Execution Copy
GE CAPITAL/GE BANK CREDIT SERVICES AGREEMENT *
This GE CAPITAL/GE BANK CREDIT SERVICES AGREEMENT,
dated as of June 4, 1996, is entered into by and among General
Electric Capital Corporation ("GE Capital") and GE Capital
Consumer Card Co. ("GE Bank"). Certain capitalized terms used
herein have the meanings given to them in Article 1 hereof or, if
not defined herein, have the meanings given to them in the
Program Agreement.
WHEREAS, GE Bank is the owner of the GE/Macy's Accounts
and desires to retain GE Capital to provide the GE Capital
Services, with respect thereto;
WHEREAS, FDS Bank is the owner of the FDS/Macy's
Accounts and simultaneously herewith GE Capital is entering into
the GE Capital Services Agreement pursuant to which it will
provide the GE Capital Services to FDS Bank with respect to the
FDS/Macy's Accounts and certain other accounts owned by FDS
(collectively, the "FDS Serviced Accounts");
WHEREAS, GE Capital, FDS, GE Bank and FDS Bank desire
that GE Capital provide the GE Capital Services with respect to
the FDS/Macy's Accounts on substantially the same terms and
conditions that it provides the GE Capital Services with respect
to the GE/Macy's Accounts;
WHEREAS, FDS Bank and GE Bank wish to facilitate
generally uniform treatment of, and performance by, the GE/Macy's
Accounts and the FDS/Macy's Accounts by utilizing common systems
and software for the servicing of all such accounts;
WHEREAS, in furtherance of the foregoing, GE Capital
and GE Bank are entering into this Agreement for purposes of
setting forth the terms and conditions that will govern the
provision of certain services by GE Capital to GE Bank.
NOW, THEREFORE, in consideration of the terms and
mutual covenants 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:
Rider X
______________________
* Confidential portions of this Exhibit have been omitted
and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
ARTICLE 1
DEFINITIONS
1.1 Definitions
. When used in this Agreement, the following
capitalized terms shall have the meaning specified below:
"Agreement" means this GE Capital/GE Bank Credit
Services Agreement as it may be amended, modified or restated
from time to time.
"FDS Information" means data with respect to GE/Macy's
Accounts transmitted by computer to GE Capital.
"FDS Information Condition" means, with respect to any
FDS Information, that (i) such information is received by GE
Capital at a time which allows GE Capital to perform the GE
Capital Services as required hereby, (ii) such information is
complete and accurate and (iii) such information is in a form
that is readily usable by the GE Credit System.
"GE Bank Event of Default" has the meaning given to it
in Section 8.3.
"GE Capital Event of Default" has the meaning given to
it in Section 8.1.
"GE Capital Services" means the services required to be
provided by GE Capital hereunder with respect to the GE/Macy's
Accounts as described in Article 3 hereof and in Section I of
Exhibit A hereto.
"GE Credit System" means the mainframe computer system
and GE Credit Software developed, owned and utilized by GE
Capital to provide credit processing services, as the same may be
modified, enhanced or replaced from time to time after the date
hereof.
"Material Adverse Effect" means any material adverse
change in the quality or financial condition of the GE/Macy's
Accounts, taken as a whole.
"Program Agreement" means the Amended and Restated
Credit Card Program Agreement, dated as of the date hereof,
entered into by and among FDS, FDS Bank, GE Bank and the other
parties thereto as it may be amended, modified or restated from
time to time.
"Service Fees" means the fees payable by GE Bank for
the GE Capital Services, as specified in Article 3.
"Service Standards" means the minimum service
performance levels at which the GE Capital Services are required
to be provided hereunder, as specified in Section II of Exhibit
A.
"Term" has the meaning given to it in Section 2.1
hereof.
1.2. General
. Except as the context may otherwise require, (i)
words of any gender include the other gender, (ii) words using
the singular or plural number also include the plural or singular
number, respectively, (iii) the terms "hereof", "herein",
"hereby", and any derivative or similar words refer to this
entire Agreement, and (iv) the term "including" means "including,
but not limited to". Whenever this Agreement refers to a number
of days or months, such number shall refer to calendar days or
months unless otherwise specified. The Exhibits and Schedules
attached hereto are incorporated herein by this reference and
constitute a part of this Agreement.
ARTICLE 2
TERM
2.1 Term
. The term of this Agreement shall commence on the
date hereof and expire simultaneously with the termination of the
Program Agreement, unless sooner terminated as provided herein
(the "Term"), provided that following termination of this
Agreement GE Bank shall have the right to require GE Capital to
continue providing all or a portion of the GE Capital Services
for up to six (6) months after termination pursuant to the
provisions of Section 8.6.
ARTICLE 3
CREDIT SERVICES
3.1 Appointment of GE Capital
. GE Capital hereby accepts appointment, as the agent
of GE Bank, for providing the GE Capital Services with respect to
the GE/Macy's Accounts. The parties hereby acknowledge and agree
that notwithstanding any other provisions of this Agreement to
the contrary, all obligations of GE Capital to perform the GE
Capital Services shall be subject to the prior satisfaction of
the FDS Information Condition.
3.2 GE Capital Services
. GE Capital shall provide the GE Capital Services and
shall comply with the Credit and Collection Policy and the FACS
License (as defined in the FACS Services Agreement) in providing
the GE Capital Services. In providing the GE Capital Services,
GE Capital will use the FACS Credit System which has been
licensed to GE Capital pursuant to the FACS Services Agreement.
In this regard, GE Capital agrees to be bound by and to comply
with the terms and conditions of the Program Agreement,
including, without limitation, Sections 4.4 and 4.5. GE Capital
shall operate credit operations and facilities in a high quality,
ethical manner, in such a way as not to disparage or embarrass GE
Bank or its name, and with a level of service to the holders of
GE/Macy's Accounts that is not less than the level of service
provided to (i) the holders of GE/Macy's Accounts by GE Capital
prior to the date hereof and (ii) the holders of FDS/Macy's
Accounts pursuant to the GE Capital Services Agreement. The GE
Capital Services provided to the GE/Macy's Accounts shall be of
the same type, quality and nature as, and implemented and
executed in the same manner as, the services provided by GE
Capital to FDS Bank with respect to the FDS/Macy's Accounts,
except to the extent such services may differ due to changes to
the Credit and Collection Policy applicable to only the GE/Macy's
Accounts or FDS/Macy's Accounts pursuant to the provisions of
Sections 4.4 or 4.5 of the Program Agreement.
3.3 Service Standards.
GE Capital shall use its best efforts to (i) design
systems to achieve, (ii) employ qualified personnel to meet, and
(iii) otherwise satisfy on average (determined with respect to
each FDS full fiscal quarter commencing after the completion of
the relevant conversion of services) the Service Standards.
3.4 Service Fees.
(a) Postage. GE Bank shall reimburse GE
Capital for all postage costs incurred in providing the GE
Capital Services in such manner as agreed upon by the parties.
(b) Service Fees. No later than ten (10) days
after the beginning of each month during the Term, GE Capital
shall deliver an invoice to GE Bank (with a copy to FACS) setting
forth in reasonable detail the aggregate amount of Service Fees
to be paid by GE Bank for the GE Capital Services rendered in the
immediately preceding month. The amount of such fees shall be
calculated in accordance with Schedule 3.4(b). GE Bank shall pay
to GE Capital, within ten (10) days after receipt of each such
statement, the full amount set forth thereon. Any disputes with
respect to any invoice delivered pursuant to Section 3.4(a) or
3.4(b) shall be resolved in accordance with the procedures
described in Section 9.9 of the Program Agreement.
(c) Inventory. The parties hereby agree that, in
addition to the Service Fees payable pursuant to Section 3.4(b),
all paper, envelopes and plastic required for production and
mailing of billing statements and credit cards with respect to
the GE/Macy's Accounts will either (i) be purchased by GE Capital
in consultation with GE Bank, in which case GE Capital will
invoice GE Bank (with a copy to FACS) directly for such purchases
and GE Bank will pay GE Capital for such invoices (including
shipping and taxes), or (ii) be purchased by GE Bank in
consultation with GE Capital at GE Bank's sole cost and expense,
provided that material qualities and quantities must be
reasonably satisfactory to GE Capital.
(d) Adjustments. The parties hereto acknowledge
and agree that the Service Fees are intended to provide GE
Capital with payment for its actual costs of performing the GE
Capital Services. The parties agree to take all commercially
reasonable efforts, and to cooperate in all commercially
reasonable respects (in each case taking into consideration their
respective businesses and operations as a whole) to minimize such
costs. On each six-month anniversary of the date hereof or at
any time that the provision of the GE Capital Services requires a
material variation from the assumptions set forth on Schedule
3.4(b), either GE Capital or GE Bank may, if it believes that the
fees set forth on Schedule 3.4(b) have resulted in GE Capital
receiving Services Fees for the immediately prior six-month
period in an amount either more or less than its actual costs for
providing the GE Capital Services for such period, deliver a
written notice to the other party requesting that the other party
meet to discuss making appropriate modifications to Schedule
3.4(b). Any such modifications would be intended to assure that
for the next six-month period GE Capital receives Service Fees
equal to its cost of providing the GE Capital Services for such
period, as adjusted to reflect the amount by which the Service
Fees received by GE Capital for the immediately prior six-month
period were more or less than the amount of GE Capital's actual
costs of providing the GE Capital Services for such period. If
one party delivers a notice to the other party pursuant to this
Section 3.4(d) and either the other party refuses to meet to
discuss modifying Schedule 3.4(b) or the parties are unable to
agree on modifications to Schedule 3.4(b) within twenty (20) days
after delivery of such notice, then the notifying party may cause
the dispute to be resolved in accordance with the procedures
described in Section 9.9 of the Program Agreement. Any Person
chosen to resolve such dispute pursuant to Section 9.9 of the
Program Agreement shall approve any proposed increase in the fees
on Schedule 3.4(b) (i) to the extent such proposed increase
reflects an actual increase in costs of performing the GE Capital
Services and (ii) to the extent such proposed increase is
reasonable based on, among other things, historical costs and the
impact of inflation on such costs.
3.5 Compliance with Law
. GE Capital shall implement and execute the Credit
and Collection Policy in compliance with all requirements of
applicable Law and shall perform the GE Capital Services in
compliance with all requirements of applicable Law, except, in
either case, to the extent a failure of GE Capital to so
implement, execute and perform in compliance with applicable Law
is due solely to the failure of the FDS Information Condition to
be satisfied.
3.6 Cooperation
. GE Capital agrees to cooperate with GE Bank in
resolving all disputes with GE/Macy's Account Debtors.
3.7 Payment Processing
. The parties intend that in addition to the GE
Capital Services provided hereunder, GE Capital shall provide
payment processing services as described and subject to the
Service Standards set forth in Exhibit A with respect to the
GE/Macy's Accounts. In this regard, the parties agree that the
fees payable for such services by GE Bank to GE Capital will be
the same as the fees paid by FDS Bank with respect to the FDS
Serviced Accounts for such services, which are being negotiated
as of the date hereof. Until such negotiation results in an
agreement, the fees payable by GE Bank to GE Capital shall be
expenses of the Program as specified in the budget for the
Interim Period and as part of each budget prepared pursuant to
Article V of the Program Agreement.
ARTICLE 4
[Intentionally Omitted]
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Mutual Representations and Warranties
. Each party to this Agreement represents and warrants
to the other party on the date hereof and on each date that GE
Capital provides any of the GE Capital Services hereunder that:
(i) Such party (A) is duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its organization; (B) is duly qualified and in
good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business
requires such qualifications, except (x) in the case of GE
Capital, where failure to be so qualified would not have a
Material Adverse Effect or a material adverse effect on the
ability of GE Capital to perform its obligations pursuant to the
terms of this Agreement and (y) in the case of GE Bank, where
failure to be so qualified would not have a material adverse
effect on their ability to perform their obligations hereunder;
(C) has the requisite power and authority and the legal right to
own, pledge, mortgage, and operate its properties, to lease the
properties it operates under lease, and to conduct its business
as now conducted and hereafter contemplated to be conducted;
(D) has all necessary licenses, permits, consents, or approvals
from or by, and has made all necessary notices to, all
authorities having jurisdiction, to the extent required for such
current ownership and operation or as proposed to be conducted,
except (x) in the case of GE Capital, where failure to obtain
such license, consent, permit or approval, or to give such notice
would not have a Material Adverse Effect or a material adverse
effect on the ability of GE Capital to perform its obligations
pursuant to the terms of this Agreement and (y) in the case of GE
Bank, where the failure to obtain such license, consent, permit
or approval or to give such notice would not have a material
adverse effect on their ability to perform their obligations
hereunder; and (E) is in compliance with its certificate of
incorporation and by-laws.
(ii) The execution, delivery, and performance
of this Agreement and all instruments and documents to be
delivered hereunder: (A) are within such party's power; (B) have
been duly authorized by all necessary or proper action of such
party; (C) do not and will not contravene any provisions of such
party's certificate of incorporation or by-laws; (D) will not
violate any law or regulation or any order or decree of any court
or governmental instrumentality applicable to such party;
(E) will not conflict with or result in the breach of, or
constitute a default under any indenture, mortgage, deed of
trust, lease, agreement, or other instrument to which such party
is a party or by which any of its property is bound; and (F) 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 previously.
Each party to this Agreement further represents and warrants that
this Agreement has been duly executed and delivered by, and
constitutes a legal, valid, and binding obligation of such party,
enforceable against it in accordance with its terms, subject to
the extent that enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally from time to time in effect
and to the availability of equitable remedies.
5.2. Representations and Warranties of GE Capital
. GE Capital represents and warrants to GE Bank on the
date hereof and on each date that GE Capital provides any of the
GE Capital Services hereunder that:
(i) GE Capital (A) has all of the necessary
facilities, equipment and personnel to provide the GE Capital
Services in accordance with the terms of this Agreement; and
(B) has and shall maintain disaster recovery procedures and
systems with respect to the GE/Macy's Accounts satisfactory to GE
Bank and at least comparable to those maintained on the date
hereof for the GE/Macy's Accounts.
(ii) GE Capital is Solvent.
(iii) GE Capital is not in default with
respect to any material contract, agreement, lease, or other
instrument to which it is a party, nor has it received any notice
of default under any such material contract, agreement, lease or
other instrument which as a consequence of any such default,
would materially and adversely affect the performance of its
obligations under this Agreement.
(iv) No contract, lease, agreement, or other
instrument to which GE Capital is a party or by which it is
bound, and no provision of applicable Law, materially and
adversely affects the business, operation, prospects, property,
or financial condition of GE Capital such as to impair its
ability to meet its obligations under this Agreement.
ARTICLE 6
CONFIDENTIALITY
6.1 Trade Secrets and Confidential Information
. GE Capital, on the one hand, and GE Bank, on the
other, acknowledge that in the course of performance hereunder,
each of them and/or their respective Affiliates may receive the
trade secrets and confidential information of the other.
(a) Trade Secrets. As used herein, "trade
secrets" shall mean information including or containing technical
or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, or a list of actual or potential
customers or suppliers that (i) derives economic value, actual or
potential, from not being generally known to, and not being
readily ascertainable by proper means by other persons who can
obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
(b) Confidential Information. As used herein,
"confidential information" shall mean information including data,
as to operation, use, prices, sales, vendors, customer lists,
customer information, account information, business plans or
administrative, financial or marketing plans, that is
competitively sensitive and not generally known by or made
available to the public, or that are treated as confidential by
the owner thereof but that does not rise to the level of a trade
secret under applicable law.
6.2 Non-Disclosure Obligations
. GE Capital, on the one hand, and GE Bank, on the
other, acknowledge that the confidentiality of the trade secrets
and the confidential information of the other is necessary and,
except as provided in Section 6.3, agree at all times, during and
after the Term, not to use, communicate, publish, disclose or
disseminate, directly or indirectly, any trade secrets or
confidential information of the other for any purpose except for
the purpose of performing in accordance with this Agreement. In
the event any information can be treated as both trade secrets
and confidential information, such information shall be treated
as trade secrets for purposes of this Agreement. Each party
shall use the same care to prevent disclosure to third parties of
the trade secrets and confidential information of the other as it
employs to avoid disclosure, publication or dissemination of its
own information of a similar nature. The parties agree that, in
addition to any other remedies which may be available at law or
in equity, each party shall have the right to obtain injunctive
relief to restrain a breach or threatened breach, or otherwise
obtain specific performance of, the other party's covenants and
agreements in this Section 6.2.
6.3 Permitted Disclosure
. Notwithstanding the foregoing, a receiving party may
disclose some or all of the trade secrets and confidential
information of the other party which are:
(i) required to be disclosed by law or order
of court or governmental agency applicable to the receiving
party, provided that the receiving party shall give prompt notice
to the other party of any request for such disclosure so that the
other party may seek a protective order or other appropriate
remedy, and notwithstanding any such disclosure, such disclosed
trade secrets or confidential information shall remain
confidential and otherwise subject to the provisions of
Article 6;
(ii) generally known and available in the
public domain, or become part of the public domain through no
violation of any confidentiality provisions of this Agreement; or
(iii) developed by the recipient or its
representatives independently of such information or trade
secrets.
6.4 Use of Trade Secrets or Confidential Information
. Neither GE Capital nor GE Bank may:
(i) acquire any right in or assert any lien
against the trade secrets or confidential information of the
other; or
(ii) refuse to return promptly upon the
reasonable request of the other as permitted herein any
confidential information or trade secrets of the other that it
may have in its possession.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification.
(a) Indemnification by GE Capital. GE Capital
shall indemnify, defend and hold harmless GE Bank and each of its
Affiliates and the officers, directors, employees, agents,
shareholders, successors and assigns of GE Bank and each of its
Affiliates ("GE Bank") from and against any and all claims,
actions, damages, losses, liabilities, costs and expenses,
including reasonable attorneys' fees and expenses (collectively,
"Damages") caused by, relating to or arising out of (i) the
failure of any representation or warranty of GE Capital hereunder
to be true and correct in any material respect when made or
remade; (ii) the breach by GE Capital or any of its Affiliates of
any of their covenants or agreements hereunder; (iii) any act or
omission by GE Capital or its Affiliates, employees or agents in
performing, implementing and/or executing the GE Capital Services
and the Credit and Collection Policy, except to the extent (x)
the Credit and Collection Policy specifically describes how such
act should be implemented and GE Capital implemented such act in
conformity with such description (other than modifications to the
Credit and Collection Policy (including the Major Credit and
Collection Policies) made by FDS without the approval of the
Policy Committee pursuant to Section 4.4 of the Program
Agreement) or (y) any such performance, implementation or
execution was effected in accordance with specific written
instructions from an Authorized GE Person or (z) the Damages
arising out of such act or omission are due solely to the failure
of the FDS Information Condition to be satisfied; (iv) any acts
or omissions of GE Bank, its employees or any of its agents taken
at the specific written request of a senior manager of GE Capital
Retailer Financial Services, and (v) notwithstanding the
provisions of Section 7.1(a)(iii) hereof, any judgmental
decisions (i.e., any determination or decision made which is not
specifically dictated by the Credit and Collection Policy)
effected by GE Capital or its employees or agents in effecting
the GE Capital Services.
(b) Indemnification by GE Bank. GE Bank shall
indemnify, defend and hold harmless GE Capital and its Affiliates
and the officers, directors, employees, agents, shareholders,
successors and assigns of GE Capital and each of its Affiliates
from and against any and all Damages caused by, relating to or
arising out of (i) the breach by GE Bank of any of its covenants
or agreements hereunder; (ii) the failure of any representation
or warranty of GE Bank hereunder to be true and correct in any
material respect when made or remade; and (iii) any act or
omission by GE Capital or its employees or agents in performing,
implementing and/or executing the GE Capital Services and the
Credit and Collection Policy effected in accordance with specific
written instructions from an Authorized GE Person.
7.2 Conduct of Litigation
. In the event a claim or judicial action is brought
or threatened against an indemnified party with respect to
matters covered by Section 7.1, the indemnifying party shall have
the sole right to defend such claim or action at its expense and
to control the defense and settlement thereof, provided, that the
indemnified party shall have the right to participate in such
defense and negotiations using counsel at its own expense and the
indemnifying party shall obtain the indemnified party's consent,
prior to entering into a settlement, consent decree, compromise
or consenting to any injunctive relief with respect to such claim
or action. Any indemnified party shall provide prompt notice to
the indemnifying party of any claims for which the indemnified
party intends to seek indemnification for hereunder, provided
that the failure to provide such notice shall not affect the
obligations of the indemnifying party except to the extent such
failure causes actual harm to the indemnified party.
ARTICLE 8
DEFAULT; REMEDIES
8.1 GE Capital Events of Default
. It shall be a "GE Capital Event of Default" if any
of the events set forth below shall occur and be continuing and
remain unremedied prior to the expiration of the specified
period.
(a) Service Standards Default. If GE Capital
shall consistently fail to perform its obligations under Section
3.3, and such consistent failure to perform shall (i) have a
Material Adverse Effect or a material adverse effect on the
Program, and (ii) remain unremedied for a period of seventy-five
(75) days after delivery of written notice thereof by GE Bank to
GE Capital.
(b) Credit and Collection Policy Defaults.
(i) If GE Capital shall fail to perform the
GE Capital Services in accordance with any provision of the
Credit and Collection Policy where such failure results in a
violation of applicable Law, and such failure is not remedied
within seven (7) days after delivery of written notice thereof by
GE Bank to GE Capital, provided that if, notwithstanding GE
Capital's diligent, best efforts to cause its employees and
agents to perform the GE Capital Services so as not to violate
applicable Law, certain employees or agents have failed to so
perform the GE Capital Services, the time period set forth in
this Section 8.1(b)(i) shall be extended, but not by more than an
additional ten (10) days, as long as GE Capital continues to use
its diligent, best efforts to remedy such failure.
(ii) If GE Capital shall fail to perform the
GE Capital Services in accordance with any provision of the
Credit and Collection Policy where such failure does not result
in a violation of applicable Law, and such failure (x) has a
Material Adverse Effect and (y) is not remedied within thirty
(30) days after delivery of written notice thereof by GE Bank to
GE Capital.
(iii) If GE Capital shall consistently
fail to perform any of the GE Capital Services in accordance with
any provision of the Credit and Collection Policy where such
failure does not result in a violation of applicable Law and does
not have a Material Adverse Effect, and is not remedied within
seventy-five (75) days after delivery of written notice thereof
by GE Bank to GE Capital; provided that each of the time periods
in this Section 8.1(b) shall be extended, but not by more than 60
days, so long as GE Capital is using its diligent, best efforts
to remedy such failure in the event that (x) the provision of the
Credit and Collection Policy that GE Capital has failed to
perform is a provision of the Credit and Collection Policy which
has been modified pursuant to Section 4.4 of the Program
Agreement and (y) the reason GE Capital has been unable to so
perform is because the GE Credit System requires modifications in
order to implement such modified provision of the Credit and
Collection Policy.
(c) Credit Systems Default. If GE Capital shall
fail to perform all or substantially all of the GE Capital
Services for a period of seven (7) consecutive days due to a
failure of the GE Credit System or otherwise.
(d) Breach of Agreement. If GE Capital shall
breach any of its obligations under this Agreement or any of its
representations and warranties under this Agreement (other than
obligations, representations or warranties the breach of which is
otherwise addressed in this Section 8.1) and such breach has a
Material Adverse Effect and is not cured within thirty (30) days
after delivery of written notice thereof by GE Bank to GE
Capital.
(e) Bankruptcy. If an Event of Bankruptcy shall
have occurred with respect to GE Capital.
(f) Material Adverse Change. If there shall have
been a material adverse change to the business, financial
condition, or operations of GE Capital which change has a
material adverse effect on its ability to fulfill its obligations
hereunder pursuant to the terms hereof.
8.2 GE Bank Remedies
. Subject to the provisions of Section 8.7, upon
the occurrence of a GE Capital Event of Default, GE Bank may, in
addition to any other remedies it may have at law or equity,
terminate this Agreement by delivering a written notice of
termination to GE Capital.
8.3 GE Bank Events of Default
. It shall be a "GE Bank Event of Default" if any of
the events set forth below shall occur and be continuing and
remain unremedied prior to the expiration of the specified
period.
(a) Breach of Agreement. If GE Bank shall breach
in any material respect any of its obligations under this
Agreement or any of their representations and warranties under
this Agreement (other than obligations, representations and
warranties the breach of which is otherwise addressed in this
Section 8.3), and fail to cure such breach within thirty (30)
days after delivery of written notice thereof by GE Capital to GE
Bank.
(b) Bankruptcy. If an Event of Bankruptcy shall
have occurred with respect to GE Bank.
8.4 GE Capital Remedies
. Upon the occurrence of a GE Bank Event of Default,
GE Capital may, in addition to any other remedies it may have at
law or equity, terminate this Agreement by delivering a written
notice of termination to GE Bank.
8.5 Excuse For Non-Performance
. In the event one party (the "Performing Party") is
unable to comply with or perform any of its obligations hereunder
solely due to (i) the other party (the "Non-Performing Party")
failing to perform its obligations hereunder or under any
Transaction Document or (ii) the quality, nature, timeliness,
completeness or accuracy of any goods, services or data provided
by the Non-Performing Party to the Performing Party, the
Performing Party shall be excused from such performance (and no
event of default shall be deemed to have occurred) provided that
the Performing Party shall (a) notify the Non-Performing Party as
soon as practicable describing the default and explaining how the
Performing Party's performance has been affected; (b) use
reasonable efforts to mitigate the effect of the Non-Performing
Party's failure; and (c) perform its obligations hereunder to the
extent reasonably practicable. Both parties shall use diligent,
uninterrupted efforts to cure the failure and eliminate the
effects thereof.
8.6 Post-Termination Procedures
. Upon termination or expiration for any reason of
this Agreement, the parties shall comply with their respective
post-termination obligations, if any, as set forth below:
(a) Payments. Except as may be expressly
provided otherwise herein, within ten (10) business days after
the effective date of termination of this Agreement, each party
shall pay the other party any amounts that as of that effective
date were due and owed thereto pursuant to this Agreement.
(b) Extended Servicing. GE Bank may cease to
receive GE Capital Services hereunder from and after the
effective date of termination, provided that GE Bank may elect to
require GE Capital to continue to provide all or a portion of the
GE Capital Services to the GE/Macy's Accounts for up to a maximum
of six (6) months following the effective date of termination.
In the event of an election by GE Bank to receive GE Capital
Services, GE Capital shall provide GE Capital Services as
described herein subject to payment by GE Bank of the applicable
Services Fees then in effect.
8.7 Special Provisions.
In the event of a GE Capital Event of Default
pursuant to the provisions of Section 8.1, GE Bank may terminate
the Agreement with respect to any one of the GE Capital Services
only at such time as GE Bank's designee is Deemed Prepared to
perform any one of such GE Capital Services. If GE Bank's
designee is not Deemed Prepared to perform any of the GE Capital
Services by the later of (i) six (6) months after the effective
date of termination and (ii) the date that a GE Capital Event of
Default with respect to such GE Capital Services no longer
exists, then GE Bank shall lose its right to perform the GE
Capital Services for which it is not so Deemed Prepared. In the
event of a subsequent GE Capital Event of Default pursuant to the
provisions of Section 8.1, the provisions of this Section 8.7
shall again be applicable.
"Deemed Prepared" means, with respect to any one of the
GE Capital Services, either (i) GE Capital and GE Bank have
agreed that GE Bank's designee is reasonably well prepared to
perform such services or (ii) an arbitrator, selected at the
request of GE Bank by the President of the AAA, has determined
what steps GE Bank's designee must take to be reasonably well
prepared to perform such services at a level at least as high as
GE Capital is required to perform hereunder and GE Bank's
designee has taken such steps.
ARTICLE 9
MISCELLANEOUS
9.1 Governing Law; Jurisdiction
. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard
to its rules governing conflicts of law.
9.2 Audit and Access Rights
. GE Bank shall have all such rights to access the
premises of GE Capital, the GE Credit System and audit the
records of GE Capital as may be necessary or desirable to permit
GE Bank to fulfill all of its responsibilities, and exercise all
of its rights, hereunder and under the Transaction Documents.
Without limiting the generality of the foregoing, GE Capital
shall permit GE Bank and its designees, officers, employees,
attorneys, accountants and/or other representatives during normal
business hours with reasonable advance notice, in such a manner
as to minimize interference with the normal business operations
of GE Capital (i) to observe, monitor and obtain information
regarding the GE/Macy's Accounts and to observe and monitor the
implementation by GE Capital personnel of the Credit and
Collection Policy, (ii) to observe whether the GE Capital
Services and the Credit and Collection Policy are being applied
consistently between the GE/Macy's Accounts and the FDS/Macy's
Accounts and in compliance with the provisions of the Program
Agreement and (iii) to examine, audit, inspect, copy and make
copies of all of the data, records, files, and books of account
under the control of GE Capital (whether received on computer,
electromagnetic storage vehicles, paper, film or other medium)
and relating strictly to the GE/Macy's Accounts and to the back-
up documentation relating to the reports provided hereunder by GE
Capital to GE Bank. The costs and expenses of any exercise by
GE Bank of its rights hereunder shall be expenses of the Program
to the extent such costs and expenses are included in the
Operating Expense Budget for the applicable Period in which such
costs and expenses were incurred. Notwithstanding any other
provision of this Agreement, GE Bank shall not have any access or
audit rights with respect to any information in the possession of
GE Capital regarding services provided by GE Capital to any non-
affiliated third party other than the FDS Parties. Employees of
GE Capital shall be permitted to be present during the exercise
by GE Bank of any of its audit and access rights under this
Section 9.2.
9.3 Entire Agreement; Amendments; Waivers
. This Agreement contains the entire agreement of the
parties hereto as to the subject matter discussed herein. Any
amendment to or modification of this Agreement must be in writing
and executed by authorized officers of GE Capital and GE Bank.
No waiver by either party of any right or power it has under this
Agreement shall impair or be construed as a further waiver of
such right or power. To be effective, all waivers must be in
writing and signed by the party waiving its rights.
9.4 Assignability
. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted assigns. Neither GE Capital, on the one hand, nor
GE Bank, on the other, may assign their rights or obligations
hereunder without the prior consent of the other, except that
(i) in the case of a proposed assignment by GE Capital to an
Affiliate, such consent shall not be unreasonably withheld,
provided that in connection with any such assignment GE Capital
delivers to the FDS Companies instruments reasonably satisfactory
to the FDS Companies pursuant to which the terms of the GE
Capital Guaranty will be extended to the Agreement and (ii) in
the case of a proposed assignment by GE Bank, such consent shall
not be unreasonably withheld.
9.5 Relationship of Parties
. In performing under this Agreement, the parties are
acting as independent contractors and this Agreement shall not be
construed as providing either party with the right, power or
authority to impose any duty or obligation on the other except as
expressly provided herein.
9.6 Survival
. The provisions of Article 6, Article 7, and
Sections 8.6 and 9.2 of this Agreement shall survive a
termination or expiration of this Agreement.
9.7 Third Party Beneficiaries
. Nothing herein shall create or be deemed to create
any third party beneficiary rights in any Person not a party to
this Agreement except (i) as expressly provided with respect to
indemnification rights in Article 7 and (ii) that FDS is an
intended third party beneficiary hereof such that, among other
things, no amendment to this Agreement shall be effective without
the consent of FDS (other than amendments that would not have an
adverse effect on the rights or obligations of GE Capital, GE
Bank or FDS) and FDS shall have the right to enforce the
obligations of GE Capital hereunder.
9.8 Notices
. Any notice or other communication required or
otherwise provided for under this Agreement shall be in writing
and shall be deemed given when delivered by hand or by courier or
express mail or by registered or certified United States mail,
return receipt requested, postage prepaid, or by facsimile if
receipt is acknowledged (except that a notice of termination or
breach shall not be sent by facsimile) and shall be addressed as
follows:
In the case of GE Bank:
GE Capital Consumer Card Co.
5300 Kings Island Drive
Mason, OH 45040
Attn: Secretary
Fax: (513) 459-6888
with copies to:
General Electric Capital Corporation
1600 Summer Street
Stamford, CT 06905
Attn: Counsel, Retailer Financial Services
Fax: (203) 357-3353
and
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, OH 45202
Attn: Law Department
Fax: (513) 579-7897
and
FACS Group, Inc.
9111 Duke Blvd.
Mason, OH 45050
Attn: Senior Vice President
Fax: (513) 573-2039
In the case of GE Capital:
General Electric Capital Corporation
5665 New Forsyth Road
Macon, Georgia 31210
Fax: (912) 471-5014
Attn: Senior Vice President - Retailer Financial Services
with copies to:
General Electric Capital Corporation
1600 Summer Street
Stamford, CT 06905
Attn: Counsel, Retailer Financial Services
Fax: (203) 357-3353
and
Macy's Credit Services
4605 Duke Drive
Mason, OH 45040
Attn: Executive Vice President
Fax: (513) 573-3251
Either party hereto may, from time to time, change its address or
designated recipient for notification purposes by giving the
other party notice thereof and the date upon which it shall
become effective.
9.9 Designees
. [OMISSION].
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Richard A. Hayes
Name: Richard A. Hayes
Title: Senior Vice President
Retailer Financial Services
GE CAPITAL CONSUMER CARD CO.
By: /s/ Kevin Knight
Name: Kevin Knight
Title: Executive Vice President
Exhibit A
GE CAPITAL SERVICES TO GE BANK
General. All of the GE Capital Services described hereafter
shall be provided by GE Capital (i) in accordance with, and as
more fully described in, the then applicable Credit and
Collection Policy and (ii) without limiting GE Bank's rights or
altering the obligations of GE Bank under the Program Agreement
including pursuant to Section 4.4 of the Program Agreement.
I. GE CAPITAL SERVICES
1. Billing Statement Production
1.1. Provide billing statement processing services as
described below and in accordance with the
technical specifications and billing cycle
timeframes established between GE Capital and GE
Bank.
(i) Receive and process the electronic periodic
billing statement file.
(ii) Trim, burst and fold all periodic billing
statements.
(iii)Insert all periodic billing statements
as described in Section 2.2 below.
(iv) Place required postage on all periodic
billing statement envelopes.
(v) Presort all qualified mail.
(vi) Seal and deliver all periodic billing
statement envelopes to US Postal Service.
2. Billing Statement Mailing
2.1. Mail periodic billing statements, except those
periodic billing statements otherwise agreed to by
GE Bank, within the timeframe established in
Section II of this Exhibit A.
2.2. Insert marketing material approved by GE Bank and
received by GE Capital in usable form that
conforms to materials specifications of GE Capital
into the designated periodic billing statements.
The inserts are to be distributed within the
periodic billing statement in the following order:
(i) First, any inserts or messages that GE Bank,
in its sole judgment, determines are required
by Law to be included in a periodic billing
statement shall be included and shall have
priority over all other inserts and messages;
(ii) Second, any inserts or messages that any FDS
Company is contractually required to include
in a periodic billing statement shall be
included;
(iii)Third, any inserts or messages that FDS,
in its sole discretion, determines should be
included in a periodic billing statement
shall be included; and
(iv) Fourth, any inserts or messages with respect
to programs approved by FDS and GE Bank for
inclusion in a periodic billing statement
shall be included.
2.3. Mail periodic billing statements within the
timeframe required by Regulation Z.
2.4. Exercise reasonable quality control review of
periodic billing statements.
2.5. In the event of any material disruption in
periodic billing statement services, GE Capital
will use commercially reasonable efforts to notify
GE Bank and FACS of such disruption on the same
business day, and, in any event will provide
notice as promptly as practicable.
2.6. Provide the following reporting for the periodic
billing statement services:
(i) Daily statement status report by Division of
cycles billed, mailed and quantity.
(ii) Monthly inventory report for all supplies.
(iii)Monthly statement analysis report of
mailings by Division with associated costs
and breakdown.
2.7. Notwithstanding the above, GE Capital will also be
responsible for inventory control, warehousing of
the periodic billing statements and associated
materials.
3. Credit Card Production
3.1. GE Capital will emboss and encode GE/Macy's Credit
Cards as described below and in accordance with
the technical specifications and credit card
production schedules established between GE
Capital and FACS.
(i) Receive and process the electronic Credit
Card file.
(ii) Emboss two (2) lines of data unless otherwise
specified.
(iii)Magnetically encode the cards.
(iv) Print the customer information on the Credit
Card card carrier form.
(v) Data match the Credit Cards and the Credit
Card card carriers.
(vi) Insert as described in Section 4.2 below.
(vii)Trim, burst and fold the Credit Card
card carriers.
(viii)Insert the Credit Card card carriers
into the Credit Card card carrier envelopes.
(ix) Place required postage on the Credit Card
card carrier envelopes.
(x) Seal and deliver all Credit Card card carrier
envelopes to US Postal Service.
3.2. GE/Macy's Credit Cards shall be in the design and
format jointly established by FACS and GE Bank and
shall include the Macy's Tradename.
4. Credit Card Mailing
4.1. Mail Credit Cards within the timeframe established
in Section II of this Exhibit A.
4.2. Insert GE Bank approved marketing material that
conforms to materials specifications of GE Capital
into the envelope carrying the designated Credit
Card card carrier. The inserts are to be included
with the Credit Card card carrier in the following
order:
(i) First, any inserts or messages that GE Bank,
in its sole judgment, determines are required
by Law to be included in a Credit Card card
carrier shall be included and shall have
priority over all other inserts and messages;
(ii) Second, any inserts or messages that any FDS
Company is contractually required to include
in a Credit Card card carrier shall be
included;
(iii)Third, any inserts or messages that FDS,
in its sole discretion, determines should be
included in a Credit Card card carrier shall
be included; and
(iv) Fourth, any inserts or messages with respect
to programs approved by FDS and GE Bank for
inclusion in a Credit Card card carrier shall
be included.
4.3. Exercise reasonable quality control review of
Credit Cards.
4.4. In the event of any material disruption in credit
and production or mailing services, GE Capital
will use commercially reasonable efforts to notify
GE Bank and FACS of such disruption on the same
business day, and, in any event will provide
notice as promptly as practicable.
4.5. Provide the following reporting for the Credit
Card services:
(i) Daily Credit Card Status report by Division
of cards produced and mailed.
(ii) Monthly Inventory report for all supplies,
including reconciliation of any lost and
damaged materials.
(iii)Monthly Credit Card Inventory report.
(iv) Monthly Credit Card analysis report of cards
embossed and mailed by Division with
associated costs and breakdown.
4.6. Notwithstanding the above, GE Capital will also be
responsible for inventory control, warehousing of
the Credit Cards and associated materials, and
providing adequate security for all credit cards
and discount coupons.
5. Remittance Processing
5.1. Provide remittance processing services as
described below and in accordance with the
technical specifications and payment processing
production schedules established between GE
Capital and FACS.
(i) Perform lock box services, daily depositing
of monetary medium in account(s) designated
by GE Bank, I/O Control, data entry,
balancing of payments and forwarding of
miscellaneous Cardholder correspondence
(including gift certificates) received
through the lock box assigned for Cardholder
payment remittance.
(ii) Receive payments from a lock box assigned for
Cardholder remittances, process payments and
forward other customer communications
received.
(iii)Retain the original payment remittance
for 7 days from the date of receipt.
(iv) All payments shall be dated as of the date
received.
(v) Process or handle exceptions as provided by
GE Bank. An "Exception" to standard
processing occurs when (i) the provided
envelope is not used, (ii) the envelope
includes anything other than one remittance
advice and one check (iii) the payment amount
or account number on the check, does not
match those on the remittance advice and
(iv) GE Capital performs special handling
instructions on behalf of GE Bank.
5.2. GE Bank will be responsible for establishing an
account for daily deposit of monetary medium
received for payment remittances.
5.3. FACS will provide the appropriate system access
for performing the account look-up function to the
authorized users at GE Capital. The account look-
up function is only to be used by GE Capital for
processing Cardholder payment remittances when the
cardholder account number does not appear on the
monetary medium nor the periodic billing statement
when the payment remittance is received by GE
Capital.
5.4. Provide the following reporting for the Remittance
Processing services:
(i) Daily Remittance Processing Status report by
Division of payments received (including gift
certificates and cash) and exceptions
returned to FACS.
II. SERVICE STANDARDS
Services Category Standard
(All days are Business Days,
measured from but excluding the
date inquiry or notice or data
is received by GE Capital; all
standards expressed are
averages calculated over a
measurement period of an FDS
fiscal quarter).
1. Billing Statement Production Best efforts to mail within 2
days after receipt by GE
Capital of file, and, in any
event, mailed not later than 4
business days after receipt by
GE Capital of FDS Information
that satisfies the FDS
Information Condition.
2. Credit Card Production Mailing Mailed not later than 2
business days after receipt by
GE Capital of FDS Information
that satisfies the FDS
Information Condition
(excluding card production
and/or mailing in connection
with reissuances, prescreen
solicitations, or other events
which do not relate to
applications made at the point
of sale in the ordinary course
of business).
3. Payment Processing For processing (including
depositing to account(s)
designated by GE Bank) other
than exception processing, best
efforts to process within 1 day
after receipt by GE Capital,
and, in any event, processed
not later than 2 business days
after receipt by GE Capital of
FDS Information that satisfies
the FDS Information Condition.
Schedule 3.4(b)
Service Fees
[OMISSION]