Exhibit 10.3
EXECUTION COPY
ASSET PURCHASE AGREEMENT DATED JULY 29, 2003 BY AND AMONG
METRIS COMPANIES INC., METRIS DIRECT, INC., METRIS DIRECT SERVICES, INC.,
METRIS TRAVEL SERVICES INC., METRIS CLUB SERVICES, INC.,
METRIS WARRANTY SERVICES, INC., AND METRIS WARRANTY SERVICES OF FLORIDA, INC.,
CPP HOLDINGS LIMITED AND CPP US OPERATIONS GROUP, LLC
Table of Contents
Page
ARTICLE I
PURCHASE AND SALE, PURCHASE PRICE, ASSUMED LIABILITIES AND RETAINED ASSETS
1
1.1 Purchase and Sale of the Purchased Assets............................1
1.2 Purchase Price.......................................................4
1.3 Assumed and Excluded Liabilities.....................................4
1.4 Consent of Third Parties; Authorizations.............................7
1.5 Retained Assets......................................................9
ARTICLE II
DEFINITIONS
9
2.1 General..............................................................9
2.2 Definitions..........................................................9
2.3 Interpretation......................................................17
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
18
3.1 Status of Sellers; Enforceability; Conflicts; Consents..............18
3.2 Financial Statements................................................20
3.3 Undisclosed Liabilities.............................................20
3.4 Title to Properties; Purchased Assets...............................20
3.5 Real Property.......................................................21
3.6 Real Estate and Personal Property Taxes Assessments.................21
3.7 Inventory...........................................................21
3.8 [Intentionally Omitted].............................................22
3.9 Contracts...........................................................22
3.10 Intellectual Property..............................................23
3.11 Required Assets; Sufficiency of Assets..............................25
3.12 Personnel Identification and Compensation...........................25
3.13 Compliance with Laws and Orders; Regulated Entity...................25
3.14 Products and Services...............................................27
3.15 Absence of Questionable Payments....................................27
3.16 Litigation..........................................................28
3.17 Employee Benefit Plans..............................................29
3.18 Tax Matters.........................................................29
3.19 Consents............................................................30
3.20 Licenses and Permits................................................30
3.21 Insurance...........................................................31
3.22 Conduct of Business.................................................31
3.23 No Bankruptcy Proceedings...........................................33
3.24 No Other Representations and Warranties.............................33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
33
4.1 Status of Purchasers................................................34
4.2 Authority of Purchasers.............................................34
4.3 Due Authorization...................................................34
4.4 Enforceability......................................................34
4.5 Consents............................................................34
4.6 [Intentionally Omitted].............................................35
4.7 No Other Representations and Warranties.............................35
ARTICLE V
COVENANTS
35
5.1 [Intentionally Omitted].............................................35
5.2 [Intentionally Omitted].............................................35
5.3 [Intentionally Omitted].............................................35
5.4 [Intentionally Omitted].............................................35
5.5 [Intentionally Omitted].............................................35
5.6 Publicity...........................................................35
5.7 [Intentionally Omitted].............................................35
5.8 Power of Attorney; Right of Endorsement, Etc........................35
5.9 [Intentionally Omitted].............................................36
5.10 Designated Employees................................................36
5.11 Allocation for Tax Purposes.........................................38
5.12 Post-Closing Taxes..................................................38
5.13 Termination or Layoffs..............................................39
5.14 Settlement Agreement................................................39
5.15 New York Order......................................................39
5.16 [Intentionally Omitted].............................................40
5.17 Cooperation.........................................................40
5.18 Non-Solicitation....................................................40
5.19 Non-Competition.....................................................40
ARTICLE VI
[Intentionally Omitted]
42
ARTICLE VII
[Intentionally Omitted]
42
ARTICLE VIII
CLOSING
42
8.1 Time and Place......................................................42
8.2 Closing Transactions................................................42
8.3 Deliveries by Sellers to Purchasers.................................42
8.4 Deliveries by Purchasers to Sellers.................................43
ARTICLE IX
OTHER AGREEMENTS
44
9.1 Further Assurances..................................................44
9.2 Access to Records, Employees and Shared Contracts After Closing.....44
9.3 Collection of Receivables...........................................45
9.4 Use of Trade Names, Domain Names and Logos..........................45
9.5 UCC Matters.........................................................46
9.6 Confidentiality.....................................................46
9.7 Trade Payables......................................................47
ARTICLE X
INDEMNIFICATION
48
10.1 Survival of Representations and Warranties..........................48
10.2 Indemnification by Sellers..........................................48
10.3 Limits on Indemnification by Sellers................................50
10.4 Indemnification by Purchasers.......................................50
10.5 Specific Breaches...................................................51
10.6 Procedure for Indemnification.......................................52
10.7 Payment.............................................................54
10.8 Recourse Against Sellers............................................54
10.9 Reduction for Insurance.............................................55
10.10 Remedies Exclusive..................................................55
10.11 Limits on Certain Damages...........................................55
10.12 [Intentionally Omitted].............................................55
10.13 Treatments of Payments..............................................55
ARTICLE XI
[Intentionally Omitted]
56
ARTICLE XII
MISCELLANEOUS PROVISIONS
56
12.1 Notices.............................................................56
12.2 Assignment..........................................................57
12.3 Benefit of the Agreement............................................57
12.4 Headings............................................................57
12.5 Entire Agreement....................................................57
12.6 Modifications and Waivers...........................................57
12.7 Counterparts........................................................58
12.8 Severability........................................................58
12.9 Governing Law.......................................................58
12.10 Expenses............................................................58
12.11 Jurisdiction; Waiver of Jury Trial; Venue...........................58
12.12 No Partnership, Agency or Joint Venture.............................59
12.13 Exhibits and Schedules..............................................59
List of Schedules AND EXHIBITS
Schedule Title
1.4(a) Transition Services Agreement Contracts
2.2 Assumed Contracts
3.5 Leased Real Property
3.1(a) Corporate/Authority Exceptions
3.1(d) Corporate/Authority Exceptions
3.1(f) No-transferable Contacts
3.2 Financial Statements
3.4(a) Assets without Title
3.4(b) Notes, Bonds, etc.
3.4(c) Maintenance and Repair Costs
3.4(d) Conduct of Business
3.4(e) Location of Assets
3.5 Real Property
3.9 Contracts
3.10 Intellectual Property
3.11 Required Assets; Sufficiency of Assets
3.12 Personnel and Compensation
3.13(a) Compliance with Laws Exceptions
3.13(c) Compliance with Laws Exceptions
3.13(d) Compliance with Laws Exceptions
3.13(g) Compliance with Laws Exceptions
3.14 Product and Services
3.14(d) Chargebacks and Denials
3.16 Litigation
3.17 Employee Benefits
3.19 Consents
3.20 Licenses and Permits
3.21 Insurance
3.22 Conduct of Business
4.5 Consents
5.10 Designated Employees
5.10(f) Cash Payments under Retention Bonus Plan
5.11 Allocation for Tax Purposes
5.14 Settlement Agreement
Exhibit Title
A Purchased Assets
B Retained Assets
B(1) Retained Intellectual Property
C Schedule of Registered/Filed Intellectual Property
D Employee Offer Letter
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into this 29th day of July 2003, by and
among Metris Companies Inc., a Delaware corporation, Metris Direct, Inc., a
Minnesota corporation, Metris Direct Services, Inc., a Delaware corporation,
Metris Travel Services Inc., a Delaware corporation, Metris Club Services, Inc.,
a Delaware corporation, Metris Warranty Services, Inc., a Delaware corporation,
and Metris Warranty Services of Florida, Inc., a Florida corporation, each of
which is located at 00000 Xxxxxxx Xxxx., Xxxxxxxxxx, Xxxxxxxxx 00000
(collectively, "Sellers"), and CPP Holdings Limited, a private limited liability
company organized and existing under the laws of England and Wales, and CPP US
Operations Group, LLC a Delaware limited liability company ("CPP US" and,
together with CPP, the "Purchasers").
RECITALS
WHEREAS,
(A) Sellers are engaged in the Business;
(B) Sellers desire to sell substantially all of their assets related to the
Business to CPP US, and CPP US desires to purchase such assets; and
(C) each term defined in this Agreement shall have the meaning ascribed to it in
Article II.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Purchasers and Sellers hereby
agree as follows:
ARTICLE I
PURCHASE AND SALE, PURCHASE PRICE,
ASSUMED LIABILITIES AND RETAINED ASSETS
1.1 Purchase and Sale of the Purchased Assets
(a) Subject to the terms and conditions of this Agreement, Sellers
shall (and shall cause each of their respective Affiliates to),
and each of them hereby does, sell, assign, convey, transfer and
deliver to CPP US (or any Designated Purchaser) and CPP US (or
such Designated Purchaser) shall, and hereby does, purchase from
Sellers the Purchased Assets, free and clear of all Liens of any
kind for the Purchase Price specified below in Section 1.2.
(b) (i) To the extent that any of the Purchased Assets
transferred to CPP US as contemplated herein include
rights that (A) are reasonably necessary for the
operation of any business of Sellers or their respective
Affiliates (other than the Business), (B) were used by
Sellers or their respective Affiliates prior to Closing
in such capacity, and (C) does not relate substantially
to, or is not used substantially in connection with, the
Business, Purchasers agree, to the extent commercially
practicable, to, without further consideration,
transfer, convey, assign, license, sublicense or enter
into another arrangement with Sellers with respect to
such rights or assets so that Sellers have substantially
similar benefits (subject to the burdens) of such rights
and assets for such business as it had prior to the
Closing.
(ii) To the extent that the Purchased Assets (other than real
property, which shall not be subject to this Section
1.1(b)) do not include any right or asset, which (A) was
owned by or licensed to Sellers or their Affiliates at
Closing, (B) is reasonably necessary for the operation
of the Business and (C) related substantially to, or was
used substantially in connection with, the Business
prior to Closing, Sellers agree, to the extent
commercially practicable and subject to Section 1.4 to,
without further consideration, transfer, convey, assign,
license, sublicense or enter into another arrangement
with Purchasers with respect to such right or asset so
that CPP US has substantially similar benefits (subject
to the burdens) of such right or asset in relation to
the conduct of the Business as did Sellers or such
Affiliates in conducting the Business prior to Closing.
(c) For a period of five years from the date of this Agreement, in
the event that Metris Companies Inc. or any of its Subsidiaries
sells, transfers, conveys, assigns or delivers, or enters into
any agreement, contract, arrangement or understanding to sell,
transfer, convey, assign or deliver, all or part of the Credit
Card Business, Metris Companies Inc. or such Subsidiary, as
applicable, will use commercially reasonable efforts to obtain
agreement from the purchaser of the Credit Card Business (the
"CCB Buyer") to allow CPP US to continue to xxxx active Members.
For the avoidance of doubt, a sale, transfer, conveyance,
assignment or delivery of the Credit Card Business shall only
be deemed to occur in the event that, following such sale,
transfer, conveyance, assignment or delivery, Metris Companies
Inc. or its Subsidiaries are no longer the servicer of the
related credit card accounts.
(i) Subject to subsection (vi) of this Section 1.1(c), in
the event the CCB Buyer agrees to continue billing
Members whose accounts are included as part of the
relevant sale (the "Affected Members") on behalf of
CPP, neither Metris Companies Inc. nor its
Subsidiaries shall have any further obligations to
CPP under this Section 1.1(c) with respect to the
Affected Members.
(ii) In the event the CCB Buyer does not agree to continue
billing Affected Members active as of the date of the
sale of the Credit Card Business, Metris Companies
Inc. will owe compensation to CPP US for its lost
income equal to the Net Present Value of the revenues
to be expected from Affected Members, according to
the following formula:
Net Present Value of the revenues to be expected from
Affected Members shall be calculated by extrapolating
the following results from the date of the sale of
the Credit Card Business to the date that is five
years from the Closing Date:
(A) Unbilled net revenue (gross xxxxxxxx less
cancellations) of then active memberships of Affected
Members eligible for Product renewal terms,
determined using the then-current membership price
and the actual average cancellation rate of each
applicable Product over the six month period
immediately preceding the sale, transfer, conveyance,
assignment or delivery of the Credit Card Business or
applicable portion thereof,
(B) Less the amount of compensation payable to Metris
Companies Inc. or its Subsidiaries under any
applicable then-current compensation program for each
Product,
(C) Less the amount of CPP US's average renewal
marketing expense, calculated by taking average renewal
marketing expense for each Product as a percentage of
net renewal revenues over the six month period
immediately preceding the sale, transfer, conveyance,
assignment or delivery of the Credit Card Business or
applicable portion thereof,
(D) Less the amount of claims expense incurred by CPP
US, calculated by taking average claims expense for each
Product as a percentage of net revenues over the six
month period immediately preceding the sale,
transfer, conveyance, assignment or delivery of the
Credit Card Business or applicable portion thereof,
applied to the renewing memberships for each Product,
(E) Less the amount of servicing expense expected to be
incurred by CPP US, calculated by taking the average
renewal servicing expense for each Product as a
percentage of net renewal revenues for that Product
over the six month period immediately preceding the
sale, transfer, conveyance, assignment or delivery of
the Credit Card Business or applicable portion
thereof.
The Net Present Value shall be calculated using a
discount rate equal to 15%.
Each party shall have the right (at its sole cost) to
have an independent accountant review the
determinations made pursuant to Sections
1.1(c)(ii)(A), (B), (C), (D) and (E) for the present
value calculation for reasonableness. The independent
accountant will have the authority to adjust the
determinations to the level that the independent
accountant deems reasonable, in which case the
parties agree to recalculate compensation due under
the formula based on such adjusted assumptions,
subject to the dispute resolution procedures set
forth herein. To the extent the parties disagree as
to the independent accountant's adjustment of the
assumptions, such dispute shall be resolved by final,
binding and nonappealable arbitration through the
American Arbitration Association or such other U.S.
national commercial arbitration organization as the
parties mutually agree on.
(iii) Metris Companies Inc. shall not be obligated to make
payments under this Section 1.1(c) in an aggregate
amount that exceeds 30% of the Purchase Price.
(iv) Results from implementation or use of credit policies,
account management strategies or any other factor
impacting the safety or soundness of CCB Buyer shall not
subject Sellers or their Subsidiaries to claims under
this Section 1.1(c).
(v) Upon payment of any claim, CPP must continue to fulfill
its obligations for the remainder of the current active
memberships.
(vi) For the avoidance of doubt, Metris Companies Inc.'s and
its Subsidiaries' obligations under this Section 1.1(c)
shall be triggered in the event of any sale, transfer,
conveyance, assignment or delivery of all or any portion
of the Credit Card Business whether in one transaction
or in multiple or successive transactions, whether at
one time or from time to time, provided that any such
sale, transfer, conveyance, assignment or delivery
only applies in the event that Metris Companies Inc. or
its Subsidiaries are no longer the servicer of the
credit card account, and it must occur within the five
year period following the date of this Agreement.
The parties agree that payment relative to each such
transaction shall be calculated and paid to CPP
independently based on the terms and conditions of that
sale, subject to the terms of this Section 1.1(c).
1.2 Purchase Price.
The purchase price for the Purchased Assets (the "Purchase Price")
shall consist of (a) cash in the amount of forty five million United States
Dollars ($45,000,000), and (b) CPP US' assumption of the Assumed Liabilities.
1.3 Assumed and Excluded Liabilities
(a) (i) Subject to the terms and conditions of this Agreement,
including Section 1.3(b), CPP US shall, and hereby does,
assume, agree to perform and, when due, pay and
discharge the obligations and liabilities of Sellers
arising under the Assumed Contracts (excluding any
liabilities set forth in clauses (A), (B), (C) or (D) of
Section 1.3(a)(ii), 1.3(a)(iii) and Section 1.3(b)),
which arise on or after the Closing Date or are
attributable to the period on or after the Closing Date
("Assumed Liabilities").
(ii) Except as set forth in Section 1.3(a)(i) above,
Purchasers shall not assume, agree to perform or pay or
discharge any liability or obligation of Sellers or
their respective Affiliates. Notwithstanding the
provisions of Section 1.3(a)(i), Purchasers shall not
assume, agree to perform or pay or discharge:
(A) liabilities and obligations that are more than 60
days overdue or delinquent on the Closing Date and
involve any increase in amounts due beyond the initial
obligation;
(B) any liability or obligation to fund or refund member
initiated refunds of membership fees paid prior to the
Closing Date;
(C) liabilities or obligations arising under the Assumed
Contracts, and which under GAAP should have been accrued
or reserved for on a balance sheet as a liability or
obligation, if and to the extent that the same were not
accrued or reserved for on the face of the Most Recent
Balance Sheet;
(D) subject to Section 10.4(e), liabilities or
obligations arising out of any breach or default
(including for this purpose any event which, with notice
or lapse of time would constitute such a breach or
default) by Sellers or their respective Affiliates of
any provision of any Assumed Contract, including
liabilities or obligations arising out of Sellers' or
their respective Affiliates' failure to perform any
agreement, contract, commitment or lease in accordance
with its terms prior to the Closing; or
(E) liabilities and obligations, whenever due or
payable, that are attributable to periods prior to the
Closing Date and, that do not relate to the Business.
(iii) For the avoidance of doubt, Purchasers shall not assume,
and Sellers hereby retain, all liabilities or
obligations with respect to (A) Retained Customer
Contracts, until such time, if ever, as such Retained
Customers Contracts become Purchased Customer Contracts,
(B) Retained Accounts Receivables, and (C) all Shared
Contracts.
(b) Purchasers shall not assume or pay and Sellers shall continue
to be, and shall cause their respective Affiliates to continue
to be, responsible for any debt, obligation or liability, of
any kind or nature (fixed or contingent, known or unknown) of
Sellers and their respective Affiliates whether or not
relating to the Business, not expressly assumed by CPP US
pursuant to Section 1.3(a) (the "Excluded Liabilities").
Without limiting the foregoing, Purchasers shall not assume
any of the following obligations or liabilities of Sellers or
their respective Affiliates:
(i) any obligation or liability arising from any Claim,
resulting from or relating to the conduct of the
Business by Sellers or their respective Affiliates prior
to the Closing Date, including, without limitation, any
Claim pending as of the Closing Date notwithstanding the
disclosure thereof in this Agreement or on the Most
Recent Balance Sheet or the Schedules hereto, or any
subsequent Claim arising out of or relating to such
pending matters or any other event occurring prior to
the Closing Date;
(ii) any obligation or liability for any Taxes for any
periods prior to or after the Closing Date whether or
not relating to the Business, and notwithstanding the
disclosure thereof on the Most Recent Balance Sheet or
the Schedules attached hereto;
(iii) any obligation or liability arising from any Claim,
resulting from property damage, personal injuries
(including death) or any other personal or pecuniary
loss or damage caused by or related to products,
materials or services invoiced, marketed, sold,
performed or shipped by Sellers or their respective
Affiliates or the Business prior to the Closing Date;
(iv) any obligation or liability arising from product or
service warranty or product or service liability claims,
with respect to products, materials or services
invoiced, sold, performed or shipped by Sellers or their
respective Affiliates or the Business prior to the
Closing Date; provided, that the obligation or liability
does not arise from acts of commission or omission by
Purchasers subsequent to the Closing;
(v) any obligation or liability arising from the matters
described in clauses (A), (B), (C) or (D) of Section
1.3(a)(ii) or Section 1.3(a)(iii);
(vi) any obligation or liability arising from the failure by
the Business, Sellers or their respective Affiliates to
comply with applicable Law prior to the Closing Date;
(vii) any obligation or liability (A) with respect to
compensation, employee benefits or the Employee Benefit
Plans of any nature owed to or in respect of any current
or former employees, directors, agents or independent
contractors of Sellers or any Affiliates or ERISA
Affiliates (or the beneficiaries or dependents thereof),
whether or not employed by Purchasers after the Closing,
that either (I) arises out of or relates to the
employment or service provider relationship between
Sellers or their respective Affiliates or ERISA
Affiliates and any such individuals or (II) arises out
of or relates to events or conditions occurring before
the Closing Date or, if later, the Employee Transfer
Date (but subject to the terms and conditions of the
Employee Leasing Agreement and the terms and conditions
of Section 5.13(b)), or (B) arising under or out of or
relating to any Employee Benefit Plan, including the
operation or administration thereof;
(viii) any other obligation or liability whatsoever (other than
the liabilities expressly assumed by CPP US pursuant to
Section 1.3(a)), including any liability arising out of
or relating to the ownership or operation of the
Purchased Assets and the Business prior to the Closing
Date (including any predecessor operations);
(ix) any obligation or liability arising from the
transactions contemplated by this Agreement or the
Ancillary Agreements, including those (A) relating to
the negotiation and preparation of this Agreement, the
Ancillary Agreements and the transactions contemplated
hereby and thereby and (B) incurred by Sellers or their
respective Affiliates with respect to their legal
counsel, accounting, brokerage and investment advisors
fees and expenses;
(x) any obligation or liability arising from or related to
the Retained Assets or any business of Sellers or their
respective Affiliates other than the Business;
(xi) any obligation or liability that does not relate
substantially to the Purchased Assets;
(xii) any trade payable or accrued expenses for the Business
for any periods prior to the Closing Date; or
(xiii) notwithstanding anything in any contract, instrument
(including consent or novation) or other agreement to
the contrary, any obligation or liability with respect
to the Leased Real Property including liabilities and
obligations to any lessor of such Real Property, except
as, and to the extent expressly set forth in the
Sublease Agreements.
(c) All obligations and claims of any nature pertaining to insurance
policies, including Employment Practices Liability, Fiduciary
and Directors' and Officers' Liability, relating to actions
prior to the Closing Date, will constitute an Excluded
Liability of Sellers and any Affiliates conducting the
Business.
1.4 Consent of Third Parties; Authorizations
(a) Sellers and their respective Affiliates, as applicable, shall,
and each of them hereby does, assign to CPP US, and, subject
to Section 1.3(a)(ii) and (iii), CPP US shall, and hereby does
assume, the Assumed Contracts and the Permits (other than the
Nonassignable Permits, which the parties acknowledge may not be
transferred) which are to be transferred to CPP US as provided
in this Agreement. Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an
agreement to sell, convey, assign, sublease or transfer any
Purchased Asset, including any Assumed Contract or Permit if an
attempted sale, conveyance, assignment, sublease or transfer
thereof, without the consent of another party thereto or an
Authority would constitute a breach of, or in any way affect the
rights of Sellers or Purchasers with respect to such Purchased
Asset ("Nonassignable Items"). In order, however, to provide
CPP US the full realization and value of every Contract and
Permit of the character described in the immediately preceding
sentence, Sellers and their respective Affiliates agree that on
and after the Closing, they will, at the reasonable request and
under the reasonable direction of Purchasers, in the name of
Sellers and their respective Affiliates or otherwise as
Purchasers shall specify, use commercially reasonable efforts to
take all reasonable actions and use commercially reasonable
efforts to do or cause to be done all such things as shall in
the reasonable opinion of Purchasers or their counsel be
necessary or proper to obtain and satisfy all consents,
novations or waivers not obtained and to resolve all
impracticalities of sale, conveyance, assignment, sublease or
transfer necessary to convey to CPP US all Nonassignable Items
(other than Nonassignable Permits) at the earliest practicable
date. Notwithstanding the foregoing, neither Sellers nor any of
their respective Affiliates shall be required to transfer to
Purchasers any Contracts or Permits listed on Schedule 1.4(a)
hereto which are necessary for Sellers or their respective
Affiliates to perform their obligations under the Transition
Services Agreement, until such time as such obligations
terminate, at which time Sellers shall transfer to Purchasers
such Contracts or Permits, subject to this Section 1.4.
Notwithstanding the foregoing, in no event shall Sellers or any
of their respective Affiliates be required to transfer any
Nonassignable Contract, the assignment of which is restricted by
state insurance or similar regulations ("Restricted Contracts"),
to Purchasers unless and until Purchasers obtain the regulatory
Permits under such regulations necessary to carry out the
obligations under such Restricted Contract.
(b) (i) In furtherance of the foregoing, from the Closing Date
until the date that any Contract designated as
nonassignable or nontransferable on Schedule 3.19 (the
"Nonassignable Contracts") is assigned as provided in
Section 1.4(a) or (b)(ii) below, Sellers will hold or
administer, as applicable, such Nonassignable Contract
for the benefit of CPP US or an affiliate (as designated
by Purchasers in writing). The parties agree that the
terms of the Transition Services Agreement will govern
the rights and obligations of the parties with respect
to the Nonassignable Contracts pending transfer thereof
to the Purchasers; provided, however, that subject to
Purchasers' right to indemnification under Section 10.2,
Sellers shall not be required to pay or commit to pay an
amount to (or incur any obligation in favor of (by way
of a guarantee or otherwise)) any Person in order to
obtain any such consent or assume such Contract, other
than (A) a nominal filing, application or similar cost
or fee, (B) nominal amounts to cover processing and
review by third parties of such consents, including
de minimis amounts of attorneys' fees and (C) any
amounts due and payable by Sellers pursuant to the
terms of such Contract prior to or as of the Closing
Date; and
(ii) Sellers shall promptly assign to CPP US or an affiliate
(as designated by Purchasers in writing), and CPP US or
such affiliate shall assume, each such Nonassignable
Contracts (using documentation substantially equivalent
to the documentation used to evidence the assignment and
assumption of Nonassignable Contracts assigned at the
Closing) as provided in the Transition Services
Agreement.
(iii) The parties acknowledge that the Nonassignable Permits
cannot be transferred by Sellers to CPP US and that
Purchasers shall pay all filing, registration and
similar fees payable in order to obtain Permits
necessary for CPP US to operate the Business from and
after the Closing Date (the "Purchaser Permits"). After
Closing, until Purchaser shall have obtained the
Purchaser Permits, Sellers and their respective
Affiliates shall (A) at their own cost and expense,
continue to maintain the Nonassignable Permits in
accordance with the Transition Services Agreement and
(B), take all reasonable actions and use commercially
reasonable efforts to assist Purchasers in obtaining the
Purchaser Permits necessary to operate the Business from
and after the Closing Date and shall, in the case of
this clause (B) pay its reasonable costs (other than
out-of-pocket costs) incurred in connection therewith.
(c) The employee records of any Designated Employee shall only be
transferred to Purchasers when such Designated Employee
becomes a Transferred Employee and then only to the extent
permitted by Law.
1.5 Retained Assets
Sellers and their respective Affiliates shall not sell, transfer,
convey or deliver to Purchasers, and Purchasers shall not purchase from Sellers
or their respective Affiliates, the assets, properties, interests and rights of
Sellers or their respective Affiliates set forth on Exhibit B hereto (the
"Retained Assets").
ARTICLE II
DEFINITIONS
2.1 General
Each term defined in the first Article of this Agreement and in the
Recitals shall have the meaning set forth below whenever used herein, unless
otherwise expressly provided or unless the context clearly requires otherwise.
2.2 Definitions
As used herein, the following terms shall have the meanings ascribed to
them in this Section 2.2:
Accounts Receivable. All trade accounts receivable and other rights to
payment from customers and the full benefit of all security for such accounts or
rights to payment, in each case to the extent relating to the Business.
Adverse Effect. Any event, development, change, circumstance or state
of facts that has resulted, or would reasonably be expected to result,
individually or in the aggregate, in costs to the Business or Purchasers or an
adverse impact on cash flows of the Business in excess of $500,000.
Affected Members. As defined in Section 1.1(c)(ii).
Affiliate. Any Person that, directly or indirectly, through one or more
intermediaries, is controlled by Metris Companies Inc. The term "controlled by",
with respect to any such Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
Agreement. This Asset Purchase Agreement, together with all Exhibits
and Schedules referred to herein, as amended, modified or supplemented from time
to time in accordance with the terms hereof.
Ancillary Agreements. (i) The Escrow Agreement, (ii) the Marketing
Agreement with Direct Merchants Credit Card Bank, N.A., (iii) the Sublease
Agreements, (iv) the Transition Services Agreement and (v) the Employee Leasing
Agreement.
Annual Financial Statements. As defined in Section 3.2.
Assumed Contracts. Contracts listed on Schedule 2.2 hereto; provided,
that "Assumed Contracts" shall not include Contracts that are Retained Customer
Contracts, unless and until such Contracts become Purchased Customer Contracts.
Assumed Liabilities. As defined in Section 1.3(a).
Assumption Agreement. The assumption agreement, executed and delivered
by CPP US to Sellers at the Closing, pursuant to which CPP US assumes specific
liabilities of Sellers set forth in Section 1.3(a).
Authority. Any governmental, regulatory or administrative body, agency
or authority, any court or judicial authority, any arbitrator or any public,
private or industry regulatory authority, whether foreign, federal, state or
local.
Bankruptcy Proceeding. As defined in Section 3.23.
Business. The business of designing, marketing, selling and providing
(i) the products and services described in Attachments 3 through 11 of Schedule
E to the Marketing Agreement, (ii) products and services substantially similar
to those described in clause (i) above and (iii) enhancement or value-added
products and services directly related to ServiceEdge(R).
Business Day. Any day other than a Saturday, Sunday or a day on which
banks are not open for business in Minneapolis, Minnesota or London, England.
Cap. As defined in Section 10.3(b).
Change of Control. The acquisition by any Person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934) of more than 50% of the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors of the Metris Companies Inc.
Claim. Any judicial, administrative, or arbitration suit, action, claim
or proceeding (whether public or private) or any suit, action, litigation,
complaint, claim or proceeding, by any Authority or Person, whether domestic or
foreign and whether civil or criminal including any investigation or enforcement
proceeding.
Closing. As defined in Section 8.1.
Closing Date. As defined in Section 8.1.
Code. Internal Revenue Code of 1986 and the regulations promulgated
thereunder, as it may be amended from time to time.
Contracts. All contracts, leases, subleases, arrangements, commitments
and other agreements of Sellers or any Affiliates conducting the Business which
relate substantially to, or have been used substantially in connection with, the
Business or Purchased Assets, including, without limitation, all customer
agreements, vendor agreements, purchase orders, installation and maintenance
agreements, computer software licenses, hardware lease or rental agreements.
CCB Buyer. As defined in Section 1.1(c).
CPP. As defined in the heading hereto.
CPP US. As defined in the heading hereto, including as it is doing
business after the Closing under its new name "CPP North America, LLC."
Credit Card Business. Credit card customers of Metris Companies Inc.
or its Subsidiaries that are not externally statused or thirty (30) or more days
contractually delinquent on the FDR system.
Designated Employees. As defined in Section 5.10(a).
Designated Purchaser. An affiliate of Purchasers selected by
Purchasers to purchase and/or acquire any of the Purchased Assets.
DMCCB. Direct Merchants Credit Card Bank, National Association.
Employee Benefit Plan. Any (a) employee benefit plan within the meaning
of Section 3(3) of ERISA which is or has been sponsored, maintained or
contributed to by Sellers or any of their respective Affiliates or ERISA
Affiliates, or (b) other bonus or other incentive compensation, deferred
compensation, salary continuation, sick or disability pay, health, life,
severance, change of control, stock award, stock option, stock purchase, stock
appreciation rights, tuition assistance, vacation, vacation pay or other benefit
plan or arrangement which is or has been sponsored, maintained or contributed to
by Sellers or any of their respective Affiliates or ERISA Affiliates, or (c)
employment, termination, retention, consulting or other compensation arrangement
or agreement, in each case with respect to current or former employees,
directors or consultants of or to Sellers or any Affiliate or ERISA Affiliate,
and under which Sellers or any Affiliate or ERISA Affiliate could have any
liability.
Employee Leasing Agreement. The Employee Leasing Agreement providing
for the lease of certain employees to CPP US, entered into as of the Closing
Date between Sellers and Purchasers.
Employee Offer Response Date. As defined in Section 5.13(b).
Employee Transfer Date. As defined in Section 5.10(a).
Equipment and Improvements. All installations, improvements,
betterments, additions, stores, supplies, equipment, furniture, fixtures, office
equipment, computers, computer terminals and printers, computer software,
telephone systems, telecopiers and photocopiers, and other tangible personal
property of every kind and description.
ERISA. The Employee Retirement Income Security Act of 1974, as it may
be amended from time to time, and the regulations promulgated thereunder.
ERISA Affiliate. Any corporation, partnership or trade or business
which is a member of a group that includes any of the Sellers or any of its
Affiliates and is treated as a single employer within the meaning of Section
414(b), (c), (m) or (o) of the Code.
Escrow Agent. The escrow agent named in the Escrow Agreement.
Escrow Agreement. The Escrow Agreement pursuant to which the Purchasers
will contribute, from time to time in accordance with the terms of such
agreement and the Transition Services Agreement, certain funds to be held in
escrow by the Escrow Agent for purposes of securing any Purchaser Losses,
entered into as of the Closing Date between Sellers, Purchasers and the Escrow
Agent.
Excluded Liabilities. As defined in Section 1.3(b).
Financial Statements. As defined in Section 3.2.
Xxxxxx Settlement Agreement. As defined in Section 10.2(h).
GAAP. U.S. generally accepted accounting principles, as in effect from
time to time.
Indemnified Claim. As defined in Section 10.6(c)(ii).
Indemnified Party. As defined in Section 10.6(a).
Indemnifying Party. As defined in Section 10.6(a).
Indemnity Basket. As defined in Section 10.3(a).
Intellectual Property. (a) All inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, domain names and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations and renewals in connection therewith,
(e) all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists (but not including customer and
supplier lists owned solely by Direct Merchants Credit Card Bank, N.A.), pricing
and cost information, and business and marketing plans and proposals), (f) all
computer software (including data and related documentation and object and
source codes), (g) all other proprietary rights, (h) all copies, whether in
magnetic format or hard copy, and tangible embodiments thereof (in whatever form
or medium) and (i) all rights of action arising therefrom, all claims by reason
of infringement thereof, and the right to xxx and collect damages for such
infringement.
Interim Financial Statements. As defined in Section 3.2.
Knowledge. All information that is actually known or, in the exercise
of reasonable diligence in the normal course of their employment and/or assigned
duties, should be known, by each of the following individuals: (i) the corporate
officers (including without limitation any chief executive officer, chief
financial officer, president, executive vice president and senior vice
president, corporate secretary, corporate treasurer or corporate controller) and
in-house legal counsel of Sellers' Affiliates conducting the Business or
Sellers, and (ii) the following individuals: Xxxx Van Ert, Xxxxxxx Xxxxxx, Xxxx
Xxxxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxxx Xxxxx, Xxx Xxxxxxxx,
Xxxxxx Xxxxx, Xxxx Xxxxx and Xxxxxxxxx Xxxxx.
Law. Any law (including common law) statute, regulation, rule,
ordinance, requirement, directive, restriction, order, decision, judgment,
decree, announcement or other binding action or requirement of an Authority.
Leased Real Property. The parcels of land more fully described on
Schedule 3.5 under the heading "Leased Real Property," together with all rights
and privileges under such leases (hereinafter referred to collectively as the
"Real Property Leases") to the real property subject to such leases, to the
extent relating to the Business.
Lien. Any lien, charge, claim, pledge, security interest, conditional
sale agreement or other title retention agreement, lease, mortgage, security
agreement, right of first refusal, option, restriction, tenancy, license,
covenant, right of way, easement or other encumbrance (including the filing of,
or agreement to give, any financing statement under the Uniform Commercial Code
or statute or law of any jurisdiction).
Litigation Conditions. As defined in Section 10.6(c)(i).
Marketing Agreement. The Marketing Agreement to be entered into as of
the Closing Date between CPP US and Sellers' Affiliate, DMCCB.
Material Adverse Effect. Any event, development, change, circumstance
or state of facts that has had, or would reasonably be expected to have,
individually or in the aggregate, a material adverse effect upon the condition
(financial or otherwise), results of operations, business, rights, prospects,
properties or assets, or supplier, business partner, customer or employee
relationships of Sellers (to the extent relating to the Business), the Business,
the Purchased Assets or the Assumed Liabilities.
Material Contracts. As defined in Section 3.9.
Members. Those credit card customers of DMCCB who have a contract and
are not externally statused or more than thirty (30) days contractually
delinquent on the FDR System as part of the Business.
Most Recent Balance Sheet. The balance sheet of Sellers dated
March 31, 2003.
Most Recent Financial Statements Date. As defined in Section 3.2.
Multiemployer Plan. A "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any of the Sellers or any ERISA Affiliate is
making, or is accruing an obligation to make, contributions or has made, or been
obligated to make, contributions.
New York Order. As defined in Section 10.2(h).
Nonassignable Contracts. As defined in Section 1.4(b).
Nonassignable Items. As defined in Section 1.4(a).
Nonassignable Permits. Those Permits specifically identified as
nonassignable and listed in Schedule 3.20.
Non-Equitable Only Claim. As defined in Section 10.6(c)(v).
Order. Any decree, order, judgment, writ, award, injunction,
stipulation or consent of or by an Authority.
Ordinary Course of Business. The ordinary course of business of
Sellers, in accordance with past custom and practice (including, without
limitation, with respect to quantity and frequency).
Permits. As defined in Section 3.20.
Person. Any natural person, corporation, limited liability company,
partnership, firm, joint venture, joint-stock company, trust, association,
unincorporated entity or organization of any kind, Authority or other entity of
any kind.
Prime Rate. Means the rate per annum announced from time to time during
the reference period by Bank of America, N.A., or, if Bank of America, N.A.
ceases to exist, any major New York bank, as its United States prime, reference
or base rate for commercial loans.
Program. The promotional offer specific to the membership price,
membership terms, and marketing channel for Products being solicited to selected
customers of Metris Companies Inc. or its Subsidiaries.
Product. A collection of features, benefits and services that are
packaged and, as applicable, branded by CPP to solicit to selected customers of
Metris Companies Inc. or its Subsidiaries.
Purchase Price. As defined in Section 1.2(a).
Purchased Assets. The assets of the Business as described on Exhibit A.
Purchased Accounts Receivable. The following Accounts Receivable:
(i) the amount represented in the first billing transaction
for all annual and multiple-year customer contracts, agreements,
memberships or subscriptions with an enrollment date on or after the
Closing Date;
(ii) the amount represented in the current billing transaction
for all renewed annual and multiple-year customer contracts,
agreements, memberships or subscriptions with a renewal date on or
after the Closing Date; and
(iii) the amount represented in all billing transactions for
monthly billed customer contracts, agreements, memberships or
subscriptions where the billing date is on or after the Closing Date.
Purchased Customer Contracts. (i) All customer contracts, agreements,
memberships and subscriptions related to the Purchased Accounts Receivable and
(ii) all Contracts that constitute Retained Customer Contracts as of the Closing
Date, if and to the extent such Contracts are renewed on or after the Closing
Date.
Purchasers. As defined in the heading hereto.
Purchaser Indemnified Parties. As defined in Section 10.2.
Purchaser Losses. As defined in Section 10.2.
Purchaser Permits. As defined in Section 1.4(b)(ii).
Purchasers' Welfare Plans. As defined in Section 5.10(c).
Quantum Threshold. As defined in Section 3.9.
Real Property Leases. As defined in the definition of Leased Real
Property.
Real Property. The Leased Real Property.
Regulatory Contracts. As defined in Section 3.13(c).
Restricted Business. (i) The Business and (ii) the business of
designing, marketing, selling and providing the products and services described
in Classes 1 through 3 of Schedule D to the Marketing Agreement and products and
services substantially similar thereto.
Restricted Contracts. As defined in Section 1.4(a).
Retained Assets. As defined in Section 1.5.
Retained Accounts Receivable. The following Accounts Receivable:
(i) the amount represented in the first billing transaction
for all annual and multiple-year customer contracts, agreements,
memberships or subscriptions with an enrollment date prior to the
Closing Date;
(ii) the amount represented in the current billing transaction
for all renewed annual and multiple-year customer contracts,
agreements, memberships or subscriptions with a renewal date prior to
the Closing Date; and
(iii) the amount represented in all billing transactions for
monthly billed customer contracts, agreements, memberships or
subscriptions where the billing date is prior to the Closing Date.
Retained Customer Contracts. All customer contracts, agreements,
memberships and subscriptions related to the Retained Accounts Receivable,
unless and until such Contracts are renewed on or after the Closing Date, in
which case such Contracts shall become Purchaser Customer Contracts as of the
date of such renewal.
Retained Names. As defined in Section 9.4.
Retention Bonus Plan. As defined in Section 5.10(f).
Sellers. As defined in the heading hereto. Seller Indemnified Parties.
As defined in Section 10.4.
Seller Losses. As defined in Section 10.4.
Sellers' DC Plans. As defined in Section 5.10(e).
Shared Contracts. Any Contract, including any service, sales, agency,
distribution or other Contract, to which any Seller or any of their Affiliates
is a party or is otherwise bound and which relates to or is necessary for the
operation of (i) the Business and (ii) any other business conducted or proposed
to be conducted by any such Seller or Affiliate. A complete list of material
Shared Contracts is set forth on Schedule 3.9.
Specialty Laws. As defined in Section 3.13(a).
Sublease Agreements. The Sublease Agreement relating to that certain
property located at 00000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, and
the Sublease Agreement relating to that certain property located at 00000
Xxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, in each case entered into
as of the Closing Date between Metris Direct, Inc. and CPP US.
Subsidiary. A Subsidiary of any Person means (i) a corporation more
than 50% of the combined voting power of the outstanding stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof, or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and one
or more other Subsidiaries thereof, directly or indirectly, has the power to
direct the policies, management and affairs thereof.
Substantially. To the extent used in the phrase "relate substantially
to" or "used substantially in connection with" the Business, "substantially"
shall mean, that the relevant relationship to, or use in, as the case may be,
the Business represents 90% or more of the total relationship to or use in, as
the case may be, the businesses of Sellers and their respective Affiliates as a
whole.
Taxes. As defined in Section 3.18.
Tax Returns. Any returns, declarations, reports, refund claims,
information returns or statements relating to Taxes, together with any
associated schedules, attachments or amendments.
Third-Party Claim. As defined in Section 10.6(a).
Third-Party Notice. As defined in Section 10.6(a).
Transferred Employees. As defined in Section 5.10(a).
Transition Services Agreement. The Transition Services Agreement
relating to (i) the provision by Sellers and MES Insurance Agency, LLC ("MES")
to CPP US of certain services and (ii) the provision by CPP US to Sellers of
certain services, in each case, for a transition period of up to 18 months (on
the terms set forth therein) entered into as of the Closing Date between
Sellers, MES and Purchasers.
WARN Act. The Worker Adjustment and Retraining Notification Act, 29
U.S.C. xx.xx. 2101-2109, as amended from time to time.
2.3 Interpretation
Unless otherwise expressly provided or unless the context requires
otherwise, (a) all references in this Agreement to Articles, Sections, Schedules
and Exhibits shall mean and refer to Articles, Sections, Schedules and Exhibits
of this Agreement; (b) all references to statutes and related regulations shall
include all amendments of the same and any successor or replacement statutes and
regulations; (c) words using the singular or plural number also shall include
the plural and singular number, respectively; (d) references to "hereof,"
"herein," "hereby" and similar terms shall refer to this entire Agreement
(including the Schedules and Exhibits hereto); and (e) references to any Person
shall be deemed to mean and include the successors and permitted assigns of such
Person (or, in the case of an Authority, Persons succeeding to the relevant
functions of such Person).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
The parties hereto intend that each representation, warranty and
covenant contained herein shall have independent significance. If any Seller
breaches any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which such Seller has not breached shall not detract from or
mitigate the fact that such Seller is in breach of the first representation,
warranty, or covenant. Subject to those exceptions and qualifications
specifically listed and described (including an identification by section
reference to the representations and warranties to which such exceptions and
qualifications relate) on the disclosure schedule attached to this Agreement,
and as an inducement to Purchasers to enter into and perform this Agreement, and
in consideration of the covenants of Purchasers contained herein, Sellers
represent and warrant to Purchasers (which representations and warranties shall
survive the Closing (subject to Section 10.1)), as of the date hereof, as
follows:
3.1 Status of Sellers; Enforceability; Conflicts; Consents
(a) Sellers and any Affiliates conducting the Business are
corporations duly organized, validly existing and in good
standing under the laws of the states set forth on Schedule
3.1(a). Each Seller and each Affiliate conducting the Business
has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations
and approvals necessary to enable it to use its name and to own,
lease or otherwise hold its properties and assets (including the
Purchased Assets) and to carry on its business (including the
Business) as conducted as of the date of this Agreement except
where the failure to possess any such governmental franchises,
licenses, permits, authorizations and approvals would not have
an Adverse Effect on Sellers or prevent Sellers from performing
their obligations under, or transacting the business
contemplated by, this Agreement. Sellers and any Affiliates
conducting the Business are duly qualified and in good standing
to do business in each jurisdiction listed on Schedule 3.1(a),
which are the only jurisdictions in which the nature of the
Business as presently conducted or the ownership, leasing or
holding of the Purchased Assets as of the date hereof makes such
qualification necessary, except where the failure to be so duly
qualified and in good standing would not have an Adverse Effect.
Schedule 3.1(a) sets forth a list of each Affiliate of Sellers
that is or has been engaged in the Business and a list of each
jurisdiction in which Sellers and such Affiliates are conducting
the Business or are qualified to do business. No shares of any
corporation or any ownership or other investment interest,
either of record, beneficially or equitably, in any Person are
included in the Purchased Assets.
(b) Each Seller and each Affiliate conducting the Business has the
requisite power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which it is a party
and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.
The execution and delivery by each Seller of this Agreement
and the Ancillary Agreements to which it is a party, and the
performance by Sellers and each Affiliate conducting the
Business of their obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby,
have been duly and validly authorized and approved by all
necessary action on the part of Sellers and each Affiliate
conducting the Business.
(c) This Agreement and the Ancillary Agreements to which Sellers
are a party are binding upon, and enforceable against, each
Seller and each Affiliate party thereto in accordance with
their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally and by general
principles of equity (whether in a proceeding at law or in
equity).
(d) Except as set forth on Schedule 3.1(d), neither the execution or
delivery of this Agreement or the Ancillary Agreements by
Sellers and each Affiliate conducting the Business nor the
performance by Sellers and each Affiliate conducting the
Business of their respective obligations under this Agreement or
the Ancillary Agreements or the transactions contemplated hereby
or thereby will (assuming the receipt of all consents and
approvals referred to in Section 3.19) (i) conflict with or
result in a breach of any of the terms or provisions of, or
constitute (with or without the giving of notice or the lapse of
time or both) a default, require any payment, or give rise to
any right of termination, modification (including, in the case
of leases, any change in the amount or nature of the rent),
cancellation, maturation or acceleration or result in the
creation or imposition of any Lien of any nature whatsoever upon
any of the Purchased Assets, any contract, lease, license,
franchise, permit, privacy policy, indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which
Sellers or any Affiliate conducting the Business are party or
are bound, or (ii) violate or conflict with any Order or Law
applicable to Sellers or any Affiliate conducting the Business
or the property or assets of Sellers or any Affiliate
conducting the Business (including, without limitation, the
Purchased Assets) or the certificate of incorporation or
bylaws of Sellers or any Affiliate conducting the Business.
(e) [Intentionally Omitted]
(f) Except as disclosed on Schedule 3.1(f)or Schedule 3.19, all
Contracts between any Seller or any Affiliate conducting the
Business and a consumer may be transferred or assigned by the
Sellers or any Affiliate party thereto without (a) obtaining
(i) novation from or (ii) consent, authorization or approval
of, or (b) delivery of any notice or other information to, any
Person (including any such customer, supplier or member) or
Authority.
3.2 Financial Statements
The books of account and related records of the Sellers for the
Business heretofore provided to Purchaser in writing, fairly reflect in all
material respects all transactions relating to the Business. Attached hereto as
Schedule 3.2 are true and correct copies of the unaudited statement of GAAP
basis assets and liabilities, a non-deferred statement of income and a GAAP
basis statement of income of the Business for the annual periods ended, and as
of, December 31, 2002 and December 31, 2001 (the "Annual Financial Statements").
Also attached hereto as Schedule 3.2 is a copy of the unaudited statement of
GAAP basis assets and liabilities, a non-deferred basis statement of income and
a GAAP basis statement of income of the Business for the three-month period
ended, and as of, March 31, 2003 (the "Most Recent Financial Statements Date")
(the "Interim Financial Statements" and, together with the Annual Financial
Statements, the "Financial Statements"). The Financial Statements are true and
correct in all material respects and are in accordance with the books and
records of the Sellers for the Business and in accordance with GAAP, and fairly
present the assets and liabilities, revenues and expenses of the Business, as at
the respective dates thereof, and the results of its operations for the periods
covered thereby and include all material adjustments, necessary for a fair
presentation (except for the following items: (i) the exclusion from the
Financial Statements of a statement of cash flows and any footnotes to such
Financial Statements; (ii) the inclusion in the Annual Financial Statements of
intercompany interest income; (iii) the exclusion from the 2001 Annual Financial
Statements of material adjustments made to accounts receivable, revenue,
intercompany commissions payable and commissions expense which were made in the
2002 annual financial statements; (iv) the exclusion from the non-deferred
statement of income of deferrals of costs and revenue required by GAAP; and (v)
the Interim Financial Statements, which are subject to normal year-end audit
adjustments). The contingency, tax and other reserves reflected on the Financial
Statements are adequate, appropriate and reasonable. Except as disclosed on
Schedule 3.2 there are no direct costs, expenses, accruals, allocations, reserve
adjustments or other charges directly allocable to the Business not shown on the
Financial Statements.
3.3 Undisclosed Liabilities
On the Most Recent Financial Statements Date, neither Sellers nor any
Affiliate conducting the Business had any debts, liabilities, Liens, claims,
encumbrances or other obligations of any nature (whether accrued, absolute,
contingent or otherwise) relating to the Business and of the type which should
be reflected in balance sheets including the notes thereto prepared in
accordance with GAAP consistently applied in accordance with the Financial
Statements, which were not disclosed, reflected or reserved against on the
Financial Statements or the Most Recent Balance Sheet. Except for liabilities
which have been incurred since the Most Recent Financial Statements Date in the
Ordinary Course of Business, since the Most Recent Balance Sheet Date neither
Sellers nor any Affiliate conducting the Business have incurred any liability of
any nature (whether accrued, absolute, contingent or otherwise) of the type
which should be reflected in balance sheets including the notes thereto prepared
in accordance with GAAP consistently applied in accordance with the Financial
Statements.
3.4 Title to Properties; Purchased Assets
(a) Except as set forth on Schedule 3.4(a), Sellers and any
Affiliate conducting the Business have, and hereby conveys to
CPP US, good, valid and marketable title to all of the
Purchased Assets free and clear of all Liens.
(b) Schedule 3.4(b) contains a true, correct and complete schedule
of all notes, bonds, mortgages, deeds of trust, collateral
security documents, guarantees and other similar and related
documents executed and/or delivered by Sellers or any
Affiliate conducting the Business, or others in connection
with any and all secured financings encumbering or otherwise
affecting, directly or indirectly, all or any portion of the
Purchased Assets.
(c) Schedule 3.4(c) sets forth all future payment obligations
relating to any software that is included in the Purchased
Assets that would exceed $250,000.
(d) Except as specifically disclosed on Schedule 3.4(d), Sellers
have conducted the Business only through Sellers party to this
Agreement and not through any other divisions or any direct or
indirect subsidiary or Affiliate of Sellers.
(e) Except as set forth on Schedule 3.4(e), all of the Purchased
Assets and all of the books and records of the Business are
located at the Leased Real Property.
3.5 Real Property
Schedule 3.5 contains true, correct and complete descriptions of each
parcel of Real Property leased or occupied in connection with the Business
(other than corporate overhead functions) by Sellers or any Affiliate conducting
the Business. Neither the Sellers nor any Affiliate conducting the Business owns
any real property in connection with the Business. All of the Real Property
Leases are valid and in full force and effect and are legal, binding and
enforceable obligations of the parties thereto, and there does not exist any
breach or default or event that with notice or lapse of time, or both, would
constitute a breach or default by Sellers or any Affiliate conducting the
Business under any of the Real Property Leases, and to the Knowledge of Sellers,
there does not exist any breach or default or event that with notice or lapse of
time, or both, would constitute a breach or default by any other party under any
of the Real Property Leases.
3.6 Real Estate and Personal Property Taxes Assessments
(a) All obligations of Sellers or any Affiliate conducting the
Business with respect to real estate Taxes and personal
property Taxes and assessments due and payable with respect to
the Purchased Assets have been paid to the applicable
landlord.
(b) Neither Sellers nor any Affiliate conducting the Business has
received any notice of any special Tax assessment affecting
any property owned or leased by it, and, to Sellers'
Knowledge, no such assessments are pending or threatened.
3.7 Inventory
Sellers and any Affiliate conducting the Business own no inventory
relating to the Business other than as described on the Most Recent Balance
Sheet.
3.8 [Intentionally Omitted]
3.9 Contracts
Schedule 3.9 sets forth a complete and accurate list of:
(a) each Contract (i) which satisfies the Quantum Threshold, and
(ii) between any Seller or any Affiliate conducting the
Business and any sales representatives or selling agents used
or retained in connection with the Business, or pursuant to
which any Seller or any Affiliate conducting the Business
sells or distributes products or services, in each case
described in this subsection (ii) regardless of the size or
term or such licenses, contracts, agreements, commitments and
undertakings,
(b) each Contract that is, contains or constitutes a conditional
sale or other title retention agreement, equipment obligation,
or lease purchase agreement relating to any of the Purchased
Assets and that satisfies the Quantum Threshold,
(c) each Contract that is, contains or constitutes a power of
attorney given by any Seller or any Affiliate conducting the
Business to any Person, firm or corporation or otherwise
relating to the Business or the Purchased Assets,
(d) each Contract that is, contains or constitutes a
non-competition, exclusivity, restrictive covenant or other
agreement that restricts any Seller or any Affiliate
conducting the Business or any other entity from conducting
the Business anywhere in the world,
(e) each Contract presently in effect, whether or not fully
performed, between any Seller or any Affiliate conducting the
Business and any Designated Employee or consultant retained or
employed in connection with the Business,
(f) each Contract that is, contains or constitutes a contract
relating to the Business with the business partners of Sellers
or any Affiliates conducting the Business and that satisfies
the Quantum Threshold,
(g) each Contract that is, contains or constitutes a contract
relating to insurance or warranty (including extended
warranty) products, including brokerage contracts,
(h) each Contract that is, contains or constitutes an outsourcing
agreement, including telemarketing agreements,
(i) each Contract that is, contains or constitutes a license
relating to any Intellectual Property, including, without
limitation, any software license, and
(j) any other Contract which is material to the condition
(financial or otherwise), results of operations, properties,
assets, liabilities, business or prospects of the Business or
any Program (as defined in the Marketing Agreement) offering,
taken as a whole.
(the Contracts described in clauses (a) through (j) above
being collectively referred to herein as the "Material
Contracts").
For purposes of this Section 3.9, "Quantum Threshold" means
that the Contract involves consideration in excess of $500,000
during any 12 month period or that it is integral to the
operation of the Business. Except as provided in the final
sentence of this paragraph, true and complete copies of all
Material Contracts (or, where appropriate with respect to
subsection (g) above, forms thereof) have been made available
to Purchasers or their counsel; provided however, that Sellers
have not provided copies of any mass marketing license used in
a mass marketing transaction. Identified on Schedule 3.9 with
(i) an asterisk (*) are those Material Contracts which (a)
contain a restriction or prohibition on assignment, (b)
provide for any event described in Section 3.1(c) or (c)
otherwise give rise to a payment or other obligation
(including any requirement to obtain a consent or novation),
of or from any Sellers or any Affiliate conducting the
Business or Purchasers as a result of the transactions
contemplated by this Agreement and (ii) a pound sign (#) are
those Material Contracts that constitute Shared Contracts. All
Material Contracts are valid and binding upon each Seller or
Affiliate conducting the Business party thereto and to each
Seller's and Affiliate's Knowledge, the other parties thereto
except as limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors generally. There
is no default or event that with notice or lapse of time, or
both, would constitute a default by Sellers or such Affiliates
conducting the Business under any Material Contracts, and to
the Knowledge of Sellers and such Affiliates, there is no
default or event that with notice or lapse of time, or both,
would constitute a default by any other party under any
Material Contracts. Sellers and such Affiliates have not
received notice that any party to any Material Contracts
intends to cancel or terminate any of such agreements or to
exercise or not exercise any options under any of such
agreements. Neither Sellers nor any Affiliate conducting the
Business knows of any written communication to the effect that
any current client or marketing partner of the Business for
the immediately preceding 12-month period or any current
supplier to Sellers or any Affiliate conducting the Business,
material to the Business, in each case, the loss of which
would likely have a Material Adverse Effect, will terminate or
materially and adversely modify its business relationship with
Sellers, any Affiliate or the Business. The Shared Contracts
that have not been provided or made available to Purchasers
may not be disclosed to Purchasers prior to Closing on account
of the existence of confidentiality provisions expressly
restricting Sellers' disclosure thereof to Purchasers;
provided that disclosure thereafter will be governed by
Section 9.2(c).
3.10 Intellectual Property
Schedule 3.10 contains a true and complete list and brief description
of all patents, trademarks, service marks, trade names, domain names and
copyrights (whether or not such trademarks, service marks, trade names, domain
names and copyrights are registered), and all pending applications therefor
owned by Sellers or any Affiliate conducting the Business or in which Sellers or
any Affiliate of Sellers have any rights or licenses, in each case that relates
to the Business or Purchased Assets. Except as set forth on Schedule 3.10, no
other patents, trademarks, service marks, trade names, domain names or
copyrights or any other Intellectual Property of the type described in Paragraph
(b) of Exhibit A are necessary for the conduct of the Business in substantially
the same manner as operated by Sellers or any Affiliate conducting the Business
prior to the Closing. None of the Retained Intellectual Property listed on
Schedule B(1) is necessary for, or material to, the conduct of the Business in
substantially the same manner as operated by Sellers or any Affiliate conducting
the Business prior to Closing. To Sellers' Knowledge, except as indicated on
Schedule 3.10, there is no infringement or alleged infringement by any Person of
any Intellectual Property included in the Purchased Assets. To Sellers'
Knowledge, no Seller or any Affiliate conducting the Business has infringed and
is now infringing on, any Intellectual Property right belonging to any other
Person. None of the Intellectual Property is used pursuant to a license from a
third party or licensed to a third party except as indicated in Schedule 3.10.
All of the Intellectual Property listed in Schedule 3.10 are in full force and
effect and are held of record in the applicable Sellers' name. Except as set
forth in Schedule 3.10, there is no agreement to which any Sellers or any
Affiliate conducting the Business is a party or to which such Sellers or any
Affiliate conducting the Business are legally bound and there is no restriction
or Lien materially and adversely affecting the use by Sellers or any Affiliate
conducting the Business and, after Closing, the use by Purchasers, of any of the
Intellectual Property included in the Purchased Assets, and neither Seller nor
any Affiliate conducting the Business, nor any other party is in breach of or
default under any such agreement, and each such agreement is now and following
its transfer to Purchasers after the Closing shall be valid and in full force
and effect. Except as set forth in Schedule 3.10, (i) there is no pending or, to
the Knowledge of Sellers, threatened reexamination of or pending or threatened
Claim with respect to any of the Intellectual Property, (ii) no order, holding,
decision or judgment has been rendered by any Authority, and no agreement,
consent or stipulation exists to which Sellers or any Affiliate of Seller is a
party or of which Sellers have Knowledge, which would prevent Sellers, their
respective Affiliates or Purchasers from using any of the Intellectual Property,
and (iii) there is no pending or, to the Knowledge of Sellers, threatened
objection or claim being asserted against Sellers or any of their Affiliates in
any administrative or judicial proceeding or by any person with respect to the
ownership, validity, enforceability or use of any of the Intellectual Property
or challenging or questioning the validity or effectiveness of any such
ownership or license. Except as otherwise disclosed on Schedule 3.10, if
Purchasers operate the Business after the Closing in the same manner as Sellers
and their respective Affiliates operated the Business before the Closing,
Purchasers will not be required to pay any royalties or other fees to third
parties or be subject to any other obligations or restrictions on or for the use
of Intellectual Property or other know-how related to the Business. To Sellers'
Knowledge, the Business does not involve employment of any Person in a manner
which violates any non-competition or non-disclosure agreement which such Person
entered into in connection with any former employment. No Person has executed or
entered into an employee nondisclosure and inventions agreement that relates to
the Business. All Intellectual Property or rights thereto, owned or held,
directly or indirectly, by any officer, director, shareholder, employee or any
Affiliate of Sellers and relating to the Business have been, or prior to the
Closing Date will have been, duly effectively transferred to Sellers, and will
be transferred to Purchasers at Closing.
3.11 Required Assets; Sufficiency of Assets
Except as set forth in Schedule 3.11 and except for the Nonassignable
Permits, there are no material assets, properties, rights or interests used or
required by Sellers or any of their respective Affiliates in the conduct of the
Business as presently conducted by Sellers or any of their respective Affiliates
that are not either owned by Sellers or their respective Affiliates or licensed
or leased to Sellers or their respective Affiliates and, in each case conveyed
to CPP US under this Agreement, other than insurance policies concerning the
Purchased Assets and the Business and assets required to provide services for
the Business described in the schedules to the Transition Services Agreement.
The Purchased Assets constitute all of the assets, goodwill, properties and
rights of every nature, kind and description, whether tangible or intangible,
real, personal or mixed, necessary to conduct the Business in substantially the
same manner as presently conducted by Sellers or any of their respective
Affiliates other than as noted in this Section 3.11.
3.12 Personnel Identification and Compensation
Schedule 3.12 contains a true and complete list of the names, titles
and compensation of all Designated Employees listed on Schedule 5.10 whose
annual salary from Sellers or their respective Affiliates exceeded $75,000.00
during 2002. There are no material controversies, including strikes, disputes,
slowdowns or work stoppages, pending, or to the best of Sellers' Knowledge,
threatened which involve any employees employed in connection with the Business.
Neither Sellers nor any Affiliate conducting the Business has experienced any
material labor difficulties, including, without limitation, strikes, slowdowns,
or work stoppages, within the five-year period preceding the date hereof.
Neither Sellers nor any Affiliate conducting the Business is a party to any
collective bargaining or union contract, and to the best of Sellers' Knowledge,
there exists no current union organizational effort with respect to any of the
Sellers' or their respective Affiliates' employees employed in connection with
the Business.
3.13 Compliance with Laws and Orders; Regulated Entity
(a) Sellers' and their respective Affiliates' operation of the
Business and ownership or lease of the Purchased Assets have
been (except for business practices specifically described on
Schedule 3.13(a) that were conducted prior to October 18, 2002),
and are in compliance in all material respects with all
applicable Laws, Permits and Orders of any Authority (including,
without limitation, to the extent the following Laws are
applicable, Laws relating to consumer protection, credit or
deceptive trade practices, the Fair Credit Reporting Act, the
Xxxxx-Xxxxx-Xxxxxx Act, all federal regulatory rules and
regulations promulgated pursuant to these laws, all federal,
state and local privacy laws, rules and regulations, all
applicable state laws and regulations relating to use of credit
reports, privacy, use and disclosure of personal information or
consumer data, marketing (including telemarketing and Internet
marketing of products and services), credit card charging and
electronic processing of transactions, and the offering of
insurance products (collectively "Specialty Laws") and similar
applicable laws, codes and regulations). Except as set forth on
Schedule 3.13(a), no notice, citation, summons or order has been
issued, no complaint has been filed, no penalty has been
assessed and to Seller's Knowledge, no investigation or review
is pending or threatened, by any Authority or other entity with
respect to any alleged (i) violation by Sellers or any Affiliate
relating to the Business of any Law or Order of any Authority
including Specialty Laws); or (ii) failure in any material
respect by Sellers or any Affiliate to have any Permit required
in connection with the conduct of the Business or otherwise
applicable to the Business (including the Purchased Assets).
Except as may be otherwise disclosed on Schedule 3.13(a),
Sellers and their respective Affiliates have no Knowledge of
(i) any claims arising under, or violations of, any such Law or
Order, (ii) any proceeding pending or threatened which is
reasonably likely to materially and adversely affect Sellers' or
any Affiliates' right to operate the Business, own, lease,
operate, use or the Purchased Assets or (iii) any event or
circumstance reasonably likely to materially and adversely
affect any Order currently in effect with respect to the
Business or the Purchased Assets. Sellers and their respective
Affiliates have complied with and satisfied all conditions set
forth in the New York Order and the Xxxxxx Settlement
Agreement, subject to Purchasers' obligations set forth in
Section 5.14.
(b) [Intentionally Omitted]
(c) Schedule 3.13(c) lists all (i) Material Contracts and (ii) other
Contracts, listed categorically, in each case that are subject
to regulation by state insurance Authorities between Sellers or
any Affiliate conducting the Business and one or more third
parties ("Regulatory Contracts") and Sellers have provided
Purchasers with a copy of each such Regulatory Contract listed
on such Schedule (or, in the case of Contracts described in (ii)
above, a form Contract from each category that accurately
represents the material terms of each Contract in the
particular category). Sellers and any Affiliate conducting the
Business are in compliance in all material respects with all of
the provisions of the Regulatory Contracts, including their
obligations thereunder and representations and warranties made
therein.
(d) Except as disclosed on Schedule 3.13(d), Sellers and any
Affiliate conducting the Business have not been subject to any
regulatory proceeding, investigation, civil action,
arbitration proceeding, or other proceeding by the Department
of Justice, Federal Trade Commission, any other federal
agency, any applicable state agency or person alleging a
violation of any applicable Laws, including Specialty Laws.
(e) Sellers and any Affiliates conducting the Business have not
engaged in any activities and do not engage in any activities
and are not obligated to engage in any activities, in each
case with respect to the Business, that would cause any
Sellers or any Affiliates conducting the Business to be a
consumer reporting agency under the applicable Laws.
(f) Sellers have provided to Purchasers or their counsel a true
and correct copy of Sellers' privacy statement sent to
purchasers of products of the Business as the same are in
effect as of the date hereof.
(g) Except as disclosed on Schedule 3.13(g), neither Sellers nor
any Affiliate conducting the Business is, or is deemed to be,
insurance companies or providers of insurance in any manner
whatsoever as a result of the conduct of the Business. Each
Seller and each Affiliate conducting the Business is in
compliance with, and has submitted all necessary filings and
obtained all necessary approvals under all applicable federal,
state and local Laws regarding provision or sale of insurance
or warranty product.
3.14 Products and Services
(a) [Intentionally Omitted]
(b) Warranties; Cancellation and Refund. Complete and correct copies
of the standard terms and conditions for each of the products or
services of the Business (containing applicable guaranty,
warranty, cancellation and refund and indemnity provisions and
policies) are set forth on Schedule 3.14; provided that Schedule
3.14 does not include copies of different versions of the terms
and conditions for such products or services which do not
deviate in any material respect from those included on the
Schedule. Except as required by applicable Law or as set forth
on Schedule 3.14, no product or service marketed, sold or
delivered by, or services rendered by or on behalf of Sellers
or any of their respective Affiliates in connection with the
Business is subject to any guaranty, warranty, cancellation or
refund right, indemnity, express or implied, beyond such
standard terms and conditions. Schedule 3.14 sets forth a
complete and correct list of all Contracts or, where
appropriate, categories thereof, pursuant to which any purchaser
may obtain a refund or cancel services of the Business.
(c) [Intentionally Omitted]
(d) Chargebacks Etc. Except as set forth on Schedule 3.14(d), each
Seller and each Affiliate conducting the Business is in
compliance with all credit card charging policies applicable
to it or the Business under the Contracts and neither any
Seller, Affiliate nor the Business is subject to any penalty
or fine in respect of chargebacks or denials except as
reflected in the Financial Statement's Most Recent Balance
Sheet. Attached as Schedule 3.14(d) is a description of the
credit transaction charge back and denial history of the
Business for the twelve (12) month period ended May 31, 2003.
3.15 Absence of Questionable Payments
Neither Sellers nor any of their respective Affiliates conducting the
Business, nor any of their respective directors, officers, agents, shareholders,
employees or other persons acting on their behalf, in connection with the
Business, have directly or indirectly offered, paid or promised to pay, or
authorized the payment or made expenditures of, any money or other thing of
value (including any contribution, payment, fee, gift, sample, travel expense,
or entertainment) to:
(a) any person who is an official, officer, agent employee or
representative of any governmental body or of any existing or
prospective customer (whether government owned or
nongovernment owned);
(b) any political party or official thereof;
(c) any candidate for political office; or
(d) any Person (excluding, in the case of this clause (d), any
such contribution, payment, fee, gift, sample, travel expense,
or entertainment with a value not in excess of one hundred
dollars ($100.00) to any individual in any year);
while knowing or having reason to believe that all or any portion of such money
or thing of value would be offered, given, or promised, directly or indirectly,
to any such official, officer, agent, employee, representative, political party,
political party official, candidate, individual, Person or any entity affiliated
with such customer, political party or official or political office. In
operating the Business, neither Sellers nor their respective Affiliates
conducting the Business, nor any of their respective directors, officers,
agents, employee or other persons acting on their behalf, has accepted or
received any unlawful contributions, payments, gifts, or expenditures.
3.16 Litigation
Except as set forth in Schedule 3.16, there are no suits, actions,
arbitrations, and legal, administrative and other proceedings and governmental
investigations, including, without limitation, any Claims, pending or, to
Sellers' Knowledge, threatened, against Sellers or any Affiliate, in each case
relating to or affecting the Business (a) involving $25,000 or more in dispute
(b) seeking any form of non-monetary remedy, including injunctive relief, or (c)
if determined adversely to any Seller or any Affiliate conducting the Business,
could result in the expenditure or recovery of $25,000 or more by such Sellers
or any Affiliate conducting the Business in connection therewith, (d)
questioning or affecting the validity of this Agreement or the Ancillary
Agreements or the enforceability thereof against Sellers, consummation by
Sellers and their respective Affiliates of the transactions contemplated hereby
or thereby, or compliance by Sellers and their respective Affiliates with the
terms hereof or thereof. Except as disclosed in Schedule 3.16 hereto, there are
currently no outstanding judgments, decrees or orders of any court or Authority
against Sellers or any Affiliate of Sellers, relating to or arising out of the
conduct of the Business or the ownership, condition or operation of the Business
or the Purchased Assets or Sellers' or any Affiliates' rights thereto, or
questioning or affecting the validity of this Agreement or the Ancillary
Agreements or the enforceability thereof against Sellers, consummation by
Sellers and their respective Affiliates of the transactions contemplated hereby
or thereby, or compliance by Sellers with the terms hereof or thereof. Except as
set forth on Schedule 3.16, neither Sellers nor any Affiliate conducting the
Business is presently engaged in any legal action to recover material moneys due
to it or material damages sustained by it in connection with the Business. Set
forth on Schedule 3.16 is a description of (i) all litigation, actions, suits,
material claims and proceedings and, to Sellers' Knowledge, investigations
(other than immaterial customer complaints being evaluated by the Business'
customer care group), including any material Claims, asserted, brought or
threatened against Sellers or any Affiliate conducting the Business or
predecessors-in-interest in respect of the Business, together with a description
of the outcome or present status thereof, and (ii) all judgments, orders,
decrees, writs or injunctions entered into by or against any Seller or any
Affiliate with respect to the Business, in each case during the three-year
period preceding the date hereof.
3.17 Employee Benefit Plans
(a) Schedule 3.17 contains a true and complete list of all
Employee Benefit Plans that cover or benefit Designated
Employees or any dependent or beneficiary thereof. A true and
complete copy of each such Employee Benefit Plan and (to the
extent applicable) a copy of each such Employee Benefit Plan's
current summary plan description has been furnished or made
available to Purchasers.
(b) There are no Multiemployer Plans and no Employee Benefit Plan
is subject to Title IV of ERISA.
(c) Except as may be triggered by Sellers' obligations under
Section 5.10(e), neither the execution and delivery of this
Agreement nor the consummation of any of the transactions
contemplated hereby will (either alone or in combination with
any other event) result in any (i) increased amount of
compensation due any Designated Employee, including without
limitation, any severance payment or benefit; (ii) increase
any benefits otherwise payable under any Employee Benefit Plan
to any Designated Employee, or (iii) result in the
acceleration of the time of payment or vesting of any such
benefits, whether or not such payment, acceleration, or
vesting would constitute a "parachute payment" (within the
meaning of Section 280G of the Code).
3.18 Tax Matters
(a) The term "Taxes" means all net income, capital gains, gross
income, gross receipts, sales, use, transfer, ad valorem,
franchise, profits, license, capital, withholding, payroll,
employment, unemployment, excise, goods and services, severance,
stamp, occupation, premium, property, assessments, or other
governmental charges of any kind whatsoever, together with any
interest, fines and any penalties, additions to tax or
additional amounts incurred or accrued under applicable federal,
state, local or foreign tax law or assessed, charged or imposed
by any Authority, domestic or foreign; provided that any
interest, penalties, additions to tax or additional amounts that
relate to Taxes for any taxable period (including any portion of
any taxable period ending on or before the Closing Date) shall
be deemed to be Taxes for such period, regardless of when such
items are incurred, accrued, assessed or charged. For the
purposes of this Section 3.18, Sellers shall be deemed to
include any predecessor to Sellers, and any Person with respect
to which Sellers incur a liability for Taxes as transferee, by
contract, under Treasury regulation Section 1.1502-6, or
otherwise.
(b) Sellers have duly and timely filed all material Tax Returns
required to be filed in connection with the Business. All such
returns are correct and complete in all material respects. All
Taxes shown as due and payable on such returns have been paid,
and there is no current liability for any Taxes due and
payable in connection with any such returns. There are no
Liens for Taxes upon any of the Purchased Assets.
(c) Sellers have: (i) withheld all required amounts from their
employees, agents, independent contractors and nonresident
payees and remitted such amounts to the proper Authorities;
(ii) paid all employer contributions and premiums required to
be remitted to the proper Authorities; and (iii) filed all Tax
Returns with respect to withholding Taxes, and social security
and unemployment Taxes and premiums, in each case as relates
to the Business.
3.19 Consents
Except as disclosed on Schedule 3.19, no consent, approval, license,
Permit, Order or authorization of, or registration, declaration or filing with,
any Authority or any other Person is required to be obtained or made by any
Sellers or any of their respective Affiliates in connection with (a) the
execution and delivery of this Agreement or any Ancillary Agreement to which
such Seller or Affiliate is a party, the performance by any Seller or Affiliate
of its obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, or (b) the transfer of the
Contracts and the Permits (other than the Nonassignable Permits, which the
parties acknowledge cannot be transferred) other than consents which have been
obtained and disclosed on Schedule 3.19.
3.20 Licenses and Permits
Sellers and any Affiliates conducting the Business possess and are in
compliance with all Permits required by any Authority including, without
limitation, insurance authorities and other similar boards and organizations in
order for Sellers and their respective Affiliates to operate the Business and
own, lease or otherwise hold the Purchased Assets under all applicable Laws and
Orders, except where failure to comply would not have an Adverse Effect.
Schedule 3.20 contains a true, correct and complete list of all qualifications,
registrations, filings, privileges, franchises, immunities, licenses, permits,
authorizations, variances, waivers, consents and approvals of Authorities which
are used or required in order for Sellers or their respective Affiliates to own
and/or operate the Business, including, without limitation, all certificates of
occupancy and certificates, licenses and permits relating to building
(collectively, the "Permits") except where the failure of Sellers or any
Affiliates conducing the Business to so possess such Permits would not have an
Adverse Effect on Sellers, any Affiliate conducting the Business or the
Business. Except as set forth on Schedule 3.20, each Permit is in good standing,
valid and subsisting, and in full force and effect in accordance with its terms.
Schedule 3.20 sets forth and specifically identifies those Permits that, under
applicable law or the terms of the Permit, may not be assigned or transferred
(the "Nonassignable Permits"). Sellers or their Affiliates conducting the
Business have received no notice, citation, summons or order with respect to any
failure by Sellers or such Affiliates to have any Permit required to operate the
Business, own or lease the Purchased Assets, or assume or discharge the Assumed
Liabilities. Except as set forth on Schedule 3.20 all Permits of Sellers or
their respective Affiliates relating to the operation of the Business, the
ownership or leasing of the Purchased Assets, or the performance of the Assumed
Liabilities are in full force and effect and good standing, and there are no
proceedings pending or, to Sellers' Knowledge, threatened that seek the
revocation, cancellation, suspension or any adverse modification of any such
Permits presently possessed by Sellers or any Affiliates conducting the
Business. Sellers and any Affiliates conducting the Business are in compliance
in all material respects with all obligations under any Permit. On the Closing
Date, the Permits shall be in full force and effect.
3.21 Insurance
Schedule 3.21 contains a list of the insurance policies (including,
without limitation, excess loss insurance policies for Business programs for
sale to consumers), other than policies related to employee benefits or director
and officer liability, that Sellers and any Affiliates conducting the Business
currently maintain with respect to the Business and the assets, properties and
employees of the Business, in each case as of the date hereof, including the
Purchased Assets, each of which is in full force and effect and a complete and
correct copy of each such policy that relates specifically to the Business has
been delivered to Purchasers. All insurance premiums currently due with respect
to such policies have been paid and Sellers and any Affiliates conducting the
Business are not otherwise in default with respect to any such policy. Except as
set forth on Schedule 3.21, neither Sellers nor any Affiliates conducting the
Business has received notice of cancellation or non-renewal of any such policy.
3.22 Conduct of Business
Except as set forth on Schedule 3.22, since March 31, 2003:
(a) Sellers and their respective Affiliates conducting the
Business have conducted the Business only in the Ordinary
Course of Business;
(b) except for assets not exceeding $25,000 in value and supplies
purchased, sold or otherwise disposed of in the Ordinary
Course of Business, neither Sellers nor any Affiliate
conducting the Business has purchased, sold, leased,
mortgaged, pledged or otherwise acquired or disposed of any
properties or assets of the Business;
(c) neither Sellers nor any Affiliates conducting the Business has
sustained or incurred any loss or damage (whether or not
insured against) on account of fire, flood, accident or other
similar calamity with respect to the Business;
(d) neither Sellers nor any Affiliates conducting the Business has
increased the compensation of any employee, officer, director
or consultant of the Business other than in the Ordinary
Course of Business consistent with past practice and has not
granted any unusual or extraordinary bonuses, benefits or
other forms of direct or indirect compensation to any
employee, officer, director or consultant of the Business;
(e) neither Sellers nor any Affiliates conducting the Business has
adopted, increased, terminated, amended or otherwise modified
any plan of the Business for the benefit of any employees
other than in the Ordinary Course of Business consistent with
past practice;
(f) there has been no Material Adverse Effect;
(g) neither Sellers nor any Affiliates conducting the Business has
changed any accounting methods or practices of the Business
(including, without limitation, any change in depreciation or
amortization policies or rates);
(h) neither Sellers nor any Affiliate conducting the Business has
agreed to take any of the actions described in paragraphs (b),
(d), (e), or (g) above;
(i) [Intentionally Omitted]
(j) there has not been any alteration in any material respect of
the customary practices with respect to the collection of
accounts receivable of the Business or payment of accounts
payable of the Business or the provision of discounts, rebates
or allowances, including any change or alteration that may
result from the transactions contemplated by this Agreement;
(k) [Intentionally Omitted]
(l) there has not been any material modification, amendment or
termination of any, or the entering into of any new, Material
Contract to which Sellers or any Affiliate conducting the
Business is a party or by which it is bound or any
cancellation, modification or waiver of any material debts or
claims held by Sellers (including any such debts or claims of
any Affiliates of Sellers conducting the Business) or any
waiver of any other rights of Sellers or any Affiliate
conducting the Business, in each case in respect of any
Purchased Asset or Assumed Liability, or otherwise related to
the Business;
(m) there has not been any disposition of or failure to keep in
effect any rights in, to or for the use of any of the
Intellectual Property included in the Purchased Assets;
(n) there has not been any sale, transfer or other disposition of
any assets, properties or rights of the Business, except sales
in the Ordinary Course of Business;
(o) there has not been any change or modification of the existing
credit, collection and payment policies, procedures and
practices of the Business with respect to receivables or
payables;
(p) there has not been any transaction, agreement or event
relating to the Business outside the Ordinary Course of
Business, including but not limited to any agreement by
Sellers or any Affiliate to compensate any Designated Employee
in any manner upon or with respect to the consummation of the
transactions contemplated at Closing; or
(q) there has not been any agreement, whether in writing or
otherwise, to take any action described in this Section 3.22.
3.23 No Bankruptcy Proceedings
There is no Bankruptcy Proceeding pending against any Sellers or any of
their respective Subsidiaries, and to the best Knowledge of the Sellers, no
other Person has threatened to commence any such Bankruptcy Proceeding against
any Sellers, any of their respective Subsidiaries or the Business. Neither
Sellers nor any of their respective Subsidiaries are insolvent, and Sellers and
their respective Subsidiaries have no reason to believe that any Seller or any
of their respective Subsidiaries may become insolvent in the Ordinary Course of
Business. For purpose of this Section 3.23, a "Bankruptcy Proceeding" shall mean
and include any action, suit or judicial or administrative proceeding under any
applicable bankruptcy or insolvency law, including, but not limited to, any such
action, suit or judicial or administrative proceeding: (i) involving the filing
of a voluntary or involuntary bankruptcy petition, or petition for relief from
claims of creditors, with respect to the Business, (ii) in which it is alleged
that any Sellers or any of their respective Subsidiaries are insolvent; or (iii)
seeking the liquidation of any Sellers or any of their respective Subsidiaries,
the appointment of a receiver or trustee over all or substantially all of the
assets of any Seller or any Subsidiaries, or the composition or assignment of
all or a substantial portion of the assets of any Seller or any Subsidiaries for
the benefit of any creditors. For purposes of this Section 3.23, Sellers or
their respective Subsidiaries shall be "insolvent" if they are generally not
paying, or are unable or lack the means to pay, their debts as they become due
in the Ordinary Course of Business.
3.24 No Other Representations and Warranties
Except for the representations and warranties contained in this
Agreement, Sellers make no other representations and warranties as to any fact
or matter, and no party shall be entitled to rely upon any such other
representation or warranty.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
The parties hereto intend that each representation, warranty and
covenant contained herein shall have independent significance. If any Purchaser
breaches any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which such Purchaser has not breached shall not detract from or
mitigate the fact that such Purchaser is in breach of the first representation,
warranty, or covenant. Subject to those exceptions and qualifications
specifically listed and described (including an identification by section
reference to the representations and warranties to which such exceptions and
qualifications relate) on the disclosure schedule attached to this Agreement,
and as an inducement to Sellers to enter into and perform this Agreement, and in
consideration of the covenants of Sellers contained herein, Purchasers represent
and warrant to Sellers (which representations and warranties shall survive the
Closing (subject to Section 10.1)), as of the date hereof, as follows:
4.1 Status of Purchasers
CPP is a private limited liability company, duly incorporated and
registered under the laws of England and Wales. CPP US is a limited liability
company duly organized, validly existing and in good standing under the laws of
the state of Delaware. Each Purchaser has the full limited liability company
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to use its name and
to own, lease or otherwise hold its properties and assets and to carry on its
business as conducted as of the date of this Agreement, except where the failure
to possess any such franchise, license, permit, authorization or approval would
not have an Adverse Effect on Purchasers or prevent Purchasers from performing
their obligations under, or transacting the business contemplated by, this
Agreement.
4.2 Authority of Purchasers
Each Purchaser has the requisite power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it is a party and
to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Neither the execution or delivery
of this Agreement or the Ancillary Agreements by Purchasers nor the performance
by Purchasers of their obligations hereby or thereby will conflict with or
result in a breach of any of the terms or provisions of, or constitute (with or
without the giving of notice or the lapse of time or both) a default under, any
contract, lease, license, franchise, permit, indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which Purchasers are a party
or are bound or violate, the certificate of formation, operating agreement or
other applicable constituent document of Purchasers or any Law or Order
applicable to Purchasers.
4.3 Due Authorization
The execution and delivery by each Purchaser of this Agreement and the
Ancillary Agreements to which it is a party, and the performance by Purchasers
of their obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby, have been duly and validly authorized and
approved by all necessary action on the part of Purchasers.
4.4 Enforceability
This Agreement and the Ancillary Agreements to which Purchasers are a
party are binding upon, and enforceable against, each Purchaser in accordance
with their respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights generally
and by principles of equity (whether in a proceeding at law or in equity).
4.5 Consents
Except as set forth on Schedule 4.5, no consent, approval, license,
Permit, Order or authorization of, or registration, declaration or filing with,
any Authority or any other Person, domestic or foreign, is required to be
obtained or made by any Purchaser in connection with its execution and delivery
of this Agreement and the Ancillary Agreement, or the performance of its
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby.
4.6 [Intentionally Omitted]
4.7 No Other Representations and Warranties
Except for the representations and warranties contained in this
Agreement, Purchasers make no other representations and warranties as to any
fact or matter, and no party shall be entitled to rely upon any such other
representation or warranty.
ARTICLE V
COVENANTS
5.1 [Intentionally Omitted]
5.2 [Intentionally Omitted]
5.3 [Intentionally Omitted]
5.4 [Intentionally Omitted]
5.5 [Intentionally Omitted]
5.6 Publicity
Sellers and Purchasers agree that no public release or announcement
concerning the transactions contemplated hereby shall be issued by any party
without the prior consent (which consent shall not be unreasonably withheld) of
the other parties, except as such release or announcement may be required by Law
or the rules or regulations of any Authority, in which case the party required
to make the release or announcement shall allow the other party reasonable time
to comment on such release or announcement in advance of such issuance.
5.7 [Intentionally Omitted]
5.8 Power of Attorney; Right of Endorsement, Etc.
Effective as of the Closing, each Seller hereby constitutes and
appoints CPP US and their successors and assigns the true and lawful attorney of
such Seller with full power of substitution, in the name of CPP US or the name
of such Seller or any Affiliate conducting the Business, on behalf of and for
the benefit of CPP US,
(a) to collect all Purchased Assets,
(b) to endorse, without recourse, checks, notes and other
instruments attributable to the Purchased Assets,
(c) [Intentionally Omitted]
(d) to do all such reasonable acts and things with respect to the
Purchased Assets as Purchasers may deem advisable. Sellers
agree that the foregoing powers are coupled with an interest
and shall be irrevocable by Sellers directly or indirectly by
the dissolution of Sellers or in any other manner. Purchasers
shall retain for their own account any amounts lawfully
collected pursuant to the foregoing powers and Sellers shall
promptly pay to Purchasers any amounts received by Sellers
after the Closing with respect to the Purchased Assets.
5.9 [Intentionally Omitted]
5.10 Designated Employees
(a) Upon the Closing Date, or such later date as is provided in the
Employee Leasing Agreement (the "Employee Transfer Date"),
CPP US shall offer employment to each employee listed on
Schedule 5.10 hereto (the "Designated Employees") who is
actively employed by any of the Sellers or any of their
respective Affiliates as of the Employee Transfer Date,
including any such Designated Employee on short-term disability
or other approved leave of absence, but not including long-term
disability (with respect to those individuals on short-term
disability or other approved leave of absence, not including
long-term disability, such offers will be conditional on their
commencement of active employment with CPP US within 60 days
following the Employee Transfer Date or, if later, the end of
any applicable maternity leave), on such terms as CPP US sees
fit, in its sole discretion, provided, however, that CPP US
shall offer all such Designated Employees who accept such
employment and who participated in Sellers' medical plan
immediately prior to the date they become Transferred Employees
group health insurance coverage immediately upon such
employment. All Designated Employees to whom CPP US offers
employment and who accept such employment and become employed by
CPP US are herein referred to as the "Transferred Employees,"
and each Transferred Employee shall cease to be an employee of
Sellers as of the date the Transferred Employee becomes an
employee of CPP US.
(b) Except as provided in Section 5.13(b), Sellers shall be solely
responsible for and shall indemnify and hold Purchasers
harmless from any liability or expense (including reasonable
attorney's fees), whether accruing before, on or after the
Closing Date, incurred by Purchasers as a result of any claims
of any nature (including without limitation claims related to
severance pay, severance benefits, termination-related benefits,
or other compensation or benefits) against Purchasers or their
affiliates that are made by or on behalf of any employees or
former employees, directors or consultants of Sellers or any of
their respective Affiliates (or a beneficiary or dependent
thereof) who do not become Transferred Employees, including,
without limitation, claims asserted against Purchasers as a
result of their termination by Sellers or any of their
respective Affiliates, whether or not in accordance with the
terms of this Agreement. Except as provided in Section 5.13(b),
Sellers shall be solely responsible for and shall indemnify and
hold Purchasers harmless from any liability or expense
(including reasonable attorneys' fees) for severance pay,
severance benefits or other termination-related benefits arising
out of Sellers' termination or constructive termination of any
Transferred Employee or for any payments pursuant to any
agreement entered into by Sellers or any of their respective
Affiliates for the purpose of facilitating the transactions
contemplated by the Agreement or of otherwise selling,
transferring or disposing of all or part of the Business.
(c) Except as otherwise provided in the Employee Leasing Agreement,
with respect to any Transferred Employees, (i) Sellers shall,
and shall cause their Affiliates to, retain all liability under
each of their applicable group life, accident, worker's
compensation, medical, hospitalization, prescription drug,
dental or short-term or long-term disability plans, whether or
not insured, for any claims arising prior to the date they
become Transferred Employees, and (ii) Purchasers shall be
responsible for all liability for claims arising on or after the
date they become Transferred Employees under any group life,
accident, worker's compensation, medical, hospitalization,
prescription drug, dental, or short-term or long term disability
plans of that Purchasers may provide ("Purchasers' Welfare
Plans"). For purposes of this Section 5.10(c), claims shall be
deemed to have arisen:
(i) with respect to all death or dismemberment claims, on
the actual date of death or dismemberment;
(ii) with respect to disability or salary continuance claims,
on the date the claimant becomes disabled;
(iii) with respect to all hospital, medical, drug or dental
claims, on the date the service or supply was purchased
or received by the claimant; and
(iv) with respect to worker's compensation claims which are
single-accident specific, on the date of the occurrence,
and with respect to all other worker's compensation
claims, on the last day worked before the occurrence
giving rise to such claims.
(d) Except as otherwise provided in the Employee Leasing Agreement,
Sellers and their Affiliates shall be responsible and retain
liability for any legally mandated continuation of health care
coverage for all employees or former employees and/or their
covered spouses and dependents who have a loss of health care
coverage under Sellers' or their Affiliates' health plans, due
to a qualifying event (as defined in Section 4980B of the Code)
that occurs on or prior to the Employee Transfer Date, and for
any legally mandated continuation of health care coverage under
Sellers' or their Affiliates' health plans for Transferred
Employees and/or their covered, spouses and dependents who (i)
have a loss of health care coverage under Sellers' or their
Affiliates' health plans due to a qualifying event (as defined
in Section 4980B of the Code) that occurs on or after the
Employee Transfer Date and (ii) are entitled to, and do,
elect such continuation coverage under Sellers' or their
Affiliates' health plans.
(e) Sellers and their Affiliates will take all such action as may
be necessary to ensure that each Transferred Employee is 100%
vested as of the Employee Transfer Date in that Transferred
Employee's accounts under any qualified defined contribution
plan maintained by Sellers or any of their Affiliates and in
the Metris Companies, Inc. Employee Stock Purchase Plan.
(f) Sellers shall be solely responsible for and shall indemnify and
hold Purchasers harmless from any liability, claim or expense
(whether accruing before, on or after the Closing Date) with
respect to the Retention Bonus Program (the "Retention Bonus
Plan"). Effective as of the Closing Date, Sellers shall cause
the Retention Bonus Plan to be amended to provide that any
Designated Employee covered under the Retention Bonus Plan
immediately prior to the date hereof shall be entitled, at the
sole expense of Sellers and their Affiliates notwithstanding any
terms of the Employee Leasing Agreement to the contrary, to the
cash payment under the Retention Bonus Plan such Designated
Employee would have been entitled under the terms thereof as in
effect as of the date hereof, during the month of July 2003 had
the Designated Employee remained employed by any of the Sellers
on the payment due date and been compensated by Sellers at the
Designated Employee's rate of pay as in effect immediately prior
to the Closing Date, provided, however, that on such payment due
date the Designated Employee is either employed by Purchasers or
any of their affiliates or remains employed by any of Sellers or
their Affiliates. After such payment is made in July 2003,
Purchasers shall reimburse Sellers and their Affiliates for cash
payments owed or paid to the Transferred Employees under the
Retention Bonus Plan and described on Schedule 5.10(f)
(including a description of amounts payable) until such time as
the Designated Employees become Transferred Employees, at which
time there shall be no further liability or cost to Sellers or
Purchasers thereunder with respect to Transferred Employees.
Sellers and their Affiliates shall be solely responsible for
liabilities associated with any restricted stock award granted
under the Retention Bonus Plan.
5.11 Allocation for Tax Purposes
Subsequent to the Closing, the parties shall cooperate in good faith to
file all Tax Returns on a basis that is consistent with the agreed upon
allocation of the Purchase Price as set forth in Schedule 5.11 hereto. The
allocation shall comply in all respects with Code Section 1060 and the related
Treasury regulations. No party hereto shall have any liability to any other
Person arising out of any challenge to such allocation by any taxing Authority
so long as such party does not take a position inconsistent with such allocation
in any Tax filing or administrative or judicial proceeding.
5.12 Post-Closing Taxes.
Purchasers shall file all Tax Returns and pay all Taxes
due with respect to the Business for taxable periods or portions thereof
beginning on or after the Closing Date.
5.13 Termination or Layoffs
Sellers and Purchasers agree to fully comply with the WARN Act, and its
corresponding regulations in 20 CFR 639 et seq., and any similar state law, rule
or regulation or local ordinance, rule or regulation providing for notification
to employees affected by a closing, relocation, sale of a business, mass layoff
or similar event, with respect to any employees affected by the sale of the
Purchased Assets.
(a) If any Seller or any of its Affiliates takes any action which
results in any employee retained or employed by such Seller or
Affiliate (other than any Designated Employee) suffering or
deeming to have suffered any "employment loss," as that term
is defined in WARN, including any layoff or loss arising as a
result of or in connection with the transactions consummated
by this Agreement, such Seller or Affiliate, as the case may
be, shall be solely responsible for providing any notice
required by WARN and for making payments, if any, which may be
required under WARN for failure to provide appropriate notice.
(b) After the Closing Date, CPP US shall be solely responsible for
providing any notice required by WARN and for making payments,
if any, which may be required under WARN for failure to provide
appropriate notice, in each case with respect to any Designated
Employee suffering or deeming to have suffered any "employment
loss," as that term is defined in WARN. For the avoidance of
doubt, if CPP US has not hired any Designated Employee who has
not rejected employment on or before the time specified in CPP
US' offer letter attached hereto as Exhibit D ("Employee Offer
Response Date") and Sellers terminate such Designated Employee
from his or her employment, CPP US shall be responsible for
making payments, if any, which may be required under WARN for
failure to provide appropriate notice related thereto. Within a
reasonable period of time after the Employee Offer Response
Date, CPP US shall provide to Sellers a list of all Designated
Employees who have rejected offers of employment.
(c) For the sixth month period prior to the Closing Date, Sellers
and their Affiliates have terminated 22 employees of the
Business, and Sellers and their Affiliates currently employ as
of the date hereof approximately 328 employees in the
Business.
5.14 Settlement Agreement.
From and after the Closing Date, Purchasers will follow the
requirements, as applicable to the Purchased Assets only, of the Xxxxxx
Settlement Agreement as set forth in Schedule 5.14, but only if and to the
extent that the Business as operated by Sellers and their respective Affiliates
shall have in place at Closing practices and procedures designed to assure that
the Business will follow and comply with such requirements.
5.15 New York Order.
The parties hereto do not view the Purchasers to be a successor or
assign and do not intend for Purchasers to be a successor or assign bound by the
New York Order.
5.16 [Intentionally Omitted]
5.17 Cooperation
Purchasers and Sellers shall cooperate with each other and shall cause
their affiliates, officers, employees, agents and representatives to cooperate
with each other to ensure the orderly transition of the Business from Sellers to
Purchasers and to minimize the disruption to the Business resulting from the
transactions contemplated hereby. Subsequent to the Closing, Sellers shall
cooperate with Purchasers in conveying to the Business' customers, partners,
suppliers and other interested parties that a change in ownership of the
Business has occurred and to preserve intact the relationship of the Business
with such parties.
5.18 Non-Solicitation
Purchasers hereby agree that for the period of one (1) year following
the date of this Agreement, neither Purchasers nor any of their affiliates shall
solicit, hire or endeavor to entice away, any employee of any Seller (other than
the Designated Employees and other than any employee whose employment is
terminated by any Seller before such employee is solicited, hired or enticed
away by Purchasers or such affiliate) to terminate his or her employment with
the applicable Sellers.
5.19 Non-Competition
(a) Sellers hereby agree that for the period of five (5) years
(except with respect to clause (ii) below which shall be for a
period of two (2) years) following the date of this Agreement,
neither Sellers nor any of their respective Affiliates shall:
(i) compete with Purchasers in any manner directly or
indirectly, on their own behalf, or on behalf of any
corporation, partnership, trust, joint venture,
individual or other entity, in any aspect of the design,
marketing, sale, distribution, research or development
of any products or services of the Restricted Business,
which include without limitation the following:
(i) DirectAlert(R); (ii) Fraud Alert ServicesSM;
(iii) RoadSaverSM; (iv) TripSaver(R); (v) Total
Advantage HealthSM; (vi) Inside AccessSM; (vii)
PurchaseShield(R); (viii) ServiceEdge(R); and (ix)
Home ServiceEdgeSM;
(ii) solicit, or accept orders or business of any kind
relating to the design, marketing, sale, distribution,
research or development of any products or services, in
each case relating to the Restricted Business, from any
customer or active prospect of the Restricted Business
or the Purchasers, or any former customer of Sellers
or any such Affiliate or endeavor to entice away from
the Restricted Business or the Purchasers or any of
their subsidiaries or affiliates, or otherwise interfere
with the relationship of the Restricted Business
or the Purchasers or any of their subsidiaries with any
Person who, to the Knowledge of the Sellers or any
such Affiliate, is, or was within the then most recent
twelve-month period, a vendor, customer or client of
the Restricted Business or the Purchasers or any of
their subsidiaries or affiliates;
(iii) solicit, hire or endeavor to entice away, any employee
of the Restricted Business or the Purchasers or former
employee of Sellers or any such Affiliate hired by
Purchasers (other than any employee whose employment is
terminated by any Purchaser before such employee is
solicited, hired or enticed away by Sellers or any
Affiliate) to terminate his or her employment with the
Restricted Business or the Purchasers; or
(iv) use, or incorporate or otherwise create any business
organization utilizing, any name, xxxx, tradename,
trademark, service name, service xxxx, trade dress or
logos included in the Purchased Assets or which are
confusingly similar thereto.
(b) Sellers shall, and shall cause their respective Affiliates to,
refrain from engaging in the activities described in this
Section 5.19 during the period specified in subsection (a)
hereof in the United States of America.
(c) Sellers and their respective Affiliates shall be deemed to be
competing with Purchasers if Sellers or any Affiliate of
Sellers are engaged or participate in any activity or
activities described in subsection (a) of this Section 5.19,
directly or indirectly, whether for their own account or for
that of any other Person, firm or corporation, and whether as
a shareholder, partner or investor controlling any such entity
or as principal, agent, representative, proprietor, or
partner, or in any other capacity, except that the ownership
of 1% or less of any publicly traded company engaged in the
Business shall not constitute a breach of this Section 5.19.
(d) In the event of a breach by Sellers or any of their respective
Affiliates of any covenant set forth in Section 5.19 of this
Agreement, the term of such covenant will be extended by the
period of the duration of such breach.
(e) [Intentionally Omitted.]
(f) From and after a Change of Control of Metris Companies Inc.,
the restrictions against competition contained in subsection
(a) and (b) above shall not apply to any persons other than
Sellers and their respective Subsidiaries as of the date of
such Change in Control.
(g) Nothing in this Section 5.19 shall be deemed to restrict
Sellers or any of their Affiliates from performing their
obligations under (i) the Marketing Agreement or (ii) the
Transition Services Agreement.
ARTICLE VI
[Intentionally Omitted]
ARTICLE VII
[Intentionally Omitted]
ARTICLE VIII
CLOSING
8.1 Time and Place
Subject to the terms and conditions of this Agreement, the closing of
the sale and purchase of the Purchased Assets (the "Closing") shall take place
on the date hereof at the offices of Xxxxx Day, 00 Xxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000 (the "Closing Date").
8.2 Closing Transactions
All documents and other instruments delivered at the Closing shall be
regarded as having been delivered simultaneously, and no document or other
instrument shall be regarded as having been delivered until all have been
delivered. Subject to Section 1.4 and 5.10, legal title, equitable title and
risk of loss with respect to the Purchased Assets shall not pass to CPP US until
the Purchased Assets are transferred at or after the Closing, which transfer,
once it has occurred, shall be deemed effective for tax, accounting and other
computational purposes as of 12:01 A.M. Central Time on the Closing Date or such
later date.
8.3 Deliveries by Sellers to Purchasers
At the Closing, Sellers shall, and hereby do, deliver or cause to be
delivered to Purchasers (except insofar as the conditions related to such
delivery have been waived by Purchasers and except as otherwise provided in this
Agreement):
(a) bills of sale and instruments of assignment to the Purchased
Assets, duly executed by Sellers in a form reasonably
satisfactory to Purchasers and Sellers;
(b) instruments of assignment of all Intellectual Property
included in the Purchased Assets, each duly executed and,
where necessary or desirable, in recordable form in a form
reasonably satisfactory to Purchasers and Sellers;
(c) each of the Ancillary Agreements which shall have been duly
executed by each Seller or Affiliate party thereto as of the
date hereof and which shall become effective upon Closing;
(d) a certificate dated the Closing Date, duly executed by the
Secretary or an Assistant Secretary of each Seller, on behalf of
each Seller certifying as to: (i) an attached copy of the
resolutions of the Board of Directors (or a duly authorized
committee or officer) of each Seller authorizing and approving
the execution, delivery and performance of, and the consummation
of the transactions contemplated by, this Agreement, the
Ancillary Agreements and any other documents or instruments
contemplated hereby or thereby, and stating that the resolutions
thereby certified have not been amended, modified, revoked or
rescinded; and (ii) the incumbency, authority and specimen
signature of each officer of such Seller executing this
Agreement, the Ancillary Agreements or any other document or
instrument contemplated hereby or thereby;
(e) a receipt for the payment of the Purchase Price due to Sellers
at Closing duly executed by each Seller; and
(f) all such other instruments of conveyance as shall, in the
reasonable opinion of Purchasers and their counsel, be
necessary to vest in CPP US good, valid and marketable title
to the Purchased Assets in accordance with Section 1.1 hereof,
including without limitation, time-stamped instruments and
releases, in form and substance satisfactory to Purchasers,
evidencing release and removal of all Liens on the Purchased
Assets.
8.4 Deliveries by Purchasers to Sellers
At the Closing, Purchasers shall, and hereby do, deliver or cause to be
delivered to Sellers (except insofar as the conditions related to such delivery
have been waived by Sellers):
(a) wire transfer of immediately available funds in an amount
equal to the cash portion of the Purchase Price;
(b) each of the Ancillary Agreements which shall have been duly
executed by each Purchaser party thereto as of the date hereof
and which shall become effective as of Closing;
(c) a certificate, dated the Closing Date, duly executed by the
Secretary of each Purchaser, on behalf of such Purchaser,
certifying as to: (i) an attached copy of the resolutions of
such Purchaser authorizing and approving the execution,
delivery and performance of, and the consummation of the
transactions contemplated by, this Agreement, the Ancillary
Agreements and any other documents or instruments contemplated
hereby or thereby, and stating that the resolutions thereby
certified have not been amended, modified, revoked or
rescinded; and (ii) the incumbency, authority and specimen
signature of each officer of such Purchaser executing this
Agreement, the Ancillary Agreements or any other document or
instrument contemplated hereby or thereby.
(d) an Assumption Agreement, properly executed by CPP US, in a
form reasonably satisfactory to Purchasers and Sellers.
ARTICLE IX
OTHER AGREEMENTS
9.1 Further Assurances
At any time and from time to time from and after the Closing, Sellers
and Purchasers shall, at the request of the other, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such instruments
and other documents and perform or cause to be performed such acts and provide
such information, as is commercially reasonable and required to evidence or
effectuate the sale, conveyance, transfer, assignment and delivery to CPP US of
the Purchased Assets and the assumption by CPP US of the Assumed Liabilities or
for the performance by Sellers or Purchasers of any of their other respective
obligations under this Agreement or the Ancillary Agreements. This obligation
shall include, without limitation, Sellers' obligation to take the actions
specified in Section 1.4(a) with respect to (a) obtaining the consents required
from the relevant parties pursuant to the Contracts set forth on Schedule 3.19,
(b) obtaining the consents required from the relevant parties pursuant to the
governmental authorizations set forth as Schedule 3.20 and (c) assigning and
transferring Permits (other than the Nonassignable Permits, which the parties
acknowledge may not be transferred) to CPP US or any of its affiliate in
accordance with Section 1.4(a). For the avoidance of doubt, this Section 9.1 is
in addition to, and not in derogation or limitation of, Purchasers' rights under
Section 10.2 or Sellers' rights under Section 10.4. Each party shall cooperate
and deliver such instruments and take such commercially reasonable actions as
may be reasonably requested by the other party in order to carry out the
provisions and purposes of this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby.
9.2 Access to Records, Employees and Shared Contracts After Closing
(a) Subject to clause (c) below, from and after the Closing Date,
each party hereto and its representatives shall have reasonable
access to inspect and copy all books and records relating to
Sellers or any Affiliate with respect to the operation of the
Business prior to Closing that the other parties hereto or their
respective affiliates may retain after the Closing Date. Such
access shall be afforded by the party maintaining such records
upon receipt of reasonable advance notice and during normal
business hours. Nothing contained in this Section 9.2 shall
require Purchasers or Sellers or any of their respective
affiliates to retain any books or records longer than such books
or records would otherwise have been retained in the Ordinary
Course of Business but for the transactions contemplated
by this Agreement and the Ancillary Agreements; provided,
however, that if the party maintaining such records shall
desire to dispose of any of such books and records, such party
shall, prior to such disposition, give the other party hereto a
reasonable opportunity, at such other party's expense, to
segregate and remove such books and records as such other party
may select. To the extent any party hereto retains particular
records or documents relating to the Business, such party shall
deliver to the other party copies of such records or documents
(to the extent reasonably necessary to enable the receiving
party to operate its business or to comply with its obligations
under applicable Laws); provided, however, that the parties
shall cooperate and take such measures as may be reasonably
necessary to preserve the attorney-client and other privileges
applicable to any such documents or records.
(b) From and after the Closing Date, Sellers, their Affiliates and
their representatives shall have reasonable access to any
Transferred Employee and Purchasers shall have reasonable
access to any employee of Sellers, in each case, to the extent
necessary to plan and prepare for threatened or pending
litigation; provided, however, that such access shall only be
afforded by the party employing such Persons during normal
business hours and only upon receipt of ten (10) Business
Days' prior written notice.
(c) From and after the Closing Date, Sellers and their respective
Affiliates shall provide Purchasers and their representatives
on reasonable notice, with access to, or an opportunity to
examine, true and complete copies of the Shared Contracts
during regular business hours for purposes related to the
operation of the Business after Closing, including Purchasers'
efforts to obtain and/or negotiate Contracts to replace Shared
Contracts; provided, however, that any Shared Contract that is
subject to a confidentiality restriction shall only be made
available to Purchasers if Purchasers agree in writing to be
bound by the confidentiality provisions that govern such
Shared Contract.
9.3 Collection of Receivables
From and after the Closing, CPP US shall collect all Retained Accounts
Receivable of the Business in accordance with the terms of the Transition
Service Agreement.
Sellers agree that if they receive any payments with respect to any
Purchased Accounts Receivable or otherwise belonging to Purchasers, Sellers or
such Affiliates shall promptly, and in any case within fourteen (14) days after
receipt thereof by Sellers or any such Affiliate, remit such amounts to
Purchasers.
9.4 Use of Trade Names, Domain Names and Logos
To the extent any trade name, domain name, trademark, service xxxx or
other name or xxxx of Sellers or any of their Affiliates (the "Retained Names")
appears on (a) any plant, building, or equipment, or (b) any stationery,
business form (including fulfillment kits), packaging, web site or other
electronic media, container, sign or other property (real or personal) included
in the Purchased Assets, Purchasers shall use reasonable efforts to minimize
their use of the Retained Names and promptly effect obliteration of the Retained
Names from all Purchased Assets, and, except as provided below, cease, in any
event, using the Retained Names no later than 180 days following the Closing
Date, except as such time period may be extended by mutual agreement of the
parties, which agreement will not be unreasonably withheld or delayed.
Purchasers also shall not be required to obliterate any of the Retained Names or
destroy any stationery, business form, packaging, container, or other document,
to the extent Purchasers retain any such items in the ordinary course of
business for purposes of maintaining files, record keeping or other normal
storage purposes. Purchasers shall endeavor, as soon as commercially
practicable, to supplement, update or otherwise modify, as Purchasers deem
appropriate in their sole discretion, such items to inform recipients thereof of
Purchasers' identity.
9.5 UCC Matters
From and after the Closing Date, Sellers will promptly refer all
inquiries with respect to ownership of the Purchased Assets or the Business to
CPP US. In addition, Sellers and their respective Affiliates will execute such
documents and financing statements as CPP US may request from time to time to
evidence transfer of the Purchased Assets to CPP US, including any necessary
termination of financing statements.
9.6 Confidentiality
(a) Sellers shall, and shall cause their Affiliates, officers,
employees, representatives, consultants and advisors to, hold
in confidence and not use all confidential information which
remains after Closing in the possession of Sellers or their
respective Affiliates concerning Purchasers or their
affiliates or the Business or the Purchased Assets. Sellers
shall not release or disclose any such information to any
Person other than Purchasers and their authorized
representatives. Notwithstanding the foregoing, the
confidentiality obligations of this Section 9.6(a) shall not
apply to information:
(i) which Sellers or their respective Affiliates are
compelled to disclose by judicial or administrative
process, or, in the opinion of counsel, by other
mandatory requirements of Law;
(ii) which can be shown to have been generally available to
the public other than as a result of a breach of this
Section 9.6(a); or
(iii) which can be shown to have been provided to Sellers or
their respective Affiliates by a third party who
obtained such information other than from Sellers or
their respective Affiliates or other than as a result of
a breach of this Section 9.6(a).
(b) Purchasers shall, and shall cause their affiliates, officers,
employees, representatives, consultants and advisors to, hold
in confidence and not use all confidential information which
remains after Closing in the possession of Purchasers or their
affiliates concerning the Sellers or their Affiliates or their
respective businesses and the Retained Assets, except, in any
such case, to the extent such information relates exclusively
to the Business or the Purchased Assets. Purchasers shall not
release or disclose any such information to any Person other
than Sellers and their authorized representatives.
Notwithstanding the foregoing, the confidentiality obligations
of this Section 9.6(b) shall not apply to information:
(i) which Purchasers or their affiliates are compelled to
disclose by judicial or administrative process, or, in
the opinion of counsel, by other mandatory requirements
of Law;
(ii) which can be shown to have been generally available to
the public other than as a result of a breach of this
Section 9.6(b); or
(iii) which can be shown to have been provided to Purchasers
or their affiliates by a third party who obtained such
information other than from Purchasers or their
affiliates or other than as a result of a breach of this
Section 9.6(b).
(c) Notwithstanding any other express or implied agreement,
arrangement or understanding to the contrary, Sellers and
Purchasers (and each of their respective employees,
representatives or other agents) may disclose to any and all
persons, without limitation of any kind, the tax treatment and
tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions and other tax
analyses) that are provided to such party relating to such tax
treatment and tax structure no later than the earliest of (i)
the date of the public announcement of discussions relating to
the transactions, (ii) the date of the public announcement of
the transactions, or (iii) the date of the execution of an
agreement (with or without conditions) to enter into the
transaction, including this Agreement. Sellers and Purchasers
may discuss the transactions contemplated by this Agreement with
their respective tax advisors at any time. This authorization is
not intended to permit disclosure of any other information
including (without limitation): (A) any portion of any materials
to the extent not related to the tax treatment or tax structure
of the transaction; (B) the identities of participants or
potential participants in the transaction; (C) the existence or
status of any negotiations relating to the transaction;
(D) any pricing or financial information (except to the extent
such pricing or financial information is related to the tax
treatment or tax structure of the transaction); (E) any other
term or detail not relevant to the tax treatment or tax
structure of the transaction; and (F) any nonpublic financial
information, including sales, costs, pricing or margin
information, identification of any party to the transaction or
any customer, vendor, supplier, employee or other party with
whom the parties do business or any other nonpublic information
that is not directly related to the potential tax consequences
of entering into the transaction.
9.7 Trade Payables
Sellers shall, and shall cause their respective Affiliates to, pay and
discharge in full all trade payables set forth on the Most Recent Balance Sheet
and all trade payables arising from the Most Recent Financial Statements Date up
to the Closing Date as and when such trade payables become due and payable.
ARTICLE X
INDEMNIFICATION
10.1 Survival of Representations and Warranties
The representations and warranties of the parties hereto contained in
Articles III and IV shall survive the Closing and expire two years following the
Closing Date; provided, however, that (a) the representations and warranties
contained in Sections 3.6 (Taxes) and 3.18 (Tax Matters) shall survive the
Closing and expire 30 days after the date on which the statute of limitations
applicable to such matters expires; and (b) the representations and warranties
contained in Sections 3.1(a), (b) and (c) (Status of Sellers, Enforceability),
3.4(a) and (d) (Title to Properties), the second and third sentences of Section
3.10 (Intellectual Property), 3.11 (Required Assets; Sufficiency of Assets) (but
only as it applies to Intellectual Property), 4.1 (Status of Purchasers), 4.2
(Authority of Purchasers), 4.3 (Due Authorization) and 4.4 (Enforceability)
shall not expire and shall survive the Closing indefinitely; provided, further,
that if at the stated expiration of any representation and warranty there shall
be pending any indemnification claim by a Person pursuant to which notice has
been given pursuant to Section 10.6, such Person shall continue to have the
right to seek such indemnification with respect to such claim notwithstanding
such expiration.
10.2 Indemnification by Sellers
Sellers shall indemnify, defend and hold harmless Purchasers, their
affiliates, shareholders, officers, directors, employees and agents ("Purchaser
Indemnified Parties") after the Closing Date from and against any loss
(including diminution in value of the Business), liability, obligation, Lien,
damage (including any government penalty or fine), deficiencies, Claims,
demands, judgments, settlements, fines, cost and expense (including reasonable
legal and accounting fees incurred in defending, investigating, preparing or
prosecuting any Claim, liability, loss or damage) ("Purchaser Losses") arising
out of or resulting from:
(a) the untruth or inaccuracy as of the date hereof or on the
Closing Date of any representation or warranty of Sellers or
its Affiliates contained in this Agreement or the Schedules
hereto (or in any document, writing, or certificate delivered
by Sellers or its Affiliates under Article VIII of this
Agreement);
(b) any Excluded Liability, including, without limitation, those
liabilities set forth in clauses (c), (d), (e), (h), (i) and
(k) of this Section 10.2;
(c) any obligation or liability arising from Claims arising from
warranty or other liability claims with respect to products,
materials or services marketed, produced, invoiced, sold,
performed or shipped by any Seller prior to the Closing Date;
(d) any Third-Party Claim resulting from or relating to the
conduct of the Business by Sellers or their respective
Affiliates prior to the Closing Date, including, without
limitation, any Third-Party Claim, pending as of the Closing
Date, notwithstanding disclosure thereof in this Agreement or
on the Most Recent Balance Sheet or the Schedules hereto, or
any subsequent Third-Party Claim arising out of or relating to
such pending matters or any other event occurring prior to the
Closing Date, unless such Purchaser Loss is a Seller Loss for
which a Seller Indemnified Party is entitled to
indemnification under Section 10.4;
(e) any liability described in Section 5.10(b);
(f) the failure by any Seller to perform any of its covenants or
obligations hereunder;
(g) any violation of or liability arising under any bulk sales law
in connection with the transfer of the Purchased Assets;
(h) (i) (A) the August 1, 2001 Assurance of Discontinuance to the
New York Attorney General's Inquiry and Findings in the Matter
of Metris Direct Services, Inc. d/b/a Fraud Alert Services (the
"New York Order") and (B) the Settlement Agreement resolving the
Xxxxxx, Xxxxx and Pita Litigation, dated as of January 28, 2002,
with an Effective Date of September 4, 2002 (the "Xxxxxx
Settlement Agreement"), including any failure by Sellers or
their respective Affiliates to comply with the provisions
thereof, or the failure of the Business to have modified its
practices prior to Closing to comply with the terms thereof,
provided that Purchasers have not changed their business
practices from those in effect as of the Closing to deviate from
those described in Schedule 5.14, (ii) any requirement by
Purchasers to implement practices and procedures, expend funds
or incur expenses after the Closing in order for the Business or
the Purchased Assets to comply with the provisions of the New
York Order or the Xxxxxx Settlement Agreement (other than
performance by Purchasers of their obligations under Section
5.14), (iii) conduct of any Seller or Affiliate of any Seller
alleged, or conduct of any Seller or Affiliate of any Seller
similar to that alleged, in the matters, inquiries and Claims
settled pursuant to the New York Order or the Xxxxxx Settlement
Agreement, including without limitation Claims by Persons who
opted-out of the settlement effected by the Xxxxxx Settlement
Agreement irrespective of the Person against whom any such Claim
is initiated, filed or asserted and (iv) any out-of-pocket
expenses incurred by Purchasers solely in connection with
advising the New York Attorney General or litigating the issue
with the New York Attorney General in any proceeding that
Purchasers are not successors or assigns within the meaning of
the New York Order;
(i) any penalty, fine or other obligation arising out of or
relating to Sellers' failure to conduct the Business prior to
Closing in compliance with VISA(R), MasterCard(R) or Discover
Card(R) credit card charging policies applicable to the
Business;
(j) Claims regarding the administration and holding of the
Nonassignable Contracts pursuant to Section 1.4(b), but only
to the extent such claims relate to Sellers' or any of their
Affiliates' failure to comply with applicable Law or Sellers'
or any of their Affiliates' gross negligence or willful
misconduct in administering and holding such Nonassignable
Contracts; or
(k) any of the matters, including Claims, described on Schedule
3.13(d) or Schedule 3.16.
10.3 Limits on Indemnification by Sellers
The amount of liability of Sellers for the Purchaser Losses shall be
subject to the following limitations:
(a) Indemnity Basket. Except as otherwise provided in this Section
10.3, Sellers shall have no liability under Section 10.2(a)
until the aggregate amount of all Purchaser Losses for which
Sellers would, but for this Section 10.3(a), be liable exceeds
$250,000 (the "Indemnity Basket"), in which event Sellers
shall, subject to Section 10.3(b), be liable for the total
amount of all Purchaser Losses in excess of $125,000.
(b) Limit of Liability. Except as provided in this Section 10.3,
the aggregate liability of Sellers under Section 10.2(a)
(after giving effect to the application of Section 10.3(a)),
shall not exceed an amount equal to $15,000,000 (the "Cap");
provided, however, that any Cap for the purpose of
indemnification under Section 10.2(a) in respect of a breach
of Sections 3.1(a), (b) or (c), 3.4(a) or (d), the second and
third sentences of Section 3.10 or 3.11 (but only as it
applies to Intellectual Property) shall not exceed an amount
equal to the Purchase Price.
(c) For purposes of calculating the amount of Purchaser Losses
incurred by the Purchaser Indemnified Party arising out of or
resulting from, any breach of a representation, covenant or
agreement by Sellers or its Affiliates or Purchasers (but not
for purposes of determining whether there has been a breach of
a representation, covenant or agreement), the references to a
"Material Adverse Effect", "Adverse Effect" or materiality (or
other correlative terms), shall be disregarded. The parties
acknowledge that any limitation or condition of liability
contained in this Section 10.3 is not applicable to
indemnification under Sections 10.2(b)-(k) inclusive.
(d) Notwithstanding anything to the contrary set forth herein, (A)
no limitation or condition of liability provided in Section
10.1 or 10.3 shall apply to the breach of any of the
representations and warranties contained herein involving
fraud, and (B) Purchasers shall be entitled to indemnification
in respect of a breach of Section 3.1(a), (b) and (c), 3.4(a)
or (d), the second and third sentences of Section 3.10 and
3.11 (but only as it applies to Intellectual Property)
irrespective of the Indemnity Basket.
10.4 Indemnification by Purchasers
Purchasers shall indemnify, defend and hold harmless Sellers and their
respective Affiliates, shareholders, officers, directors, employees and agents
("Seller Indemnified Parties") after the Closing Date from and against any loss
(including diminution in value), liability, obligation, Lien, damage,
deficiencies, Claims, demands (including any government penalty or fine),
judgments, settlements, fines, cost and expense (including reasonable legal and
accounting fees incurred in defending, investigating, preparing or prosecuting
any claim for any such Claim liability, loss or damage) ("Seller Losses")
arising out of or resulting from:
(a) the untruth or inaccuracy as of the date hereof or on the
Closing Date of any representation or warranty of Purchasers
contained in this Agreement or in any document, writing or
certification delivered by Purchasers;
(b) the failure by any Purchaser to perform any of its covenants
or obligations hereunder;
(c) any Assumed Liability;
(d) any Third-Party Claim resulting from or relating to
Purchasers' ownership of the Purchased Assets following the
Closing or the operation of Purchasers and conduct of
Purchasers' business following the Closing, including, without
limitation, any loss, liability, obligation, Lien, damage,
cost or expense arising from products produced or processed by
Purchasers or Purchasers' use of pre-printed business forms or
other materials pursuant to Section 9.4 after the Closing,
unless such Seller Loss is a Purchaser Loss for which a
Purchaser Indemnified Party is entitled to indemnification
under Section 10.2; or
(e) the costs and liabilities incurred by Sellers in holding or
administering the Nonassignable Contracts for the benefit of
Purchasers from and after the Closing Date, unless such Seller
Loss is a Purchaser Loss for which any Purchaser Indemnified
Party is entitled to indemnification under Section 10.2(j).
Notwithstanding anything in this Agreement or this Section 10.4 to the contrary,
Purchasers shall not be required to indemnify Seller with respect to any Seller
Losses that arise out of or result from the matters described in Section 10.2(h)
and for which Seller must indemnify Purchasers.
Purchasers shall have no liability under Section 10.4(a) until the aggregate
amount of all Seller Losses for which Purchasers would, but for this paragraph,
be liable exceeds the Indemnity Basket, in which event Purchasers shall, subject
to the second sentence of this paragraph, be liable for the total amount of all
Seller Losses in excess of the Indemnity Basket. The aggregate liability of
Sellers under Section 10.4(a), shall not exceed an amount equal to the Cap.
Notwithstanding anything to the contrary set forth herein, (i) no limitation or
condition of liability provided in Section 10.1 or this Section 10.4 shall apply
to the breach of any of the representations and warranties contained herein
involving fraud, and (ii) Sellers shall be entitled to indemnification in
respect of a breach of Section 4.1, 4.2, 4.3 and 4.4 irrespective of the
Indemnity Basket. The parties acknowledge that any limitation or condition of
liability contained in this paragraph is not applicable to indemnification under
Sections 10.4(b)-(e) inclusive.
10.5 Specific Breaches
The breach of a specific representation, warranty, or agreement by
Sellers or Purchasers, as applicable, shall be determined independently of any
other representation, warranty or agreement made by Sellers or Purchasers, as
applicable, whether or not, apart from such specific representation, warranty or
agreement, the transactions provided for in this Agreement prove to be more
favorable to Purchasers or Sellers, as applicable, and whether or not the facts
and circumstances covered by any one or more of the other representations,
warranties or agreements made by Sellers or Purchasers, as applicable, prove to
be more favorable than so represented and warranted.
10.6 Procedure for Indemnification
(a) If any Person shall claim indemnification (the "Indemnified
Party") hereunder for any claim other than a third party claim,
the Indemnified Party shall promptly give written notice to the
other party from whom indemnification is sought (the
"Indemnifying Party") of the nature of the claim in detail and
amount of the claim. If an Indemnified Party shall claim
indemnification hereunder arising from any claim or demand of a
third party, including any Authority (a "Third-Party Claim"),
the Indemnified Party shall promptly give written notice (a
"Third-Party Notice") to the Indemnifying Party of the basis for
such claim or demand, setting forth the nature of the claim or
demand in detail and the amount of the claim. The rights of the
Indemnified Party to be indemnified hereunder shall not be
adversely affect by its failure to give, or its failure to
timely give, such notice with respect thereto unless, and if so,
only to the extent that, the Indemnifying Party is materially
prejudiced thereby.
(b) In the event that an Indemnifying Party which receives notice
of an indemnification claim contests its liability for such
indemnification claim, such party shall send written notice to
the Indemnified Party of its dispute of indemnification within
15 days thereof. If the parties are unable to resolve such
dispute of indemnification within 60 days after the date of
the notice of dispute, the Indemnified Party may bring an
action against the Indemnifying Party to enforce such
indemnification claim.
(c) (i) The Indemnifying Party shall have the right, exercisable by
written notice to the Indemnified Party of the commencement of
or assertion of any Third Party Claim, to assume the defense of
such Third Party Claim which involves (and continues to involve)
solely monetary damages; provided that (A) the Indemnifying
Party expressly agrees in such notice, that as between the
Indemnifying Party and the Indemnified Party, the Indemnifying
Party shall be solely obligated to satisfy and discharge the
Third Party Claim; and (B) the defense or settlement of such
Third Party Claim by the Indemnifying Party will not, in the
reasonable judgment of the Indemnified Party, have an adverse
effect on the Indemnified Party's business (the conditions set
forth in clauses (A) and (B) are collectively referred to as the
"Litigation Conditions"); provided, however, that if the parties
in any action shall include both an Indemnifying Party and an
Indemnified Party, and the Indemnified Party shall have
reasonably concluded that there are available different or
additional defenses to the Indemnified Party, the Indemnified
Party shall have the right to select separate counsel to
participate in the defense of such action on its behalf; and
provided further, however, that the Indemnifying Party shall
forfeit the right to control the defense or settlement of any
such claim if, at any time after assuming the defense or
settlement thereof, the Indemnifying Party no longer satisfies
the Litigation Conditions.
(ii) With respect to any Third Party Claim for which
indemnification is available ("Indemnified Claim") that is
combined or joined with one or more claims which are not
Indemnified Claims or with respect to any Indemnified Claim
under which both the Indemnified Party and the Indemnifying
Party may be liable, Sellers or Purchasers, as the case may be,
shall have the right to participate in, and control the defense
of, such claims as to which it has sole liability, at its own
expense and with its own counsel. Purchasers and Sellers shall
cause their respective counsel to cooperate in the defense of
such Third Party Claims, and shall endeavor to coordinate their
defenses with a view towards avoiding prejudice to the overall
defense of the Third Party Claim.
(iii) Subject to the foregoing, if the Indemnifying Party
elects to compromise or defend such Third Party Claim, it shall
within 20 days (or sooner, if the nature of the Third Party
Claim so requires) notify the Indemnified Party of its intent to
do so, and the Indemnified Party shall reasonably cooperate, at
the expense of the Indemnifying Party, in the compromise of, or
defense against, such Third Party Claim. If the Indemnifying
Party elects not to compromise or defend the Third Party
Claim, fails to notify the Indemnified Party of its election
as herein provided, or fails to satisfy the Litigation
Conditions, the Indemnified Party may, subject to clause (v)
of this Section 10.6(c), pay, compromise or defend such Third
Party Claim.
(iv) The Indemnifying Party or the Indemnified Party, as the
case may be, shall have the right to participate in (but not
control), at its own expense, the defense of any Third Party
Claim which the other party is defending as provided in this
Agreement. If the Indemnifying Party elects (and is permitted
hereunder) to defend any claim, the Indemnified Party shall,
subject to receipt of a reasonable confidentiality agreement,
make available to the Indemnifying Party any books, records or
other documents within its control, and the reasonable
assistance of its employees, for which the Indemnifying party
shall be obliged to reimburse the Indemnified Party for the
reasonable out-of-pocket expenses of making them available.
(v) The Indemnifying Party, if it shall have assumed the defense
of any Third Party Claim as provided in this Agreement, shall
not consent to a settlement of, or the entry of any judgment
arising from, any such Third Party Claim without the prior
written consent of the Indemnified Party (which consent shall
not be unreasonably withheld or delayed). The Indemnifying Party
shall not, without the prior written consent of the Indemnified
Party, enter into any compromise or settlement which commits the
Indemnified Party to take, or to forbear to take, any action.
The Indemnified Party shall have the sole and exclusive right to
settle any Third Party Claim, on such terms and conditions as it
deems reasonably appropriate, to the extent such Third Party
Claim involves equitable or other non-monetary relief binding
solely on the Indemnified Party and that would not involve a
Purchaser Loss or Seller Loss (as the case may be) with respect
to which the Indemnifying Party may have an indemnification
obligation. The Indemnified Party shall have the right to
settle any Third Party Claim involving monetary damages or that
would involve a Purchaser Loss or Seller Loss (as the case may
be) with respect to which the Indemnifying Party may have an
indemnification obligation (a "Non-Equitable Only Claim") with
the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed. At the
Indemnifying Party's request in connection with the settlement
of a Non-Equitable Only Claim, the Indemnified Party shall
provide the Indemnifying Party with a good faith estimate
(which may be expressed within a range of values), based on such
facts as are reasonably available to the Indemnified Party at
the time the Non-Equitable Only Claim is proposed to be settled,
of the amount of Purchaser Losses or Seller Losses (as the case
may be) that the Indemnified Party expects to incur as a result
of such settlement. Such estimate shall not limit an Indemnified
Party's right to indemnification under this Article X to the
extent facts not reasonably available to the Indemnified Party
at the time such estimate was prepared or facts later discovered
or established by the Indemnified Party establish Purchaser
Losses or Seller Losses (as the case may be) in excess of
amounts set forth in such estimate.
(d) Amounts paid in respect of indemnification obligations of the
parties shall be treated as an adjustment to the Purchase
Price. Whether or not the Indemnifying Party chooses to defend
or prosecute any claim involving a third party, subject to
Section 10.6, all the parties hereto shall cooperate in the
defense or prosecution thereof and shall furnish such records,
information and testimony, and attend such conferences,
discovery proceedings, hearings, trials and appeals, as may be
reasonably requested in connection therewith.
10.7 Payment
Except for Third-Party Claims being defended in good faith by the
Indemnifying Party in accordance with Section 10.6, the Indemnifying Party shall
satisfy its obligations hereunder within fifteen (15) days after receipt of
notice of a claim, unless the Indemnifying Party has contested its liability for
indemnification pursuant to Section 10.6(b). Any amount not paid to the
Indemnified Party by such date shall bear interest as may be determined by a
court at a rate equal to the Prime Rate.
10.8 Recourse Against Sellers
The indemnification obligations of Sellers will be satisfied initially
solely as provided in the Escrow Agreement. If the amount of the Escrow Fund (as
defined in the Escrow Agreement) is insufficient or unavailable to cover
Purchaser Loss claims for indemnification, Purchasers may pursue any other
remedies against Sellers subject to the terms of this Agreement. For the
avoidance of doubt, the fact that the Escrow Funds shall have been set aside for
satisfaction of claims for indemnification and to provide for the payment of any
indemnifiable Purchaser Loss shall in no way limit Purchasers' rights, remedies
and extent of recovery against Sellers under Section 10.2 or otherwise.
10.9 Reduction for Insurance
The amount of any payment to any Indemnified Party pursuant to this
Article X shall be reduced by the amount of any insurance proceeds actually
received by or on behalf of the Indemnified Party in reduction of the related
indemnifiable loss. An Indemnified Party which subsequently receives insurance
proceeds in respect of the related indemnifiable loss shall pay to the
Indemnifying Party the amount of such actually received insurance proceeds. For
the avoidance of doubt, Purchasers shall not have any obligation to submit or
pursue any claim with insurers. This Section 10.9 shall apply only to claims for
amounts in excess of the Indemnity Basket and shall not apply for purposes of
calculating whether and at what point the Indemnity Basket shall have been
reached.
10.10 Remedies Exclusive
Absent fraud, the remedies provided in this Article X shall be the
exclusive remedies of the parties hereto after the Closing in connection with
any breach of a representation or warranty or non-performance, partial or total,
of any covenant or agreement contained in this Agreement. Nothing contained
herein, however, shall (a) preclude a party from seeking injunctive relief or
specific performance, under circumstances where such relief might be
appropriate, provided that the moving party shall not be entitled to ancillary
relief in the nature of damages or fee awards unless specifically so provided
for herein, or (b) limit or affect a party's rights, remedies or obligations
under the Ancillary Agreements.
10.11 Limits on Certain Damages
The Indemnifying Party shall not be liable to the Indemnified Party for
consequential damages (unless such consequential damages are the reasonably
forseeable consequence of the breach prior to or as of the Closing Date),
punitive or special damages, unless such damages are included in a Third-Party
Claim and the Indemnified Party is liable to the third party claimant for such
damages. The parties acknowledge that any limitation contained in this Section
10.11 is only applicable to indemnification under Section 10.2(a).
10.12 [Intentionally Omitted]
10.13 Treatments of Payments
For Tax purposes, indemnification payments shall be treated as
adjustments to the Purchase Price but only if and to the extent allowed by
applicable Law.
ARTICLE XI
[Intentionally Omitted]
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Notices
All notices or other communications required or permitted by this
Agreement shall be in writing and shall be deemed to have been duly received (a)
if given by certified or registered mail, return receipt requested, postage
prepaid, three Business Days after being deposited in the U.S. or U.K. mails, as
applicable and (b) if given by courier or other means, when received or
personally delivered, and, in any such case, addressed as follows:
If to Purchasers:
CPP Holdings Limited
Xxxxxxx Xxxx
Xxxx, Xxxxxx Xxxxxxx
XX00 0XX
Attention: Company Secretary
With a copy to:
Xxxxx Day
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx
If to Sellers:
Metris Companies Inc.
00000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: President or Chief
Executive Officer
with a copy to:
(same address)
Attn: General Counsel
or to such other addresses as may be specified by any such Persons to the other
Persons, pursuant to notice given by such Person in accordance with the
provisions of this Section 12.1.
12.2 Assignment
No party may assign or transfer any or all of its rights or obligations
under this Agreement without the prior written approval of the other party;
which shall not be unreasonably withheld.
12.3 Benefit of the Agreement
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by any of the parties hereto without the prior written consent
of the other parties hereto; provided, however, that Purchasers may without such
consent assign or delegate their rights and obligations hereunder or under any
instrument executed in connection herewith as collateral security to any lender
providing financing to Purchasers in connection herewith; provided, however,
that no such assignment shall release Purchasers from any obligation hereunder
or under any such instrument executed in connection herewith. Except as set
forth in Article X with respect to indemnification of indemnified parties
hereunder, nothing in this Agreement shall confer any rights upon any Person
other than the parties hereto and their respective permitted successors and
assigns.
12.4 Headings
The headings used in this Agreement are for convenience of reference
only and shall not be deemed to limit, characterize or in any way affect the
interpretation of any provision of this Agreement.
12.5 Entire Agreement
This Agreement, together with the Schedules and Exhibits hereto, the
Ancillary Agreements and any other documents and instruments referred to herein
or contemplated hereby, contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and thereof, and no other
representations, promises, agreements or understandings regarding the subject
matter hereof or thereof shall be of any force or effect unless in writing,
executed by the party to be bound thereby and dated on or after the date hereof.
Effective as of the date hereof, the Confidentiality Agreement dated April 25,
2003 between Metris Companies Inc. and CPP shall terminate and be of no further
force and effect.
12.6 Modifications and Waivers
No change, modification or waiver of any provision of this Agreement
shall be valid or binding unless it is in writing, dated subsequent to the date
hereof and signed by Purchasers and Sellers. No waiver of any breach, term or
condition of this Agreement by any party shall constitute a subsequent waiver of
the same or any other breach, term or condition.
12.7 Counterparts
This Agreement may be executed in counterparts (including by facsimile
transmission), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.8 Severability
In case any one or more of the provisions contained herein for any
reason shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision or provisions had never been
contained herein.
12.9 Governing Law
This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of Delaware (without reference to the conflict
of law provisions thereof).
12.10 Expenses
Other than as specifically provided in this Agreement, each party
hereto shall pay all of its own costs and expenses incurred or to be incurred in
negotiating and preparing this Agreement and in closing and carrying out the
transactions contemplated by this Agreement.
12.11 Jurisdiction; Waiver of Jury Trial; Venue.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF ANY DELAWARE STATE COURT OR FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW CASTLE
COUNTY, DELAWARE, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
DELAWARE STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT IN THE COURTS OF ANY OTHER JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT.
(c) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY
DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT IN ANY DELAWARE STATE OR
FEDERAL COURT SITTING IN NEW CASTLE COUNTY, DELAWARE. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
(d) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION 12.11, IN
THE EVENT THAT A PARTY AGAINST WHOM ANY CLAIM, RIGHT OR CAUSE
OF ACTION IS ASSERTED COMMENCES, OR HAS COMMENCED AGAINST IT,
BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS, THE PARTY OR
PARTIES ASSERTING SUCH CLAIM, RIGHT OR CAUSE OF ACTION SHALL
HAVE NO OBLIGATIONS UNDER THIS SECTION 12.11 AND MAY ASSERT
SUCH CLAIM, RIGHT OR CAUSE OF ACTION IN THE MANNER AND FORUM
IT DEEMS APPROPRIATE, SUBJECT TO APPLICABLE LAWS.
12.12 No Partnership, Agency or Joint Venture
The parties are independent, and nothing in this Agreement will create
any partnership, joint venture, agency, franchise, sales representative, servant
or employment relationship between or among the parties or any affiliates of the
parties, and no party to this Agreement will have any authority whatsoever to
bind the other party to any obligation, except as noted in Section 5.8.
12.13 Exhibits and Schedules
All exhibits and schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. The mere listing (or inclusion of a copy) of a document or other item
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein (unless the representation or warranty has to do with the
existence of the document or other item itself).
(Signature Page Follows)
IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement the date first written above.
METRIS COMPANIES INC. CPP HOLDINGS LIMITED
/s/Xxxxx X. Xxxxxxxxx /s/Xxxxxx X. Xxxxxx
Its Chairman and CEO Its Director
Date July 29, 2003 Date July 29, 2003
METRIS DIRECT, INC. CPP US OPERATIONS GROUP, LLC
/s/Xxxxx X. Xxxxxxxxx /s/Xxxxxx X. Xxxxxx
Its Chairman and CEO Its President and CEO
Date July 29, 2003 Date July 29, 2003
METRIS DIRECT SERVICES, INC.
/s/Xxxxx X. Xxxxxxxxx
Its President
Date July 29, 2003
METRIS TRAVEL SERVICES INC.
/s/Xxxxx X. Xxxxxxxxx
Its President
Date July 29, 0000
XXXXXX XXXX SERVICES, INC.
/s/Xxxxx X. Xxxxxxxx
Its Treasurer
Date July 29, 0000
XXXXXX XXXXXXXX SERVICES, INC.
/s/Xxxxx X. Xxxxxxxx
Its Treasurer
Date July 29, 2003
METRIS WARRANTY SERVICES OF FLORIDA, INC.
/s/Xxxxx X. Xxxxxxxxx
Its President
Date July 29, 2003
EXHIBIT A
Purchased Assets
"Purchased Assets" shall mean all of Sellers' and their Affiliates'
right, title and interest in, under and to the goodwill, assets, properties and
rights of every nature, kind and description, whether tangible or intangible,
real, personal or mixed, wherever located and whether or not carried or
reflected on the books and records of the Sellers, which are used substantially
in, or relate substantially to, the Business, excepting only the Retained
Assets. The Purchased Assets shall include all of the assets, properties and
rights of the Business listed below, except for any of the following which were
not used substantially in connection with, or are not related substantially to,
the Business:
(a) all Contracts, including, without limitation, all Purchased
Customer Contracts;
(b) all of the Intellectual Property related substantially to, or
used substantially in connection with, the Business, including
without limitation the registered Intellectual Property set
forth on Exhibit C, but excluding the Intellectual Property
set forth on Schedule B(1);
(c) any Permits of Sellers to the extent any of the same are
transferable or assignable to CPP US or an affiliate (as
designated by Purchasers in writing) (the parties acknowledge
that this does not include Nonassignable Permits);
(d) choses in action, claims and causes of action or rights of
recovery or set-off of every kind and character, to the extent
such choses in action, claims and causes of action or rights
of recovery or set-off arise on or after the Closing Date;
(e) all of Sellers' files, papers, documents and records relating
to the Business, and all other miscellaneous assets of Sellers
relating to the Business wherever located, including, without
limitation, customer and supplier lists, credit, sales and
accounting records, price sheets, catalogues and sales
literature, books, processes, formulae, product data,
advertising material, stationery, office supplies, forms,
catalogues, manuals, correspondence, production records,
employee records for Transferred Employees (which records
shall only be transferred at the time such employee becomes a
Transferred Employee and only to the extent permitted by Law)
and any other information reduced to writing relating to the
Business;
(f) all assets and properties reflected on the Most Recent Balance
Sheet, under the captions (i) "Prepaid Fulfillment" and (ii)
"Net Fixed Assets" (provided that the information under such
captions shall be updated as of the Closing Date);
(g) all rights, claims and benefits of Sellers and any of their
respective Affiliates in, to or under any (A) employee
confidentiality agreements to which any Designated or
Transferred Employees are a party, or that otherwise relate
substantially to the Business and entered into by Sellers or
any of their respective Affiliates and (B) confidentiality or
secrecy agreements that related substantially to the Business
entered into by Sellers or any of their respective Affiliates
with third parties that relate to the use or disclosure of
information used substantially in connection with, or related
substantially to, the Business, in each case to the extent
permitted by Law;
(h) any fulfillment kits used substantially in connection with, or
relate substantially to, the Business;
(i) the goodwill of the Business as a going concern; and
(j) all Purchased Accounts Receivable.
EXHIBIT B
Retained Assets
"Retained Assets" shall mean (i) any and all assets, properties,
interests and rights which are not used substantially in connection with, or do
not relate substantially to, the operation of the Business and (ii) each of the
following assets, properties, interests and rights:
(a) all assets and properties reflected on the Most Recent Balance
Sheet except as otherwise provided in Exhibit A;
(b) all bank accounts and all cash, bank deposits and cash equivalents;
(c) all corporate certificates of authority, corporate minute books,
stock transfer books and corporate seals;
(d) all Tax records, prepayment and refunds for any Taxes;
(e) Sellers' employee benefit agreements, plans or arrangements,
including those set forth in Section (e)(2) on Schedule 3.9 and Schedule 3.17;
(f) all Retained Accounts Receivable;
(g) all Nonassignable Permits;
(h) all prepaid insurance premiums and contracts of insurance, except
for those contracts of insurance that are Contracts;
(i) all real estate leases and leasehold improvements;
(j) choses in action, claims and causes of action or rights of recovery
or set-off of every kind and character to the extent such choses in action,
claims and causes of action or rights of recovery or set-off arose prior to the
Closing Date;
(k) furniture and Equipment and Improvements;
(l) all title, right and interest in and to the Intellectual Property
listed on the attached Schedule B(1) and all goodwill associated therewith;
(m) all inventories, except as otherwise provided in Exhibit A;
(n) all Shared Contracts;
(o) except as provided on Exhibit A, all employee records and other
records of employees; and
(p) all Retained Customer Contracts.
Schedule B(1)
Retained Intellectual Property
(a) All trademarks and servicemarks, whether or not registered with the
United States Patent and Trademark Office or any state agency, that
contain, as a distinct word or as a component of a compound name, word,
phrase or fragment, the proprietary names "Metris", "metris", "Direct
Merchants Credit Card Bank, National Association", "Direct Merchants
Credit Card Bank, N.A.", "Direct Merchants Credit Card Bank", "Direct
Merchants Bank", "DMCCB", and "DMB";
(b) The following Internet Web-sites and domain names:
Customer Name Domain Name Creation Date
Metris Companies Inc XXX0XXXXXXXXXX.XXX 9/19/01
Metris Companies Inc. XXXXXXXXXXXXX.XXX 4/9/02
Metris Companies Inc. XXXXXXXXXXX.XXX 4/9/02
Metris Companies Inc. XXXXXXXXX.XXX 4/9/02
Metris Companies Inc XXXXXXXXXXXX.XXX 4/23/99
Metris Companies Inc XXXXXXXXXXXXXX.XXX 4/23/99
Metris Companies Inc XXXXXXXXXXX.XXX 4/23/99
Metris Companies Inc XXXXXXXXXXXXXXX.XXX 4/23/99
Metris Companies Inc XXXXXXXXXXXXXX.XXX 4/23/99
Metris Companies Inc XXXXXXXXXXXX.XXX 4/26/99
Metris Companies XXXXXXXXXXXXXXXX.XXX 7/10/02
Metris Companies Inc XXXXXXXXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXX.XXX 5/13/99
Metris Companies Inc. XXXXXXXXXXXXXXXX.XXX 5/15/02
Metris Companies Inc XXXXXXXX.XXX 6/1/01
Metris Companies Inc XXXXXXXXXXX.XXX 6/2/99
Metris Companies Inc XXXXXXXXXXX.XXX 6/2/99
Metris Companies Inc XXXXXXXXXXX.XXX 6/2/99
Metris Companies Inc XXXXXXXXXXX.XXX 6/2/99
Metris Companies Inc XXXXX000.XXX 6/6/01
Metris Companies Inc XXXXXXXXXXXXXXXXXX.XXX 6/7/01
Metris Companies Inc XXXXXXXXXXXXX.XXX 6/7/01
Metris Companies Inc XXXXXXXXXXXXX.XXX 6/7/01
Metris Companies Inc XXXXXXXX.XXX 6/7/01
Prodigy Communications
Corporation XXXXXXXXXXX.XXX 6/8/00
Metris Companies Inc XXXXXXXXX.XXX 6/12/01
Metris Companies Inc XXXXXXXXX.XXX 6/12/01
Metris Companies Inc XXXXXXXXXXXX.XXX 6/12/01
Metris Companies Inc XXXXXXXXXXXX.XXX 6/12/01
Metris Companies Inc XXXXXXXXXXXX.XXX 6/18/99
Metris Companies Inc XXXXXXXXXXXX.XXX 6/18/99
Metris Companies Inc XXXXXXXXXXXXXXX.XXX 6/18/99
Metris Companies Inc XXXXXXXXXX.XXX 6/23/99
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXX.XXX 6/23/99
Metris Companies Inc XXXXXX.XXX 6/23/99
Metris Companies Inc XXXXXXX.XXX 6/23/99
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXX.XXX 6/23/99
Metris Companies Inc. XXXXXXXXXXX.XXX 6/25/02
Metris Companies Inc XXXXXXXXXXXXXXXXX.XXX 7/5/01
Metris Companies Inc XXXXXXXXX.XXX 7/8/99
Metris Companies Inc XXXXXXXXXXX.XXX 7/8/99
Metris Companies Inc XXXXXXXXXXX.XXX 8/20/99
Metris Companies Inc XXXXXXXXXXXXXX.XXX 8/20/99
Metris Companies Inc XXXXX-XXXXXXXXX.XXX 8/20/99
Metris Companies XXXXXXXXX.XXX 10/28/02
Metris Companies XXXXXXXXX.XXX 10/28/02
Metris Companies XXXXXXXXX.XXX 10/28/02
Metris Companies XXXXXXXXXXXX.XXX 9/19/96
Metris Companies Inc XXXXXXXXXXXXXX.XXX 9/21/01
Metris Companies XXXXXXXXXXXX.XXX 9/29/00
Metris Companies Inc. XXXXXXXXXXXXXXXXXXX.XXX 9/26/98
Metris Companies Inc XXXXX.XXX 9/26/98
Metris Companies Inc XXXXXXXXXXXX.XXX 9/26/98
Metris Companies XXXXXXXXXXXX.XXX 10/2/00
Metris Companies Inc XXXXXXXXXXXXXX.XXX 10/10/01
Metris Companies Inc XXXXXXXXXXXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXXXX.XXX 10/11/99
Metris Companies Inc XXXXXXXXXXX.XXX 10/13/99
Metris Companies Inc XXXXXXXXXXXXX.XXX 10/17/01
Metris Companies Inc XXXXXXXXXXXXXX.XXX 10/24/00
Metris Companies Inc XXXXXXXXXXXXXX.XXX 10/24/00
Metris Companies Inc XXXXXXXXXXXXXX.XXX 10/24/00
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXX.XXX 10/24/00
Metris Companies Inc XXXXXXXXXXXXXXXXXXX.XXX 10/24/00
Metris Companies Inc XXXXXXXXXXXXXXXXXXXX.XXX 11/2/99
Metris Companies Inc XXXXXXXXXXXXXX.XXX 11/19/01
Metris Companies Inc XXXXXXXX.XXX 11/20/97
Metris Companies Inc XXXXXXXXXXXXXX.XXX 11/29/00
Metris Companies Inc XXXXXXXXXXX.XXX 11/29/00
Metris Companies Inc XXXXXXXXXXXXXXX.XXX 11/29/00
Metris Companies Inc XXXXXXXXXXXXX.XXX 11/29/00
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXX.XXX 11/29/00
Metris Companies Inc XXXXXXXXXXXX.XXX 11/29/00
Metris Companies XXXXXXXXXXXXXXXXXX.XXX 12/8/99
Metris Companies Inc XXXXXXXX.XXX 12/14/00
Metris Companies Inc XXXXXXXXXXXXXXXX.XXX 12/14/00
Metris Companies Inc XXXXXXXX.XXX 12/14/00
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXXXXXX.XXX 12/26/01
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXXXXXX.XXX 12/26/01
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXXXXXX.XXX 12/26/01
Metris Companies Inc XXXXXXXXXXXX.XXX 12/26/01
Metris Companies Inc XXXXXXXXXXXX.XXX 12/26/01
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXXXXXX.XXX 12/26/01
Metris Companies Inc XXXXXXXXXXXXXXXXXXX.XXX 1/4/00
Metris Companies Inc XXXXXXXXXXXXX.XXX 1/4/00
Metris Companies Inc XXXXXXXXXXXXXX.XXX 1/5/00
Metris Companies Inc XXXXXXXXXXXXXXXXX.XXX 1/5/00
Metris Companies Inc XXXXXXXXXXXXXXXXX.XXX 1/5/00
Metris Companies Inc XXXXXXXXXXXXXXXXX.XXX 1/5/00
Metris Companies Inc XXXXXX.XXX 1/27/99
Metris Companies Inc XXXXXXXXXXXXXXX.XXX 3/6/97
Metris Companies Inc. XXXXXXXXXXXXX.XXX 3/11/02
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXXX.XXX 3/12/01
Metris Companies Inc XXXXXXXXXXXX.XXX 3/12/01
Metris Companies Inc XXXXXXXXXXXXXX.XXX 3/14/01
Metris Companies Inc XXXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXX-XX.XXX 4/5/00
Metris Companies Inc XXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXXXXXX.XXX 4/5/00
Metris Companies Inc XXXXXXXXXXXXXXXXXXXXX.XXX 4/10/00
Metris Companies Inc XXXXXXXXXXXXXXXXXXXX.XXX 4/18/01
Metris Companies Inc XXXXXXXXXX.XXX 4/23/99
Metris Companies Inc XXXXXXXXXXXXXXXX.XXX 4/23/99
Metris Companies Inc XXXXXXXXXXXXXXXX.XXX 7/10/02
Metris Companies Inc XXXXXXXXXXX.XXX 5/10/00
Metris Companies Inc XXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXXXXXXXXXXXXXXXX.XXX 5/11/99
Metris Companies Inc XXXXXX.XXX 5/17/99
Metris Companies Inc XXXXXXXXXXX.XXX 5/25/99
Metris Companies Inc XXXXXXXXXXX.XXX 5/25/99
All of the following registered or filed marks set forth below:
Item # Registered or Pending Xxxx Status
1. ACCOUNTCENTRAL Registered
2. ANCHORED IN EXPERIENCE. POWERED BY GROWTH Registered
3. A REFLECTION OF ALL YOU'VE ACHIEVED Registered
4. DIRECT MERCHANTS BANK Registered
5. DIRECT MERCHANTS VALUES Registered
6. DIRECT REWARDS Registered
7. METRIS DIRECT Registered
8. MORE BENEFITS MORE VALUE MORE FREEDOM Registered
9. POWER THAT SETS YOU APART Registered
10. PUT THE WEB IN YOUR WALLET Registered
11. RESERVE LINE (and design) Registered
12. SAVINGS YOU'VE EARNED Registered
13. TRAVEL EXTRAS EXTRA TRAVEL. EXTRA FAST Registered
14. METRIS TRAVEL SERVICES Registered
15. RATE REWARDS Registered
16. TRAVEL EXTRAS Registered
17. 90 DAYS TO SAVE Status Pending
18. 90 XXXX DE AHORROS Status Pending
19. A PRODUCT FOR ALL PEOPLE Status Pending
20. AYUDANTE DE CUENTA Status Pending
21. BUT ITS YOUR LITTLE PIECE OF PLASTIC Status Pending
22. DIRECT MERCHANTS BANK SELECT Status Pending
23. EMOTICARD Status Pending
24. EVERY PURCHASE, EVERY TIME, MONTH AFTER MONTH,
YEAR AFTER YEAR Status Pending
25. EVERY PURCHASE, EVERY TIME MONTH AFTER MONTH Status Pending
26. GET JUST WHAT YOU WANT Status Pending
27. IADVANTAGES Status Pending
28. LET'S WORK TOGETHER Status Pending
29. MAGNUS SERVICES Status Pending
30. METRIS COMPANIES Status Pending
31. METRIS CREDIT CARD SERVICES, INC. Status Pending
32. METRIS FINANCIAL SERVICES Status Pending
33. METRIS SERVICING, INC. Status Pending
33. MEXICO LINDO QUERIDO Status Pending
34. MONEY ABC'S Status Pending
35. SABOR CARIBENO Status Pending
36. TWIN PORTS SPIRIT Status Pending
(c) All copyrights related to direct-mail solicitation materials,
telemarketing scripts, fulfillment kits, proprietary Internet Web-site
pages, e-mail solicitations and all other communications that the
Sellers have used in promoting DMCCB-issued credit cards, debt
suspension and cancellation products;
(d) All trade secrets and business methods related to the advertisement,
processing and maintenance of DMCCB credit cards and debt waiver
products including, without limitation, the process designated by
Sellers or any of their Affiliates as (i) "Pre-Screen of One" or "PS-1"
and (ii) "Metris Quick Check" or "Quick-Check";
(d) All customer and supplier lists owned by DMCCB;
(f) The contact management systems used by DMCCB and all associated models,
formulas, data and support documentation; and
(g) All licenses and rights arising under the items identified in Sections
(a) through (f)of this Schedule B(1), except to the extent assigned or
sublicensed to Purchasers or Purchasers' designee pursuant to this
Agreement.
EXHIBIT C
Schedule of Registered/Filed Intellectual Property
Item # Registered or Pending Xxxx Status
1. DIRECTALERT Registered
2. PURCHASESHIELD and Design Registered
3. QUALITY FURNITURE CARE Registered
4. QUALITY JEWELRY CARE Registered
5. SERVICEEDGE Registered
6. TRIPSAVER Registered
7. FRAUD ALERT SERVICES Status Pending
8. HOME SERVICEEDGE Status Pending
9. IDENTITY PROTECTOR & Design Status Pending
10. INFORMATION THAT MATTERS Status Pending
11. INSIDEACCESS Status Pending
12. ROADSAVER Status Pending
13. THINK OF IT AS 911 FOR YOUR WALLET Status Pending
Schedule of ICAN property for Purchased Assets:
TripSaver
xxxxxxxxxx.xxx (immediately redirects to the URL below)
xxxxx://xxx.xxxxxxxxxxxx.xxx/xxxxXxxxx/xxxxxxx/xxxxxxxxxxxxxxx.xxxx?xxxx0
=TMZZ0IZTDi
PurchaseShield
xxxxxxxxxxxxxxx.xxx (immediately redirects to the URL below)
xxxxxxxxxxxxxx.xxx (immediately redirects to the URL below)
xxxxx://xxx.xxxxxxxxxxxx.xxx/xxxxxxxxXxxxxx/xxxxxxx/xxxxxxxxxxxxxxxxxxxx.xxxx?
code1=PMZZ9IZCDC
Direct Alert
xxxxx://xxx.xxxxxxxxxxxx.xxx/xxxxxxXxxxx/xxxxxxx/xxxxxxxxxxxxxxxxx.xxxx?xxxx0x
RMZZ0IZZDX&code2=RMZZ0IZZEX
xxxxxxxxxxx.xxx (immediately redirects to the URL below)
xxxxx://xxx.xxxxxxxx.xxx/xx/xxx_xxx.xxx
Fraud Alert Services
xxxx://xxx.xxxxxxxxxxxxxxxxxx.xxx/
Identity Protector
xxxx://xxx.xxxxxxxxxxxxxxxxxxx.xxx/ (immediately redirects to the URL below)
xxxxx://xxx.xxxxxxxxxxx.xxx/xxxxxxxxxxxx/xxxxxxxxxxxxxxxxx/xxxxxxXxxxxXxxxXx.xxx
RoadSaver
xxxxxxxxxx.xxx
xxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxx.xxx
Inside Access
xxx.xxxxxx-xxxxxx.xxx
xxx.xxxxxxxxxxxxxx.xxx
Total Advantage Health
xxxxxxxxxxxxxxxxxxxx.xxx (immediately redirects to the URL below)
xxxx://xxx.xxxxxxxxxx.xxx/xx/xxxxxxxxxxxxxxxxxxxx/
Safekeeper (Union Plus and Household Bank)
xxxxx://xxx.xxxxxxxxxxxx.xxx/xxxxXxxxxx/xxxxxxx/xxxxxxxxxx_XX.xxxx?xXxxxXXx
IEFATUPCENOTLXXXXX02XXXXXX&code1=CYUZ1IZ1QC
xxxxx://xxx.xxxxxxxxxxxx.xxx/xxxxXxxxxx/xxxxxxx/xxxxxxxxxx_XX.xxxx?xXxxxXXx
IEFATHBCENOTLXXXXX02XXXXXX&code1=CY6Z1IZ1QC
EXHIBIT D
Form of Offer Letter
[cpp NORTH AMERICA, llc]
00000 Xxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
__________, 2003
[Addressee]
Dear :
---------------------------
As recently announced, CPP North America, LLC ("CPP"), has purchased the
membership and warranty products and operations of Metris' enhancement services
business that Metris Companies, Inc. ("Metris") has operated at 00000 Xxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxx and 00000 Xxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxx.
For CPP, the acquisition of the membership and warranty business lines of
Metris' Enhancement Services division represents a logical progression of its
long-term growth strategy. It is also a significant expansion opportunity in a
key market where it can build upon many of its existing business partner
relationships. There are clear synergies between the two companies with an
excellent fit in core capabilities, as well as the potential for considerable
knowledge sharing. This acquisition will strengthen the CPP Group and be of
benefit to business partners, customers and employees. The purchase of this
business by CPP is a wonderful way to enable the continued development of the
enhancement services business.
As this acquisition has taken place in a very short time-scale it has not been
possible to fully integrate all aspects of the businesses in time for July 29,
2003, the date of purchase. For this reason Metris will continue as your
employer for a short transition period until September 30, 2003 during which you
will continue to be eligible for Metris benefit plans.
CPP would like to offer you employment, effective from October 1, 2003. The
offer is subject to you actively being employed in the business at that time and
not on a leave of absence or short term disability. (If this is the case you
must start active employment with CPP on or before November 29, 2003, or by the
end of any applicable maternity leave, if later, for the offer to be effective).
You will be employed initially by CPP in the same position and at the same
salary that you received when employed by Metris. It is anticipated that as a
CPP employee, very similar health, dental, life, disability and 401(k) plan
benefits will be available to you. Further details regarding CPP benefits will
be provided closer to the end of the transition period.
This letter does not bind you or CPP to any specific period of employment,
rather, our employment relationship shall be considered "at will". By accepting
employment with CPP, you are acknowledging and agreeing that you are not being
hired for any specific or definite period of time. This means that your
employment can be terminated at any time, with or without cause, and with or
without advance notice, at your option or the option of CPP. Your "at will"
status can only be modified in writing by the Executive Vice President of CPP
North America. It will not be deemed amended or modified by any policies,
practices or procedures that may be implemented by CPP.
By accepting employment with CPP you are agreeing to abide by the policies and
practices that CPP will institute. You acknowledge that CPP is not obligated to
continue any of Metris' policies and can establish such policies and practices
as CPP deems appropriate. By accepting this offer of employment, you are also
agreeing to continue not to disclose to anyone outside of CPP the confidential,
proprietary or secret information relating to Metris' or CPP's business,
products or customers. You also agree to the transfer to CPP of your records
relating to your employment with Metris.
Metris and CPP have agreed that any claims you have relating to your employment
by Metris prior to July 29, 2003 are to be raised with Metris, and not CPP.
However, should you have any questions that relate to your on-going employment,
I, as Executive Vice President of CPP North America in charge of this business,
would be happy to discuss them with you.
This letter constitutes the entire agreement between you and CPP regarding your
employment, including its duration, and there are no other promises, agreements
or understandings that have been made to you regarding your employment.
I do hope that you will accept CPP's offer of employment. If you do wish to be
employed by CPP following the transition period under the above terms, please
sign this letter below and return it to Xxxxxxx Xxxxxx, Vice President of Human
Resources no later than September 1, 2003. If you have any questions, please
feel free to contact me personally.
Yours sincerely,
Xxxx Xxxxxxxx, Executive Vice President CPP North America
I understand and agree to abide by the terms of employment with CPP as set forth
above:
Executed on _________________, 2003
By:____________________________________________________
Signature
Print Name
