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Title: |
Asset Purchase Agreement |
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Entities: |
Metris Companies Inc.; Bank of America, NA; Jones, Day, Reavis & Pogue |
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Date: |
2003 |
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Size: |
Preview shows 24KB of 245KB total |
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Price: |
$54 |
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ID: |
#354523 |
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ASSET PURCHASE AGREEMENT DATED JULY 29, 2003 BY AND AMONG
METRIS COMPANIES INC., METRIS DIRECT, INC., METRIS DIRECT SERVICES, INC.,
METRIS TRAVEL SERVICES INC., METRIS CLUB SERVICES, INC.,
METRIS WARRANTY SERVICES, INC., AND METRIS WARRANTY SERVICES OF FLORIDA, INC.,
CPP HOLDINGS LIMITED AND CPP US OPERATIONS GROUP, LLC
Table of Contents
Page
ARTICLE I
PURCHASE AND SALE, PURCHASE PRICE, ASSUMED LIABILITIES AND RETAINED ASSETS
1
1.1 Purchase and Sale of the Purchased Assets............................1
1.2 Purchase Price.......................................................4
1.3 Assumed and Excluded Liabilities.....................................4
1.4 Consent of Third Parties; Authorizations.............................7
1.5 Retained Assets......................................................9
ARTICLE II
DEFINITIONS
9
2.1 General..............................................................9
2.2 Definitions..........................................................9
2.3 Interpretation......................................................17
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
18
3.1 Status of Sellers; Enforceability; Conflicts; Consents..............18
3.2 Financial Statements................................................20
3.3 Undisclosed Liabilities.............................................20
3.4 Title to Properties; Purchased Assets...............................20
3.5 Real Property.......................................................21
3.6 Real Estate and Personal Property Taxes Assessments.................21
3.7 Inventory...........................................................21
3.8 [Intentionally Omitted].............................................22
3.9 Contracts...........................................................22
3.10 Intellectual Property..............................................23
3.11 Required Assets; Sufficiency of Assets..............................25
3.12 Personnel Identification and Compensation...........................25
3.13 Compliance with Laws and Orders; Regulated Entity...................25
3.14 Products and Services...............................................27
3.15 Absence of Questionable Payments....................................27
3.16 Litigation..........................................................28
3.17 Employee Benefit Plans..............................................29
3.18 Tax Matters.........................................................29
3.19 Consents............................................................30
3.20 Licenses and Permits................................................30
3.21 Insurance...........................................................31
3.22 Conduct of Business.................................................31
3.23 No Bankruptcy Proceedings...........................................33
3.24 No Other Representations and Warranties.............................33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
33
4.1 Status of Purchasers................................................34
4.2 Authority of Purchasers.............................................34
4.3 Due Authorization...................................................34
4.4 Enforceability......................................................34
4.5 Consents............................................................34
4.6 [Intentionally Omitted].............................................35
4.7 No Other Representations and Warranties.............................35
ARTICLE V
COVENANTS
35
5.1 [Intentionally Omitted].............................................35
5.2 [Intentionally Omitted].............................................35
5.3 [Intentionally Omitted].............................................35
5.4 [Intentionally Omitted].............................................35
5.5 [Intentionally Omitted].............................................35
5.6 Publicity...........................................................35
5.7 [Intentionally Omitted].............................................35
5.8 Power of Attorney; Right of Endorsement, Etc........................35
5.9 [Intentionally Omitted].............................................36
5.10 Designated Employees................................................36
5.11 Allocation for Tax Purposes.........................................38
5.12 Post-Closing Taxes..................................................38
5.13 Termination or Layoffs..............................................39
5.14 Settlement Agreement................................................39
5.15 New York Order......................................................39
5.16 [Intentionally Omitted].............................................40
5.17 Cooperation.........................................................40
5.18 Non-Solicitation....................................................40
5.19 Non-Competition.....................................................40
ARTICLE VI
[Intentionally Omitted]
42
ARTICLE VII
[Intentionally Omitted]
42
ARTICLE VIII
CLOSING
42
8.1 Time and Place......................................................42
8.2 Closing Transactions................................................42
8.3 Deliveries by Sellers to Purchasers.................................42
8.4 Deliveries by Purchasers to Sellers.................................43
ARTICLE IX
OTHER AGREEMENTS
44
9.1 Further Assurances..................................................44
9.2 Access to Records, Employees and Shared Contracts After Closing.....44
9.3 Collection of Receivables...........................................45
9.4 Use of Trade Names, Domain Names and Logos..........................45
9.5 UCC Matters.........................................................46
9.6 Confidentiality.....................................................46
9.7 Trade Payables......................................................47
ARTICLE X
INDEMNIFICATION
48
10.1 Survival of Representations and Warranties..........................48
10.2 Indemnification by Sellers..........................................48
10.3 Limits on Indemnification by Sellers................................50
10.4 Indemnification by Purchasers.......................................50
10.5 Specific Breaches...................................................51
10.6 Procedure for Indemnification.......................................52
10.7 Payment.............................................................54
10.8 Recourse Against Sellers............................................54
10.9 Reduction for Insurance.............................................55
10.10 Remedies Exclusive..................................................55
10.11 Limits on Certain Damages...........................................55
10.12 [Intentionally Omitted].............................................55
10.13 Treatments of Payments..............................................55
ARTICLE XI
[Intentionally Omitted]
56
ARTICLE XII
MISCELLANEOUS PROVISIONS
56
12.1 Notices.............................................................56
12.2 Assignment..........................................................57
12.3 Benefit of the Agreement............................................57
12.4 Headings............................................................57
12.5 Entire Agreement....................................................57
12.6 Modifications and Waivers...........................................57
12.7 Counterparts........................................................58
12.8 Severability........................................................58
12.9 Governing Law.......................................................58
12.10 Expenses............................................................58
12.11 Jurisdiction; Waiver of Jury Trial; Venue...........................58
12.12 No Partnership, Agency or Joint Venture.............................59
12.13 Exhibits and Schedules..............................................59
List of Schedules AND EXHIBITS
Schedule Title
1.4(a) Transition Services Agreement Contracts
2.2 Assumed Contracts
3.5 Leased Real Property
3.1(a) Corporate/Authority Exceptions
3.1(d) Corporate/Authority Exceptions
3.1(f) No-transferable Contacts
3.2 Financial Statements
3.4(a) Assets without Title
3.4(b) Notes, Bonds, etc.
3.4(c) Maintenance and Repair Costs
3.4(d) Conduct of Business
3.4(e) Location of Assets
3.5 Real Property
3.9 Contracts
3.10 Intellectual Property
3.11 Required Assets; Sufficiency of Assets
3.12 Personnel and Compensation
3.13(a) Compliance with Laws Exceptions
3.13(c) Compliance with Laws Exceptions
3.13(d) Compliance with Laws Exceptions
3.13(g) Compliance with Laws Exceptions
3.14 Product and Services
3.14(d) Chargebacks and Denials
3.16 Litigation
3.17 Employee Benefits
3.19 Consents
3.20 Licenses and Permits
3.21 Insurance
3.22 Conduct of Business
4.5 Consents
5.10 Designated Employees
5.10(f) Cash Payments under Retention Bonus Plan
5.11 Allocation for Tax Purposes
5.14 Settlement Agreement
Exhibit Title
A Purchased Assets
B Retained Assets
B(1) Retained Intellectual Property
C Schedule of Registered/Filed Intellectual Property
D Employee Offer Letter
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into this 29th day of July 2003, by and
among Metris Companies Inc., a Delaware corporation, Metris Direct, Inc., a
Minnesota corporation, Metris Direct Services, Inc., a Delaware corporation,
Metris Travel Services Inc., a Delaware corporation, Metris Club Services, Inc.,
a Delaware corporation, Metris Warranty Services, Inc., a Delaware corporation,
and Metris Warranty Services of Florida, Inc., a Florida corporation, each of
which is located at 10900 Wayzata Blvd., Minnetonka, Minnesota 55305
(collectively, "Sellers"), and CPP Holdings Limited, a private limited liability
company organized and existing under the laws of England and Wales, and CPP US
Operations Group, LLC a Delaware limited liability company ("CPP US" and,
together with CPP, the "Purchasers").
RECITALS
WHEREAS,
(A) Sellers are engaged in the Business;
(B) Sellers desire to sell substantially all of their assets related to the
Business to CPP US, and CPP US desires to purchase such assets; and
(C) each term defined in this Agreement shall have the meaning ascribed to it in
Article II.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Purchasers and Sellers hereby
agree as follows:
ARTICLE I
PURCHASE AND SALE, PURCHASE PRICE,
ASSUMED LIABILITIES AND RETAINED ASSETS
1.1 Purchase and Sale of the Purchased Assets
(a) Subject to the terms and conditions of this Agreement, Sellers
shall (and shall cause each of their respective Affiliates to),
and each of them hereby does, sell, assign, convey, transfer and
deliver to CPP US (or any Designated Purchaser) and CPP US (or
such Designated Purchaser) shall, and hereby does, purchase from
Sellers the Purchased Assets, free and clear of all Liens of any
kind for the Purchase Price specified below in Section 1.2.
(b) (i) To the extent that any of the Purchased Assets
transferred to CPP US as contemplated herein include
rights that (A) are reasonably necessary for the
operation of any business of Sellers or their respective
Affiliates (other than the Business), (B) were used by
Sellers or their respective Affiliates prior to Closing
in such capacity, and (C) does not relate substantially
to, or is not used substantially in connection with, the
Business, Purchasers agree, to the extent commercially
practicable, to, without further consideration,
transfer, convey, assign, license, sublicense or enter
into another arrangement with Sellers with respect to
such rights or assets so that Sellers have substantially
similar benefits (subject to the burdens) of such rights
and assets for such business as it had prior to the
Closing.
(ii) To the extent that the Purchased Assets (other than real
property, which shall not be subject to this Section
1.1(b)) do not include any right or asset, which (A) was
owned by or licensed to Sellers or their Affiliates at
Closing, (B) is reasonably necessary for the operation
of the Business and (C) related substantially to, or was
used substantially in connection with, the Business
prior to Closing, Sellers agree, to the extent
commercially practicable and subject to Section 1.4 to,
without further consideration, transfer, convey, assign,
license, sublicense or enter into another arrangement
with Purchasers with respect to such right or asset so
that CPP US has substantially similar benefits (subject
to the burdens) of such right or asset in relation to
the conduct of the Business as did Sellers or such
Affiliates in conducting the Business prior to Closing.
(c) For a period of five years from the date of this Agreement, in
the event that Metris Companies Inc. or any of its Subsidiaries
sells, transfers, conveys, assigns or delivers, or enters into
any agreement, contract, arrangement or understanding to sell,
transfer, convey, assign or deliver, all or part of the Credit
Card Business, Metris Companies Inc. or such Subsidiary, as
applicable, will use commercially reasonable efforts to obtain
agreement from the purchaser of the Credit Card Business (the
"CCB Buyer") to allow CPP US to continue to bill active Members.
For the avoidance of doubt, a sale, transfer, conveyance,
assignment or delivery of the Credit Card Business shall only
be deemed to occur in the event that, following such sale,
transfer, conveyance, assignment or delivery, Metris Companies
Inc. or its Subsidiaries are no longer the servicer of the
related credit card accounts.
(i) Subject to subsection (vi) of this Section 1.1(c), in
the event the CCB Buyer agrees to continue billing
Members whose accounts are included as part of the
relevant sale (the "Affected Members") on behalf of
CPP, neither Metris Companies Inc. nor its
Subsidiaries shall have any further obligations to
CPP under this Section 1.1(c) with respect to the
Affected Members.
(ii) In the event the CCB Buyer does not agree to continue
billing Affected Members active as of the date of the
sale of the Credit Card Business, Metris Companies
Inc. will owe compensation to CPP US for its lost
income equal to the Net Present Value of the revenues
to be expected from Affected Members, according to
the following formula:
Net Present Value of the revenues to be expected from
Affected Members shall be calculated by extrapolating
the following results from the date of the sale of
the Credit Card Business to the date that is five
years from the Closing Date:
(A) Unbilled net revenue (gross billings less
cancellations) of then active memberships of Affected
Members eligible for Product renewal terms,
determined using the then-current membership price
and the actual average cancellation rate of each
applicable Product over the six month period
immediately preceding the sale, transfer, conveyance,
assignment or delivery of the Credit Card Business or
applicable portion thereof,
(B) Less the amount of compensation payable to Metris
Companies Inc. or its Subsidiaries under any
applicable then-current compensation program for each
Product,
(C) Less the amount of CPP US's average renewal
marketing expense, calculated by taking average renewal
marketing expense for each Product as a percentage of
net renewal revenues over the six month period
immediately preceding the sale, transfer, conveyance,
assignment or delivery of the Credit Card Business or
applicable portion thereof,
(D) Less the amount of claims expense incurred by CPP
US, calculated by taking average claims expense for each
Product as a percentage of net revenues over the six
month period immediately preceding the sale,
transfer, conveyance, assignment or delivery of the
Credit Card Business or applicable portion thereof,
applied to the renewing memberships for each Product,
(E) Less the amount of servicing expense expected to be
incurred by CPP US, calculated by taking the average
renewal servicing expense for each Product as a
percentage of net renewal revenues for that Product
over the six month period immediately preceding the
sale, transfer, conveyance, assignment or delivery of
the Credit Card Business or applicable portion
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