EX-10.2 3 dex102.htm AFFINITY CARD AGREEMENT AFFINITY CARD AGREEMENT
Exhibit 10.2
THIS AFFINITY CARD AGREEMENT (“Agreement”), made as of February 16, 2005, between First Bank of Delaware, a bank organized under the laws of the State of Delaware with an office at 0000 Xxxxx Xxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as “Bank”), and CompuCredit Corporation, a corporation organized under the laws of Georgia with an office at 000 Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (hereinafter referred to as “Marketer”).
WHEREAS, Bank is a licensed affiliate member of MasterCard International (“MasterCard”); and
ARTICLE I
“Alternative Logo” shall mean a logo and/or trademark requested by Marketer for a Credit Card.
“Bank Credit Card Marks” or “Bank Marks” shall have the meaning specified in Section 2.8(b) hereof.
“[Brand] Card” shall mean a MasterCard Card bearing the Brand name or logo [“Logo”] on the front thereof.
“Cardholder” shall mean an individual in whose name a Credit Card Account is established.
“Cardholder Agreement” shall mean an agreement between Bank and a Cardholder for the extension of credit in connection with a Credit Card Account.
“Credit Card” or “Card” shall mean each MasterCard issued by Bank which is identified by any one of the bank identification numbers specified on Schedule A hereto, as such Schedule A may be revised from time to time.
“Credit Card Account” or “Account” shall mean an unsecured account that is opened by Bank pursuant to which one or more Credit Cards are issued to a Cardholder, including, without limitation, any and all documents, books and records pertaining thereto and any and all rights, remedies, benefits, interests and titles, both legal and equitable, to which Bank as creditor and issuer may now or, hereafter be entitled with respect thereto.
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“Credit Products” shall mean the products and services relating to, or intended for use or application in, the Program or third party credit programs, including, without limitation, credit insurance programs, membership programs, buying clubs, debt cancellation or forbearance programs, or credit card registration services and/or other credit card-related programs that safeguard, insure or enhance any of the foregoing.
“Credit Card Receivables” shall mean all amounts owing to Bank on the Accounts, including, without limitation, principal balances from outstanding purchases and cash advances, accrued finance charges, accrued late charges, accrued returned check charges and any other accrued charges and fees, whether or not billed.
“Letter of Credit Bank” shall have the meaning specified in Section 4.1(c) hereof.
“Marketer Credit Card Marks” or “Marketer Marks” shall have the meaning specified in Section 2.7(a) hereof.
“Non-Program Receivables” shall mean all amounts owing to Bank on the Accounts other than Program Receivables.
“Nonpublic Personal Information” shall mean: (i) personally identifiable financial information; and (ii) any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived using any personally identifiable financial information that is not publicly available.
“Person” shall mean any person or entity, including any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, governmental entity or other entity of any nature, whether or not a legal entity.
“Prime Rate” shall have the meaning specified in Section 3.2 hereof.
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“Program” shall mean the affinity credit card program conducted pursuant to the terms hereof.
“Program Receivables” shall mean all purchases and cash advances attributable to the Accounts, less any adjustments or credits for which Bank is obligated to settle with MasterCard.
“Solicitation Materials” shall mean any applications, marketing materials, advertising pieces, sales literature, telemarketing scripts, any other materials used to induce persons to apply for Credit Cards, and any other materials used to induce use of the Credit Cards.
ARTICLE II
ESTABLISHMENT OF CREDIT CARD ACCOUNTS
2.1 Issuance of Credit Cards. Bank shall issue Credit Cards to applicants who qualify for such Cards under the Credit Criteria (as defined in Section 2.3 hereof) and shall extend all credit with respect to such Credit Cards. Bank and Marketer intend that Bank shall be the creditor on the Credit Card Account and that Marketer shall not be considered a creditor on any Credit Card Account for any purpose whatsoever. Subject to the Operating Regulations (as defined in Section 2.9 hereof) and the terms of Section 2.7 herein, each Credit Card shall have the name, logo and/or trademark of [Brand] Card or an Alternative Logo on the front thereof and shall be of a design approved by Bank, Marketer and MasterCard, as applicable.
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otherwise distribute Solicitation Materials to promote the Program and to solicit new Credit Card Accounts for Bank. Sample copies of such Solicitation Materials are attached hereto as Exhibit A and incorporated herein by reference. Marketer shall provide copies of all Solicitation Materials to Bank for its review and approval as soon as practicable, but no less than ten (10) days prior to their first intended use. Bank shall respond by approving, or giving specific reasons for disapproval, within five (5) days of receipt and shall not unreasonably withhold or delay its approval of such materials. The frequency and timing of such solicitations shall be determined by Marketer in consultation with Bank. In Marketer’s discretion, solicitations may be conducted by direct mail, telephone, email or other means. However, Marketer shall not use spammed email in order to solicit customers and will adhere to CAN-SPAM ACT. Marketer shall (i) prepare and include on or with each solicitation any notices and disclosures required under applicable laws and regulations, (ii) provide such notices and disclosures to Bank for its review and approval, and (iii) otherwise conduct all such solicitation activities in compliance with all applicable laws and regulations. Bank shall be identified to applicants and to Cardholders as the Card issuer and the creditor for all credit extended on the Credit Card Accounts.
(a) Bank will require that each person who desires to become a Cardholder complete a written application, submit an application via the Internet, or apply for a Credit Card in response to a telemarketing solicitation. Marketer shall ensure that the form of the written application, the telemarketing script and all other Solicitation Materials are in compliance with all applicable laws and regulations. The credit criteria for issuing Credit Cards (the “Credit Criteria”) established by Bank are set forth in the Operations Manual (as defined in Section 2.5 below). Unless otherwise required by applicable laws and regulations, by any regulatory agency
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having jurisdiction over Bank, by final order of any court having jurisdiction over Bank, or by changing economic conditions, Bank will notify Marketer at least 180 days in advance of any changes to the Credit Criteria which have not previously been consented to by Marketer. Where changes to the Credit Criteria are required by applicable laws and regulations, by any regulatory agency having jurisdiction over Bank, by final order of any court having jurisdiction over Bank, or by changing economic conditions, Bank will provide Marketer with as much advance notice of any such changes to the Credit Criteria, as Bank determines to be practicable under the circumstances.
(b) Bank shall approve an applicant for a Credit Card only if the applicant meets the then applicable Credit Criteria. In the event that an applicant for a Card does not meet the Credit Criteria or is offered credit on materially less favorable terms than the most favorable terms available to a substantial proportion of consumer applicants, the applicant shall be notified in accordance with applicable laws and regulations. Upon approval of an application, Bank shall establish a Credit Card Account for the applicant. Bank shall provide one or more Credit Cards to each approved applicant and shall automatically issue a renewal card to each Cardholder whose Account is in good standing as of the scheduled Credit Card renewal date and who meets the then existing Credit Criteria for such renewal cards. Bank shall provide to each Cardholder a Cardholder Agreement and such other notices or documents related to such Cardholder’s Credit Card Account as are required from time to time, in the reasonable determination of Bank, under applicable laws and regulations. The Cardholder Agreement and other documents shall provide, as appropriate, that they are governed by Delaware and federal law. Marketer shall be responsible for preparing and providing said documents, in a form and content acceptable to Bank, and shall ensure that they comply in all respects with all applicable laws and regulations.
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Regulations (as defined in Section 2.9 below) and this Agreement. Marketer acknowledges that it has reviewed and understands such policies and procedures and hereby agrees that Bank shall apply such policies and procedures for the services provided under this Agreement. Marketer may subcontract with a third party to provide any service required to be provided by Marketer hereunder, and Bank shall have the right to approve such third party, provided that such approval is not unreasonably delayed, conditioned or withheld.
2.6 Non-Credit Revenue on Accounts
(a) Marketer shall, at its own expense and at no cost to Bank, arrange for third parties to provide enhancements to Cardholders in connection with the Program. Bank shall have the right to approve all such enhancements, provided that such approval is not unreasonably delayed, conditioned or withheld. Marketer shall be responsible for assuring that all such enhancements comply with all applicable laws and regulations. If Bank currently offers any of these enhancements through the Marketer or any affiliate of the Marketer, then Bank will be the issuer of such enhancements.
(b) Marketer shall be entitled, at its own expense, to solicit Cardholders for goods and services, including Credit Products, and to place solicitation or promotional materials for such goods and services, including Credit Products, in communications by Bank to Cardholders. Bank shall have the right to approve all such goods and services, provided that such approval is not unreasonably delayed, conditioned or withheld. Marketer shall be responsible for assuring that all such goods and services and the solicitation practices and materials comply with all applicable laws and regulations. Marketer shall provide copies of all such solicitation and promotional materials to Bank for its review and approval as soon as practicable, but no less than ten (10) days prior to their first intended use. Bank shall respond by approving, or giving
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specific reasons for disapproval, within five (5) days of receipt and shall not unreasonably withhold or delay its approval of such documents. Marketer shall comply with all applicable laws and regulations in connection therewith. If Bank currently offers any of these goods and services including Credit Products through the Marketer or any affiliate of the Marketer, then Bank will be the issuer of such enhancements.
(c) Marketer agrees that none of the foregoing enhancements, goods or services shall involve any other credit or debit product, without the prior written consent of Bank.
(d) Marketer shall be entitled to retain all income and fees, if any, resulting from the foregoing good and services unless the Credit Products are offered by Bank in which case the income will be split according to the agreement related to the Credit Products offered by Bank.
(e) Any rebates, marketing fees, revenues or other fees or discounts that are paid or granted by MasterCard to Bank with respect, or apportionable, to Accounts shall be paid over to Marketer as additional consideration under this Agreement net of, with respect to MasterCard, any INET or INAS, with respect, or apportionable, as to each, to Accounts.
2.7 Use of Names and Trademarks
(a) Marketer hereby authorizes Bank, during the term of this Agreement and for a period of up to 180 days after any purchase of Accounts by Marketer, on a non-exclusive, nonassignable basis, to use Marketer’s name and such trademarks of Marketer, including, without limitation, the “[Brand]” servicemark as may be used in connection with the Credit Card Accounts (the “Marketer Credit Card Marks” or “Marketer Marks”) in the forms and formats approved by Marketer: (i) on Credit Cards, and (ii) on periodic statements, Cardholder Agreements and other communications to Cardholders with respect to the Credit Card Accounts. Marketer represents and warrants to Bank that Marketer has the power and authority to provide
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the authorization herein granted. It is expressly agreed that Bank is not acquiring any right, title or interest in the name “[Brand]” or any trade names, trademarks, logos or service marks of Marketer or of the Credit Card design, all of which shall be and remain the property of Marketer. Bank shall make no use of any trade names, trademarks, logos or service marks of Marketer, or of the Credit Card design without Marketer’s prior written consent, except as specifically authorized in this Section 2.7.
(b) Bank hereby authorizes Marketer, during the term of this Agreement and for a period of up to 180 days after any purchase of Accounts by Marketer, on a non-exclusive, nonassignable basis, to use Bank’s name and such trademarks of Bank as may be used in connection with the Credit Card Accounts (the “Bank Credit Card Marks” or “Bank Marks”), in the forms and formats approved by Bank, in communications to Cardholders with respect to the Credit Card Accounts made by Marketer pursuant to its obligations under this Agreement. It is expressly agreed that Marketer is not acquiring any right, title or interest in the name “First Bank of Delaware” or any trade names, trademarks, logos or service marks of Bank, all of which shall be and remain the property of Bank. Marketer shall make no use of the name “First Bank of Delaware” or of any trade names, trademarks, logos or service marks of Bank, without Bank’s prior written consent, except as specifically authorized in this Section 2.7.
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2.9 MasterCard Membership. Bank shall, at all times during the term of this Agreement and for so long thereafter as Bank shall own any Account, maintain an active sponsored membership (or obtain a principal membership) in MasterCard that allows Bank to issue cards bearing the MasterCard logo and otherwise to perform all of its obligations under this Agreement. Bank shall maintain such membership through Republic First Bank, as evidenced by an agreement substantially in the form attached as Exhibit C, or other eligible financial institution (or through a direct relationship with MasterCard). Bank shall ensure that Marketer is a third-party beneficiary of its agreement with Republic First Bank (or other eligible financial institution) and, as such, is entitled to enforce Bank’s rights under such agreement. Bank shall be responsible for making all reports to MasterCard which may be required by its membership therein. Bank will comply with the operating rules and regulations of MasterCard (its “Operating Regulations”) in connection with the Program and the Marketer will not request or demand that Bank take any action not in compliance with those Operating Regulations. If Bank no longer has membership, directly or indirectly, in MasterCard, Marketer may terminate this Agreement without any termination fee.
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to the processing system designated by Marketer, and cooperate with Marketer in its efforts to effect such conversion, at the earliest reasonably practicable date.
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MasterCard network with the exception of the annual ICA and BIN Fees. Marketer agrees to reimburse Bank for any out of pocket costs related to its audits of any third party vendors used in conjunction with this Agreement who are not located in the United States of America.
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interest, whether now existing or hereafter acquired or arising, in, to and under each and every Account described in this Section 2.16 and all rights of Bank, if any, to Credit Card Receivables therein, for the purpose of securing Marketer’s rights under this Agreement.
(i) | the terms and conditions for the Credit Cards (including, without limitation, the interest rates, fees and charges), |
(ii) | the Cardholder Agreement , form of billing statement (except to the extent Bank refuses to format, for reasons other than system limitations, the billing statement pursuant to Marketer’s written request), and other notices and documents related to each Cardholder’s Credit Card Account, |
(iii) | the forms of the written application, the telemarketing scripts and all other Solicitation Materials, including any notices and disclosures required or permitted under applicable laws, rules or regulations to be included thereon or therewith, |
(iv) | the Manual and any amendments to the Manual, |
(v) | the credit and marketing scorecards, criteria and procedures, |
(vi) | with regard to all enhancements, goods and services, all (A) solicitation and promotional materials, scripts and procedures, (B) the enhancements, goods and services themselves, (C) all agreements, notices, documents and |
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procedures pertaining thereto, and (D) the application and implementation of each of the foregoing, |
(vii) | all laws and regulations applicable to all other solicitation, marketing, advertisement, acquisition and collection activities (but only where such collection activities are performed by Marketer or vendors unaffiliated with Bank) relating in any way to the Credit Cards or to the enhancements, goods and services, including, without limitation, all Internet advertising, websites and links (whether or not operated by Marketer) which make any reference to the Credit Cards or to any enhancements, goods and services, and all activities involving disclosure to, or use or disclosure by, Marketer or any third party under arrangement with Marketer, of any information relating to any Bank “consumer” or “customer” (as those terms are defined in the Xxxxx-Xxxxx-Xxxxxx Act and regulations thereunder). |
ARTICLE III
3.1 Co-Branding Fee. Marketer shall pay to Bank a co-branding fee as follows:
[DELETED]
For the purpose of this calculation, the term “Active Account” shall mean all open, statemented Accounts but excluding Accounts with a zero (0) balance and Accounts that have been charged-
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Bank may immediately access the Letter of Credit. If Bank accesses the Letter of Credit, the Marketer shall reinstate the Letter of Credit within five business days. Marketer may revoke the Letter of Credit after termination of this Agreement, but the Letter of Credit shall be irrevocable through the termination of this Agreement and thereafter until Bank shall no longer own any of the Accounts.
3.4 Marketing Fee. Bank shall pay to Marketer daily a marketing fee in the form of the Non-Program Receivables related to the Program Receivables retained by Bank and not sold to Marketer pursuant to Section 4.1(a) (the “Marketing Fee”).
ARTICLE IV
PURCHASE AND SALE OF RECEIVABLES AND ACCOUNTS
4.1 Purchase and Sale of Receivables.
(a) At any time when outstanding Program Receivables exceed Two Hundred Thousand Dollars ($200,000), Bank shall thereafter sell to Marketer and Marketer shall thereafter purchase from Bank, on a daily basis, (i) 100% of the Program Receivables in excess of Two Hundred Thousand Dollars ($200,000) and all Non-Program Receivables related thereto, and (ii) all of Bank’s right, title and interest in and to all payments made by or on behalf of Cardholders attributable to the purchased Program Receivables and the purchased Non-Program Receivables related thereto. For purposes hereof, the purchase price (“Purchase Price”) shall be
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equal to 100% of the Program Receivables in excess of Two Hundred Thousand Dollars ($200,000). With respect to Credit Card Receivables sold to Marketer under this Section 4.1 (a), Bank shall pay daily to Marketer all payments made by or on behalf of the Cardholders attributable to the purchased Credit Card Receivables. Bank does hereby sell, transfer, assign, set over and otherwise convey to Marketer, without recourse except as provided herein, on a daily basis, 100% of the Program Receivables in excess of Two Hundred Thousand Dollars ($200,000), all Non-Program Receivables related thereto, the Marketing Fee and all of Bank’s right, title and interest in and to all payments made by or on behalf of Cardholders attributable to the purchased Credit Card Receivables. The parties hereto intend that the conveyance of Bank’s right, title and interest in and to the Program Receivables and Non-Program Receivables shall constitute a sale and not a secured borrowing, including for accounting purposes. If despite such intention, a court characterizes the sale of such Program Receivables and Non-Program Receivables hereunder as a loan rather than an absolute transfer, then this Agreement shall be deemed to be, and hereby is a security agreement, within the meaning of the Uniform Commercial Code in effect in any relevant jurisdiction, and Bank hereby grants to Marketer, a first priority perfected security interest in, to and under all of Bank’s right, title and interest, whether now existing or hereafter acquired or arising, in, to and under each and every Program Receivable and Non-Program Receivable required to be transferred to Marketer pursuant to this Section 4.1(a) and the Marketing Fee, for the purpose of securing Marketer’s rights under this Agreement.
(b) No later than 1:00 p.m. (Eastern Time) on each Banking Day, Bank shall notify by facsimile transmission the Chief Financial Officer or such officer’s designee at Marketer of the amount due to or owed by Marketer for transactions pursuant to Section 4.1 (a) above (the
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“Settlement Amount”). For purposes of this Agreement, Banking Day shall mean a day that Bank is open for business and excluding Saturdays, Sundays and legal holidays. Payments due for any day shall be made by the appropriate party by wire transfer no later than 4:00 p.m. (Eastern Time), unless Bank is late in notifying Marketer of the Settlement Amount due for any day, in which case the appropriate party shall use all reasonable efforts to send the wire transfer within the time period set forth above or as soon thereafter as possible, but in any event no later than 1:00 p.m. (Eastern Time) of the next Banking Day following Marketer’s receipt of notice from Bank. In the event the wire transfer of the full Purchase Price due is not received by Bank by 3:00 p.m. (Eastern Time) of the next Banking Day following Marketer’s receipt of notice from Bank, Bank may immediately access the Letter of Credit for such past due amount. The delay until 3:00 p.m. (Eastern Time) of the next Banking Day shall only apply to the first day’s failure to receive the full Purchase Price due within a 6-month period and does not apply to any subsequent day’s failure within such 6-month period. For any subsequent day’s failure within such 6-month period Bank shall be entitled to immediately access the Letter of Credit for the past due amount, plus a fee of ten thousand dollars ($10,000). The party receiving payment shall promptly notify the party sending payment by facsimile transmission if any such required payment is not received when due and shall use reasonable efforts to provide such notice to the party sending payment by 5:30 p.m. (Eastern Time) of the due date but in no event shall such notice be given later than 12:30 p.m. (Eastern Time) of Banking Day following said due date.
(c) In the event Marketer has reason to dispute the accuracy of the Settlement Amount reported by Bank for any day, Marketer shall promptly so notify Bank, but such notice shall not affect either party’s obligation for timely payment of the Settlement Amount as noticed by Bank.
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In the event it is determined that Marketer was correct in disputing the accuracy of the Settlement Amount for a given day, or if Bank shall fail for any other reason to properly remit the Settlement Amount due for any given day to Marketer, Bank shall promptly remit to Marketer the amount due Marketer with interest thereon computed at the rate of three (3) percentage points above the Prime Rate in effect on the date said sum was first due. If Marketer shall fail for any reason to remit to Bank the Settlement Amount due for any given day, then Marketer shall promptly remit to Bank the amount due Bank with interest thereon from the date such sum was due until the date the Settlement Amount is paid computed at the rate of three (3) percentage points above the Prime Rate in effect on the date said sum was first due. However, if Marketer makes a payment under this provision and Bank uses the Letter of Credit to satisfy the Purchase Price due then Bank shall have the right to retain such duplicate payment by Marketer as security for Marketer’s obligations under this Agreement until Bank has received written confirmation from the bank issuing the Letter of Credit (the “Letter of Credit Bank”) that the amount of the Letter of Credit has been reinstated, by a total amount corresponding to Marketer’s duplicate payment, and, upon receipt of such confirmation, Bank shall promptly remit to Marketer (i) the amount due Marketer and (ii) if Bank’s remittance is made more than one Banking Day following the receipt by Bank of such confirmation, with (A) interest thereon computed at the rate of three (3) percentage points above the Prime Rate in effect on the date said sum was paid in duplicate, for each full Banking day between (x) and including the date Bank received confirmation of the reinstatements of the Letter of Credit and (y) the date of Bank’s remittance, or (B) $100, whichever is greater.
If Marketer fails on any given day to pay the Purchase Price indicated by Bank, as provided hereunder, even in the event Marketer disputes such amount, and such failure is not
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cured within five (5) Banking Days from the date Marketer receives notification of nonpayment, Bank may (but need not and without waiver of its rights), in addition to any other rights and remedies it may have, upon notice to Marketer, sell to any third party any interest in the Program Receivables that Marketer failed to purchase; provided, however, that Bank shall not sell any interest in the Credit Card Receivables until it shall have utilized all funds available under the Letter of Credit to purchase Program Receivables for Marketer’s account.
(d) Bank shall remain the owner of all Credit Card Accounts, notwithstanding any sale of any Credit Card Receivables to Marketer or a third party, under this Section 4.1. Neither Marketer nor any third party shall be deemed to have assumed any obligations of Bank with respect to the Credit Card Accounts by virtue of any purchase of an interest in Credit Card Receivables hereunder. Except as otherwise provided in this Agreement, Bank shall not sell any Credit Card Receivables or any interest therein to any third party without the prior written consent of Marketer.
(e) The sale of Program Receivables and Non-Program Receivables contemplated in Section 4.1(a) hereof shall occur upon settlement therefor by or on behalf of Marketer and no additional documents shall be required by the parties to effect any such sale. Notwithstanding the foregoing, if, in the reasonable judgment of either party, in connection with any such purchase and sale, any additional instrument, document, or certificate is required to further evidence such purchase and sale, the other party shall execute and deliver any such document.
(a) Except as provided in this Agreement, Bank shall not sell or transfer any Credit Card Account created under the Program, or any interest therein, to any party without the prior written consent of Marketer. Where sale or transfer to any party may be required by applicable
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laws and regulations, by formal written communication of any regulatory agency having jurisdiction over Banks, or by final order of any court having jurisdiction over Bank, Bank (i) must promptly notify Marketer, with as much advance notice as is practicable, of any such potential required sale or transfer, (ii) may stop the development of new solicitation campaigns (although Bank will remain bound to honor solicitation campaigns in progress at the time of any such notice of stoppage), and (iii) must cooperate with Marketer to find a replacement financial institution of Marketer’s choice to assume substantially all of Bank’s obligations under this Agreement, acquire the Accounts and continue the Program. If no replacement issuer acceptable to Marketer can be found, then Bank may terminate the Accounts under the Program and the parties will cooperate in an orderly wind-down of the Program.
(b) Upon expiration or termination of this Agreement, Marketer shall have the right, exercisable by giving written notice to Bank no later than sixty (60) days after notice of termination is provided by a party hereunder, to purchase the Accounts and all Credit Card Receivables then owned by Bank or to arrange for said purchase by a financial institution designated by Marketer, provided that such purchase by Marketer, or by a financial institution designated by Marketer, closes within 180 days. The purchase price for said Accounts and Credit Card Receivables shall be equal to 100% of the Program Receivables then owed by Bank. The terms of Section 8.1 (d) hereof shall apply to any such purchase.
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Receivables, (iii) Bank shall take no action (or fail to take any action) that could prevent Bank from having the absolute right and authority to sell the Accounts and Credit Card Receivables.
ARTICLE V
ADDITIONAL PRODUCTS AND SERVICES
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of Bank. Bank hereby represents and warrants Marketer as follows:
(a) Organization. Bank is a state-chartered bank duly organized, validly existing and in good standing under the laws of the State of Delaware, with its headquarters located in Wilmington, Delaware.
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valid and binding obligation of Bank and is enforceable in accordance with its terms (except as such enforceability may be limited by equitable limitations on the availability of equitable remedies and by bankruptcy and other laws affecting the rights of creditors generally).
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has been threatened or is contemplated and to the best of Bank’s knowledge, no facts exist which would provide a basis for any such claim, litigation, proceeding, arbitration, investigation or controversy.
(f) No Consent, Etc. Except as otherwise disclosed by Bank to Marketer, at the date of this Agreement, no consent of any person (including without limitation, any stockholder or creditor of Bank) and no consent, license, permit or approval or authorization or exemption by notice or report to, or registration, filing or declaration with, any governmental authority is required (other than those previously obtained and delivered to Marketer) in connection with the execution or delivery of this Agreement by Bank, the validity of this Agreement with respect to Bank, the enforceability of this Agreement against Bank, the consummation by Bank of the transactions contemplated hereby, or the performance by Bank of its obligations under this Agreement.
(g) FDIC Insurance. Bank is, and at all times during the term of this Agreement will remain, a member of the Federal Deposit Insurance Corporation.
(h) MasterCard Membership. Bank is, and at all times during the terms of this Agreement will remain, a member (or become a principal member) of MasterCard, through Republic First Bank, as evidenced by an agreement substantially in the form attached as Exhibit C, or another eligible financial institution (or through a direct relationship with MasterCard), in accordance with Section 2.9 of this Agreement. Marketer is, and shall remain during the term of this Agreement and for so long thereafter as Bank shall own any Account, a third party beneficiary of Bank’s agreement with Republic First Bank (or other eligible financial institution) and, as such, is (and shall remain) entitled to enforce Bank’s rights under such agreement.
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(a) Organization. Marketer is a for profit corporation duly organized, validly existing and in good standing under the laws of the State of Georgia.
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judgment, order, writ, decree, permit or license, to which Marketer is a party or by which it is bound, or (iv) require the consent or approval of any other party to any contract, instrument or commitment to which Marketer is a party or by which it is bound. Marketer is not subject to any agreement with any regulatory authority, which would prevent the consummation by Marketer of the transactions contemplated by this Agreement.
(f) No Consent, Etc. No consent of any person (including without limitation, any stockholder or creditor of Marketer) and no consent, license, permit or approval or authorization or exemption by notice or report to, or registration, filing or declaration with, any governmental authority is required (other than those previously obtained and delivered to Bank) in connection with the execution or delivery of this Agreement by Marketer, the validity or enforceability of this Agreement against Marketer, the consummation of the transactions contemplated hereby, or the performance by Marketer of its obligations under this Agreement.
ARTICLE VII
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including, but not limited to, information concerning either party’s marketing plans; technological developments, objectives and results; financial results; customers; business operations; and vendor agreements are confidential and proprietary to the disclosing party (“Confidential Information”). Confidential Information does not include any information that was (i) known to the receiving party at the time of disclosure or developed independently by such party without violating the terms herein; (ii) in the public domain at the time of disclosure or enters the public domain following disclosure through no fault of the receiving party; or (iii) disclosed to the receiving party by a third party that is not prohibited by law or agreement from disclosing the same. Nonpublic Personal Information regarding a consumer Cardholder while the Account is owned by Bank shall be deemed Confidential Information. Notwithstanding the foregoing, but without limiting the effect of the last sentence of Section 2.11 hereof, each Cardholder List shall be deemed, for purposes of this Article VII, Confidential Information owned by Marketer.
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agents, and subcontractors having access to Confidential Information to enter into appropriate confidentiality agreements containing such terms as are necessary to satisfy its obligation herein. Each party shall promptly report to the other party any unauthorized disclosure or use of any Confidential Information of that party of which it becomes aware. Neither party shall use any Confidential Information in any manner contrary to the interests of the other party. Upon request or upon termination of this Agreement, each party shall return to the other party all Confidential Information in its possession or control. No disclosure by a party hereto of Confidential Information of such party shall constitute a grant to the other party of any interest or right whatsoever in such Confidential Information, which shall remain the property solely of the disclosing party. Nothing contained herein shall limit a party’s rights to use its Confidential Information in any manner permitted by applicable law. Confidential Information constituting Nonpublic Personal Information regarding consumer Cardholders obtained from Bank shall be used and disclosed by Marketer and other third parties only in furtherance of the performance of services for Bank or functions on Bank’s behalf; as necessary to effect, administer, or enforce a transaction that a consumer requested or authorized; or as otherwise permitted by applicable law. Marketer and any third party with access to Nonpublic Personal Information obtained from Bank shall comply with Bank’s information security program in regard to such Nonpublic Personal Information, including proper disposal of such Nonpublic Personal Information
7.3 Survival. The terms of this Article 7 shall survive the termination of this Agreement.
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ARTICLE VIII
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(1) | an “Event of Default” hereunder by Marketer shall occur in the event Marketer fails to pay the full Purchase Price due as specified by Bank for any day by 4:00 p.m. Eastern Time that day pursuant to Section 4.1 hereof (or, if Bank was late in notifying Marketer of the Purchase Price due, by 4:00 p.m. Eastern Time of the next Banking day following Marketer’s receipt of notice from Bank of the Purchase Price due), unless such failure is fully corrected by Marketer, in the manner described in clause (3) below, by 4:00 p.m. Eastern Time of the third calendar day thereafter (or of the first Banking Day after such third calendar day if such third calendar day is not a Banking Day), |
(2) | an “Event of Default” hereunder by Bank or Marketer, to the extent not described in clause (1) above, shall occur in the event such party defaults in the performance of any of its other material duties or obligations under this Agreement and fails to correct the default, to the reasonable satisfaction of the other party, within a 30-day cure period commencing upon receipt of notice from the other party, and |
(3) | for purposes of clause (1) above, the failure to pay the Purchase Price due for any day will be considered “fully corrected” only when Marketer shall have both (i) paid Bank by wire transfer of collected funds the full Purchase Price due as specified by Bank for the first day the Purchase Price due was not paid in full and for |
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each day thereafter for which the Purchase Price due as specified by Bank was not paid in full (“Past Due Amounts”), and (ii) (to the extent Bank shall have drawn on the Letter of Credit to satisfy all or part of any of such Past Due Amounts) reinstated the Letter of Credit by the full amount drawn and also caused Bank to be in receipt of written notification from the Letter of Credit Bank of such reinstatement, or alternatively, provided Bank written authority to communicate with the Letter of Credit Bank and like written authority for the Letter of Credit Bank to disclose to Bank that the Letter of Credit has been reinstated and the details associated therewith and the Letter of Credit Bank confirms that the Letter of Credit has been reinstated. |
Notwithstanding the foregoing, except in the case of an Event of Default described in clause (1) above, notice of termination may not be sent until the party seeking to terminate has followed the provisions of Section 8.1(e) hereof.
(B) |
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the application of the other party for the appointment of a receiver or trustee of its assets. |
(C) | Termination for Force Majeure or Changes in Laws or Regulations. This Agreement may be terminated by either party on or after the ninetieth (90th) day following the giving of notice by the other party that such notice-giving party’s performance is: (A) prevented or delayed by a force majeure event listed in Section 8.7 hereof, if the failure to perform has not been cured at the end of such ninety (90) day period, or (B) rendered (through no act or omission of such party) illegal or impermissible for that party or its ultimate parent corporation due to changes in laws or regulations applicable to the terminating party. |
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(i) (A) Marketer shall have the right, exercisable by providing written notice to Bank, to purchase within 30 days, and (B) Bank shall have the right, upon the expiration or termination of this Agreement, exercisable by providing written notice to Marketer, to cause Marketer to purchase, all of the Credit Card Accounts and (to the extent not previously purchased by Marketer) all of the Credit Card Receivables as of the date of such purchase, and this Agreement shall terminate upon the consummation of such purchase. Marketer may fulfill such obligation by arranging for said purchase to be made by a third party designated by Marketer. The purchase price in the event of a purchase and sale under this Section 8.1 (d) shall be equal to 100% of the Program Receivables owned by Bank on the date of purchase. The purchase should close within 30 days.
(ii) Bank shall transfer to Marketer all books and records relating to the Accounts and Credit Card Receivables and each party shall return all property belonging to the other party which is in its possession or control at the time of termination. In the event Marketer defaults in its obligation to purchase the Accounts and Marketer’s Letter of Credit become exhausted, Bank (without limiting any other remedy it may have) may elect to retain the
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Accounts, in which case Bank shall so notify Marketer, or the parties may mutually agree to sell the Accounts and Credit Card Receivables to an unrelated purchaser, in which case any premium received on the sale of the Accounts shall be payable in full to Marketer, less any fees due to Bank under this Agreement and any reasonable expenses actually incurred by Bank in connection with the sale of the Accounts.
(iii) From and after the date of purchase, Bank agrees to (A) segregate, specially xxxx and otherwise appropriately identify all Accounts purchased by Marketer as belonging to Marketer and (B) to execute and deliver to Marketer such additional documents and instruments and to take such action, all without further consideration, as Marketer shall reasonably request to effectuate the giving, granting, bargaining, sale, conveyance, setting over, delivery, transfer, confirmation and assignment provided for therein, including, without limitation, such Uniform Commercial Code financing statements as may be requested by Marketer.
(iv) Bank shall (A) give such further assurances to Marketer and shall execute, acknowledge and deliver all such acknowledgments, assignments and other instruments and take such further action as may be reasonably necessary and appropriate to effectively vest in Marketer the full legal and equitable title to all Accounts and Credit Card Receivables purchased by Marketer and (B) make reasonable efforts to assist Marketer in the orderly transition of the operations being acquired by Marketer, including sending to Marketer any payments on Accounts which may be received by Bank after closing. Bank agrees to work with Marketer’s personnel to assure a smooth transition of the Accounts and continuity of operations with respect to the Accounts.
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(a) Except to the extent of any Losses which arise from the direct acts or omissions of Bank or an affiliate of Bank, Marketer shall be liable to and shall indemnify and hold harmless Bank and its respective directors, officers, employees, agents and affiliates and permitted assigns from and against any and all “Losses” (as herein defined) arising out of (i) any failure of Marketer or any third parties selected by Marketer to comply with any of the terms and
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conditions of this Agreement, (ii) the inaccuracy of any representation or warranty made by Marketer or any third parties selected by Marketer herein, (iii) any infringement or alleged infringement of any of the Marketer Credit Card Marks, or the use thereof hereunder, on the rights of any third party, (iv) failure of Marketer or any third parties selected by Marketer to comply, in respect of its obligations in connection with the Program hereunder, with any applicable laws or regulations whether immaterial or material, regardless of whether such failure to comply would constitute a breach of a representation, warranty or covenant of Marketer hereunder, (v.) any losses or penalties related to unlawful use of Cardholders’ identifying information, including, but not limited to, his or her name, address, social security number, date of birth, official State or government-issued driver’s license or identification number, alien registration number, government passport number, employer or taxpayer identification number, or Card number by the Marketer or any third parties selected by Marketer or (vi) the offering of the Program and any and all aspects thereof, including (without limitation) any demands or claims made in any individual, joint, representative or class action by or on behalf of Cardholders and or other persons, and any inquiries, investigation or actions by federal, state, or local regulatory agencies or administrative bodies.
(b) Except to the extent of any Losses which arise from the direct acts or omissions of Marketer or an affiliate of Marketer, Bank shall be liable to and shall indemnify and hold harmless Marketer and its respective officers, directors, employees, agents and affiliates and permitted assigns, from and against any Losses (as defined below) arising out of (i) the failure of Bank to comply with any of the terms and conditions of this Agreement, (ii) the inaccuracy of any representation or warranty made by Bank herein, (iii) any infringement or alleged infringement of any of Bank Credit Card Marks, or the use thereof hereunder, on the rights of
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any third party, or (iv) any failure of Bank to comply, in respect of its obligations in connection with the Program hereunder, with any applicable laws or regulations whether immaterial or material, regardless of whether such failure to comply would constitute a breach of a representation, warranty or covenant of Bank hereunder. For the purposes of this Agreement, the term “Losses” shall mean all out-of-pocket costs, damages, losses, fines, penalties, judgments, settlements, and expenses whatsoever, including, without limitation, (i) outside attorneys’ fees, expert testimony, accountants fees and disbursements and court costs reasonably incurred by the indemnified party; (ii) punitive, consequential, special and incidental damages and (iii) costs (including reasonable expenses and reasonable value of time spent) attributable to the necessity that any officer or employee (other than in-house attorneys) of any Indemnified Party spend more than 25% of his or her normal business hours, over a period of two (2) months, in connection with any judicial, administrative, legislative, or other proceeding.
8.3 Procedures for Indemnification
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requesting assistance) in order to insure prompt and adequate defense of any suit, claim or proceeding based upon a state of facts which may give rise to a right of indemnification hereunder.
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respect to any suit, claim or proceeding which seeks any non-monetary relief, without the consent of the Indemnified Party, which consent shall not be unreasonably withheld. Any final judgment or decree entered on or in, any claim, suit or action which the Indemnifying Party did not assume the defense of in accordance herewith, shall be deemed to have been consented to by, and shall be subject to the other provisions hereof be binding upon, the Indemnifying Party as fully as if the Indemnifying Party had assumed the defense thereof and a final judgment or decree had been entered in such suit or action, or with regard to such claim, by a court of competent jurisdiction for the amount of such settlement, compromise, judgment or decree. The Indemnifying Party shall be subrogated to any claims or rights of the Indemnified Party as against any other Persons with respect to any amount paid by the Indemnifying Party under this Section 8.3.
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(e) Survival. The terms of Section 8.2 and 8.3 shall survive the termination of this Agreement; provided however, that a direct claim made by a party hereto against the other party hereto for breach of any part of this Agreement other than Sections 8.2 and 8.3 hereof, shall only survive the termination of this Agreement for a period of five years.
8.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
8.5 Press Releases. Except as may be required by law or regulation or a court or regulatory authority or any stock exchange, neither Bank nor Marketer, nor their respective affiliates, shall issue a press release or make public announcement or any disclosure to any third party related to the terms of this Agreement without the prior consent of the other party hereto, which consent shall not be unreasonably withheld or delayed.
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promptly and in writing advise the other party if it is unable to perform due to a force majeure event, the expected duration of such inability to perform and of any developments (or changes therein) that appear likely to affect the-ability of that party to perform any of its obligations hereunder a whole or in part.
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sent by facsimile (with oral confirmation of receipt), or nationally recognized overnight delivery, upon delivery thereof. The addresses of the parties are as follows:
To Bank: | FIRST BANK OF DELAWARE |
Attention: Xxxxxx X. Xxxxxx, CPA
0000 Xxxxx Xxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000, x5260
Fax: (000) 000-0000
With copy
FIRST BANK OF DELAWARE
Attention: Xxxx Xxxxxxxx, Chief Financial Officer
0000 Xxxxx Xxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000, x5255
Fax: (000) 000-0000
To Marketer: | COMPUCREDIT CORPORATION |
Attention: General Counsel
000 Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
8.10 Modification and Changes. This Agreement, together with any Exhibits attached hereto, constitutes the entire agreement between the parties relating to the subject matter herein. This Agreement may only be amended by a written document signed by both parties; provided, however, that there may be separate written agreements signed by both parties from time to time that serve to augment certain of the provisions contained herein.
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or delayed, and any such permitted assignment shall terminate when such assignee is no longer a wholly-owned subsidiary or affiliate of such party. Notwithstanding the foregoing, Marketer may assign such rights hereunder as may be required to accomplish a securitization of all or part of the Program Receivables and the Non-Program Receivables.
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8.18 Consumer Complaints. Marketer shall provide to Bank any copies of customer complaints received from Cardholders within five (5) business days of receipt.
FIRST BANK OF DELAWARE | COMPUCREDIT CORPORATION | |||||||
By: | By: | |||||||
Title: | Title: |
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