ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this
"Agreement"), dated as of September 16, 1996, by and
among FINGERHUT COMPANIES, INC., a Minnesota corporation
("FCI"), METRIS COMPANIES INC., a Delaware corporation
("Metris") and DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION, a national banking association with
its principal offices located in Utah (the "Bank").
W I T N E S S E T H :
WHEREAS, FCI and the Bank have entered into
that certain Amended and Restated Bank Receivables
Purchase Agreement, dated as of May 26, 1995, as amended
(the "Bank Receivables Purchase Agreement") pursuant to
which FCI has agreed to purchase, and the Bank has agreed
to sell, from time to time, certain open-end or revolving
credit receivables as described therein;
WHEREAS, in connection with a business
realignment of FCI's subsidiaries, effective as of the
date of execution of this Agreement (the "Effective
Date"), the Bank will become a direct wholly owned
subsidiary of Metris and Metris will be an indirect
wholly owned subsidiary of FCI;
WHEREAS, in connection with such business
realignment, FCI wishes to assign to Metris all of its
rights arising under the Bank Receivables Purchase
Agreement, effective as of the Effective Date, Metris
wishes to accept such assignment and has agreed to assume
and perform all of FCI's duties and obligations under the
Bank Receivables Purchase Agreement, and the Bank
consents to such assignment and assumption;
NOW, THEREFORE, in consideration of the terms
and conditions hereof and for other good and valuable
consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. Definitions. Capitalized terms
used herein and not otherwise defined herein shall have
their respective meanings in the Bank Receivables
Purchase Agreement.
SECTION 2. Assignment and Assumption. FCI
hereby assigns to Metris all of its rights arising under
the Bank Receivables Purchase Agreement, effective as of
the Effective Date, and Metris hereby accepts such
assignment. FCI hereby delegates to Metris all of its
duties and obligations under the Bank Receivables
Purchase Agreement and, for the benefit of FCI and the
Bank, Metris hereby assumes and agrees to perform all of
FCI's duties and obligations under the Bank Receivables
Purchase Agreement. Metris agrees that it shall be
liable to the Bank for all of the obligations of FCI
arising under and in accordance with the Bank Receivables
Purchase Agreement, whether arising prior to or after the
Effective Date.
SECTION 3. Representations.
(a) FCI and Metris each represents to the
other and to the Bank as follows with respect to itself:
(i) Organization and Good
Standing. It is a corporation duly organized
and validly existing in good standing under the
laws of its state of incorporation, and has the
corporate power and authority and legal right
to own its property 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.
(ii) Due Qualification. It is
duly qualified to do business and is in good
standing (or is exempt from such requirements)
as a foreign corporation in any state required
in order to conduct business and has obtained
all necessary licenses and approvals with
respect to it required under federal law and
the law of the jurisdiction of its
incorporation.
(iii) Due Authorization. The
execution and delivery of this Agreement and
the consummation of the transactions
contemplated herein have been duly authorized
by all necessary corporate action on its part.
(iv) No Conflicts/No Violation.
The execution and delivery of this Agreement
and the performance of the transactions
contemplated hereby (i) do not contravene its
certificate of incorporation or by-laws, (ii)
violate any material provision of law
applicable to it, or (iii) result in any breach
of any of the terms and provisions of, or
constitute (with or without notice or lapse of
time or both) a default under, any material
indenture, contract, agreement, mortgage, deed
of trust or other material instrument to which
it is a party or by which it or its properties
are bound, and (iv) such action does not
require any filing (except for the UCC filing),
registration, consent or approval under any
law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award
presently in effect and applicable to it,
except for such filings, registrations,
consents or approvals as have already been
obtained or made and as are in full force and
effect.
(v) No Proceedings. There are
no proceedings or investigations pending or, to
the best of its knowledge, threatened, against
it before any Governmental Authority (a)
asserting the invalidity of this Agreement, (b)
seeking to prevent the consummation of any of
the transactions contemplated hereby, (c)
seeking any determination or ruling that would
materially and adversely affect the performance
by it of its obligations hereunder, or (d)
seeking any determination or ruling that would
materially and adversely affect the validity or
enforceability of this Agreement.
(b) FCI further represents to Metris that
(i) the Bank Receivables Purchase Agreement is in full
force and effect as of the Effective Date, (ii) it has
delivered to Metris, on or prior to the Effective Date,
all amendments, modifications or supplements, as the case
may be, to the Bank Receivables Purchase Agreement.
SECTION 4. References to FCI. The parties
agree that references in the Bank Receivables Purchase
Agreement to "Fingerhut" or the "Buyer" shall be deemed
to refer, on and after the Effective Date and wherever
appropriate in the context, to Metris.
SECTION 5. Amendments to Bank Receivables
Purchase Agreement. The parties agree that the Bank
Receivables Agreement shall be amended as follows:
(i) The word "Purchaser" in the
sixth line of paragraph (e) of the definition
of "Eligible Account" in Article I of the Bank
Receivables Purchase Agreement shall be deleted
and replaced with "Buyer."
(ii) The definition of "Pooling
and Servicing Agreement" in Article I of the
Bank Receivables Purchase Agreement shall be
deleted in its entirety and replaced with the
following:
"Pooling and Servicing Agreement" shall mean
the Pooling and Servicing Agreement dated as of
May 26, 1995, as amended from to time, by and
among Direct Merchants Credit Card Bank,
National Association, as servicer, Metris
Receivables, Inc., as transferor, and The Bank
of New York (Delaware), as trustee.
SECTION 6. Consent of Bank. The Bank hereby
consents to the assignment herein by FCI to Metris of all
of Metris' rights arising under the Bank Receivables
Purchase Agreement and the delegation herein by FCI to,
and the assumption herein by, Metris of all of FCI's
duties and obligations under the Bank Receivables
Purchase Agreement. The Bank agrees that on and after
the Effective Date, the Bank shall look only to Metris
for the performance of FCI's duties and obligations
arising under the Bank Receivables Purchase Agreement
prior to the Effective Date and the Bank hereby releases
FCI from any and all claims the Bank may have against FCI
arising under or in connection with the Bank Receivables
Purchase Agreement.
SECTION 7. Conditions Precedent. FCI, Metris
and the Bank agree that the consummation of the
transactions contemplated by (i) the contribution by FCI
to Metris of the capital stock of the Bank and Metris
Receivables shall have occurred, (ii) the Assignment and
Assumption Agreement dated as of September 16, 1996,
among FCI, Metris and Metris Receivables, Inc. (formerly
Fingerhut Financial Services Receivables, Inc.) ("Metris
Receivables") and (iii) Amendment No. 2 dated as of
September 16, 1996, among Metris Receivables, as
transferor, the Bank, as servicer, and The Bank of New
York (Delaware), as trustee, to the Pooling and Servicing
Agreement dated as of May 26, 1995, and the satisfaction
of the conditions precedent to each of the foregoing
stated therein, shall be conditions precedent to the
effectiveness of this Agreement.
SECTION 8. Indemnification. FCI hereby agrees
to indemnify and hold harmless Metris from and against
any and all liabilities, losses, damages, claims,
actions, and suits, and all costs and expenses relating
thereto, including reasonable legal fees, expenses and
costs of investigation (collectively, "Claims"), which
may at any time be imposed upon, incurred by or asserted
against Metris and in any way related to or arising out
of the breach of any of the agreements, representations
or warranties made by or on behalf of FCI in the Purchase
Agreement, except that FCI shall not be required to
indemnify Metris for any Claim resulting from (i) Metris'
own gross negligence, bad faith or willful misconduct,
(ii) the breach or inaccuracy of a representation,
warranty, agreement or covenant of Metris set forth
herein or in the Bank Receivables Purchase Agreement, or
(iii) any act of or omission by any person or entity
occurring subsequent to the Effective Date.
SECTION 9. Indemnification Procedure.
Notwithstanding the provisions of Section 8 hereof, FCI
shall not be required to indemnify Metris under such
Section with respect to any Claim unless (a) Metris
notifies FCI promptly upon becoming aware of the
existence, assertion or likely assertion of such Claim,
and in any event before the failure to so notify FCI
adversely affects the ability of FCI to defend against
such Claim, (b) Metris permits FCI to assume and control
the defense of such Claim, and to negotiate and conclude
a settlement of such Claim if FCI elects to do so, and
(c) Metris cooperates with FCI in the defense of such
Claim.
SECTION 10. GOVERNING LAW. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 11. Counterparts. This Agreement may
be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which
together shall be deemed to be one and the same
instrument.
SECTION 12. Amendments. The terms of this
Agreement may not be amended, waived, modified or
terminated except by written instrument signed by the
parties hereto. No such amendment or waiver shall extend
to or affect any obligation not expressly amended or
waived or impair any rights consequent thereon.
SECTION 13. Notices. All notices and
communications under this Agreement shall be in writing
and shall be mailed by registered or certified mail,
postage prepaid, or delivered by hand or transmitted by
telex or other communications device capable of
transmitting or creating a written record:
(a) if to FCI:
Fingerhut Companies, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or at such other address as it may have furnished in
writing to Metris and the Bank;
(b) if to Metris:
Metris Companies Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 0000
Xx. Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or at such other address as it may have furnished in
writing to FCI and the Bank; and
(c) if to the Bank:
Direct Merchants Credit Card Bank, N.A.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or at such other address as it may have furnished in
writing to FCI and Metris. Any notice so addressed and
mailed by registered or certified mail shall be deemed to
be given when received and any notice delivered by hand
or transmitted by telecommunications device shall be
deemed to be given when so delivered or transmitted as
applicable. Each party agrees that all notices or other
communications permitted or required to be given to FCI
under the Bank Receivables Purchase Agreement shall be
given to Metris at the address set forth above or at such
other address as the Metris may have furnished in writing
to the appropriate party.
SECTION 14. Successors and Assigns. Neither
the obligations of FCI nor the obligations of Metris
hereunder, including any obligations assumed as a result
of this Agreement, shall be assigned to any person
without the prior written consent of the other parties
hereto. Subject to the preceding sentence, this
Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties
hereto.
SECTION 15. Headings. The headings of
Sections have been included herein for convenience only
and should not be considered in interpreting this
Agreement.
SECTION 16. Survival of Representations. All
representations contained in this Agreement shall survive
the execution and delivery of this Agreement.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the day
and year first above written.
FINGERHUT COMPANIES, INC.
By:________________________
Name:
Title:
METRIS COMPANIES INC.
By:________________________
Name:
Title:
DIRECT MERCHANTS CREDIT CARD
BANK, NATIONAL ASSOCIATION
By:________________________
Name:
Title:
