EXHIBIT 10.17
[EXECUTION COPY]
THE NEIMAN MARCUS GROUP, INC.,
Seller
and
NEIMAN MARCUS FUNDING CORPORATION,
Purchaser
RECEIVABLES PURCHASE AGREEMENT
Dated as of March 1, 1995
and Amended and Restated as of July 2, 2000
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 1.1. Definitions . . . . . . . . . . . . . . . .4
Section 1.2. Other Definitional Provisions. . . . . . .6
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES. . . . . . . . . .7
Section 2.1. Purchase. . . . . . . . . . . . . . . . . .7
Section 2.2. Addition of Additional Accounts . . . . . .8
ARTICLE III
CONSIDERATION AND PAYMENT. . . . . . . . . . . . . . . . . . .9
Section 3.1. Purchase Price. . . . . . . . . . . . . . .9
Section 3.2. Adjustments to Purchase Price . . . . . . .9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 10
Section 4.1. Representations and Warranties of NMG Relating to NMG10
Section 4.2. Representations and Warranties of NMG Relating to the
Agreement and the Receivables. . . . . . . . . . . 11
Section 4.3. Representations and Warranties of Funding 13
ARTICLE V
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.1. NMG Covenants . . . . . . . . . . . . . . 14
Section 5.2. Funding Covenant; Servicing Fee . . . . . 17
ARTICLE VI
REPURCHASE OBLIGATION. . . . . . . . . . . . . . . . . . . . 17
Section 6.1. Reassignment of Ineligible Receivables. . 17
Section 6.2. Reassignment of Certificateholders' Interest in Trust
Portfolio. . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . 18
Section 7.1. Conditions to Funding's Obligations Regarding Initial
Receivables. . . . . . . . . . . . . . . . . . . . 18
Section 7.2. Conditions to Funding's Obligations Regarding
Additional Receivables . . . . . . . . . . . . . . 19
Section 7.3. Conditions Precedent to Obligations of NMG19
ARTICLE VIII
TERM AND PURCHASE TERMINATION. . . . . . . . . . . . . . . . 20
Section 8.1. Term. . . . . . . . . . . . . . . . . . . 20
Section 8.2. Purchase Termination. . . . . . . . . . . 20
ARTICLE IX
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . 20
Section 9.1. Amendment . . . . . . . . . . . . . . . . 20
SECTION 9.2. GOVERNING LAW . . . . . . . . . . . . . . 21
Section 9.3. Notices . . . . . . . . . . . . . . . . . 21
Section 9.4. Severability of Provisions. . . . . . . . 21
Section 9.5. Assignment, Sale of Accounts. . . . . . . 22
Section 9.6. Acknowledgement and Agreement of NMG. . . 23
Section 9.7. Further Assurances. . . . . . . . . . . . 23
Section 9.8. No Waiver; Cumulative Remedies. . . . . . 23
Section 9.9. Counterparts . . . . . . . . . . . . . . 23
Section 9.10. Binding Third-Party Beneficiaries. . . . 23
Section 9.11. Merger and Integration . . . . . . . . . 24
Section 9.12. Headings . . . . . . . . . . . . . . . . 24
Section 9.13. Schedules and Exhibits . . . . . . . . . 24
Section 9.14. Survival of Representations and Warranties24
EXHIBIT
Exhibit A - Form of Supplemental Conveyance
SCHEDULE
Schedule 1 - List of Accounts [Deemed Incorporated by Reference]
RECEIVABLES PURCHASE AGREEMENT, dated as of March 1, 1995 and amended
and restated as of July 2, 2000, by and between THE NEIMAN MARCUS GROUP,
INC., a Delaware corporation ("NMG"), and NEIMAN MARCUS FUNDING CORPORATION,
a Delaware corporation and a subsidiary of NMG ("Funding").
NMG, as seller, and Funding, as purchaser, originally entered into
this Agreement (the "Existing Agreement") as of March 1, 1995. Pursuant to
Section 9.1 of the Existing Agreement, the parties desire to amend and
restate the Existing Agreement as set forth herein.
It is hereby agreed by and between Funding and NMG as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Each capitalized term used herein or in
any certificate, document, or Conveyance Paper made or delivered pursuant
hereto, and not defined herein or therein, shall have the meaning specified
in the Pooling and Servicing Agreement. In addition, the following words
and phrases shall have the following meanings:
"Account" shall mean (a) each revolving credit account or other
consumer revolving credit or installment account established pursuant to an
Account Agreement between NMG and any Person and identified by account
number and by the receivables balance in a computer file, microfiche list
or printed list delivered to Funding by NMG (and, in turn to the Trustee by
Funding pursuant to Section 2.01 of the Pooling and Servicing Agreement) on
or prior to the Closing Date, (b) each Additional Account, (c) any account
originated as a replacement of an Account in connection with the upgrade of
such Account to premium status (provided that such a replacement account
can be traced or identified by reference to, or by way of, the applicable
computer file, microfiche list or printed list previously delivered
pursuant hereto), (d) each account into which an Account shall be
transferred (a "Transferred Account") provided that (i) such transfer was
made in accordance with the Account Guidelines and (ii) such account can be
traced or identified as an account into which an Account has been
transferred, and (e) each surviving account resulting from the combination,
in accordance with the Account Guidelines, of two or more of the Accounts
but shall exclude (f) any Account all of the Receivables of which are
either: (i) after the Removal Date, removed by Funding pursuant to Section
2.10 of the Pooling and Servicing Agreement, (ii) reassigned to Funding
pursuant to Section 2.05 of the Pooling and Servicing Agreement or (iii)
assigned and transferred to the Servicer pursuant to Section 3.03 of the
Pooling and Servicing Agreement.
"Addition Date" shall mean (a) with respect to any Additional
Accounts designated by Funding pursuant to Section 2.09(a), (b) or (d) of
the Pooling and Servicing Agreement, the date from and after which such
Additional Accounts are to be included as Accounts pursuant to Section
2.09(a), (b) or (d) of the Pooling and Servicing Agreement, and (b) with
respect to any Participation Interests, the date from and after which such
Participation Interests are to be included as assets of the Trust pursuant
to Section 2.09(a) or (b) of the Pooling and Servicing Agreement. For the
avoidance of doubt, the "Addition Date" for each account identified in the
Restatement Date Account Schedule that was not designated as an Account
prior to the Restatement Date is the Restatement Date.
"Addition Notice Date" shall have the meaning specified in Section
2.2 of this Agreement.
"Agreement" shall mean this Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"Closing Date" shall mean March 15, 1995.
"Conveyance" shall have the meaning specified in Section 2.1(a).
"Conveyance Papers" shall have the meaning specified in Section 4.1(c).
"Credit Adjustment" shall have the meaning specified in Section 3.2.
"Debtor Relief Laws" shall mean (i) the Bankruptcy Code of the United
States of America and (ii) all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, readjustment of debt, marshalling of
assets or similar debtor relief laws of the United States, any state or any
foreign country from time to time in effect affecting the rights of creditors
generally.
"Funding" shall mean Neiman Marcus Funding Corporation, a Delaware
corporation.
"Initial Account" shall mean any Account in existence on the Closing
Date.
"Initial Cut-Off Date" shall mean the close of business on March 1,
1995.
"Insolvency Event" shall have the meaning specified in Section 8.2.
"New Principal Receivables" shall have the meaning set forth in Section
3.1.
"NMG" shall mean The Neiman Marcus Group, Inc., a Delaware corporation.
"Pooling and Servicing Agreement" shall mean the Pooling and
Servicing Agreement, dated as of March 1, 1995, and amended and restated as
of July 2, 2000, among NMG, as Servicer, Funding, as Seller and the
Trustee, and all amendments and supplements thereto.
"Portfolio Reassignment Price" shall mean the portion of the amount
payable by Funding to the Trustee pursuant to Section 2.06 of the Pooling and
Servicing Agreement.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Purchased Assets" shall have the meaning set forth in Section 2.1.
"Receivables" shall mean "Receivables" (as such term is defined in
the Pooling and Servicing Agreement) existing or created after the Initial
Cut--Off Date in respect of the Initial Accounts or the Additional Cut-Off
Date in respect of Additional Accounts.
"Repurchase Price" shall have the meaning set forth in Section 6.1.
"Supplemental Conveyance" shall have the meaning set forth in Section
2.2.
"Trust" shall mean the trust created by the Pooling and Servicing
Agreement.
"Trustee" shall mean The Bank of New York, a New York banking
corporation, as, and acting in the capacity of, Trustee under the Pooling
and Servicing Agreement, or its successor-in-interest, or any successor
trustee appointed in accordance with the Pooling and Servicing Agreement.
Section 1.2. Other Definitional Provisions. (a) Each capitalized
term defined in this Agreement shall have the defined meaning when used in
any certificate, other document, or Conveyance Paper made or delivered
pursuant hereto unless otherwise defined therein.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement; and Section, Subsection, Schedule and Exhibit references contained
in this Agreement are references to Sections, Subsections, Schedules and
Exhibits in or to this Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Pooling and Servicing Agreement and all applicable Supplements.
(d) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To
the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document
shall control.
(e) Any reference to each Rating Agency shall only apply to any
specific rating agency if such rating agency is then rating any outstanding
Series.
(f) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at the
close of business on such day.
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.1. Purchase. (a) By execution of this Agreement, NMG
does hereby sell, transfer, assign, set over and otherwise convey to
Funding (collectively, the "Conveyance"), without recourse all of its
right, title and interest in, to and under (i) the Receivables now existing
or hereafter created from time to time under the Initial Accounts prior to
the termination of this Agreement pursuant to Article VIII hereof, (ii) all
Recoveries allocable to the foregoing Accounts and all Recoveries which are
identified as relating to specific Defaulted Receivables and (iii) all
monies due or to become due thereunder and all amounts received with
respect thereto and all proceeds (including, without limitation, "proceeds"
as such term is defined in the UCC) thereof (the "Purchased Assets").
(b) In connection with such Conveyance, NMG agrees (i) to record and
file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) and to
take such other action with respect to the Receivables now existing and
hereafter created, meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect, and maintain
perfection of, the Conveyance of such Purchased Assets from NMG to Funding on
and after the Closing Date, (ii) that such financing statements shall name
NMG, as seller, and Funding, as purchaser, of the Receivables and (iii) to
deliver a file-stamped copy of such financing statements or other evidence of
such filings (excluding such continuation statements, which shall be
delivered as filed) to Funding (or to the Trustee, if Funding so directs) as
soon as is practicable after filing.
(c) In connection with such Conveyance, NMG further agrees that it
will, at its own expense, on or prior to the Closing Date, (i) indicate in
its computer files or microfiche or printed lists that Receivables created in
connection with the Initial Accounts have been conveyed (a) to Funding
pursuant to this Agreement and (b) by Funding to the Trustee pursuant to the
Pooling and Servicing Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Removed Accounts) in such computer
files and microfiche or printed lists the code or other notation identifying
each such Account and (ii) deliver to Funding on or prior to the Closing Date
a computer file or microfiche or printed list containing a true and complete
list of all such Initial Accounts specifying for each such Account, as of the
Initial Cut-Off Date (A) its account number, (B) the aggregate amount
outstanding in such Account and (C) the aggregate amount of Principal
Receivables in such Initial Account. Such computer files or microfiche or
printed lists, as supplemented from time to time to reflect Additional
Accounts or Removed Accounts, shall be marked as Schedule I to this
Agreement, shall be delivered to Funding (or to the Trustee, if so directed
by Funding) and marked as proprietary and confidential, and are hereby
incorporated into and made a part of this Agreement. NMG further agrees not
to alter the code or other notation referenced in clause (i) of this
paragraph with respect to any Account during the term of this Agreement
unless and until (x) such Account becomes a Removed Account or (y) NMG shall
have delivered to Funding and the Trustee at least 30 days' prior written
notice of its intention to do so and has taken such action as is necessary or
advisable to cause the respective interests of Funding and the Trustee in the
Receivables and other Trust Assets to continue to be perfected with the
priority required by this Agreement and the Pooling and Servicing Agreement,
respectively.
(d) It is the intention of the parties hereto that the conveyance of
the Receivables and the other Purchased Assets by NMG to Funding as provided
in this Section 2.1 be, and be construed as, an absolute sale of the
Receivables by NMG to Funding. Furthermore, it is not intended that such
conveyance be deemed a pledge of the Receivables and the other Purchased
Assets by NMG to Funding to secure a debt or other obligation of NMG. This
Agreement shall also be deemed to be a security agreement within the meaning
of Article 9 of the UCC and the conveyance provided for in this Section 2.1
shall be deemed to be a grant by NMG to Funding of a "security interest"
within the meaning of Article 9 of the UCC in all of NMG's right, title and
interest in and to the Receivables and the other Purchased Assets and all
amounts payable to the holders of the Receivables after the Closing Date in
accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or other property.
Section 2.2. Addition of Additional Accounts. (a) If, from time to
time, Funding becomes obligated to designate Additional Accounts pursuant to
Section 2.09(a) of the Pooling and Servicing Agreement, then Funding shall
give NMG written notice thereof on or before the eighth Business Day (the
"Addition Notice Date") prior to the Addition Date therefor, and NMG shall on
or before the Addition Date, designate sufficient Eligible Accounts to be
included as Accounts so that after the inclusion thereof Funding will be in
compliance with the requirements of Section 2.09 of the Pooling and Servicing
Agreement. NMG shall have sole responsibility for selecting such Additional
Accounts and shall on or prior to the Addition Date therefor execute and
deliver to Funding a written assignment from NMG to Funding in substantially
the form of Exhibit A (the "Supplemental Conveyance"). Upon such
designation, such Automatic Additional Accounts shall be deemed to be
Accounts hereunder.
(b) Subject to the limitations set forth in Section 2.09(d) of the
Pooling and Servicing Agreement and in any Supplement, Automatic Additional
Accounts shall be included as Accounts from and after the date of creation
thereof (other than any such date of creation falling during each period
beginning on an Automatic Addition Termination Date or an Automatic Addition
Suspension Date and ending on the day immediately preceding a Restart Date).
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1. Purchase Price. (a) The "Purchase Price" for the
Receivables which came into existence on or prior to the Closing Date
conveyed to Funding under this Agreement shall be payable on the Closing
Date and shall be an amount equal to 100% of Principal Receivables so
conveyed, adjusted to reflect such factors as NMG and Funding mutually
agree will result in a Purchase Price determined to approximate the fair
market value of such Receivables. Such computation of initial purchase
price shall assume no reinvestment in new Receivables. The Purchase Price
for the Receivables (including Receivables in Additional Accounts) to be
conveyed to Funding under this Agreement that come into existence after the
Closing Date shall be payable on the Distribution Date following the
Monthly Period during which such Receivables are conveyed by NMG to Funding
in an amount equal to 100% of the Principal Receivables so conveyed (the
"New Principal Receivables"), adjusted to reflect such factors as NMG and
Funding mutually agree will result in a Purchase Price determined to
approximate the fair market value of such New Principal Receivables.
(b) The Purchase Price to be paid by Funding on the Closing Date and
on each Addition Date shall be paid (i) in cash, (ii) with the consent of
NMG, by means of capital contributed by NMG to Funding in the form of a
contribution of the Receivables in the related Additional Accounts, (iii)
with the consent of NMG pursuant to the Revolving Credit Agreement, dated as
of March 1, 1995, between NMG and Funding, or (iv) with the consent of NMG,
any combination of the foregoing.
Section 3.2. Adjustments to Purchase Price. The Purchase Price shall
be adjusted on each Distribution Date (a "Credit Adjustment") with respect to
any Receivable previously conveyed to Funding by NMG which has since been
reduced by NMG or the Servicer because of a rebate, refund, unauthorized
charge or billing error to a cardholder because such Receivable was created
in respect of merchandise that was refused or returned by a cardholder. The
amount of such adjustment shall equal (x) the reduction in the principal
balance of such Receivable resulting from the occurrence of such event
multiplied by (y) a fraction, the numerator of which is the Purchase Price
paid with respect to all Receivables on the Payment Date on which such
Receivables were purchased computed in accordance with Section 3.1 and the
denominator of which is the aggregate face amount of the Principal
Receivables paid for on such date pursuant to such Section. In the event
that an adjustment pursuant to this Section 3.2 causes the Purchase Price to
be a negative number, NMG agrees that, not later than 11:00 A.M. New York
City time on such Distribution Date, NMG shall pay to Funding, by making a
deposit into the Collection Account in same-day funds, an amount equal to the
amount by which the Purchase Price minus the Credit Adjustment would be
reduced below zero.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of NMG Relating to NMG.
NMG hereby represents and warrants to, and agrees with, Funding as of the
Closing Date and on each Addition Date, that:
(a) Organization and Good Standing. NMG is a corporation validly
existing in good standing under the laws of the State of Delaware, and has
full corporate 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.
(b) Due Qualification. NMG is duly qualified to do business and is
in good standing as a foreign corporation (or is exempt from such
requirements), and has obtained all necessary licenses and approvals 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
owned by NMG or any Receivable unenforceable by NMG, the Seller, the
Servicer or the Trustee or would have a material adverse effect on the
interests of the Investor Certificateholders.
(c) Due Authorization. The execution, delivery and performance of
this Agreement and any other document or instrument delivered pursuant hereto
(such other documents or instruments, collectively, the "Conveyance Papers")
and the consummation of the transactions provided for in this Agreement or
any other Conveyance Papers have been duly authorized by all necessary
corporate action on the part of NMG.
(d) No Conflict. The execution and delivery of this Agreement and
the Conveyance Papers by NMG, the performance of the transactions
contemplated by this Agreement and the Conveyance Papers, and the fulfillment
of the terms of this Agreement and the Conveyance Papers applicable to NMG
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 material default under, any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which NMG is a
party or by which it or any of its properties are bound.
(e) No Violation. The execution, delivery and performance of this
Agreement and the Conveyance Papers by NMG and the fulfillment by NMG of the
terms hereof and thereof will not conflict with or violate any Requirements
of Law applicable to NMG.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of NMG, threatened against NMG, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement
or any of the Conveyance Papers, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or any of the
Conveyance Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of NMG, would materially and adversely affect the
performance by NMG of its obligations under this Agreement or any of the
Conveyance Papers, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement or any of the Conveyance Papers or (v) seeking to affect adversely
the income tax attributes of the Trust under United States Federal or
applicable state income or franchise tax systems.
(g) All Consents. All approvals, authorizations, consents, orders or
registrations or declarations with any Person or any governmental body or
official required in connection with the execution and delivery by NMG of
this Agreement or any of the Conveyance Papers and the performance of the
transactions contemplated by this Agreement or any of the Conveyance Papers
by NMG have been duly obtained, effected or given and are in full force and
effect.
(h) Insolvency. NMG is not insolvent and no Insolvency Event with
respect to NMG has occurred, and the transfer of the Receivables by NMG to
Funding contemplated hereby has not been made in contemplation of such
insolvency or Insolvency Event.
The representations and warranties set forth in this Section 4.1
shall survive the transfer and assignment of the Receivables to Funding.
Upon discovery by NMG or Funding of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall
give written notice to the other party within three Business Days following
such discovery. NMG agrees to cooperate with Funding and the Trustee in
attempting to cure any such breach.
Section 4.2. Representations and Warranties of NMG Relating to the
Agreement and the Receivables.
(a) Representations and Warranties. NMG hereby represents and
warrants to Funding as of the date of this Agreement, as of the Closing Date
and, with respect to Additional Accounts, as of the related Addition Date
that:
(i) this Agreement and, in the case of Additional Accounts, the
related Supplemental Conveyance, each constitute a valid and binding
obligation of NMG enforceable against NMG in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, 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 suit at law or in
equity);
(ii) as of the Initial Cut-Off Date, and as of the related
Addition Date with respect to Additional Accounts, Schedule I to this
Agreement and the related computer file, microfiche list or printed
list delivered pursuant to this Agreement, as supplemented to such
date, is an accurate and complete listing in all material respects of
all the Accounts as of the Initial Cut-Off Date or such Additional Cut-
Off Date, 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 Initial Cut-Off Date or such applicable Additional Cut-Off Date, as
the case may be;
(iii) NMG is the legal and beneficial owner of all right, title
and interest in and to each Receivable, NMG has the full right, power
and authority to transfer the Receivables pursuant to this Agreement;
and each Receivable conveyed to Funding by NMG has been conveyed to
Funding free and clear of any Lien of any Person claiming through or
under NMG or any of its Affiliates (other than Liens permitted under
Section 5.1(b)) and in compliance, in all material respects, with all
Requirements of Law applicable to NMG;
(iv) all authorizations, consents, orders, approvals or
authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by
NMG in connection with the conveyance of such Receivable to Funding
have been duly obtained, effected or given and are in full force and
effect;
(v) this Agreement or, in the case of Additional Accounts, the
related Supplemental Conveyance constitutes a valid transfer and
assignment to Funding of all right, title and interest of NMG in and to
the Receivables and the other Purchased Assets, all monies due or to
become due with respect thereto and all proceeds thereof, and, in the
case of Additional Accounts, the related Supplemental Conveyance, will
constitute, at the time of such addition, an absolute sale of such
property and the proceeds thereof. Upon the filing of the financing
statements pursuant to Section 2.1(a) and, in the case of Receivables
hereafter created and the proceeds thereof, upon the creation thereof,
Funding shall have a first-priority security interest in such property
and proceeds (as defined in the UCC) except for Liens permitted by
Section 5.1(b);
(vi) except as otherwise expressly provided in this Agreement,
the Pooling and Servicing Agreement or any Supplement, neither NMG nor
any Person claiming through or under NMG has any claim to or interest
in the Collection Account, the Special Funding Account, any Series
Account or any Series Enhancement;
(vii) on the Initial Cut-Off Date, each Initial Account is an
Eligible Account and, on the applicable Additional Cut-Off Date, each
related Additional Account is an Eligible Account;
(viii) on the Initial Cut-Off Date, each Receivable then
existing is an Eligible Receivable, and, on the applicable Additional
Cut-Off Date, each Receivable contained in any related Additional
Account is an Eligible Receivable;
(ix) as of the date of the creation of any new Receivable, such
Receivable is an Eligible Receivable; and
(x) no selection procedure has been utilized by NMG that NMG
reasonably believes would result in a selection of Initial Accounts
(from among the available Eligible Accounts owned by NMG on the Trust
Cut-Off Date) that would be materially adverse to the interests of the
Investor Certificateholders.
(b) Notice of Breach. The representations and warranties set forth
in this Section 4.2 shall survive the transfer and assignment of the
Receivables to Funding. Upon discovery by either NMG or Funding of a breach
of any of the representations and warranties set forth in this Section 4.2,
the party discovering such breach shall give written notice to the other
party within three Business Days following such discovery; provided that the
failure to give notice within three Business Days does not preclude
subsequent notice. NMG hereby acknowledges that Funding intends to rely on
the representations hereunder in connection with representations made by
Funding to secured parties, assignees or subsequent transferees including but
not limited to transfers made by Funding to the Trust pursuant to the Pooling
and Servicing Agreement. NMG agrees to cooperate with Funding and the
Trustee in attempting to cure any such breach.
Section 4.3. Representations and Warranties of Funding. As of the
Closing Date, Funding hereby represents and warrants to, and agrees with, NMG
that:
(a) Organization and Good Standing. Funding is a corporation validly
existing in good standing under the laws of the State of Delaware and has
full power and authority 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 and
the Conveyance Papers.
(b) Due Authorization. The execution and delivery of this Agreement
and the Conveyance Papers and the consummation of the transactions provided
for in this Agreement and the Conveyance Papers have been duly authorized by
Funding by all necessary corporate action on the part of Funding.
(c) No Conflict. The execution and delivery of this Agreement and
the Conveyance Papers, the performance of the transactions contemplated by
this Agreement and the Conveyance Papers, and the fulfillment of the terms
hereof and thereof, will not conflict with, result in any breach of any of
the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which Funding is a
party or by which it or any of its properties are bound.
(d) No Violation. The execution, delivery and performance of this
Agreement and the Conveyance Papers by Funding and the fulfillment of the
terms contemplated herein and therein applicable to Funding will not conflict
with or violate any Requirements of Law applicable to Funding.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Funding, threatened against Funding,
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality (i) asserting the invalidity of this
Agreement or any of the Conveyance Papers, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any
of the Conveyance Papers, (iii) seeking any determination or ruling that, in
the reasonable judgment of Funding, would materially and adversely affect the
performance by Funding of its obligations under this Agreement or any of the
Conveyance Papers or (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement or any of the Conveyance Papers.
(f) All Consents. All authorizations, consents, orders or approvals
of or registrations or declarations with any Governmental Authority required
to be obtained, effected or given by Funding in connection with the execution
and delivery by Funding of this Agreement and the Conveyance Papers and the
performance of the transactions contemplated by this Agreement and the
Conveyance Papers or the fulfillment of the terms of this Agreement and the
Conveyance Papers by Funding have been duly obtained, effected or given and
are in full force and effect.
The representations and warranties set forth in this Article IV shall
survive the Conveyance of the Receivables to Funding and termination of the
rights and obligations of Funding and NMG under this Agreement. Upon
discovery by Funding or NMG of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other party.
ARTICLE V
COVENANTS
Section 5.1. NMG Covenants. NMG hereby covenants and agrees with
Funding as follows:
(a) Receivables not to be Evidenced by Promissory Notes. Except in
connection with the enforcement or collection of an Account, NMG will take no
action to cause any Receivable transferred by it pursuant hereto to be
evidenced by any "instrument", other than an instrument that, taken together
with one or more other writings constitutes chattel paper (as such terms are
defined in the UCC) and, if any such Receivable is so evidenced (whether or
not in connection with the enforcement or collection of an Account), it shall
be deemed to be an Ineligible Receivable in accordance with Section 6.1(a)
and shall be reassigned to the Seller in accordance with Section 6.1(b).
(b) Security Interests. Except for the conveyances hereunder or as
otherwise provided herein, NMG will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist, any
Lien on any Receivable, whether now existing or hereafter created, or any
interest therein; and NMG will immediately notify Funding of the existence of
any Lien on any Receivable; and NMG shall defend the right, title and
interest of Funding in, to and under the Receivables, whether now existing or
hereafter created, against all claims of third parties claiming through or
under NMG; provided, however, that nothing in this Section 5.1(b) shall
prevent or be deemed to prohibit NMG from suffering to exist upon any of the
Receivables any Lien for taxes if such taxes shall not at the time be due and
payable or if the Seller shall currently be contesting the validity thereof
in good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
(c) NMG's Interest. Except for the conveyances hereunder and in
connection with any transaction permitted pursuant to Section 9.5 or the
Pooling and Servicing Agreement, NMG hereby agrees not to transfer, assign,
exchange or otherwise convey or pledge, hypothecate or otherwise grant a
security interest in the Accounts and any such attempted transfer,
assignment, exchange, conveyance, pledge, hypothecation or grant shall be
void.
(d) Account Allocations. In the event that NMG is unable for any
reason to transfer Receivables to Funding in accordance with the provisions
of this Agreement (including, without limitation, by reason of the
application of the provisions of Section 8 or any Governmental Authority
having regulatory authority over NMG or any court of competent jurisdiction
ordering that NMG not transfer any additional Principal Receivables to
Funding) then, in any such event, NMG agrees (except as prohibited by any
such order) to allocate and pay to Funding, after the date of such inability,
all amounts in the manner by which Funding will allocate and pay to the Trust
after such inability by Funding pursuant to Section 2.11 of the Pooling and
Servicing Agreement.
(e) Delivery of Collections or Recoveries. If NMG receives
Collections or Recoveries, NMG agrees to pay to Funding (or to the Servicer
if Funding so directs) all such Collections and Recoveries as soon as
practicable after receipt thereof but in no event later than two Business
Days after the Date of Processing by NMG.
(f) Notice of Liens. NMG shall notify Funding promptly after
becoming aware of any Lien on any Receivable other than the conveyances
hereunder or any Lien permitted under Section 5.1(b) hereof or Section
2.07(b) of the Pooling and Servicing Agreement.
(g) Periodic Rate Finance Charges. (i) Except (x) as otherwise
required by any Requirement of Law or (y) as is deemed by NMG in its sole
discretion to be necessary, it shall not at any time reduce the annual
percentage rates of the Periodic Finance Charges assessed on the Receivables
or other fees charged on any of the Accounts if, as a result of any such
reduction, either (i) NMG's reasonable expectation is that such reduction
will cause a Pay Out Event to occur or (ii) such reduction is not also
applied to any comparable segment of consumer revolving credit card accounts
or other consumer revolving credit or installment accounts owned by NMG which
have characteristics the -same as, or substantially similar to, such
Accounts.
(h) Account Agreements and Guidelines. NMG shall comply with and
perform its obligations under the Account Agreements relating to the Accounts
and the Account Guidelines except insofar as any failure to so comply or
perform would not materially and adversely affect the rights of Funding
hereunder and the rights of the Trust or the Certificateholders under the
Pooling and Servicing Agreement or the Certificates. Subject to compliance
with all Requirements of Law, NMG may change the terms and provisions of the
Account Agreements or the Account Guidelines with respect to any of the
Accounts in any respect (including the calculation of the amount, or the
timing, of charge-offs and the Periodic Finance Charges and other fees to be
assessed thereon) only if in the reasonable judgment of NMG such change is
made applicable to any comparable segment of the consumer revolving credit
card accounts or other consumer revolving credit or installment accounts
owned by NMG that have characteristics the same as, or substantially similar
to, such Accounts.
(i) Documentation of Transfer. NMG shall cause to be executed,
delivered and/or filed any documents (including financing statements and/or
continuation statements under the UCC) that would be necessary to perfect and
maintain the security interest in and to the Purchased Assets contemplated by
this Agreement.
(j) Approval of Official Records. The execution, delivery and
performance of NMG's obligations under this Agreement, and the transactions
contemplated hereby, have been duly approved by NMG's Board of Directors.
(k) Sale. NMG agrees to treat the Conveyance, for all purposes
(including all relevant tax and financial accounting purposes) as a sale on
all federal and state tax returns, financial statements and other applicable
documents.
(l) Continuous Perfection. NMG shall not change its name, identity
or structure in any manner that might cause any financing or continuation
statement filed pursuant to this Agreement to be misleading within the
meaning of Section 9-402(7) of the UCC (or any other then applicable
provision of the UCC) unless NMG shall have delivered to Funding at least 30
days prior written notice thereof and, no later than 30 days after making
such change, shall have taken all action necessary or advisable to amend such
financing statement or continuation statement so that it is not misleading.
NMG shall not change its chief executive office or change the location of its
principal records concerning the Receivables or the Collections unless it has
delivered to Funding at least 30 days prior written notice of its intention
to do so and has taken such action as is necessary or advisable to cause the
interest of Funding in the Receivables and other Purchased Assets to continue
to be perfected with the priority required by this Agreement.
Section 5.2. Funding Covenant; Servicing Fee. Funding covenants and
agrees with NMG to pay NMG from available amounts any portion of the
Servicing Fee that is not paid to NMG pursuant to Section 3.02 of the Pooling
and Servicing Agreement. If NMG is subsequently paid such Servicing Fee
pursuant to the Pooling and Servicing Agreement, then NMG shall promptly
return such payments to Funding.
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1. Reassignment of Ineligible Receivables. (a) In the event
any representation or warranty under Section 4.2(a)(ii), (iii), (iv), (vii),
(viii) or (ix) is not true and correct in any material respect as of the date
specified therein with respect to any Receivable or any related Account and
as a result thereof Funding is required to accept reassignment of Ineligible
Receivables previously sold by NMG to Funding pursuant to Section 2.05(a) of
the Pooling and Servicing Agreement, NMG shall accept reassignment of
Funding's interest in such Ineligible Receivables on the terms and conditions
set forth in Section 6.1(b).
(b) NMG shall accept the reassignment from Funding of any Ineligible
Receivables previously sold by NMG to Funding on or prior to the end of the
Monthly Period in which such reassignment obligation arises, and shall pay
for such reassigned Ineligible Receivables by treating such Ineligible
Receivables as if they were subject to a reversal of the entire unpaid
principal balance thereof plus accrued and unpaid finance charges at the
annual percentage rate applicable to such Receivables from the last date
billed through the end of such Monthly Period and by adjusting the purchase
price of future Receivables purchased as provided in Section 3.2 (the
"Repurchase Price"). Upon any such reassignment of Ineligible Receivables,
Funding shall automatically and without further action be deemed to sell,
transfer, assign, set-over and otherwise convey to NMG, without recourse,
representation or warranty, all the right, title and interest of Funding in
and to such Ineligible Receivables, all monies due or to become due with
respect thereto and all proceeds thereof; and such reassigned Ineligible
Receivables shall be treated by Funding as collected in full as of the date
on which they were transferred. Funding shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by NMG to effect the reassignment to NMG of such
Ineligible Receivables pursuant to this subsection.
Section 6.2. Reassignment of Certificateholders' Interest in Trust
Portfolio. In the event any representation or warranty set forth in Section
4.1(a) or (c) or Section 4.2(a)(i), (v) or (vi) is not true and correct in
any material respect and as a result thereof Funding is required to accept a
reassignment of the Receivables transferred to the Trust by Funding pursuant
to Section 2.06 of the Pooling and Servicing Agreement, NMG shall be
obligated to accept a reassignment of Funding's interest in such Receivables
on the terms set forth below.
NMG shall pay to Funding by depositing in the Collection Account in
same-day funds, not later than 12:00 noon New York City time, on the
Distribution Date following the Monthly Period in which such reassignment
obligation arises, in payment for such reassignment, an amount equal to the
Portfolio Reassignment Price.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions to Funding's Obligations Regarding Initial
Receivables. The obligations of Funding to purchase the Receivables in the
Initial Accounts on the Closing Date shall be subject to the satisfaction of
the following conditions:
(a) All representations and warranties of NMG contained in this
Agreement shall be true and correct on the Closing Date with the same effect
as though such representations and warranties had been made on such date;
(b) All information concerning the Initial Accounts provided to
Funding shall be true and correct as of the Initial Cut-Off Date in all
material respects;
(c) NMG shall have (i) delivered to Funding (or to the Trustee, if
Funding so directs) a computer file, microfiche list or printed list
containing a true and complete list of all Initial Accounts identified by
account number and by the Receivables balance as of the Initial Cut-Off Date
and (ii) substantially performed all other obligations required to be
performed by the provisions of this Agreement;
(d) NMG shall have recorded and filed, at its expense, any UCC-1 or
other financing statement with respect to the Receivables (other than
Receivables in Additional Accounts) now existing and hereafter created for
the transfer of accounts (as defined in Section 9-106 of the UCC) meeting the
requirements of applicable state law in such manner and in such jurisdictions
as would be necessary or advisable to perfect or evidence the sale of the
Receivables from NMG to Funding, and shall deliver a file-stamped copy of
such financing statements or other evidence of such filings to Funding;
(e) On or before the Closing Date, Funding and the Trustee shall have
entered into an amendment to the Pooling and Servicing Agreement and the
closing of such amendment to the Pooling and Servicing Agreement shall take
place simultaneously with the initial closing hereunder; and
(f) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Funding, and Funding shall have
received from NMG copies of all documents (including, without limitation,
records of corporate proceedings) relevant to the transactions herein
contemplated as Funding may reasonably have requested.
Section 7.2. Conditions to Funding's Obligations Regarding Additional
Receivables. The obligations of Funding to purchase any Receivables created
on or after the Closing Date, shall be subject to the satisfaction of the
following conditions:
(a) All representations and warranties of NMG contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on the date of such purchase;
(b) All information (concerning any Account to which such Receivables
relate) provided or to be provided to Funding shall be true and correct in
all material respects on the date of such purchase;
(c) NMG shall have indicated in its computer files, microfiche list
or printed list that such Receivables (created in respect of any Account to
which such Receivables relate) have been sold to Funding in accordance with
this Agreement and transferred to the Trust pursuant to the Pooling and
Servicing Agreement for the benefit of the Certificateholders; and
(d) NMG shall have recorded and filed, at its expense, any UCC-1 or
other financing statement with respect to such Receivables in any Additional
Accounts in connection with the transfer of accounts (as defined in Section
9-106 of the UCC) meeting the requirements of applicable state law in such
manner and in such jurisdictions as may be necessary or advisable to perfect
or evidence the sale of such Receivables from NMG to Funding, and shall
deliver a file-stamped copy of such financing statements or other evidence of
such filings to Funding.
Section 7.3. Conditions Precedent to Obligations of NMG. The
obligations of NMG to sell on any date Receivables shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of Funding contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on the date of such sale;
(b) Payment or provision for payment of the Purchase Price in
accordance with the provision of Section 3.1 and 3.2 hereof shall have been
made; and
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to NMG, and NMG shall have received from
Funding copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein contemplated as
NMG may reasonably have requested.
ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.1. Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue until the termination of the
Trust as provided in Article XII of the Pooling and Servicing Agreement.
Section 8.2. Purchase Termination. If NMG shall fail generally to, or
admit in writing its inability to, pay its debts as they become due; or if a
proceeding shall have been instituted in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of NMG in an
involuntary case under any Debtor Relief Law, or for the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator
or other similar official of NMG or for any substantial part of NMG's
property, or for the winding-up or liquidation of NMG's affairs and, if
instituted against NMG, any such proceeding shall continue undismissed or
unstayed and in effect, for a period of 60 consecutive days, or any of the
actions sought in such proceeding shall occur; or if NMG shall commence a
voluntary case under any Debtor Relief Law, or if NMG shall consent to the
entry of an order for relief in an involuntary case under any Debtor Relief
Law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of, or for, any substantial part of its property, or any
general assignment for the benefit of its creditors; or NMG or any subsidiary
of NMG shall have taken any corporate action in furtherance of any of the
foregoing actions (each an "Insolvency Event"); then NMG shall immediately
cease to transfer Principal Receivables to Funding and shall promptly give
notice to Funding and the Trustee of such Insolvency Event. Notwithstanding
any cessation of the transfer to Funding of additional Principal Receivables,
Principal Receivables transferred to Funding prior to the occurrence of such
Insolvency Event and Collections in respect of such Principal Receivables and
Finance Charge Receivables whenever created, accrued in respect of such
Principal Receivables, shall continue to be property of Funding transferable
by Funding to the Trust pursuant to the Pooling and Servicing Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Amendment. This Agreement and any Conveyance Papers and
the rights and obligations of the parties hereunder may not be changed
orally, but only by an instrument in writing signed by Funding and NMG in
accordance with this section 9.1. This Agreement and any Conveyance Papers
may be amended from time to time by Funding and NMG (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein or in any such other Conveyance
Papers, (iii) to add any other provisions with respect to matters or
questions arising under this Agreement or any Conveyance Papers that shall
not be inconsistent with the provisions of this Agreement or any Conveyance
Papers, (iv) to change or modify the Purchase Price, (v) to change, modify,
delete or add any other obligation of NMG or Funding and (vi) to provide for
the transfer by NMG or Funding of its interest in and to all or part of the
Accounts in accordance with the provisions of the Pooling and Servicing
Agreement (if such transfer is for less than all of the Accounts, the
respective rights, duties and obligations of Funding, NMG and the Servicer
will be determined at the time of such transfer); provided, however, that no
amendment pursuant to clause (v) of this Section 9.1 shall be effective
unless NMG and Funding have been notified in writing that the Rating Agency
Condition has been satisfied; provided, further, that such action shall not
(as evidenced by an Opinion of Counsel delivered to the Trustee) adversely
affect in any material respect the interests of the Trustee or the
Certificateholders, unless the Trustee shall consent thereto. Any
reconveyance executed in accordance with the provisions hereof shall not be
considered to be an amendment to this Agreement. A copy of any amendment to
this Agreement shall be sent to the Rating Agency.
SECTION 9.2. GOVERNING LAW. THIS AGREEMENT AND THE CONVEYANCE PAPERS
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 9.3. Notices. (a) All demands, notices, instructions,
directions and communications (collectively, "Notices") under this Agreement
shall be in writing and shall be deemed to have been duly given if personally
delivered at, mailed by registered mail, return receipt requested, or sent by
facsimile transmission to (i) in the case of Funding, to Neiman Marcus
Funding Corporation, 1201 Elm Street, Dallas, Texas 75201, Attention of the
President (facsimile no. 214-761-2650), (ii) in the case of NMG, to The
Neiman Marcus Group, Inc., 27 Boylston Street, Chestnut Hill, Massachusetts
02467, Attention of the General Counsel (facsimile no. 617-278-5397) and
(iii) in the case of the Trustee, to The Bank of New York, 101 Barclay
Street, Floor 12E, New York, New York 10286, Attention Corporate Trust
Administration-Asset-Backed Finance Unit (facsimile no. 212-___-____), (iv)
in the case of Moody's, to 99 Church Street, New York, New York 10007,
Attention ABS Monitoring Department 4th Floor (facsimile no. 212-553-4600)
and (v) in the case of Standard & Poor's, to 55 Water Street, New York, New
York 10004, Attention Asset Backed Group, 15th Floor (facsimile no. 212-312-
0323).
Section 9.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any
Conveyance Paper shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions, or terms shall be deemed severable from
the remaining covenants, agreements, provisions, and terms of this Agreement
or any Conveyance Paper and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Conveyance
Paper.
Section 9.5. Assignment, Sale of Accounts. (a) Notwithstanding
anything to the contrary contained herein, except as set forth in Section
9.5(b) and other than Funding's assignment of its rights, title, and
interests in, to, and under this Agreement to the Trustee for the benefit of
the Certificateholders as contemplated by the Pooling and Servicing Agreement
and Section 9.6 hereof, the Accounts, this Agreement and all other Conveyance
Papers may not be assigned by the parties hereto.
(b) Notwithstanding the provisions of Section 9.5(a) hereof and of
Sections 7.02 and 8.02 of the Pooling and Servicing Agreement, NMG may
assign, convey and transfer all of its consumer revolving credit card
accounts or other consumer revolving credit or installment accounts and the
receivables arising thereunder, which may include all, but not less than all,
of the Accounts, and its interest in any Participation Interests
(collectively, the "Assigned Assets"), together with all servicing functions
under the Pooling and Servicing Agreement and other obligations under this
Agreement or relating to the transactions contemplated hereby (collectively,
the "Assumed Obligations"), to another entity (the "Assuming Entity") which
may be an entity that is not affiliated with NMG, and NMG may assign, convey
and transfer the Assigned Assets and the Assumed Obligations to the Assuming
Entity, without the consent or approval of the Certificateholders in the
proportions described in Section 9.02(a) of the Pooling and Servicing
Agreement, in each case upon satisfaction of the following conditions:
(i) the Assuming Entity, NMG and the Trustee shall have entered
into an assumption agreement (the "Assumption Agreement") providing for
the Assuming Entity to assume the Assumed Obligations, including the
obligation under this Agreement to transfer the Receivables arising
under the Accounts to Funding, and NMG shall have delivered to Funding
and the Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such assumption and transfer comply with this Section,
that such Assumption Agreement is a valid and binding obligation of
such Assuming Entity enforceable against such Assuming Entity in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship or other similar laws affecting
creditors' rights generally from time to time in effect and except as
such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and that all
conditions precedent herein provided for relating to such transaction
have been complied with;
(ii) NMG or the Assuming Entity shall have delivered to the
Trustee copies of UCC-1 financing statements covering such Accounts to
perfect Funding's interest in the Receivables arising herein and any
Conveyance Papers or Supplemental Conveyance;
(iii) Funding shall have received written notice that the Rating
Agency Condition has been satisfied with respect to such transfer and
assumption and shall have delivered copies of each such written notice
to the Servicer and the Trustee;
(iv) Funding shall have received an Opinion of Counsel with
respect to clauses (i) and (ii) above and as to certain other matters
that Funding may specify; and
(v) the Trustee shall have received a Tax Opinion.
Notwithstanding such assumption, NMG shall continue to be liable for
all representations and warranties and covenants made by it and all
obligations performed or to be performed by it in its capacity hereunder
prior to such transfer or as Servicer prior to such transfer.
Section 9.6. Acknowledgement and Agreement of NMG. By execution
below, NMG expressly acknowledges and agrees that all of Funding's right,
title, and interest in, to, and under this Agreement, including, without
limitation, all of Funding's right, title, and interest in and to the
Receivables purchased pursuant to this Agreement, shall be assigned by
Funding to the Trustee for the benefit of the Certificateholders, and NMG
consents to such assignment. Additionally, NMG agrees for the benefit of
the Trustee that any amounts payable by NMG to Funding hereunder which are
to be paid by Funding to the Trustee for the benefit of the
Certificateholders shall be paid by NMG, on behalf of Funding, directly to
the Trustee. Any payment required to be made on or before a specified date
in same-day funds may be made on the prior business day in next-day funds.
Section 9.7. Further Assurances. Funding and NMG agree to do and
perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the other party more
fully to effect the purposes of this Agreement and the Conveyance Papers,
including, without limitation, the execution of any UCC financing statements
or continuation statements or equivalent documents relating to the
Receivables for filing under the provisions of the UCC or other law of any
applicable jurisdiction.
Section 9.8. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of Funding or NMG, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers
and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
Section 9.9. Counterparts. This Agreement and all Conveyance
Papers may be executed in two or more counterparts (and by different
parties on separate counterparts), each of which shall be an original, but
all of which together shall constitute one and the same instrument.
Section 9.10. Binding Third-Party Beneficiaries. This Agreement and
the Conveyance Papers will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The
parties hereto intend that the Trustee shall be a third-party beneficiary of
this Agreement.
Section 9.11. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Conveyance Papers set forth the
entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this
Agreement and the Conveyance Papers. This Agreement and the Conveyance
Papers may not be modified, amended, waived or supplemented except as
provided herein.
Section 9.12. Headings. The headings set forth herein are for
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
Section 9.13. Schedules and Exhibits. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.
Section 9.14. Survival of Representations and Warranties. All
representations, warranties and agreements contained in this Agreement or
contained in any Assignment, shall remain operative and in full force and
effect and shall survive conveyance of the Receivables by Funding to the
Trustee pursuant to the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, Funding and NMG have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
NEIMAN MARCUS FUNDING CORPORATION
By ______________________________________
Name: ___________________________________
Title: ____________________________________
THE NEIMAN MARCUS GROUP, INC.
By ______________________________________
Name: ___________________________________
Title: ____________________________________
EXHIBIT A
FORM OF SUPPLEMENTAL CONVEYANCE
(As required by Section 2.2 of
the Receivables Purchase Agreement)
SUPPLEMENTAL CONVEYANCE NO. ____ dated as of __________, 2000, by and
between THE NEIMAN MARCUS GROUP, INC., as seller ("NMG"), and NEIMAN MARCUS
FUNDING CORPORATION, as purchaser ("Funding"), pursuant to the Receivables
Purchase Agreement referred to below.
WITNESSETH:
WHEREAS, NMG and Funding are parties to a Receivables Purchase
Agreement, dated as of March 1, 1995 and amended and restated as of July 2,
2000 (hereinafter as such agreement may have been, or may from time to time
be, amended, supplemented or otherwise modified, the "Receivables Purchase
Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, NMG wishes to
designate Additional Accounts to be included as Accounts and NMG wishes to
convey the Receivables of such Additional Accounts, whether now existing or
hereafter created, to Funding pursuant to the Receivables Purchase Agreement
(as each such term is defined in the Receivables Purchase Agreement); and
WHEREAS, Funding is willing to accept such designation and conveyance
subject to the terms and conditions hereof.
NOW, THEREFORE, NMG and Funding hereby agree as follows:
1. Defined Terms. Each capitalized term used herein shall have the
meanings specified in the Receivables Purchase Agreement unless otherwise
defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, __________, 2000.
2. Designation of Additional Accounts. NMG delivers herewith a
computer file, microfiche list or printed list containing a true and complete
schedule identifying all such Additional Accounts and specifying for each
such Account, as of the Additional Cut-Off Date, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables in such Account. Such computer file, microfiche list
or printed list shall be, as of the date of this Supplemental Conveyance,
incorporated into and made part of this Supplemental Conveyance and is marked
as Schedule I to this Supplemental Conveyance.
3. Conveyance of Receivables.
(a) NMG does hereby sell, transfer, assign, set over and otherwise
convey to Funding (collectively, the "Conveyance"), without recourse, all of
its right, title and interest in, to and under the Receivables generated by
such Additional Accounts, now existing and hereafter created, all Recoveries
allocable to such Additional Accounts and all monies due or to become due
thereunder and all amounts received with respect thereto and all proceeds
(including, without limitation, "proceeds" as defined in Article 9 of the
UCC) thereof. The foregoing sale, transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in a creation or
an assumption by Funding of any obligation of the Servicer, NMG or any other
Person in connection with the Accounts, the Receivables or under any
agreement or instrument relating thereto.
(b) In connection with the Conveyance, NMG agrees to record and file,
at its own expense, one or more UCC financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables, now existing and hereafter created, for the sale
of accounts meeting the requirements of applicable state law in such manner
and in such jurisdictions as may be necessary or advisable to perfect or
evidence the sale and assignment of the Receivables to Funding, and to
deliver a file-stamped copy of such financing statement or other evidence of
such filing to Funding.
(c) In connection with such sale, NMG further agrees, at its own
expense, on or prior to the date of this Supplemental Conveyance, to indicate
in the appropriate computer files, microfiche list or other records that all
Receivables created in connection with the Additional Accounts designated
hereby have been conveyed to Funding pursuant to this Supplemental
Conveyance.
4. Acceptance by Funding. Subject to the satisfaction of the
conditions set forth in Section 6 of this Supplemental Conveyance, Funding
hereby acknowledges its acceptance of all right, title and interest to the
property, now existing and hereafter created, conveyed to Funding pursuant to
Section 3(a) of this Supplemental Conveyance, and declares that it shall
maintain such right, title and interest. Funding further acknowledges that,
prior to or simultaneously with the execution and delivery of this
Supplemental Conveyance, NMG delivered to Funding (or to the Trustee if
Funding has so directed) the computer file, microfiche list or printed list
described in Section 2 of this Supplemental Conveyance.
5. Representations and Warranties of NMG. NMG hereby represents and
warrants to Funding as of the date of this Supplemental Conveyance and as of
the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Supplemental
Conveyance constitutes a legal, valid and binding obligation of NMG
enforceable against NMG in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally from time to time in effect and except as such
enforceability may be limited by general principles of equity;
(b) Eligibility of Accounts. Each Additional Account designated
hereby is an Eligible Account;
(c) Selection Procedures. (i) No selection procedure believed by NMG
to be adverse to the interests of Funding or the Investor Certificateholders
was used in selecting the Additional Accounts; and (ii) the selection
procedures used in selecting the Additional Accounts designated hereby are
substantially the same as the selection procedures used in selecting the
Initial Accounts identified in the computer file, microfiche list or printed
list delivered pursuant to Section 2.1(c) of the Receivables Purchase
Agreement;
(d) Insolvency. NMG is not insolvent and, after giving effect to the
conveyance set forth in Section 3 of this Supplemental Conveyance, will not
be insolvent;
(e) Sale of Receivables. This Supplemental Conveyance constitutes a
valid sale, transfer and assignment to Funding of all right, title and
interest of NMG in the Receivables and other Purchased Assets now existing or
hereafter created, all monies due or to become due and all amounts received
with respect thereto and the "proceeds" (as defined in the UCC) thereof,
relating thereto;
(f) No Conflict. The execution and delivery of this Supplemental
Conveyance, the performance of the transactions contemplated by this
Supplemental Conveyance and the fulfillment of the terms hereof, will not
conflict with, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which NMG is a party or by which it or
its properties are bound;
(g) No Violation. The execution and delivery of this Supplemental
Conveyance by NMG, the performance of the transactions contemplated by this
Supplemental Conveyance and the fulfillment of the terms hereof applicable to
NMG will not conflict with or violate any Requirements of Law applicable to
NMG;
(h) No Proceedings. There are no proceedings or investigations,
pending or, to the best knowledge of NMG, threatened against NMG before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (i) asserting the invalidity of the Receivables
Purchase Agreement or this Supplemental Conveyance, (ii) seeking to prevent
the consummation of any of the transactions contemplated by the Receivables
Purchase Agreement or this Supplemental Conveyance, (iii) seeking any
determination or ruling that, in the reasonable judgment of NMG, would
materially and adversely affect the performance by NMG of its obligations
under the Receivables Purchase Agreement or this Supplemental Conveyance or
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Supplemental Conveyance; and
(i) All Consents. All authorizations, consents, orders or approvals
of any court or other governmental authority required to be obtained by NMG
in connection with the execution and delivery of this Supplemental Conveyance
by NMG and the performance of the transactions contemplated by this
Supplemental Conveyance by NMG, have been obtained.
6. Conditions Precedent. The acceptance of Funding set forth in
Section 4 of this Supplemental Conveyance is subject to the satisfaction, on
or prior to the Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by NMG in Section 5 of this Supplemental Conveyance shall be
true and correct as of the date of this Supplemental Conveyance and as of the
Addition Date.
(b) Officer's Certificate. NMG shall have delivered to Funding
an Officer's Certificate confirming that (i) the Additional Accounts shall be
Eligible Accounts and (ii) (A) no selection procedures believed by NMG or
Funding to be materially adverse to the interests of the Investor
Certificateholders shall have been used in selecting the Additional Accounts;
(B) the selection procedures used in selecting the Additional Accounts shall
be substantially the same as the selection procedures used in selecting the
original Accounts identified in the computer file, microfiche list or printed
list delivered pursuant to Section 2.01 of the Pooling and Servicing
Agreement; (C) the list of Additional Accounts, as of the Additional Cut-Off
Date, is a true and complete schedule identifying all such Additional
Accounts and specifies for each such Account, as of the Additional Cut-Off
Date, its account number, the aggregate amount outstanding in such Account
and the aggregate amount of Principal Receivables in such Account.
(c) Additional Information. NMG shall have delivered to Funding such
information as was reasonably requested by Funding to satisfy itself as to
the accuracy of the representation and warranty set forth in Section 5(d) of
this Supplemental Conveyance.
7. Ratification of the Receivables Purchase Agreement. The
Receivables Purchase Agreement is hereby ratified, and all references to the
"Receivables Purchase Agreement", to "this Agreement" and "herein" shall be
deemed from and after the Addition Date to be a reference to the Receivables
Purchase Agreement as supplemented by this Supplemental Conveyance. Except
as expressly amended hereby, all the representations, warranties, terms,
covenants and conditions of the Receivables Purchase Agreement shall remain
unamended and shall continue to be, and shall, remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with
or consent to non-compliance with any term or provision of the Receivables
Purchase Agreement.
8. Counterparts. This Supplemental Conveyance may be executed in
any number of counterparts, all of which taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Conveyance to be duly executed and delivered by their respective duly
authorized officers on the day and the year first above written.
NEIMAN MARCUS FUNDING CORPORATION
By ________________________________
Name: _____________________________
Title: ____________________________
THE NEIMAN MARCUS GROUP, INC.
By _______________________________
Name: ____________________________
Title: ___________________________
Schedule I to
Supplemental Conveyance
Additional Accounts
Schedule I
LIST OF ACCOUNTS
DEEMED INCORPORATED BY REFERENCE