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RECEIVABLES PURCHASE AND SALE AGREEMENT
BETWEEN
BANKBOSTON (NH), NATIONAL ASSOCIATION
AND
PARTNERS FIRST RECEIVABLES, LLC
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TABLE OF CONTENTS
PAGE
Parties.............................................................1
Recitals............................................................1
ARTICLE 1
DEFINITIONS...................................................1
Section 1.1. Certain Defined Terms.....................1
ARTICLE 2
SALE OF ASSETS................................................3
Section 2.1. Accounts Receivable.......................3
Section 2.2. Excluded Assets...........................4
Section 2.3. Relative Valuation........................4
ARTICLE 3
ASSUMPTION OF OBLIGATIONS.....................................5
Section 3.1. Assumption of Obligations.................5
Section 3.2. Consideration.............................5
Section 3.3. Payment of Purchase Price.................5
Section 3.4. Post-Closing Adjustments..................5
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER..................6
Section 4.1. Organization..............................6
Section 4.2. Authority; Enforceability.................6
Section 4.3. No Conflicts..............................7
Section 4.4. Ownership of Assets.......................7
Section 4.5. Cardholder Agreements.....................7
Section 4.6. Litigation................................7
Section 4.7. Accounts Receivable.......................8
Section 4.8. Compliance with Applicable Law............8
Section 4.9. Licensed to Carry on Credit Card Business.8
Section 4.10. Account Records..........................8
Section 4.11. Brokers..................................8
Section 4.12. Permits, Etc.............................8
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...............9
Section 5.1. Organization..............................9
Section 5.2. Authority; Enforceability.................9
Section 5.3. No Conflicts..............................9
Section 5.4. Permits, Etc..............................9
Section 5.5. Litigation................................9
Section 5.6. Finders or Brokers........................9
ARTICLE 6
CERTAIN TRANSITIONAL MATTERS.................................10
Section 6.1. Third Party Consents.....................10
Section 6.2. Responsibility for Pre-Closing
Transactions...........................................10
Section 6.3. Business Records.........................10
Section 6.4. Further Assistance.......................10
ARTICLE 7
INDEMNIFICATION..............................................11
Section 7.1. Indemnity by the Seller..................11
Section 7.2. Indemnity by the Purchaser...............11
Section 7.3. Claims...................................11
Section 7.4. Time Limits..............................12
Section 7.5. Exclusive Remedy; Damage Limitations.....12
ARTICLE 8
ITEMS TO BE DELIVERED AT CLOSING.............................13
Section 8.1. Items to be Delivered by Seller..........13
Section 8.2. Items to Be Delivered by Purchaser.......13
ARTICLE 9
GENERAL......................................................14
Section 9.1. Disputes.................................14
Section 9.2. Notices..................................14
Section 9.3. Entire Agreement.........................15
Section 9.4. Governing Law............................15
Section 9.5. Consent to Jurisdiction..................15
Section 9.6. Waiver of Certain Damages................15
Section 9.7. Section and Subsection Headings..........15
Section 9.8. Assigns..................................16
Section 9.9. No Implied Rights or Remedies............16
Section 9.10. Counterparts.............................16
Section 9.11. Construction.............................16
Section 9.12. Severability.............................16
Section 9.13. Survival.................................16
Section 9.14. WAIVER OF RIGHT TO JURY TRIAL............16
Section 9.15. Remedies.................................16
ARTICLE 10
CHARGEBACKS..................................................17
Signatures.........................................................18
Schedules
Schedule 2.1-- Accounts
Schedule 4.6-- Litigation
RECEIVABLES PURCHASE AND SALE AGREEMENT
This Receivables Purchase and Sale Agreement, dated as of January
29, 1998 (as in effect from time to time, this "Agreement"), between
(a) BankBoston (NH), National Association (the "Seller"), and (b)
Partners First Receivables, LLC, a Delaware limited liability company
(the "Purchaser").
WHEREAS, Seller desires to sell the Accounts Receivable (as
hereinafter defined) to Purchaser, and Purchaser desires to purchase the
Accounts Receivable, on the terms and conditions hereinafter set forth
and provided.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth below, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree, intending to be legally bound, as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Certain Defined Terms. Capitalized terms used herein
without definition have the meaning assigned to such terms in the Limited
Liability Company Agreement of Partners First Holdings, LLC dated as of
the date hereof among BankBoston (NH), National Association, Bankmont
Financial Corp., Xxxxxx Trust and Savings Bank, First Annapolis Marketing
Information Services, Inc. and the Company (the "Operating Agreement").
Additionally, the following capitalized terms shall have the following
meanings:
"Accounts" means all of the credit card accounts of the Seller's
Credit Card Business (other than Excluded Accounts) including, without
limitation, those identified on Schedule 2.1 which is attached
hereto or provided herewith and made a part hereof (which may in the
Seller's sole discretion be in the form of a computer file or magnetic
tape) which contains sufficient information to identify each account and
respective Cardholder such as name, address, social security number,
account number, status codes, account balance and such other information
as is mutually agreed upon by Purchaser and Seller.
"Accounts Receivable" has the meaning set forth in Section 2.1.
"Adjusted Closing Statement" has the meaning set forth in
Section 3.3(b).
"Agreement" has the meaning set forth in the preamble.
"Applicable Agreements" means (i) that certain Contribution
Agreement dated as of the date hereof by and between Partners First
Holdings, LLC and Seller, and (ii) that certain Overdue Receivables
Purchase and Sale Agreement dated as of the date hereof by and between
Seller and the Purchaser.
"Assumed Obligations" has the meaning set forth in
Section3.1.
"Cardholder" means a holder of a Credit Card.
"Cardholder Agreements" means the agreements between the
Cardholders or other obligors with respect to a Credit Card and Seller,
including, without limitation, any agreements relating to credit
enhancements provided in connection with such Credit Card, and as the
same has been amended or otherwise modified and in effect from time to
time.
"Chargeback Amount" has the meaning set forth in Article 10.
"Claim" has the meaning set forth in Section 7.3(a).
"Closing Date" means the date on which the transactions described
in this Agreement are consummated, except that for purposes of
determining Accounts or Accounts Receivable it shall mean the opening of
business on the day on which the transactions described in this Agreement
are consummated.
"Credit Card" means a MasterCard(R) or Visa(R) card issued by
Seller and associated solely with an Account of Seller's Credit Card
Business.
"Credit Card Business" means the provision of unsecured lines of
credit accessible by Visa(R) or MasterCard(R) to consumers within the
United States of America, the servicing of such credit card
relationships, and the provision of services incidental thereto.
"Estimated Purchase Price" has the meaning set forth in
Section 3.3.
"Excluded Accounts" has the meaning set forth in Section 2.2.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Governmental Authority" means any federal, national, state,
municipal, local, territorial or other governmental department,
commission, board, bureau, agency, regulatory authority, instrumentality,
judicial or administrative body, domestic or foreign and Visa(R) and
MasterCard(R).
"Indemnified Party" has the meaning set forth in Section 7.3(a).
"Indemnifying Party" has the meaning set forth in Section 7.3(a).
"Initial Closing Statement" has the meaning set forth in
Section 3.3(a).
"Losses" has the meaning set forth in Section 7.1.
"MasterCard(R)" means MasterCard International Incorporated.
"Purchase Price" has the meaning set forth in Section 3.2.
"Purchaser" has the meaning set forth in the preamble hereto.
"Purchaser Indemnitees" has the meaning set forth in Section
7.1.
"Purchaser Indemnity Representations" means the representations and
warranties of Purchaser contained in Section 5.4 and 5.5 of this
Agreement.
"Retained Liabilities" has the meaning set forth in
Section 3.1.
"Seller" has the meanings set forth in the preamble hereto.
"Seller Indemnitees" has the meanings set forth in Section 7.2.
"Seller Indemnity Representations" means the representations and
warranties of Seller contained in Sections 4.5, 4.6, 4.7 (except the
first sentence thereof), 4.8, 4.9, 4.10 and 4.12 of this Agreement.
"Subject Losses" has the meaning set forth in Section 7.5.
"Third Party Claim" has the meaning set forth in Section 7.3(a).
"Visa(R)" means Visa U.S.A., Inc.
"Zero Value Accounts" means Accounts which as of the Closing Date
are (i) statused by Seller as bankruptcy, deceased, fraud, lost or
stolen or charged off or (ii) 180 days or more contractually past
due (in each case such status to be determined in a manner consistent
with Seller's customary practices consistently applied).
ARTICLE 2
SALE OF ASSETS
Section 2.1. Accounts Receivable. On the Closing Date, and subject
to the terms and conditions set forth in this Agreement, the Seller
(subject to the provisions of Article 10 hereto) shall sell,
assign, transfer and deliver to Purchaser, and the Purchaser shall
purchase and take assignment and delivery of, all of the Seller's right,
title and interest in, to and under the following assets as of the
Closing Date (other than the Excluded Accounts and the Excluded Assets):
any and all amounts owing from the Cardholders to the Seller (whether
billed or unbilled, posted or not) in connection with the Accounts,
including, without limitation, all principal, outstanding purchases, cash
advances, interest (including accrued but unbilled interest), annual
fees, finance and service charges and other charges and fees, less any
and all amounts owing from the Seller to the Cardholders as a credit
balance, whether or not credited (hereinafter referred to collectively as
the "Accounts Receivable").
The parties hereto intend that the conveyance of the Seller's
right, title and interest in and to the Accounts Receivables shall
constitute an absolute sale, conveying good title free and clear of any
liens, claims, encumbrances or rights of others from the Seller to the
Purchaser and that the Accounts Receivables shall not be a part of the
Seller's estate in the event of the insolvency of the Seller or a
conservatorship, receivership or similar event with respect to the
Seller. It is the intention of the parties hereto that the arrangements
with respect to the Accounts Receivables shall constitute a purchase and
sale of such Accounts Receivables and not a loan. In the event, however,
that it were to be determined that the transactions evidenced hereby
constitute a loan and not a purchase and sale, it is the intention of the
parties hereto that this Agreement shall constitute a security agreement
under applicable law, and that the Seller shall be deemed to have granted
and does hereby grant to the Purchaser a first priority perfected
security interest, in all of the Seller's right, title and interest,
whether now owned or hereafter acquired, in, to and under the Accounts
Receivables to secure the rights of the Purchaser hereunder and the
obligations of the Seller hereunder.
Section 2.2. Excluded Assets. Notwithstanding the foregoing, the
Seller is not transferring to the Purchaser and the Purchaser is not
acquiring pursuant to this Agreement, and the term "Accounts Receivable"
shall not include, any other assets of Seller not specifically referenced
in Section 2.1 (the "Excluded Assets") or any Accounts Receivable
generated by or related to accounts which are part of Seller's BKB
International Credit Card Business, BKB Relationship Credit Card Business
or BKB Value-Limited Credit Card Business or are secured accounts,
commercial or business accounts, dormant accounts, in-active accounts,
closed accounts, accounts without outstanding balances, accounts
classified as "substandard," "doubtful," or "loss" or treated as "other
loans especially mentioned" in the most recent report of examination
prepared by any Federal or State supervisory agency, accounts in
nonaccrual status, accounts on which principal or interest payments are
more than 30 days past due, accounts whose terms have been renegotiated
or compromised due to the deteriorating financial condition of the
Cardholder and accounts which are statused by Seller on the Closing Date
as bankrupt, deceased, fraud, lost or stolen or charged off (such status
to be determined in a manner consistent with Seller's customary practices
consistently applied) ("Excluded Accounts").
Section 2.3. Relative Valuation. The Seller and the Purchaser agree
that, immediately after giving effect to the transactions effected by the
BKB Purchase Agreements, the Accounts Receivable and the Overdue
Receivables (as defined in the applicable BKB Purchase Agreement)
transferred by the Seller to the Purchaser pursuant to the BKB Purchase
Agreements will have characteristics substantially similar to the
Accounts Receivable and the Overdue Receivables (as defined in the
applicable BKB Purchase Agreement) comprising the BKB Value-Limited
Credit Card Business.
ARTICLE 3
ASSUMPTION OF OBLIGATIONS
Section 3.1. Assumption of Obligations. The Purchaser hereby
assumes, and agrees to pay, perform, fulfill and discharge, all of the
Seller's obligations with respect to the Accounts Receivable from and
after the Closing Date (collectively, the "Assumed Obligations").
Anything in this Agreement to the contrary notwithstanding, the Purchaser
shall not assume, and shall not be deemed to have assumed, any liability,
contract or obligation of the Seller not specifically listed or included
herein or assumed by separate written agreement signed by the Purchaser
(all such liabilities and obligations not being assumed being referred to
herein as the "Retained Liabilities"), which Retained Liabilities are
retained by the Seller and the Purchaser shall not be liable therefor.
Section 3.2. Consideration. In consideration of the sale of the
Accounts Receivable by the Seller to the Purchaser hereunder, the
Purchaser agrees to assume the Assumed Obligations and to pay to the
Seller, the purchase price ("Purchase Price") which shall be an amount
equal to the sum of all Accounts Receivable as of the Closing Date
Section 3.3. Payment of Purchase Price. (a) On the Closing Date,
the parties shall prepare a closing statement (the "Initial Closing
Statement") calculating the Purchase Price as of the date of the most
recently available data (or another date mutually acceptable to Purchaser
and Seller) with respect to the Accounts Receivable (the "Estimated
Purchase Price"). On the Closing Date, the Estimated Purchase Price shall
be paid in immediately available funds to Seller by Purchaser.
(b) As soon as practicable after the Closing Date, Purchaser and
Seller shall conduct and complete a post-Closing review of the Accounts
Receivable and shall prepare a closing statement as of the Closing Date
(the "Adjusted Closing Statement"), mutually acceptable to Seller and
Purchaser, and showing any adjustments from the Initial Closing Statement
including the difference between the Estimated Purchase Price and the
Purchase Price. Purchaser shall pay Seller (or Seller shall pay Purchaser
as the case may be) an amount equal to the difference between the
Estimated Purchase Price and the Purchase Price as reflected on the
Adjusted Closing Statement plus interest thereon at the federal funds
rate from the Closing Date to the date of payment.
Section 3.4. Post-Closing Adjustments. Seller is responsible for
any and all fees in connection with the Accounts Receivable related to
the period prior to the Closing Date, including fees, normal operating
assessments or penalties and other charges imposed by MasterCard(R) or
Visa(R). The parties hereto herebY agree to cooperate in good faith to
estimate such fees and include them on the Initial Closing Statement and
to make such post-closing adjustments between themselves as may be
necessary to give effect to the provisions hereof and to reflect such
adjustments on the Adjusted Closing Statement. Adjustments to amounts
calculated pursuant to Section 3.3 and this Section 3.4 may include
unposted amounts, miscalculations, errors, incorrect status,
mis-characterization or mis-classification of Accounts and Accounts
Receivable. For purposes of this adjustment, mis-classified Accounts
which should have been classified as Zero Value Accounts as of the
Closing Date will be valued accordingly. As provided in Section 6.2
hereof, for the purpose of determining when or whether an event took
place, the interchange date as specified by Visa(R) or MasterCard(R)
shall be determinative. (a) In the event that as of April 30, 1998 (the
"Adjustment Date") the aggregate outstanding amount of all Accounts
Receivable in connection with accounts generated by the approximately
5,846,849 mail piece credit card solicitation known as the "January
Mailing" is less than $84 million, then (i) Seller may sell to Purchaser,
on terms similar to those set forth in this Agreement, Credit Card
accounts in good standing included within the BKB Value-Limited Credit
Card Business with Accounts Receivable in good standing in an aggregate
outstanding amount as of the Adjustment Date not to exceed the amount of
such deficiency and (ii) Seller shall pay to the Purchaser, on or prior
to the date that is twenty Business Days after the Adjustment Date, an
amount equal to seven percent (7%) of the amount by which the sum of all
Accounts Receivable generated by the January Mailing as of the Adjustment
Date, plus all Accounts Receivable as of the Adjustment Date sold to
Purchaser pursuant to clause (i) above is less than $84 million.
(b) The Seller hereby agrees to pay expenses for the January
Mailing as attached hereto as Exhibit A which is Purchaser's estimate of
all expenses payable by BankBoston N.A. (to the extent such expenses are
not paid by BankBoston N.A. under Sections 4.3(b) (ii) and (iii) of the
Service Agreement, dated as of June 22, 1995, between BankBoston, N.A.
and First Annapolis Marketing Information Services, Inc.). Purchaser
agrees that it shall approve responses to the January Mailing using
substantially the same credit and other criteria as used to determine
recipients of such mailing, except for insubstantial changes in the
ordinary course of business consistent with Purchaser's past practices.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as
follows:
Section 4.1. Organization. The Seller is a national banking
association organized under the laws of the United States and is
authorized to conduct general banking business under such laws.
Section 4.2. Authority; Enforceability. The Seller has all
requisite power and authority (i) to enter into and carry out its
obligations under this Agreement, (ii) to hold the Accounts Receivable
and (iii) to sell, assign and transfer the Accounts Receivable being sold
to the Purchaser by it. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary action on the part
of the Seller. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as
enforcement thereof may be limited by receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, as well as
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or similar laws of general applicability relating to or affecting
creditors' rights or to general equity principles (regardless of whether
such matters are considered in a proceeding in equity or at law) and the
availability of equitable remedies.
Section 4.3. No Conflicts. The execution, delivery and performance
by Seller of this Agreement does not violate (a) Seller's Articles of
Association or By-Laws, as applicable, (b) any material agreement or
instrument to which Seller is a party or by which Seller is bound or
which affects the Accounts Receivable, or (c) any law, rule or
regulation applicable to Seller or which affects the Accounts Receivable.
Section 4.4. Ownership of Assets. Seller is the sole owner of all
right, title and interest in, to and under the Accounts Receivable being
sold to the Purchaser under this Agreement. Seller has the right, power
and authority to sell and transfer the Accounts Receivable to the
Purchaser, and the Accounts Receivable are not subject to any assignment,
lien, charge, encumbrance or security interest, except that such Accounts
Receivable may be subject to the terms of the Cardholder Agreements and
to other rights of Cardholders and other obligors as specified in Section
4.7 hereof. Seller hereby sells the Accounts Receivable being sold by it
to the Purchaser free and clear of all assignments, liens, charges,
encumbrances and other security interests and of all claims or rights of
third parties, except as such Accounts Receivable may be subject to the
terms of the Cardholder Agreements and to other rights of Cardholders and
other obligors as specified in Section 4.7 hereof.
Section 4.5. Cardholder Agreements. The Accounts Receivable have
been generated pursuant to the Accounts and pursuant to Cardholder
Agreements which are legal, valid and binding upon the Seller and, to the
best of Seller's knowledge, such Cardholder Agreements are legally
binding agreements, enforceable in all material respects against the
Cardholders or other obligors who are a party thereto in accordance with
their respective terms, except as enforcement thereof may be limited by
bankruptcy, fraudulent transfer, reorganization, moratorium or similar
laws of general applicability relating to or affecting creditors' rights
or to general equity principles (regardless of whether such matters are
considered in a proceeding in equity or at law) and the availability of
equitable remedies. The Seller is in compliance with the Cardholder
Agreements except where the failure to so comply would not have a
material adverse effect on the Accounts Receivable.
Section 4.6. Litigation. Except for the litigation described on
Schedule 4.6, which is attached hereto and made a part hereof,
there are no actions, suits or proceedings pending or, to the knowledge
of the Seller, threatened against or affecting the Seller which would
reasonably be expected to cause any material adverse effect on the
Accounts Receivable. There is no action, suit or proceeding pending
against the Seller which would prevent the Seller from consummating the
sale of the Accounts Receivable to the Purchaser hereunder.
Section 4.7. Accounts Receivable. Other than the right of
Cardholders or other obligors to assert claims and defenses against the
Seller pursuant to 12 C.F.R. ss.226.12(c) and under any other applicable
laws and the Cardholders' "billing error" rights pursuant to 12 C.F.R.
ss.226.13, to the best of the Seller's knowledge, the Accounts Receivable
are not subject to Cardholder or other obligor claims, offsets or
adjustments and represent the legal, valid and binding obligations of the
Cardholders, enforceable against the Cardholders in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
fraudulent transfer, reorganization, moratorium or similar laws of
general applicability relating to or affecting creditors' rights or to
general equity principles (regardless of whether such matters are
considered in a proceeding in equity or at law) and the availability of
equitable remedies. Seller makes no representation or warranty regarding
the payment or collectibility of the Accounts Receivable.
Section 4.8. Compliance with Applicable Law. The Accounts
Receivable have been generated in compliance, in all material respects,
with applicable federal and state laws, rules and regulations, and
judicial, administrative and arbitrator's orders relating thereto,
including without limitation the federal Truth-in-Lending Act, Equal
Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt Collection
Practices Act and Regulations B and Z promulgated by the Board of
Governors of the Federal Reserve System.
Section 4.9. Licensed to Carry on Credit Card Business. The Seller
is and has been licensed to participate in the programs offered by
Visa(R) and by MasterCard(R) to the full extent necessary to generate the
Accounts Receivable.
Section 4.10. Account Records. The books and records relating to
the Accounts Receivable are accurate and complete in all material
respects, in each case, as of the date when each such record was made and
all information relating to application, payment history, customer
inquiry and other relevant Account information is contained in the
relevant books and records.
Section 4.11. Brokers. Neither Seller nor any Affiliate of Seller
has agreed to pay any fee or commission to any agent, broker, finder or
other person for or on account of services rendered as a broker or finder
in connection with this Agreement or the sale of the Accounts Receivable
hereunder.
Section 4.12. Permits, Etc. No consent of any Person and no
license, permit or approval with any Governmental Authority having
jurisdiction over Seller is required in connection with the transactions
contemplated by this Agreement. The Seller has not received notice from
any Governmental Authority indicating that it would oppose or not grant
or issue its consent or approval, if required, with respect to the sale
of the Accounts Receivable hereunder or any of the other transactions
contemplated hereby.
The Seller makes no other representations or warranties, expressed
or implied, with respect to the subject matter hereof other than as
specifically set forth in this Article 4.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller as
follows:
Section 5.1. Organization. The Purchaser is a limited liability
company duly organized and validly existing in good standing under the
laws of the State of Delaware.
Section 5.2. Authority; Enforceability. The Purchaser has all
requisite power and authority (i) to enter into and carry out its
obligations under this Agreement, (ii) to purchase and hold the
Accounts Receivable and (iii) to assume the Assumed Obligations.
The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser and
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws of general
applicability relating to or affecting creditors' rights or to general
equity principles (regardless of whether such matters are considered in a
proceeding in equity or at law) and the availability of equitable
remedies.
Section 5.3. No Conflicts. The execution, delivery and performance
of this Agreement by the Purchaser does not violate (a) Purchaser's
Certificate of Formation or Limited Liability Company Agreement, (b) any
material agreement or instrument to which the Purchaser is a party or by
which the Purchaser is bound, or (c) any law, rule or regulation
applicable to the Purchaser.
Section 5.4. Permits, Etc. The Purchaser has obtained all licenses,
permits and approvals of all Governmental Authorities necessary for the
Purchaser to purchase, service and collect the Accounts Receivable and to
consummate the transactions contemplated hereby.
Section 5.5. Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Purchaser, threatened against the
Purchaser which challenges the validity, propriety or enforceability of,
or seeks to enjoin the performance of, the transactions contemplated by
this Agreement.
Section 5.6. Finders or Brokers. Neither Purchaser nor any
Affiliate of Purchaser has agreed to pay any fee or commission to any
agent, broker, finder or other person for or on account of services
rendered as a broker or finder in connection with this Agreement or the
transactions contemplated hereby.
ARTICLE 6
CERTAIN TRANSITIONAL MATTERS
Section 6.1. Third Party Consents. To the extent any Assumed
Obligation is not transferable or assignable without the consent of any
third party or the transfer or assignment of which would result in a
violation of any law or order, this Agreement shall not constitute on
assignment or attempted assignment thereof; Seller shall use all
reasonable efforts to obtain the required consent of any such third party
to the transfer or assignment thereof to the Purchaser and if any such
consent shall not be obtained, Seller shall cooperate with the Purchaser
in any reasonable arrangement (including reimbursement of monies paid by
the Purchaser on account of any such arrangement) designed to provide the
Purchaser with the benefits and/or burdens intended to be transferred and
assigned to it thereunder.
Section 6.2. Responsibility for Pre-Closing Transactions. Subject
to the provisions of Article 10, the Seller shall remain liable after the
date hereof for all draft retrievals, representments or incorrectly
posted transactions arising from transactions with an interchange
transaction date occurring prior to the Closing Date with respect to the
Accounts Receivable.
Section 6.3. Business Records. The Purchaser acknowledges that
certain business records of the Seller relating to the Seller's Credit
Card Business prior to the Closing Date will be conveyed to the Purchaser
or others, and that the Seller may from time to time require access to
such records, and the Purchaser agrees that upon reasonable prior notice
from the Seller, it will, during normal business hours, either provide
the Seller with access to records under its custody or control or, at the
Purchaser's option, copies of such records for such purposes. The Seller
agrees to hold any information so provided as confidential and in strict
confidence as it would its own confidential information. The Purchaser
agrees that it will not destroy any such business records during the
three (3) year period after the date hereof, and it will not within the
two (2) year period after such date destroy any business records prepared
prior to the date hereof without first notifying the Seller and affording
the Seller the opportunity to remove or copy them.
Section 6.4. Further Assistance. On and after the Closing Date, the
Seller shall (i) execute, acknowledge and deliver all such
acknowledgments and other instruments (including financing statements)
and take such further action as may be necessary and appropriate to
effectively vest in the Purchaser the full legal and equitable title to
the Accounts Receivable or to perfect the Purchaser's interest therein,
and (ii) assist the Purchaser in the orderly transition of the Accounts
Receivable being acquired by the Purchaser, and (iii) deliver such other
information about the Accounts Receivable as the Purchaser may reasonably
request. Subject to the provisions of Article 10 hereof, in the event
Seller shall receive any payments relating to the Accounts Receivable
attributable to the period after the Closing Date, the Seller shall
promptly endorse and transfer such payments to the Purchaser and take all
necessary and reasonable actions to vest such monies in the Purchaser.
ARTICLE 7
INDEMNIFICATION
Section 7.1. Indemnity by the Seller. The Seller agrees to
indemnify and hold the Purchaser, and its affiliates, employees,
officers, directors, controlling persons, successors and assigns (the
"Purchaser Indemnitees"), harmless from and with respect to any and all
claims, liabilities, losses, damages, costs and expenses, including
without limitation the reasonable fees and disbursements of counsel and
expert witnesses, net of insurance proceeds (collectively, the "Losses"),
related to or arising directly or indirectly out of (a) any inaccuracies
in any representation or warranty made by the Seller in or pursuant to
this Agreement, (but only to the extent that Losses relating to or
arising directly or indirectly out of such inaccuracies when taken
together with Losses (as that term is defined in the Applicable
Agreements) for which the Seller is obligated to indemnify the Purchaser
Indemnitees (as defined in the BKB Overdue Receivables Purchase
Agreement) pursuant to Section 7.1(a) of the BKB Overdue Receivables
Purchase Agreement and the Company Indemnitees (as defined in the BKB
Contribution Agreement) pursuant to Section 7.1(a) of the BKB
Contribution Agreement, without duplication, exceed $100,000 in the
aggregate), (b) any failure or breach by the Seller of any covenant,
obligation, or undertaking made by the Seller in this Agreement or (c)
the Retained Liabilities, in each such case, except to the extent that
any such Losses were caused by any such Indemnified Party's gross
negligence or willful misconduct.
Section 7.2. Indemnity by the Purchaser. The Purchaser agrees to
indemnify and hold the Seller, and its affiliates, employees, officers,
directors, controlling persons, successors and assigns (the "Seller
Indemnitees"), harmless from and with respect to any and all Losses
related to or arising directly or indirectly out of (a)any inaccuracies
in any representation or warranty made by the Purchaser in this Agreement
(but only to the extent that Losses relating to or arising directly or
indirectly out of such inaccuracies when taken together with Losses (as
that term is defined in the Applicable Agreements) for which Purchaser
and/or the Company are obligated to indemnify the Seller Indemnitees (as
defined in the relevant Applicable Agreement) pursuant to Section 7.2(a)
of each such Applicable Agreement, without duplication, exceed $100,000
in the aggregate), (b) any failure or breach by the Purchaser of any
covenant, obligation or undertaking made by the Purchaser in this
Agreement (including without limitation any failure by the Purchaser to
pay or perform any of the Assumed Obligations), (c) the collection of the
Accounts Receivable by the Purchaser after the Closing Date, or (d) the
Assumed Obligations, in each case, except to the extent that any such
Losses are caused by any such Indemnified Party's gross negligence or
willful misconduct.
Section 7.3. Claims. (a) Any party seeking indemnification
hereunder (the "Indemnified Party") shall promptly notify the party
hereto obligated to provide indemnification hereunder (the "Indemnifying
Party") of any action, suit, proceeding, demand or breach (a "Claim")
with respect to which the Indemnified Party claims indemnification
hereunder, provided that failure of the Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations under
this Article 7 except to the extent, if at all, that such Indemnifying
Party shall have been prejudiced thereby. If such Claim relates to any
action, suit, proceeding or demand instituted against the Indemnified
Party by a third party (a "Third Party Claim"), then upon receipt of such
notice from the Indemnified Party the Indemnifying Party shall be
entitled to participate in the defense of such Third Party Claim, and if
and only if each of the following conditions is satisfied, the
Indemnifying Party may assume the defense of such Third Party Claim, and
in the case of such an assumption the Indemnifying Party shall have the
authority to negotiate, compromise and settle such Third Party Claim:
(i) the Indemnifying Party confirms in writing that it is
obligated hereunder to indemnify the Indemnified Party with respect
to such Third Party Claim; and
(ii) there is no conflict of interest which would make
separate representation by the Indemnified Party's own counsel
advisable.
The Indemnified Party shall retain the right to employ its own counsel
and to participate in the defense of any Third Party Claim, the defense
of which has been assumed by the Indemnifying Party pursuant hereto, but
the Indemnified Party shall bear and shall be solely responsible for its
own costs and expenses in connection with such participation. The
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party, settle or compromise any claim or consent to the entry
of any judgment that does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Indemnified Party a
release from all liability in respect of such claim.
(b) In the event of any Claim under Section 7.1 or 7.2, the
Indemnified Party shall advise the Indemnifying Party in writing of the
amount and circumstances surrounding such Claim.
Section 7.4. Time Limits. No claim for indemnification under this
Article 7 may be asserted for the first time after June 30, 1999.
Section 7.5. Exclusive Remedy; Damage Limitations. The Seller and
the Purchaser acknowledge and agree that, except for the right to seek
specific performance of covenants and other agreements, the
indemnification rights and remedies available to each party under this
Article 7 shall be the sole and exclusive rights and remedies of the
Purchaser and the Seller with respect to any Losses arising out of or
relating in any way to (a) any breach of this Agreement, (b) the
acquisition of the Accounts Receivable and the assumption of the Assumed
Obligations by the Purchaser, or (c) the consummation of the transactions
contemplated hereby (collectively, the "Subject Losses"), including
without limitation any claims, rights or remedies for negligent
misrepresentation but excluding specifically, any claims, rights or
remedies for fraud. Without limiting the generality of the foregoing,
except for remedies for fraud and as specifically authorized by this
Article 7, the Purchaser and the Seller hereby waive, release and
disclaim any claims, rights or remedies arising in tort, by statute, or
otherwise, with respect to the Subject Losses. As provided in Section
9.6, in no event shall the Purchaser or the Seller be entitled to recover
from the other party hereto for incidental, special, consequential,
exemplary or punitive damages, and for all purposes of this Agreement,
the term "Losses" shall be deemed not to include any such damages.
Seller's maximum aggregate liability, and the right of recovery of the
Purchaser Indemnitees against the Seller under this Article 7 for
Losses, arising as a result of breaches of the Seller Indemnity
Representations contained herein shall, in all events, other than fraud
by Seller, be limited in the aggregate to $10,000,000 less all amounts
paid by Seller under Article 7 of the respective Applicable Agreements as
a result of breaches by Seller of the Seller Indemnity Representations
(as that term is defined in the respective Applicable Agreements).
Purchaser's maximum aggregate liability, and the right of recovery of the
Seller Indemnitees against the Purchaser under this Article7 for Losses,
arising as a result of breaches of the Purchaser Indemnity
Representations contained herein shall, in all events other than fraud by
the Purchaser, be limited in the aggregate to $10,000,000, less all
amounts paid by the Company and/or the Purchaser under the Applicable
Agreements as a result of breaches by the Company and/or the Purchaser of
the Purchaser Indemnity Representations and the Company Indemnity
Representations (as such terms are defined in the respective Applicable
Agreements).
ARTICLE 8
ITEMS TO BE DELIVERED AT CLOSING
Section 8.1. Items to be Delivered by Seller. Seller shall deliver
to Purchaser:
(a) Such bills of sale, assignments, UCC-1 forms, and other
instruments and documents duly executed and in full force and effect with
respect to Seller as Purchaser may reasonably require as necessary or
desirable for transferring, assigning and conveying title to the Accounts
Receivable to Purchaser, all in form and substance reasonably
satisfactory to Purchaser;
(b) The Initial Closing Statement; and
(c) Such other documents as Purchaser may reasonably request.
Section 8.2. Items to Be Delivered by Purchaser. Purchaser shall
deliver to Seller:
(a) An Assignment and Assumption Agreement duly executed and in
full force and effect with respect to Purchaser;
(b) Payment of the Estimated Purchase Price stated on the Initial
Closing Statement by wire transfer of funds immediately available in
Boston, Massachusetts; and
(c) Such other documents as Seller may reasonably request.
ARTICLE 9
GENERAL
Section 9.1. Disputes. In the event of any dispute or disagreement
between the parties after the Closing Date, either with respect to the
interpretation of any provision of this Agreement or with respect to the
performance or nonperformance by any party hereto, upon the written
request of any party, corporate executives of Seller and Purchaser shall
attempt to resolve any such dispute.
Section 9.2. Notices. All notices, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if delivered personally or if mailed by certified mail, return receipt
requested, postage prepaid or if sent by overnight courier or sent by
written facsimile with answerback confirmed, as follows:
If to the Seller: c/o Bank Boston Corporation
000 Xxxxxxx Xxxxxx, at 25-08
Xxxxxx, Xxxxxxxxxxxxx 000000
Attn: Xx. Xxxxx X. Xxxxxxx and
Xxxx X. Xxxxxx, Esq.
with a copy sent
contemporaneously to: Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to the Purchaser: Partners First Receivables, LLC
000 Xxxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
with a copy sent
contemporaneously to: Partners First Receivables, LLC
000 Xxxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Any such communication shall be deemed to have been received (i)
when delivered, if personally delivered, or sent by nationally recognized
overnight courier or sent via facsimile or (ii) on the third Business Day
following the date on which the piece of mail containing such
communication is posted, if sent by certified mail.
Section 9.3. Entire Agreement. This Agreement (including the
Exhibits (including the Assignment and Assumption Agreement dated of even
date herewith (the "Assignment") between the parties hereto) and
Schedules hereto) and the letter agreement dated of even date herewith
(the "Letter") among the Company, the Seller and BankBoston (NH),
National Association, a national banking association (this Agreement, the
Assignment and the Letter being, collectively the "Receivables
Agreements") contains the entire understanding of the parties hereto, and
supersedes all prior agreements and understandings relating to the
subject matter hereof; and further, provided that nothing contained in
this Agreement, the Assignment or the Letter shall be deemed in any
manner to amend, modify, revise or otherwise change or supersede any of
the terms or provisions of any of the other Receivables Agreements. This
Agreement shall not be amended except by a written instrument hereafter
signed by the authorized officers of all of the parties hereto. No waiver
of any provision of this Agreement shall be effective unless evidenced by
a written instrument signed by the waiving party. Each of the parties
hereto further acknowledges and agrees that, in entering into this
Agreement, it has not in any way relied upon any oral or written
agreements, statements, promises, information, arrangements,
understandings, representations or warranties, express or implied, not
specifically set forth in this Agreement.
Section 9.4. Governing Law. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware without regard to its conflict of laws rules.
Section 9.5. Consent to Jurisdiction. Each of the parties hereto
agrees that any suit, action or proceeding instituted against such party
under or in connection with this Agreement may be brought in a court of
competent jurisdiction in State of Delaware. By execution hereof, each
party hereto irrevocably waives any objection to, and any right of
immunity on the grounds of, improper venue, the convenience of the forum,
the personal jurisdiction of such courts or the execution of judgments
resulting therefrom. Each party hereto hereby irrevocably accepts and
submits to the jurisdiction of such courts in any such action, suit or
proceeding.
Section 9.6. Waiver of Certain Damages. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by law, any rights
that it may have to punitive, incidental, special, exemplary or
consequential damages in respect of any litigation based upon, or arising
out of, this Agreement or any course of conduct, course of dealing,
statements or actions of any of the parties hereto relating thereto.
Section 9.7. Section and Subsection Headings. The headings of
sections and subsections are for reference only and shall not limit or
control the meaning thereof.
Section 9.8. Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. Neither this Agreement nor the
obligations of any party hereunder shall be assignable or transferable by
any party without the prior written consent of the other party hereto.
Section 9.9. No Implied Rights or Remedies. Except as otherwise
expressly provided herein, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any Person,
except the parties hereto, any rights or remedies under or by reason of
this Agreement.
Section 9.10. Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
Section 9.11. Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction will be applied
against any party hereto.
Section 9.12. Severability. The invalidity or unenforceability of
any particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects
as if such invalid or unenforceable provision were omitted.
Section 9.13. Survival. The representations, warranties and
covenants of the parties hereto shall survive indefinitely, unless
otherwise specified therein.
Section 9.14. WAIVER OF RIGHT TO JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION IN
ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF, THIS
AGREEMENT, OR THE VALIDITY, INTERPRETATION OR ENFORCEMENT HEREOF OR
THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.15. Remedies. Each party hereto will be entitled to
enforce its rights under this Agreement specifically (without posting a
bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights existing
in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that either party may in its sole discretion apply to
any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement. In the event of any
dispute involving the terms of this Agreement, the prevailing party shall
be entitled to collect reasonable fees and expenses incurred by the
prevailing party in connection with such dispute from the other parties
to such dispute.
ARTICLE 10
CHARGEBACKS
Seller shall retain all right, title and interest in claims against
or payments from merchants in respect of amounts that were charged back
through Visa(R) or MasterCard(R) by Seller prior to the Closing Date or
will be charged back after the Closing Date in each case in respect to
which Seller had credited the affected Account Receivable prior to the
Closing Date (the "Chargeback Amount"). In the event any such payment
with respect to such Chargeback Amount is received by Purchaser, such
amount shall be promptly paid to Seller. After the Closing Date,
Purchaser shall have all right, title and interest in claims against or
payments from merchants in respect of all amounts in connection with the
Accounts that were charged back through the systems of Visa(R) or
MasterCard(R) by Seller prior to the Closing Date and in respect to which
Seller had not credited the affected Account Receivable prior to the
Closing Date; provided, however, that if the merchant refuses to pay such
Chargeback Amount because of any act or omission of Seller in violation
of applicable rules of Visa(R) or Mastercard(R), Seller shall promptly
pay Purchaser such amount and Purchaser shall assign to Seller any and
all rights Purchaser may have against the merchant. Purchaser shall have
all right, title and interest in all claims against or payment from
merchants in respect of all amounts in connection with the Accounts that
are charged back through the systems of Visa(R) or Mastercard(R) after
the Closing Date and in respect to which the affected Account had not
been credited prior to the Closing Date, and in the event that any such
payment is received by Seller, such amount shall be promptly paid by
Seller to Purchaser.
In the event either party hereto receives, or otherwise has
possession of, documents which the other party needs in order to pursue a
chargeback claim, the party which has such documents shall send such
documents to the other party within five (5) Business Days after written
request therefore.
Anything contained in this Agreement to the contrary
notwithstanding, all amounts received with respect to any Account after
the Closing Date not in excess of the amount (if any) of the Chargeback
Amount with respect to such Account shall belong to Seller and, if
received by Purchaser after the Closing Date, shall be promptly paid to
Seller. Seller may retain any such amounts received by it after the
Closing Date.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Receivables Purchase and Sale Agreement
to be duly executed and delivered as a sealed instrument as of the date
and year first above written.
BANKBOSTON (NH), NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Parent
____________________________________
Name: Xxxxxxx X. Parent
Title: Authorized Officer
PARTNERS FIRST RECEIVABLES, LLC
By /s/ Xxxx X. Xxxxxxxxx
____________________________________
Name: Xxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
SCHEDULE 2.1
ACCOUNTS
Tape to be supplied by First Annapolis Marketing Information
Services, Inc., as agent for the Seller.
SCHEDULE 4.6
LITIGATION
NONE
