EXHIBIT 99.2
Receivables Purchase Agreement dated as of July 1, 1999, by and among National
Bank of the Great Lakes, as Seller, Saks Incorporated, as Servicer, and Saks
Credit Corporation, as Purchaser.
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 0.0.Xxxx............................................................................. 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
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SECTION 9.3.Notices.......................................................................... 22
SECTION 9.4.Severability of Provisions....................................................... 23
SECTION 9.5.Assignment....................................................................... 23
SECTION 9.6.Further Assurances............................................................... 24
SECTION 0.0.Xx Waiver; Cumulative Remedies................................................... 24
SECTION 0.0.Xx 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
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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
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corporation, as purchaser (the "Purchaser"), and SAKS INCORPORATED (formerly
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named "Xxxxxxxx'x, Inc."), a Tennessee corporation, as servicer (the
"Servicer").
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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
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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
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and Servicing Agreement"), and thereby created a trust on behalf of the holders
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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:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used herein shall have
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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,
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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
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and Servicing Agreement.
"Advance" shall have the meaning specified in Section 3.2(a) hereof.
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"Automatic Additional Accounts" shall have the meaning specified in
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the Pooling and Servicing Agreement.
"Benefit Plan" shall mean any employee benefit plan as defined in
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Section 3(3) of ERISA which the Seller maintains.
"Certificateholders" shall have the meaning specified in the Pooling
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and Servicing Agreement.
"Closing Date" shall mean the beginning of business on July 1, 1999.
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"Creation Date" shall have the meaning specified in the Pooling and
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Servicing Agreement.
"Cut-Off Date" shall mean the close of business on June 28, 1999.
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"Department Stores" shall mean the Saks Fifth Avenue, Off Fifth,
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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
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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
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Servicing Agreement.
"Eligible Receivable" shall have the meaning specified in the Pooling
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and Servicing Agreement.
"ERISA Affiliate" shall mean, with respect to any Person, (i) any
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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
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and Servicing Agreement.
"Finance Charges" shall have the meaning specified in the Pooling and
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Servicing Agreement.
"Insurance Charges" shall have the meaning specified in the Pooling
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and Servicing Agreement.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
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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)
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hereof.
"Purchase Rate" shall mean the percentage equivalent of the decimal
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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);
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XXX = an allowance for bad debts (expressed as the decimal equivalent
of a percentage), based on, among other relevant factors,
historical rates for the previous twelve (12) months (or such
other period mutually agreed upon by the Purchaser and the
Seller);
SF = a Servicer fee equal to 2.00% (expressed as the decimal
equivalent of a percentage) per annum;
PCF = the Purchaser's cost of funds, as calculated from time to time,
equal to the sum (expressed as the decimal equivalent of a
percentage) of (i) the product of a fraction equal to the
adjusted investor amount of all classes of Certificates issued by
the Trust (other than those held by the Purchaser) divided by the
Aggregate Principal Receivables multiplied by the prime rate (as
published in the Money Rates Section of The Wall Street Journal)
plus (ii) the product of (x) 20% (to be adjusted from time to
time based on changes to the Purchaser's reasonably estimated
marginal cost of capital) multiplied by (y) a fraction equal to
the sum of the Transferor Amount plus the investor amount of any
class of Certificates held by the Purchaser divided by the
Aggregate Principal Receivables;
OE = the fraction (expressed as the decimal equivalent of a
percentage), the numerator of which is the Purchaser's annualized
estimate of projected operating expenses for the next twelve (12)
months and the denominator of which is the estimated outstanding
principal balance of Receivables expected to be sold by the
Seller to the Purchaser in the next twelve (12) months; and
RF = a contingency risk factor (expressed as the decimal equivalent of
a percentage) based on industry and economic considerations, as
determined by the Purchaser in its reasonable discretion and as
agreed upon between the Purchaser and the Seller.
"Purchase Period" shall mean, with respect to Receivables sold by the
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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.
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"Purchaser" shall mean Saks Credit Corporation, a Delaware
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corporation, and its successors and assigns.
"Receivable" shall mean any amount owing by an Obligor under an
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Account with the Seller, including any Additional Account and/or Automatic
Additional Account, from time to
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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,
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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
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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
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the State of Illinois.
"Secured Obligations" shall have the meaning set forth in Section
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2.1(d) hereof.
"Subservicers" shall mean initially XxXxx'x, Inc. and any Person
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thereafter appointed by the Servicer as a Subservicer of the Receivables.
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"Subordinated Note" shall mean the subordinated note in the amount of
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$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
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hereof.
SECTION 1.2. Other Terms. All accounting terms not specifically
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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
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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
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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
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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
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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
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Obligations"). The Seller and the Purchaser shall, to the extent consistent with
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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,
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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.
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ARTICLE III
CONSIDERATION AND PAYMENT; RECEIVABLES
SECTION 3.1. Purchase Price (a) The purchase price ("Purchase Price")
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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
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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
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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
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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
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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
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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
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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,
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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
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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
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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
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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
-11-
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
-12-
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
-13-
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
-14-
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
-15-
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
-16-
their interests may appear, and remit, immediately, but in any event not later
than the close of business on the second Business Day following its receipt
thereof, to the Servicer, all Collections received from time to time by the
Seller.
(h) Sale Treatment. The Seller agrees to treat this conveyance for
--------------
all purposes (including, without limitation, tax and financial accounting
purposes) as a sale and, to the extent any such reporting is required, shall
report the transactions contemplated by this Agreement on all relevant books,
records, tax returns, financial statements and other applicable documents as a
sale of the Receivables to the Purchaser.
(i) ERISA. The Seller shall promptly give the Purchaser written
-----
notice upon becoming aware that (i) the Seller or any of its ERISA Affiliates is
not in compliance in all material respects with ERISA and to the extent required
of the Purchaser and its ERISA Affiliates in the Certificate Purchase Agreement
or that (ii) any ERISA Lien on any of the Receivables exists.
SECTION 5.2. Negative Covenants of the Seller. During the term of
--------------------------------
this Agreement, unless the Trustee and the Purchaser shall otherwise consent in
writing:
(a) No Sales, Liens, Etc. Except for the conveyances hereunder, the
--------------------
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on (or the filing of any
financing statement with respect to) any Receivable, whether now existing or
hereafter created, or any interest therein; the Seller will notify the Purchaser
and the Trustee of the existence of any Lien on any Receivable transferred and
sold by the Seller to Purchaser hereby; and immediately upon discovery thereof,
the Seller will defend the right, title and interest of the Purchaser and the
Trust in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Seller; provided, however, that nothing in this Section 5.2(a) shall prevent or
be deemed to prohibit the Seller from suffering to exist upon any of the
Receivables any Liens for, municipal or other local taxes and other governmental
charges if such taxes or governmental charges shall not at the time be due and
payable or if the Transferor shall currently be contesting the validity thereof
in good faith by appropriate proceedings and shall have set aside on its books
adequate reserves under generally accepted accounting principles with respect
thereto.
(b) Account Agreements and Credit Card Guidelines. Subject to
---------------------------------------------
compliance with all Requirements of Law, the failure to comply with which would
have a material adverse effect on the Purchaser or the Certificateholders, the
Seller or the Servicer may change the terms and provisions of the Account
Agreements or the Credit Card Guidelines in any respect (including, without
limitation, the calculation of the amount, or the timing, of charge offs of
Receivables) as follows: (i) if the Seller owns a comparable segment of
accounts, then such change shall be made applicable to such comparable segment
of the accounts owned and serviced by the Seller that have characteristics the
same as, or substantially similar to, the Accounts that are the subject of such
change, and (ii) if the Seller does not own such a comparable segment, then the
Seller will not
-17-
make or cause to be made any such change with the intent to materially benefit
the Seller over the Purchaser or the Certificateholders.
(c) Change of Name, Etc. The Seller shall not change its name,
-------------------
identity or structure or location of its chief executive office, unless at least
ten (10) Business Days prior to the effective date of any such change the Seller
delivers to the Purchaser such documents, instruments or agreements, including,
without limitation, appropriate financing statements under the Relevant UCC,
executed by the Seller necessary to reflect such change and to continue the
perfection of the Purchaser's and any assignee's first priority interest in the
Receivables.
(d) No Change in Business or Credit Card Guidelines. The Seller will
-----------------------------------------------
not make any change in the Credit Card Guidelines or any change in the character
of its business, which change would, in either case, impair the collectibility
of any substantial portion of the Receivables or otherwise materially and
adversely affect the rights of the Purchaser, the Trust or the
Certificateholders, the ability of the Servicer to collect the Receivables, the
validity or enforceability of this Agreement, the Pooling and Servicing
Agreement, or any documents or agreements related thereto, or the performance by
any party of its obligations hereunder or thereunder.
(e) ERISA Matters. The Seller will not (i) engage in any prohibited
-------------
transaction (as defined in Section 4975 of the Code and Section 406 of ERISA)
for which an exemption is not available or has not previously been obtained from
the U.S. Department of Labor; (ii) permit to exist any accumulated funding
deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of the
Code) or funding deficiency with respect to any Defined Benefit Plan other than
a Multiemployer Plan that could reasonably result in the PBGC or IRS filing a
lien; (iii) fail to make any payments to any Multiemployer Plan that the Seller
or any ERISA Affiliate of the Seller is required to make under the agreement
relating to such Multiemployer Plan or any law pertaining thereto; (iv)
terminate any Defined Benefit Plan so as to result in any liability; or (v)
permit to exist any occurrence of any Reportable Event which represents a
material risk of a liability to the Seller or any ERISA Affiliate of the Seller
under ERISA or the Code.
(f) Transfers of Accounts. The Seller will not convey, transfer or
---------------------
assign any Accounts to any Person, except for Removed Accounts, unless the
Rating Agency Condition is satisfied.
SECTION 5.3. Indemnification. The Seller agrees to indemnify, defend
---------------
and hold the Purchaser harmless from and against any and all loss, liability,
damage, judgment, claim, deficiency, or expense (including interest, penalties,
reasonable attorneys' fees and amounts paid in settlement) (collectively,
"Indemnified Amounts") to which the Purchaser or any assignee thereof may become
-------------------
subject insofar as such loss, liability, damage, judgment, claim, deficiency, or
expense arises out of or is based upon a breach by the Seller of its
representations, warranties and covenants contained herein, or any information
certified in any written schedule or certificate delivered by the Seller
hereunder being untrue in any material respect at the time so certified;
provided, however, neither the Purchaser nor any of its assignees shall be
entitled to
-18-
indemnification hereunder for any Indemnified Amount to the extent the same
resulted from the gross negligence or willful misconduct of the Purchaser or any
of its assignees. The obligations of the Seller under this Section 5.3 shall be
considered to have been relied upon by the Purchaser and shall survive the
execution, delivery, performance and termination of this Agreement and any sale
or transfer of the Receivables or any interest therein by the Purchaser,
regardless of any investigation made by the Purchaser or on its behalf.
ARTICLE VI
REPURCHASE OBLIGATION
SECTION 6.1. Mandatory Repurchase
--------------------
(a) Breach of Warranty. If on any day the repurchase of any
------------------
Receivable which has been sold by the Seller hereunder shall be required
pursuant to Sections 4.3 or 4.4 hereof, the Seller shall be deemed to have
received on such day a Collection of such Receivable in full and shall on such
day pay to the Purchaser an amount equal to the aggregate outstanding principal
balance of such Receivable, plus outstanding Finance Charges accrued thereon
through the date of such repurchase; provided that, prior to the Termination
Date, such amount may be paid, at the election of the Purchaser, by a reduction
in or an offset to the Purchase Price paid to the Seller on the next occurring
Purchase Date, unless the Purchaser is required to make a payment in respect of
such breach pursuant to the Pooling and Servicing Agreement; provided, however,
in all events at least the amount of any cash deposit required to be made by the
Purchaser under the Pooling and Servicing Agreement in respect of the retransfer
of such Ineligible Receivable shall be paid in immediately available funds by
the Seller.
(b) Repurchase of All Receivables. If on any day the repurchase of
-----------------------------
all Receivables which have been sold by the Seller hereunder shall be required
pursuant to Section 4.5 hereof, the Seller shall be deemed to have received on
such day a Collection of such Receivables in full and shall on such day pay to
the Purchaser an amount equal to the aggregate outstanding principal balance of
such Receivable, plus Finance Charges accrued thereon through the date of such
repurchase; provided, however, in all events at least the amount of any cash
deposit required to be made by the Purchaser under the Pooling and Servicing
Agreement in respect of the retransfer of such Ineligible Receivable shall be
paid in immediately available funds by the Seller.
SECTION 6.2. Dilutions, etc. If the Servicer or the Seller adjusts
--------------
downward the amount of any Receivable without receiving Collections therefor or
without charging off such amount as uncollectible, because of a rebate, refund,
unauthorized charge or billing error to an Obligor, or because such Receivable
was created in respect of merchandise or services which were refused, returned
or not received by an Obligor, then the Seller shall be deemed to have received
on such day a Collection of such Receivable in the amount of such reduction,
cancellation or payment made by the Obligor and shall on such day pay to the
Purchaser an amount equal to such reduction or cancellation; provided that,
prior to the Termination Date,
-19-
such amount may be paid by a reduction in the Purchase Price paid to the Seller
on the next occurring Purchase Date, unless the Purchaser is required to make a
payment in respect of such breach sooner pursuant to the Pooling and Servicing
Agreement. Similarly, if the Servicer or the Seller adjusts downward the amount
of any Receivable because such Receivable was discovered as having been created
through a fraudulent or counterfeit charge or with respect to which the covenant
contained in Section 5.2(a) hereof was breached, then the Seller shall be deemed
to have received on such day a Collection of such Receivable in the amount of
such reduction, cancellation or payment made by the Obligor and shall on such
day pay to the Purchaser an amount equal to such reduction or cancellation;
provided that, prior to the Termination Date, such amount may be paid by a
reduction in the Purchase Price paid to the Seller on the next occurring
Purchase Date; provided, however, in all events at least the amount of any cash
deposit required to be made by the Purchaser under the Pooling and Servicing
Agreement in respect of any such adjustment shall be paid in immediately
available funds by the Seller. Any adjustment ("Adjustment Payment Obligation"),
-----------------------------
required pursuant to either of the two preceding sentences shall be made within
two (2) Business Days of the making of the Adjustment Payment Obligation, and in
no event later than the end of the Monthly Period in which such adjustment
obligation arises.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. Conditions to the Purchaser's Obligations Regarding
---------------------------------------------------
Receivables. The obligations of the Purchaser to purchase the Receivables on
-----------
the Closing Date and any Purchase Date shall be subject to the satisfaction of
the following conditions:
(a) All representations and warranties of the Seller contained in
this Agreement shall be true and correct on the Closing Date and on each
Purchase Date thereafter with the same effect as though such representations and
warranties had been made on such date (except to the extent any such
representation or warranty specifically related to an earlier date, in which
case such representation or warranty shall have been true as of such earlier
date);
(b) All information concerning the Receivables provided to the
Purchaser shall be true and correct in all material respects as of the Closing
Date, in the case of any Receivables existing on the Closing Date, or the
Purchase Date, in the case of any Receivables created after the Closing Date,
and in each Schedule of Accounts delivered to the Purchaser hereunder for
inclusion in Schedule 1 to the Pooling and Servicing Agreement;
(c) The Seller shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement;
(d) The Seller shall have filed or caused to be filed the financing
and continuation statement(s) and all amendments thereto required to be filed
pursuant to Section 2.1(b); and
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(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.
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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
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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.
-23-
SECTION 9.5. Assignment and Designation of Selling Subsidiaries
--------------------------------------------------
(a) This Agreement may not be assigned by the parties hereto, except
that the Purchaser may assign its rights hereunder pursuant to the Pooling and
Servicing Agreement to the Trustee, for the benefit of the Certificateholders.
The Purchaser hereby notifies 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.
-24-
SECTION 9.9. Counterparts. This Agreement may be executed in two or
------------
more counterparts including telecopy transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
SECTION 9.10. Binding Effect; Third-Party Beneficiaries. This
-----------------------------------------
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. The Trustee on behalf of
the Certificateholders is intended by the parties hereto to be a third-party
beneficiary of this Agreement, but otherwise no Person not a party is intended
to or shall have any rights hereunder, whether as a third party beneficiary or
otherwise.
SECTION 9.11. Merger and Integration. Except as specifically
----------------------
stated otherwise herein or incorporated hereby, this Agreement sets forth the
entire understanding 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.
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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: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
SAKS CREDIT CORPORATION,
as Purchaser
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
SAKS INCORPORATED,
as Servicer
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
-26-
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
A-1
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.
A-2
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
A-3
ADVANCES AND PAYMENTS
Date and Payments Unpaid Principal Name of Person
Amount of Advance Principal/Interest Balance of Note Making Notation
----------------- ------------------ --------------- ---------------
A-4
EXHIBIT B
to the
RECEIVABLES PURCHASE AGREEMENT
LOCATION OF RECORDS
1. Purchaser
000 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 39289-0080
B-1
EXHIBIT C
to the
RECEIVABLES PURCHASE AGREEMENT
SUBSIDIARIES, DIVISIONS, TRADE NAMES, BANKRUPTCY PROCEEDINGS
None
C-1
