1
EXHIBIT 2.2
RECEIVABLES PURCHASE AGREEMENT
BETWEEN
▇▇▇▇ FUNDING TRUST,
AS SELLER,
AND
ASSOCIATES CREDIT CARD SERVICES, INC.,
AS PURCHASER
DATED AS OF
JULY 10, 2000
2
RECEIVABLES PURCHASE AGREEMENT
This RECEIVABLES PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of July 10, 2000, by and between ▇▇▇▇ FUNDING TRUST, a Delaware
statutory business trust wholly owned by ▇▇▇▇ Delaware, Inc. ("Seller"), and
ASSOCIATES CREDIT CARD SERVICES, INC., a Delaware corporation ("Purchaser").
RECITALS
Seller owns certain receivables originated by Jewelers National Bank, a
national banking association ("JNB"), which Seller purchased, without recourse,
from ▇▇▇▇ Delaware, Inc., a Delaware corporation ("Z Del"), pursuant to a
Purchase and Servicing Agreement dated as of July 15, 1999 among Seller, Z Del
and JNB.
Purchaser desires to purchase from Seller, without recourse, and Seller
desires to sell to Purchaser, without recourse, all of Seller's right, title and
interest in and to such receivables, upon the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings:
"Account" shall mean a credit card account owned by JNB.
"Account Documentation" shall mean all books and records in the
possession or control of Seller relating to the Accounts, including without
limitation, applications for accounts, acceptance certificates for prescreened
offers, periodic statements, credit and collection files, file maintenance data,
correspondence, whether in documentary form or on microfilm, microfiche,
magnetic tape, computer disk or other form.
"Adjustment Notice" shall have the meaning set forth in Section 2.2(b)
hereof.
"Adjustment Notice Date" shall have the meaning set forth in Section
2.2(b) hereof.
"ADS" shall mean ADS Alliance Data Systems, Inc., a Delaware
corporation.
"ADS Agreement" shall mean that certain Credit Services Processing
Agreement dated May 5, 1998, among ADS, Z Del and JFS.
"Applicable Interest Rate" shall have the meaning set forth in Section
2.2(b) hereof.
"Applicable Law" means all provisions of statutes, rules, regulations
and orders of any Federal, state, municipal or other governmental department,
commission, board, bureau, agency
3
or instrumentality or any court, in each case, whether of the United States or
foreign, applicable to a Person, and all orders and decrees of arbitrators in
proceedings or actions in which the Person in question is a party.
"Arbitration Notice" shall have the meaning set forth in Article XII
hereof.
"Bank" shall mean ▇▇▇▇▇▇ State Bank, a bank organized under the laws of
South Dakota.
"Business Day" shall mean any day other than a Saturday or Sunday or
legal holiday in the States of Texas, South Dakota, Illinois, Delaware,
Tennessee or Utah.
"Cardholder", with respect to an Account, means any Person to whom the
card evidencing such Account has been issued and/or any Person who has actual,
implied or apparent authority to use such card.
"Cardholder Agreement" shall mean, with respect to an Account, the
agreement governing such Account.
"Closing" shall have the meaning set forth in Section 2.3 hereof.
"Closing Date" shall have the meaning set forth in Section 2.3 hereof.
"Closing Purchase Price" shall have the meaning set forth in Section
2.2(a) hereof.
"Confidential Information" shall have the meaning set forth in Section
6.1 hereof.
"Confidentiality Agreement" shall have the meaning set forth in Section
6.1 hereof.
"Discount Amount" shall mean US$83,200,000.00.
"DOJ" shall have the meaning set forth in Section 7.3 hereof.
"Effective Date" shall mean the close of business on July 31, 2000 or
such later date as may be agreed upon by the parties hereto.
"Eligible Account" shall mean an Account with respect to which a
transaction may be or has been made by the Cardholder and which, as of the
Closing Date: (i) has not been or should not have been charged off as
uncollectible pursuant to JNB's policies regarding charge-offs as in effect on
the Closing Date; (ii) is not an account with respect to which the related card
has been reported as lost or stolen; (iii) is an account the Cardholder
responsible for payment of which is not deceased; (iv) does not have any
Receivables that have been identified by Seller or the relevant Cardholder as
having been incurred as a result of fraudulent use of the related credit card;
(v) is not an account subject to a filing for protection under the bankruptcy
laws of the United States.
"FTC" shall have the meaning set forth in Section 7.3.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 0.01%) equal to the weighted average of
the rates on overnight federal funds transactions with member banks of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day.
"Governmental Entity" shall have the meaning set forth in Section 3.2.
3
4
"HSR Act" shall have the meaning set forth in Section 3.2.
"Indemnified Party" shall have the meaning set forth in Section 10.3(a)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section
10.3(a) hereof.
"Interim Purchase and Servicing Agreement" shall mean that certain
Interim Purchase and Servicing Agreement of even date herewith between JNB and
Purchaser.
"JNB" shall have the meaning assigned to such term in the recitals
hereto.
"JFS" shall mean Jewelers Financial Services, Inc., a Delaware
corporation.
"Losses" shall have the meaning set forth in Section 10.2(a) hereof.
"Material Adverse Effect" shall have the meaning set forth in Section
3.2.
"Merchant Services Agreement" shall mean that certain Merchant Services
Agreement of even date herewith among ▇▇▇▇ Delaware, Inc., ▇▇▇▇ Puerto Rico,
Inc. and ▇▇▇▇▇▇ State Bank.
"Merger Agreement" shall mean that certain Merger Agreement of even
date herewith by and among Z Del, JNB and ▇▇▇▇▇▇ State Bank.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership, or government or any agency or
political subdivision thereof.
"Purchase Price" shall have the meaning set forth in Section 2.2(a)
hereof.
"Purchaser" shall mean Associates Credit Card Services, Inc., a
Delaware corporation.
"Purchaser Eligible Account Amount" shall have the meaning set forth in
Section 2.2(c) hereof.
"Receivables" shall mean all amounts shown on JNB's or Seller's Account
Documentation as amounts payable by obligors on any Account as of the Closing
Date, including any such amounts that have been charged off on or prior to the
Closing Date.
"Receivables Assignment" shall mean the Assignment covering the
Receivables to be delivered by Seller to Purchaser pursuant to Section 2.4(a)
hereof.
"Seller" shall mean ▇▇▇▇ Funding Trust, a Delaware statutory business
trust.
"Seller Eligible Account Amount" shall have the meaning set forth in
Section 2.2(c).
"Servicer Related Claim" shall mean any claim by ADS or its affiliates
against Z Del, JNB or any of their respective affiliates based upon the ADS
Agreement.
"Termination Agreement" shall mean that certain termination agreement
among ADS, Z Del and JFS, dated July 6, 2000.
"Third Party Claims" shall have the meaning set forth in Section 10.3
hereof.
"Third Party Servicer Related Claim" shall mean any Third Party Claim
related to or arising in connection with the performance of services by ADS or
its affiliates under the ADS Agreement.
"Z Del" shall have the meaning assigned to such term in the recitals
hereto.
4
5
"Zale Receivables Securitization Facility" shall mean the receivables
securitization facility of Z Del established pursuant to (a) that certain
Purchase and Servicing Agreement dated as of July 15, 1999 among Seller, Z Del
and JNB; (b) that certain Indenture dated as of July 15, 1999 between Seller and
The Bank of New York; (c) each Indenture Supplement entered into from time to
time on or after July 15, 1999 between Seller and The Bank of New York; (d) that
certain Amended and Restated Trust Agreement dated as of July 15, 1999 between Z
Del and Wilmington Trust Company; (e) that certain Class A Note Purchase
Agreement dated as of July 15, 1999 among Seller, Z Del, JNB, the purchasers
party thereto, Credit Suisse First Boston, New York Branch, as agent, and the
other agents identified therein, as amended; and (f) each of the other
agreements, documents and instruments executed from time to time in connection
therewith.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1 Purchase and Sale of Receivables; Non-Recourse Sale. Upon the terms
and subject to the conditions contained herein, on the Closing Date, to be
effective as of the Effective Date, Seller will sell, convey, transfer, assign
and deliver to Purchaser, without recourse, and Purchaser will purchase from
Seller, without recourse, the Receivables, such Receivables to be free and clear
of all security interests, liens, charges and encumbrances. The sale of
Receivables hereunder is without recourse to, or representation or warranty of
any kind (express or implied) by, Seller, except as otherwise specifically
provided herein.
2.2 Calculation and Payment of Purchase Price.
(a) Closing Purchase Price. The purchase price (the "Purchase Price")
for the Receivables purchased by Purchaser hereunder shall be an amount equal to
100% of the outstanding aggregate balance of the Receivables under all Eligible
Accounts as of the Effective Date minus the Discount Amount. Not later than
three (3) Business Days prior to the Effective Date, Seller shall deliver to
Purchaser a statement, in the form attached hereto as Schedule 2.2, setting
forth a good faith estimate of the Purchase Price (the "Closing Purchase
Price"), together with data processing system reports supporting such
calculation. On the Closing Date and immediately prior to the sale of the
Receivables contemplated by Section 2.1, Purchaser shall pay the Closing
Purchase Price by delivery to Seller by electronic wire transfer to a bank
account designated in writing by Seller (such account to be designated by Seller
at least two (2) Business Days prior to the Closing Date) of immediately
available funds in an amount equal to the Closing Purchase Price.
(b) Purchase Price Adjustments. As soon as reasonably possible
following Closing, and in any event within forty-five (45) days after the
Effective Date (the "Adjustment Notice Date"), Seller shall deliver to Purchaser
a notice (the "Adjustment Notice") of Seller's calculation of the actual
Purchase Price as of the Effective Date, together with data processing system
reports supporting such calculation. If the Closing Purchase Price is less than
the actual Purchase Price specified in the Adjustment Notice, Purchaser shall
pay Seller within five (5) days of the Adjustment Notice Date an amount equal to
the difference between the Closing
5
6
Purchase Price and the actual Purchase Price specified in the Adjustment Notice,
together with interest thereon at a rate (the "Applicable Interest Rate") equal
to the lesser of (i) the Federal Funds Rate on the Effective Date and (ii) the
maximum amount permitted by Applicable Law, for a period beginning with the day
following the Effective Date and continuing through the date of payment. If the
Closing Purchase Price is greater than the actual Purchase Price specified in
the Adjustment Notice, Seller shall pay Purchaser on the Adjustment Notice Date
an amount equal to the difference between the Closing Purchase Price and the
actual Purchase Price specified in the Adjustment Notice, together with interest
thereon at the Applicable Interest Rate, for a period beginning with the day
following the Effective Date through the date of payment.
(c) Adjustments for Improperly Classified Accounts. If, within one
hundred twenty (120) days following the Effective Date, Purchaser determines
that any Account classified as an Eligible Account as of the Effective Date was
in fact not an Eligible Account as of such date, Purchaser shall so notify
Seller, identifying any such Account and specifying in reasonable detail why
such Account is not an Eligible Account and the amount of Receivables (including
the date and amount of each charge thereunder) outstanding under such Account as
of the date of such notice, and Seller shall, within five (5) days of receipt of
such notice, pay Purchaser an amount (the "Seller Eligible Account Amount")
equal to (i) 100% of the Receivables in existence under such Account as of the
date of such notice less (ii) the amount of any Receivables arising after
Purchaser becomes aware that the relevant Account is not an Eligible Account,
together with interest thereon at the Applicable Interest Rate, for a period
beginning with the day following the Effective Date and continuing through the
date of reimbursement. If, within one hundred twenty (120) days following the
Effective Date, Seller determines that any Account not classified as an Eligible
Account should have been so classified as of the Effective Date, Seller shall so
notify Purchaser, identifying any such Account and specifying in reasonable
detail why such Account is an Eligible Account and the amount of Receivables
outstanding under such Account as of the Effective Date, and Purchaser shall,
within five (5) days of receipt of such notice, pay Seller an amount (the
"Purchaser Eligible Account Amount") equal to (A) the Purchase Price for such
Eligible Account as of the Effective Date, less (B) any payments received and
retained by Seller with respect to such Account following the Effective Date,
together with interest thereon at the Applicable Interest Rate, for a period
beginning with the day following the Effective Date through the date of payment.
(d) Adjustment Disputes. The parties shall cooperate in good faith to
resolve any disputes relating to the adjustments provided for in this Section
2.2. Any such dispute which cannot be resolved by the parties within thirty (30)
days after such dispute arose shall be resolved in accordance with the
provisions of Article XII hereof. No amounts due under this Section 2.2 shall be
payable until resolution of the dispute relating thereto, but any applicable
interest shall continue to accrue until such resolution.
2.3 Closing. Upon the terms and subject to the conditions hereof, the
closing of the transactions contemplated hereby (the "Closing") shall take place
at (i) the offices of Seller at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ at 10:00 a.m., local time, on the first Business Day after all of the
conditions set forth in Article VIII hereof have been, or are capable of being,
satisfied or (ii) such other place and/or time and/or on such other date as
Seller and
6
7
Purchaser may agree or as may be necessary to permit the fulfillment or waiver
of the conditions herein (in case of either clause (i) or (ii), the "Closing
Date").
2.4 Seller's Deliveries to Purchaser. At Closing, Seller shall deliver
to Purchaser the following:
(a) An Assignment, without recourse, of the Receivables in such form as
may be mutually agreed upon by the parties hereto, (the "Receivables
Assignment");
(b) Such form UCC-1 financing statement or statements as shall be
required to evidence the purchase and sale of Receivables hereunder;
(c) A certificate of a Co-Trustee of Seller certifying resolutions
adopted by the Co-Trustees of Seller authorizing and approving the execution,
delivery and performance of this Agreement and the transfer of the Receivables
to Purchaser pursuant to this Agreement;
(d) A certificate of existence of Seller issued by the Secretary of
State of the State of Delaware, dated not more than thirty (30) days before the
Closing Date; and
(e) All other documents, certificates, instruments, agreements and
writings required to be delivered by Seller on the Closing Date pursuant to this
Agreement.
2.5 Purchaser's Deliveries to Seller. At Closing, the Purchaser shall
pay the Closing Purchase Price to Seller and deliver to Seller the following:
(a) A certificate of Purchaser's Secretary or an Assistant Secretary
certifying resolutions of the Board of Directors of Purchaser authorizing and
approving the execution, delivery, and performance of this Agreement; and
(b) All other documents, certificates, instruments, agreements and
writings required to be delivered by Purchaser on the Closing Date pursuant to
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
3.1 Authority. Seller has the power and authority to execute this
Agreement and all documents, instruments and agreements required to be executed
by Seller pursuant hereto and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and all documents,
instruments and agreements required to be executed by Seller pursuant hereto,
and the performance by Seller of its obligations hereunder, have been duly
authorized and no further action is necessary on the part of Seller to authorize
such actions. This Agreement has been duly executed and delivered by Seller and,
assuming the due execution and delivery hereof by Purchaser, constitutes a valid
and legally binding obligation of Seller, enforceable against it in accordance
with its terms (subject, as to the enforcement of remedies, to
7
8
applicable bankruptcy, reorganization, insolvency, moratorium (whether general
or specific) and similar laws relating to creditors' rights generally, and
general principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law)).
3.2 No Conflicts; Consents. Except as set forth on Schedule 3.2 hereto,
neither the execution and delivery of this Agreement by Seller, nor the
consummation of the transactions contemplated hereby will result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under any provision of (i) any
trust agreement pursuant to which Seller is organized, (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, contract, commitment,
agreement or arrangement to which Seller is a party or by which Seller or its
properties or assets are bound; or (iii) any judgment, order or decree, or
statute, law, ordinance, rule or regulation, applicable to Seller or any of its
properties or assets, in each case except for any such conflict, violation,
default or right which would not reasonably be expected to have a material
adverse effect on the Receivables taken as a whole or the ability of Seller to
consummate the transactions contemplated hereby (a "Material Adverse Effect").
No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, or other regulatory or self-regulatory body or association (each, a
"Governmental Entity") is required to be obtained or made by Seller in
connection with the consummation of the transactions contemplated hereby other
than (i) compliance with and filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) as become applicable
as a result of the specific regulatory status of Purchaser and (iii) those the
failure of which to make or obtain would not have a Material Adverse Effect.
3.3 Organization and Standing. Seller is duly organized, validly
existing and in good standing as a statutory business trust under the laws of
the State of Delaware. Seller has all requisite power and authority to enter
into and perform its obligations hereunder.
3.4 Title. Seller owns the Receivables free and clear of all security
interests, liens, adverse claims, charges and encumbrances other than those
described on Schedule 3.4 hereto. Upon execution and delivery to Purchaser at
the Closing of the Receivables Assignment and receipt of the Purchase Price by
Seller, Purchaser will acquire title to the Receivables free and clear of any
adverse claim, other than those arising from acts of Purchaser or its
affiliates, representatives or agents.
3.5 Litigation. Except as disclosed on Schedule 3.5 hereto, there is no
suit, action or proceeding pending or threatened against Seller that,
individually or in the aggregate, (i) is reasonably likely to have a Material
Adverse Effect or (ii) is reasonably likely to prevent or delay in any material
respect Seller from performing its obligations under, or consummating the
transactions contemplated by, this Agreement. There is no judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against Seller which is reasonably likely to have a Material Adverse Effect.
8
9
3.6 Compliance, Licenses and Permits. Except for such non-compliance as
may result from any action or omission of any Person with whom Seller or an
affiliate of Seller has contracted for provision of services to Seller with
respect to the Receivables and who has agreed to indemnify Seller with respect
thereto, Seller has complied in all material respects with all laws, statutes,
ordinances, regulations, rules, judgments, decrees and orders applicable to the
Receivables, including, without limitation, all consumer protection laws and
regulations, except where the failure to so comply would not have a Material
Adverse Effect.
3.7 Brokers, Finders, etc. Seller has not taken any action which would
result in any valid claim against Purchaser of any broker, investment banker,
finder or other intermediary in connection with the transactions contemplated by
this Agreement.
3.8 Absence of Certain Changes or Events. Since April 30, 2000, except
as contemplated hereby or except as disclosed on Schedule 3.8, Seller has
conducted its business in the ordinary course and there has not occurred or
arisen any event or events which, individually or in the aggregate, has had or
is reasonably likely to (i) have a Material Adverse Effect, (ii) require filings
with the SEC under the Exchange Act (except for any filings that will be filed
under the Exchange Act after the date hereof but prior to the Closing Date) or
(iii) prevent or delay in any material respect the consummation of any of the
transactions contemplated by this Agreement.
3.9 Credit Card Business. Upon the closing of the transactions
contemplated by this Agreement and the Merger Agreement, Purchaser and its
affiliates will acquire all of JNB's business related to the credit card
services as such business exists on the closing dates of the Merger Agreement
and this Agreement, respectively, except for any such business or services
directly provided by Z Del or an affiliate of Z Del (other than JNB) or by ADS
and except for such business or services related to JNB's credit operations as
are not material in the aggregate.
3.10 Charge-Off Policy. JNB has not made changes to its charge-off
policy since December 31, 1999, except for such changes which are not material.
3.11 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither Seller nor
any other Person makes any other express or implied representation or warranty
on behalf of Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
4.1 Organization and Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2 Authority. Purchaser has all requisite corporate power and
authority to execute and deliver this Agreement and all documents, instruments
and agreements required to be
9
10
executed by Purchaser pursuant hereto and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and all documents, instruments and agreements required to be executed by
Purchaser hereunder, and the performance by Purchaser of its obligations
hereunder and thereunder have been duly authorized by all necessary action on
the part of Purchaser (including requisite stockholder approval, if necessary).
This Agreement has been duly executed and delivered by Purchaser and, assuming
the due execution and delivery hereof by Seller, constitutes a valid and legally
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium (whether general or specific)
and similar laws relating to creditors' rights generally, and general principles
of equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law)).
4.3 No Conflicts; Consents. Neither the execution and delivery of this
Agreement or the other documents, instruments and agreements to be delivered by
Purchaser hereunder, nor the consummation of the transactions contemplated
hereby or thereby will result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under any provision of (i) the certificate of incorporation or by-laws of
Purchaser, (ii) any note, bond, mortgage, indenture, deed of trust, license,
lease, contract, commitment, agreement or arrangement to which Purchaser is a
party or by which it or any of its properties or assets are bound or (iii) any
judgment, order or decree, or statute, law, ordinance, rule or regulation,
applicable to Purchaser or any of its properties or assets, in each case except
for any such conflict, violation, default or right which would not reasonably be
expected to have a material adverse effect on the business, assets, financial
condition or results of operations of Purchaser and its subsidiaries taken as a
whole. No consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required to
be obtained or made by Purchaser in connection with the consummation of the
transactions contemplated hereby other than (i) compliance with and filings
under the HSR Act, (ii) as set forth on Schedule 4.3 hereto and (iii) those the
failure of which to make or obtain would not affect the ability of Purchaser to
consummate the transactions contemplated hereby.
4.4 Financial Ability to Perform. Purchaser has sufficient funds
available (through existing credit arrangements or otherwise) to pay the
Purchase Price and to pay all of its fees and expenses related to the
transactions contemplated by this Agreement.
4.5 Absence of Certain Changes or Events. Since December 31, 1999,
except as contemplated hereby and except as disclosed in any form, report,
schedule or definitive proxy statement filed by Purchaser or its parent with the
SEC since December 31, 1999 and prior to the date hereof, Purchaser and its
subsidiaries have conducted their respective businesses in the ordinary course
and there has not occurred or arisen any event or events which are reasonably
likely to prevent or delay in any material respect the consummation of any of
the transactions contemplated by this Agreement.
4.6 Brokers, Finders, Etc. Purchaser has not taken any action which
would result in any valid claim against Seller of any broker, investment banker,
finder or other intermediary in connection with the transactions contemplated by
this Agreement.
10
11
4.7 Litigation. There is no suit, action or proceeding pending or
threatened against Purchaser that, individually or in the aggregate, is
reasonably likely to prevent or delay in any material respect Purchaser from
performing its obligations under, or consummating the transactions contemplated
by, this Agreement.
4.8 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither Purchaser
nor any other Person makes any other express or implied representation or
warranty on behalf of Purchaser.
ARTICLE V
COVENANTS OF SELLER
Seller covenants and agrees with Purchaser as follows:
5.1 Access. Prior to the Closing, Seller shall give Purchaser and its
officers, employees, representatives, counsel and independent public accountants
reasonable access during normal business hours and upon reasonable notice to any
Account Documentation in Seller's possession.
ARTICLE VI
CONFIDENTIALITY
6.1 Confidentiality. Except to the extent that any of the provisions of
that certain confidentiality agreement dated February 3, 2000 between ▇▇▇▇
Corporation and Associates Credit Card Services (the "Confidentiality
Agreement") are inconsistent with this Agreement, in which case the terms of
this Agreement shall govern and supersede such provisions, the parties hereto
acknowledge and agree that the Confidentiality Agreement remains in full force
and effect and shall survive any termination of this Agreement. The parties
hereto hereby agree to be bound by the provisions of the Confidentiality
Agreement as fully as though they had originally been parties thereto.
In performing its obligations under this Agreement, each party may have
access to and receive certain confidential or proprietary information about the
other party, including, but not limited to: such party's marketing philosophy
and objectives, competitive advantages and disadvantages, Cardholder and
customer names and addresses, financial results, technological development,
store locations, sales volume(s), merchandise mix or other information of the
business or affairs of each party, its parent, or its affiliated and subsidiary
companies, which that party reasonably considers confidential and/or proprietary
(collectively referred to as "Confidential Information"). Each party agrees that
it will reveal such Confidential Information only to those of its directors,
officers, employees (or, with regard to Z Del, directors, officers or employees
of any of its operating divisions/subsidiaries which accept or may consider
accepting the Card, and, with regard to Bank, directors, officers, employees of
Bank, or its affiliates which are involved in the development of the Card
Program) who are engaged in the implementation of
11
12
policies, programs or procedures with regard to the acceptance of the Card by Z
Del. Each party agrees not to use such Confidential Information nor to disclose
Confidential Information to any third party, except as may be necessary for that
party to perform its obligations pursuant to this Agreement and except as may be
agreed upon by the parties. If either should disclose Confidential Information
to a third party, such party shall cause said third party to agree to the
confidentiality provisions set forth in this Section 6.1.
Confidential Information does not include information in the public
domain, information already known by the party receiving the information prior
to commencing the discussions that led to this Agreement, and information
lawfully obtained from a third party or information independently developed by a
party. The terms of this Section 6.1 will survive the termination of this
Agreement and will continue for a period of three (3) years following the date
of this Agreement.
ARTICLE VII
MUTUAL COVENANTS
7.1 Consummation of the Transactions. Subject to the terms and
conditions of this Agreement, each party hereto shall use its reasonable best
efforts consistent with applicable legal requirements to cause the Closing to
occur. Seller and its officers, directors and representatives shall file and
agree to cooperate with Purchaser in filing, and Purchaser and its directors,
officers and representatives shall, file, and agree to cooperate with Seller in
filing, any necessary applications, reports or other documents with, giving any
notices to, and seeking any consents from, all Governmental Entities and all
third parties as may be required by Seller, on the one hand, and Purchaser, on
the other hand, in connection with the consummation of the transactions
contemplated by this Agreement.
7.2 Publicity. The parties hereto agree that, from the date of the
execution and delivery of this Agreement through the Closing, no public release
or announcement concerning the transactions contemplated hereby shall be issued
by any party hereto without the prior consent of (i) Purchaser, in the case of a
release or an announcement by Seller or (ii) Seller, in the case of a release or
an announcement by Purchaser (in each case which consent shall not be
unreasonably withheld), except to the extent either party hereto reasonably
determines that such release or announcement is required by law or the rules or
regulations of any United States or foreign securities exchange, in which case
the party required to make the release or announcement shall allow the other
party reasonable time to comment on such release or announcement in advance of
such issuance. The parties agree to work together to create mutually acceptable
press releases which will announce this Agreement and the accompanying Merger
Agreement and Merchant Services Agreement.
7.3 Antitrust Notification. Seller shall, and Purchaser shall, as
promptly as reasonably practicable following the date hereof, file with the
United States Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") the notification and report form, if any,
required for the transactions contemplated hereby and any supplemental
information requested in connection therewith pursuant to the HSR Act. Any such
12
13
notification and report form and supplemental information shall be in
substantial compliance with the requirements of the HSR Act. Seller shall
furnish to Purchaser, and Purchaser shall furnish to Seller, such reasonable
assistance as may be requested in connection with the preparation of any filing
or submission which is necessary under the HSR Act. Seller shall keep Purchaser
reasonably informed, and Purchaser shall keep Seller reasonably informed, of the
status of any communications with, and any inquiries or requests for additional
information from, the FTC and the DOJ and shall comply promptly with any such
inquiry or request. The filing fee payable in connection with any such filing
shall be paid by Purchaser.
7.4 Cooperation. Each party hereto agrees to cooperate with and provide
all reasonable assistance to the other party in connection with any litigation
or government or regulatory investigation, whether now existing or hereafter
initiated, in connection with ▇▇▇▇ Corporation's credit card operations acquired
by Bank pursuant to this Agreement and the Merger Agreement. The provisions of
this Section 7.4 shall survive the Closing.
7.5 Further Assurances. From time to time, as and when reasonably
requested by another party hereto, a party hereto shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further acts or other actions as such other
party may reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Each Party's Obligations. The respective obligations of each party
hereto to effect the transactions contemplated hereby are subject to the
satisfaction or waiver as of the Closing of the following conditions:
(a) No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order shall have
been enacted, entered into, promulgated, enforced or issued by any Governmental
Entity and no other legal restraint or prohibition shall be in effect preventing
any of the transactions contemplated by this Agreement.
(b) The waiting period under the HSR Act, if applicable to the
transactions contemplated hereunder, shall have expired or been terminated.
(c) The parties hereto shall have filed all material applications,
reports or other documents, given all material notices, met all material
requirements, received all material consents and approvals, satisfied any and
all conditions of approval and all applicable waiting periods shall have expired
in connection with the consummation of the transactions contemplated hereby.
8.2 Seller's Obligations. The obligation of Seller to effect the
transactions contemplated hereby is subject to the satisfaction (or waiver by
Seller) as of the Closing of the following additional conditions:
13
14
(a) Accuracy of Representations and Warranties; Compliance with
Covenants. The representations and warranties of Purchaser made in this
Agreement qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, as of the date
hereof and as of the time of the Closing as though made as of such time, except
to the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties qualified as to
materiality shall be true and correct, and those not so qualified shall be true
and correct in all material respects, on and as of such earlier date). Purchaser
shall have duly performed, complied with and satisfied in all material respects
all covenants, agreements and conditions required by this Agreement to be
performed, complied with or satisfied by it by the time of the Closing.
Purchaser shall have delivered to Seller a certificate dated the Closing Date
and signed by an officer of Purchaser confirming the foregoing.
(b) Absence of Litigation, Injunction. There shall not be threatened,
instituted or pending any suit, action, investigation, inquiry or other
proceeding by or before any court or governmental or other regulatory or
administrative agency or commission requesting an order, judgment or decree
(except those in which Seller is a plaintiff directly or derivatively) which, in
the reasonable judgment of Seller, would, if issued, be reasonably likely to
restrain or prohibit the consummation of the transactions contemplated hereby or
require rescission of this Agreement or such transactions or result in material
damages to Seller, and there shall not be in effect any injunction, writ,
preliminary restraining order or any order of any nature issued by a court or
governmental agency of competent jurisdiction directing that the transactions
contemplated hereby not be consummated as so provided or any statute, rule or
regulation enacted or promulgated that makes consummation of the transactions
contemplated hereby illegal.
(c) Related Agreements. ▇▇▇▇▇▇ State Bank and/or the appropriate
affiliates thereof shall have executed and delivered the Merger Agreement, the
Merchant Services Agreement and the Interim Purchase and Servicing Agreement.
(d) Specified Items. Purchaser shall have delivered the items to be
delivered and made the payments to Seller to be made by Purchaser pursuant to
Sections 2.2(a) and 2.5 hereof.
(e) Consents. Seller shall have received all consents, authorizations
or approvals from Governmental Entities and other Persons referred to in Section
3.2 hereto, in each case in form and substance reasonably satisfactory to
Seller, and no such consent, authorization or approval shall have been revoked.
8.3 Purchaser's Obligations. The obligation of Purchaser to effect the
transactions contemplated hereby is subject to the satisfaction (or waiver by
Purchaser) as of the Closing of the following additional conditions:
(a) Accuracy of Representations and Warranties; Compliance with
Covenants. The representations and warranties of Seller made in this Agreement
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects, as of the date
hereof and as of the time of the Closing as though made as of such time, except
to the
14
15
extent such representations and warranties expressly relate to an earlier date
(in which case such representations and warranties qualified as to materiality
shall be true and correct, and those not so qualified shall be true and correct
in all material respects, on and as of such earlier date). Seller shall have
duly performed, complied with and satisfied in all material respects all
covenants, agreements and conditions required by this Agreement to be performed,
complied with or satisfied by Seller by the time of the Closing. Seller shall
have delivered to Purchaser a certificate dated the Closing Date and signed by
an officer of Seller confirming the foregoing.
(b) Absence of Litigation, Injunction. There shall not be threatened,
instituted or pending any suit, action, investigation, inquiry or other
proceeding by or before any court or governmental or other regulatory or
administrative agency or commission requesting an order, judgment or decree
(except those in which Purchaser is a plaintiff directly or derivatively) which,
in the reasonable judgment of Purchaser would, if issued, be reasonably likely
to restrain or prohibit the consummation of the transactions contemplated hereby
or require rescission of this Agreement or such transactions or result in
material damages to Purchaser, if the transactions contemplated hereby are
consummated, and there shall not be in effect any injunction, writ, preliminary
restraining order or any order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions contemplated
hereby not be consummated as so provided or any statute, rule or regulation
enacted or promulgated that makes consummation of the transactions contemplated
hereby illegal.
(c) Other Agreements. Z Del and/or JNB, as the case may be, shall have
executed and delivered to Purchaser the Merger Agreement, the Merchant Services
Agreement and the Interim Purchase and Servicing Agreement.
(d) Specified Items. Seller shall have delivered the items to be
delivered to Purchaser pursuant to Section 2.4 hereof.
8.4 Frustration of Closing Conditions. No party to this Agreement may
rely on the failure of any condition set forth in this Article VIII if such
failure was caused by such party's failure to act in good faith or to use its
reasonable efforts to cause the Closing to occur.
ARTICLE IX
TERMINATION
9.1 Termination Events. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date as follows:
(a) by mutual written consent of the parties hereto;
(b) by either party hereto, if the Closing does not occur on or prior
to October 31, 2000; provided, however, that the right to terminate this
Agreement pursuant to this Section 9.1(b) shall not be available to any party
hereto if it has failed to perform any of its obligations under this Agreement,
which failure has resulted in a failure of any of the conditions of Article VIII
hereto;
15
16
(c) by either party hereto, if any Governmental Entity shall have
issued a judgment, order or decree or taken any other action permanently
enjoining, restraining or otherwise prohibiting any of the transactions
contemplated by this Agreement, and such judgment, order or decree or other
action shall have become final and nonappealable; or
(d) by either party hereto, if the other party shall have breached a
representation, warranty, or covenant hereunder in any material respect, and, in
any such case, such breach shall not have been remedied within thirty (30) days
after receipt by the breaching party of notice in writing from the non-breaching
party specifying such breach and requesting that it be remedied.
9.2 Information and Confidentiality. In the event of any termination
pursuant to this Article IX by one party hereto, written notice thereof setting
forth the reasons therefor shall promptly be given to the other party hereto. If
such Agreement is terminated as provided herein: (i) Purchaser shall promptly
return to Seller all documents and other materials (including, without
limitation, microfilm, microfiche, magnetic tape, computer disk or other form of
materials) received from Seller and its affiliates relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof;
and (ii) all Confidential Information received by Purchaser with respect to the
business of Seller and its affiliates shall be treated in accordance with the
Confidentiality Agreement, which shall remain in full force and effect
notwithstanding the termination of this Agreement.
9.3 Abandonment. If this Agreement is terminated pursuant to this
Article IX, this Agreement shall become void and of no further force or effect,
except for the provisions of (i) Section 6.1 relating to the obligation of
Purchaser to keep confidential certain information and data obtained by
Purchaser; (ii) Section 7.2 relating to publicity; (iii) this Article IX; (iv)
Article XI relating to certain expenses; (v) Article XII relating to
arbitration; (vi) Section 13.9 relating to consent to jurisdiction; and (vii)
Section 13.10 relating to choice of law; and provided, however, that nothing in
this Article IX shall release or be deemed to release any party hereto from any
liability to the other party hereto for any breach by such party of the terms
and provisions of this Agreement or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement.
16
17
ARTICLE X
INDEMNIFICATION
10.1 Survival of Representations, Warranties and Agreements. The
representations, warranties, covenants and agreements in this Agreement and in
any certificate delivered pursuant hereto shall survive until the second
anniversary of the Closing Date, except that the agreement of Z Del and JNB to
indemnify Bank under Sections 10.2(a)(ii) and 10.2(a)(iii) hereunder and under
Sections 10.2(a)(ii) and 10.2(a)(iii) of the Merger Agreement shall continue for
a period two (2) years from the Conversion Date (as such term is defined in the
Merchant Services Agreement). The representations and warranties included herein
are exclusive, and the parties hereto confirm that they have not relied upon any
representations or warranties not contained herein or in the Schedules hereto as
an inducement to enter into this Agreement.
10.2 Agreement to Indemnify.
(a) Indemnification by Z Del and JNB. Z Del and JNB, jointly and
severally, will indemnify Bank and its affiliates against, and agree to hold
each of them harmless from, any and all damage, loss, liability or expense
(including reasonable expenses of investigation and reasonable attorney's fees
and expenses in connection with any action, suit or proceeding) ("Losses")
incurred or suffered by Bank or any of its affiliates (i) because of any breach
of an agreement, covenant, representation or warranty made by Z Del or JNB in
this Agreement, or (ii) in connection with any Losses (except for any amounts
incurred by Z Del in connection with the Termination Agreement for which Bank is
obligated to pay Z Del pursuant to Section 6.6 of the Merger Agreement) incurred
as a result of any Servicer Related Claim based upon acts or omissions occurring
prior to the Closing Date, including such acts or omissions occurring prior to
such Closing Date which continue after such Closing Date, or (iii) any Third
Party Servicer Related Claim based upon acts or omissions of ADS occurring prior
to the Closing Date, including such acts or omissions occurring prior to such
Closing Date which continue after such Closing Date, or (iv) any Servicer
Related Claim based upon the negligence or willful misconduct of Z Del or JNB or
their respective affiliates occurring after the Closing Date. Notwithstanding
the foregoing:
(A) Bank will not be entitled to indemnity from Z Del and JNB
with respect to claims for indemnification under Section 10.2(a)(i)
hereunder and under Section 10.2(a)(i) of the Merger Agreement unless
and until the aggregate of all such claims for indemnification exceed
the sum of $5,000,000.00 of Losses (as a single aggregate amount for
both this Agreement and the Merger Agreement and not an individual
amount as to each such agreement) incurred or suffered by Bank of a
type otherwise indemnifiable pursuant to Section 10.2(a)(i) of this
Agreement, in the case of claims hereunder, and Section 10.2(a)(i) of
the Merger Agreement, in the case of claims under the Merger Agreement,
at which time Z Del and JNB shall be liable to Bank for such amounts in
excess of such $5,000,000.00; provided however, that Bank will not be
entitled to indemnity from Z Del and JNB with respect to claims for
indemnification under Section 10.2(a)(i) hereunder and under Section
10.2(a)(i) of the Merger Agreement in excess of $150,000,000.00;
17
18
(B) Bank will not be entitled to indemnity from Z Del and JNB
with respect to claims for indemnification under Sections 10.2(a)(ii),
10.2(a)(iii) and 10.2(a)(iv) hereunder and under Sections 10.2(a)(ii),
10.2(a)(iii) and 10.2(a)(iv) of the Merger Agreement unless and until
the aggregate of all such claims for indemnification exceed the sum of
$5,000,000.00 of Losses (as a single aggregate amount for both this
Agreement and the Merger Agreement and not an individual amount as to
each such agreement) incurred or suffered by Bank of a type otherwise
indemnifiable pursuant to Sections 10.2(a)(ii), 10.2(a)(iii) and
10.2(a)(iv) of this Agreement, in the case of claims hereunder, and
Sections 10.2(a)(ii), 10.2(a)(iii) and 10.2(a)(iv) of the Merger
Agreement, in the case of claims under the Merger Agreement, at which
time Z Del and JNB shall be fully liable to Bank for any and all such
amounts in excess of such $5,000,000.00.
(b) Indemnification by Bank. Bank will indemnify Z Del and JNB and
their affiliates against, and agree to hold each of them harmless from, any and
all Losses incurred or suffered by Z Del or JNB or any of their affiliates (i)
because of any breach of an agreement, covenant, representation or warranty made
by Bank in this Agreement, or (ii) in connection with any Losses incurred as a
result of any Servicer Related Claim based upon acts or omissions occurring on
or after the Closing Date, provided that such Losses are not incurred as a
result of the negligence or willful misconduct of Z Del or JNB or their
respective affiliates, or (iii) any Third Party Servicer Related Claim based
upon acts or omissions of ADS occurring on or after the Closing Date.
Notwithstanding the foregoing:
(A) neither Z Del nor JNB will be entitled to indemnity from
Bank with respect to claims for indemnification under Section
10.2(b)(i) hereunder and under Section 10.2(b)(i) of the Merger
Agreement unless and until the aggregate of all such claims for
indemnification exceed the sum of $5,000,000.00 of Losses (as a single
aggregate amount for both this Agreement and the Merger Agreement and
not an individual amount as to each such agreement) incurred or
suffered by Z Del or JNB of a type otherwise indemnifiable pursuant to
Section 10.2(b)(i) of this Agreement, in the case of claims hereunder,
and Section 10.2(b)(i) of the Merger Agreement, in the case of claims
under the Merger Agreement, at which time Bank shall be liable to Z Del
and JNB for such amounts in excess of such $5,000,000.00; provided
however, that neither Z Del nor JNB will be entitled to indemnity from
Bank with respect to claims for indemnification under Section
10.2(b)(i) hereunder and under Section 10.2(b)(i) of the Merger
Agreement in excess of the Purchase Price hereunder;
(B) Z Del and JNB will be entitled to indemnity from Bank,
without limitation, with respect to claims for indemnification under
Sections 10.2(b)(ii) and 10.2(b)(iii) hereunder and under Sections
10.2(b)(ii) and 10.2(b)(iii) of the Merger Agreement for all Losses
incurred or suffered by Z Del or JNB of a type otherwise indemnifiable
pursuant to Sections 10.2(b)(ii) and 10.2(b)(iii) of this Agreement, in
the case of claims hereunder, and Sections 10.2(b)(ii) and 10.2(b)(iii)
of the Merger Agreement, in the case of claims under the Merger
Agreement.
18
19
(c) Z Del and JNB, jointly and severally, shall indemnify Bank and its
affiliates against, and agree to hold each of them harmless from, any and all
Losses incurred or suffered by Bank or any of its affiliates based on Third
Party Claims relating to any security interests, liens, adverse claims, charges
and encumbrances described on Schedule 3.4 hereto.
10.3 Conditions of Indemnification. Subject to the provisions of
Section 10.4, the obligations and liabilities of Seller, in the case of Section
10.2(a), and the Purchaser, in the case of Section 10.2(b), with respect to
claims made by or against third parties ("Third Party Claims") shall be subject
to the following terms and conditions:
(a) The person to whom such Third Party Claim relates (the "Indemnified
Party") will give the party from which indemnity is sought hereunder (the
"Indemnifying Party") prompt notice of such Third Party Claim, (which notice in
any event shall be given to the Indemnifying Party within 10 days of the
Indemnified Party first becoming aware of the facts and circumstances that form
the basis of such Third Party Claim), and the Indemnifying Party will (except as
otherwise contemplated by the proviso to Section 10.3(b) hereof) assume the
defense thereof by representatives chosen by it; provided, that the Indemnified
Party shall be entitled (but not required) to participate in such action and to
employ counsel at its own expense to assist in the handling of such Third Party
Claim.
(b) If the Indemnifying Party, within a reasonable time after notice of
any such Third Party Claim, fails to assume the defense thereof, the Indemnified
Party shall (upon a subsequent 10 days' notice to the Indemnifying Party) have
the right to undertake the defense or, with the consent of the Indemnifying
Party, to undertake a compromise or settlement of such Third Party Claim on
behalf of and for the account and risk of the Indemnifying Party, subject to the
right of the Indemnifying Party to assume the defense of such Third Party Claim
at any time prior to the settlement, compromise or final determination thereof.
The Indemnifying Party shall not be liable for any compromise or settlement of a
Third Party Claim effected without its written consent, which consent shall not
be unreasonably withheld or delayed. During any period when the Indemnifying
Party is contesting any such Third Party Claim in good faith, the Indemnified
Party shall not pay, compromise or settle such Third Party Claim without the
Indemnifying Party's consent; provided, that the Indemnified Party may
nonetheless pay, compromise or settle such Third Party Claim without such
consent during such period, in which event it shall, automatically and without
any further action on its part, waive any right (whether or not pursuant to this
Agreement) to indemnity in respect of all losses, liabilities, damages or
expenses relating to such Third Party Claim.
(c) Anything in this Section 10.3 to the contrary notwithstanding, the
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld or delayed),
settle or compromise any Third Party Claim or consent to the entry of any
judgment which settlement, compromise or consent imposes any future obligation
on the Indemnified Party or which does not include as an unconditional term
thereof the giving by the claimant and/or plaintiff to the Indemnified Party a
release from all liabilities in respect of such Third Party Claim.
19
20
(d) The Indemnified Party shall, and shall cause its affiliates to,
provide the Indemnifying Party with such assistance (without charge) as may
reasonably be requested by the Indemnifying Party in connection with any
indemnification or defense provided for herein, including, without limitation,
providing the Indemnifying Party with such information, documents and records
and reasonable access to the services of and consultations with such personnel
of the Indemnified Party or its affiliates as the Indemnifying Party shall
reasonably deem necessary (provided that such access shall not unreasonably
interfere with the performance of the duties performed by or responsibilities of
such personnel).
10.4 Limitation of Indemnification. Each claim shall be reduced by the
amount of any insurance proceeds actually received in connection with such
claim. The party seeking indemnification covenants to exercise its reasonable
best efforts to collect insurance proceeds under applicable insurance policies
that are then in force if and to the extent that such claim relates to an event
covered by such insurance policies before such party may recover for any claim
pursuant to this Article X.
10.5 Claims Adjusted for Taxes. The amount of any claim for which
indemnification is provided under this Article X shall be (i) if the indemnity
payment is not treated as an adjustment to the Purchase Price for tax purposes
pursuant to the second succeeding sentence hereof, increased to take account of
any net tax cost incurred by the Indemnified Party arising from the receipt or
accrual of indemnity payments hereunder and (ii) reduced to take account of any
net tax benefit realized by the Indemnified Party as a result of the
deductibility, amortization or other cost recovery for tax purposes of such
claim. In computing the amount of any such tax cost or tax benefit, the
Indemnified Party shall be deemed to recognize all other items of income, gain,
loss, deduction or credit before recognizing any item arising from the receipt
of any indemnity payment hereunder or the incurrence or payment of such claim.
Any indemnity payment under this Agreement shall be treated as an adjustment to
the Purchase Price for tax purposes, unless a final and conclusive determination
with respect to the Indemnified Party or any or its affiliates causes any such
payment not to be treated as an adjustment to the Purchase Price for United
States Federal income tax purposes.
10.6 Exclusive Remedy. After the Closing, the sole and exclusive remedy
of the parties hereto for any breach or inaccuracy of any representation or
warranty contained in this Agreement or any other claim (whether or not alleging
a breach of this Agreement) that arises out of the facts and circumstances
constituting such breach or inaccuracy, shall be the indemnity provided in this
Article X.
ARTICLE XI
EXPENSES
Whether or not the transactions contemplated hereby are consummated,
and except as otherwise specifically provided in this Agreement, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby by Seller shall be paid by Seller, and all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby by Purchaser shall be paid by Purchaser.
20
21
ARTICLE XII
ARBITRATION
If Purchaser and Seller are unable to resolve any dispute arising out
of or in connection with this Agreement or the transactions contemplated hereby,
such dispute shall be submitted to arbitration in accordance with the procedures
hereof. The arbitration shall be initiated by a party's delivering to the other
party hereto a notice of intention to arbitrate (the "Arbitration Notice"). The
arbitration shall be held in Dallas County, Texas and shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association in effect at the time the arbitration is instituted and as provided
herein. In the event of any inconsistency between such Rules and this Agreement,
this Agreement shall control. Unless the parties agree to a single arbitrator,
the arbitration shall be conducted before three (3) independent and impartial
arbitrators, none of whom shall be affiliated with either party hereto. Within
ten (10) days of the date of the Arbitration Notice each party shall notify the
other of its choice of an arbitrator. Each party shall have the right, for a
period of ten (10) days following its receipt of notice of a proposed arbitrator
from the other party, to investigate the arbitrator so chosen to verify his or
her impartiality. Thereafter, the two (2) arbitrators so chosen shall choose the
third arbitrator who shall be the chairman of the panel of the three
arbitrators. All arbitrators, prior to their service, shall disclose all actual
or perceived conflicts of interest involving the subject matter of the dispute
or with the parties. In the event the parties agree to a single arbitrator, the
selection of the arbitrator shall be made by mutual consent. The three (3)
arbitrators (or the single arbitrator, if the parties so choose, in either case,
the "Tribunal") selected shall hear and decide the arbitration case. The
arbitration shall be governed by the Federal Arbitration Act (9 U.S.C. Section
Section 1-16) to the exclusion of any provision of state law inconsistent
therewith and which would produce a different result, and the parties agree to
be bound by the decision of the arbitrators and agree that judgment thereon may
be entered by any court having jurisdiction thereof. The Tribunal shall
determine the fact-based claims of the parties and render its final decision in
accordance with the substantive laws of the State of Texas, exclusive of its
conflict of law rules. The limitations on any actions will be determined under
Texas law. The Tribunal may, in the course of proceedings, order any provisional
remedy or conservatory measure, including, but not limited to attachment,
preliminary injunction or the deposit of specified security, which it considers
to be necessary, just and suitable under the circumstances. The failure of a
party to comply with such an interim order, after due notice and opportunity to
cure such non-compliance, may be treated by the Tribunal as a default, and all
or some of the claims or defenses of the defaulting party may be stricken and
partial or final decision entered against such party, or the Tribunal may award
such lesser sanctions as it deems appropriate. A request for interim or
provisional relief to a court shall not be deemed incompatible with the parties'
agreement to arbitrate or as a waiver of such agreement. Within thirty (30) days
after the Tribunal has been appointed, a preliminary hearing among the Tribunal
and counsel for each party shall be held for the purpose of developing a plan
for the management of the arbitration, all of which shall then be memorialized
in an appropriate order. The Tribunal shall actively manage the proceedings as
it deems best so as to make such proceedings expeditious, economical and less
burdensome and adversarial than litigation. The Tribunal shall permit and
facilitate such discovery as it shall determine appropriate and as the
circumstances warrant, taking into account the needs of the parties and the
desirability of making discovery expeditious and cost effective.
21
22
Such discovery may include prehearing depositions, particularly depositions of
witnesses who will not appear personally before the Tribunal to testify, if
there is a substantial demonstrated need therefor. Papers, documents and written
communications shall be served by the parties directly upon each other and the
Tribunal. All papers, documents, briefs, written communication, testimony and
transactions, as well as any and all Tribunal decisions, shall be confidential
and not disclosed to anyone other than the Tribunal, the parties or the parties'
attorneys and expert witnesses (where applicable to their testimony) except that
upon written consent of the parties, such information shall be disclosed to
additional third-parties, and except that such information may be disclosed to
the extent required by Applicable Law or pursuant to the rules of any foreign or
domestic stock exchange on which shares of either party hereto are listed. All
third parties shall agree in writing to keep such information confidential. The
Tribunal may limit the issues so as to focus on the core of the dispute, limit
the time allotted to each party for presentation of its case and exclude
testimony and other evidence that it deems irrelevant, cumulative or in
admissible. Notwithstanding the parties' agreement regarding arbitration venue
above, upon motion of any party, the Tribunal may temporarily relocate a hearing
to a place designated by the Tribunal as may be necessary to hear the testimony
of particular witnesses not subject to subpoena at the designated hearing site.
The purpose of such temporary relocation is to permit a hearing at a place where
such witnesses can be compelled to attend. With the consent of both parties, the
testimony may be recorded before a single member of the Tribunal. There shall be
a stenographic transcript of the proceedings, the cost of which shall be borne
equally by the parties pending the final decision of the Tribunal. The Tribunal
is empowered to award only compensatory damages as such may be limited by the
terms of this Agreement. Each party hereby irrevocably waives any damages in
excess of compensatory damages including a waiver of any punitive or multiple
damages. The Tribunal may, in its discretion, grant pre-decision interest and,
if so, such interest shall be at commercial rates during the relevant period.
The Tribunal may award all or a part of a party's reasonable attorneys' fees and
costs of arbitration, taking into account the final result of arbitration, the
conduct of the parties and their counsel in the course of the arbitration and
other relevant factors. The Tribunal shall, in a final decision, assess the
amount of the costs of the proceedings. Prior to rendering its final decision,
the Tribunal shall submit to the parties an unsigned draft of the proposed
decision and each party, within five (5) Business Days after receipt of such
draft decision, may serve on the other party and file with the Tribunal a
written statement outlining any alleged errors of fact, law, computation or
otherwise. Within five (5) Business Days after receipt of such statement, the
Tribunal shall render its final decision. Any arbitration decision shall conform
as closely as reasonably possible to the order or judgment which would be
rendered by a court of the State of Texas. Any arbitration decision shall state
the reasoning on which it is based, although such reasons shall not be used as a
basis of appeal or other judicial proceeding. To the extent permitted by law,
any decision by the Tribunal shall not be res judicata or have any binding
effect in any unrelated litigation or arbitration where any party to this
Agreement may also be a party.
22
23
ARTICLE XIII
MISCELLANEOUS
13.1 No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns, and nothing herein
expressed or implied shall give or be construed to give to any person, other
than the parties hereto and such assigns, any legal or equitable rights
hereunder.
13.2 Amendment or Waiver. No amendment, modification or waiver in
respect of this Agreement shall be effective unless it shall be in writing and
signed by the parties hereto.
13.3 Headings. The headings contained in this Agreement, or in any
exhibit or schedule hereto and in the table of contents to this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
13.5 Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by any party hereto (including
by operation of law in connection with a merger, or sale of substantially all
the assets, or any dissolution, of any party hereto) without the prior written
consent of the other parties hereto. Any attempted assignment in violation of
this Section 13.5 shall be void.
13.6 Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or sent
by telecopy or sent, postage prepaid, by registered, certified or express mail
or overnight courier service and shall be deemed given when so delivered by
hand, or telecopied, or if mailed, three days after mailing (one business day in
the case of express mail or overnight courier service), as follows:
if to Seller:
▇▇▇▇ Funding Trust
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Operating Officer
with a copy to:
Zale Delaware, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
23
24
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
if to Purchaser:
Associates Credit Card Services, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Private Label General Manager
with a copy to:
Associates First Capital Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
or such other address as any party hereto may from time to time specify by
written notice to the other parties hereto.
13.7 Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto, and the Confidentiality Agreement contain the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter. The parties hereto shall not be liable or bound to any other
party in any manner by any representations, warranties or covenants relating to
such subject matter except as specifically set forth herein or in the
Confidentiality Agreement.
13.8 Severability. If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability.
24
25
13.9 Consent to Jurisdiction. The parties hereto irrevocably submit to
the exclusive jurisdiction of (a) the courts of the State of Texas and (b) the
federal court sitting in the Northern District of Texas for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. The parties hereto agree to commence any
action, suit or proceeding relating hereto either in the federal court sitting
in the Northern District of Texas or, if such suit, action or other proceeding
may not be brought in such court for jurisdictional reasons, in the courts of
the State of Texas. The parties hereto further agree that service of any
process, summons, notice or document by United States certified mail, postage
prepaid, to such party's address set forth above shall be effective service of
process for any action, suit or proceeding in the State of Texas with respect to
any matters to which it has submitted to jurisdiction in this Section 13.9. The
parties hereto irrevocably and unconditionally waive any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the courts of the State of Texas or (ii)
the federal court sitting in the Northern District of Texas, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
13.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Texas, without giving
effect to conflicts of laws principles of such State.
25
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on their respective behalf, by their respective duly authorized
officers, as of the day and year first above written.
▇▇▇▇ FUNDING TRUST
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee under the Amended and
Restated Trust Agreement dated as of
July 15, 1999
By:/s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Title: Financial Services Officer
ASSOCIATES CREDIT CARD SERVICES, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
26
27
GUARANTY OF OBLIGATIONS OF ▇▇▇▇ FUNDING TRUST
In consideration of the execution and delivery by Purchaser of
the foregoing Receivables Purchase Agreement, the undersigned, parent company of
Seller, hereby guarantees absolutely and unconditionally to Purchaser the due
and punctual performance, when and as due, of (i) all obligations of Seller
arising under or pursuant to the foregoing Receivables Purchase Agreement; (ii)
the accuracy of Seller's representations and warranties set forth herein, and
(iii) the punctual payment of all sums now or hereafter owed by Seller under the
foregoing Agreement. The liability of the undersigned under this Guaranty shall
be unlimited and unconditional, and this Guaranty shall be a continuing
guarantee. Purchaser may proceed directly against the undersigned without
proceeding against or otherwise exercising any remedy with respect to Seller.
The undersigned represents and warrants that it is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
that it has all necessary power, authority, licenses and permits necessary to
execute, deliver and perform its obligations under this Guaranty; that the
execution, delivery and performance of this Guaranty by the undersigned do not
require any filing or registration with, or the consent or approval of, any
governmental body, agency, authority, or any other Person which has not been
made or obtained; that this Guaranty has been duly authorized, executed and
delivered by the undersigned and constitutes the legal, valid and binding
obligation of the undersigned, enforceable in accordance with its terms, except
to the extent the same may be limited by applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance and other laws governing the rights of
creditors generally and except as limited by applicable principles of equity;
and that the execution, delivery and performance of this Guaranty by the
undersigned do not conflict with or result in the breach of, or constitute a
default under any indenture, mortgage, deed of trust, loan, agreement, or other
instrument to which the undersigned is party or by which its assets or
properties are bound.
IN WITNESS WHEREOF, the undersigned has hereunto set its hand through
its duly authorized representative this 10th day of July, 2000.
ZALE DELAWARE, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President and
Chief Operating Officer
27
28
GUARANTY OF OBLIGATIONS OF ASSOCIATES CREDIT CARD SERVICES, INC.
In consideration of the execution and delivery by Seller of the
foregoing Receivables Purchase Agreement, the undersigned, parent company of
Purchaser, hereby guarantees absolutely and unconditionally to Z Del the due and
punctual performance, when and as due, of (i) all obligations of Purchaser
arising under or pursuant to the foregoing Receivables Purchase Agreement; (ii)
the accuracy of Purchaser's representations and warranties set forth herein; and
(iii) the punctual payment of all sums now or hereafter owed by Purchaser under
the foregoing Agreement. The liability of the undersigned under this Guaranty
shall be unlimited and unconditional, and this Guaranty shall be a continuing
guarantee. Z Del may proceed directly against the undersigned without proceeding
against or otherwise exercising any remedy with respect to Purchaser. The
undersigned represents and warrants that it is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
that it has all necessary power, authority, licenses and permits necessary to
execute, deliver and perform its obligations under this Guaranty; that the
execution, delivery and performance of this Guaranty by the undersigned do not
require any filing or registration with, or the consent or approval of, any
governmental body, agency, authority, or any other Person which has not been
made or obtained; that this Guaranty has been duly authorized, executed and
delivered by the undersigned and constitutes the legal, valid and binding
obligation of the undersigned, enforceable in accordance with its terms, except
to the extent the same may be limited by applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance and other laws governing the rights of
creditors generally and except as limited by applicable principles of equity;
and that the execution, delivery and performance of this Guaranty by the
undersigned do not conflict with or result in the breach of, or constitute a
default under any indenture, mortgage, deed of trust, loan, agreement, or other
instrument to which the undersigned is party or by which its assets or
properties are bound.
IN WITNESS WHEREOF, the undersigned has hereunto set its hand through
its duly authorized representative this 10th day of July, 2000.
ASSOCIATES FIRST CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Executive Vice President
28
29
DISCLOSURE SCHEDULES
These Schedules are made and given pursuant to the Receivables Purchase
Agreement, dated as of July 10, 2000, by and between ▇▇▇▇ Funding Trust
("Seller") and Associates Credit Card Services, Inc. ("Purchaser") (the
"Receivables Purchase Agreement"). Any terms defined in the Receivables Purchase
Agreement shall have the same meaning when used in these Schedules unless the
context otherwise requires. Any information disclosed herein under any section
number shall be deemed to be disclosed and incorporated by reference into any
other section number under the Receivables Purchase Agreement where such
disclosure would be appropriate.
Nothing herein constitutes admission of any liability or obligation of Seller
nor an admission against Seller's interests. Inclusion of any agreement or other
matter herein or any exhibit hereto should not be interpreted as indicating that
Seller has determined that such agreement or other matter (a) is necessarily
material or (b) has had or would have a Material Adverse Effect.
29
30
SCHEDULES
Schedule
--------
2.2 Estimate of Purchase Price
3.2 No Conflicts; Consents
3.4 Security Interests, Liens, Adverse Claims, Charges and
Encumbrances on Receivables
3.5 Litigation
3.8 Absence of Certain Changes or Events
4.3 No Conflicts; Consents
30