<PAGE>
EXHIBIT 10.1
PURCHASE, SALE AND SERVICING TRANSFER AGREEMENT
AMONG
WORLD FINANCIAL CAPITAL BANK,
BLAIR CORPORATION, JLB SERVICE BANK OF DELAWARE,
BLAIR CREDIT SERVICES CORPORATION
AND
BLAIR FACTORING COMPANY
DATED AS OF APRIL 26, 2005
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS....................................................
2
SECTION 1.1 Definitions of
Certain Terms.......................... 2
SECTION 1.2
Interpretation........................................ 7
ARTICLE II PURCHASE, SALE AND
ASSUMPTION................................. 8
SECTION 2.1 Purchase and
Sale of Assets........................... 8
SECTION 2.2 Assumption of
Liabilities............................. 8
SECTION 2.3 Purchase Price;
Purchase Price Adjustment............. 8
SECTION 2.4 Intentionally
Omitted................................. 9
SECTION 2.5 Intentionally
Omitted................................. 9
SECTION 2.6 Reimbursement
For Non-Eligible Accounts............... 9
SECTION 2.7 Post-Closing
Deliveries............................... 9
ARTICLE III CLOSING;
ASSIGNMENT.......................................... 10
SECTION 3.1 The
Closing........................................... 10
ARTICLE IV REPRESENTATIONS OF THE
PARTIES................................ 11
SECTION 4.1 Representations
of the Sellers........................ 11
SECTION 4.2 Representations
of the Purchaser...................... 14
SECTION 4.3 No Other
Representations or Warranties................ 16
ARTICLE V
COVENANTS......................................................
16
SECTION 5.1 Conduct of
Business................................... 16
SECTION 5.2 Certain
Changes....................................... 17
SECTION 5.3 Access and
Confidentiality............................ 18
SECTION 5.4 Reasonable Efforts;
Other Filings..................... 18
SECTION 5.5 Additional
Instruments................................ 20
SECTION 5.6 Marks;
Branding....................................... 20
SECTION 5.7 Notice to
Customers................................... 20
SECTION 5.8 Intentionally
Omitted................................. 20
SECTION 5.9 Post-Closing
Access................................... 20
SECTION 5.10 Cooperation in
Litigation............................. 21
SECTION 5.11 Bulk Sales
Law........................................ 21
SECTION 5.12 Sellers other than the
Parent......................... 21
SECTION 5.13 Other
Negotiations.................................... 21
SECTION 5.14 No
Waiver............................................. 21
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TABLE OF CONTENTS
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ARTICLE VI
TAXES.........................................................
22
ARTICLE VII
CONDITIONS...................................................
23
SECTION 7.1 Conditions to
Each Party's Obligations to
Effect the Purchase and Assumption................. 23
SECTION 7.2 Conditions to
Obligations of the Purchaser............ 24
SECTION 7.3 Conditions to
Obligations of the Sellers.............. 24
ARTICLE VIII
TERMINATION.................................................
25
SECTION 8.1
Termination........................................... 25
SECTION 8.2 Effect of
Termination................................. 26
ARTICLE IX SURVIVAL;
INDEMNIFICATION..................................... 26
SECTION 9.1
Survival.............................................. 26
SECTION 9.2 Indemnification
by the Sellers........................ 26
SECTION 9.3 Indemnification
by the Purchaser ..................... 27
SECTION 9.4 Notice,
Settlements and Other Matters................. 28
ARTICLE X
MISCELLANEOUS..................................................
30
SECTION 10.1
Notices............................................... 30
SECTION 10.2
Expenses.............................................. 31
SECTION 10.3 Successors and
Assigns................................ 31
SECTION 10.4 Entire Agreement;
Amendment; Waiver................... 32
SECTION 10.5
Counterparts.......................................... 32
SECTION 10.6 Governing
Law......................................... 32
SECTION 10.7 Waiver of Jury
Trial.................................. 32
SECTION 10.8 Severability
......................................... 32
SECTION 10.9 Public
Announcement................................... 32
SECTION 10.10 Third-Party
Beneficiaries............................. 32
SECTION 10.11 Further
Assurances.................................... 32
SCHEDULES AND ANNEXES
Schedule A Closing Statement
Schedule B Write-Off Policy
Schedule C Certain Defined Terms
Annex A Form of
Program Agreement
Annex B Form of
Assignment and Assumption Agreement
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ii
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PURCHASE, SALE
AND SERVICING TRANSFER AGREEMENT, dated as of April 26, 2005
(this "Agreement"), among Blair
Corporation, a Delaware corporation (the
"Parent"), JLB Service Bank of Delaware, a
bank organized under the laws of the
state of Delaware ("JLB"), Blair Credit
Services Corporation, a Delaware
corporation ("BCSC"), Blair Factoring
Company, a Delaware corporation ("BF"),
and World Financial Capital Bank, an
industrial loan bank with its principal
offices located in Utah (the
"Purchaser").
RECITALS
WHEREAS, the
Parent is, among other things, (i) engaged in the business of
selling merchandise through catalogs,
retail stores and by other means and (ii)
directly and indirectly through certain of
its Subsidiaries, including JLB, BCSC
and BF, engaged in the Business (as defined
herein);
WHEREAS,
pursuant to this Agreement, the Parent and its Subsidiaries
JLB,
BCSC and BF desire to sell to the
Purchaser, and the Purchaser desires to
purchase from the Sellers (as defined
below), the Acquired Assets (as defined
below) used in the Business pursuant to the
terms contained and in the manner
described herein;
WHEREAS, the
Parent entered into that certain Receivables Purchase
Agreement, dated as of December 20, 2001,
as amended and/or supplemented through
the Closing Date (the "Pooling Agreement"),
by and among, BF, as seller, BCSC as
servicer, and PNC Bank, National
Association and the conduit purchaser party
thereto (collectively, the "Pooling
Agreement");
WHEREAS, on the
date hereof, the Parent and the Purchaser are entering into
a Program Agreement (the "Program
Agreement") in the form attached hereto as
Annex A, to become effective as of the
Closing under this Agreement, that
provides for, among other things, the
issuance of Parent proprietary cards, the
issuance of existing and new credit related
products to be developed with the
Purchaser, the processing and servicing of
the related accounts, and the conduct
of related marketing activities; and
WHEREAS, simultaneously with
the Closing under this Agreement, the Sellers,
the Purchaser and certain of their
respective Affiliates desire to enter into
other agreements in connection with the
transactions contemplated hereby.
NOW, THEREFORE,
in consideration of these premises, and of the mutual
representations and agreements contained in
this Agreement, the parties agree as
follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1
Definitions of Certain Terms.
(a) In this
Agreement, the following terms are used with the meanings
assigned below:
"Account
Agreement" means an agreement (including related disclosure)
between Sellers or their Affiliates and a
Person or Persons under which accounts
are established and pursuant to which
credit is made available to or on behalf
of such Person or Persons, as such
agreement may be amended, modified or
otherwise changed from time to time
(including pursuant to change of terms
notices).
"Accrued
Interest" means the aggregate amount of all finance charges
that
were accrued and earned, but not posted to
the Eligible Accounts as of the
Cut-Off Time.
"Acquired
Assets" means all right, title and interest of the Sellers,
free
of any Liens, in and to the following
assets and properties:
(1) the Eligible
Accounts and the Gross Receivables accrued as of the
Cut-Off Time related to the Eligible Accounts;
(2)
the applications for
Eligible Accounts pending and solicitations
for Eligible Accounts outstanding;
(3) the Account
Agreements and the Master File;
(4) the Bad Debt
Inventory;
(5) the Books and
Records;
(6) rights, claims,
credits, causes of action and rights of set-off
against third parties relating principally to the Business or
any
Acquired Assets; and
(7) the Scoring
Models.
"Action" means
any claim, action, complaint, investigation, subpoena,
petition, suit or other proceeding, whether
civil, criminal or administrative,
in law or in equity, or before any
arbitrator or Governmental Authority.
"Affiliate"
means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or
under common control with such Person.
"Applicable
Order" means, with respect to any Person, a judgment,
injunction, writ, decree or order of any
Governmental Authority, in each case
legally binding on that Person or on any of
its property.
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"Assumed
Liabilities" mean the following Liabilities of the Sellers:
(1) all obligations to
Customers from and after the Closing Date in
respect of Eligible Accounts to perform under Account
Agreements,
including payment of credit balances as of the Cut-Off Time;
(2) all fees, normal
operating assessments and other charges relating
to the Eligible Accounts that are incurred or accrue on or
after
the Closing Date;
(3) all Liabilities
for Taxes relating to the Business or the
Acquired Assets to the extent set forth in Article VI; and
(4) all obligations
relating to Bad Debt Inventory after the Closing
Date.
"Bad Debt
Inventory" shall mean all accounts charged off by Blair for any
reason (but excluding commissions of
collection agencies), except those accounts
twenty-four (24) months or greater past due
that Blair is in the process of
selling in the ordinary course of business
at the date of this Agreement.
"Books and
Records" means books, records, original documents, files and
papers maintained by or for the Sellers,
whether in hard copy or electronic
format, in each case to the extent within
any Seller's control and/or possession
and principally used in the Business, other
than Tax returns or Tax workpapers.
"Business" means
the business relating to the Eligible Accounts, including
the extension of credit to Customers, the
servicing and management of the
Eligible Accounts, billings, collections,
processing of Eligible Account
transactions and the administration of the
Eligible Accounts and Gross
Receivables, and any actions taken with
respect to the Bad Debt Inventory.
"Business Day"
means any day other than a Saturday, a Sunday or a day on
which banks located in New York or
Pennsylvania generally are required or
authorized by law or executive order to
close.
"Code" means the
Internal Revenue Code of 1986, as amended.
"Constituent
Documents" means the articles of association, articles of
incorporation, certificate of
incorporation, by-laws and/or other organizational
documents, as appropriate, of any
Person.
"Contract"
means, with respect to any Person, any agreement, undertaking,
contract, indenture, deed of trust or other
instrument, document or agreement by
which that Person, or any amount of its
properties, is bound and/or subject.
"Conversion
Date" has the meaning assigned to such term in the Program
Agreement.
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"Customer" means
a Person or Persons at no time employed by Parent or any
of its Affiliates in whose name(s) a credit
account has been established
pursuant to an Account Agreement.
"Cut-Off Time"
means 11:59 PM Eastern time on the date immediately
preceding the Closing Date.
"Eligible
Account" means, as of the Cut-Off Time, any account that is
current through 179 days past due,
identified by name and account number under
which a purchase or credit transaction may
be or has been made by a Customer,
which has not been nor should have been
written-off as part of the Sellers'
normal policies and procedures, and for
which an Account Agreement is in effect
as of the Closing Date; provided that
"Eligible Account" shall not include any
account where the accountholder is deceased
or has been declared incompetent or
is subject to any petition under federal
bankruptcy law, which account has been
found to be fraudulent, as to which the
accountholder is under 18 years of age
or is not an individual or which account is
maintained in a corporate or
business name, as to which account there is
no valid Account Agreement, which
account is subject to a claim or
litigation, or a final Office of Foreign Assets
Control check, or which account is more
than 180 days past due.
"Eligible
Receivables" means all Gross Receivables.
"Estimated
Closing Statement" means a statement prepared by the Sellers,
substantially in the form of Schedule A,
showing in reasonable detail the
Sellers' calculation of the Estimated
Purchase Price.
"Estimated
Purchase Price" means the calculation of the Purchase Price
based on data available as of the close of
business on the fifth Business Day
preceding the Closing Date, in accordance
with the Estimated Closing Statement.
"Federal Funds
Rate" means the offered rate as reported in The Wall Street
Journal in the "Money Rates" section for
reserves traded among commercial banks
for overnight use in amounts of one million
dollars or more or, if no such rate
is published for a day, the rate published
for the preceding Business Day.
"Final Closing
Statement" means a statement prepared by the Purchaser,
substantially in the form of Schedule A,
showing in reasonable detail the
Purchaser's calculation of the Purchase
Price, based on the Eligible Accounts
and the Acquired Assets as of the Cut-Off
Time.
"GAAP" means
generally accepted accounting principles in the United States.
"Governmental
Authority" means any domestic or foreign governmental,
regulatory or self-regulatory authority,
agency, court, tribunal, commission or
other governmental, regulatory or
self-regulatory entity exercising legislative,
judicial, regulatory or administrative
functions.
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"Gross
Receivables" means all amounts owing (after deduction of credit
balances scheduled as of the Cut-Off Time
and unapplied cash) to the Sellers
from Customers with respect to Eligible
Accounts (including outstanding loans,
cash advances and other extensions of
credit; billed or posted but unbilled
finance charges and late charges; Accrued
Interest; and any other fees, charges
and interest assessed on the Eligible
Accounts) as of the Cut-Off Time (or,
solely with respect to the Estimated
Closing Statement, as of the close of
business on the fifth Business Day
preceding the Closing Date).
"HSR Act" means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Indemnity Cap
Amount" has the meaning set forth on Schedule C.
"Indemnity
Deductible" has the meaning set forth on Schedule C.
"Intellectual
Property Right" means any intellectual property right,
including any trademark, service mark or
other source indicator, invention,
patent, copyright, trade secret, know-how,
and any registration or application
for registration of any of the
foregoing.
"Knowledge"
means the actual knowledge of the executive officers of the
respective parties who have managerial
responsibility for the relevant area of
the party's business or operations.
"Liability"
means any debt, liability, commitment or obligation, of any
kind whatsoever, whether due or to become
due, known or unknown, accrued or
fixed, absolute or contingent, or
otherwise.
"Lien" means,
with respect to any property, any lien, security interest,
mortgage, pledge, charge or encumbrance
relating to that property, including the
interest of a vendor or lessor under any
conditional sale agreement, capital
lease or other title retention agreement
relating to such property, or tax
related lien.
"Master File"
means the master file maintained by the Sellers with respect
to the Eligible Accounts, including
identification and other Customer data and
Eligible Account information, the names and
addresses of Customers with respect
to the Eligible Accounts and any and all
Eligible Account adjustments made by or
on behalf of the Sellers in the form
commonly maintained by Sellers or an
Affiliate of Sellers.
"Material
Adverse Effect" means:
(a) With respect to
the Business, a material adverse change in, or a
material adverse effect upon, the results of operations or
financial condition of the Business, taken as a whole,
excluding
any effect or change attributable to or resulting from (1)
events, conditions or occurrences in economic, business or
financial conditions generally affecting the consumer credit
business or banking industry, (2) financial market conditions,
including interest rates or changes therein, (3)
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changes in laws, GAAP or regulatory accounting principles, (4)
any action, omission, change, effect, circumstance or condition
contemplated by this Agreement, or attributable to the signing
and announcement of this Agreement or the transactions
contemplated by this Agreement or (5) any actions or omissions
required by the terms of this Agreement; and
(b) With respect to
the Sellers or the Purchaser, impairment of the
ability of the relevant Person or Persons to perform its or
their
obligations under this Agreement.
"Permissible
Liens" means Liens for taxes, assessments and other
governmental charges or levies not yet due
or which are being contested in good
faith by appropriate action.
"Person" means
any individual, corporation, business trust, partnership,
association, limited liability company or
similar organization, or any
Governmental Authority.
"Previously Disclosed"
means, with respect to the Seller or the Purchaser,
information previously given in writing by
one party to the other party, whether
in response to an express informational
requirement or as an exception to one or
more representations or covenants.
"Purchase Price"
means the purchase price as defined in Schedule A, payable
in accordance with the Final Closing
Statement, as finally determined in
accordance with Section 2.3.
"Requirement of
Law" means, with respect to any Person, any law, ordinance,
statute, treaty, rule or regulation or
determination of an arbitrator or of a
Governmental Authority, in each case
applicable to or binding on that Person or
any material amount of its property.
"Requisite
Regulatory Approvals" means the consents, registrations,
approvals, permits or authorizations
referred to in clause (i) of Section
7.1(a).
"Scoring Models"
means the Customer risk scorecard and the Customer
behavioral risk scorecard developed on
behalf of the Sellers relating to the
Eligible Accounts and maintained by Sellers
or an Affiliate of Sellers.
"Sellers" means
the Parent, JLB, BCSC and BF.
"Subsidiary"
means, with respect to any Person, any other Person a majority
of the outstanding voting securities of
which are owned directly or indirectly
by such Person.
"Tax Return"
means any return, declaration, report or similar statement
required to be filed with respect to any
Taxes (including any attached
schedules) including any information
return, claim for refund, amended return
and declaration of estimated Tax.
"Taxes" means
(A) any income, alternative or add-on minimum tax, gross
receipts, sales, use, transfer, gains, ad
valorem, franchise, profits, license,
withholding, payroll, employment,
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excise, severance, stamp, occupation,
premium, property, environmental or
windfall profit tax, custom, duty or other
tax, governmental fee or other like
assessment or charge, together with any
interest or any penalty, addition to tax
or additional amount imposed by any
Governmental Authority responsible for the
imposition of any such tax (domestic or
foreign), and (B) any Liability of the
Sellers for the payment of any amounts of
the type described in clause (A) above
as a result of being a member of an
affiliated, consolidated, combined or
unitary group for any period.
(b) Each of the
following terms is defined in the section of this Agreement
set forth opposite such term:
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Agreement................... Preamble
Allocation Statement........ 2.4(a)
BF (and JLB and BCSC)....... Preamble
Closing..................... 3.1(a)
Closing Date................ 3.1(a)
Confidentiality Agreement... 5.3(c)
Indemnified Party........... 9.4(a)
Indemnifying Party.......... 9.4(a)
Losses...................... 9.2
Parent...................... Preamble
Pooling Agreement........... Recitals
Program Agreement........... Recitals
Purchase and Assumption..... 3.1(a)
Purchaser................... Preamble
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SECTION 1.2
Interpretation.
(a) In this
Agreement, unless the context otherwise requires, references
to:
(i) the Preamble or the Recitals, Sections, Annexes or Schedules
refer
to the Preamble or a Recital or Section of,
or Annex or Schedule to, this
Agreement;
(ii) any statute or regulation refer to the statute or regulation
as
amended, modified, supplemented or replaced
from time to time (and, in the case
of statutes, include any rules and
regulations promulgated under the statute)
and to any section of any statute or
regulation include any successor to the
section;
(iii) any Governmental Authority include any successor to the
Governmental Authority; and
(iv) this Agreement are to this Agreement, the Schedules, and to
the
Annexes hereto.
(b) The table of
contents and headings contained in this Agreement are for
reference purposes only and do not limit or
otherwise affect any of the
provisions of this Agreement.
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(c) Whenever the
word "include," "includes" or "including" is used in this
Agreement, it will be deemed to be followed
by the words "without limitation."
(d) Unless the
context otherwise requires, the word "or" when used in this
Agreement will be deemed to have the
inclusive meaning represented by the phrase
"and/or."
(e) This
Agreement is the product of negotiation by the parties having
the
assistance of counsel and other advisers.
It is the intention of the parties
that this Agreement not be construed more
strictly with regard to one party than
with regard to the other.
ARTICLE II
PURCHASE, SALE AND ASSUMPTION
SECTION 2.1
Purchase and Sale of Assets. On the terms and subject to the
conditions of this Agreement at the time of
the Closing, and effective from and
after the Closing Date, the Sellers shall
sell, convey and assign to the
Purchaser, free and clear of all Liens,
except Permissible Liens, the Acquired
Assets, and the Purchaser agrees to
purchase all such Acquired Assets.
SECTION 2.2
Assumption of Liabilities. On the terms and subject to the
conditions of this Agreement from and after
the Closing Date, the Purchaser
agrees to assume, pay, defend, discharge
and perform as and when due the Assumed
Liabilities.
SECTION 2.3
Purchase Price; Purchase Price Adjustment.
(a) On the
second Business Day before the Closing, the Parent, on behalf
of
the Sellers, will deliver to the Purchaser
the Estimated Closing Statement
reflecting the Sellers' calculation of the
Estimated Purchase Price to be paid
by the Purchaser at the Closing.
(b) Within sixty
(60) Business Days after the Closing, Purchaser will
deliver to Parent the Final Closing
Statement prepared based on the information
in the Master File and the other Acquired
Assets as of the Cut-Off Time and
copies of the Master File as of the Cut-Off
Time and all material working papers
relating to the Final Closing
Statement.
(c) The Parent
shall, within fifteen (15) days after receipt of the Final
Closing Statement, advise the Purchaser in
writing and in reasonable detail of
any inaccuracies it believes were reflected
in the Final Closing Statement. In
the event no such objection is delivered to
the Purchaser within such time
period, the Final Closing Statement, as
delivered to the Parent, shall be final
and binding upon the parties. In the event
the Parent delivers such an
objection, the Sellers and the Purchaser
shall attempt in good faith to resolve
their differences. In the event all
differences are not resolved within thirty
(30) days following receipt of the Final
Closing Statement by the Parent, then
the issues remaining unresolved shall be
determined by an independent public
accountant mutually acceptable to the
Parent and the Purchaser (the
"Accountant"). The Accountant shall resolve
all disputed items in accordance
with the provisions of this Agreement. In
making its determination, the
Accountant may only consider
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those items and amounts as to which the
Purchaser and the Sellers have disagreed
within the time periods and the permitted
grounds specified. The Accountant's
determination will be conclusive and
binding on the Purchaser and the Sellers
absent manifest error. The fees of the
Accountant will be shared by the
Purchaser and the Sellers in proportion to
the relative differences between
their respective calculations of the
Purchase Price and the amount determined by
the Accountant.
(d) If the
Estimated Purchase Price exceeds the Purchase Price, then the
Parent, on behalf of the Sellers, shall,
within five (5) Business Days after the
Purchase Price has been finally determined
pursuant to Section 2.3(c), pay such
excess to the Purchaser, together with
interest on such excess for the period
from and including the Closing Date to but
excluding the date of such payment at
a rate per annum equal to the Federal Funds
Rate. If the Estimated Purchase
Price is less than the Purchase Price, then
the Purchaser shall, within five (5)
Business Days after the Purchase Price has
been finally determined pursuant to
Section 2.3(c), pay such deficiency to the
Parent on behalf of the Sellers,
together with interest on such deficiency
for the period from and including the
Closing Date to but excluding the date of
such payment at a rate per annum equal
to the Federal Funds Rate. Each party to
this Agreement will make available to
the other parties, and to the Accountant,
its and its accountants' work papers,
schedules and other supporting data as may
be reasonably requested by such party
to enable it to verify the amounts set
forth in the Final Closing Statement.
SECTION 2.4
Intentionally Omitted.
SECTION 2.5
Intentionally Omitted.
SECTION 2.6
Reimbursement For Non-Eligible Accounts. If Sellers transfer
any non-Eligible Accounts and related Gross
Receivables to the Purchaser, then
during the one hundred eighty (180) day
period following the Closing Date, the
Sellers shall promptly, following written
notice to the Sellers by the
Purchaser, repurchase all such non-Eligible
Accounts and related Gross
Receivables. The Sellers shall pay to the
Purchaser, for any such repurchases,
an amount equal to the Purchase Price of
the Eligible Accounts and/or Gross
Receivables together with interest at the
Federal Funds Rate on such Purchase
Price from the Closing Date to the date of
payment, and the Purchaser will
reassign such non-Eligible Accounts and/or
Gross Receivables to the Sellers and
the Purchaser will promptly credit against
the Seller's payment all Customers'
payments received for such non-Eligible
Accounts. The Sellers will assume any
obligations of the Purchaser to refund such
Customer payments. This provision
applies only to accounts that were not
charged off by Blair prior to Closing.
SECTION 2.7
Post-Closing Deliveries.
(a) The Sellers
shall be entitled to retain all payments from Customers on
Eligible Accounts posted by the Sellers
prior to the cut-Off Time.
(b) All payments
posted to the Eligible Accounts by the Sellers after the
Cut-Off Time shall be deposited by the
Sellers in their own account and
thereafter settled with the Purchaser in
accordance with the provisions of this
Section 2.7. The Purchaser hereby
authorizes and empowers the Sellers to sign
and endorse (without recourse by the
Purchaser against the Sellers
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with respect to such endorsement) the
Purchaser's name as the Purchaser's
attorney-in-fact on all checks, drafts,
money orders or other forms of payment
relating to such Eligible Account so
received by the Sellers but payable to the
order of the Purchaser. Within 24 hours
after the end of each Business Day, the
Sellers will provide the Purchaser with a
computer tape listing all said
payments containing the amount and Eligible
Account number for each payment so
received by the Sellers. The Sellers will
transfer via wire transmission or
automated clearinghouse said funds to the
Purchaser, without cost to the
Purchaser, for the first thirty (30) days
after the Closing Date, on each Friday
following the Closing and monthly
thereafter. If the Purchaser receives any
checks, drafts, money orders or other forms
of payment relating to the Eligible
Accounts subsequent to the Cut-Off Time,
which instruments are payable to the
order of the Sellers, the Sellers hereby
authorize and empower the Purchaser to
sign and endorse (without recourse by the
Sellers against the Purchasers with
respect to such endorsement) the Seller's
name as the Sellers' attorney-in-fact
on such Eligible Accounts to facilitate the
deposit thereof. If any such payment
is sent to the Purchaser later than
specified above, such payment shall be
accompanied by interest on such amount
calculated on the basis of an interest
rate equal to the Federal Funds Rate for
each day during the period between the
date of receipt of such payment by the
Sellers and the date the Sellers pay the
Purchaser.
ARTICLE III
CLOSING; ASSIGNMENT
SECTION 3.1 The
Closing.
(a) The closing
(the "Closing") of the purchase and sale of the Acquired
Assets and assumption of the Assumed
Liabilities hereunder (collectively, the
"Purchase and Assumption") will take place
through the wire transfer of the
Estimated Purchase Price and facsimile
exchange, together with subsequent
overnight courier exchange, of the required
closing documents, on the Business
Day after the last of the conditions set
forth in Sections 7.1, 7.2 and 7.3
(other than conditions relating solely to
the delivery of documents to be dated
the Closing Date) has been satisfied or
waived in accordance with the terms of
this Agreement or at such other date as the
parties hereto jointly designate in
writing (the "Closing Date").
(b) At the
Closing, the Purchaser will, and the Sellers will, deliver or
cause to be delivered to each other an
agreement of sale, assignment, transfer
and conveyance of the Acquired Assets and
assumption of the Assumed Liabilities,
respectively, in substantially the forms
set forth in Annex B and such other
instruments as are necessary or appropriate
to reflect any alternative
arrangements described in Section 2.5,
appropriately executed by the Sellers and
the Purchaser.
(c) At the
Closing, the Purchaser will pay the Estimated Purchase Price by
initiating a wire transfer of immediately
available funds (in U.S. dollars) on
the Closing Date to an account or accounts
specified by the Parent at least one
Business Day prior to the Closing Date.
(d) If a credit
is posted to an Eligible Account after the Cut-Off Time
with respect to a Gross Receivable arising
prior to the Cut-Off Time, the
Purchaser shall notify the Sellers and the
Sellers shall send to the Purchaser
the amount of such credit. Such payments
shall be transmitted
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to the Purchaser on each Friday following
the Closing Date. If any such payment
is sent to the Purchaser later than
specified above, such payment shall be
accompanied by interest on such amount
calculated on the basis of an interest
rate equal to the Federal Funds Rate for
each day during the period between the
date of such credit and the date the
Sellers pay the Purchaser.
ARTICLE IV
REPRESENTATIONS OF THE PARTIES
SECTION 4.1
Representations of the Sellers. The Sellers represent to the
Purchaser as follows, Purchaser
acknowledging that as of the date of this
Agreement the Pooling Agreement and related
agreements are in full force and
effect and the following representations
are subject to the termination thereof
in accordance with Section 7.1 and 7.2(a)
thereof:
(a) Existence
and Authority. Each Seller is duly organized and validly
existing under its jurisdiction of
organization. Each Seller has the requisite
power and authority to own the Acquired
Assets owned by it and to carry on the
Business as currently conducted by it, and
is duly qualified to do business in
each jurisdiction where its the ownership
or operation of the Acquired Assets or
its conduct of the Business requires such
qualification, except for any failure
to have such authority or be so qualified
that would not reasonably be expected
to have a Material Adverse Effect on the
Business or the Sellers.
(b)
Authorization and Validity. Each Seller has the requisite
corporate
power and authority to execute, deliver and
perform its obligations under this
Agreement. This Agreement has been duly
authorized by each Seller party thereto.
This Agreement has been duly executed and
delivered by each Seller. Subject to
required regulatory filings with and
approvals by the Federal Deposit Insurance
Corporation and the [Delaware Banking
Department], and assuming that this
Agreement has been duly authorized,
executed and delivered by the Purchaser,
this Agreement is the legal, valid and
binding obligation of the Sellers,
enforceable against Sellers in accordance
with its terms, subject to applicable
bankruptcy, insolvency, moratorium,
reorganization, fraudulent transfer and
other laws affecting creditors' rights
generally and to general equitable
principles.
(c) Governmental
and Third-Party Consents. Except for any notification that
may be required under the HSR Act, the Bank
Merger Act and Delaware banking law,
no notices, reports or other filings are
required to be made by the Sellers
with, nor are any consents, registrations,
approvals, permits or authorizations
required to be obtained by the Sellers
from, any Governmental Authority or any
other third party in connection with the
execution, delivery or performance of
this Agreement by the Sellers or the
consummation by them of the transactions
contemplated by this Agreement, except for
such notices, reports, filings,
consents, registrations, approvals, permits
or authorizations which have been
given or made or those the failure to
obtain which would not have a Material
Adverse Effect on the Business or the
Sellers.
(d) No
Conflicts. The execution, delivery and performance by the Sellers
of
this Agreement does not, and (subject to
obtaining the Previously Disclosed
governmental and third-party consents
referred to in Section 4.1(c)) the
consummation of the transactions
contemplated by this Agreement will not:
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(i) Breach or violate the Constituent Documents of the Sellers;
(ii) Breach or violate any Requirement of Law or Applicable
Order
applicable to the Sellers;
(iii) Breach, violate or result in a default under the terms,
conditions or provisions of any Contract of
any Seller, or give any third party
the right to terminate or cancel any right
of any Seller under any Contract of
such Seller, or accelerate the performance
of its obligations thereunder, in
each case where such Contract relates to
the Business or is binding upon the
Acquired Assets; or
(iv) Result in the creation of any Lien (other than Permissible
Liens)
on any Acquired Asset other than a
Permissible Lien (with or without the giving
of notice or the lapse of time, or
both);
except in each case described in clause
(ii), (iii) or (iv), for any breach,
violation, default, termination,
cancellation, acceleration or Lien that would
not reasonably be expected to have a
Material Adverse Effect on the Sellers or
on the Business prior to the Closing
Date.
(e) Absence of
Certain Changes.
(i) Since January 1, 2005, the Business has been conducted in
the
ordinary course and there has not been any
change in the financial condition or
results of operations of the Business that
has had or would reasonably be
expected to have a Material Adverse Effect
on the Business prior to the Closing
Date or the Sellers.
(ii) Set forth on Schedule B hereto is a true and complete copy of
the
write-off policy of each of the Sellers as
in effect on January 1, 2005. Since
January 1, 2005 (A) the Eligible Accounts
and Gross Receivables have been
underwritten, established, administered,
serviced, collected, terminated and
charged-off in the ordinary course
consistent with Sellers' past practice, and
(B) Sellers have not materially amended,
modified or supplemented or otherwise
made any material changes to the policies
and procedures as in effect on such
date.
(f) Title to
Properties; Encumbrances. Each Seller has good title to or a
valid leasehold interest in, or is licensed
or otherwise entitled to use, all of
the Acquired Assets owned or used by it
(other than the Eligible Accounts, to
which Section 4.1(k) is applicable), free
and clear of all Liens other than
Permissible Liens.
(g) Litigation.
There are no Actions pending, in arbitration or before any
Governmental Authority against any Seller
in connection with the Business or any
Acquired Asset, or to the Sellers'
Knowledge, threatened against any of the
Sellers with respect to the Business or
Acquired Assets, in each case that would
reasonably be expected to have a Material
Adverse Effect on the Business or
Acquired Assets prior to the Closing
Date.
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(h) Books and
Records. All Books and Records of the Sellers relating to the
Business have been maintained accurately
and in accordance with GAAP (where
applicable) and with all Requirements of
Law applicable to the Sellers and the
Business, except for any instances of
inaccuracy or noncompliance that would not
reasonably be expected to have a Material
Adverse Effect on the Business or the
Sellers.
(i) Compliance
with Laws. Except to the extent that the following would not
reasonably be expected to have a Material
Adverse Effect on the Business or the
Sellers prior to the Closing Date:
(i) the Sellers are in compliance with all Requirements of Law
relating to the Business and the Acquired
Assets; and
(ii) the Sellers are not subject to any capital plan or
supervisory
agreement, order or memorandum between any
of them and any Governmental
Authority.
(j) Account
Agreements; Eligible Accounts and Gross Receivables. Except to
the extent that any of the following would
not have a Material Adverse Effect on
the Business prior to the Closing Date or
the Sellers:
(i) Each Seller is the sole owner of and has good title to its
Eligible Accounts and Gross Receivables and
the Bad Debt Inventory. This
Agreement shall, following the Closing
Date, and subject to the filing of
appropriate financing statements and all
required continuations, amendments and
replacements thereof, vest in the Purchaser
all right, title and interest of the
Sellers in and to the Eligible Accounts,
the Gross Receivables, free and clear
of all Liens.
(ii) Each Account Agreement is a valid and legally binding
obligation
of each obligor thereunder, including any
cosigner, guarantor or surety, in the
full amount thereof set forth in the Books
and Records of the Business, and is
enforceable against such obligors in
accordance with its terms, subject to (A)
claims and defenses on disputed
transactions asserted by a Customer as indicated
on the Master File or the Books and
Records, (B) applicable bankruptcy,
insolvency, reorganization, moratorium,
fraudulent transfer and other laws
relating to or affecting creditors' rights
generally and the effect of general
equitable principles, and (C) the Soldiers'
and Sailors' Civil Relief Act of
1940, as amended. The form of Account
Agreement has been previously provided by
Sellers to Purchaser, and that form
contains all material terms of the Account
Agreement as in effect as of the date of
this Agreement for each of the Eligible
Accounts and the Bad Debt Inventory;
provided that no representation or warranty
is hereby given as to the capacity,
authority or any other factor relating to
the identity or status of the obligor which
may effect the enforceability of the
Account Agreement to which it is party.
(iii) Each Gross Receivable is not subject to offset, refund,
recoupment, reversal, adjustment or any
claim or defense by any Person (other
than claims or defenses on disputed
transactions and refunds of credit balances,
as indic
