PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
GE CAPITAL CONSUMER CARD CO.
AND
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION
Dated as of May 10, 1999
TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS....................................................1
1.1 Definitions..............................................1
1.2 Construction. ..........................................6
ARTICLE 2 - PURCHASE AND SALE OF ACQUIRED ASSETS...........................7
2.1 Acquired Assets. .......................................7
2.2 Assumed Liabilities. ...................................7
2.3 Purchase Price. ........................................8
2.4 Use of Name and Trademarks...............................8
2.5 Interim Servicing Agreement. ...........................9
2.6 Agreements with Third Parties. .........................9
ARTICLE 3 - THE CLOSING....................................................9
3.1 The Closing. ...........................................9
3.2 Documents and Certificates. ...........................10
3.3 Valuation Date Statement................................10
3.4 Payments on the Closing Date............................11
3.5 Settlement Date Statement. ............................11
3.6 Payments on the Settlement Date. ......................11
3.7 Post Closing Payments (the "Post Closing Payments").....12
3.8 Power of Attorney ......................................12
3.9 Dispute Resolution......................................12
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES................................13
4.1 Representations and Warranties of Seller................13
4.2 Representations and Warranties of Purchaser.............17
4.3 NO OTHER REPRESENTATIONS OR WARRANTIES..................19
ARTICLE 5 - CERTAIN COVENANTS.............................................19
5.1 Mutual Covenants and Agreements.........................19
5.2 Certain Covenants of Seller.............................21
5.3 Covenants of Purchaser..................................23
ARTICLE 6 - CONDITIONS OF CLOSING.........................................24
6.1 Conditions Applicable to Purchaser......................24
6.2 Conditions Applicable to Seller.........................26
ARTICLE 7 - INDEMNIFICATION...............................................27
7.1 Seller's Indemnification Obligations....................27
7.2 Purchaser's Indemnification Obligations.................28
7.3 Definition of Losses....................................28
7.4 Tax Consequences of Indemnification.....................28
7.5 Procedures..............................................28
ARTICLE 8 - TERMINATION...................................................30
8.1 Termination By Either Party.............................30
8.2 Effect of Termination...................................30
ARTICLE 9 - MISCELLANEOUS.................................................31
9.1 Survival of Representations and Warranties..............31
9.2 Notices.................................................31
9.3 Assignment..............................................32
9.4 Entire Agreement........................................32
9.5 Amendments and Waivers..................................32
9.6 Expenses................................................32
9.7 Captions; Counterparts..................................32
9.8 Governing Law...........................................33
9.9 Severability............................................33
Exhibit A.........Interim Servicing Agreement
Exhibit B.........Settlement Date Statement
Exhibit C.........Valuation Date Statement
Exhibit D.........Assignment and Assumption Agreement
Exhibit E.........Opinion of Counsel for Seller
Exhibit F.........Additional Opinion of Counsel for Seller
Exhibit G.........Opinion of Counsel for Purchaser
Schedule 4.1(c)...Consents
Schedule 4.1(g)(i)Copies of forms of Cardholder Agreements
Schedule 4.1(g)(ii)Change of Terms not Implemented
Schedule 4.1(m)...Third Party Agreements Relating to Benefit
or Enhancement Programs
Schedule 4.1(n)...Co-Brand Agreements
Schedule 5.2(d)...Card Enhancements
SALE AND PURCHASE AGREEMENT
This Sale and Purchase Agreement (the "Agreement") is made and entered into as
of the 10th day of May, 1999 by and between GE Capital Consumer Card Co., an
Ohio state-chartered Bank ("Seller"), and Direct Merchants Credit Card Bank,
National Association, a national banking association ("Purchaser").
WITNESSETH
A. Seller is the owner of unsecured lines of credit accessible by
MasterCard and Visa credit cards.
B. Seller desires to sell, and Purchaser desires to purchase, on the
terms set forth herein, the properties, rights and privileges of Seller in and
to certain credit card accounts and related assets.
C. Purchaser has requested, and Seller has agreed, that Seller will
service the credit card accounts sold and purchased hereunder for an interim
period after the Closing Date.
ARTICLE 1 - DEFINITIONS
1.1 Definitions. Except as otherwise specifically indicated, the following terms
shall have the meanings specified herein.
"Accountants" shall have the meaning specified in Section 3.9(b).
"Accounts" shall mean the credit card accounts that are identified by
name and account number on the computer generated tape of accounts as
of the Cut-Off Time (the "Accounts Tape").
"Accrued Interest" shall mean, as of the relevant date, all accrued but
unposted periodic finance charges on the Accounts, prorated for that
period of the billing cycle on or before such relevant date.
"Acquired Assets" shall have the meaning specified in Section 2.1(a).
"Affiliate" shall mean, with respect to any person, corporation or
entity, any other person, corporation or entity that directly or
indirectly controls, is controlled by or is under common control with,
such person, corporation or entity.
"Agreement" shall have the meaning specified in the first paragraph
hereof.
"AMGEN Loss Sharing" shall mean Seller's rights and obligations from
and after the Closing Date, under Article VIII of that certain Sale and
Purchase Agreement dated as of June 27, 1997, among American General
Financial Center, a Utah corporation and AGF Funding, Inc., a Delaware
corporation, as sellers, and Seller, as buyer.
"Assignment and Assumption Agreement" shall have the meaning specified
in Section 3.2.
"Assumed Liabilities" shall have the meaning specified in Section 2.2.
"Bank Waiver" shall have the meaning specified in Section 4.2(c).
"Bankrupt" shall mean an Account which fits one or more of the
following descriptions as of the Cut-Off Time:
(i) has been identified on the Seller's processing system
in a type code, credit rating or user status code as
Bankrupt; or
(ii) Seller receives notice that the Cardholder is
bankrupt by conducting the bankruptcy database
match-up in accordance with Section 3.3(a).
"Books and Records" shall mean the following books and records in the
possession of Seller, relating to the Accounts: applications for
Accounts, acceptance certificates for prescreened offers, periodic
statements, credit and collection files, file maintenance data and
correspondence, whether in documentary form or on microfilm,
microfiche, magnetic tape, computer disk or other form.
"Business Day" shall mean each day other than Saturday, Sunday or a day
on which banking institutions in the State of Ohio or the State of
Arizona are authorized or obligated by law or regulation to close.
"Cardholder" shall mean an applicant and/or co-applicant in whose name
an Account was established or is maintained.
"Cardholder Agreement" shall mean an agreement between Seller and a
Cardholder containing the terms and conditions applicable to an
Account, as amended and in effect from time to time.
"Cardholder List" shall mean a list containing the names and most
recent addresses of Cardholders.
"Charge-off" or "Charged-off" shall mean an Account which fits one of
the following descriptions as of the Cut-Off Time:
(i) Accounts which have been identified on the Seller's
processing system in a type code, credit rating or
user status code as charged-off;
(ii) Accounts with balances that are equal to or more than
180 days contractually delinquent; or
(iii) any Accounts that are not statused as charged-off on
the Seller's processing system but should have been
so statused prior to the Cut-Off Time in accordance
with the Policies and Procedures.
"Closing" shall have the meaning specified in Section 3.1.
"Closing Date" shall have the meaning specified in Section 3.1.
"Closing Time" shall have the meaning specified in Section 3.1.
"Co-Brand Agreements" shall mean the agreements set forth on Schedule
4.1(n).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Computer Systems" shall have the meaning specified in Section 4.1(p).
.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement dated as of March 9, 1999, between Purchaser and Seller.
"Credit Balances" shall mean all amounts owing by Seller to Cardholders
on Accounts as of the relevant date.
"Credit Card" shall mean a MasterCard or Visa credit card issued by
Seller to a Cardholder or an authorized user or other access device
(including cash advance checks and balance transfer checks) that may be
used from time to time to obtain open-ended credit pursuant to a
Cardholder Agreement.
"Credit Card Marks" shall mean Seller's name and such trademarks and
service marks of Seller as Seller uses in connection with the Accounts
immediately prior to the Closing Date. "Credit Card Receivables" shall
mean all amounts owing, whether or not billed, to Seller by Cardholders
with respect to Accounts as of the relevant date, including extensions
of credit, accrued and posted periodic finance charges, Accrued
Interest, cash advances and any other charges and fees assessed on said
Accounts, less all Credit Balances as of such date.
"Cut-Off Time" shall mean 11:59 p.m. on the day immediately preceding
the Closing Date.
"Deceased" shall mean an Account which fits one or more of the
following descriptions as of the Cut-Off Time:
(i) has been identified on the Seller's processing system
in a type code, credit rating or user status code as
deceased; or
(ii) for which the Cardholder (who is not an authorized
user) has died before the Cut-Off Time and Seller
receives notification of the Cardholder's death by
conducting the deceased database match-up in
accordance with Section 3.3(a).
"Excluded Account" shall mean any Account that is Bankrupt,
Charged-off, Fraud, Lost/Stolen or Deceased as of the Cut-Off Time.
"FDR" shall mean First Data Resources, Inc.
"Final Conversion Date" shall mean the date (which shall be no later
than the last transfer date allowed by FDR in October, 1999, unless the
delay is outside the reasonable control of Purchaser) on which
Purchaser converts the Accounts to its own bank identification number.
"Fraud" shall mean an Account which fits one or more of the following
descriptions as of the Cut-Off Time:
(i) has been identified on the Seller's processing system
in a type code, credit rating or user status code as
fraudulent; or
(ii) had any fraudulent transaction posted to the Account
prior to the Cut-Off Time and Seller receives
notification of the fraudulent transaction from any
source before the Settlement Date.
"Federal Funds Rate" shall mean the offered rate as reported in The
Wall Street Journal in the "Money Rates" section for reserves traded
among commercial banks for overnight use in amounts of one million
dollars or more, as published in the most recent Friday edition prior
to any required payment or settlement date.
"HSR Act" shall mean the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended.
"Indemnified Party" shall have the meaning specified in Section 7.5(a).
"Indemnifying Party" shall have the meaning specified in Section 7.5(a).
"Initial Conversion Date" shall mean the date on which Seller shall
convert from TSYS to FDR system and on which Purchaser shall assume all
servicing functions (except the functions performed by FDR and except
as set forth in Section 2.01(a)(ii) of the Interim Servicing
Agreement).
"Interim Servicing Agreement" shall mean the Interim Servicing
Agreement in the form of Exhibit A attached hereto.
"Losses" shall have the meaning specified in Section 7.3.
"Lost/Stolen" shall mean an Account which has been identified on the
Seller's processing system in a type code, credit rating or user status
code as lost/stolen prior to the Cut-Off Time.
"Offering Memorandum" means that certain Confidential Memorandum dated
March 1999 of the Seller.
"MasterCard" shall mean MasterCard International, Inc.
"Material," "Material Adverse Effect," "material" or "materially" shall
mean any amount which exceeds the Threshhold Amount.
"Operating Regulations" shall mean the by-laws, rules and regulations
of MasterCard and Visa.
"Policies and Procedures" shall mean the policies and procedures of
Seller relating to the Accounts, as in effect from time to time.
"Post Closing Payments" shall have the meaning specified in Section 3.7.
"Protected Party" shall have the meaning specified in Section 5.1(c).
"Purchase Price" shall have the meaning specified in Section 2.3.
"Purchaser" shall have the meaning specified in the first paragraph
hereof.
"Related Agreements" shall mean the Assignment and Assumption Agreement
and the Interim Servicing Agreement.
"SEC" shall have the meaning specified in Section 5.1(c).
"Seller" shall have the meaning assigned in the first paragraph hereof.
"Settlement Date" shall mean the date, not later than sixty (60) days
after the Closing Date, on which the parties make any adjustment to the
Purchase Price, computed as of the Cut-Off Time, and corresponding
payment.
"Settlement Date Statement" shall mean a statement, substantially in
the form of Exhibit B attached hereto, which contains the Purchase
Price, computed as of the Cut-Off Time.
"Tax" (and, with correlative meaning, "Taxes") shall mean any federal,
state, local or foreign net income, gross income, gross receipts,
windfall profit, severance, property, production, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or
add-on minimum, ad valorem, value added, transfer, stamp, or
environmental tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with
any interest or penalty, addition to tax or additional amount imposed
by any governmental authority.
"Threshhold Amount" shall mean $200,000.
"TSYS" shall mean Total System Services, Inc.
"Unauthorized Use" shall mean use that was made by a person other than
the Cardholder who did not have actual, implied or apparent authority
for such use of the Account and from which the Cardholder received no
benefit.
"Unearned Annual Fees" shall mean the portion of the billed annual fees
(net of waivers), if any, on an Account as of the relevant date which
is derived by multiplying such annual fee by a fraction, the numerator
of which is equal to the number of months (including any fraction
thereof) from the Cut-Off Time remaining in the fiscal year covered by
such annual fees, and the denominator of which is twelve.
"Valuation Date" shall mean a date at least five (5) Business Days
before the Closing Date.
"Valuation Date Statement" shall mean a statement, substantially in the
form of Exhibit C attached hereto, which contains Seller's computation
of the Purchase Price in accordance with Section 2.3, but determined as
of the Valuation Date.
"Visa" shall mean Visa U.S.A., Inc.
"Year 2000 Capable" shall have the meaning specified in Section 4.1(p).
1.2 Construction.
Unless the context otherwise clearly indicates, words used in the
singular include the plural and words used in the plural include the
singular. The Schedules and Exhibits referred to herein shall be
construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein.
ARTICLE 2 - PURCHASE AND SALE OF ACQUIRED ASSETS
2.1 Acquired Assets.
(a) On the Closing Date, Purchaser agrees to purchase from
Seller, and Seller agrees to sell, convey, assign and
transfer to Purchaser, all of Seller's right, title and
interest in, to and under the following assets , as the same
exist on the Closing Date (collectively, the "Acquired
Assets"): (i) the Accounts including the Excluded Accounts
(but not reaffirmation, corporate card, line of credit or
secured card accounts); (ii) the Credit Card Receivables;
(iii) the Cardholder Agreements and all rights and privileges
of Seller accruing thereunder on and after the Closing
Date, including the right to receive all payments on
Accounts due from Cardholders on and after the Closing Date;
(iv) the Books and Records; (v) the AMGEN Loss Sharing;
(vi) the right to receive net interchange fees on the
Accounts from MasterCard or Visa accruing on and after the
Closing Date; (vii) the right to receive revenues under
certain third party agreements, in accordance with Section
2.6(b); (viii) the Cardholder List; and (ix) the Co-Brand
Agreements and all rights and privileges of Seller accruing
thereunder on and after the Closing Date.
(b) No later than five (5) Business Days following the Closing,
Seller shall deliver to Purchaser an updated tape of Accounts
including the Excluded Accounts as of the Cut-Off Time.
2.2 Assumed Liabilities.
On and after the Closing Date, Purchaser shall assume and perform and
discharge, in accordance with their respective terms, the following
obligations of Seller with respect to the Acquired Assets
(collectively, the "Assumed Liabilities"): (i) the obligation to pay
fees and assessments to MasterCard or Visa on the Accounts accruing on
and after the Closing Date; (ii) the Credit Balances; (iii) all of
Seller's obligations under the Cardholder Agreements; (iv) all
liabilities in respect of Taxes for which Purchaser is liable pursuant
to Section 5.2(f); (v) all of Seller's obligations with respect to the
AMGEN Loss Sharing; (vi) all of Seller's obligations under the Co-Brand
Agreements accruing on and after the Closing Date; and (vii) the costs
of the benefit or enhancement programs set forth in Schedule 4.1(m)
accruing on and after the Closing Date.
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanies by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24B-2 of the Securities
Exchange Act of 1934.
2.3 Purchase Price.
The purchase price for the Acquired Assets (the "Purchase Price") shall
be an amount, determined as of the Cut-Off Time, equal to (x) ***
multiplied by an amount equal to the total amount of all *** minus (y)
*** minus (z) ***.
2.4 Use of Name and Trademarks.
(a) Limited Rights. Purchaser agrees to use its reasonable best
efforts to replace the Cardholders' Credit Cards with Credit
Cards not bearing any of the Credit Card Marks as soon as
possible but no later than thirty (30) days after the Final
Conversion Date. For the period commencing on the
Closing Date and ending sixty (60) days after replacement
of Cardholders' Credit Cards, Seller authorizes Purchaser
to use the Credit Card Marks in accordance with the provisions
of this Section 2.4. During such period of authorized use,
Purchaser may use the Credit Card Marks: (i) on Credit Cards
and (ii) on periodic statements, Cardholder Agreements and
other communications to Cardholders with respect to the
Accounts. Purchaser shall so use the Credit Card Marks
solely in the forms and formats currently in use for Credit
Cards, periodic statements, Cardholder Agreements and
communications, or in the forms and formats and on such forms
as Seller shall approve in writing prior to any such use.
The authorization contained in this Section 2.4 shall be
exclusive with respect to the use of the Credit Card Marks by
Purchaser for the purposes authorized under this Section 2.4.
The authorization contained in this Section shall not be
assignable by Purchaser. Purchaser is not permitted to
sublicense or authorize any other party to make any use of any
of the Credit Card Marks without the prior written consent of
the Seller.
(b) Rights Reserved by Seller. It is expressly agreed that
Purchaser is not purchasing or acquiring any right, title or
interest in the Credit Card Marks. Purchaser acknowledges
that Seller exclusively owns the Credit Card Marks and
goodwill related thereto and symbolized thereby. Purchaser
shall not combine the Credit Card Marks with any other
▇▇▇▇ or term (other than Visa or MasterCard), and shall not
use the Credit Card Marks in any manner which will
materially damage or diminish Seller's goodwill. Purchaser
shall immediately upon receipt of written notice from
Seller, which notice shall provide detailed information about
inconsistent usage of the Credit Card Marks, cease any
act or practice that in Seller's reasonable opinion has or
may damage or diminish the goodwill of Seller or its
Affiliates.
2.5 Interim Servicing Agreement.
As of the date hereof, Seller and Purchaser shall enter into the
Interim Servicing Agreement.
2.6 Agreements with Third Parties.
(a) Seller will cooperate with Purchaser to the extent reasonably
requested by Purchaser in its efforts to ensure uninterrupted
availability of benefits and enhancements with respect to the
Accounts to Cardholders.
(b) Seller shall assign all payments paid or payable to Seller
under agreements (but shall not be required to assign the
agreements) with third party providers of services to
Cardholders identified on Schedule 4.1(m) hereto that pertain
to Accounts and relate to transactions or periods following
the Cut-Off Time, and Seller agrees to execute and deliver
to Purchaser on the Closing Date and thereafter one or more
instruments of assignment to evidence such assignment and
to reasonably cooperate with Purchaser in arranging, to the
extent possible, for direct payment of the amounts subject
to this assignment by the third party providers. Within 120
days of the Final Conversion Date, Purchaser shall enter
into separate contractual arrangements with third party
providers for the payment of any amounts assigned to
Purchaser under this Section 2.6(b) and Seller's obligation
to forward to Purchaser any payments that are rightfully
Purchaser's shall terminate.
Purchaser shall be responsible for all credit
insurance claims relating to events occurring on and after the
Cut-Off Time. Seller shall continue to retain the credit
insurance reserves maintained by it to pay the credit
insurance claims relating to events occurring before the
Cut-Off Time.
ARTICLE 3 - THE CLOSING
3.1 The Closing.
Subject to the satisfaction or waiver of all conditions set forth in
Article 6, the closing of the transactions contemplated hereby (the
"Closing") shall be held at 11:00 a.m. Central Time on June 30, 1999 at
the offices of Sidley & Austin, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other time, place and manner (including via
facsimile) as may be mutually agreed to by the parties hereto (such
time and date being referred to herein as the "Closing Time" and the
"Closing Date," respectively). Upon Closing, Purchaser shall own the
Acquired Assets as of the Cut-Off Time and shall assume and perform and
discharge, in accordance with their respective terms, the Assumed
Liabilities. Seller shall have no further income participation or
ownership interest in any of the Acquired Assets. It is the express
intent of the parties that the conveyance of the Acquired Assets by the
Seller to the Purchaser pursuant hereto be construed as a sale, free
and clear of all security interests, pledges, liens or other
encumbrances or adverse claims, for accounting, regulatory, tax and all
other purposes, and that the Acquired Assets not be a part of the
Seller's assets or its estate in the event of its insolvency.
3.2 Documents and Certificates.
At the Closing, Seller shall deliver to Purchaser, and Purchaser shall
deliver to Seller, the Assignment and Assumption Agreement in the form
of Exhibit D attached hereto (the "Assignment and Assumption
Agreement"), dated the Closing Date, and appropriately completed and
duly executed. Purchaser and Seller shall, at or prior to the Closing
Date, execute and deliver all such additional instruments, documents or
certificates as may be reasonably requested by the other party for the
consummation at the Closing of the transactions contemplated by this
Agreement.
3.3 Valuation Date Statement.
(a)(i) Bankrupt Accounts. Purchaser shall receive a masterfile
tape of Accounts as of May 21, 1999. Purchaser shall
deliver the masterfile tape of Accounts to a bankruptcy
database of Purchaser's choice for a match using primary
cardholder name and social security number, and will ensure
that results of the match are provided to both Purchaser
and Seller. Any Account that matches to the database if the
filing date occurred after the Account open date and
before the Cut-Off Time shall be considered an Excluded
Account for purposes of calculating the Purchase Price and
will be included in the Valuation Date Statement. Purchaser
shall receive another masterfile tape of Accounts as of
the Cut-Off Time. Purchaser shall deliver the masterfile
tape of Accounts to a bankruptcy database of Purchaser's
choice for a match using primary cardholder name and social
security number, and will ensure that results of the match
are provided to both Purchaser and Seller. Any Account
that matches to the database if the filing date occurred
after the Account open date and before the Cut-Off Time
shall be an Excluded Account. Any Account identified
through this match that was not included in the Valuation
Date Statement shall be included as an adjustment in the
Settlement Date Statement. The expenses relating to the
database matching under this Section 3.3(a)(i) shall be borne
by Purchaser.
(ii) Deceased Accounts. Purchaser shall receive a masterfile tape
of Accounts as of May 21, 1999. Purchaser shall deliver the
masterfile tape of Accounts to a deceased database of
Purchaser's choice for a match using primary cardholder name
and social security number, and will ensure that results of
the match are provided to both Purchaser and Seller. Any
Account that matches to the database if the date of death
occurred before the Cut-Off Time shall be considered an
Excluded Account for purposes of calculating the Purchase
Price and will be included in the Valuation Date Statement.
Purchaser shall receive another masterfile tape of Accounts as
of the Cut-Off Time. Purchaser shall deliver the masterfile
tape of Accounts to a deceased database of Purchaser's choice
for a match using primary cardholder name and social security
number, and will ensure that results of the match are provided
to both Purchaser and Seller. Any Account that matches to the
database if the date of death occurred before the Cut-Off Time
shall be an Excluded Account. Any Account identified through
this match that was not included in the Valuation Date
Statement shall be included as an adjustment in the Settlement
Date Statement. The expenses relating to the database matching
under this Section 3.3(a)(ii) shall be borne by Purchaser.
(b) Seller shall deliver to Purchaser the Valuation Date
Statement, along with the masterfile tape, supporting
calculations for the Accrued Interest, Unearned Annual Fee and
Cardholder rewards liability, and the masterfile extension
record, at least three (3) Business Days prior to the Closing
Date.
3.4 Payments on the Closing Date.
At the Closing, Purchaser shall pay Seller the Purchase Price set forth
in the Valuation Date Statement. Payment to Seller on the Closing Date
shall be made by a wire transfer of immediately available U.S. dollars
no later than 11:00 a.m. Central Time to an account designated in
writing by Seller. Seller shall provide Purchaser with wire
instructions no later than two(2) Business Days prior to the Closing
Date.
3.5 Settlement Date Statement.
Seller shall deliver to Purchaser the Settlement Date Statement along
with supporting calculations for the Accrued Interest, Unearned Annual
Fee and Cardholder rewards liability, and the masterfile extension
record, at least ten (10) Business Days prior to the Settlement Date.
Purchaser shall have the right to review the Settlement Date Statement,
together with any supporting documents reasonably requested by
Purchaser to verify the accuracy and completeness of the valuations set
forth therein, and the Settlement Date Statement shall be revised by
Seller to reflect any corrections agreed to by Purchaser and Seller.
3.6 Payments on the Settlement Date.
If the Purchase Price for the Acquired Assets as reflected on the
Settlement Date Statement is greater than the Purchase Price paid by
Purchaser on the Closing Date, Purchaser shall remit the difference to
Seller together with interest on such amount at the Federal Funds Rate
divided by three hundred sixty (360) for each day during the period
from the Closing Date to the Settlement Date. If the Purchase Price for
the Acquired Assets as reflected on the Settlement Date Statement is
less than the Purchase Price paid by Purchaser on the Closing Date,
Seller shall remit the difference to Purchaser together with interest
on such amount at the Federal Funds Rate divided by three hundred sixty
(360) for each day during the period from the Closing Date to the
Settlement Date. Payments on the Settlement Date shall be remitted no
later than 11:00 a.m. Central Time by a wire transfer of immediately
available U.S. dollars to an account designated in writing by the party
to which payment is due. Wire instructions shall be forwarded to the
paying party no later than two (2) Business Days prior to the
Settlement Date.
3.7 Post Closing Payments (the "Post Closing Payments").
(a) If (i) Seller is debited by MasterCard or Visa after the
Cut-Off Time for a chargeback in respect of which Seller
provided a Cardholder a credit on an Account prior to the
Cut-Off Time, (ii) a check from a Cardholder in payment of
amounts owed on an Account, which was credited to such
Account prior to the Cut-Off Time, is returned unpaid by the
drawee after the Cut-Off Time, (iii) Purchaser provides a
credit on an Account with respect to Unauthorized Use of
an Account prior to the Closing Date, or (iv) Purchaser
provides a credit on an Account in connection with a
transaction posted before the Cut-Off Time as a result of
rights asserted by the Cardholder under 12 CFRss.226.12(c)
or 12 CFRss.226.13(d), then an adjustment to the Purchase
Price shall be made in favor of Seller (in the case of
clause (i) or (ii)) and Purchaser (in the case of clause
(iii) or (iv)) in the amount of such chargeback, check or
credit (as the case may be). The adjustment to the
Purchase Price shall be affected by making the appropriate
adjustment to the Daily Settlement that occurs between
the parties in accordance with the Interim Servicing
Agreement.
(b) In the event any Account acquired hereunder by Purchaser is
discovered by Purchaser and Seller after the Closing Date to
be an Account which should have been classified as an Excluded
Account as of the Cut-Off Time, Purchaser may, on or before
the 45th day after the Closing Date, request that Seller
refund 100% of the Purchase Price relating to such Account.
The refund of the Purchase Price on such Accounts shall be
included in the adjustments made on the Settlement Date
Statement, provided, however, that Purchaser identifies such
Accounts to Seller at least fifteen (15) days prior to the
Settlement Date.
3.8 Power of Attorney
-----------------
Effective upon the Closing Date and thereafter, Seller hereby
irrevocably names, constitutes and appoints Purchaser and Purchaser's
officers, agents, employees and representatives its duly authorized
attorney and agent with full power and authority to endorse in Seller's
name, any checks relating to the Accounts.
3.9 Dispute Resolution
------------------
(a) Each party will use its best efforts to resolve any disputes
regarding the contents of the Settlement Date Statement in
good faith. However, if Purchaser and Seller can not mutually
agree upon the correct amounts for all line items in the
Settlement Date Statement, the parties shall:
(i) pay to each other any undisputed amounts in the
Settlement Date Statement that are owed, plus
interest calculated at the Federal Funds Rate from
the Closing Date to the date the undisputed payments
are made; and
(ii) resolve any outstanding disputed line items in the
Settlement Date Statement by resorting to the dispute
resolution procedures that are set forth in Section
3.9(b).
(b) Seller and Purchaser agree to attempt in good faith to resolve
any disputes arising in connection with the payments made or
demanded by the parties under this Article 3. In the event
Purchaser and Seller are unable to resolve any such dispute,
either party may request a mutually agreed upon nationally
recognized firm of independent accountants
(the "Accountants") to reconcile any financial items in
dispute. Any such request shall be in writing, shall
specify with particularity the disputed amounts being
submitted for determination and a direction to the Accountants
to proceed with such review as soon as practicable. The
requesting party shall furnish the other party hereto with
a copy of such request at the same time it is submitted to
the Accountants. Purchaser and Seller shall cooperate
fully in assisting the Accountants in their review, including,
without limitation, by providing the Accountants full
access to all files, books and records relevant thereto and
providing such other information as the Accountants may
reasonably request in connection with any such review.
One-half of the fees and disbursements of such Accountants
arising out of such review shall be borne by Purchaser
and the other one-half by Seller. In the event the
determination made by the Accountants requires either party
to make payment to the other of any additional amount,
such party shall make such payment no later than five
(5) Business Days following receipt from the Accountants of
written notice to both parties of such determination plus
interest on any amount due at a rate equal to the Federal
Funds Rate divided by 360 for each day during the period from
the date on which a payment was required pursuant to
the terms of this Agreement through the date of payment.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Seller. Seller hereby represents and
warrants to Purchaser as follows:
(a) Organization. Seller is a state-chartered bank, validly
existing and in good standing under the laws of the State of
Ohio.
(b) Capacity; Authority; Validity. Seller has all necessary
corporate power and authority to enter into this Agreement
and the Related Agreements and to perform all of the
obligations to be performed by it under this Agreement and the
Related Agreements. This Agreement and the Related
Agreements and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action of Seller
and this Agreement has been duly executed and delivered by
Seller. This Agreement constitutes, and the Related
Agreements, when executed by Seller, will constitute,
the valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms
(except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership,
conservatorship, the rights and obligations of receivers and
conservators of insured depository institutions under 12
U.S.C.ss.1821(d) and (e) and other laws relating to or
affecting creditors' rights generally and by general equity
principles).
(c) Conflicts; Defaults. Except as set forth in Schedule 4.1(c),
neither the execution and delivery of this Agreement and the
Related Agreements by Seller, nor the consummation of the
transactions contemplated hereby and thereby will
(i) conflict with, result in the breach of, constitute a
default under, or accelerate the performance required by,
the terms of any order, law, regulation, contract, instrument
or commitment to which Seller is a party or by which
it is bound, (ii) violate the articles of incorporation or
bylaws or any other equivalent organizational document of
Seller, (iii) require any consent, approval, authorization
or filing under any law, regulation, judgment, order,
writ, decree, permit, license or agreement to which Seller
is a party, or (iv) require the consent or approval of any
other party to any contract, instrument or commitment to
which Seller is a party, in each case other than (x)
approvals of regulatory authorities, if any, which have been
obtained or will be obtained prior to or on the Closing Date
and (y) any of the foregoing which would not have a material
adverse effect on the Acquired Assets. Seller is not subject
to any agreement with any regulatory authority which would
prevent the consummation by Seller of the transactions
contemplated by this Agreement and the Related Agreements.
No receiver or conservator has been appointed for the
Seller nor has any proceeding been instituted or, to the best
knowledge of Seller, threatened for such appointment.
(d) Title to Acquired Assets. Seller has good and marketable title
to the Acquired Assets free and clear of any lien, pledge,
claim, security interest, encumbrance, charge or restriction
of any kind. Delivery by Seller of the Assignment and
Assumption Agreement to Purchaser will vest in Purchaser good
and marketable title to all the Acquired Assets, free and
clear of any lien, pledge, claim, security interest,
encumbrance, charge or restriction of any kind.
(e) Litigation. There is no claim, litigation, proceeding,
arbitration or governmental investigation pending against
Seller, which will have a material adverse effect on the
Acquired Assets or the ability of Seller to consummate the
transactions contemplated hereby and by the Related
Agreements. Seller represents that the litigation titled ▇▇▇▇▇
▇. GE Capital Consumer Card Co. No. 99C1625 (N.D.-Ill.) is in
the process of being settled, and no claims will be made
against Purchaser as a result of this matter.
(f) Compliance with Laws. (i) The Accounts and Cardholder
Agreements comply in all material respects with all
applicable laws, rules and regulations and Seller has
complied with all applicable federal and state laws and
regulations and the Operating Regulations with respect
to the origination, maintenance and servicing of the
Accounts, including any change in the terms of any Account;
(ii) the interest rates, fees and charges in connection
with the Accounts comply with all applicable federal and
state laws and regulations and with the Operating
Regulations; (iii) other than in the Cardholder Agreements
and other related documents made available to Purchaser,
Seller has made no promise, agreement or commitment to any
Cardholder in connection with an Account, except in the
ordinary course of business in connection with collection
and customer service; (iv) to the best knowledge of
Seller, each Cardholder Agreement is the legal, valid and
binding obligation of the Cardholder and any guarantor or
co-signer named therein and is enforceable in accordance with
its terms, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights
generally and by general equity principles, and is not subject
to offset, recoupment, adjustment or any other claim
except for the rights of Cardholders under 12 CFRss.226.12(c),
12 CFRss.226.13(d) and the Soldiers and Sailors Civil
Relief Act; and (v) to the best knowledge of Seller,
except for billing inquiries, each of the Credit Card
Receivables arises from a bona fide sale or loan transaction.
(g) Cardholder Agreements. Attached as Schedule 4.1(g)(i), to the
best knowledge of Seller, are copies of all forms of
Cardholder Agreements governing the Accounts. Except as set
forth in Schedule 4.1(g)(ii), the Cardholder Agreements
accurately reflect the method Seller uses to calculate and
impose charges, collect fees and payments and to process and
service the Acquired Assets. Seller has made no promises,
commitments or agreements to any Cardholder except in
accordance with the Policies and Procedures.
(h) Performance of Obligations. Seller has performed, in all
material respects, all obligations required to be
performed by it to date under the Cardholder Agreements, and
Seller is not materially in default under, and no event
has occurred which, with the lapse of time or action by a
third party, could result in a material default under, any
such agreements. All Cardholder Agreements are legal, valid
and binding obligations of Seller, enforceable by the other
parties thereto in accordance with their respective terms,
except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship, the rights and obligations of
conservators or receivers of insured depository institutions
under 12 U.S.C.ss.1821(d) and (e) and other laws relating to
or affecting creditors' rights generally and by general equity
principles.
(i) Operation of Business. Since March 1, 1999, Seller has not (i)
effected any material change in Policies and Procedures
relating to the Accounts that would have a material adverse
effect on the Acquired Assets; (ii) entered into any
transaction or made any commitment or agreement in connection
with the Accounts, other than in the ordinary course of
Seller's business consistent with past practice and the
Policies and Procedures; or (iii) amended the terms of any
Cardholder Agreement, except on an individual basis in
accordance with the Policies and Procedures.
(j) Finders or Brokers. Seller acknowledges that it has agreed to
pay any fee or commission to any agent, broker, finder, or
other person retained by it, for or on account of services
rendered as a broker or finder in connection with this
Agreement or the transactions contemplated hereby and agrees
that Seller is solely responsible for the payment of any such
fee or commission.
(k) Effect of Law on Closing. There is no federal or state
statute, rule or regulation, or order or rule of any federal
or state regulatory agency which prevents Seller from selling
the Acquired Assets to Purchaser as contemplated by this
Agreement or from performing its obligations under the Interim
Servicing Agreement.
(l) Books and Records. The Books and Records with respect to the
Accounts accurately reflect in all material respects the terms
and conditions of the Accounts. Except to the extent set forth
in the Co-Brand Agreements, no third party has rights to use
or market the information contained in the Books and Records
and the Cardholder List.
(m) Third Party Agreements. Schedule 4.1(m) sets forth a list of
all third party contracts relating to benefit or enhancement
programs in effect with respect to the Accounts on the date
hereof.
(n) Co-Brand Agreements. Schedule 4.1(n) sets forth a list of all
Co-Brand Agreements in effect with respect to the Accounts on
the date hereof. Seller shall make reasonable best efforts to
obtain the consents required under such contracts to effect
the transactions hereby contemplated by the Closing Date.
(o) Chattel Paper. None of the Acquired Assets (other than
Excluded Accounts) constitutes "chattel paper" within the
meaning of the Uniform Commercial Code as in effect in the
State of Ohio.
(p) Year 2000 Compliance. All of Seller's hardware, firmware or
software, or any Seller system consisting of one or more
thereof, including, without limitation, any and all
enhancements, upgrades, customizations, modifications,
maintenance and the like used or necessary to perform the
Services (as defined in the Interim Servicing Agreement)
(collectively, the "Computer Systems") will be Year 2000
Capable (as defined below).
As used in this Agreement, "Year 2000 Capable" as it
relates to the Computer Systems, shall mean that: (i) no value
for current dates will cause any interruption in the operation
of the Computer Systems; (ii) all manipulations of
time-related data will produce the desired results for all
value dates within the application domain and in combination
with other products, prior to, through and beyond the year
2000; (iii) date elements in interfaces and data storage will
permit specifying the century to eliminate date ambiguity
without human intervention, including leap year calculations;
(iv) where any date element is represented without a century,
the correct century shall be unambiguous for all manipulations
involving that element; and (v) authorization codes, passwords
and zaps relative to expiration dates and CPU serial numbers
shall function normally during year 2000 testing time
horizons.
(q) AMGEN Loss Sharing. Not more than $24 million of the
cumulative maximum reimbursement obligations of the "Sellers",
as defined in the agreement with respect to the AMGEN Loss
Sharing, has been claimed by Seller as of March 31, 1999.
(r) Conversion to FDR. The conversion from the TSYS system to the
FDR system shall not create a material adverse effect on the
Accounts.
(s) No "Early-Out" Accounts. Seller represents that the Accounts
do not include any accounts (other than Deceased Accounts)
that are "early outs" (that is, Accounts that have been sent
to a collection agency and identified as uncollectible prior
to being statused as charged-off on the Seller's processing
system).
4.2 Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to Seller as follows:
(a) Organization. Purchaser is a national bank, validly existing
and in good standing under the laws of the State of Arizona.
(b) Capacity; Authority; Validity. Purchaser has all necessary
corporate power and authority to enter into this
Agreement and the Related Agreements and to perform all
of the obligations to be performed by it under this
Agreement and the Related Agreements. This Agreement and the
Related Agreements and the consummation by Purchaser
of the transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary corporate
action of Purchaser and this Agreement has been duly
executed and delivered by Purchaser. This Agreement
constitutes, and the Related Agreements, when executed
by Purchaser, will constitute, the valid and binding
obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms (except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship, the
rights and obligations of receivers and conservators of
insured depository institutions under 12 U.S.C.ss.1821(d) and
(e) and other laws relating to or affecting creditors' rights
generally and by general equity principles).
(c) Conflicts; Defaults. Neither the execution and delivery of
this Agreement and the Related Agreements by Purchaser
nor the consummation of the transactions contemplated hereby
or thereby by Purchaser will (i) conflict with, result
in the breach of, constitute a default under, or accelerate
the performance required by, the terms of any order,
law, regulation, contract, instrument or commitment to which
Purchaser is a party or by which Purchaser is bound,
(ii) violate the articles of incorporation or bylaws or any
other equivalent organizational document of Purchaser,
(iii) require any consent, approval, authorization or filing
under any law, regulation, judgment, order, writ,
decree, permit or license to which Purchaser is a party or
by which Purchaser is bound, or (iv) require the consent
or approval of any other party to any contract, instrument
or commitment to which Purchaser is a party or by which
Purchaser is bound, other than (A) the approvals of
regulatory authorities, if any (which have been obtained or
will be obtained prior to or on the Closing Date), and (B)
the waiver (the "Bank Waiver") of the lenders of Metris
Companies Inc. ("MCI") under its Amended and Restated
Revolving Credit Agreement dated June 30, 1998 among MCI, The
Chase Manhattan Bank, as agent and the lenders named
therein. Purchaser is not subject to any agreement or
understanding with any regulatory authority which would
prevent the consummation by Purchaser of the transactions
contemplated by this Agreement and the Related Agreements.
No receiver or conservator has been appointed for the
Purchaser nor has any proceeding been instituted or, to
the best knowledge of Purchaser, threatened for such
appointment.
(d) Litigation. There is no claim, litigation, proceeding,
arbitration or governmental investigation pending against
Purchaser, which will have a material adverse effect on the
Purchaser's ability to consummate the transactions
contemplated hereby and by the Related Agreements.
(e) Finders or Brokers. Purchaser has not agreed to pay any fee or
commission to any agent, broker, finder, or other person for
or on account of services rendered as a broker or finder in
connection with this Agreement or the transactions
contemplated hereby which would give rise to any valid claim
against Seller for any brokerage commission or finder's fee or
like payment.
(f) Effect of Law on Closing. There is no federal or state
statute, rule or regulation, or order or rule of any federal
or state regulatory agency, which prevents Purchaser from
purchasing the Acquired Assets as contemplated by this
Agreement.
(g) Source of Funding. Purchaser has the necessary sources of
funding to complete the transactions contemplated in this
Agreement in accordance with the terms hereof, except that
Purchaser shall not be obligated to purchase, and Seller shall
not be obligated to sell, the Acquired Assets to be sold if
Purchaser has not received the Bank Waiver.
(h) MasterCard and Visa Member. Purchaser is qualified to
participate in, and is a member in good standing of, the
MasterCard and Visa credit card programs.
4.3 NO OTHER REPRESENTATIONS OR WARRANTIES...... EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT AND THE RELATED
AGREEMENTS, SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
WRITTEN OR ORAL, AND SELLER HEREBY DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY
(INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR
A PARTICULAR PURPOSE), WHETHER BY SELLER, ITS AFFILIATES OR ANY OF THEIR
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OR ANY OTHER PERSON,
WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE RELATED
AGREEMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY; PROVIDED,
HOWEVER, THAT ALL DISCLOSURES OF INFORMATION (WHETHER ORAL OR IN WRITING) MADE
BY SELLER OR ITS AGENTS AND REPRESENTATIVES IN CONNECTION WITH THE OFFERING
MEMORANDUM, DUE DILIGENCE AND THE MASTERFILE TAPE, WERE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS AND SELLER ACKNOWLEDGES PURCHASER HAS RELIED ON SUCH
INFORMATION.
ARTICLE 5 - CERTAIN COVENANTS
5.1 Mutual Covenants and Agreements. Each party hereto covenants and agrees
that:
(a) Cooperation. It shall cooperate with the other party hereto in
furnishing any information or performing any action reasonably
requested by that party, which information or action is
necessary for the prompt consummation of the transactions
contemplated by this Agreement.
(b) Other Required Information. It shall furnish to the other
party hereto all information as is required or requested to be
set forth in any application or statement to be filed with any
state or federal governmental agency or authority in
connection with the regulatory approval or review of the
transactions contemplated by this Agreement.
(c) Confidentiality. All information furnished by a party
(the "Protected Party") to the other party in connection with
this Agreement and the transactions contemplated hereby
shall be received in confidence and kept confidential by
such other party, and shall be used by it only in connection
with this Agreement and the transactions contemplated
hereby, except to the extent that such information:
(i) is already lawfully known to such other party when
received; (ii) thereafter becomes lawfully obtainable
from other sources other than as a result of disclosure by
such other party; (iii) is required to be disclosed to
MasterCard or Visa or to a regulatory authority having
authority over such party; (iv) is disclosed to its
Affiliates, provided that such parties agree to be bound by
the provisions of this Section 5.1(c); (v) is disclosed to
its auditors or counsel (each of whom the disclosing party
shall cause to keep such information confidential and to
use the same only in connection with this Agreement,
including in the case of auditors, any general or more
limited audit or review of Purchaser or Seller, and in the
case of counsel, any disputes relating to this Agreement or
legal matters which involve Seller or its Affiliates
with respect to which confidential information which is
subject to this Section 5.1(c) is germane) or is required to
be disclosed strictly on a need to know basis to its lenders,
investors, or rating agencies; (vi) is required to be
disclosed in the financial statements of such other party or
its Affiliates to the extent required by GAAP, or in
any filing with the Securities and Exchange Commission
(the "SEC"); (vii) is required to be disclosed to its
source(s) of funding, provided such sources agree to be
bound by confidentiality provisions similar to those
contained in this Section 5.1(c); or (viii) is required by
law, regulation or court order to be disclosed by such
other party, provided that prior notice of such disclosure
(other than to its Affiliates, auditors, counsel, rating
agencies or lenders) has been given to the Protected Party,
when legally permissible, and that the party which is
required to make the disclosure uses its reasonable best
efforts to provide sufficient notice to permit the Protected
Party to take legal action to prevent the disclosure. In the
event that the transactions contemplated by this Agreement
shall fail to be consummated, such other party shall promptly
cause all originals and copies of documents or extracts
thereof containing all information and data furnished by the
Protected Party to be returned to the Protected Party or
destroyed and shall cause an officer to so certify to the
Protected Party. This Section 5.1(c) shall survive any
termination of this Agreement.
(d) Press Releases. Except as may be required by law or regulation
or a court or regulatory authority or the rules of a stock
exchange, or as may be necessary to disclose to lenders and
rating agencies, neither Seller nor Purchaser, nor any of
their respective Affiliates, subsequent to the date hereof and
continuing after the Closing Date, shall issue a press release
or make any public announcement related to the transactions
contemplated hereby without the prior written consent of the
other party hereto, which consent shall not be unreasonably
withheld or delayed. This Section 5.1(d) shall survive any
termination of this Agreement.
(e) Notice to Cardholders. Seller and Purchaser shall cooperate
with each other in good faith to enable Purchaser, prior to
the Final Conversion Date, to prepare, print and mail, at
Purchaser's expense, a notice notifying each Cardholder on a
timely basis of the purchase of the Accounts by Purchaser and
such other information as may be required to be given to such
Cardholder and other matters which the parties determine to be
appropriate. Any such notice shall be in a form consented to
by each of the parties hereto prior to mailing, but no party
shall unreasonably withhold such consent.
(f) Miscellaneous Agreements and Consents. Subject to the terms
and conditions contained herein, each party to this
Agreement shall use its reasonable best efforts to take, or
cause to be taken, all action, and to do, or cause to be
done, all things necessary, appropriate or desirable
hereunder and under applicable laws and regulations to
consummate and make effective the transactions contemplated
by this Agreement. Each party to this Agreement will use its
reasonable best efforts to obtain consents of all third
parties and governmental bodies necessary for the
consummation of the transactions contemplated by this
Agreement. The parties and their respective officers,
directors and/or employees shall use their reasonable best
efforts to take such further actions subsequent to the
Closing Date as are reasonably necessary, appropriate or
desirable to carry out the purposes of this Agreement.
(g) Advice on Changes. Between the date hereof and the Closing
Date, each party shall promptly advise the other of any fact
known to it which, if existing or known at the date hereof,
would have been required to be set forth or disclosed in or
pursuant to this Agreement or of any fact which, if existing
or known at the date hereof, would have made any of the
representations of such party contained herein untrue in any
material respect.
(h) Preserve Accuracy of Representations and Warranties. Each
party hereto shall refrain from taking any action which would
render any representation or warranty of such party contained
in Article 4 of this Agreement materially inaccurate as of the
Closing Date. Each party shall promptly notify the other party
of any action, suit or proceeding that shall be instituted or
threatened against such party to restrain, prohibit or
otherwise challenge the legality of any transaction
contemplated by this Agreement.
5.2 Certain Covenants of Seller. Seller hereby agrees with Purchaser as
follows:
(a) Preservation of Credit Card Business. From the date of this
Agreement and continuing until the Closing Date, Seller
shall, and shall cause its agents, to: (i) maintain and
service the Accounts in substantially the same manner
(except for marketing activities) as currently maintained and
serviced and in accordance with the Policies and
Procedures, (ii) maintain and service the Accounts in
compliance, in all material respects , with applicable federal
and state laws and regulations; and (iii) not make any
change to the Policies and Procedures that would have a
material adverse effect on the Accounts except as required by
law, safe or sound banking practices or the Operating
Regulations. Seller shall, and shall cause its agents to,
post all payments received prior to the Cut-Off Time to
the applicable Account as of the Cut-Off Time.
(b) Preservation of Accounts. From the date of this Agreement and
continuing until the Closing Date, Seller shall: (i) not sell,
assign, transfer or pledge, any Account without the prior
written consent of Purchaser; (ii) not take any substantial
action with respect to the Accounts which will impair any
material rights of Seller, and shall not amend any Cardholder
Agreement other than on a per customer basis in accordance
with the Policies and Procedures; and (iii) comply, in all
material respects, with the terms and conditions of the
Cardholder Agreements, as then in effect.
(c) Access. From the date of this Agreement and continuing until
the Closing Date, Seller shall (i) permit Purchaser and its
authorized representatives reasonable access, during
reasonable hours, to the Books and Records of Seller as
they relate to the Acquired Assets; (ii) make available
to Purchaser true, accurate and complete copies of such
contracts and other such records and all other information in
its possession with respect to the Acquired Assets as
Purchaser or its authorized representatives may reasonably
request; (iii) cause its personnel and its agents to provide
Purchaser assistance in its investigation of such matters;
provided, however, that such investigation shall be conducted
in a manner which does not unreasonably interfere with
Seller's normal operations and, provided, further, that
Seller shall not be required to divulge, and shall not
divulge, any records or information to the extent prohibited
by applicable laws or regulations.
(d) Use of List. Seller agrees that for a period of two (2) years
from the Closing Date, neither Seller, nor any Affiliate of
Seller, will sell or otherwise provide the Cardholder List,
in whole or in part, to any third party or use the Cardholder
List to solicit any Cardholder for a credit card account or
any card enhancement set forth in Schedule 5.2(d). The parties
acknowledge that Seller has previously included in the
internal records or databases of its Affiliates some or all
of the names of Cardholders. Nothing contained herein shall
require Seller or its respective Affiliates to remove
Cardholder names from such internal records or databases. The
parties agree that it shall not be a violation of this Section
5.2(d) if an Affiliate of Seller: (i) solicits a Cardholder or
develops a solicitation list that includes names of some but
not all Cardholders (as well as the names of persons who are
not Cardholders) if such name or list is obtained (A) from a
third party, or (B) from the internal records or a database
of Seller or an Affiliate of Seller not derived from the
Cardholder List, provided that such Affiliate does not
intentionally target Cardholders for such solicitation;
(ii) solicits the public at large for any product or service
through a list of names other than one derived from the
Cardholder List; or (iii) engages in any marketing of
products or services, provided that such Affiliate does not
intentionally target Cardholders in such marketing efforts.
(e) Further Assurances. On and after the Closing Date, Seller
shall, at Purchaser's request, execute, acknowledge and
deliver all such acknowledgments and other instruments as may
be reasonably necessary or appropriate to fully and
effectively carry out the transactions contemplated hereby.
(f) Responsibility for Taxes. Seller shall be liable for and pay,
and pursuant to Article 7 shall indemnify and hold
Purchaser harmless from and against all Taxes applicable to
the Acquired Assets and the Assumed Liabilities, in each
case incurred or assessed during the portion of the
taxable years or periods on or prior to the Closing Date.
Purchaser shall be liable for and pay, and pursuant to
Article 7 shall indemnify and hold Seller harmless from and
against, (i) all Taxes applicable to the Acquired Assets and
the Assumed Liabilities, in each case incurred or assessed
during the portion of the taxable years or periods after the
Closing Date, and (ii) any sales Tax, use Tax, transfer or
gains Tax, documentary stamp Tax or similar Tax attributable
to the sale or transfer of the Acquired Assets or the Assumed
Liabilities pursuant to this Agreement and the Related
Agreements. Each of Seller and Purchaser shall be entitled to
refund of any Taxes for which it is liable under this Section
5.2(f).
(g) Books and Records. Commencing on the Closing Date, the Books
and Records shall be the property of Purchaser, provided that
Seller may retain possession of such copies thereof as may be
required to meet legal, regulatory, tax, accounting and
auditing requirements. Except for (i) keeping such records
as Seller may require to perform its interim servicing
obligations, and (ii) any Books and Records which Seller
cannot reasonably segment from books and records relating to
the credit card accounts not being sold to Purchaser
hereunder, Seller will make the Books and Records available
for delivery to Purchaser on the Closing Date. In addition,
on the Initial Conversion Date, Seller shall deliver to
Purchaser all Books and Records retained by Seller or its
agents in connection with Seller's performance of its interim
servicing obligations, excluding any Books and Records which
Seller cannot reasonably segment from books and records
relating to the credit card accounts not being sold to
Purchaser hereunder. If the Books and Records delivered by
Seller contain information on accounts not being sold to
Purchaser hereunder, Purchaser shall comply with the
provisions of Section 5.1(c) with respect to such information
and shall not use such information for any purpose.
(h) Payments to Co-Brand Partners. Seller shall pay to its
co-brand partners any amounts validly owed to them under the
Co-Brand Agreements listed in Schedule 4.1(n) for the period
up to the Cut-Off Time.
5.3 Covenants of Purchaser. Purchaser hereby agrees with Seller as follows:
(a) Books and Records. Purchaser shall retain the Books and
Records delivered to Purchaser for at least the periods
required under applicable laws and under the Operating
Regulations and shall allow Seller reasonable access to such
Books and Records and the right to make copies thereof at any
reasonable time or shall provide, upon request, copies
thereof, in the event any such Books and Records are required
by Seller in connection with any claim or proceeding in which
Seller is involved, including, but not limited to, any
financial reporting obligation, tax claim, legal claim or
accounting matter, or any other reasonable business
requirement of Seller.
(b) Covenant to Comply with Cardholder Agreements. On and after
the Closing Date, Purchaser will comply with the terms and
conditions of the Cardholder Agreements, as they may be
amended by Purchaser from time to time, the Operating
Regulations and all laws and regulations applicable to the
Acquired Assets.
(c) Assumed Liabilities. On and after the Closing Date, Purchaser
shall discharge the Assumed Liabilities in accordance with the
terms thereof.
(d) Further Assurances. On and after the Closing Date, Purchaser
shall, at Seller's request, execute, acknowledge and deliver
all such acknowledgments and other instruments as may be
reasonably necessary or appropriate to fully and effectively
carry out the transactions contemplated hereby.
(e) Payments to Co-Brand Partners. Purchaser shall pay to its
co-brand partners any amounts validly owed to them under the
Co-Brand Agreements listed in Schedule 4.1(n) for the period
on and after the Cut-Off Time.
ARTICLE 6 - CONDITIONS OF CLOSING
6.1 Conditions Applicable to Purchaser. The obligation of Purchaser under
this Agreement to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver by Purchaser of the
following conditions as of the Closing Date:
(a) Related Agreements. Seller shall have executed and delivered
to Purchaser the Related Agreements, each dated as of the
Closing Date.
(b) Financing Statements. On or before the Closing Date, Seller
shall have executed and delivered to Purchaser, financing
statements, prepared by Purchaser, in the appropriate form for
filing under the Uniform Commercial Code of the State of Ohio
to give notice of Purchaser's interest in the Acquired Assets.
(c) Board Resolutions; Incumbency Certificates. Purchaser shall
have received from Seller certified resolutions of Seller's
Board of Directors authorizing the execution and delivery of
this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby, and
certificates as to incumbency and signatures of officers
authorized to execute this Agreement and the Related
Agreements.
(d) Performance of this Agreement. All the terms, covenants and
conditions of this Agreement to be complied with and performed
by Seller on or prior to the Closing Date shall have been
complied with and performed in all material respects; and
there shall have been delivered to Purchaser a certificate to
such effect, dated the Closing Date, signed by an authorized
officer of Seller.
(e) Accuracy of Representations and Warranties. The
representations and warranties of Seller as set forth in
Section 4.1 hereof shall be true and correct in all material
respects on the Closing Date as though made on the Closing
Date, except for changes therein permitted by this Agreement
or resulting from any transaction consented to in writing by
Purchaser; and there shall have been delivered to Purchaser a
certificate to such effect, dated the Closing Date, signed by
an authorized officer of Seller.
(f) Litigation. No action, suit, litigation or proceeding related
to any of the transactions contemplated hereby shall have been
threatened or instituted by a governmental body to restrain or
prohibit the consummation of any of the transactions
contemplated hereby.
(g) HSR Waiting Period. The waiting period (and any extensions
thereof), if any, under the HSR Act applicable to the
consummation of the transactions contemplated by this
Agreement shall have expired or been terminated.
(h) Legal Opinion. Seller shall have delivered to Purchaser (and
each other addressee) an opinion of counsel to Seller, dated
the Closing Date, substantially in the form of Exhibit E.
(i) List of Accounts. Seller shall have delivered to Purchaser a
list of Accounts (including Excluded Accounts) in computer
tape form containing with respect to each Account and Excluded
Account, the account number and information supporting
calculation of Accrued Interest, Unearned Annual Fees and
Cardholder reward liability, and the masterfile extension
record.
(j) Additional Legal Opinions. Seller shall have delivered to
Purchaser (and each other addressee) an opinion of counsel to
Seller substanitally in the form of Exhibit F and, if required
in order to satisfy the conditions precedent to the funding
source of Purchaser, either or both of (1) an opinion of
counsel to Seller addressed to and acceptable to the rating
agencies rating the commercial paper of such funding source's
commercial paper conduit, and addressed to NationsBank, N.A.,
as agent, as to the consequences of proceeding in respect of
the insolvency of the Seller (or a true sale opinion, if the
Seller may be a "debtor" under the U.S. Bankruptcy Code),
and (2) officers' certificates of the Seller as may be
requested by and acceptable to such rating agencies.
(k) Government Consents. The parties shall have received all
approvals and actions of or by all governmental authorities
which are necessary to consummate the transactions
contemplated hereby.
(l) Other Consents. Seller shall have received any required
consents to the transactions contemplated hereby from the
other party to any contract, instrument or commitment to which
Seller is a party, other than those the failure to receive
which would not have a material adverse effect on the Acquired
Assets. Seller shall have received any required consent to
assignment of each Co-Brand Agreement, which consent shall
include (i) consent to the subsequent assignments pursuant to
a receivables securitization program, and (ii) with respect to
the agreement with ▇▇▇▇ Department Stores, Inc., forfeiture or
waiver of any option to elect to purchase or require a sale of
Accounts at the termination thereof.
(m) No Injunction. There shall not be in effect any injunction
restraining or prohibiting the consummation of the
transactions contemplated hereby.
(n) Waiver by MCI Lenders. Metris Companies Inc. shall have
received the Bank Waiver.
6.2 Conditions Applicable to Seller. The obligation of Seller under this
Agreement to consummate the transactions contemplated by this Agreement
is subject to the satisfaction or waiver by Seller of the following
conditions as of the Closing Date:
(a) Related Agreements. Purchaser shall have executed and
delivered to Seller the Related Agreements, each dated as of
the Closing Date.
(b) Board Resolutions; Incumbency Certificates. Seller shall have
received from Purchaser certified resolutions of Purchaser's
Board of Directors authorizing the execution and delivery of
this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby, and
certificates as to incumbency and signatures of officers
authorized to execute this Agreement and the Related
Agreements.
(c) Performance of this Agreement. All the terms, covenants and
conditions of this Agreement to be complied with and performed
by Purchaser on or prior to the Closing Date shall have been
complied with and performed in all material respects; and
there shall have been delivered to Seller a certificate to
such effect, dated the Closing Date, signed by an authorized
officer of Purchaser.
(d) Accuracy of Representations and Warranties. The
representations and warranties of Purchaser as set forth in
Section 4.2 hereof shall be true and correct in all material
respects on the Closing Date as though made on the Closing
Date, except for changes therein permitted by this Agreement
or resulting from any transaction consented to in writing by
Seller; and there shall have been delivered to Seller a
certificate to such effect, dated the Closing Date, signed by
an authorized officer of Purchaser.
(e) Litigation. No action, suit, litigation or proceeding related
to any of the transactions contemplated hereby shall have been
threatened or instituted by a governmental body to restrain or
prohibit the consummation of any of the transactions
contemplated hereby.
(f) HSR Waiting Period. The waiting period (and any extensions
thereof), if any, under the HSR Act applicable to the
consummation of the transactions contemplated by this
Agreement shall have expired or been terminated.
(g) Government Consents. The parties shall have received all
approvals and actions of or by all governmental authorities
which are necessary to consummate the transactions
contemplated hereby.
(h) Other Consents. Seller shall have received any required
consents to the transactions contemplated hereby from the
other party to any contract, instrument or commitment to which
Seller is a party, other than those failure to receive which
would not have a material adverse effect on the Acquired
Assets.
(i) No Injunction. There shall not be in effect any injunction
restricting or prohibiting the consummation of the
transactions contemplated hereby.
(j) Purchase Price. Purchaser shall have delivered to Seller the
Purchase Price.
(k) Legal Opinion. Purchaser shall have delivered to Seller an
opinion of counsel to Purchaser, dated the Closing Date,
substantially in the form of Exhibit G.
(l) Waiver by MCI Lenders. Metris Companies Inc. shall have received,
and delivered to Seller, the Bank Waiver.
ARTICLE 7 - INDEMNIFICATION
7.1 Seller's Indemnification Obligations. Seller shall indemnify and hold
harmless, Purchaser and its Affiliates and their respective officers,
directors and employees, from and against any and all Losses (as
hereinafter defined) arising from or relating to: (i) the inaccuracy of
any representation or the breach of any warranty of Seller contained in
this Agreement or the Assignment and Assumption Agreement; or (ii) the
failure by Seller to perform any of its covenants contained in this
Agreement or the Assignment and Assumption Agreement.
7.2 Purchaser's Indemnification Obligations. Purchaser shall indemnify and
hold harmless, Seller and its Affiliates and their respective officers,
directors and employees, from and against any and all Losses arising
from or relating to: (i) the inaccuracy of any representation or the
breach of any warranty of Purchaser contained in this Agreement or the
Assignment and Assumption Agreement; or (ii) the failure by Purchaser
to perform any of its covenants contained in this Agreement or the
Assignment and Assumption Agreement.
7.3 Definition of Losses. For purposes of this Article 7, the term "Losses"
shall mean any liability, damage, Tax, costs and expenses, including,
without limitation, any attorneys' fees, disbursements and court costs,
in each case reasonably incurred by Purchaser or Seller, as the case
may be.
7.4 Tax Consequences of Indemnification. Purchaser and Seller agree that,
for purposes of computing the amount of any indemnification payment
under this Article 7, any such indemnification payment shall be treated
as an adjustment to the Purchase Price for all Tax purposes.
7.5 Procedures.
(a) Notice of Claims. The parties agree that in case any claim
is made, any suit or action is commenced, or any knowledge is
received of a state of facts which, if not corrected, may
give rise to a right of indemnification for such party
hereunder ("Indemnified Party") from the other party
("Indemnifying Party"), the Indemnified Party will give notice
to the Indemnifying Party as promptly as practicable after
the receipt by the Indemnified Party of notice or knowledge
of such claim, suit, action or state of facts. Notice to the
Indemnifying Party under the preceding sentence shall be
given no later than fifteen (15) days after receipt by the
Indemnified Party of service of process in the event a suit
or action has commenced or thirty (30) days under all other
circumstances. The failure to give prompt notice shall not
relieve an Indemnifying Party of its obligation to indemnify
except to the extent the Indemnifying Party is prejudiced by
such failure. The Indemnified Party shall make available to
the Indemnifying Party and its counsel and accountants at
reasonable times and for reasonable periods, during normal
business hours, all books and records of the Indemnified Party
relating to any such possible claim for indemnification, and
each party hereunder will render to the other such assistance
as it may reasonably require of the other in order to insure
prompt and adequate defense of any suit, claim or proceeding
based upon a state of facts which may give rise to a right of
indemnification hereunder.
The Indemnifying Party shall have the right to
defend, compromise and settle any third party suit, claim or
proceeding in the name of the Indemnified Party to the extent
that the Indemnifying Party may be liable to the Indemnified
Party in connection therewith. The Indemnifying Party shall
notify the Indemnified Party within thirty (30) days of having
been notified pursuant to this Section 7.5(a) if the
Indemnifying Party elects to assume the defense of any such
claim, suit or proceeding and employ counsel. The Indemnified
Party shall have the right to employ its own counsel if the
Indemnifying Party so elects to assume such defense, but the
fees and expenses of such counsel shall be at the Indemnified
Party's expense.
Notwithstanding anything to the contrary set forth in
the preceding paragraph, the Indemnified Party shall have the
right to defend, compromise and settle any third party suit,
claim or proceeding in the name of the Indemnified Party
involving an amount of less than $1,000. The Indemnifying
Party shall have the right to employ its own counsel in such
case, but the fees and expenses of such counsel shall be at
the Indemnifying Party's expense.
(b) Settlement of Claims. The Indemnified Party may at any time
notify the Indemnifying Party of its intention to settle or
compromise any claim, suit or action against the Indemnified
Party without the consent of the Indemnifying Party, provided
that the Indemnifying Party shall have no further liability in
respect thereof.
(c) Subrogation. The Indemnifying Party shall be subrogated to any
claims or rights of the Indemnified Party as against any other
persons with respect to any amount paid by the Indemnifying
Party under this Article 7. The Indemnified Party shall
cooperate with the Indemnifying Party, at the Indemnifying
Party's expense, in the assertion by the Indemnifying Party of
any such claim against such other persons.
(d) Limitations on Indemnification. Notwithstanding anything to
the contrary set forth in this Article 7, Purchaser shall not
be entitled to indemnification for any breach of any
representation or warranty or covenants made by Seller under
this Agreement, unless and until the aggregate amount of all
Losses of Purchaser sustained by reason of such breach(es)
exceeds $200,000 in the aggregate (it being understood and
agreed that $200,000 is intended as a deductible, and Seller
shall be responsible only for Losses in excess of $200,000).
Notwithstanding anything to the contrary set forth in
this Article 7, Seller shall not be entitled to
indemnification for any breach of any representation or
warranty or covenants made by Purchaser under this Agreement,
unless and until the aggregate amount of all Losses of Seller
sustained by reason of such breach(es) exceeds $200,000 in the
aggregate (it being understood and agreed that $200,000 is
intended as a deductible, and Purchaser shall be responsible
only for Losses in excess of $200,000).
(e) Survival of Indemnification Obligations. The obligations of
the parties set forth in this Article 7 shall survive the
Closing Date for a period of one (1) year, except that a claim
for indemnification for which notice was given pursuant to
Section 7.5(a) hereof by an Indemnified Party prior to the end
of such one (1) year period shall survive until such claim is
fully and finally determined, and except that the
indemnification shall continue as to the covenants of Seller
set forth in Sections 5.1(c), 5.1(d), 5.2(e) and 5.2(f) and in
the Assignment and Assumption Agreement and the covenants of
Purchaser set forth in Sections 5.1(c), 5.1(d), 5.2(f) and 5.3
and in the Assignment and Assumption Agreement, as to all of
which no time limitation shall apply.
(f) Exclusive Remedy. (i) Subject to the provisions of Section
7.5(f)(ii), the indemnification provided in this Article 7
shall be the exclusive post-Closing remedy available to each
party and its Affiliates and their respective officers,
directors and employees in connection with any breach of any
representation, warranty, covenant or agreement made by the
other party in this Agreement or the Assignment and Assumption
Agreement, or for any other matter or claim arising under or
in connection with this Agreement, the Assignment and
Assumption Agreement or the transactions contemplated hereby
or thereby.
(ii) The parties agree that damages at law may not be an
adequate remedy for violation of Section 5.2(a), (b), (c) and
(d). The parties, therefore, agree that in the event of any
violation of any of the aforesaid provisions by a party, the
other party shall be entitled to seek appropriate injunctive
relief to prevent the violation of such provision.
ARTICLE 8 - TERMINATION
8.1 Termination By Either Party. Anything contained in this Agreement to
the contrary notwithstanding, this Agreement may be terminated prior to
the Closing Date:
(a) by either Purchaser or Seller if a material breach of
any provision of this Agreement has been committed by
the other party and such breach has not been cured or
waived within fifteen (15) Business Days from the
date of notice from the party alleging the breach;
(b) by the mutual consent of the parties;
(c) by Seller if Purchaser has not delivered to Seller a copy
of the Bank Waiver by May 30,1999; or (d) by Purchaser or
Seller if the Closing Date has not occurred by July 30,
1999.
8.2 Effect of Termination. In the event that this Agreement shall be
terminated pursuant to this Article 8, all further obligations of the
parties under this Agreement (other than Sections 5.1(c), 5.1(d) and
9.6 and the Confidentiality Agreement) shall be terminated without
further liability of any party to the other, provided that nothing
herein shall relieve any party from liability for its breach of this
Agreement.
ARTICLE 9 - MISCELLANEOUS
9.1 Survival of Representations and Warranties. The representations and
warranties of each party contained in this Agreement or in any
certificates or other instruments delivered pursuant to this Agreement
will survive the Closing of the transactions contemplated herein
through the period during which claims for indemnification may be made
pursuant to Article 7.
9.2 Notices. All notices and other communications by Purchaser or Seller
hereunder shall be in writing to the other party and shall be deemed to
have been duly given when delivered in person or to an overnight
courier service, receipt requested, or sent via telecopy transmission,
receipt requested or when posted by the United States registered or
certified mail, with postage prepaid, addressed as follows:
If to Seller: GE Capital Consumer Card Co.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: President
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
copy to: GE Capital Consumer Card Co.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
and copy to: GE Card Services
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: Direct Merchants Credit Card Bank, N.A.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
copy to: Metris Companies Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other addresses as a party may from time to time designate
by notice as provided herein, except that notices of change of address
shall be effective only upon actual receipt.
9.3 Assignment. Prior to the Closing, the rights of any party under this
Agreement shall not be assigned or transferred by any party without the
prior written approval of the other party hereto. Upon and following
the Closing, any party may assign any of its rights hereunder, but no
such assignment shall relieve it of its obligations hereunder.
9.4 Entire Agreement. This Agreement, together with the exhibits and
schedules to this Agreement and the Confidentiality Agreement,
constitutes the entire agreement between the parties and supersedes any
other agreement, whether written or oral, that may have been made or
entered into by Seller and Purchaser (or by any officer or officers of
any of such parties) relating to the matters contemplated hereby.
9.5 Amendments and Waivers. This Agreement may be amended, modified,
superseded, or canceled, and any of the terms, representations,
warranties or covenants hereof may be waived, only by written
instrument executed by each of the parties or, in the case of a waiver,
by the party waiving compliance. In the course of the planning and
coordination of this Agreement, written documents have been exchanged
between the parties. Such written documents shall not be deemed to
amend or supplement this Agreement. The failure of any party at any
time or times to require performance of any provision hereof shall in
no manner affect the right at a later time to enforce the same. No
waiver by any party of any condition or of any breach of any term,
representation, warranty or covenant under this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to
be or construed as a further or continuing waiver of any other
condition or of any breach of any such condition of breach or waiver of
any other condition or of any breach of any other term, representation,
warranty or covenant under this Agreement.
9.6 Expenses. The parties will each bear their own legal, accounting and
other costs in connection with the transactions contemplated hereby,
including taxes, if any, which are imposed upon a party attributable to
its activities hereunder, except as otherwise specified in this
Agreement.
9.7 Captions; Counterparts. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in two or more counterparts, each of which
shall be an original, but all of which together shall constitute one
and the same instrument.
9.8 Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of New
York, without regard to principles of conflict of laws.
9.9 Severability. If any provision of this Agreement or portion thereof is
held invalid, illegal, void or unenforceable by reason of any rule of
law, administrative or judicial provision or public policy, such
provision shall be ineffective only to the extent invalid, illegal,
void or unenforceable, and the remainder of such provision and all
other provisions of this Agreement shall nevertheless remain in full
force and effect.
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be duly executed as of the date first above written.
GE CAPITAL CONSUMER CARD CO., Seller
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, Purchaser
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO & Controller
