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EXHIBIT 10.8
PURCHASE AND SALE AGREEMENT
between
WORLD FINANCIAL NETWORK NATIONAL BANK,
as Purchaser
and
XXXXXXX JEWELERS, INC.
as Seller
Dated as of July __, 1999
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 1
1.1 Definition of Terms 1
ARTICLE 2 PURCHASE AND SALE 5
2.1 Purchase and Sale 5
2.2 Assumption of Rights and Liabilities 5
2.3 Repurchase of Ineligible Accounts 6
ARTICLE 3 THE CLOSING 6
3.1 Time and Place of the Closing 6
3.2 Delivery of Instruments at the Closing 6
3.3 Purchase Price 7
3.4 Payments at Closing 7
3.5 Post-Closing Reconciliation 7
3.6 Audit Adjustment 7
3.7 Payment of Taxes and Other Charges 8
3.8 Other Adjustments 8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER 9
4.1 Organization 9
4.2 Capacity; Authorization; Validity 9
4.3 Conflicts; Defaults; Etc. 9
4.4 Title to Subject Assets 9
4.5 Receivables and Accounts 10
4.6 Litigation and Claims 11
4.7 Conduct 11
4.8 Executive Offices 11
4.9 Solvency 11
4.10 Permits, Licenses, Etc. 11
4.11 Compliance with Applicable Laws 12
4.12 Absence of Undisclosed Liabilities 12
4.13 Agreements 12
4.14 Consents 12
4.15 Contracts With Third Parties 13
4.16 Finders or Brokers 13
4.17 Books and Records 13
4.18 Accuracy of Information 13
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER 13
5.1 Organization 13
5.2 Capacity; Authority; Validity 13
5.3 Conflicts; Defaults; Etc. 14
5.4 Litigation 14
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5.5 Finders or Brokers 14
5.6 Compliance with Applicable Laws 14
ARTICLE 6 CERTAIN COVENANTS 14
6.1 Mutual Covenants and Agreements 16
6.2 Certain Covenants of Seller 16
ARTICLE 7 CONDITIONS OF CLOSING 17
7.1 Conditions to Obligations of Purchaser and Seller 17
7.2 Conditions Applicable to Purchaser 17
7.3 Conditions Applicable to Seller 19
ARTICLE 8 INDEMNIFICATION 20
8.1 Indemnification by Seller 20
8.2 Indemnification by Purchaser 21
8.3 Procedures 21
ARTICLE 9 TERMINATION 21
9.1 Termination 21
9.2 Expenses 21
ARTICLE 10 MISCELLANEOUS 22
10.1 Survival of Representations and Warranties 22
10.2 Notices 22
10.3 Assignment 22
10.4 Waiver 22
10.5 Entire Agreement 23
10.6 Amendments and Supplements 23
10.7 Captions 23
10.8 Counterparts 23
10.9 Governing Law 23
10.10 Binding Effect 23
10.11 Severability 23
10.12 Waiver of Jury Trial 23
10.13 Consent to Jurisdiction 24
10.14 Mutual Drafting 24
EXHIBITS:
EXHIBIT 1.1 INELIGIBLE ACCOUNTS 25
EXHIBIT 3.2 ASSIGNMENT AND ASSUMPTION AGREEMENT 26
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement is made and entered into this ___ day of July,
1999 (this "Agreement"), between World Financial Network National Bank
("Purchaser") and Xxxxxxx Jewelers, Inc. ("Seller"). All capitalized terms
contained in this Agreement that are not otherwise defined in this Agreement
shall have the respective meanings assigned to such terms in Article 1.
Recitals
WHEREAS, Seller is currently the owner of the Subject Assets. Purchaser
desires to purchase, and Seller desires to sell, the Subject Assets on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
various agreements, promises and covenants contained in this Agreement, the
parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1. Definition of Terms. As used in this Agreement:
"Account" shall mean (i) a Credit Card accessed open-end consumer
credit account established by Seller, (ii) the numbers associated with such
accounts, and (iii) any and all rights, remedies, benefits, interests and
titles, both legal and equitable, to which Seller may be entitled with respect
to any of the foregoing. "Account" shall exclude any Ineligible Accounts.
"Account Balance" shall mean, with respect to any Account, the
outstanding balance of such Account at the time of determination, which shall
consist of, without limitation (i) the sum of (A) the aggregate outstanding
amount of Receivables posted to such Account at such time, and (B) the aggregate
amount of any and all fees and charges posted to such Account at such time,
including, without limitation, interest and finance charges, returned check
charges, late charges, insurance premiums and attorneys' fees, MINUS (ii) the
aggregate amount of all credits, other adjustments and credit balances posted to
such Account at such time.
"Account Documentation" shall mean, with respect to an Account, any and
all documentation from time to time relating to such Account, including, without
limitation, Cardholder Agreements, applications and all legally required forms,
notices and disclosures relating to such applications and Accounts, historical
statements and microfilm records thereof, paper and systemic records of customer
service and collection notes and letters, all computer master file records and
any records of whatever form or nature related to any of the foregoing, all
Transaction Records and all
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tangible and intangible information, arising from any of the foregoing or
pertaining thereto.
"Affiliate" shall mean any Person that, directly or indirectly, through
one or more entities controls or is controlled by or is under common control
with the Person specified.
"Ancillary Documents" shall mean any agreement, certificate or other
document delivered at or prior to the Closing in connection herewith.
"BHCA" means the Bank Holding Company Act of 1956, as amended.
"Books and Records" shall mean all books, records, files, credit or
collection information, periodic statement applications, business records,
reports, correspondence, and other financial and computer data owned by Seller
for use in connection with, or relating to, the Credit Card Business or the
Subject Assets whether in documentary form or on microfilm, microfiche, magnetic
tape, computer disk or other form and whether maintained by Seller or an agent
or servicer of Seller.
"Business Day" shall mean any day, other than a Saturday or Sunday, on
which banking institutions in the State of Ohio are not authorized or obligated
by applicable Law, regulation or executive order, to close.
"Cardholder" shall mean an individual (i) to whom a Credit Card has
been issued pursuant to a Cardholder Agreement, (ii) in whose name an Account,
in connection with which the Credit Card may be used, is established, or (iii)
who is or may become an obligor on the Account.
"Cardholder Agreement" shall mean an agreement between Seller, on the
one hand, and a Cardholder, on the other hand, under which Credit Cards are
issued, containing the terms and conditions applicable to an Account as such
agreement may be amended, modified and supplemented from time to time.
"Cardholder Lists" shall mean all lists of names and/or addresses of
Cardholders.
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall have the meaning set forth in Section 3.1.
"Closing Date Statement" shall mean a statement prepared by Seller on
or before the Closing Date, a copy of which shall be delivered to Purchaser
which contains a computation of the Purchase Price as of the Cut-Off Time.
"Credit Card" shall mean the plastic card or temporary card with the
name "Jewelcard" on it which card is owned by Seller in respect of an Account
and evidences a Cardholder's right to purchase goods and services on credit.
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"Credit Card Business" shall mean, collectively, all the Accounts and
Receivables and all of the elements of Seller's business of operating the
open-ended credit card revolving retail credit plan.
"Cut-Off Time" shall mean the end of Seller's processing on the
Business Day immediately preceding the Closing Date.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a basis consistent with the prior accounting practices
of the applicable party or parties.
"Governmental Authority" shall mean any government, any state, or any
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, in each case whether national, state or local.
"Ineligible Account" shall mean any account as defined in Exhibit 1.1.
"Law" shall mean all laws, codes, statutes, ordinances, rules,
regulations, decrees and orders of any Governmental Authority.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
claim, lien (statutory or other), right of first refusal, charge or encumbrance,
imperfection of title or other matters affecting title, and any rights of third
parties whatsoever, including, without limitation, any liens or encumbrances
arising in respect of taxes.
"Master File" means, at the time of determination, the computer files
containing the most recently-posted financial, Account status and demographic
information with respect to any of the Accounts, including, without limitation,
active, inactive and recovery Accounts, which computer files represent the
aggregate amount of Account Balances on such date, together with corresponding
control reports.
"Materials and Information" shall have the meaning set forth in Section
4.18.
"Permit" shall mean any license, permit, certificate, consent,
authorization, franchise or other approval from any Governmental Authority.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, entity or
Governmental Authority.
"Prime Rate" means, on the date of determination, the bank prime loan
rate reported in the "Money Rates" section of The Wall Street Journal (or, if
such publication is discontinued, such other publication of similar type
mutually agreed upon by the parties) as the "Prime Rate" on such date, whether
or not such rate is ever actually charged or paid by any Person.
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"Private Label Program Agreement" shall mean that certain Private Label
Program Agreement entered into by and between Purchaser and Seller, dated July
16, 1999.
"Purchaser" shall have the meaning set forth in the first paragraph of
this Agreement.
"Receivables" shall mean any and all amounts owing by Cardholders on
Accounts, including, without limitation, amounts owed due to outstanding
extensions of credit, interest and finance charges (whether billed or accrued)
and fees for returned checks, late payments or otherwise.
"Scorecards" shall mean with respect to any Account, authorization or
collection, the statistical model which uses customized risk quantification to
assign numeric values or scores for each credit applicant, Cardholder or
prospect and which the Seller has used in evaluation of credit granting and
control.
"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Settlement Master File" means the Master File as of the Cut-Off Time.
"Solvent" shall mean, when used with respect to any Person on a
particular date, that on such date (i) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (ii) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subject Assets" shall have the meaning set forth in Section 2.1.
"Subsidiary" shall mean any corporation or other Person of which more
than 50% of the outstanding capital stock, or other equitable interests having
ordinary voting or other power to elect or appoint a majority of the Board of
Directors or other governing body of such corporation or Person, is at the time
directly or indirectly owned by the Person specified.
"Transaction Records" shall mean all records (in any form, paper,
electronic, magnetic or otherwise) of charges, credits, adjustments, payments or
other items, received by Seller for posting to Cardholder's Accounts, including
but not limited to charge slips and credit or adjustment slips.
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"UCC" shall mean the Uniform Commercial Code in effect in the state of
Ohio and in any other State where the filing of a financing statement is deemed
necessary by Purchaser.
ARTICLE 2
PURCHASE AND SALE
2.1. Purchase and Sale. (a) At the Closing, on the terms and subject to
the conditions set forth in this Agreement, Seller shall sell, transfer, assign,
convey and deliver to Purchaser in exchange for the Purchase Price, and
Purchaser shall purchase and acquire from Seller, free and clear of all Liens,
all of Seller's right, title and interest in and to all of the following:
(i) all of the Accounts and the Receivables (excluding
all Ineligible Accounts) as of the Cut-Off Time;
(ii) all Account Documentation;
(iii) all Books and Records;
(iv) all pending Credit Card applications and Seller's
rights with respect to applications for new Accounts;
and
(v) the Cardholder List;
(b) The items to be sold, transferred, assigned and conveyed to
Purchaser pursuant to Section 2.1(a) are collectively referred to herein as the
"Subject Assets".
2.2. Assumption of Rights and Liabilities. (a) As of the Cut-Off Time,
Purchaser shall assume all of Seller's rights and perform or discharge (or cause
to be performed or discharged), Seller's obligations arising after the Cut-Off
Time with respect to the Subject Assets conveyed to Purchaser at the Closing,
including, but not limited to, (i) the right to receive all payments on Accounts
due from Cardholders after the Cut-Off Time, and (ii) the obligations of Seller
after the Cut-Off Time under the terms of the Cardholder Agreements, but
excluding Seller's obligations related to any breach of such Cardholder
Agreements occurring before the Closing Date.
(b) Except as expressly provided herein, Purchaser does not assume,
agree to pay, perform or discharge or otherwise have, any liability or
obligation of any nature (whether fixed, contingent, accrued, unliquidated,
absolute or otherwise) of Seller or any other Person, whether arising or to be
paid, performed or discharged prior to, at, or after the Cut-Off Time.
2.3. Repurchase of Ineligible and Other Accounts. If Seller transfers
any Ineligible Accounts or related Receivables to Purchaser, during the 180 day
period
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following the Closing Date, Seller shall promptly, following written notice to
Seller by Purchaser, repurchase all such Ineligible Accounts. Seller shall pay
to Purchaser, for any such repurchases, an amount equal to the Purchase Price of
the Accounts and/or Receivables (excluding the Contingent Purchase Price related
to such Accounts and/or Receivables) together with interest at the Prime Rate on
such amount from the Closing Date to the date of payment, and Purchaser will
reassign such Accounts and/or Receivables to Seller and Purchaser will promptly
credit against Seller's payment all Cardholders' payments received for such
Accounts. Seller will assume any obligations of Purchaser to refund such
Cardholder payments credited against the Ineligible Accounts.
ARTICLE 3
THE CLOSING
3.1. Time and Place of the Closing. The closing of the transactions
contemplated hereby (the "Closing") shall take place after all of the conditions
contained in Article 7 are satisfied or waived by the appropriate party, but in
no event later than August 27, 1999,or at such other time and/or date as the
parties hereto may agree (the date of the Closing being referred to herein as
the "Closing Date").
3.2. Delivery of Instruments at the Closing. At the Closing, Seller
shall execute and deliver to Purchaser and Purchaser shall deliver to Seller an
Assignment and Assumption Agreement (the "Assignment Agreement"), which conveys
to Purchaser on the Closing Date all of Seller's rights, title and interest in
and to the Subject Assets, free and clear of all Liens, and under which
Purchaser shall assume the liabilities to be assumed by Purchaser hereunder.
Said Assignment Agreement shall be in the form of Exhibit 3.2 attached hereto,
dated the Closing Date, and shall be appropriately completed and duly executed.
Seller shall deliver to Purchaser Form UCC-1 financing statements under the
Uniform Commercial Code as in effect in the jurisdictions of the principal
executive offices of Seller and Purchaser, executed by Seller and Form UCC-3
executed by the secured party in whose favor Seller has executed a financing
statement with respect to the Subject Assets and/or their proceeds, terminating
such financing statement or releasing the Subject Assets from the property
described therein, and a separate release executed by such secured party of all
of its right, title and interest in or to the Subject Assets. Purchaser and
Seller shall, at or prior to the Closing, execute and deliver all such
additional instruments, documents or certificates as may be necessary for the
consummation of the Closing of the transactions contemplated by this Agreement.
Seller shall have also delivered such other documents and instruments as
required under Article 7.
3.3. Purchase Price. [INTENTIONALLY OMITTED FOR PURPOSES OF FILING WITH
SEC]
3.4. Payments at Closing. [INTENTIONALLY OMITTED FOR PURPOSES OF FILING
WITH SEC]
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3.5. Post-Closing Reconciliation. (a) As soon as practicable after the
Closing Date, but in no event more than thirty (30) days thereafter, Purchaser
and Seller shall recompute the Purchase Price based on the Settlement Master
File, and if there shall be a difference between the Purchase Price as stated in
the Closing Date Statement and the Purchase Price as recomputed based on the
Settlement Master File, the Seller shall pay to the Purchaser any deficiency or
the Purchaser shall repay to the Seller any excess amount paid by Seller.
(b) If Purchaser and Seller are unable in good faith to reach agreement
with respect to the Purchase Price they shall jointly select and engage a
nationally recognized firm of independent certified public accountants (the
"Third-Party Accountants") to calculate the final Purchase Price based on the
Settlement Master File and the terms of this Agreement. The Third-Party
Accountants' determination of the final Purchase Price shall be conclusive and
binding upon the parties hereto. In determining the final Purchase Price, the
Third Party Accountants shall have no authority to resolve any disagreement
which does not relate directly to the determination of the final Purchase Price.
(c) Purchaser and Seller shall cooperate with any and all reasonable
requests by the Third-Party Accountants made in connection with the Third-Party
Accountants' determination of the Purchase Price, as described in Section
3.5(b).
3.6. Audit Adjustment. (a) In the event the determination of the final
Purchase Price 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 determination of the final Purchase Price plus interest
on any amount due at the Prime Rate for each day during such period.
(b) Purchaser and Seller shall each be responsible for the fees and
expenses of their respective personnel incurred in connection with the
examination and review described in this Article 3. The fees and expenses of the
Third-Party Accountants, if any, shall be paid equally by Purchaser and Seller.
3.7. Payment of Taxes and Other Charges. Seller shall pay, or cause to
be paid, promptly when due, (a) all taxes arising out of or relating to the
operations and conduct of the Credit Card Business and/or the Subject Assets
prior to the Cut-Off Time, (b) all taxes imposed on Seller and payable by reason
of the transactions contemplated hereby and (c) use or transfer taxes imposed on
Purchaser with respect to the sale of the Subject Assets hereunder. Purchaser
shall pay all taxes arising out of or in connection with the operations and
conduct of the Credit Card Business and/or the Subject Assets after the Cut-Off
Time, other than taxes for which Seller is responsible under the first sentence
of this Section 3.7.
3.8. Other Adjustments. (a) Payments Received Before Cut-Off Time.
Seller shall be entitled to retain all payments on Accounts from Cardholders
received and posted to Accounts by Seller prior to the Cut-Off Time.
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(b) Payments Received After Cut-Off Time. Seller shall instruct the
U.S. Postal Service to forward, beginning on the Closing Date, all payments from
Seller's lockbox to Purchaser's lockbox. All payments received by Seller prior
to or after the Cut-Off Time, which were not posted to Accounts prior to the
Cut-Off Time and which constitute Account Balances or payments thereon for any
Account shall be deposited by Seller in its own account and thereafter settled
with Purchaser in accordance with the provisions of this Section 3.8(b).
Purchaser hereby authorizes and empowers Seller to sign and endorse (without
recourse by Purchaser against Seller with respect to such endorsement)
Purchaser's name as Purchaser's attorney-in-fact on all checks, drafts, money
orders or other forms of payment relating to such Account so received by Seller
but payable to the order of Purchaser. Within 24 hours after the end of each
Business Day, Seller will provide Purchaser with a computer tape listing all
said payments containing the amount and Account number for each payment so
received by Seller. Seller will transfer via wire transmission said funds to
Purchaser, without cost to Purchaser, for the first 30 days after the Closing
Date, on each Friday following the Closing and monthly thereafter. If Purchaser
receives any checks, drafts, money orders or other forms of payment relating to
the Accounts subsequent to the Cut-Off Time, which instruments are payable to
the order of Seller, Seller hereby authorizes and empowers Purchaser to sign and
endorse (without recourse by Seller against Purchaser with respect to such
endorsement) Seller's name as Seller's attorney-in-fact on such Accounts to
facilitate the deposit thereof. If any such payment is sent to Purchaser later
than specified above, such payment shall be accompanied by interest on such
amount calculated on the basis of an interest rate equal to the Prime Rate for
each day during the period between the date of receipt of such payment by Seller
and the date Seller pays Purchaser.
(c) Credits Received After Cut-Off Time. If a credit is posted to an
Account after the Cut-Off Time with respect to a Receivable arising prior to the
Cut-Off Time, Purchaser shall notify Seller and Seller shall send to Purchaser
the amount of such credit. Such payments shall be transmitted to Purchaser on
each Friday following the Closing Date. If any such payment is sent to Purchaser
later than specified above, such payment shall be accompanied by interest on
such amount calculated on the basis of an interest rate equal to the Prime Rate
for each day during the period between the date of such credit and the date
Seller pays Purchaser.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as of the date
hereof and as of the Closing Date as follows:
4.1. Organization. Seller is a corporation duly organized, validly
existing and in good standing under the Laws of the state of Delaware.
4.2. Capacity; Authorization; Validity. Seller has all necessary power
and authority to enter into this Agreement and Ancillary Documents and to
perform all of the
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obligations to be performed by it under this Agreement and Ancillary Documents.
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 and Ancillary Documents have been duly executed
and delivered by Seller and this Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms, except
as such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, and other laws relating to or
affecting creditors' rights generally and by general equity principles.
4.3. Conflicts; Defaults; Etc. Except for the consents required under
the Xxxxxxx Loan Agreement (as defined below) which Xxxxxxx shall use its best
efforts to obtain, neither the execution and delivery of this Agreement and
Ancillary Documents by Seller nor the consummation of the transactions
contemplated hereby by Seller will (i) conflict with, result in the breach of,
constitute an event which would, or with the lapse of time or action by a third
party or both would, result in a default under, or accelerate the performance
required by, the terms of any contract, instrument or commitment to which Seller
is a party or by which it is bound; (ii) violate the articles of incorporation
or by-laws, or any other equivalent organizational document, of Seller; (iii)
result in the creation of any Lien upon any of the Subject Assets; (iv) to
Seller's knowledge result in the creation of any Purchaser tax liability on the
purchase of the Subject Assets; or (v) require any consent or approval of any
regulatory authority, or under any judgment, order, writ, decree, permit or
license to which Seller is a party or bound or to which any of the Subject
Assets are subject.
4.4. Title to Subject Assets. Except for Liens existing and/or arising
under that certain Loan and Security Agreement, dated as of October 2, 1998,
between Xxxxxxx Jewelers, Inc., as Borrower, and Foothill Capital Corporation,
as Agent (the "Xxxxxxx Loan Agreement"), which Liens Seller shall cause to be
released on or before the Closing Date, Seller has good and valid title to all
of the Subject Assets, free and clear of any Lien. No person other than Seller
has owned at any time, or had any right, title or interest in at any time, any
of the Receivables or Accounts. The Assignment Agreement and the consummation of
the transactions contemplated hereby will vest in the Purchaser all right, title
and interest of Seller in and to the Subject Assets, free and clear of any Lien.
4.5. Receivables and Accounts. (a) All underwriting and origination of
Accounts were performed in accordance with the then applicable written policies
and procedures of Seller, true and complete copies of which have previously been
furnished to Purchaser. The Credit Card Business has been operated as a part of
the business of Seller and under the control of Seller. All aspects of the
Credit Card Business have been operated solely by Seller. There are no
Receivables that have been criticized by any Governmental Authority, regulatory
authority or any internal auditor in any written communication to Seller, or
classified by any regulatory authority as "Other Assets Specially Mentioned,"
"Substandard," "Doubtful," "Loss" or any similar classifications.
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(b) (i) Each of the Receivables and Accounts and the interest rates,
fees and charges in connection therewith comply, and have at all times complied
with, all applicable Laws; (ii) each Account, Receivable and the related
Cardholder Agreement is the legal, valid and binding obligation of the
Cardholder-obligor and any guarantor named therein and each is enforceable and
legally collectible (not including the ability of the Cardholder to pay) in
accordance with its terms under all applicable Laws, and to Seller's knowledge
is subject to no defense, including without limitation, bankruptcy, offset or
counterclaim; (iii) a Credit Card has been issued in connection with each
Account; (iv) all Accounts are with natural persons for use primarily for
personal, family or household purposes, and no Account has been entered into
with any corporation, partnership, association or other similar entity; (v) to
Seller's knowledge, no Receivable is a "commercial loan", as that term is used
in the BHCA; (vi) each Receivable is free and clear of any and all Liens
incurred or existing by, through or on behalf of, or in favor of any Person;
(vii) each Receivable arose in connection with a bona fide sale and delivery of
merchandise or Services by Seller; (viii) each Receivable is for an amount
payable in U.S. dollars, subject to returns, allowances and other adjustments in
the ordinary course of business; (ix) to the best of Seller's knowledge none of
the Receivables arose out of any fraud or malfeasance of any Cardholder,
customer of Seller, or any other person, or any fraud, malfeasance or negligence
of any employee or agent of Seller; (x) each Receivable is collectible in the
ordinary course of business (not including the ability of the Carholder to pay);
(xi) each Receivable consists of an "account", "chattel paper" or a "general
intangible", and is not an "instrument", under and as defined in Article or
Division 9 of the UCC; (xii) each Cardholder Agreement constitutes the entire
agreement of the Seller and the Cardholder and Seller has made no amendment,
modification or supplement to any Cardholder Agreement which is not reflected in
writing in such agreement; and (xiii) the Credit Card Business has been
conducted by Seller in all material respects in compliance with all applicable
Laws.
4.6. Litigation and Claims. To the best of Seller's knowledge, there is
no litigation, proceeding, or arbitration pending against or to which Seller is
a party. To the best of Seller's knowledge, there is no claim, investigation or
material controversy pending against or affecting Seller or to which Seller is a
party, materially and adversely affecting or which could materially and
adversely affect the Subject Assets, the Credit Card Business or the ability of
Seller to consummate the transactions contemplated hereby or under the Ancillary
Documents; (b) to the best of Seller's knowledge, no such claim, litigation,
proceeding, arbitration, investigation or controversy has been threatened or is
contemplated and no facts exist which would provide a basis for any such claim
or proceeding; (c) the Subject Assets and Credit Card Business are subject to no
proceeding pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940; (d)
Seller is not subject to any agreement with any regulatory authority with
respect to its operations affecting the Subject Assets, the Credit Card Business
or the ability of Seller to consummate the transactions contemplated hereby or
under the Ancillary Documents; and (e) there are no violations, with respect to
which refunds or restitutions on any Account may be required, cited in any
compliance report relating to the Credit Card Business as a result of an
examination or review by any regulatory authority.
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4.7. Conduct. Since April 9, 1999, (a) there has been no material and
adverse change in the results of operations of the Credit Card Business
jeopardizing the collectibility of the Accounts and there has been no material
and adverse change with respect to the Subject Assets; Seller has not effected
any change in its policies, practices or procedures relating to the Accounts,
Seller has not amended the Cardholder Agreements except for the amendments
provided to Purchaser; (b) Seller has carried on the Credit Card Business in the
ordinary course of business, diligently and in a manner consistent with its past
practices, and (c) except in the ordinary course of business, Seller has not
disposed of or discontinued any portion of its Credit Card Business or any
Receivables. Seller has performed all obligations required to be performed by it
to date under the Cardholder Agreements and is not in default under, and no
event has occurred which, with the lapse of time or action by a third party,
could result in a default under, any such agreements. All such agreements are
legal, valid and binding obligations of Seller, the Cardholder and any guarantor
named therein, fully enforceable by the respective parties thereto in accordance
with their respective terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship, and other laws relating to or affecting creditors' rights
generally and by general equity principles.
4.8. Executive Offices. The chief executive office and principal place
of business of Seller is 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
4.9. Solvency. Seller is, and immediately after the consummation of the
transactions contemplated by this Agreement, will be, Solvent.
4.10. Permits, Licenses, Etc. Seller has all Permits that are required
in order to carry on the Credit Card Business (including, without limitation,
Permits relating to consumer finance) and to consummate the transactions
contemplated by this Agreement (collectively, the "Business Permits"). Seller is
not in violation or default of any of the Business Permits. All the Business
Permits are in full force and effect, and, to the knowledge of Seller, no
suspension, cancellation or non-renewal of any Business Permit is threatened,
nor does any basis for such suspension, cancellation or non-renewal exist.
4.11. Compliance with Applicable Laws. Neither (a) the origination,
establishment, maintenance, servicing or use of any Account, any Receivable or
any of the other Subject Assets by Seller; (b) any of the Account Documentation;
(c) the conduct of the Credit Card Business by Seller, nor (d) the consummation
of the transactions contemplated by this Agreement or any Ancillary Document,
violates or has violated any Law now in effect or in effect when any Account,
Receivable, or any other Subject Asset was established or used. Seller has not
received any notice of any violation of Law applicable to the Credit Card
Business, any Account, any Receivable or any other Subject Asset, and to
Seller's knowledge no basis for the allegation of any such violation exists. No
Governmental Authority has placed any restriction on the Credit Card Business or
any of the Accounts, the Receivables or the other Subject Assets, or the
consummation of the transactions contemplated by this Agreement or any Ancillary
Document. No investigation or review by any Governmental Authority with
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respect to the Credit Card Business or any of the Accounts, the Receivables, the
other Subject Assets or the consummation of the transactions contemplated by
this Agreement or any Ancillary Document is pending or, to Seller's knowledge,
threatened, nor to Sellers' knowledge has any Governmental Authority indicated
an intention to conduct such an investigation or review.
4.12. Absence of Undisclosed Liabilities. Seller has no liability or
obligation of any nature, secured or unsecured (whether accrued, absolute,
contingent or otherwise) which are reasonably likely to have an adverse effect
on the Subject Assets. To the best of Seller's knowledge, there is no basis, for
assertion against it as of the Closing Date of any liability or obligation of
any nature which are reasonably likely to have an adverse effect on the Subject
Assets.
4.13. Agreements. Seller has furnished to Purchaser true and complete
copies of the form of Cardholder Agreement, periodic statement, application form
and all notices relating to any change of terms regarding any Credit Card.
4.14. Consents. Except for the consents required under the Xxxxxxx Loan
Agreement, which Seller shall obtain prior to the Closing Date, no consent,
authorization or approval of, or exemption by, or filing with, any Governmental
Authority or any other Person is required to be obtained by Seller in connection
with the execution, delivery and performance by Seller of this Agreement or any
other Ancillary Document to which Seller is a party or the consummation by
Seller of the transactions contemplated hereby or thereby.
4.15. Contracts With Third Parties. Purchaser will not be assuming any
contracts of Seller.
4.16. 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 claim against
Purchaser for any brokerage commission or finder's fee or like payment.
4.17. Books and Records. All of Seller's Books and Records are in all
material respects, complete and correct, and are and have been maintained in
accordance with GAAP and all Laws applicable to the Credit Card Business and/or
all of the Subject Assets.
4.18. Accuracy of Information. This Agreement, the Master File of
Accounts and all reports, statements, lists, certificates and other documents
delivered, and any information heretofore or hereafter furnished, by Seller in
writing to Purchaser in connection with this Agreement or any of the
transactions contemplated hereby, and all written information supplied by Seller
in the due diligence review by Purchaser (collectively, the "Materials and
Information"), are materially true and complete with respect to all such
information presented therein and materially accurate and do not omit to state a
material fact required to be stated therein or necessary to make the
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statements herein or therein, in the light of the circumstances under which they
were made, not misleading. Such Materials and Information shall be deemed to
constitute representations and warranties of Seller under this Agreement to the
same extent as if set forth in this Agreement in full. Seller has provided in
writing all information requested from it in writing by Purchaser.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as of the date
hereof and of the Closing Date as follows:
5.1. Organization. Purchaser is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States.
5.2. Capacity; Authority; Validity. Purchaser has all necessary power
and authority to enter into this Agreement and the Ancillary Documents and to
perform all the obligations to be performed by it under this Agreement and the
Ancillary Documents. This Agreement and the Ancillary Documents 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 and the Ancillary Documents have been duly
executed and delivered by Purchaser and this Agreement constitutes a legal,
valid and binding obligation of Purchaser, enforceable in accordance with its
terms, and except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship, and other laws
relating to or affecting creditors' rights generally and by general equity
principles.
5.3. Conflicts; Defaults; Etc. Neither the execution and delivery of
this Agreement by Purchaser nor the consummation of the transactions
contemplated hereby by Purchaser will: (i) conflict with, result in the breach
of, constitute an event which would, or with the lapse of time or action by a
third party or both would, result in a default under, or accelerate the
performance required by, the terms of any contract, instrument or commitment to
which Purchaser is a party or by which it is bound; (ii) violate the articles of
incorporation or by-laws of Purchaser; (iii) require any consent or approval
under any judgment, order, writ, decrees, permit or license, to which Purchaser
is a party or by which it is bound; or (iv) require the consent or approval of
any Governmental Authority or other Person.
5.4. Litigation. There is no claim, or any litigation, proceeding,
arbitration, investigation or controversy pending against or affecting Purchaser
and by which it is bound, which adversely affects in any material respect
Purchaser's ability to consummate the transactions contemplated hereby; to
Purchaser's knowledge, no such claim, litigation, proceeding, arbitration,
investigation or controversy has been threatened or is contemplated; to
Purchaser's knowledge, no facts exist which would provide a basis for any such
claim, litigation, proceeding, arbitration, investigation, or
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controversy; and Purchaser is not subject to any agreement with any regulatory
authority which would prevent the consummation of the transactions contemplated
by this Agreement or the Ancillary Documents by the Purchaser.
5.5. 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 claim against
Seller for any brokerage commission or finder's fee or like payment.
5.6 Compliance with Applicable Laws. The consummation of the
transactions contemplated by this Agreement or any Ancillary Document does not
violate nor has violated any Law now in effect.
ARTICLE 6
CERTAIN COVENANTS
6.1. Mutual Covenants and Agreements. Seller and Purchaser each hereby
covenant and agree that:
(a) Cooperation. It shall cooperate fully with the other party hereto
in furnishing any information or performing any action reasonably requested by
such party, which information or action is necessary to the speedy and
successful consummation of the transactions contemplated by this Agreement.
Subject to its further rights under this Agreement, it shall promptly cause the
Closing to occur at the earliest practicable time, with time being of the
essence.
(b) Confidentiality. All information furnished by one 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 necessary or required to be disclosed to
Affiliates, auditors, investment advisors, legal counsel or rating agencies,
provided that such party is advised of the confidential nature of the
information; (ii) is already lawfully known to such other party when received;
(iii) thereafter becomes lawfully obtainable from other sources; (iv) is
required to be disclosed to, or by, a Governmental Authority; or (v) is, based
on the advice of counsel, required by Law to be disclosed by such other party;
provided, however, that notice of such disclosure has been given to the
Protected Party, when legally permissible, and that such other party making the
disclosure uses its best efforts to provide notice to permit a Protected Party
to take legal action to prevent the disclosure; or (vi) is required by court
order.
(c) Press Releases. Except as may be required by Law or a court or
Governmental Authority, neither Seller nor Purchaser, nor any of their
respective Affiliates, shall, prior to, on or after the Closing, issue a press
release or make a public
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announcement related to the transactions contemplated hereby without the prior
consent of the other party hereto, which consent shall not be unreasonably
withheld or delayed.
(d) Notice to Cardholders. Seller and Purchaser shall cooperate with
each other in good faith, consistent with applicable Law, to prepare, print and
mail on a timely basis to each Cardholder a notice notifying each Cardholder of
(i) the purchase of the Accounts by Purchaser; (ii) matters of which Cardholders
are required, in Purchaser's good faith judgment, by applicable Law to be
notified as a result of the transactions contemplated by this Agreement, and
(iii) other matters which Purchaser reasonably determines to be appropriate.
Each such notice shall be prepared, printed and mailed by Purchaser in such
manner and at such time as determined by Purchaser.
(e) Advice of Changes. Between the date hereof and the Closing Date,
each party shall promptly advise the other in writing of any fact 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
contained herein untrue in any material respect; provided, however, that for the
purposes of determining whether the conditions set forth in Section 7.2.(b) and
Section 7.3.(b) are satisfied, the representations and warranties set forth in
Article 4 and Article 5 shall be unaffected by any update provided pursuant to
this Section 6.1.(e).
6.2. 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: (i) maintain and
service the Accounts in substantially the same manner as previously maintained
and serviced and in compliance with applicable Law; (ii) not pledge (other than
the existing Lien created by Xxxxxxx Loan Agreement), sell or transfer any
Account without the prior written consent of the Purchaser; (iii) not make any
change to their policies and procedures that could have an adverse effect on the
Accounts except as required by Law or without Purchaser's prior written consent,
including without limitation their write-off policy, credit scoring criteria and
new account approval criteria; (iv) not send a change in terms notice to
Cardholders without the prior written approval of Purchaser; (v) take no action
or fail to take any action which impairs any rights of Purchaser under this
Agreement; (vi) not amend any Cardholder Agreements; and (vii) not close any
Accounts, except in accordance with established policies and procedures in
existence at the date of this Agreement.
(b) Other Negotiations. During the period from the date of this
Agreement to the Closing Date, Seller shall not, directly or indirectly, (i)
initiate, solicit or encourage discussions with; (ii) provide (or permit access
to) information to, or (iii) approve or enter into a transaction with, any
Person or group of Persons concerning any proposed or possible transfer of any
of the Subject Assets (all such transactions being referred to herein as
"Acquisition Transactions"). Seller shall promptly communicate to Purchaser
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the terms of any proposal which they may receive in respect of an Acquisition
Transaction and any request by or indication of interest on the part of any
third party with respect to initiation of any Acquisition Transaction or
discussions with respect thereto.
(c) Access. Seller shall permit Purchaser and its representatives full
access to its Books and Records. Seller shall furnish (or cause to be furnished)
Purchaser with true, accurate and complete copies of properties, books, records,
files, contracts and other records related to the Subject Assets as Purchaser
may reasonably request. Seller shall cause its personnel to provide Purchaser
assistance in Purchaser's investigation of matters related to the Subject
Assets; provided, however, that Purchaser's investigation shall be conducted in
a manner which does not unreasonably interfere with Seller's normal operations,
customer and employee relations. Seller shall permit Purchaser (or its designee)
to review all Accounts to verify none of the Accounts is subject to a bankruptcy
proceeding.
(d) Further Assistance. On and after the Closing Date, Seller (i) shall
give such further assurances to Purchaser, execute, acknowledge and deliver all
such acknowledgments and other instruments and take such further action as may
be necessary and appropriate to carry out fully and effectively the transactions
contemplated hereby, including, without limitation, the conveyance of the
Subject Assets and full legal and equitable title to such Subject Assets, and to
discharge Purchaser from any obligations not otherwise assumed by Purchaser on
the Closing Date relating to the Subject Assets; and (ii) shall execute and
deliver such documents as are reasonable necessary in Purchaser's opinion to
vest in Purchaser, good and valid title to the Accounts and Receivables,
including, without limitation, UCC financing statements and amendments to
existing UCC financing statements.
(e) Books and Records. At or prior to the Closing, Seller shall deliver
(or cause to be delivered), at its expense, to Purchaser, the originals and all
copies of all notices, Cardholder Lists, Books and Records. Such documents, when
delivered shall be organized in substantially the same manner as organized by
Seller in the normal conduct of the Credit Card Business. Any such documents not
delivered at or prior to the Closing, shall be delivered by Seller within 24
hours (except in the case in the case of credit card applications and agreements
which shall be provided as soon as practicable, but in no event later than 10
Business Days) of any request for such documentation by Purchaser.
(f) Limited Right to Use Marks. Seller hereby grants Purchaser a
royalty-free license to use, after the Closing, the name "Jewelcard" and such
other marks of Seller as have been used in connection with the Accounts and the
Receivables for identification purposes, to the extent permitted by Law, in any
collection efforts or other Cardholder communications and for the purpose of
otherwise enforcing all of Purchaser's rights in the Subject Assets. Purchaser
shall cease all use of the Marks when Purchaser no longer owns any Accounts.
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ARTICLE 7
CONDITIONS OF CLOSING
7.1. Conditions to Obligations of Purchaser and Seller. The obligations
of Purchaser and Seller under this Agreement to consummate the transactions
contemplated by this Agreement are subject to the satisfaction of the following
conditions as of the Closing Date:
(a) Approvals and Authorizations. All necessary approvals and
authorizations of, filings and registrations with and notifications to, all
Governmental Authorities with respect to the transactions contemplated by this
Agreement shall have been duly obtained or made and shall be in full force and
effect at the Closing Date.
7.2. Conditions Applicable to Purchaser. The obligations of Purchaser
under this Agreement to consummate the transactions contemplated by this
Agreement are, in addition to the condition contained in Section 7.1, subject to
the satisfaction of the following conditions as of the Closing Date:
(a) Performance of This Agreement. Each of the terms, covenants and
conditions of this Agreement to be complied with and performed by the Seller at
or prior to the Closing Date shall have been fully complied with and performed
in all material respects.
(b) Accuracy of Representations and Warranties. There shall be no
material inaccuracy in any of the representations and warranties of Seller set
forth in Article 4 as of the date of this Agreement or as of the Closing Date,
assuming that such representations and warranties are made anew with the same
force and effect on and as of the Closing Date.
(c) No Material and Adverse Change. Since the date of this Agreement,
there shall have been no material and adverse change in the condition (financial
or otherwise, including no material increase in the percentage of delinquent
accounts) of the Subject Assets or the Credit Card Business.
(d) Litigation. No action, suit, litigation, proceeding or
investigation related to any of the transactions contemplated hereby shall have
been threatened or instituted which in the opinion of the Purchaser is
reasonably likely to (i) materially restrict or prohibit or otherwise have a
material and adverse effect on the consummation of any of the transactions
contemplated hereby, or (ii) have a material and adverse effect on Purchaser,
the Subject Assets or the Credit Card Business.
(e) Seller's Certificate Concerning Agreement. Seller shall have
furnished to Purchaser a certificate dated the Closing Date, signed by an
authorized officer of Seller (no less senior than a Vice President) that, the
conditions set forth in Sections 7.2(a), 7.2(b) 7.2(c), and 7.2(d) have been
satisfied with respect to the Seller. Seller shall have
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furnished a Certificate of Incumbency, signed by the Secretary of Seller, as to
the title and status of the authorized officers signing the above-referenced
certificate.
(f) Effect of Acquisition. The acquisition of the Subject Assets shall
(i) be lawful for Purchaser under all applicable Laws; (ii) shall not cause
Purchaser or any of its parent companies or other Affiliates to lose any rights
or privileges, or have imposed on them any obligations, under the BHCA or to be
in any respect not in compliance with any Law, and (iii) not cause Purchaser or
any of its Affiliates to become a "bank holding company", as that term is
defined in Section 2(a) of the BHCA. Neither Purchaser nor any of its
Affiliates, as a result of a change in any Law applicable thereto, shall be
subject or face a significant possibility of being subjected to any requirement,
restriction or condition with respect to its structure or operations which, in
the judgment of Purchaser exercised in good faith, will have a material and
adverse effect upon, or will be materially burdensome with respect to Purchaser
or any of its Affiliates.
(g) Financing Statements. Seller shall have executed and delivered to
Purchaser for filing all such UCC financing statements, in a form reasonably
acceptable to Purchaser, as are reasonably required by Purchaser.
(h) Perfection. Purchaser shall have received evidence, in form and
substance reasonably satisfactory to it, that all actions necessary to perfect
its interest in and to the Accounts, the Receivables and the other Subject
Assets, and to ensure that Purchaser has good and valid title in and to the
Accounts, the Receivables and the other Subject Assets, have been taken.
(i) Licenses and Consents. Purchaser shall have received evidence, in
form and substance reasonably satisfactory to it, that all licenses and consents
required by or necessary for the consummation of the transactions contemplated
by this Agreement have been obtained.
(j) Governmental Authority. Purchaser shall have received evidence, in
form and substance reasonably satisfactory to it, that all registrations and
filings required by or with any Governmental Authority for the consummation of
the transactions contemplated by this Agreement have been taken.
(k) Identification of Accounts. The Accounts shall have been identified
and all Ineligible Accounts shall have been separately identified. Purchaser and
Seller are able to process such Accounts and Ineligible Accounts separately.
Separate lockboxes shall have been established for the remittance of payments
under the Accounts and the Ineligible Accounts.
7.3. Conditions Applicable to Seller. The obligations of Seller under
this Agreement to consummate the transactions contemplated hereby are, in
addition to the conditions contained in Section 7.1, subject to the satisfaction
of the following conditions as of the Closing Date:
(a) Performance of This Agreement. Each of the terms, covenants and
conditions of this Agreement to be complied with and performed by the Purchaser
at or
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prior to the Closing Date shall have been fully complied with and performed in
all material respects.
(b) Accuracy of Representations and Warranties. There shall be no
material inaccuracy in the representations and warranties of Purchaser set forth
in Article 5 as of the date of this Agreement or as of the Closing Date,
assuming that such representations and warranties are made anew with the same
force and effect on and as of the Closing Date.
(c) Purchaser's Certificate Concerning Agreement. Purchaser shall have
furnished to Seller a certificate dated the Closing Date, signed by an
authorized officer of Purchaser (no less senior than a Vice President) that, to
the best of the knowledge and information of such officer, the conditions set
forth in Sections 7.3(a) and 7.3(b) have been satisfied with respect to
Purchaser.
(d) No Material and Adverse Change. Since the date of this Agreement,
there shall have been no material and adverse change in the condition (financial
or otherwise) of Bank.
(e) Litigation. No action, suit, litigation, proceeding or
investigation related to any of the transactions contemplated hereby shall have
been threatened or instituted which in the opinion of the Seller is reasonably
likely to (i) materially restrict or prohibit or otherwise have a material and
adverse effect on the consummation of any of the transactions contemplated
hereby, or (ii) have a material and adverse effect on Seller.
(f) Licenses and Consents. Seller shall have received evidence, in form
and substance reasonably satisfactory to it, that all licenses and consents
required by or necessary for the consummation of the transactions contemplated
by this Agreement have been obtained.
(g) Governmental Authority. Seller shall have received evidence, in
form and substance reasonably satisfactory to it, that all registrations and
filings required by or with any Governmental Authority for the consummation of
the transactions contemplated by this Agreement have been taken.
ARTICLE 8
INDEMNIFICATION
8.1. Indemnification by Seller. Seller shall indemnify and hold
harmless Purchaser, its Affiliates, their respective officers, directors,
employees and agents from and against any and all claims, losses, liabilities,
actions or causes of action, assessments, damages, fines, penalties, costs and
expenses (including, without limitation, reasonable fees and disbursements of
counsel) (collectively, "Losses"), based upon, in connection with, arising out
of, or resulting from, any of the following:
(a) any inaccuracy of any of the representations or warranties made by
Seller in this Agreement or in any Ancillary Document;
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(b) any breach or failure by Seller to perform any of its covenants or
agreements contained in this Agreement or in any Ancillary Document;
(c) any act or omission of Seller and its agents and dealers with
respect to any of the Subject Assets prior to the Closing Date; or
(d) any liability or obligation of any nature of Seller whether arising
or to be paid, performed or discharged prior to, at or after the Cut-Off Time.
8.2. Indemnification by Purchaser. Purchaser shall indemnify and hold
harmless Seller, its Affiliates, their respective officers, directors, employees
and agents, from and against, any and all Losses based upon, in connection with,
arising out of, or resulting from any of the following:
(a) any inaccuracy of any of the representations or warranties made by
Purchaser in this Agreement or in any Ancillary Document;
(b) any breach or failure by Purchaser to perform any of its covenants
or agreements contained in this Agreement or in any Ancillary Document;
(c) all of Purchaser's liabilities and obligations under the Cardholder
Agreements to be performed by Purchaser after the Cut-Off Time; or
(d) any act or omission of Purchaser and its agents with respect to any
of the Subject Assets on or after the Closing Date.
8.3. Procedures. Each party shall promptly notify the other party of
any claim, demand, suit or threat of suit of which that party becomes aware
(except with respect to a threat of suit either party might institute against
the other) which may give rise to a right of indemnification pursuant to this
Agreement. The indemnifying party will be entitled to participate in the
settlement or defense thereof and, if the indemnifying party elects, to take
over and control the settlement or defense thereof with counsel satisfactory to
the indemnified party. In any case, the indemnifying party and the indemnified
party shall cooperate (at no cost to the indemnified party) in the settlement or
defense of any such claim, demand, suit or proceeding.
ARTICLE 9
TERMINATION
9.1. Termination. (a) In the event the requirements of Sections 7.2 or
7.3 are not satisfied or waived by August 27, 1999, either party may terminate
this Agreement without any further obligation or liability (except for
obligations which expressly survive) to the party who did not satisfy the
conditions of Section 7.2 or 7.3, as the case may be, effective upon filing
notice of such termination to such other party.
(b) Effect of Termination. If this Agreement is terminated, the
agreements of the parties hereto contained in Section 6.1(b), Section 6.1(c),
Section 9.2 and Article 8
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shall survive such termination. Termination of this Agreement will not relieve
either party of liability for breaches of this Agreement.
9.2. Expenses. Each party shall pay all of its own fees and expenses
incurred in connection with the transactions contemplated in this Agreement,
except as otherwise provided expressly herein.
ARTICLE 10
MISCELLANEOUS
10.1. Survival of Representations and Warranties. Notwithstanding any
investigation made by or on behalf of any party at any time, each representation
and warranty shall survive the Closing Date.
10.2. Notices. All notices, consents, approvals and other
communications to be given hereunder shall be in writing, shall be deemed to
have been duly given upon receipt, and shall be delivered (i) in person, (ii) by
United States registered or certified mail, with postage prepaid, return receipt
requested, or (iii) by a nationally recognized overnight courier service that
provides written evidence of receipt, and addressed as follows:
(a) If to Purchaser:
World Financial Network With a Copy to:
National Bank Attn: Xxxxx X. Xxxxxxxx, Counsel
000 XxxxXxxxxx Xxxxx Fax: (000) 000-0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President
Fax: (000) 000-0000
(b) If to Seller:
Xxxxxxx Jewelers, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: E. Xxxxx Xxxxxx
Fax: (000) 000-0000
or to such other address or addresses as Purchaser and Seller may from time to
time designate by notice as provided herein, except that notices of change of
address shall be effective only upon receipt.
10.3. Assignment. No party hereto shall assign or delegate this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party, except that either party shall be permitted to
assign its rights hereunder to any of its Affiliates without the other party's
consent.
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10.4. Waiver. One party hereto may, by written notice to the other
party hereto, (a) extend the time for the performance of any of the obligations
or other actions of the other party under this Agreement; (b) waive any
inaccuracies in the representations or warranties of the other party contained
in this Agreement or in any document delivered pursuant to this Agreement; (c)
waive compliance with any of the conditions or covenants of the other party
contained in this Agreement; or (d) waive or modify performance of any of the
obligations of the other party under this Agreement. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including,
without limitation, any investigation by or on behalf of one party, shall be
deemed to constitute a waiver by such party of compliance with any of the
representations, warranties, covenants, conditions or agreements contained in
this Agreement. The waiver by one party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
10.5. Entire Agreement. This Agreement (including the Exhibits hereto)
supersedes any other agreement, whether written or oral, that may have been made
or entered into by Seller and Purchaser relating to the matters contemplated
hereby, and together with the Private Label Credit Card Program Agreement
between Purchaser and Seller constitutes the entire agreement of the parties.
10.6. Amendments and Supplements. This Agreement may be amended,
modified or supplemented only by the written agreement of the parties hereto.
10.7. Captions. 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.
10.8. Counterparts. This Agreement may be executed with counterpart
signature pages or in two or more counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.
10.9. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Ohio without regard to internal
principles of conflict of laws.
10.10. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns, and the provisions of Article 8 shall inure to the benefit of
the indemnified parties referred to therein.
10.11. Severability. If any provision of this Agreement is held to be
invalid, void or unenforceable, all other provisions shall remain valid and be
enforced and construed as if such invalid provision were never a part of this
Agreement.
10.12. Waiver of Jury Trial. Each of the parties hereto shall, and
hereby does, waive trial by jury in any action or proceeding involving any of
the parties hereto on any matters whatsoever arising out of or in any way
connected with this Agreement; provided that such waiver shall not apply to
cross claims in any bona fide action
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originally involving a third-party and a jury trial or any bona fide action
brought by a third-party against one or more of the parties hereto and involving
a jury trial.
10.13. Consent to Jurisdiction. Each party (i) consents and submits to
the jurisdiction of the Courts of the State of Ohio and of the Courts of the
United States for the Eastern Division of the Southern District of Ohio for all
purposes of this Agreement, including, without limitation, any action or
proceeding instituted for the enforcement of any right, remedy, obligation or
liability arising under or by reason hereof or thereof.
10.14. Mutual Drafting. This Agreement is the joint product of Seller
and Purchaser and each provision hereof has been subject to mutual consultation,
negotiation and agreement of Seller and Purchaser and shall not be construed for
or against any party hereto.
IN WITNESS WHEREOF, each of Seller and Purchaser have caused this
Agreement to be duly executed and delivered as of the date first above written.
WORLD FINANCIAL NETWORK
XXXXXXX JEWELERS, INC. NATIONAL BANK
By: By:
-------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
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EXHIBIT 1.1 TO PURCHASE AND SALE AGREEMENT
INELIGIBLE ACCOUNTS
An open-end credit card account shall be deemed an "Ineligible Account" if as of
the Cut-Off Time one or more of the following criteria shall be applicable,
whether or not the revelant facts are then known to Seller or Purchaser:
1) as to which any Receivable has been written off by Seller or has not
been written off but was required to have been written off according to
GAAP or the normal operating policies of Seller or has been referred to
a collection agency or an attorney for collection;
2) as to which the Cardholder is deceased or has been declared incompetent;
3) as to which the Cardholder is the subject of any petition under the
United States Bankruptcy Code of 1978, as amended, or is a party to any
other insolvency proceedings under state law, or as to which Seller has
executed a reaffirmation agreement with a Cardholder who filed a
petition for protection under any chapter of the United States
Bankruptcy Code of 1978, as amended;
4) as to which the Cardholder's Account does not have in effect a valid
written Cardholder Agreement enforceable in accordance with its terms,
or is subject to a dispute by the Cardholder or is subject to defense,
offset, claim or counterclaim as a result of Seller's action or
inaction;
5) which has been identified in the exercise of diligence and good faith by
Seller on its books and records as being fraudulent;
6) as to which the Cardholder is under the age of 18 years;
7) which is a non-Credit Card accessed account;
8) as to which the Cardholder is not an individual, or the account is
maintained in a corporate or other business name;
9) as to which the account is one-hundred eighty (180) or more days past
due;
10) any account which was opened prior to January 1, 1996 which has no
outstanding balance and which has had no financial activity including
purchases, payments or credits within the prior 12 month period; or
11) as to which there is pending litigation, proceeding or arbitration
against or affecting Seller.
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EXHIBIT 3.2 TO PURCHASE AND SALE AGREEMENT
[FORM OF] ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is made and delivered this
day of July, 1999 by and between Xxxxxxx Jewelers, Inc. ("Seller") and World
Financial Network National Bank ("Purchaser"), pursuant to the Purchase and Sale
Agreement between the parties dated July , 1999 (the "Purchase Agreement"),
and for the consideration and on the terms stated therein, the terms defined
therein being used herein shall have the meaning as defined in the Purchase
Agreement.
1. Assignment. Seller does hereby sell, convey, transfer and assign to
Purchaser, its successors and assigns, for its own use and benefit forever, and
not as security for any indebtedness, all of the Subject Assets.
2. Assumption. Purchaser does hereby assume each of Seller's obligations
under the Cardholder Agreements relating to Accounts including the liability for
Credit Balances and the obligation to refund them, but excluding Seller's
obligations for any breach of such Cardholder Agreements occurring before the
Closing Date or arising from any act or omission of Seller or its dealers, all
subject to the terms and conditions of the Purchase Agreement.
3. Assignments; Governing Law. This Assignment and Assumption Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto, and shall be governed by and construed and
interpreted in accordance with the Purchase Agreement, the internal laws of the
State of Ohio without reference to rules of conflicts of laws, and applicable
federal law.
4. Purchase Agreement Continued. Nothing herein shall be deemed to
supersede any of the obligations, agreements, covenants, representations or
warranties of Seller or Purchaser contained in the Purchase Agreement.
WORLD FINANCIAL NETWORK
NATIONAL BANK XXXXXXX JEWELERS, INC.
By: By:
-------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
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