations and
warranties by the Seller or the Purchaser. Without limiting the
foregoing, prior to termination, the failure of the Seller to
deliver or cause to be delivered computer records of Receivables or
any reports regarding the Receivables shall not render such
transfer or obligation executory, nor shall the continued duties of
the parties pursuant to Article V or Section 9.1 of this Agreement
render an executed sale executory.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendment. This Agreement and the rights
and obligations of the parties hereunder may not be changed orally,
but only by an instrument in writing signed by the Purchaser and
the Seller. Any reconveyance executed in accordance with the
provisions hereof shall not be considered an amendment to this
Agreement.
SECTION 9.2. Governing Law. THIS AGREEMENT GOVERNS
TRANSACTIONS EXCLUSIVELY IN INTERSTATE COMMERCE, AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
SECTION 9.3. Notices. Except as provided below, all
communications and notices provided for hereunder shall be in
writing (including telecopy or electronic facsimile transmission or
similar writing) and shall be given to the other party at its
address or telecopy number set forth below or at such other address
or telecopy number as such party may hereafter specify for the
purposes of notice to such party. Each such notice or other
communication shall be effective (i) if given by telecopy, when
such telecopy is transmitted to the telecopy number specified in
this Section 9.3 and confirmation is received, (ii) if given by
mail three (3) Business Days following such posting, postage
prepaid, U.S. first class or overnight mail, (iii) if given by
overnight courier, such as FedEx, one Business Day after deposit
thereof with a national overnight courier service, or (iv) if given
by any other means, when received at the address specified in this
Section 9.3.
(a) in the case of the Purchaser:
Saks Credit Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Saks Incorporated
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
Senior Vice President and
Associate General Counsel
(b) in the case of the Seller:
National Bank of the Great Lakes
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx Xxxxx
Vice President
(c) in the case of the Servicer:
Saks Incorporated
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
Senior Vice President and
Associate General Counsel
or, as to each party, at such other address as shall be designated
by such party in a written notice to each other party.
SECTION 9.4. Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions, or terms shall be deemed
severable from the remaining covenants, agreements, provisions, or
terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 9.5. Assignment and Designation of Selling
Subsidiaries.
(a) This Agreement may not be assigned by the parties
hereto, except that the Purchaser may assign its rights hereunder
pursuant to the Pooling and Servicing Agreement to the Trustee, for
the benefit of the Certificateholders. The Purchaser hereby
notifies the Seller, (and the Seller hereby acknowledges that, the
Purchaser, pursuant to the Pooling and Servicing Agreement, has
assigned all its rights hereunder to the Trustee. All rights of
the Purchaser hereunder may be exercised by the Trustee or its
assignees, to the extent of their respective rights pursuant to
such assignments.
(b) Saks Incorporated may from time to time designate
its subsidiaries, divisions or department stores as "Selling
Subsidiaries." To become a Selling Subsidiary, (i) the Purchaser,
the Seller and the proposed Selling Subsidiary must execute an
assumption agreement pursuant to which the Selling Subsidiary
assumes certain of the Seller's obligations under this Agreement
and is granted the right to sell Receivables to the Purchaser upon
the terms and conditions set forth herein, (ii) such proposed
Selling Subsidiary must deliver certain other documents (including
UCC-1 financing statements) to the Transferor, the Trustee and the
Rating Agencies, (iii) certain representations and warranties made
by such Selling Subsidiary must be true as of the date it first
sells Receivables to the Purchaser, and (iv) each Rating Agency
must confirm that the Rating Agency Condition has been met. In the
event any Selling Subsidiary is designated and approved hereunder,
each reference to the Seller herein shall be deemed to include each
Selling Subsidiary.
SECTION 9.6. Further Assurances. The Purchaser and the
Seller agree to do and perform, from time to time, any and all acts
and to execute any and all further instruments required or
reasonably requested by the other party more fully to effect the
purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements or
equivalent documents relating to the Receivables for filing under
the provisions of the Relevant UCC or other laws of any applicable
jurisdiction.
SECTION 9.7. No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of the
Purchaser, the Seller or the Trustee (as assignee of the
Purchaser), any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privilege provided
by law.
SECTION 9.8. No Bankruptcy Petition Against the
Purchaser or Trust. Each of the Seller and the Servicer hereby
covenants and agrees that, prior to the date which is one year and
one day after the payment in full of all Certificates, it will not
institute against, or join any other Person in instituting against,
the Purchaser or the Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar
proceeding under the laws of the United States or any state of the
United States.
SECTION 9.9. Counterparts. This Agreement may be
executed in two or more counterparts including telecopy
transmission thereof (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 9.10. Binding Effect; Third-Party
Beneficiaries. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
permitted assigns. The Trustee on behalf of the Certificateholders
is intended by the parties hereto to be a third-party beneficiary
of this Agreement, but otherwise no Person not a party is intended
to or shall have any rights hereunder, whether as a third party
beneficiary or otherwise.
SECTION 9.11. Merger and Integration. Except as
specifically stated otherwise herein or incorporated hereby, this
Agreement sets forth the entire understanding and agreement of the
parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded and replaced by
this Agreement. This Agreement may not be modified, amended,
waived or supplemented except in writing executed by the parties as
provided herein.
SECTION 9.12. Headings. The cover page, table of
contents, and article and section headings hereof are for purposes
of convenience of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.
SECTION 9.13. Exhibits. The schedules and exhibits
referred to herein shall constitute a part of this Agreement and
are incorporated into this Agreement for all purposes.
IN WITNESS WHEREOF, the Seller, the Purchaser and the
Servicer each have caused this Receivables Purchase Agreement to be
duly executed by their respective officers as of the day and year
first above written, and it shall become effective upon delivery to
the Bank and the Trustee on such date.
NATIONAL BANK OF THE GREAT LAKES,
as Seller
By: ____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
SAKS CREDIT CORPORATION,
as Purchaser
By: ____________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Treasurer
SAKS INCORPORATED,
as Servicer
By: _____________________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
Treasurer
EXHIBIT A
to the
RECEIVABLES PURCHASE AGREEMENT
FORM OF SUBORDINATED NOTE
$500,000,000
July 1, 1999
FOR VALUE RECEIVED, the undersigned, SAKS CREDIT
CORPORATION, a Delaware corporation (the "Maker"), hereby
unconditionally promises to pay to the order of SAKS INCORPORATED
(the "Payee"), on December 31, 2005 or earlier as provided for in
the Receivables Purchase Agreement dated as of the date hereof
between the Maker and the Payee (as such agreement may from time to
time be amended, supplemented or otherwise modified and in effect,
the "Receivables Purchase Agreement"), the lesser of the principal
sum of up to Five Hundred Million Dollars and No/100 ($500,000,000)
or the aggregate unpaid principal amount of all Advances to the
Maker from the Payee pursuant to Section 3.2, and the other terms,
of the Receivables Purchase Agreement, in lawful money of the
United States of America in immediately available funds, and to pay
interest from the date thereof on the principal amount hereof from
time to time outstanding, in like funds, at said office, at the
rate per annum set forth in Section 3.2(c)(iii) of the Receivables
Purchase Agreement and shall be payable in arrears on the first day
of each calendar month (or if any such day is not a Business Day,
on the succeeding Business Day).
The Maker hereby waives diligence, presentment, demand,
protest and notice of any kind whatsoever. The non-exercise by the
holder hereof of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any
subsequent instance.
All borrowings evidenced by this Subordinated Note and
all payments and prepayments of the principal hereof and interest
hereon and the respective dates thereof shall be endorsed by the
holder hereof on the schedule attached hereto and made a part
hereof, or on a continuation thereof which shall be attached hereto
and made a part hereof, or otherwise recorded by such holder in its
internal records; provided, however, that (a) the failure of the
holder hereof to make such a notation or record or (b) any error in
such a notation, shall not in any manner affect the obligation of
the Maker to make payments of principal and interest in accordance
with the terms of this Subordinated Note and the Receivables
Purchase Agreement. Any such notation or record shall be
conclusive and binding as to the date and amount of such Advance,
or payment of principal or interest thereon, absent manifest error.
The Maker shall have the right to borrow, repay and,
subject to the limitations set forth in the Receivables Purchase
Agreement, reborrow Advances made to it without penalty, premium or
charge. The Maker shall be obligated to repay Advances to the
Payee only to the extent of funds available to the Maker from
Collections on the Receivables and, to the extent that such
payments are insufficient to pay all amounts owing to the Payee
under the Subordinated Note, the Payee shall not have any claim
against the Maker for such amounts and no further or additional
recourse shall be available against Maker.
This Subordinated Note is the Subordinated Note referred
to in the Receivables Purchase Agreement. The indebtedness
evidenced by this Subordinated Note is subordinated to the prior
payment in full of all of the Maker's recourse obligations under
the Pooling and Servicing Agreement. The subordination provisions
contained herein are for the direct benefit of, and may be enforced
by, the Trustee, the Certificateholders and/or any of their
respective permitted assignees pursuant to the Pooling and
Servicing Agreement (collectively, the "Senior Claimants") under
the Pooling and Servicing Agreement. Until the date on which all
obligations of the Maker and/or the Servicer under the Pooling and
Servicing Agreement (all such obligations, collectively, the
"Senior Claims") have been indefeasibly paid and satisfied in full,
the Payee shall not demand, accelerate, xxx for, take, receive or
accept from the Maker, directly or indirectly, in cash or other
property or by set-off or any other manner (including, without
limitation, from or by way of collateral) any payment or security
of all or any of the indebtedness under this Subordinated Note or
exercise any remedies or take any action or proceeding to enforce
the same; provided, however, that nothing in this paragraph shall
restrict the Maker from paying, or the Payee from requesting, any
payments under this Subordinated Note so long as the Maker is not
required under the Pooling and Servicing Agreement to set aside for
the benefit of, or otherwise pay over to, the funds used for such
payments to any of the Senior Claimants and further provided that
the making of such payment would not otherwise violate the terms
and provisions of the Pooling and Servicing Agreement. Should any
payment, distribution or security or proceeds thereof be received
by the Payee in violation of the immediately preceding sentence,
the Payee agrees that such payment shall be segregated, received
and held in trust for the benefit of, and deemed to be the property
of, and shall be immediately paid over and delivered to the Trustee
for the benefit of the Senior Claimants.
Upon the occurrence of any event described in the first
sentence of Section 9.2(a) of the Pooling and Servicing Agreement
with respect to the Maker, then and in any such event the Senior
Claimants shall receive payment in full of all amounts due or to
become due on or in respect of the Senior Claims before the Payee
is entitled to receive payment on account of this Subordinated
Note, and to that end, any payment or distribution of assets of the
Maker of any kind or character, whether in cash, securities or
other property, in any applicable insolvency proceeding, which
would otherwise be payable to or deliverable upon or with respect
to any or all indebtedness under this Subordinated Note, is hereby
assigned to and shall be paid or delivered by the Person making
such payment or delivery (whether a trustee in bankruptcy, a
receiver, custodian or liquidating trustee or otherwise) directly
to the Trustee for application to, or as collateral for the payment
of, the Senior Claims until such Senior Claims shall have been paid
in full and satisfied.
Capitalized terms not otherwise defined herein are used
herein with the respective meanings given them in the Receivables
Purchase Agreement.
This Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
SAKS CREDIT CORPORATION
By: ____________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Treasurer
Advances and Payments
Date and Payments Unpaid Principal Name of Person
Amount of Advance Principal/Interest Balance of Note Making Notation
----------------- ------------------ ---------------- ---------------
EXHIBIT B
to the
RECEIVABLES PURCHASE AGREEMENT
LOCATION OF RECORDS
1. Purchaser
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
2. Seller
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
0000 Xxxxxxx 00 Xxxx
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
EXHIBIT C
to the
RECEIVABLES PURCHASE AGREEMENT
SUBSIDIARIES, DIVISIONS, TRADE NAMES, BANKRUPTCY PROCEEDINGS
None
