EXHIBIT 10.6
DEPOSIT ACCOUNTS PURCHASE AND ASSUMPTION AGREEMENT
THIS DEPOSIT ACCOUNTS PURCHASE AND ASSUMPTION AGREEMENT (the
"Agreement") is made and entered into as of the 26th day of September, 2003, by
and between DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION, a national
banking association ("Seller"), and FIRST NATIONAL BANK OF OMAHA, a national
banking association ("Purchaser").
WITNESSETH:
WHEREAS, Seller is the issuer of certain certificates of deposit
identified in Exhibit A and desires to have Purchaser accept an assignment of
such certificates of deposit; and
WHEREAS, said certificates of deposit call for payment of above-market
interest rates and Purchaser is unwilling to accept such assignment except on
the terms and conditions hereof, including, but not limited to, payment of the
Premium Amount specified herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Except as otherwise specifically indicated,
the following terms shall have the meanings specified herein.
"Accrued Interest" shall mean accrued interest that is not yet due and
payable.
"Accrued Interest Due" shall mean interest that is due and payable
prior to the Closing Date.
"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.
"Books and Records" shall mean the CDs and all CD-specific
documentation (e.g., correspondence, notices and statements) and records
maintained by Seller, whether in documentary or electronic form, in the ordinary
course of business with respect to each CD.
"Business Day" shall mean each day other than Saturday, Sunday or a day
on which banking institutions in the State of Arizona or State of Nebraska are
authorized or obligated by law or regulation to close.
"CDs" shall mean the certificates of deposit referenced in Exhibit A
which mature on or after the Closing Date. Certain of such CDs are identified as
brokered CDs and are referred to herein as the "Brokered CDs." In the case of
Brokered CDs, references to CDs include the Master Certificates of Deposit
issued in connection therewith (the "Master Certificates").
"Closing" shall have the meaning specified in Section 3.01.
"Closing Date" shall have the meaning specified in Section 3.01.
"Consideration" shall have the meaning set forth in Section 2.03.
"Cut-Off Time" shall mean 11:59 p.m. Central Time on the day
immediately preceding the Closing Date.
"Data Files" shall have the meaning specified in Section 6.01(j).
"Depositors" shall mean the persons entitled to payment of the deposit
liabilities assumed by Purchaser in connection herewith. In the case of Brokered
CDs, "Depositor" includes the deposit broker for such CDs.
"Indemnified Party" shall have the meaning specified in Section
7.05(a).
"Indemnifying Party" shall have the meaning specified in Section
7.05(a).
"Premium Amount" shall mean $30,000,000.00.
"Protected Party" shall have the meaning specified in Section 5.01(c).
"Purchaser" shall have the meaning specified in the first paragraph
hereof.
"Seller" shall have the meaning specified in the first paragraph
hereof.
"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.
SECTION 1.02. CONSTRUCTION. For purposes of this Agreement, unless the
context otherwise clearly indicates: (a) words used in the singular include the
plural and words used in the plural include the singular; (b) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Agreement (or the certificate or other document in which they are used) as a
whole and not to any particular provision of this Agreement (or such certificate
or document); (c) references to any Article, Section, Schedule or Exhibit are
references to Articles, Sections, Schedules and Exhibits in or to this Agreement
(or the certificate or other document in which the reference is made), and
references to any paragraph, Section, clause or other subdivisions within any
Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (d) the term "including" means
"including without limitation"; (e) references to any law or regulation refer to
that law or regulation as amended from time to time and include any successor
law or regulation; (f) references to any person include that person's successors
and assigns; and (g) references to any agreement refer to that agreement as
amended, supplemented or otherwise modified from time to time. 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.
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ARTICLE II
ASSIGNMENT AND ASSUMPTION OF CERTAIN DEPOSIT LIABILITIES
SECTION 2.01. ASSIGNMENT AND ASSUMPTION OF DEPOSIT LIABILITIES. Upon
the terms and subject to the conditions set forth herein, Purchaser agrees to
assume, perform and discharge: (i) Seller's obligations to pay the deposit
liabilities set forth in Exhibit A; and (ii) the other obligations of continued
performance imposed upon Seller under the terms of the CDs disclosed to
Purchaser, as referenced in Section 4.01(g), and that accrue after the Cut-Off
Time. Seller agrees to sell, convey, assign and transfer to Purchaser all of
Seller's rights, titles and interests in, to, under and with respect to the CDs
and the Books and Records, including Seller's rights under any deposit broker
agreements and related documents pursuant to which Brokered CDs were issued.
SECTION 2.02. OTHER ASSUMED LIABILITIES.
(a) In addition to its obligations under Section 2.01,
Purchaser shall assume and become responsible for:
(i) Responding to all Depositor customer service
inquiries after the Cut-Off Time;
(ii) Payment of Accrued Interest, excluding Accrued
Interest Due;
(iii) All data processing and account servicing
activities necessary in connection with the CDs after the
Cut-Off Time;
(iv) Sending any required maturity notices and/or
periodic statements to Depositors after the Cut-Off Time;
(v) 1099 reporting for all interest paid by the
Purchaser after the Cut-Off Time;
(vi) All expenses incurred by Purchaser for the
Closing and for the conversion of the CDs from Seller's
processing system to Purchaser's processing system; and
(vii) Purchaser agrees to issue Master Certificates
in its own name and to allow such Master Certificates to be
substituted for the existing certificates issued by Seller in
connection with the Brokered CDs (such Master Certificates
issued by Purchaser may expressly indicate that they are
issued in substitution of, and not in addition to, Seller's
Master Certificates assumed by Purchaser). Purchaser shall
deliver such Master Certificates to Seller within 30 days
after the Closing Date, and Seller shall promptly provide the
Master Certificates to the appropriate deposit brokers with
instructions for substitution. Upon delivery of such Master
Certificates, Purchaser shall be deemed to have satisfied its
obligations under Section 2.01 in respect of the Brokered
Deposits and Purchaser shall have no further obligations
whatsoever under the Master Certificates issued by Seller.
Seller is solely responsibly for obtaining the return or
cancellation of the Master Certificates issued by Seller and
for any claims subsequently made thereon.
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(b) Seller shall be solely responsible for, and Purchaser
shall not assume any liability, commitment or any other obligation of
Seller, whether absolute, contingent or otherwise known or unknown, of
any nature, kind or description whatsoever, that is not expressly
assumed by Purchaser pursuant to Section 2.01 or 2.02. Without limiting
the generality of the preceding sentence, Seller shall be solely
responsible for, and Purchaser shall not assume responsibility for:
(i) Any liability, commitment or any other obligation
of Seller, whether absolute, contingent or otherwise known or
unknown, of any nature, kind or description whatsoever arising
from or relating to the CDs prior to the Closing Date;
(ii) Responding to all Depositor customer service
inquiries prior to the Closing Date;
(iii) Payment of Accrued Interest Due;
(iv) All data processing and account servicing
activities necessary in connection with the CDs up to the
Cut-Off Time;
(v) Sending any required maturity notices and/or
periodic statements to Depositors prior to the Closing Date;
(vi) 1099 reporting for all interest paid by Seller
up to the Cut-Off Time;
(vii) Notwithstanding Sections 2.02(a)(iii) or
5.03(a) or anything else herein to the contrary, any
obligations of Seller to its deposit brokers; and
(viii) All expenses incurred by Seller for the
Closing and for the performance of Seller's obligations
hereunder.
SECTION 2.03. CONSIDERATION. In consideration of Purchaser's assumption
of Seller's deposit liabilities, Seller shall pay to Purchaser: (i) the accrued
principal balance of each CD as of the Cut-Off Time; (ii) all Accrued Interest
up to the Cut-Off Time (excluding Accrued Interest Due); and (iii) the Premium
Amount (collectively, the "Consideration").
ARTICLE III
THE CLOSING AND SETTLEMENT
SECTION 3.01. THE CLOSING. Subject to the satisfaction or waiver of all
conditions set forth in Article VI, including receipt of regulatory approvals,
the closing of the transactions contemplated hereby (the "Closing") shall be
held on October 10, 2003, or upon a mutually agreed date after regulatory
approval is provided, at the offices of Purchaser or at such other date, place
and manner (including via facsimile) as may be mutually agreed to by the parties
hereto (such date being referred to herein as the "Closing Date").
SECTION 3.02. DOCUMENTS AND CERTIFICATES. 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.
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SECTION 3.03. PAYMENTS ON THE CLOSING DATE. At the Closing, Seller
shall pay Purchaser the Consideration. Payment to Purchaser on the Closing Date
shall be made by a wire transfer of immediately available U.S. dollars no later
than 3:00 p.m. Central Time to an account designated in writing by Purchaser.
Purchaser shall provide Seller with wire instructions prior to the Closing Date.
TIME IS OF THE ESSENCE IN THE FULFILLMENT OF THIS CONDITION. In the event that
payment is not made by Seller as of the time indicated, Purchaser may refuse to
close and immediately terminate this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Purchaser as follows (such representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date):
(a) ORGANIZATION. Seller is a national bank, validly existing
and in good standing under the laws of the United States. Seller has
designated Arizona as its State of location for purposes of Uniform
Commercial Code Section 9-307.
(b) CAPACITY; AUTHORITY; VALIDITY. Seller has all necessary
corporate power and authority to enter into this Agreement and to
perform all of the obligations to be performed by it under this
Agreement. This Agreement and the consummation by Seller of the
transactions contemplated hereby 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 the
valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms (except as such enforcement may be limited by
the rights and obligations of receivers and conservators of insured
depository institutions under 12 U.S.C. Section 1821(d) and (e)) or
similar laws or equitable principles and doctrines.
(c) CONFLICTS; DEFAULTS. Neither the execution and delivery of
this Agreement by Seller nor the consummation of the transactions
contemplated hereby 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 charter 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 by which
Seller is bound, other than approvals of regulatory authorities, if
any, which have been obtained or will be obtained prior to or on the
Closing Date; or (iv) require the consent or approval of any other
party to any contract, instrument or commitment to which Seller is a
party or by which Seller is bound. 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. No receiver or conservator has been appointed for Seller nor
has any proceeding been instituted or, to the best knowledge of Seller,
threatened, for such appointment.
(d) FREEDOM FROM LIENS; FRAUDULENT CONVEYANCE.
(i) Upon receipt of regulatory approval, Seller has
the right to transfer the Consideration and all of Seller's
rights, titles and interests in, to, under and with respect to
the CDs and the Books and Records, free and clear of any lien,
pledge, claim, security interest, encumbrance, charge or
restriction of any kind.
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(ii) Seller has valid business reasons for the
assignment contemplated hereby and the payment of the
Consideration, including, but not limited to, the payment of
the Premium Amount (altogether, the "Transfer"). The Transfer
is made without any intent to hinder, delay or defraud any
current or future creditor of Seller, without a view to
prevent the application of Seller's assets in the manner
required by law, and without a view to the preference of one
creditor to another. Seller is not insolvent or entering into
this transaction in contemplation of insolvency. Seller will
not become insolvent as a result of the Transfer; Seller is
not engaged and is not about to engage in any business or
transaction for which any property remaining with Seller is an
unreasonably small capital or for which the remaining assets
of Seller will be unreasonably small in relation to the
business of Seller or the transaction; Seller has received
fair and reasonable value for the Transfer and for the
obligations undertaken in this Agreement; and Seller does not
intend to incur debts beyond its ability to pay as they become
due. Seller does not believe, nor do any facts exist to
support the proposition that Seller reasonably should believe,
that it will incur debts beyond its ability to pay as they
become due.
(e) LITIGATION AND OTHER MATTERS.
(i) There is no claim, litigation, proceeding,
arbitration or governmental investigation pending or to the
best knowledge of Seller, threatened, against Seller or any of
its Affiliates or with respect to the CDs, which, if adversely
determined, would have a material adverse effect on Purchaser
or the ability of Seller to consummate the transactions
contemplated hereby;
(ii) There are no outstanding judgments, orders,
rules, regulations, official interpretations and guidelines of
any arbitrator or governmental authority with jurisdiction
over Seller or any of its Affiliates that could reasonably be
expected to have a material adverse effect with respect to the
CDs or Seller's ability to perform this Agreement; and
(iii) No audit, investigation or inspection or any
other review or inquiry whatsoever of any governmental
authority concerning or involving the CDs has reported a
material violation of any requirements of law by Seller or any
of its Affiliates or any other issue or matter that would
reasonably be expected to have a material adverse effect on
Purchaser.
(f) COMPLIANCE WITH LAWS.
(i) The CDs were issued and have been continuously
serviced in compliance with all applicable laws, rules and
regulations and the terms of the CDs themselves, including,
but not limited to, laws, rules and regulations pertaining to
the acceptance of deposits, the issuance of brokered deposits,
truth-in-savings, federal deposit insurance in general and
pass-through insurance in particular (as referenced in 12
C.F.R. Section 330.14), and escheatment and/or abandoned
property.
(ii) The terms of the CDs comply with all applicable
federal and state laws, rules and regulations.
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(g) AGREEMENTS.
(i) Seller has provided to Purchaser all forms that
have been used for the CDs. All CDs were issued using one of
such forms and no other form, and such forms have not been
substantively modified for any of the CDs other than as set
forth in the December 1, 2002 change in terms notification, a
copy of which was provided to Purchaser. None of the CDs
restricts the assignment and assumption contemplated by this
Agreement and such CDs may be assigned by Seller without
restriction, other than the requirement of regulatory approval
which is obtained prior to Closing. No notice of the
assignment and assumption contemplated hereby is required to
be given to Depositors other than the notice contemplated by
Section 5.01(e).
(ii) None of the CDs: (1) permit additional deposits
thereto; or (2) permit early withdrawals except: (A) CDs,
other than Brokered CDs, upon payment of an early withdrawal
penalty; and (B) Brokered CDs, upon the death or adjudication
of incompetence of the underlying Depositor. All of the CDs
constitute time deposits for purposes of Federal Reserve
Regulation D.
(iii) Seller has not made any promise, agreement or
commitment to any Depositor in connection with a CD, except in
the ordinary course of business in connection with servicing
the CDs and recorded in the Books and Records.
(iv) Each CD is enforceable in accordance with its
terms.
(v) With respect to the Brokered CDs, such CDs were
issued in full compliance with the terms and conditions of the
brokered deposit agreements under which they were issued and
Seller is otherwise in compliance with the terms and
conditions of such agreements. Such agreements do not prohibit
or restrict the assignment and assumption or substitution
contemplated by this Agreement.
(h) PERFORMANCE OF OBLIGATIONS. Seller has performed all
obligations required to be performed under the CDs up to the Closing
Date and under the additional promises, commitments and agreements made
to Depositors and recorded in the Books and Records. Seller is not in
default under the CDs. Without limiting the generality of the
foregoing, Seller has paid to the Depositors all Accrued Interest Due.
(i) FINDERS OR BROKERS. Seller 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 Purchaser for any brokerage commission
or finder's fee or like payment.
(j) BOOKS AND RECORDS. Exhibit A and the Books and Records
accurately reflect the term and maturity dates of the CDs, the interest
rates thereon, the payment frequency, the identities of the Depositors,
and the liabilities assumed by Purchaser in respect thereof. Exhibit A
and the Books and Records accurately reflect notations on or
reissuances of Master Certificates for Brokered CDs. All interest
referenced on the CDs is calculated as follows: (A) compounded on a
daily basis for CDs other than Brokered CDs; and (B) simple interest
for Brokered CDs. None of the CDs were issued on a discounted or zero
coupon basis and none of the CDs have a stepped or variable rate.
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(k) DISCLOSURE. No statement or description contained in the
documents provided or delivered by or on behalf of Seller to Purchaser
in connection with the transactions contemplated by this Agreement, as
of the date of the statement or description, contains any untrue
statement of a material fact or, to the best of Seller's knowledge,
omits to state a material fact necessary in order to make the
statements and descriptions contained in this Agreement or therein not
misleading.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
hereby represents and warrants to Seller as follows (such representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date):
(a) ORGANIZATION. Purchaser is a national bank, validly
existing and in good standing under the laws of the United States.
(b) CAPACITY; AUTHORITY; VALIDITY. Purchaser has all necessary
corporate power and authority to enter into this Agreement and to
perform all of the obligations to be performed by it under this
Agreement. This Agreement and the consummation by Purchaser of the
transactions contemplated hereby 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 the valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms (except as such
enforcement may be limited by the rights and obligations of receivers
and conservators of insured depository institutions under 12 U.S.C.
Section 1821(d) and (e)) or similar laws or equitable principles and
doctrines.
(c) CONFLICTS; DEFAULTS. Neither the execution and delivery of
this Agreement by Purchaser, nor the consummation of the transactions
contemplated hereby, 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 charter 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, license or agreement to which Purchaser is
a party or by which Purchaser is bound, other than approvals of
regulatory authorities, if any, which have been obtained or will be
obtained prior to or on the Closing Date; 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. 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. No
receiver or conservator has been appointed for Purchaser nor has any
proceeding been instituted or, to the best knowledge of Purchaser,
threatened for such appointment.
(d) LITIGATION AND OTHER MATTERS.
(i) There is no claim, litigation, proceeding,
arbitration or governmental investigation pending or to the
best knowledge of Purchaser, threatened, against Purchaser or
any of its Affiliates, which, if adversely determined, would
have a material adverse effect on the ability of Purchaser to
consummate the transactions contemplated hereby.
(ii) There are no outstanding judgments, orders,
rules, regulations, official interpretations and guidelines of
any arbitrator or governmental authority with
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jurisdiction over Purchaser or any of its Affiliates that
could reasonably be expected to have a material adverse effect
on Purchaser's ability to perform this Agreement.
(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. Purchaser shall be solely
responsible for any deposit broker commission that Purchaser may
separately agree in writing to pay due to the renewal of any Brokered
CD after the Closing Date.
ARTICLE V
CERTAIN COVENANTS
SECTION 5.01. 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, with respect to that party, 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. Each party shall use commercially
reasonable efforts to obtain such approvals and to satisfy any
conditions to such approvals imposed by any state or federal
governmental agency or authority expeditiously, and shall keep the
other party closely informed as to developments and progress of such
applications. Each party shall deliver to the other party a copy of
each notice, order or other item of correspondence received by such
party from any governmental authority in respect of any application
(except for confidential provisions).
(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 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 5.01(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 5.01(c) is
germane) or is required to be disclosed strictly on a need-to-know
basis to its lenders, investors, rating agencies, regulators, courts or
arbitrators; (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
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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
5.01(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, regulators 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. For any such disclosure pursuant to this subparagraph
(viii), the disclosing party will disclose only such information that,
pursuant to the opinion of its counsel, the disclosing party is legally
obligated to disclose and the disclosing party will cooperate with any
of the other party's efforts to obtain reliable assurance that
confidential treatment will be accorded to any information so
furnished. 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 5.01(c)
shall survive any termination of this Agreement. As of the Closing, all
Books and Records shall be deemed the confidential information of
Purchaser.
(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, such consent not
to be unreasonably withheld. This Section 5.01(d) shall survive any
termination of this Agreement.
(e) NOTICE TO DEPOSITORS. Seller and Purchaser shall cooperate
with each other in good faith to enable Purchaser to prepare, print and
mail, at Purchaser's expense, a notice notifying each Depositor, or in
the case of Brokered Deposits, each deposit broker, of the assignment
and assumption contemplated hereby and such other information as may be
required to be given to such Depositor or deposit broker 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.
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(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 IV 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.
(i) RESPONSIBILITY FOR TAXES. Each party understands and
intends that no taxes are due by reason of the assignment and
assumption contemplated hereby. However, in the event any such tax is
assessed: (i) the parties will equally share responsibility therefor,
if such tax is imposed by the federal government; (ii) Purchaser shall
be solely responsible therefor, if such tax is imposed by a Nebraska
state or local taxing authority; and (iii) Seller shall be solely
responsible therefor, if such tax is imposed by any other taxing
authority.
SECTION 5.02. CERTAIN COVENANTS OF SELLER. Seller hereby agrees with
Purchaser as follows:
(a) SERVICING, ETC. From the date of this Agreement and
continuing until the Closing Date: (i) Seller shall, and shall cause
its agents, to service the CDs in substantially the same manner as
currently serviced and in accordance with the terms of the CDs and all
applicable laws, rules and regulations; (ii) Seller shall not take any
action with respect to the CDs which will increase the obligations
assumed by Purchaser; and (iii) Seller shall comply with the terms and
conditions of the CDs and all laws, rules and regulations applicable
thereto.
(b) 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 normal business
hours, upon reasonable advance notice, to the Books and Records of
Seller as they relate to the CDs; (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
CDs as Purchaser or its authorized representatives may reasonably
request; and (iii) cause its personnel and its agents to provide
Purchaser assistance in its investigation of such matters.
(c) 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.
(d) RESPONSIBILITY FOR TAXES. Seller shall be liable for and
pay, and pursuant to Article VII shall indemnify and hold Purchaser
harmless from and against, all Taxes applicable to the CDs in each case
incurred or assessed during the portion of the taxable years or periods
up to the Cut-Off Time.
(e) 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.
Seller shall deliver the original Books and Records to Purchaser within
five (5) Business Days of the Closing Date, current through the Cut-Off
Time.
SECTION 5.03. CERTAIN COVENANTS OF PURCHASER. Purchaser hereby agrees
with Seller as follows:
(a) SERVICING, ETC. After the Closing Date: (i) Purchaser
shall, and shall cause its agents, to service the CDs in accordance
with the terms of the CDs disclosed to Purchaser and all
11
applicable laws, rules and regulations; (ii) Purchaser shall not take
any action with respect to the CDs which will create any obligations on
the part of Seller; and (iii) Purchaser shall comply with the terms and
conditions of the CDs as disclosed to Purchaser and all laws, rules and
regulations applicable thereto.
(b) 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.
(c) RESPONSIBILITY FOR TAXES. Purchaser shall be liable for
and pay, and pursuant to Article VII shall indemnify and hold Seller
harmless from and against, all Taxes applicable to the CDs, in each
case incurred or assessed during the portion of the taxable years or
periods after the Cut-Off Time.
ARTICLE VI
CONDITIONS OF CLOSING
SECTION 6.01. 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) BOARD RESOLUTIONS; INCUMBENCY CERTIFICATES. Purchaser
shall have received from Seller certified resolutions or unanimous
consents of Seller's Board of Directors authorizing the execution and
delivery of this Agreement, the consummation of the transactions
contemplated hereby and certificates as to incumbency and signatures of
officers authorized to execute this Agreement.
(b) 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 respects with only such exceptions as,
individually or in the aggregate, could not be expected to have a
material adverse effect on Seller, the CDs or the liabilities assumed
by Purchaser hereunder; and there shall have been delivered to
Purchaser a certificate to such effect, dated the Closing Date, signed
by an authorized officer of Seller.
(c) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Seller as set forth in Section 4.01
hereof shall be true and correct on the Closing Date in all respects as
though made on the Closing Date with only such exceptions as,
individually or in the aggregate, could not be expected to have a
material adverse effect on Seller, the CDs or the liabilities assumed
by Purchaser hereunder; and there shall have been delivered to
Purchaser a certificate to such effect, dated the Closing Date, signed
by an authorized officer of Seller.
(d) LITIGATION. No action, suit, litigation or proceeding
related to any of the transactions contemplated hereby shall have been
threatened or instituted to restrain or prohibit the consummation of
any of the transactions contemplated hereby.
(e) 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.
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(f) 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.
(g) NO INJUNCTION. There shall not be in effect any injunction
restraining or prohibiting the consummation of the transactions
contemplated hereby.
(h) NO CHANGE. There shall not have been any material adverse
change in the liabilities to be assumed by Purchaser hereunder.
(i) CONSIDERATION. Seller shall have delivered to Purchaser
the Consideration.
(j) DATA FILES; BOOKS AND RECORDS. Seller shall have delivered
to Purchaser, at least six Business Days prior to Closing: (i) data
files for the CDs as of the Cut-Off Time that are consistent with
Exhibit A and in a format reasonably acceptable to Purchaser (which
format shall be provided to Purchaser no later than September 29, 2003)
(the "Data Files"); (ii) copies of all Books and Records for all CDs
(other than Brokered CDs) that are scheduled to mature on or after
October 10, 2003 and through November 30, 2003, which Books and Records
shall be current through September 24, 2003; and (iii) an additional
copy of Exhibit A, modified to include social security and/or tax ID
numbers for Depositors.
SECTION 6.02. 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) BOARD RESOLUTIONS; INCUMBENCY CERTIFICATES. Seller shall
have received from Purchaser certified resolutions or unanimous
consents of Purchaser's Executive Committee authorizing the execution
and delivery of this Agreement, the consummation of the transactions
contemplated hereby and certificates as to incumbency, the signatures
of officers authorized to execute this Agreement and the authority of
the Executive Committee to act in this matter.
(b) 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 respects with only such exceptions as,
individually or in the aggregate, could not be expected to have a
material adverse effect on Purchaser; and there shall have been
delivered to Seller a certificate to such effect, dated the Closing
Date, signed by an authorized officer of Purchaser.
(c) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Purchaser as set forth in Section
4.02 hereof shall be true and correct on the Closing Date in all
respects as though made on the Closing Date with only such exceptions
as, individually or in the aggregate, could not be expected to have a
material adverse effect on Purchaser; 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) LITIGATION. No action, suit, litigation or proceeding
related to any of the transactions contemplated hereby shall have been
threatened or instituted to restrain or prohibit the consummation of
any of the transactions contemplated hereby.
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(e) 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.
(f) OTHER CONSENTS. Purchaser shall have received any required
consents to the transactions contemplated hereby from the other party
to any contract, instrument or commitment to which Purchaser is a
party.
(g) NO INJUNCTION. There shall not be in effect any injunction
restricting or prohibiting the consummation of the transactions
contemplated hereby.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. SELLER'S INDEMNIFICATION OBLIGATIONS. Seller shall
defend, 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: (a) the inaccuracy of any
representation or the breach of any warranty of Seller contained in this
Agreement; or (b) the failure by Seller to perform any of its covenants and
agreements contained in this Agreement.
SECTION 7.02. PURCHASER'S INDEMNIFICATION OBLIGATIONS. Purchaser shall
defend, 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: (a) the inaccuracy of any representation or the
breach of any warranty of Purchaser contained in this Agreement; or (b) the
failure by Purchaser to perform any of its covenants and agreements contained in
this Agreement.
SECTION 7.03. DEFINITION OF LOSSES. For purposes of this Article VII,
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.
SECTION 7.04. TAX CONSEQUENCES OF INDEMNIFICATION. Purchaser and Seller
agree that for federal income tax purposes any such indemnification payment
shall be treated as an adjustment to the Consideration.
SECTION 7.05. 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
written 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. Except as provided in
Section 7.05(d), notice to the Indemnifying Party under the preceding
sentence shall be given no later than 15 days after receipt by the
Indemnified Party of service of process in the event a suit or action
has commenced or 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
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any such possible claim for indemnification, and each party hereunder
will render to the other such assistance, at the expense of the
Indemnifying Party, 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
obligation to defend, and may, subject to Section 7.05(b), 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 15 days of
having been notified pursuant to this Section 7.05(a) of its assumption
of the defense of any such claim, suit or proceeding and counsel
employed. The Indemnified Party shall have the right to employ its own
counsel but the fees and expenses of such counsel shall be at the
Indemnified 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.
The Indemnifying Party may not compromise or settle any claim, suit or
action against the Indemnified Party without the consent of the
Indemnified Party: (i) unless such settlement or compromise contains a
full, absolute and unconditional release reasonably acceptable to the
Indemnified Party; or (ii) if the settlement admits liability on behalf
of or imposes obligations on the Indemnified Party that are not
satisfied by the Indemnifying Party under this Article VII.
(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 VII. 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 VII, an Indemnified Party
shall not be entitled to indemnification for any breach of any
representation or warranty or covenants made by the Indemnifying Party
under this Agreement, unless and until the aggregate amount of all
Losses of the Indemnified Party sustained by reason of such breach(es)
exceeds the Threshold Amount in the aggregate (it being understood and
agreed that the Threshold Amount is intended as a deductible, and the
Indemnifying Party shall be responsible only for Losses in excess of
the Threshold Amount). For purposes of this Agreement, the Threshold
Amount is Five Hundred Thousand Dollars ($500,000).
(e) SURVIVAL OF INDEMNIFICATION OBLIGATIONS. The obligations
of the parties set forth in this Article VII shall survive the Closing
Date for a period of two years, except that a claim for indemnification
for which notice was given pursuant to Section 7.05(a) hereof by an
Indemnified Party prior to the end of such two-year period shall
survive until such claim is fully and finally determined, and except
that the indemnification shall continue as to the covenants of the
parties set forth in Sections 5.01(c) and (d), and 5.02(e), as to all
of which no time limitation shall apply.
(f) EXCLUSIVE REMEDY.
(i) Subject to the provisions of Section 7.05(f)(ii),
the indemnification provided in this Article VII 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
15
by the other party in this Agreement, or for any other matter
or claim arising under or in connection with this Agreement or
the transactions contemplated hereby.
(ii) The parties agree that damages at law may not be
an adequate remedy for violation of Sections 5.01(c) and (d)
and 5.02(e). 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 VIII
TERMINATION
SECTION 8.01. 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 the required regulatory
approvals are not obtained;
(b) 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 30 Business Days, or
such time as may be mutually agreed upon by the parties, from the date
of notice from the party alleging the breach;
(c) by the mutual consent of the parties; or
(d) by Purchaser or Seller (provided that such terminating
party has not breached any of its representations, warranties or
covenants or is not otherwise in default hereunder) if the Closing Date
has not occurred by November 30, 2003.
SECTION 8.02. EFFECT OF TERMINATION. In the event that this Agreement
shall be terminated pursuant to this Article VIII, all further obligations of
the parties under this Agreement (other than Sections 5.01(c) and (d) and 9.06)
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 IX
MISCELLANEOUS
SECTION 9.01. 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 VII.
SECTION 9.02. 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 by 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:
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If to Seller: Prior to October 20, 2003:
Direct Merchants Credit Card Bank, N.A.
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
On or after October 20, 2003:
Direct Merchants Credit Card Bank, N.A.
Kierland I, Suite 3043
00000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
With Copies To:
Metris Companies Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
If to Purchaser: First National Bank of Omaha
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Facsimile: (000) 000-0000
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.
SECTION 9.03. ASSIGNMENT. 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.
SECTION 9.04. ENTIRE AGREEMENT. This Agreement, together with the
exhibits and schedules to this 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. This Agreement does not supersede any separate document that
specifically refers to this Agreement and indicates it is not superseded hereby.
SECTION 9.05. 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.
17
SECTION 9.06. EXPENSES. Except as the parties may otherwise agree with
respect to any required regulatory filings, 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.
SECTION 9.07. 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.
SECTION 9.08. GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the internal laws of the State of
Nebraska, without regard to principles of conflict of laws.
SECTION 9.09. 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.
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IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be duly executed as of the date first above written.
DIRECT MERCHANTS CREDIT CARD BANK,
NATIONAL ASSOCIATION, as Seller
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name Xxxxxxx X. Xxxxxx
--------------------------------------
Title President and Chief Executive Officer
-------------------------------------
FIRST NATIONAL BANK OF OMAHA,
as Purchaser
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name Xxxxxxx X. Xxxxxx
--------------------------------------
Title Senior Vice President
-------------------------------------
19
