Receivables Sale and Purchase Agreement, by and among Sterling Jewelers Inc., Zale Delaware, Inc., Signet Jewelers Limited and CLSIG Acquisition Trust, dated April 30, 2018

(a)       Definitions.

(b)       Interpretation.  As used in this Agreement: (i) all references to the masculine gender shall include the feminine gender (and vice versa); (ii) all references to “include,” “includes,” or “including” shall be deemed to be followed by the words “without limitation”; (iii) references to any law or regulation refer to that law or regulation as amended from time to time and include any successor law or regulation; (iv) references to another agreement, instrument or other document means such agreement, instrument or other document as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof; (v) unless otherwise specified, all references to an article, section, subsection, exhibit or schedule shall be deemed to refer to, respectively, an article, section, subsection, exhibit or schedule of or to this Agreement; (vi) references to any Person include that Person’s permitted successors and assigns; and (vii) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

 

(a)       Seller shall designate the Credit Card Receivables arising under thirty percent (30%) of all Accounts for sale to the Company hereunder.  For purposes of selecting the Receivables to be sold hereunder, which shall be on a per Account basis, Seller shall perform such selection on a randomized basis, using a generally accepted randomization software tool agreeable to CarVal, without use of adverse selection tactics.  Seller shall consider in good faith any comments made by Company with respect to the selection of such randomization software tool.  For the avoidance of doubt, in no event shall Company and CarVal be allocated Credit Card Receivables with respect to the same Account.

(b)       Subject to Section 15, Company agrees to purchase, and Seller agrees to sell, without recourse, representations and warranties (except as otherwise expressly provided herein), and without the need for further agreement or documentation, all of Seller’s right, title and interest in and to:

(a)       Effective on the Initial Closing Date, Seller hereby sells to Company, and Company hereby purchases from Seller, all of Seller’s right, title and interest in, to and under the Back Book Receivables.

(b)       On each Closing Date after the Initial Closing Date, one hundred percent (100%) of each Forward Flow Receivable and of each Add-on Receivable generated by Seller shall be sold by Seller to Company without recourse, representations and warranties (except as otherwise expressly provided herein), and without the need for further agreement or documentation.

(c)       In consideration for Seller’s sale, transfer, assignment, set over, and conveyance to Company of a Receivable, Company shall pay to Seller the amounts in accordance with Section 4 below.

(e)       Seller and Company each intend the transfer of Receivables under this Agreement to be a true sale by Seller to Company that is absolute and irrevocable, conveying good title free and clear of any Liens, from Seller to Company, and not a secured borrowing, including for accounting purposes.  At any time and from time to time, Seller will, at its sole expense, promptly and duly authorize, execute and deliver or will promptly cause to be authorized, executed and delivered, such further instruments and documents and take such further actions as are reasonably requested by Company to confirm the sale of the Receivables and/or as is necessary for the purpose of obtaining or preserving the full benefits of this Agreement, including the filing of any financing or continuation statements under the UCC or other Applicable Law in effect in any jurisdiction with respect to the perfection of the transfer of ownership of the Receivables; provided that, any initial financing statement that Company wishes to file at the Initial Closing shall be prepared and filed by Company, at its sole expense, and such financing statement shall be designed to cover all Receivables to be purchased by Company under this Agreement.  However, notwithstanding the intent of Seller and Company, if a court of competent jurisdiction holds that the conveyance of the Receivables purchased hereunder is not a true sale of such Receivables from Seller to Company, this Agreement also shall be deemed to be and hereby is a security agreement within the meaning of the UCC, and the conveyance by Seller provided for in this Agreement shall be deemed to be, and Seller hereby grants to Company, a first priority security interest in and to all of Seller’s right, title, and interest, in the Receivables to secure the obligations now or hereafter arising of Seller to Company to remit the payments in respect of the Receivables and other amounts payable under and in accordance with the terms of this Agreement.  Seller also hereby authorizes Company to file any instruments to confirm the sale of the Receivables and/or for the purpose of obtaining or preserving the full benefits of this Agreement, including the filing of any financing or continuation statement under the UCC or other Applicable Law in effect in any jurisdiction with respect to the perfection of the transfer of ownership of the Receivables.

 

(a)       Initial Closing Statement.  Not less than three (3) Business Days prior to the Initial Closing Date or on such other date as mutually agreed by the Parties, Seller shall deliver the Initial Closing Statement to Company, showing Seller’s good faith determination of the Estimated Purchase Price, together with the Receivables Closing File and other reasonable supporting documentation and calculations.  Company shall have the right to review the Initial Closing Statement, together with any supporting documents reasonably requested by Company to verify the accuracy and completeness of the valuations set forth therein, and the Initial Closing Statement shall be revised by Seller to reflect any corrections mutually agreed to by Seller and Company acting in good faith.

(b)       Payments for Receivables at the Initial Closing.  At the Initial Closing, Company shall pay to Seller ninety-five percent (95%) of the Estimated Purchase Price as reflected on the Initial Closing Statement (as such statement may be revised in accordance with Section 4(a)).  Such payment shall be made by wire transfer in immediately available funds to an account specified by Seller in writing at least two (2) Business Days prior to the Initial Closing Date.  The Parties acknowledge that a true-up payment shall be paid in accordance with the true-up procedures set forth in Schedule 4(b).

(c)        (****).

(d)       Final Purchase Price of Back Book Receivables.

 

(e)        Payment for Receivables following the Initial Closing.  From the Initial Closing Date:

 

(g)       Dispute Resolution.

 

(a)        Seller shall be the owner of the Accounts but, on and after each Closing Date, Company shall be the owner of the Receivables transferred on such date and shall be entitled to all of the rights, privileges, and remedies applicable to such ownership interest.  Except as provided in Section 22, Seller does not assume and shall not have any liability to Company or its assignees for the repayment of any advances made under the Accounts; provided that Seller shall forward to Company payments in respect of the Accounts received by it as provided in Section 8(d).

 

(a)        In connection with any material change to the Credit Underwriting Standards, Seller shall deliver to Company a reasonable description of the proposed change and the rationale for the proposed change at least thirty (30) days prior to implementing such change.

(b)       Unless prohibited by Applicable Law, Seller shall notify Company in writing at least thirty (30) days prior to a change to the Credit Underwriting Standards, required by Applicable Law unless Seller is required by Applicable Law to implement such change in less than such thirty (30) day period, in which case Seller will provide Company with notice as soon as practicable following the date Seller becomes aware such change will likely be so required.

(c)        Other than as expressly disclosed to Company prior to the Effective Date, the materials and documents comprising the Credit Underwriting Standards in effect as of the date hereof have been in materially and substantially the same form for (****).

 

(a)        Volume Projection Report.  On the forty-fifth (45^th) day prior to the beginning of each fiscal year (or if such day is not a Business Day, the next Business Day), Seller shall deliver to Company a report (which, for the avoidance of doubt, shall be the same report delivered to CarVal pursuant to Section 7(a) of the CarVal RPA) (a “Volume Projection Report”) containing a forward annual forecast of (i) the Forward Flow Receivables and Add-on Receivables to be sold under this Agreement for such fiscal year plus (ii) the CarVal Receivables defined as “Forward Flow Receivables” and “Add-on Receivables” under the CarVal RPA to be sold under the CarVal RPA for such fiscal year; provided that, Company hereby acknowledges and agrees that such forecasts are subject to various risks and uncertainties and actual business results may vary substantially from the forecasts expressed or implied therein and Seller makes no representation as to the accuracy of such forecasts (except that such forecasts were developed in good faith).

(b)       Actual Lower than Forecast.  If for any fiscal year the actual amount of the aggregate of the Forward Flow Receivables and Add-on Receivables purchased by Company under this Agreement (determined as of the applicable Closing Date) (****), then Seller shall pay to Company a fee in an amount equal to the product of (****) within ten (10) Business Days of the end of such year; provided that, Company shall not be entitled to such fee if it has otherwise failed to meet its purchase obligations under Section 2.  The payment of such fee shall be Company’s sole and exclusive remedy if the actual volume is lower than thirty percent (30%) of the aggregate amount of receivables set forth in the forecast contained in the Volume Projection Report .

(b)       Seller will take no action to cause any Account to be evidenced by any “instrument” (as defined in the UCC as in effect in any relevant jurisdiction).  Seller will take all actions reasonably requested by Company for the purpose of ensuring that each Account will not be classified as anything other than a “general intangible” or as a “payment intangible” (as those terms are defined in the UCC as in effect in any relevant jurisdiction).

 

(c)        Seller will not sell, pledge, assign or transfer to any other Person, any Account allocated to Company pursuant to Section 2(a) of this Agreement, or any interest therein, other than with the prior written consent of Company or in favor of Company or Company’s designee.

 

(d)       If Seller receives or collects any funds in repayment of a Receivable, Seller shall use reasonable best efforts to send an e-mail notice of any such receipt within one (1) Business Day (but in no event later than two (2) Business Days) thereof to Company and Genesis and simultaneously send such funds by wire transfer (or other means as agreed to by Parties) to Genesis for deposit into the cash management system under the Company Servicing Agreement.  Seller hereby agrees and acknowledges that any payments so collected by Seller shall be held in trust for Company and shall be delivered to Company promptly.

 

(e)       Seller acknowledges and agrees that Company shall be the owner of the Borrower Data for the purposes related to billing and collections of the Receivables (provided that, Seller shall be deemed to retain ownership of all Borrower Data for all other purposes, including Borrower Data needed by Seller and its affiliates to maintain business relationships with the Borrowers), credit file information, servicing and collection history and that all such information shall constitute “Confidential Information” for purposes of Section 21 and the Confidentiality Agreement.

 

(f)        Seller will not create, or suffer to exist (by operation of law or otherwise) any Lien (other than Company’s Lien hereunder) upon or with respect to, any of the Receivables or any of its interest therein (including the related Account).  Seller shall notify Company as soon as practicable after it becomes aware of the existence of any Lien (other than Company’s Lien hereunder) on any of the Receivables or the related Accounts and Seller shall defend the right, title and interest of Company in, to and under the Receivables against all claims of third parties arising from events occurring prior to the purchase of the Receivables by Company hereunder.

 

(g)       Seller shall take all action necessary to effect, and shall use commercially reasonable efforts to maintain, Company’s ownership interest in the Receivables (or, to the extent the transactions evidenced hereby are deemed to be a loan, Seller shall take all action reasonably necessary to ensure that the Lien of this Agreement constitutes a valid first priority security interest in the related Receivables to secure such loan).

 

(h)       Seller (or Genesis (or any successor servicer) on behalf of Seller) shall maintain accounts and records as to each Receivable purchased hereunder accurately and in sufficient detail to permit the identification of such Receivable.  Seller (or Genesis (or any successor servicer) on behalf of Seller) shall maintain its computer records so that, from and after the related Closing Date, Seller’s master computer records that refer to any Receivable indicate clearly the interest of Company in such Receivable and that such Receivable is owned by Company with record title vested in the name of Company’s trustee for the benefit of Company.  Except as set forth in Section 3(e), Seller will not account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than as a sale of the Receivables to Company.  Seller shall not take any action in the name or on behalf of Company with respect to the Receivables except as otherwise permitted hereunder or with Company’s express written consent; provided that the foregoing shall not limit the actions of Seller pursuant to any activities involving any cure of a Receivable pursuant to Section 20.

(i)         Seller shall notify Company promptly after becoming aware of:

 

(j)        Seller shall ensure that all marketing and training materials produced in connection with the Program, including those marketing and training materials produced in connection with the sale of the underlying financed merchandise related to the Receivables and any related ancillary products (whether currently produced or to be produced following the date hereof) (i) comply with the Marketing P&Ps in effect at the relevant time in all material respects and (ii) to the extent Seller and Company have not implemented a mutually agreed operational approach pursuant to Section 8(p)(ii), are updated as necessary to ensure notice and instructions are provided to Borrowers with respect to the (****).

 

(k)       Seller will do, execute and perform all such other acts, deeds and documents as Company may from time to time reasonably require in order to carry into effect the purposes of this Agreement; provided that, with respect to any Financing, Seller’s obligations shall be limited in the manner set forth in Section 16.

 

(l)        Seller shall provide notice to Company as soon as practicable after it decides or agrees to make any material changes to the services to be performed by Genesis under the Amended and Restated Servicing Agreement, including any material changes to any SLAs as contained in the Amended and Restated Servicing Agreement.

(m)      Seller shall not, unless required by Applicable Law or Company provides its written consent thereto, make or agree to any changes to the Amended and Restated Servicing Agreement that would loosen any SLAs contained in the Amended and Restated Servicing Agreement below the standards that Genesis provides to Seller with respect to the Back Book Receivables as of the Effective Date.

 

(n)       Seller shall notify Company in writing of any proposed amendments to any Account Agreement. (****).

 

(o)       Seller will not exercise any right to terminate Genesis, for convenience, as servicer under the Amended and Restated Servicing Agreement other than with the prior written consent of (****) and, in such case, will identify and appoint a replacement servicer in compliance with Section 17(b). (****).

 

(p)       (i)         Subject to the right of first refusal in Section 19, following the expiry or termination of this Agreement or at any time during the suspension of Company’s purchase obligation in accordance with Section 7, (****).

 

(q)       Following the Initial Closing Date, Sterling shall ensure that any Forward Flow Receivables with Borrowers that have an origination FICO score of (****) as of the date of Settlement shall be offered to Company for purchase pursuant to Section 2, subject to all other terms and conditions of this Agreement.

 

(r)        Seller shall use commercially reasonable efforts to satisfy the conditions precedent set forth in Section 13 for which it is reasonably able to exercise control, in each case, on or prior to the related Closing Date.

 

(s)       Seller shall ensure that Company shall have the right(****).

 

(a)       Company shall provide notice to Seller as soon as practicable after it decides or agrees to make any material changes to the services to be performed by Genesis under the Company Servicing Agreement, including any material changes to any SLAs as contained in the Company Servicing Agreement.

(b)       Company shall not, unless required by Applicable Law or Seller provides its written consent thereto, make or agree to any changes to the Company Servicing Agreement that would loosen any SLAs contained in the Company Servicing Agreement below the standards that Seller currently provides as of the Effective Date.

(c)       Other than pursuant to a bona fide Financing, Company shall not sell or transfer any Receivables it purchases under this Agreement (other than any Receivables that have been charged-off) to any third party unless (i) Company ensures that such Receivables are serviced by the same servicer that services Receivables sold under this Agreement on terms that are substantially the same terms as the Company Servicing Agreement; (ii) such third party transferee is restricted from making any changes to their applicable servicing agreement with respect to such Receivables that would loosen any SLAs contained in such servicing agreement below the standards that Genesis provides to Seller under the Amended and Restated Servicing Agreement as of the Effective Date; and (iii) the transfer agreement between Company and such third party reflects the covenants in this Section 9(c).

 

(d)       Company shall use commercially reasonable efforts to satisfy the conditions precedent set forth in Section 14 for which it is reasonably able to exercise control, in each case, on or prior to the related Closing Date.

 

(a)       Seller is a Delaware corporation, duly organized and validly existing in good standing under the laws of the State of Delaware, and has the full power and authority to make the extensions of credit to Borrowers and has full corporate power and authority to execute, deliver, and perform its obligations under this Agreement; the execution, delivery and performance of this Agreement and the other agreements and instruments to be executed by Seller as contemplated hereby have been duly authorized and are not in conflict with and do not violate Applicable Law or the terms of the charter or bylaws of Seller and will not result in a breach of or constitute a default under, or require any consent under, any indenture, loan or agreement to which Seller is a party;

 

(b)       This Agreement constitutes a legal valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and general principles of equity;

 

(c)       All consents, licenses, approvals, or authorizations of, or registrations or declarations with any Regulatory Authority required to be obtained, effected, or given by Seller in connection with the execution, delivery, and performance of Seller’s obligations under this Agreement and with respect to the Accounts have been duly obtained, effected, or given and are in full force and effect;

 

(d)       There are no Proceedings or investigations pending or, to the best knowledge of Seller, threatened against Seller (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation by Seller of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that, in the reasonable judgment of Seller would materially and adversely affect the performance by Seller of its obligations under this Agreement, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement; or (v) which could reasonably be expected to materially and adversely affect Company’s interest in, or the value or collectability of the Receivables;

 

(e)       Seller is not subject to an Insolvency Event;

 

(f)        Seller is operating the Program in compliance with Applicable Law;

(g)       Seller is not in default under any agreement, contract, instrument or indenture to which Seller is a party or by which it (or any of its assets) is bound, which default would have a Material Adverse Effect with respect to Seller, the Program or this Agreement, nor has any event occurred which, with the giving of notice, the lapse of time or both, would constitute a default under any such agreement, contract, instrument or indenture that would have a Material Adverse Effect with respect to Seller, the Program or this Agreement;

 

(h)       Seller is in compliance in all material respects with all applicable provisions of the AML-BSA Laws and has adopted and put into practice policies and procedures reasonably designed to ensure its ongoing compliance with such laws, which policies and procedures are consistent with generally accepted standards within Seller’s industry for ensuring such compliance;

 

(i)        All written information, reports, certificates and statements (other than projections and forward-looking statements) furnished by or on behalf of Seller for purposes of or in connection with the Program this Agreement or any other transaction document contemplated by this Agreement are true, complete and correct in all material respects as of the date such information is stated or certified; provided that with respect to any information regarding a Receivable that was provided to Seller or any of its Affiliates by the Borrower, credit bureau or other third party, Seller only represents and warrants that such information is true and correct to the best of Seller’s knowledge.  There is no fact, condition, circumstance or event known to Seller that has not been disclosed to Company in writing which could reasonably be expected to be, have or result in a Material Adverse Effect with respect to Seller, the Program or this Agreement or materially and adversely affect Company’s interest in, or the value or collectability of, the Receivables purchased under this Agreement.  Seller has furnished or disclosed all definitive agreements, side letters, binding letters of intent and all schedules, exhibits, ancillary agreements and documentation related thereto containing any terms or conditions with respect to any of the transactions contemplated by the CarVal RPA;

 

(j)        Except as expressly disclosed to Company by Seller in writing prior to the Effective Date with respect to certain Back Book Receivables, none of the compensation practices of Seller encourage behavior that is contrary to Applicable Law;

 

(k)       Seller maintains all intellectual property and all licenses of, or any other interest in, intellectual property (including the Proprietary Materials) necessary for the origination, identification, collection, enforcement or servicing of, or necessary to maintain the value and validity of, each Receivable by Seller, Genesis, any successor thereto and any other assignees of any of the foregoing.  Seller has good and valid title to all such intellectual property (including the Proprietary Materials), free and clear of any Lien.  All such intellectual property (including the Proprietary Materials) is valid, subsisting, and enforceable.  Seller has prevented any Person from having or obtaining any interests, Liens or other rights to any intellectual property or any licenses of, or any other interest in, intellectual property (including the Proprietary Materials) that could individually or in the aggregate, interfere in any material respect with the origination, identification, collection, enforcement or servicing of, each Receivable by Seller, Genesis, any successor thereto and any other assignees of any of the foregoing or otherwise impair the validity or value of any Receivable;

 

(l)        All marketing and training materials utilized by Seller or its Affiliates and agents with respect to the Receivables and the Program comply with the Marketing P&Ps and all Applicable Laws.

 

(m)      Seller’s sales practices with respect to the underlying financed merchandise related to the Receivables, and any ancillary products related thereto, comply with all Applicable Laws.

 

(n)       The (****), together with any policies forming part of the Marketing P&Ps, related to the Program contains the following criteria:

 

(o)       With respect to the Initial Closing Date, all of the factual statements and representations in any officer’s certificate delivered in connection with the True Sale Opinion on the Initial Closing Date are true and correct in all respects as of the date thereof, and Seller shall have complied with all of the assumptions set forth in such opinion as of the date thereof, including with respect to Seller having a valid business reason for selling the Receivables to Company hereunder, and with all of the statements set forth in such officer’s certificate.

 

The representations and warranties set forth in this Section 10 shall survive the sale, transfer and assignment of the Receivables to Company pursuant to this Agreement and, with the exception of those representations and warranties contained in Section 10(d) shall be made continuously throughout the Term.  In the event that any investigation or Proceeding of the type described in Section 10(d) is instituted or threatened against Seller, Seller shall promptly notify Company of such pending or threatened investigation or Proceeding.

(a)       Seller is the sole owner of each Receivable purchased hereunder, has good and marketable title thereto, and has the right to assign, sell and transfer such Receivable to Company free and clear of any Lien, other than the security interest granted pursuant to this Agreement.  Seller has not sold, assigned, pledged, granted a security interest in or otherwise transferred any right or interest in or to such Receivable and has not pledged such Receivable as collateral for any debt or other purpose, other than the security interest granted hereto.  Seller has not authorized the filing of and is not aware of any financing statements against Seller that include a description of collateral covering any portion of such Receivables other than any financing statement relating to the security interest granted to Company pursuant to this Agreement;

(b)       Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the applicable Borrower, directly or indirectly for the payment of any amount required by the related Receivable;

 

(c)       The servicing practices used by Genesis, on behalf of Seller, with respect to each Receivable purchased hereunder have been, in all respects (i) legal, proper, prudent and customary in the open-ended consumer private label credit card receivable origination and servicing industry, and (ii) in accordance with the Applicable Requirements, Applicable Law and the terms of such Receivable.

 

(d)       The terms, covenants and conditions of such Receivable have not been waived, altered, impaired, modified or amended in any respect, except as previously disclosed in a written document to Company, which document has been disclosed to Company and included in the related Records, and in each case solely as permitted under the Account Agreement;

 

(e)       Such Receivable and its related Borrower meet the Credit Underwriting Standards and each of the following criteria:

 

(f)        (i) Such Receivable is in full force and effect and represents a legal, valid and binding payment obligation of the applicable Borrower, enforceable against such Borrower in accordance with its terms (subject to general principles of equity) for the amount outstanding thereof without any right of rescission, offset, counterclaim, dispute, discount, adjustment or defense, except that enforceability may be limited by Debtor Relief Laws and general principles of equity; (ii) there are no conditions precedent to the enforceability or validity of such Receivable that have not been satisfied or waived; (iii) the Borrower under such Receivable has no bona fide claim against Seller or any Affiliate thereof; (iv) each of Seller and, to Seller’s knowledge, Genesis, has not done anything to prevent or impair such Receivable from being valid, binding and enforceable against such Borrower; (****);

(g)       The Records applicable to each such Receivable are true, accurate and complete in all material respects except as would not reasonably be expected to adversely affect the value or collectability of the Receivable as of the Closing Date and, if applicable, such Records include all amendments, supplements and modifications thereto as of such date;

 

(h)       Each Account Agreement pertaining to such Receivable provides consent by the related Borrower for Seller to deliver or disclose all relevant information and data, including the Borrower Data, pertaining to such Borrower to Company and its Affiliates and any successors and assignees thereto in accordance with the terms of this Agreement;

 

(i)        Except as expressly set forth in this Agreement, there is no limitation or restriction pertaining to the current or future sale, transfer, financing or securitization of such Receivable in the related Account Agreement or in any other document or agreement to which Seller is a party and, to Seller’s knowledge, there is no such limitation or restriction under Applicable Law or in any document or agreement to which Genesis or the related Borrower is a party;

 

(j)        By delivering the Daily Receivables Sale Statement to Company pursuant to Section 4(e) (whether delivered by Seller or Genesis), Seller shall be deemed to have represented that the content of such statement, including the Forward Flow Purchase Price and the Add-on Receivable Purchase Price, is true, complete and accurate in all material respects; and

 

(k)       No selection procedures were used by Seller that identified such Receivable as being less desirable or valuable than other comparable Receivables being originated by Seller under the Program.

 

(a)       Company is a Delaware statutory trust duly formed and validly existing, in good standing under the laws of the State of Delaware, and has full power and authority to execute, deliver, and perform its obligations under this Agreement, and that Company holds all licenses to purchase the Receivables under this Agreement necessary to ensure the enforceability of the Receivables; the execution, delivery, and performance of this Agreement have been duly authorized, and are not in conflict with and do not violate the terms of the governing documents of Company and will not result in a breach of or constitute a default under or require any consent under any indenture, loan, or agreement to which Company is a party;

(b)       All approvals, authorizations, consents, and other actions by, notices to, and filings with any Person required to be obtained for the execution, delivery, and performance of this Agreement by Company, have been or will be obtained by Company or its service providers prior to the Effective Date;

(c)       This Agreement constitutes, a legal, valid, and binding obligation of Company, enforceable against Company in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and general principles of equity;

 

(d)       There are no Proceedings or investigations pending or, to the best knowledge of Company, threatened against Company (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation, of any of the transactions contemplated by Company pursuant to this Agreement, (iii) seeking any determination or ruling that in the reasonable judgment of Company, would materially and adversely affect the performance by Company of its obligations under this Agreement, or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement;

 

(e)       Company is not subject to an Insolvency Event; and

 

(f)        The execution, delivery and performance of this Agreement by Company comply with Applicable Law.

 

(a)       As of such Closing Date, no action or Proceeding shall have been instituted or threatened against Company or Seller (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of the transactions contemplated hereby, (iii) seeking any determination or ruling that, in the reasonable judgment of Company, would materially and adversely affect the performance by 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, or (v) which might materially and adversely affect any Receivable purchased under this Agreement or Company’s interest in any such Receivable;

(b)       The representations and warranties of Seller set forth in Sections 10 and 11 shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualifier) or in all material respects (in the case of any representation or warranty that does not contain any materiality qualifier) on such Closing Date as though made on and as of such date;

(c)       With respect to each Closing Date for any Forward Flow Receivable, the purchase of such Forward Flow Receivable shall not reasonably be expected to result in a violation of (****).  For the avoidance of doubt, if Company elects to invoke this condition in respect of any Forward Flow Receivable, Company must still comply with its obligations with respect to all other Forward Flow Receivable that are not reasonably expected to violate (****);

(d)       The material terms, covenants and conditions of Seller set forth in this Agreement to be complied with on or before such Closing Date shall have been complied with in all respects as of such date by Seller;

 

(e)       No CSA Event of Default or Servicer Event of Default has occurred and is continuing;

 

(f)        The Amended and Restated Servicing Agreement and the Company Servicing Agreement shall be in full force and effect and there is no continuing material breach by either Seller or Genesis, as applicable, thereunder; provided that the failure of the Company Servicing Agreement to be in full force and effect, or any breach thereof, is not attributable to Company acting in bad faith;

 

(g)       With respect to the Initial Closing Date, Seller has delivered to Company (i) the Initial Closing Statement, (ii) duly executed copies of this Agreement, the Amended and Restated Servicing Agreement and the True Sale Opinion substantially in the form as set forth in Exhibit D; and (iii) an officer’s certificate of Seller confirming that, to the knowledge of such officer, the conditions in Sections 13(b) and 13(d) have been or will be satisfied on and as of the Initial Closing Date;

 

(h)       With respect to the Initial Closing Date, Genesis and Company have entered the Company Servicing Agreement in a form reasonably satisfactory to Company, (****);

 

(i)        (****); and

 

(j)        There is no fact, condition, circumstance or event which could reasonably be expected to result in a material and adverse effect on Company’s interest in, or the value or collectability of the Back Book Receivables since the Effective Date.

 

(a)       As of each Closing Date, no action or Proceeding shall have been instituted or threatened against Company or Seller (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of the transactions contemplated hereby, (iii) seeking any determination or ruling that, in the reasonable judgment of Seller, would materially and adversely affect the performance by Company of its obligations under this Agreement, or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement;

(b)       The representations and warranties of Company set forth in Section 12 shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualifier) or in all material respects (in the case of any representation or warranty that does not contain any materiality qualifier) on each Closing Date as though made on and as of such date;

 

(c)       The material terms, covenants and conditions of Company set forth in this Agreement to be complied with on or before each Closing Date shall have been complied with in all material respects as of such date by Company;

 

(d)       The Amended and Restated Servicing Agreement and the Company Servicing Agreement shall be in full force and effect and there is no continuing material breach by either Genesis or Company, as applicable, thereunder; provided that the failure of the Amended and Restated Servicing Agreement to be in full force and effect, or any breach thereof, is not attributable to Seller acting in bad faith; and

 

(e)       With respect to the Initial Closing Date, Company has delivered to Seller (i) the Estimated Purchase Price, and (ii) duly executed copies of this Agreement and the Company Servicing Agreement.

 

(a)       (****).

 

(b)       Notwithstanding anything to the contrary in this Agreement, (****), and Company (****); provided that, (****). Notwithstanding anything herein to the contrary, (****).

 

(c)       For the period between (****).

 

(d)       Seller and Company acknowledge and agree that (****) to this Agreement.

 

(a)       Company shall have the right, subject to Section 15 hereof, to either finance or securitize the Receivables acquired by it under this Agreement, or any part thereof, at any time or from time to time, by itself or as part of a larger offering (any such financing or securitization by Company, a “Financing”).  Such Financing shall not affect Seller’s rights or Company’s obligations hereunder except as expressly set forth herein.

 

(b)       Seller shall, and shall cause its Affiliates to, use commercially reasonable efforts to provide, at Company’s sole expense, cooperation to the extent reasonably requested by Company and that is customary in connection with a financing comparable to the Financing, including with respect to the preparation of disclosure and the provision of information to third parties, regarding the origination and servicing of the Receivables subject to the Financing and the related Accounts.

(c)       Notwithstanding anything to the contrary, neither Seller nor any of its Affiliates shall:

 

(d)       Company shall, promptly upon request by Seller, reimburse Seller for all reasonable and documented out-of-pocket expenses (including reasonable attorney’s fees and expenses) incurred by Seller or its Affiliates in good faith in connection with the cooperation outlined in this Section 16.

(e)       Any disclosure by Company to actual or potential investors, rating agencies, underwriters, placement agents, trustees, their representatives and other interested parties in connection with the Financing shall be made subject to an industry-standard confidentiality agreement that prohibits the recipient’s use and disclosure of such information in a manner inconsistent with the Confidentiality Agreement.

 

(a)       Upon the occurrence of the following circumstances, Seller shall appoint a replacement servicer that is a Qualified Servicer in accordance with Section 17(b):

 

(b)       Upon the occurrence of the circumstances set forth in Section 17(a), Seller shall identify a replacement servicer that is a Qualified Servicer and such Qualified Servicer’s appointment as servicer shall be effective within (****) of the occurrence of the circumstances set forth in Section 17(a).  The Parties agree to take all commercially reasonable actions and to act with due speed and in good faith to effectuate any such replacement, including to consummate a written agreement with the chosen Qualified Servicer and finalize a conversion of systems needed in connection with the transition in order for the appointment of such replacement servicer to be effective within (****) period.

(a)       This Agreement shall have a term of five (5) years from the Initial Closing Date (the “Term”).

 

(b)       Subject to Section 15(b), Company and Seller shall have the right to terminate this Agreement:

 

(c)       Seller shall have the right to terminate this Agreement:

 

(d)       Subject to Section 15(b), Company shall have the right to terminate this Agreement upon (****) prior written notice to Seller in any of the following circumstances:

 

(e)       Subject to Section 15(b), Company shall have the right to terminate this Agreement (****) upon written notice:

 

(f)        The termination of this Agreement either in part or in whole shall not discharge any Party from any obligation incurred prior to such termination.  Unless otherwise specified herein, other than Sections 2, 3, 4, 6, 7, 8(a), 8(c) (only with respect to Accounts that are unrelated to Receivables held by Company), 8(j), 8(n) (only with respect to Accounts that are unrelated to Receivables held by Company), 8(q), 8(r), 9(c), 9(d), 13, 14, 15, 18 (other than this Section 18(f)) and 42 which shall not survive the termination or expiry of this Agreement, all other terms of this Agreement shall survive the expiration or termination of this Agreement until the last Receivable purchased hereunder is paid or charged off in full or repurchased by Seller and all obligations of the Parties have been performed in connection with such Receivables.

(g)       Upon expiration or notice of termination of this Agreement, the Parties shall agree to work together to develop and agree on a transition plan to wind down this Agreement in accordance with Applicable Law.  Each Party acknowledges that the goals of the transition plan include benefitting Borrowers by minimizing any possible burdens or confusion and protecting and enhancing the names and reputations of the Parties.

 

(a)       During the Term and for (****) following expiration or termination of this Agreement (the “Restricted Period”), Company shall provide written notice to Seller (the “Transfer Notice”) prior to such time as Company offers any or all of the Receivables for sale to any third party (other than any Receivables that have been charged-off) and such Transfer Notice shall include a proposed term sheet setting forth the material terms and conditions of such sale in reasonable detail, including (i) the number and amount of such Receivables proposed to be transferred by Company (the “Subject Receivables”), (ii) if such Subject Receivables are to represent less than all the Receivables (other than any Receivables that have been charged-off) owned by Company at the time of transfer, the method by which Receivables will be chosen for inclusion as Subject Receivables, (iii) the purchase price of such Subject Receivables at which Company proposes to transfer the Subject Receivables (the “Sale Price”) and (iv) such additional business and legal terms as Company deems to be material to the sale (the “Transfer Term Sheet”).  For the avoidance of doubt, the rights of first refusal set forth in this Section 19 shall not apply to any bona fide Financing by Company or any sale or transfer of Receivables to any Affiliate of Company.

 

(b)       The giving of the Transfer Notice shall constitute an offer (the “Transfer Offer”) by Company to sell to Seller (or its designee) the Subject Receivables at the Sale Price and subject to the terms and conditions set forth in the Transfer Term Sheet.  (****) following receipt by Seller of the Transfer Notice and Transfer Term Sheet (the “ROFR Election Period”), Seller may elect to purchase (or cause its designee to purchase) (and, in which case, Company shall be obligated to sell) all of such Subject Receivables at the Sale Price and subject to the terms and conditions set forth in the Transfer Term Sheet by delivering to Company a notice (the “ROFR Purchase Notice”) indicating its wish to exercise its rights under this Section 19(b) to purchase (or cause to be purchased) such Subject Receivables on such terms or other terms as may be agreed between the Parties.  For the avoidance of doubt, during the ROFR Election Period, Seller and Company may negotiate the terms of the Transfer Term Sheet, including the Sale Price, and may agree on terms that are different from the Transfer Term Sheet originally provided to Seller as part of the Transfer Offer; provided, however, that any counter proposal offered by Seller to Company’s Transfer Notice and the related Transfer Term Sheet during the ROFR Election Period shall be deemed a rejection by Seller of the Transfer Offer unless otherwise agreed to in writing by Company.  If Seller does not deliver a ROFR Purchase Notice within the ROFR Election Period, Seller shall be deemed to have rejected the Transfer Offer.  Delivery of the ROFR Purchase Notice will constitute a binding and irrevocable commitment by Seller to purchase (or cause to be purchased) the Subject Receivables on the terms specified in the Transfer Notice and Transfer Term Sheet (as may be modified by agreement between the Parties).  Such purchase and sale shall be consummated as promptly as reasonably possible, but in no event the later of (****) if the consummation requires approvals of any Regulatory Authority to consummate such purchase and sale, (****).  If the Transfer Notice is given prior to the expiry or termination of this Agreement, the ROFR Election Period shall be (****).

(c)       If Seller rejects or is deemed to have rejected the Transfer Offer, Company shall have the right, for a period of (****), to sell all the Subject Receivables (****).

 

(a)       Seller shall repurchase any Receivable (i) with respect to which a breach of any of the representations and warranties set forth in Section 11 occurred as of the related Closing Date which materially and adversely affects the value or collectability of the related Receivable or the interest of Company in such Receivable or (ii) that is legally unenforceable because the origination of such Receivable by Seller involved fraud by Seller or any of its Affiliates, or any of its or their respective agents or employees.  Seller shall repurchase any such Receivable on the date mutually agreed to by Seller and Company, which date shall be within a commercially reasonable time period, not to exceed five (5) Business Days, after notice or knowledge of the event giving rise to the repurchase obligation contained in this Section 20(a).  Seller and Company shall execute all agreements and other documents, and shall take all other actions, reasonably requested by the other to effect any required repurchase.

 

(b)       If any Receivable sold by Seller pursuant to this Agreement is subject to Dilution, then Company shall be entitled to a credit against Seller in an amount of the net reduction caused by the Dilution of such Receivable, less the Discount Rate applied to such Receivable as of the Closing Date for such Receivable.  Any credits that Company is entitled to pursuant to this Section 20(b) shall be applied as a credit for the account of Company against the purchase price of Receivables subsequently purchased by Company from Seller hereunder; provided that within five (5) Business Days of termination or expiration of this Agreement, the amount of any credit outstanding at the time of such termination or expiration shall be paid by Seller to Company in immediately available funds.

 

(c)       For each repurchase of a Receivable under Section 20(a), the repurchase price to be paid by Seller shall be equal to the Back Book Purchase Price, the Add-on Receivable Purchase Price or Forward Flow Purchase Price, each as applicable, paid by Company for such Receivable, minus any net proceeds received by Company with respect to such Receivable.  Upon receipt of such repurchase price, Company shall, at Seller’s sole expense, transfer its interest in such repurchased Receivable to Seller on an “AS-IS”, “WHERE-IS” basis, without any representations or warranties, other than the absence of Liens on such Receivable created by or on behalf of Company.

 

(d)       Any payment by Seller pursuant to this Section 20, shall be made in accordance with Section 33.

(a)       The Parties agree that Confidential Information of each other Party shall be used by each Party solely in the performance of its obligations pursuant to this Agreement, any Financing and the Confidentiality Agreement, except as required by Applicable Law, a Regulatory Authority or legal process.  Neither Party (the “Restricted Party”) shall disclose Confidential Information of the other Party to third parties; provided, however, that the Restricted Party may disclose Confidential Information of the other Party (i) to its Affiliates, employees and agents or representatives for the sole purpose of fulfilling the Restricted Party’s obligations under this Agreement (as long as the Restricted Party prohibits any further disclosure by its Affiliates, employees, agents or representatives); or (ii) to the Restricted Party’s auditors, accountants and other professional advisors.  Confidential Information of the other shall not include information that:

(b)       Upon request or upon the termination of this Agreement, each Party shall destroy all Confidential Information of the other Party in its possession that is in written form, including by way of example, but not limited to, reports, plans, and manuals; provided, however that either Party may maintain in its possession all such Confidential Information of the other Party required to be maintained under Applicable Law relating to the retention of records for the period of time required thereunder and in accordance with the bona fide document retention policies of such Party.  Notwithstanding the destruction of the Confidential Information, the Parties shall continue to be bound by their obligations of confidentiality hereunder.

 

(c)       Each Party shall require its subcontractors having access to Confidential Information of the other Party to agree in writing to be bound by provisions materially similar to this Section 21 prior to disclosure of any Confidential Information of the other Party to such subcontractors.  Such Party shall keep and maintain such protective agreements and shall promptly provide the other Party with copies thereof upon request.

 

(d)       In the event that a Restricted Party is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information of another Party, the Restricted Party, unless prohibited by applicable law, will provide the other Party with prompt notice of such request(s) so that the other Party may seek an appropriate protective order or other appropriate remedy. In the event that the other Party does not seek such a protective order or other remedy, or such protective order or other remedy is not obtained, the Restricted Party may furnish that portion (and only that portion) of the Confidential Information which the Restricted Party is legally compelled to disclose and will exercise such effort to obtain reasonable assurance that confidential treatment will be accorded any Confidential Information so furnished as the Restricted Party would exercise in assuring the confidentiality of any of its own confidential information.

(e)       Notwithstanding anything to the contrary herein or in the Confidentiality Agreement, Company shall be permitted to reveal Confidential Information to the extent necessary (i) to perfect or enforce the transfer of the Receivables to Company and (ii) to effect a Financing, in each case subject to any restrictions under Applicable Law.

(f)        Notwithstanding anything to the contrary herein, no limitation is imposed with respect to any disclosure of the tax treatment or tax structure of the transactions contemplated hereby.

 

(g)       The terms of this Section 21, together with the Confidentiality Agreement, shall supersede and replace any other agreements between the Parties pertaining to confidentiality.

 

(a)       Seller and Guarantor agree to indemnify, defend and hold harmless on a joint and several basis Company and its Affiliates, as well as any of its permitted assignees or transferees hereunder, and the officers, directors, members, employees, representatives, shareholders and agents of such entities (the “Company Indemnified Parties”) from and against any and all claims, actions, liability, judgments, damages, reasonable costs and expenses, including reasonable attorneys’ fees (“Losses”), that arise from (i) the gross negligence or willful misconduct of Seller or its agents or contractors (other than Company) in connection with Seller’s performance of its obligations under, or alleged breach of, this Agreement; (ii) Seller’s, or its agents’ or contractors’ (other than Company) breach of any of Seller’s covenants, obligations, representations, warranties or undertakings under this Agreement; (iii) Seller’s, or its agents or contractors’ (other than Company) violation of Applicable Law (other than any violation of Applicable Law resulting from the activities of Company, or the failure of Company to perform its obligations under this Agreement); or (iv) third party claims relating to unauthorized release of or access to non-public customer and consumer information and any other confidential and proprietary consumer or customer information involving the systems or data of Seller (or its agents or service providers), in each case, to the extent within Seller’s (or its agents’ or service providers’) control or possession and caused by an act or omission of Seller.

 

(b)       Company agrees to indemnify, defend and hold harmless Seller and its Affiliates, as well as any of its permitted assignees or transferees hereunder, and the officers, directors, members, employees, representatives, shareholders and agents of such entities (the “Seller Indemnified Parties”) from and against any and all Losses, that arise from (i) the gross negligence or willful misconduct of Company, or its agents or contractors in connection with Company’s performance of its obligations under this Agreement; (ii) breach or alleged breach by Company or its agents or contractors, of any of Company’s covenants, obligations, representations, warranties or undertakings under this Agreement; or (iii) a violation by Company, or its agents or contractors of any Applicable Law in connection with Company fulfilling its obligations under this Agreement (other than any violation of Applicable Law resulting from the activities of Seller, or the failure of Seller to perform its obligations under this Agreement) or (iv) third party claims relating to unauthorized release of or access to non-public customer and consumer information and any other confidential and proprietary consumer or customer information involving the systems or data of Company (or its agents or service providers), in each case, to the extent within Company’s (or its agents’ or service providers’) control or possession and caused by an act or omission of Company.

(c)       The Company Indemnified Parties and Seller Indemnified Parties are sometimes referred to herein as the “Indemnified Parties,” and Company or Seller, as indemnitor hereunder, is sometimes referred to herein as the “Indemnifying Party.”

 

(d)       Any Indemnified Party seeking indemnification hereunder shall promptly notify the Indemnifying Party, in writing, of any notice of the assertion by any third party of any claim or of the commencement by any third party of any legal or regulatory proceeding, arbitration or action, or if the Indemnified Party determines the existence of any such claim or the commencement by any third party of any such legal or regulatory proceeding, arbitration or action, whether or not the same shall have been asserted or initiated, in any case with respect to which the Indemnifying Party is or may be obligated to provide indemnification (an “Indemnifiable Claim”), specifying in reasonable detail the nature of the Loss, and, if known, the amount, or an estimate of the amount of the Loss, provided that failure to promptly give such notice shall only limit the liability of the Indemnifying Party to the extent of the actual prejudice, if any, suffered by such Indemnifying Party as a result of such failure.

 

(e)       The Indemnified Party shall provide to the Indemnifying Party as promptly as practicable thereafter information and documentation reasonably requested by such Indemnifying Party to defend against the claim asserted. The Indemnifying Party shall have twenty (20) days after receipt of any notification of an Indemnifiable Claim (a “Claim Notice”) to undertake, conduct and control, through counsel of its own choosing, and, at its own expense, the settlement or defense thereof and the Indemnified Party shall cooperate with the Indemnifying Party in connection therewith if such cooperation is so requested and the request is reasonable; provided that the Indemnifying Party shall hold the Indemnified Party harmless from all its reasonable out-of-pocket expenses, including reasonable attorneys’ fees incurred in connection with the Indemnified Party’s cooperation.  If the Indemnifying Party assumes responsibility for the settlement or defense of any such claim, (i) the Indemnifying Party shall permit the Indemnified Party to participate in such settlement or defense through counsel chosen by the Indemnified Party, (subject to the consent of the Indemnifying Party, which consent shall not be unreasonably withheld); provided that the fees and expenses of such counsel shall not be borne by the Indemnifying Party; and (ii) the Indemnifying Party may settle or compromise any Indemnifiable Claim solely for the payment of money damages for which the Indemnified Party will be released and fully indemnified hereunder, but shall not agree to any other settlement or compromise without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, conditioned or delayed. So long as the Indemnifying Party is vigorously contesting any such Indemnifiable Claim in good faith, the Indemnified Party shall not pay or settle such claim without the Indemnifying Party’s consent which consent shall not be unreasonably withheld.

(f)        Notwithstanding the foregoing, the Indemnifying Party shall not have the right to control the defense of any such Indemnifiable Claim if: (a) the Indemnifying Party fails to assume the defense of such Indemnifiable Claim or acknowledge in writing that it will assume the defense of such Indemnifiable Claim within twenty (20) days of receipt of the applicable Claim Notice or thereafter fails to contest such Indemnifiable Claim; (b) the Indemnified Party reasonably determines (at any time while the Indemnifiable Claim is pending) based upon advice of counsel that there are issues which could raise possible conflicts of interest between the Indemnifying Party and the Indemnified Party or that the Indemnified Party has claims or defenses that are separate from or in addition to the claim or defenses of the Indemnifying Party; (c) such Indemnifiable Claim seeks an injunction, cease and desist order, or other equitable relief  against the Indemnified Party that could reasonably be expected to materially adversely affect the ongoing business of the Indemnified Party; or (d) such Indemnifiable Claim arises out of or is related to any investigation or proceeding of a Regulatory Authority having jurisdiction over the Indemnified Party.  In each such case described in clauses (a) – (d) above, the Indemnified Party shall have the right to control the defense of the Indemnifiable Claim and retain its own counsel and the Indemnifying Party shall pay the reasonable cost of such defense, including reasonable attorneys’ fees and expenses of one law firm, and shall be entitled to participate in the defense of such claim, on a non-controlling basis, at its expense with counsel of its own choosing.  In such event, the Indemnified Party shall have the right, upon notice to contest, settle or compromise the Indemnifiable Claim in the exercise of its reasonable discretion; provided that the Indemnified Party shall notify the Indemnifying Party of any compromise or settlement of any such Indemnifiable Claim.  No action taken by the Indemnified Party pursuant to this paragraph (f) shall deprive the Indemnified Party of its rights to indemnification pursuant to this Section 22.

 

(g)       After (i) any final judgment or award shall have been rendered by a governmental authority and the time in which to appeal therefrom has expired, (ii) a settlement shall have been consummated or (iii) the Indemnified Party and the Indemnifying Party shall arrive at a mutually binding agreement with respect to any matter for which the Indemnified Party seeks indemnification from the Indemnifying Party  hereunder, the Indemnified Party shall forward to the Indemnifying Party notice of any sums due and owing by it with respect to such matter and the Indemnifying Party shall pay all of the sums so owing to the Indemnified Party by wire transfer, certified or bank cashier’s check within ten (10) Business Days after the date of such notice; provided that in the event the Indemnifying Party does not make such payment by such date, the sums due and owing to the Indemnified Party shall include interest thereon, computed at a rate per annum equal to the Prime Rate from the date (and applying the Prime Rate as of such date) on which  the Indemnified Party delivered the applicable notice to the Indemnifying Party and to the date of payment.

 

(h)       In the event any Indemnified Party should have a claim against any Indemnifying Party that does not involve a third party Indemnifiable Claim, the Indemnified Party shall deliver a notice of such claim to the Indemnifying Party, setting forth in reasonable detail the identity, nature and estimated amount of Losses related to such claim or claims, with reasonable promptness and in any event prior to the expiration of the Indemnifying Party’s indemnification obligation hereunder.  If the Indemnifying Party notifies the Indemnified Party that Indemnifying Party disputes the claim described in such notice, the Indemnifying Party and Indemnified Party will proceed in good faith to negotiate a resolution of such dispute for a period of at least thirty (30) days.  If the Indemnifying Party disputes its liability to the Indemnified Party for the amount of the claim described in such notice and all or any part of such amount is subsequently determined in any settlement or final resolution to be owed to the Indemnified Party, the Indemnifying Party shall promptly, upon such settlement or resolution, pay such amount, together with interest thereon, computed at a rate per annum equal to the Prime Rate from the date (and applying the Prime Rate as of such date) on which the claim was finally settled or resolved to the date of payment.

(i)        Except with respect to the right of either Party to seek injunctive or other equitable relief, the foregoing indemnification provisions shall be the sole and exclusive remedies of each Party and their respective Affiliates and their respective officers, directors, employees, stockholders and representatives for Losses.

 

(j)        Any Losses under this Section 22 shall be determined after giving effect to any actual cash payments, setoffs or recoupment of any payments in each case actually received, realized or retained by an Indemnified Party as a result of any event giving rise to a claim for such indemnification.  Notwithstanding the foregoing, the Indemnified Party shall have no duty or obligation to mitigate any damages incurred in connection with this Agreement except as required by Applicable Law; provided, however, that in no event shall Company have any obligation to pursue any legal action or litigation in connection with any such mitigation obligations.

 

(a)        This Agreement and all rights and obligations hereunder, including matters of construction, validity and performance, shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made to be performed within such State.

 

(b)       THE PARTIES HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER.

 

(a)       Guarantor hereby absolutely and unconditionally guarantees to Company and its permitted successors and assigns the due and punctual payment of Seller’s repurchase, indemnity, and payment obligations under this Agreement (such obligations, the “Guaranteed Obligations”).  Such guaranty is a continuing guaranty of payment and not of collection.

 

(b)       The Guaranteed Obligations and the liabilities and obligations of Guarantor under this Section 43, shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense (other than the defense of payment) of Guarantor against Company or Seller, whether such offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions relating to the Guaranteed Obligations) or otherwise.

(c)       In the event that, pursuant to the Bankruptcy Code or any judgment, order or decision thereunder, Company must rescind or restore any payment, or any part thereof, received by Company in satisfaction of the Guaranteed Obligations (including pursuant to any settlement entered into by Company in its discretion), as set forth herein, all obligations under this Section 43 shall be reinstated as though such payment had been due but not made at such time and remain in full force and effect and any prior release or discharge from the terms of this Agreement given to Guarantor shall be without effect.  It is the intention of Company and Guarantor that Guarantor’s obligations hereunder shall not be discharged except by its performance of such obligations and then only to the extent of such performance.

 

(d)       (****).

 

(a)        Sterling and Zale hereby agree that they will be jointly and severally liable for all covenants, agreements, obligations and representations made by any of them in this Agreement.

 

(b)       Whenever this Agreement requires Seller to take any action, such requirement shall be deemed to include an undertaking on the part of any of Sterling or Zale to take such action and a guarantee of the payment and performance thereof.

 

(c)        Unless otherwise stated, any negotiation, consent, discretion, election or any other action taken by Sterling in the execution of this Agreement and performance of the obligations of Seller hereunder shall be binding on Zale.  For the avoidance of doubt, Sterling shall have sole authority to act as Seller under Sections 4(g), 8(p), 18 and 19 and any actions with respect thereto shall be binding on Zale.

 

(d)       Unless otherwise stated, the defined term “Seller” shall refer to Sterling and, only with respect matters involving Zale Receivables, Zale.