EX-10.1






Exhibit 10.1




CREDIT CARD ACCOUNT PURCHASE AGREEMENT




     This Credit Card Account Purchase Agreement (“Agreement”) is made as of this 15 day of
September 2008 (the “Effective Date”), by and between U.S. Bank National Association ND, d/b/a Elan
Financial Services, a national bank, with its main office located at 4325 17th Ave. SW,
Fargo, North Dakota 58103 (“Purchaser”), and Columbia River Bank, an Oregon State Bank, with its
main office located at 401 East Third Street, Suite 200, The Dalles, OR 97058 (“Seller”).



RECITALS




     WHEREAS, Seller is the issuer of MasterCard- or Visa-branded credit card accounts; and



     WHEREAS, Seller desires to sell and transfer and Purchaser desires to purchase the Accounts
(as defined below) on September 25, 2008 (the “Closing Date”) as well as all Account balances owed
by Cardholders (as defined below) on such Accounts.



     WHEREAS, Purchaser desires to convert the Seller’s Accounts and their respective balances to
the Purchaser’s own processing platform and Seller agrees to assist in this effort.



     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, Purchaser and Seller agree as follows:



AGREEMENT




I. DEFINITIONS





	A.	 	For purposes of this Agreement and except as otherwise specifically set forth in the text of
the Agreement, capitalized terms shall have the meanings specified in Exhibit A, attached
hereto and incorporated by reference. If there is a conflict between the definition ascribed
to a capitalized term defined herein and the same term defined in another agreement entered
into by the parties to this Agreement, the definition set forth in this Agreement shall
control for the purposes of this Agreement and any Exhibits and Schedules attached hereto or
referenced in this Agreement.






	B.	 	All terms defined in this Agreement shall have the same meaning in any Exhibits and Schedules
attached hereto or referenced in this Agreement.






	C.	 	Other terms defined herein shall have the meanings set forth in the context of their use.





II. GENERAL RIGHTS AND RESPONSIBILITIES





	A.	 	Accounts to be Sold.






	 	1.	 	Seller agrees to sell, and Purchaser agrees to purchase open Accounts and
closed Accounts with a balance, as they exist as of the Seller’s close of business on
the Closing Date (separately and collectively, the “Accounts to be Sold”). Accounts to
be Sold shall not include any Ineligible Account as defined in Section II.A.2. below.
	 
	 	2.	 	“Ineligible Account” means an Account:






	 	a.	 	which has been identified in the Seller’s processing system as
deceased, or with respect to which the Cardholder obligated on such Account has
died before the Closing Date and there is no remaining Cardholder obligated on
such Account;
	 
	 	b.	 	which as of the Closing Date was or should have been canceled
or blocked because (i) an applicable Cardholder has notified Seller that the
Credit Card was lost or stolen; (ii) fraud




 









 






	 	 	 	(either in connection with the use of, the application for, or the
establishment of such Credit Card) or unauthorized use occurred; or (iii) an
applicable Cardholder notified Seller (or Seller otherwise became aware or
should have become aware using Seller’s Policies and Procedures) that fraud
or unauthorized use may have occurred in connection with any such Account;
	 
	 	c.	 	with respect to which any Cardholder obligated on such Account
is, or within thirty (30) days after the Closing Date has filed to be, a debtor
in a proceeding instituted under the United States Bankruptcy Code or any
bankruptcy, insolvency or other law for the relief of debtors prior to the
Closing Date and for which, other than such Cardholder, there is no other
responsible Cardholder obligated on the Account; or any such Account where the
Cardholder is working with Seller or a consumer credit counseling service for
altered pay-off terms;
	 
	 	d.	 	which is, as of the Closing Date, five or more payments past
due;
	 
	 	e.	 	which was or should have been written off prior to the Closing
Date in accordance with Seller’s customary accounting practices;
	 
	 	f.	 	which has been closed in accordance with Seller’s Policies and
Procedures and has a balance that is equal to or less than zero as of the
Closing Date;
	 
	 	g.	 	which as of the Closing Date is subject to any lien, interest,
or right of any affiliate of Seller or any third party; or is an Account that
is securitized;
	 
	 	h.	 	which as of the Closing Date has an annual percentage rate on
any balance that cannot be changed by Seller because of the terms or
provisions of the Cardholder Agreement or any marketing materials for such
Account or any Requirements of Law (including, but not limited to, Accounts
subject to a consumer credit counseling service payment plan agreement or court
order, but specifically excluding any Accounts subject to the Servicemembers
Civil Relief Act as of the Closing Date);
	 
	 	i.	 	which as of the Closing Date is not governed by the terms of a
Cardholder Agreement;
	 
	 	j.	 	on which there exists a billing dispute as of the Closing Date,
excluding billing disputes relating to a purchase;
	 
	 	k.	 	which as of the Closing Date has an outstanding compliance or
arbitration case that has not been decided and processed by Seller accordingly;
or
	 
	 	l.	 	which as of the Closing Date is the subject matter of current
litigation (or past litigation but with appeals available) or similar dispute
with Seller.






	B.	 	Purchase Price, Assignment and Transfer of Accounts to be Sold.






	 	1.	 	Purchase Price. The purchase price of the Accounts to be Sold (the
“Purchase Price”) shall be calculated as follows: 100% of the Principal Balance as of
the Cut-Off Time of the Accounts to be Sold, plus the Premium described in Schedule A.
	 
	 	2.	 	Assignment.






	 	a.	 	Upon and as of the Closing Date, subject to the satisfaction or
waiver of each condition precedent specified in Section X of this Agreement,
Seller hereby sells, assigns, transfers, and conveys to Purchaser and Purchaser
purchases, all of Seller’s right, title and interest in and to all of the
following assets (collectively, the “Assets to be Sold”):




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	 	1.	 	the Accounts to be Sold;
	 
	 	2.	 	all Related Receivables;
	 
	 	3.	 	the Customer Base of the Accounts to be Sold;
	 
	 	4.	 	the Credit Cards and all instruments and other
Account Documentation relating to the Accounts to be Sold;
	 
	 	5.	 	any rights or claims which Seller may have
against any third Persons with respect to any indebtedness owing or
purportedly owing on any Account to be Sold (which transfer of such
rights and claims to Purchaser shall not affect Purchaser’s rights to
recourse, reimbursement and sale (repurchase by Seller) described in
Section II.C. below with respect to any Account sold to Purchaser);
	 
	 	6.	 	all of Seller’s rights pursuant to the
Cardholder Agreements governing the Accounts to be Sold and the related
Credit Cards; and
	 
	 	7.	 	all rights to any interchange fees paid or
payable from a National Association with respect to such Accounts to be
Sold associated with Cardholder transactions that occur after the
Cut-Off Time.






	 	b.	 	Seller for itself and its successors or assigns covenants to
and agrees with Purchaser and its successors and assigns that Seller shall
execute all documents that Purchaser may reasonably require to evidence
Purchaser’s ownership of the Accounts to be Sold. Seller shall cooperate with
Purchaser in preparing, executing and delivering any bills of sale,
assignments, or other documents, if any, as Purchaser, or counsel for
Purchaser, may reasonably require from time to time for purposes of
transferring the Accounts to be Sold to Purchaser, evidencing Purchaser’s
ownership of the Accounts to be Sold, or carrying out any of the other
objectives of this Agreement.
	 
	 	c.	 	Insofar as the same may be necessary to facilitate the
preservation or exercise of Purchaser’s rights and powers created or
transferred by this Agreement, Seller hereby constitutes and appoints
Purchaser and its successors and assigns (and the officers, agents, employees
or representatives thereof) the true and lawful attorney or attorneys of
Seller, with full power of substitution, for Seller and in Seller’s name and
stead or otherwise, by and on behalf of and for the benefit of Purchaser and
its successors and assigns, to demand and receive the Assets to be Sold and
from time to time to institute and prosecute in the name of Seller or
otherwise, at the expense and for the benefit of Purchaser and its successors
and assigns, any and all proceedings at law, in equity or otherwise that
Purchaser and its successors and assigns may deem proper in order to enforce
any claim, right or title of any kind in and to the Assets to be Sold and to
defend or compromise any and all actions, suits or proceedings with respect to
any of the Assets to be Sold and to all such other acts and things in relation
thereto as Purchaser and its successors and assigns shall deem desirable,
Seller hereby declaring that the appointment hereby made and the power hereby
granted are coupled with an interest and are and will be irrevocable by Seller
in any manner or for any reason except as provided otherwise in this Agreement.
	 
	 	d.	 	Seller shall take no action after the Closing Date that would
be inconsistent with the effective transfer by Seller to Purchaser hereunder as
of the Closing Date of Seller’s entire right, title and interest in and to the
Accounts to be Sold. The parties agree that the transactions contemplated
herein constitute a sale and assignment of the Accounts to be Sold to Purchaser
and not a loan.




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	 	3.	 	Seller shall provide Purchaser, no later than five (5) Business Days after the
Closing Date, with all necessary system reports to support the Preliminary Purchase
Price. No later than ten (10) Business Days following the receipt of such information
from Seller, Purchaser shall prepare a Preliminary Closing Statement, in the form set
forth in Schedule A, setting forth the calculation of the Preliminary Purchase Price.
Payment terms relating to the Preliminary Purchase Price are set forth in Section
II.B.5., below.
	 
	 	4.	 	Within forty-five (45) days after the Conversion Date, Purchaser shall prepare
a Closing Statement, a form of which is attached hereto as Schedule A-1. The Closing
Statement will be used in part to identify adjustments of the Preliminary Purchase
Price based upon changes in identification of Accounts to be Sold, including, without
limitation, Accounts to be Sold that should have been identified as Ineligible
Accounts. Payment terms relating to the Closing Payment are set forth in Section
II.B.5., below.
	 
	 	5.	 	Seller shall provide Purchaser with written instructions designating the
deposit account to which the Preliminary Purchase Price and Closing Payment shall be
transferred or deposited by wire transfer or ACH. The Preliminary Purchase Price shall
be paid no later than five (5) Business Days following presentation and mutual
agreement on the Preliminary Closing Statement. The Closing Payment shall be made to
Seller no later than five (5) Business Days after presentation and mutual agreement of
the Closing Statement.
	 
	 	6.	 	If within fifteen (15) Business Days after Seller’s receipt of the Preliminary
Closing Statement or the Closing Statement, Purchaser and Seller do not mutually agree
on any line item in the Preliminary Closing Statement or the Closing Statement (other
than the Preliminary Purchase Price or the Closing Payment), then Seller shall notify
Purchaser in writing of all line items in dispute. Within fifteen (15) Business Days
after Seller’s notice to Purchaser that some line items remain in dispute, the parties
shall contract with an independent public accounting firm mutually acceptable to Seller
and Purchaser to audit the line items in dispute on the Preliminary Closing Statement
or the Closing Statement and any other items that must be reviewed to resolve the
dispute. The cost of such audit and the preparation of the revised Preliminary Closing
Statement or the Closing Statement (respectively the “Audited Preliminary Closing
Statement” or “Audited Closing Statement”) shall be shared equally between Purchaser
and Seller. The Audited Preliminary Closing Statement or Audited Closing Statement
prepared by such accounting firm shall be final, conclusive and binding on the parties
for matters covered thereby and a judgment may be entered thereon. The Audited
Preliminary Closing Statement or the Audited Closing Statement shall be in a form
substantially similar to the Preliminary Closing Statement or the Closing Statement,
except that they will reflect either the Preliminary Purchase Price or the Closing
Payment established by the third party auditor.






	C.	 	Recourse and Repurchase Obligations.






	 	1.	 	Purchaser’s purchase of the following Accounts to be Sold is subject to the
full recourse terms described below:






	 	a.	 	any Account that is two or more payments past due as of the
Cut-Off Time, but less than five payments past due as of the Cut-Off Time, or
any Account that contains the same Cardholders as such delinquent Account;
	 
	 	b.	 	any Account the balance of which is ten percent (10%) or more
over the applicable credit limit as of the Cut-Off Time;
	 
	 	c.	 	the Secured Account balances as of the Cut-Off Time; and




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	 	d.	 	any Account described in Section VI.B., below (in which it has
been determined that there is an inaccuracy or misrepresentation with respect
to any representation or warranty).






	 	 	 	No later than thirty (30) days following the date Purchaser received the data
regarding Accounts to be Sold from Seller, except in the case of an Account
described in Section VI.B., Purchaser shall provide to Seller a list of the Accounts
to be Sold that are subject to this Section II.C. For a period of one (1) year
following the Conversion Date, upon demand by Purchaser, Seller shall repurchase an
Account listed in this Section II.C.1. by paying to Purchaser a purchase price equal
to the principal balance, which means the net amount, including interest, fees, and
any other charges owing by a Cardholder to Purchaser on the Cardholder’s Account, of
any credit balance in favor of the Cardholder, and less disputed items as recorded
in the periodic statement of such Account most recently rendered prior to the
repurchase date, plus all debits and less any credit properly posted to such Account
pursuant to the terms of the Cardholder Agreement as of the repurchase date and, at
Purchaser’s discretion, in addition to the principal balance, the Premium for said
Account, minus the revenue Purchaser collected on such Account(s), regardless of
whether the Account is then in default, deemed uncollectible by Purchaser, charged
off by Purchaser, is or has been subject to fraudulent activity, or over the credit
limit or is otherwise impaired.
	 
	 	2.	 	Within ninety (90) days after the Conversion Date, if Purchaser determines that
any of the Accounts to be Sold that were sold to Purchaser should have been deemed to
be an Ineligible Account as of the Closing Date, Purchaser shall so notify Seller and
Seller shall repurchase the Ineligible Account(s) by paying to Purchaser, a purchase
price equal to the principal balance, which means the net amount, including interest,
fees, and any other charges owing by a Cardholder to Purchaser on the Cardholder’s
Account, of any credit balance in favor of the Cardholder, and less disputed items as
recorded in the periodic statement of such Account most recently rendered prior to the
repurchase date, plus all debits and less any credit properly posted to such Account
pursuant to the terms of the Cardholder Agreement as of the repurchase date, and, at
Purchaser’s discretion, in addition to the principal balance, the Premium for such
Ineligible Account(s), minus the revenue Purchaser collected on such Ineligible
Account(s). Failure by Purchaser to identify within such ninety days any Accounts to
be Sold to be repurchased hereunder shall result in forfeiture of Purchaser’s right to
require repurchase hereunder.
	 
	 	3.	 	Payments pursuant to any of the repurchase obligations set forth in Sections
II.C.1. and 2., above and 4. below, or pursuant to Section VI.C., shall be made via
wire transfer if the repurchase occurs during the Interim Servicing Period, or via ACH
if the repurchase occurs after the Interim Servicing Period or if there is no Interim
Servicing Period, within five (5) Business Days after notice by Purchaser. Purchaser
will execute and deliver to Seller any documents reasonably necessary to reassign and
transfer any purchased Account(s) to Seller, and will take all steps reasonably
necessary to facilitate the transfer of the Account(s), including title therein, back
to Seller. Following the repurchase of an Account by Seller hereunder (“as is” and
without recourse to Purchaser), Purchaser will close the Account on its books, and
Seller shall own, have full servicing responsibility for, and assume all obligations
with respect to, such Account(s) (whether arising before, on, or after the Closing
Date). Purchaser shall be responsible for necessary reporting to a credit bureau
related to the Accounts and Purchaser’s records, and Seller shall be responsible for
any credit bureau reporting necessary related to the continued existence and
collection, if any, of the Account(s) by Seller.
	 
	 	4.	 	By no later than the Closing Date, Seller shall provide Purchaser with a list
of Accounts that have credit limits or balances that exceed $50,000, along with the
required financial documents pursuant to Section II.F. Purchaser will apply
Purchaser’s established underwriting criteria to the Accounts. If Purchaser does not
approve the Account(s), Seller shall execute a separate Full Recourse Agreement on each
Account, and the Account(s) will then become Full Recourse Account(s). If Purchaser
has purchased such Accounts and Seller fails to execute any Full Recourse Agreement
with respect to any such Account, Seller, on Purchaser’s written demand for repurchase,
shall repay to Purchaser the principal balance, which means the net amount, including




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	 	 	 	interest, fees, and any other charges owing by a Cardholder to Purchaser on the
Cardholder’s Account, of any credit balance in favor of the Cardholder, and less
disputed items as recorded in the periodic statement of such Account most recently
rendered prior to the repurchase date, plus all debits and less any credit properly
posted to such Account pursuant to the terms of the Cardholder Agreement as of the
repurchase date, and, at Purchaser’s discretion, in addition to the principal
balance of said Account(s), the Premium for said Accounts, minus the revenue
Purchaser collected on such Account(s).






	D.	 	Assumption of Liabilities. Except as otherwise expressly set forth herein or, if
applicable, in the Interim Servicing Agreement, upon the satisfaction or waiver of each
condition precedent specified in Section X.A of this Agreement, Purchaser shall assume the
following obligations, each without the execution or delivery of any additional document, on
the Closing Date:






	 	1.	 	All of the obligations of Seller arising after the Cut-Off Time to perform
under the Cardholder Agreements, and the Security Agreements included in the Accounts
to be Sold (excluding obligations for Account Benefits pursuant to Article III); and
	 
	 	2.	 	All of the obligations of Seller arising after the Cut-Off Time to perform with
respect to the Accounts to be Sold under any Requirements of Law, except for those
charges: (a) arising from Seller’s violation on or before Cut-Off Time to any
Requirements of Law; or (b) arising from or relating to any special assessments with
respect to periods up to and including the Cut-Off time (collectively, the “Assumed
Liabilities”). Prior to the Conversion Date, the payments to be made by Purchaser to
Seller under this section shall be made pursuant to Article III of the Interim
Servicing Agreement.
	 
	 	3.	 	Except as provided above, Purchaser shall not assume any liability, commitment,
or any other obligation of Seller, whether absolute, contingent, or otherwise known or
unknown of any nature, kind or description whatsoever, arising from or related to the
operation of the Seller’s business prior to, at or after the Cut-Off Time.
	 
	 	4.	 	Seller expressly retains all liability arising out of or from the Account
Benefits, including, but not limited to, points and the cost of the possible redemption
of such points prior to the Cut-Off Time. Purchaser assumes liability for points and
redemption thereof after the Cut-Off Time.






	E.	 	Cooperation with Sale and Conversion Manager. Seller shall cooperate fully with
Purchaser in connection with the sale and transfer of the Accounts, and shall designate a
dedicated Conversion Manager within its organization to act as the primary contact for
Purchaser. The Conversion Manager will be familiar with this Agreement and have decision
making authority and the ability to coordinate activities contemplated under this Agreement to
help facilitate the sale and transfer of the Accounts to be Sold. Seller and Purchaser shall
schedule and attend meetings necessary to facilitate the smooth transfer of the Accounts to be
Sold, and shall establish and adhere to timelines set up, as described further in Schedule B,
to facilitate the transfer of the Accounts to be Sold. Should Seller be party to an agreement
with a third party who is performing any functions related to the Accounts to be Sold
(including, but not limited to processing or reward administration), Seller shall work with
such third party to determine their respective obligations with respect to their agreement and
facilitate the timely cancellation of any such agreement as well as timely transfer of such
Accounts, following as closely as reasonably possible the timelines established by Purchaser.






	F.	 	Information Access, Records Retention and Risk of Loss. Seller shall provide
Purchaser and its officers, accountants, counsel and other representatives reasonable access
to review the Account Documentation and Seller’s Policies and Procedures and, commencing on
the Closing Date, such other properties, reports, books, contracts, and customer records that
relate to the Accounts to be Sold subject to reasonable security requirements, during Seller’s
normal business hours through a mutually agreeable process upon three (3) Business Days’
notice, throughout the period commencing on the date of this Agreement. In the case of
Purchaser’s review of Seller’s Policies and Procedures, Purchaser and its officers,
accountants, counsel and other representatives, unless otherwise permitted by Seller in
writing, may not photocopy any of Seller’s




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	 	 	Policies and Procedures and may retain only summary notes regarding the same. In addition,
Seller shall provide Purchaser with portfolio summary reports (as further described below in
Section II.G.) within three (3) Business Days after such information becomes available in
each month prior to the Closing Date. Seller will, for a period of five (5) years from the
Conversion Date, or longer as necessary for compliance with the Requirements of Law,
maintain in a fully accessible fashion the Account Documentation and all of its books and
records, including, without limitation, information received from Cardholder applicants for
purposes of USA PATRIOT Act compliance, relating to the Accounts to be Sold. Seller will,
upon Purchaser’s request, transfer or make available to Purchaser Account Documentation,
books and records as Purchaser may request, and will, upon Purchaser’s request, provide
witnesses and/or signed affidavits to establish the reliability and authenticity of such
books and records. Where any Account included in Accounts to be Sold has a credit limit or
balance greater than fifty thousand dollars ($50,000), Seller shall provide Purchaser with
copies of financial information provided to Seller by the Cardholder in connection with the
establishment and maintenance of such Account, provided, however, that if Seller is unable
to provide such financial information, Seller acknowledges that Purchaser may request such
information from the Account obligor. While such documentation and information is in the
control of Seller, the cost to transfer or make available Account Documentation and books
and records to Purchaser as provided herein shall be borne by Seller. Further, the risk of
loss, damage or destruction from any cause to any Account Documentation of Accounts to be
Sold shall be borne by Seller at all times between the date hereof and the date such Account
Documentation or Accounts to be Sold is in Purchaser’s possession, and once in Purchaser’s
possession, thereafter by the Purchaser.
	 
	G.	 	Master File Information. Seller shall transmit to Purchaser, in a secure format
(which may include, but is not limited to, an electronic and encrypted transmission) as
requested by Purchaser, Cardholder information reasonably necessary to facilitate Purchaser’s
timely mailing of change in terms and other notice(s), as described in this Section II.G., as
well as determination of the Purchase Price as described in Section II.B.1. Seller agrees to
provide Purchaser, at Seller’s cost and up to four (4) times prior to the Conversion Date
(according to the timeline set forth in Schedule B), with master file information about the
Accounts to be Sold in a format prescribed and containing information requested by Purchaser,
which will include, without limitation, Cardholder name, address and social security number.
Each transmission of the master file information provided hereunder shall have been produced
no earlier than five (5) Business Days prior to the date the information is transferred to
Purchaser and shall be current as of said production date and contain all of the Accounts to
be Sold. In addition to other uses in connection with the transfer of the Accounts to be
Sold, the master file information will be used to identify Accounts for which Purchaser needs
more information. Seller shall research and provide an answer to any request made by
Purchaser for more information within five (5) Business Days of each request by Purchaser.
Seller shall provide to Purchaser, no later than ten (10) Business Days after the Conversion
Date, the last six months of Account statements for each Account to be Sold.
	 
	H.	 	Notices to Cardholders and Issuance of Replacement Credit Cards.






	 	1.	 	Prior to the Conversion Date, Purchaser, at its own expense and upon prior
written notice to Seller, shall send out one or more notices to Cardholders informing
them of the termination of Seller’s credit card plan and the substitution of
Purchaser’s plan, any changes to certain benefits offered to Cardholders and any new
Account Benefits, and certain changes in terms to be made to the Accounts to be Sold
all in a manner which serves to preserve and promote the goodwill and business
reputation of both Seller and Purchaser. Purchaser may require Seller to notify
certain Cardholders of notice of termination of such Cardholders’ Accounts with Seller.
Notices will be sent sufficiently in advance of the Conversion Date so as to comply
with any applicable Requirements of Law. Prior to the mailing of any change in terms
notice(s) to Cardholders, such notices may be reviewed and approved (such approval
rights shall not include approval of any Account terms, such as pricing, new Account
Benefits or changes to the Cardholder Agreements) by Seller, which approval shall not
be unreasonably withheld or delayed and shall be deemed given if Seller does not reply
within ten (10) Business Days following Purchaser’s request for review.




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	 	2.	 	Based upon the current status of each Account to be Sold, Purchaser will, in
its sole discretion, determine whether or not to continue or cancel an Account. Seller
understands that Purchaser will be relying on information received from Seller and its
current processor (if any) for purposes of making these decisions and, to the extent
such information is accurate, Purchaser will hold Seller harmless with respect to these
decisions. The notices described in Section II.H.1. above will inform Cardholders, as
appropriate, that either the Cardholder will be receiving a new Credit Card from
Purchaser, or the Cardholder’s account with Seller is being terminated and no new
Credit Card will be issued. Purchaser will provide to Seller a list of the Accounts
that will show which products the Accounts will be converted to, as well as show which
Accounts will not be issued a new Credit Card.
	 
	 	3.	 	In order to facilitate the smooth transfer of balances to Purchaser, Seller
shall change the cycle dates of the Accounts to be Sold to one cycle so that all
Accounts to be Sold cycle on the Cut-Off Time, or the last processing date prior to the
Conversion Date, to ensure that all such Accounts have a final statement with an ending
Principal Balance that reflects the amount that is transferred as of the Conversion
Date. If Seller fails or is unable to change the cycle dates of the Accounts to be
Sold to one cycle date, the Accounts will not be billed for fees and interest beginning
after the date of the last statement produced by Seller through the end of the first
statement period produced by Purchaser. This will result in reduced revenue to Seller
pursuant to the Joint Marketing Agreement between Seller and Purchaser, which will not
be reimbursed by Purchaser.
	 
	 	4.	 	Seller shall not share with or otherwise communicate to any third party the
notices to be provided by Purchaser to Cardholders, prior to the mailing of any such
notice, except with Purchaser’s prior written permission.
	 
	 	5.	 	In connection with the notification to Cardholders described in Section II.H.1.
above, Seller authorizes Purchaser, and grants to Purchaser during the term of this
Agreement a limited license, to use the Seller Marks in accordance with the provisions
of this Agreement. Seller represents, warrants and covenants that it or an affiliate
of Seller is and shall remain the sole owner of the Seller Marks, and that it has
authority to grant the license for such use, and that use of the Seller Marks by
Purchaser will not infringe upon the trade name, copyright, trademark or other
intellectual property rights of any third party. Except as otherwise agreed to by the
parties, following termination of this Agreement Purchaser shall not have the right to
disseminate any Cardholder communications using the Seller Marks.






	I.	 	Seller Acknowledgments. Seller acknowledges and agrees to the following:






	 	1.	 	it shall be solely responsible for determining the disposition of funds held by
Seller in connection with an Account to be Sold that is a Secured Account;
	 
	 	2.	 	if the Accounts to be Sold are branded as “MasterCard” accounts, they will be
converted to Visa-branded accounts as of the Conversion Date;
	 
	 	3.	 	it shall be solely responsible for costs incurred with its current third party
processor (if any) due to trailing transactions that apply to any Account to be Sold
following the Conversion Date;
	 
	 	4.	 	it shall obtain a deconversion date from Seller’s third party processor no
later than twenty (20) Business Days from the Closing Date, which date must be approved
by Purchaser; and
	 
	 	5.	 	it shall be solely responsible for any deconversion fees or other fees or
charges assessed to Seller by any third party providing servicing, rewards program
administration, or other services for the Accounts to be Sold.






	J.	 	Collections Rights. After the Closing Date, and except where provided elsewhere in
this Agreement, Purchaser shall have the sole right to make collections with respect to the
Accounts to be Sold.




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	 	 	Notwithstanding the foregoing, prior to the Conversion Date, Seller shall make collections
on the Accounts to be Sold for the Purchaser pursuant to the terms of an Interim Servicing
Agreement, if applicable. From the date of this Agreement until the Conversion Date, Seller
shall not change Seller’s Policies and Procedures with respect to its collection practices
of the Accounts to be Sold except as may be required by Requirements of Law or otherwise as
mutually agreed in writing between the parties.
	 
	K.	 	Compliance with the FCRA. Except as provided in Section II.C.3., Seller shall be
solely responsible for all reporting to credit reporting agencies prior to the Conversion Date
as well as final reporting to credit reporting agencies relating to the satisfaction of
balances of Accounts to be Sold (including, but not limited to, notifying the credit reporting
agency that Accounts have been sold and that the balances are zero). In order to comply with
the requirements of the Fair Credit Reporting Act, Seller agrees that prior to the Conversion
Date it shall, in accordance with Purchaser’s specifications and at Seller’s cost, provide to
Purchaser information that is formatted as specified by Purchaser with the date on which each
Account to be Sold that is reported to a credit reporting agency as being delinquent as of the
Conversion Date first went delinquent. Purchaser shall only be liable to report on the
Accounts to be Sold activity related to Purchaser’s experience with the Accounts after the
Conversion Date.
	 
	L.	 	Forwarding of Notices. From the Effective Date, Seller shall forward to Purchaser
within two (2) Business Days after its receipt thereof any notice, summons, inquiry (but not
general Account inquiries), or other information of any kind (including, but not limited to,
notices of bankruptcy or other insolvency proceedings) relating to, or in any way affecting
Accounts to be Sold. Any such communication shall be sent by Seller to Purchaser in
accordance with the procedure described in Section XI.C. of this Agreement.





III. SELLER PROGRAM, ACCOUNT BENEFITS AND CARDHOLDER SERVICE





	A.	 	Seller Program. After the date of this Agreement, and before the Conversion Date,
Seller will not, without Purchaser’s consent: (1) engage in or participate in any material
transaction or incur or sustain any material obligation with respect to the credit card
business, except in the ordinary course of business; (2) transfer, assign, encumber, or
otherwise dispose of, or enter into any agreement to transfer, assign, encumber, or dispose of
any Account to be Sold, except in the ordinary course of business; (3) change Seller’s
Policies and Procedures with respect to the Accounts to be Sold except as may be required by
Requirements of Law (in which case Seller shall promptly notify Purchaser of such change); or
(4) conduct its credit card plan in other than a normal and regular manner, as it has been
previously conducted; or (5) take any action that would adversely affect any Account to be
Sold. From the date of this Agreement, Seller shall not offer, or enter into an agreement
with a third party with the intent to offer, to existing and potential Cardholders any Account
terms that restrict Purchaser’s ability to change such terms.
	 
	B.	 	Account Benefits.






	 	1.	 	To the extent that Seller provides, or facilitates through a third party the
provision of Account Benefits to Cardholders related to use of their Accounts, Seller
shall cooperate with Purchaser to facilitate the continued enjoyment by Cardholders of
the applicable Account Benefit(s) as close to the Conversion Date as possible, but may
not terminate Seller’s Account Benefits prior to the time that Purchaser may
communicate Purchaser’s Account Benefits to Cardholders. Where a third party is
providing one or more Account Benefit(s), Seller shall be solely responsible for
working with providers of such benefits for the timely cancellation of such benefits
(which Seller acknowledges was Seller’s decision in connection with entering into this
Agreement), and Seller shall indemnify and hold harmless Purchaser from any claims that
a third party Account Benefit provider may have in connection with the cancellation of
the agreement between such third party and Seller. Purchaser may communicate with
Cardholders about Purchaser’s Account Benefits including, but not limited to,
Purchaser’s reward program, if applicable, at anytime prior to cancellation or
termination of Seller’s Account Benefits. Purchaser’s communication of the Purchaser’s
Account Benefits will be sent to Cardholders prior to the Conversion Date, which may
necessitate that such communication occur prior to the Closing Date. Purchaser shall
work with Seller to ascertain the applicable timelines for such communications, some of
which may be set forth in Schedule B.




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	 	2.	 	In connection with any existing reward program related to any Account(s) to be
Sold, if the reward program liability to Cardholders is cash, Seller shall be solely
responsible for, and Purchaser shall have no liability for any cash reward of
Cardholders earned and not paid prior to the Closing Date. Purchaser shall be liable
for cash rewards earned between the Closing Date and the Conversion Date. Seller shall
provide to Purchaser within thirty (30) days after the Closing Date the amount of cash
rewards earned and not paid prior to the Closing Date together with supporting
information. Within five (5) Business Days after the Conversion Date, Seller shall
remit payment of cash rewards to qualifying Cardholders, subject to reimbursement by
Purchaser of an amount equal to cash rewards earned by Cardholders between the Closing
Date and the Conversion Date upon Purchaser’s receipt of an invoice and supporting
documentation from Seller for the amounts remitted. If the reward program liability
consists of a “points” program, which points are redeemable for something other than
cash, such as travel, services, or merchandise, Purchaser will award to Cardholders
points equal to their outstanding points as of the final redemption period for the
points, as established by the Seller or third party facilitating such program, if any.
Seller acknowledges that the Premium takes into account Purchaser’s assumption of any
points-based reward liability outstanding as of Closing Date. Redemptions that occur
prior to the Closing Date are at Seller’s expense. In connection with any existing
reward program related to any Account(s) to be Sold, Seller shall promptly provide
Purchaser with the current program rules, and when the first master file information is
provided (pursuant to Schedule B), provide Purchaser with information necessary to
identify the Accounts to be Sold that have a reward component.
	 
	 	3.	 	Seller shall provide Purchaser with electronic files related to reward points
as provided by Seller or a third party facilitating the reward program, if any,
applicable to Accounts to be Sold, in the following format:






	 	a.	 	a Monthly Cardholder Liability Report, which will include the
beginning reward point balance plus new points earned for the month, less
redemptions for the month equaling the ending reward point balance; and
	 
	 	b.	 	a Cardholder Redemption Report, which will list redemptions by
Cardholders.






	 	4.	 	Seller shall provide the Monthly Cardholder Liability Report and the Cardholder
Redemption Report for Accounts to be Sold pursuant to the following timing:






	 	a.	 	the first set of files will be provided to Purchaser no later
than five (5) Business Days after the last reward point accrual date (the last
date on which Cardholders can earn reward points for purchases); and
	 
	 	b.	 	files will be provided by the fifth (5th) Business
Day of each of the months following delivery of the first set of files until
the Seller’s reward program terminates. The date of termination of Seller’s
reward program will be the final date on which Cardholders may redeem points
under the Seller’s reward program.






	C.	 	Cardholder Service Matters.






	 	1.	 	Seller shall discontinue accepting applications for Accounts to be opened upon
the earlier of sixty (60) days before the Conversion Date, or the launch of the
Seller’s credit card program pursuant to the terms of the Joint Marketing Agreement,
and in any case, pursuant to the timing established in Schedule B or, at Purchaser’s
option, immediately upon Purchaser’s written notice to Seller. Should Seller receive
any application for an Account after it has discontinued accepting applications, Seller
shall forward such application to Purchaser for processing and simultaneously forward a
letter to the applicant informing such applicant of the discontinuation of the Seller’s
program and substitution of Purchaser’s program (which letter shall be in a standard
form approved by Purchaser).




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	 	2.	 	If, at any time during the sixty (60) days after the Conversion Date Purchaser
credits an Account to be Sold for any reason (including, but not limited to, fraud,
unauthorized use, billing error, or disputes as to quality of goods or services
purchased) for any charge which was made on an Account to be Sold prior to the Closing
Date, Seller will reimburse Purchaser for the amount of the credit. Purchaser may
decide, in its reasonable discretion, whether or not to credit a Cardholder’s Account,
and Seller will be obligated to reimburse Purchaser under this section even though
Purchaser may not have been legally obligated to credit the Cardholder’s Account. (For
the purpose of illustration only and without limiting Purchaser’s discretion, Purchaser
may credit an Account to provide good Cardholder service and protect both parties’ good
will.) Seller authorizes Purchaser to offset or charge any amounts due to Purchaser
under this section, whether or not such charges create overdrafts, against the
Correspondent Account under the Joint Marketing Agreement between Seller and Purchaser,
within five (5) Business Days after receipt of notice by Seller from Purchaser
describing the credit provided. Seller will only be responsible under this section for
credits which Purchaser is unable to recover through the appropriate channels through
reasonable and normal efforts.
	 
	 	3.	 	Seller agrees that: (1) any pre-compliance case, pre-arbitration case, incoming
compliance case, or incoming arbitration case on the Accounts to be Sold (all cases
presented pursuant to National Association dispute and chargeback rules and procedures)
notice of which is received by Seller within the ten (10) Business Days prior to the
Closing Date and for which the date that Seller must respond is after the Closing Date,
will be promptly forwarded to Purchaser for decisioning and processing; and (2) without
Purchaser’s consent, Seller shall not accept any resolution (i.e., that Seller or
Cardholder will be liable) of any pre-compliance case, pre-arbitration case, incoming
compliance case, or incoming arbitration case for which the date that Seller must
respond is within the ten (10) Business Days prior to the Closing Date.
	 
	 	4.	 	Prior to the Conversion Date, Seller agrees to use commercially reasonable
efforts to clear any suspense account entries relating to payments or any chargebacks
for the Accounts to be Sold.





IV. COVENANTS AND AGREEMENTS





	A.	 	Mutual Covenants and Agreements of Seller and Purchaser. In addition to other
obligations set forth in this Agreement, each of Seller and Purchaser covenants and agrees
that:






	 	1.	 	it shall use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, appropriate or desirable
hereunder and under the Requirements of Law to consummate and make effective the
transactions contemplated by this Agreement;
	 
	 	2.	 	it shall cooperate fully with the other party hereto in furnishing any
information or performing any action reasonably requested by that party, which
information or action is necessary to the speedy and successful consummation of the
transactions contemplated by this Agreement;
	 
	 	3.	 	it shall use commercially reasonable efforts to obtain consents of all third
parties and governmental bodies necessary for the consummation of the transactions
contemplated by this Agreement (including, without limitation, and to the extent
applicable, requirements of the Hart-Scott-Rodino Act);
	 
	 	4.	 	it shall furnish to the other party hereto all information as is required or
requested to be set forth in any application or statement to be filed with any state or
federal governmental agency or authority in connection with the regulatory approval or
review, or any National Association of the transactions contemplated by this Agreement;
and
	 
	 	5.	 	it shall promptly advise the other in writing of any fact that, if existing or
known as of the date hereof, would have been required to be set forth or disclosed in
or pursuant to this Agreement or




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	 	 	 	of any fact that, if existing or known as of the date hereof, would have made any of
the representations contained herein untrue in any material respect.





V. CONFIDENTIALITY





	A.	 	Confidentiality Information. Both parties acknowledge that in performing their
respective obligations hereunder, they may have access to information and/or documentation of
the other that is of a confidential and/or proprietary nature.






	 	1.	 	“Confidential Information” includes information of a confidential and/or
proprietary nature that may be commercial information or information related to each
party’s customers or consumers. Confidential Information includes, but is not limited
to, the following, whether now in existence or hereafter created:






	 	a.	 	all information marked as “confidential” or with similar
designation; or information which the receiving party should, in the exercise
of reasonable judgment, recognize to be confidential;
	 
	 	b.	 	all information protected by rights embodied in “know how,”
trade secrets, and any other non-public intellectual property rights;
	 
	 	c.	 	all business, financial or technical information of either
party and any of either party’s vendors (including, but not limited to credit
card account numbers, and software licensed from third parties or owned by
either party or its affiliates);
	 
	 	d.	 	both parties’ marketing philosophy and objectives, promotions,
markets, materials, financial results, technological developments and other
similar proprietary information and materials; and
	 
	 	e.	 	any and all master file information of or about customer(s) of
either party, of any nature whatsoever, and specifically including without
limitation, the fact of the existence of a relationship or prospective
relationship between the providing party and customer(s), all lists of
customers, former customers, applicants and prospective customers and all
personal or financial information relating to and identified with such Persons
(“Customer Information”); provided that all of such information of Seller
related to Accounts to be Sold shall become Confidential Information of
Purchaser upon the Closing Date.
	 
	 	f.	 	All notes, memoranda, analyses, compilations, studies and other
documents, whether prepared by the disclosing party, the receiving party or
others, which contain or otherwise reflect Confidential Information.






	 	2.	 	Exceptions. Except for Customer Information, the term “Confidential
Information” excludes any portion of such information that the receiving party can
establish by clear and convincing evidence: (1) to have been publicly known without
breach of this Agreement; (2) known by the receiving party without any obligation of
confidentiality, prior to disclosure of such Confidential Information; (3) to have been
received in good faith by the receiving party, without any confidentiality
restrictions, from a third-party source having the right to disclose such information;
(4) to have been independently acquired or developed without violating any of the
receiving party’s obligations under this Agreement; (5) is required to be disclosed in
the financial statements of the receiving party or its affiliates, to the extent
required by applicable accounting principles, or in any regulatory filing; (6) is
required to be disclosed to a National Association; or (7) is disclosed to its
affiliates, auditors or counsel who have a need to know such information, provided that
such affiliates, auditors or counsel agree to be bound by the provisions of this
Article V. If either party is required by a court or governmental agency having proper
jurisdiction to disclose any Confidential Information, such party shall promptly
provide to the other party notice of such




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	 	 	 	request, if permitted by law, so that the other party may seek an appropriate
protective order; provided, that either party may disclose Confidential Information
to its regulatory governmental agency or to the relevant National Association, if
required by the operating regulations of such National Association, without prior
notice to the other party.






	B.	 	Limited Use of Confidential Information and Survival of Obligations. Both parties
agree now and at all times in the future that all such Confidential Information shall be held
in strict confidence and disclosed only to those employees or agents whose duties reasonably
require access to such information. The receiving party shall protect such Confidential
Information using the same degree of care, but no less than due care, to prevent the
unauthorized use, disclosure or duplication (except as required for backup systems) of such
Confidential Information as the receiving party uses to protect its own confidential
information. Both parties may use the Confidential Information only as necessary for
performance hereunder and for no other use. Both parties’ limited right to use the
Confidential Information shall expire upon termination of this Agreement for any reason. Both
parties’ obligations of confidentiality and non-disclosure, however, shall survive beyond
their duty to perform and shall survive termination or expiration of this Agreement.






	C.	 	Data Security Policies and Procedures. Both parties shall establish data security
policies and procedures to ensure compliance with this section that are designed to: (a)
ensure the security and confidentiality of Customer Information; (b) protect against any
anticipated threats or hazards to the security or integrity of such Customer Information; and
(c) protect against unauthorized access to or uses of such Customer Information that could
result in substantial harm or inconvenience to any customer. Further, Seller agrees, at its
own expense, that it shall transfer Confidential Information, especially Cardholder Account
information, to Purchaser in a secure fashion, which includes, but is not limited to,
transferring the data electronically and in an encrypted format. If data cannot be
transferred electronically, Seller and Purchaser shall arrange for Purchaser’s representative
to travel and collect the data file at Seller’s expense. Seller agrees to indemnify and hold
Purchaser harmless from all claims, damages or expenses related to the loss or unauthorized
access resulting from the transfer of such Confidential Information by Seller to Purchaser.






	D.	 	Audit Obligations. Each party (the “Audited Party”) agrees to permit the other (the
“Auditing Party”), using a mutually-acceptable third party auditor, to audit its compliance
with this Article V during regular business hours upon reasonable notice to the Audited Party.
The Audited Party shall provide to the Auditing Party’s auditor copies of audits and system
test results acquired by the Audited Party in relation to the data security policies and
procedures designed to meet the requirements set forth above. Any audit performed hereunder
shall be at the cost of the Auditing Party.






	E.	 	Return or Destruction. The parties are required to develop appropriate security
measures for the proper disposal and destruction of Confidential Information. Upon expiration
of the receiving party’s limited right to use the Confidential Information, the receiving
party shall return all physical embodiments thereof to the providing party or shall destroy or
otherwise dispose of the Confidential Information in the manner requested by the providing
party. The receiving party shall provide written certification to the other that such
Confidential Information has been destroyed. Notwithstanding the forgoing, the receiving
party may retain one archival copy of the Confidential Information, which may be used solely
to demonstrate compliance with the provisions of this Article V.






	F.	 	Disclosure to Third Parties. If performance by either party, as the receiving party,
requires or allows disclosure of the Confidential Information to any third parties, then such
receiving party shall ensure that such third parties will have express obligations of
confidentiality and non-disclosure, with regard to the Confidential Information, similar to
the receiving party’s obligations hereunder. Liability for damages due to disclosure of the
Confidential Information by any such third parties shall be with the receiving party.






	G.	 	Security Breach. Purchaser and Seller each shall notify the other promptly following
discovery or notification of any actual security breach of the information systems maintained
by it. The party that suffers the security breach (the “Affected Party”) agrees to take
action promptly, at its own expense, to investigate the actual security breach, to identify
and mitigate the effects of any such security breach and to implement reasonable and
appropriate measures in response to such security breach, including, but not limited to,
immediate remedial action designed to prevent any future such occurrence. The Affected Party




 Page 13









 






	 	 	also will provide the other party with all reasonably available information regarding such
security breach to assist that other party in implementing its information security response
program, including, but not limited to, the actions taken by the Affected Party in response
to such security. The Affected Party, to the extent required by Requirements of Law, shall
notify affected customers of the security breach; provided, that, if the security breach
relates to Customer Information of a Cardholder, Purchaser shall determine whether Purchaser
or Seller will send any required notice and the content of any such notice. In either case,
the Affected Party shall bear all costs related to any such notice. Except as may be
strictly required by Requirements of Law, the Affected Party will not inform a third Person
of any such security breach without the other party’s prior written consent; however, if
such disclosure is required by Requirements of Law, Affected Party shall work with the other
party regarding the content of such disclosure as to minimize any potential adverse impact
upon the other party, its clients and customers.






	H.	 	Public Statements. Except as may be required pursuant to a Requirement of Law or
permitted pursuant to Section II.H. relating to Cardholder communications, neither Seller nor
Purchaser, nor any of their respective affiliates, shall, either prior to or after the Closing
Date, issue a press release or make any public announcement or any disclosure to any third
party related to the transactions contemplated hereby that identifies the other party hereto
without the prior written consent of such other party.






	I.	 	Terms of Agreement as Proprietary Information. Without limitation, this Agreement
and the terms of this Agreement shall be deemed to be proprietary information of the
Purchaser. This Article V. shall survive any termination of this Agreement.





VI. REPRESENTATIONS AND WARRANTIES





	A.	 	Seller and Purchaser. As of the date of this Agreement, each of Purchaser and Seller
represents and warrants to each other as to itself as follows:






	 	1.	 	It has full right, power and authority to enter into and perform this Agreement
in accordance with all of the terms and provisions hereof, and that the execution and
delivery of this Agreement has been duly authorized, and the individuals signing this
Agreement on behalf of it are duly authorized to execute this Agreement in the capacity
of his or her office, and to obligate and bind the parties, and/or the parties’
subsidiaries and affiliates, in the manner described;
	 
	 	2.	 	The execution and performance of this Agreement will not violate the
organizational documents or by-laws or any material contract or other instrument,
Requirement of Law or order to which it has been named a party or by which it is bound.
The execution and performance of this Agreement does not require the approval or
consent of any other Person;
	 
	 	3.	 	There are no material actions, suits or proceedings pending or threatened
against either party or its affiliates or subsidiaries which would adversely affect its
ability to perform this Agreement; and
	 
	 	4.	 	It or one of its subsidiaries or affiliates owns all right, title and interest
in its marks and it or one of its subsidiaries or affiliates has all necessary
authority to permit use of its marks as contemplated by this Agreement.






	B.	 	Seller. As of the date of this Agreement, Seller represents and warrants to
Purchaser as follows:






	 	1.	 	Seller is the sole owner of and has good title to the Accounts to be Sold free
and clear of all liens, encumbrances or adverse claims of any kind or character and is
not subject to any offset, counterclaim or defense of any kind;
	 
	 	2.	 	Each of the Accounts to be Sold represents a valid and binding obligation of a
bona fide Cardholder, enforceable in accordance with its terms, and Seller has
delivered to Purchaser all documents and records necessary to enable Purchaser to
legally enforce all terms of the Accounts to be Sold;




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	 	3.	 	The Accounts to be Sold, or a substantial portion thereof, are not subject to
or bound by any agreement between Seller and a governmental agency or court of law or
other party with authority over Seller that may impair Purchaser’s full ownership and
administrative rights or create additional responsibilities for Purchaser with respect
to such Accounts;
	 
	 	4.	 	Seller has not previously assigned the Accounts to be Sold and has no
contractual or other obligation to sell or otherwise transfer the Accounts or the
indebtedness thereunder to any other party;
	 
	 	5.	 	Each of the Accounts to be Sold, and all documents provided to Cardholders in
connection with the Accounts, are legal and enforceable in accordance with their terms,
and comply with all applicable Requirements of Law;
	 
	 	6.	 	All information provided to Purchaser by Seller with respect to the Accounts to
be Sold (including, but not limited to, information concerning the overall quality and
aging of the Accounts to be Sold and information concerning rewards programs, Account
terms, or other product features or benefits) was true and correct on the date
furnished, and Seller has no updated information which would make any previously
provided information materially misleading or incorrect or which would make the
Accounts to be Sold materially less valuable than they would appear to be on Seller’s
records; and
	 
	 	7.	 	No Account to be Sold contains one or more Account terms that cannot be changed
by Purchaser or otherwise limits Purchaser’s ability to change the terms of the Account
in the manner and timing established by Purchaser related to such Accounts, or is
subject to an agreement with a third party, including, without limitation, a third
party providing Account Benefits, that would in any way limit Purchaser’s ability to
change the terms of the Account in the manner and timing established by Purchaser.






	C.	 	Survival; Obligations of Seller. The representations and warranties contained in
this Article VI. shall survive any termination of this Agreement and the transfer of the
Accounts to be Sold. If any of the representations or warranties prove to be inaccurate with
respect to any Account to be Sold, Purchaser may, at Purchaser’s option, require Seller to
purchase such Account to be Sold. If so required, Seller shall repay to Purchaser the
principal balance as of the repurchase date, which means the net amount, including interest,
fees, and any other charges owing by a Cardholder to Purchaser on the Cardholder’s Account, of
any credit balance in favor of the Cardholder, and less disputed items as recorded in the
periodic statement of such Account most recently rendered prior to the repurchase date, plus
all debits and less any credit properly posted to such Account pursuant to the terms of the
Cardholder Agreement on or before the repurchase date, and, at Purchaser’s discretion, in
addition to the principal balance, the Premium for such principal balance, minus the revenue
Purchaser collected on any Account to be Sold, plus Purchaser’s expenses. The terms of
Section II.C.3 of this Agreement shall apply to the repurchase of Accounts. Seller’s
obligation to repurchase Accounts shall continue for one year after Purchaser obtains
knowledge of such inaccuracy. Except with respect to any Account that Seller has repurchased
and satisfied all of its obligations with respect to such repurchase, Seller shall be liable
to Purchaser for any loss, claim, damage or expense arising or incurred as a result of any
such inaccuracy and, without limiting the foregoing, Purchaser may recover from Seller the
amount by which the net present value of the contribution (revenues less expenses)
(“Contribution”) from the Accounts to be Sold that Purchaser reasonably estimated that it
would realize from the Accounts to be Sold relying on the accuracy of the information provided
to Purchaser exceeds the net present value of the Contribution from the Accounts to be Sold
for the same period for which Purchaser estimated such expected Contribution as reasonably
estimated by Purchaser after taking into account the effect of the inaccuracy of the
information provided. For purposes of illustration only, if Seller has provided or provides
inaccurate information with respect to the annual percentage rate applicable to any Accounts
to be Sold, Purchaser shall be entitled to recover from Seller the net present value of the
amount by which the Contribution from the Accounts to be Sold the Purchaser reasonably
estimated that it would realize based on the applicable annual percentage rate represented to
Purchaser by Seller exceeds the net present value of Contribution from the Accounts to be Sold
for the




 Page 15









 












same period for which Purchaser
estimated such expected Contribution
as reasonably estimated by Purchaser
after taking into account the actual
annual percentage rate.



VII. TERMINATION



Except as provided in Section VIII.A. and Section XI.B., this Agreement shall terminate and shall
be of no further force or effect upon the earliest of: (1) as of the close of business on the
Conversion Date; (2) upon mutual agreement of the parties; (3) upon notice given by either party to
the other party in the event Requirements of Law prohibit the sale transaction contemplated by this
Agreement; or (4) if by the date that is one hundred (100) days after the Effective Date of this
Agreement the Closing has not occurred and, thereafter, either party provides written notice to the
other party of conditions precedent to the notifying party’s performance hereunder that have not
been satisfied and that the notifying party is terminating this Agreement. Purchaser also may
terminate this Agreement and require Seller to repurchase from it all Assets to be Sold if
forty-five (45) days after the Closing Date Seller shall have failed to provide to Purchaser all
information required by Purchaser under this Agreement to determine the Preliminary Purchase Price,
or if after the Closing Date and prior to payment of the Preliminary Purchase Price by Purchaser,
Seller shall have breached any covenant to be performed by it under this Agreement. On the fifth
(5th) Business Day after Purchaser sends notice to Seller of termination of this
Agreement pursuant to the preceding sentence, this Agreement shall terminate and all right, title
and interest in and to the Assets to be Sold (other than Purchaser’s right to receive payments from
Cardholders or National Associations on account of Cardholders’ obligations or interchange fees
related to or arising out of Accounts to be Sold in each case, after the Cut-Off Time and prior to
the repurchase of the Accounts to be Sold) shall revert to Seller and Seller shall assume all
obligations with respect to the Assets to be Sold. The provisions of Section II.C. shall apply
with respect to the Accounts to be Sold that are repurchased by Seller (other than payment
provisions if no payment was made by Purchaser for the Accounts to be Sold). Purchaser will
execute and deliver to Seller any documents reasonably necessary to reassign and transfer any other
Assets to be Sold to Seller. Notwithstanding termination of this Agreement under this Article VII,
each party shall retain all rights and remedies against the other party provided by law for any
material breach of this Agreement.




VIII. DAMAGES AND INJUNCTIVE RELIEF





	A.	 	Delay; Liquidated Damages. Should either party fail to perform its obligations
pursuant to Section II.B.3. or otherwise delay in the performance of its obligations, whether
the failure to perform or delay is caused by the party itself who fails to perform or a third
party, which delay has not been excused by the other party as an Excusable Delay (as defined
in Section XI.G), the party who fails to perform timely shall pay to the other liquidated
damages in the amount of .0125% of the Principal Balance to be purchased, per day for each day
that such non-performing party under Section II.B.3. has failed to perform; provided, that
upon termination of this Agreement, such damages determined under this Section VIII.A. shall
cease to accrue and the performing party shall be entitled to recover such damages from the
non-performing party as the performing party may have suffered in addition to the damages
specified in this Section VIII.A. The payment of any of the foregoing amounts shall not be
deemed to constitute a forfeiture or a penalty.






	B.	 	Default; Damages. In the event that either party breaches any of its obligations
under this Agreement, in addition to any other remedies provided pursuant to this Agreement or
applicable Requirements of Law, the non-breaching party shall be entitled to recover from the
breaching party the actual damages which the non-breaching party may incur on account of such
breach. Except as otherwise provided in this Agreement, neither party shall be liable to the
other party for damages for lost profits, exemplary, punitive, special, incidental, indirect
and consequential damages suffered by the other party, including indemnified parties pursuant
to Article IX (except any such damages payable by an indemnified party to Persons not related
to the parties hereto or liquidated damages payable under this Agreement that may include any
of the foregoing) (“Excluded Damages”).






	C.	 	Injunctive Relief. It is understood and agreed that money damages would not be a
sufficient remedy for any breach of Article V. of this Agreement by any party or by any other
Person or entity receiving Confidential Information pursuant to Article V. and that the party
whose Confidential Information is disclosed or used in violation of this Agreement shall be
entitled to claim injunctive or equitable relief as a




 Page 16









 












remedy for any such breach. Such remedy
shall not be deemed to be the exclusive
remedy for breach of this Agreement, but
shall be in addition to all other
remedies available to such party at law
or equity.



IX. INDEMNIFICATION 





	A.	 	Indemnification of Purchaser by Seller. Seller agrees to indemnify and hold
Purchaser, its affiliates and its officers, directors, employees and permitted assigns
harmless of and from any and every claim, demand, proceeding and suit, and from every
liability, loss, damage, cost, charge and expense (including, without limitation, any actions
or expenditures required by Requirements of Law, operating regulations of National
Associations or card agreements to correct deficiencies related to the Accounts to be Sold) or
any other liability of every nature, kind and description whatsoever, whether or not material,
liquidated, contingent or prospective in nature, exclusive of Excluded Damages, by reason of
or resulting from or arising out of any of:






	 	1.	 	The ownership or administration of the Assets to be Sold by the Seller prior to
the Closing Date (whether known or unknown, contingent or matured);
	 
	 	2.	 	Seller’s performance of its obligations under this Agreement affecting or
alleged to affect Persons not related to the parties hereto;
	 
	 	3.	 	Any misrepresentation or breach of any representation, warranty or covenant of
Seller contained herein or in any document or instrument delivered by Seller hereunder;
	 
	 	4.	 	The termination of any agreements or relationships related to the Assets to be
Sold;
	 
	 	5.	 	Any fraudulent or dishonest act by Seller, its affiliates, agents or
representatives related to this Agreement; or
	 
	 	6.	 	Seller’s failure to comply with applicable Requirements of Law relevant to this
Agreement.






	 	 	Seller shall be liable for reasonable attorneys’ fees and expenses incurred by Purchaser,
but only if the same are incurred in connection with claims, demands, proceedings or suits
asserted by Persons not related to the parties hereto.
	 
	B.	 	Indemnification of Seller by Purchaser. Purchaser agrees to indemnify and hold
Seller, its affiliates and its officers, directors, employees and permitted assigns harmless
of and from any and every claim, demand, proceeding and suit, and from every liability, loss,
damage, cost, charge and expense (including, without limitation, any actions or expenditures
required by Requirements of Law, operating regulations of National Associations or card
agreements to correct deficiencies related to the Accounts to be Sold (but in no event with
respect to credit losses related to the Accounts to be Sold unless otherwise provided in this
Agreement)) or any other liability of every nature, kind and description whatsoever whether or
not material, liquidated, contingent or prospective in nature, exclusive of Excluded Damages,
by reason of or resulting from or arising out of:






	 	1.	 	The ownership or administration of the Assets to be Sold by the Purchaser
subsequent to the Closing Date (whether known or unknown, contingent or matured);
	 
	 	2.	 	Purchaser’s performance of its obligations under this Agreement affecting or
alleged to affect Persons not related to the parties hereto;
	 
	 	3.	 	Any misrepresentation or breach of any representation, warranty or covenant of
Purchaser contained herein or in any document or instrument delivered by Purchaser
hereunder;
	 
	 	4.	 	Any fraudulent or dishonest act by Purchaser, its affiliates, agents or
representations related to this Agreement; and




 Page 17









 






	 	5.	 	Purchaser’s failure to comply with applicable Requirements of Law relevant to
this Agreement.






	 	 	Purchaser shall be liable for reasonable attorneys’ fees and expenses incurred by Seller,
but only if the same are incurred in connection with claims, demands, proceedings or suits
asserted by Persons not related to the parties hereto.
	 
	C.	 	Indemnification Procedures. The Indemnified Party will notify the Indemnifying Party
in a reasonably prompt manner of any claim that is asserted and each action or suit that is
filed or served (any of the foregoing being a “Claim”) for which the Indemnified Party is
seeking indemnification pursuant to this Section IX.C. The Indemnifying Party may thereafter
assume control of such Claim, provided, that the Indemnified Party will have the right to
participate in the defense or settlement of such Claim. Neither the Indemnifying Party nor
the Indemnified Party may settle such Claim or consent to any judgment with respect thereto
without the consent of the other party hereto (which consent may not be unreasonably withheld
or delayed). The Indemnified Party will provide the Indemnifying Party with a reasonable
amount of assistance in connection with defending or settling any such Claim.





X. CONDITIONS PRECEDENT





	A.	 	Conditions Precedent to Purchaser’s Obligations. The obligation of Purchaser to
close under this Agreement is subject to the fulfillment of each of the following conditions
which shall be deemed waived if the parties complete Closing:






	 	1.	 	The representations and warranties made by Seller herein shall be true and
correct in all material respects as of the Closing Date, as though such representations
and warranties were restated and made at and as of the Closing Date;
	 
	 	2.	 	All the necessary consents, regulatory and other approvals, licenses and other
authorizations which are material to the transactions contemplated hereby shall have
been obtained permitting the post-Closing ownership and operation by Purchaser of the
Accounts on terms substantially comparable to those existing at the present and all
applicable waiting periods (and extensions thereof), if any, under the
Hart-Scott-Rodino Act shall have expired or otherwise been terminated and Seller and
Purchaser shall have received all other permits or consents of governmental authorities
necessary. No such permit or consent shall contain any condition, limitation or
requirement that, individually or in the aggregate, would, in Purchaser’s reasonable
good faith judgment, materially reduce the benefits of the transaction contemplated by
this Agreement to Purchaser;
	 
	 	3.	 	As of the Closing Date, there shall not have been any material adverse change
in the Assets to be Sold since completion of due diligence by Purchaser;
	 
	 	4.	 	Seller shall have delivered to Purchaser such documents, certificates and
agreements reasonably requested by Purchaser;
	 
	 	5.	 	Seller and Purchaser shall have entered into the “Elan Financial Services Joint
Marketing Agreement” (the “Joint Marketing Agreement”);
	 
	 	6.	 	No claim, action, suit, proceeding or governmental investigation shall have
been threatened or instituted challenging the validity of this Agreement or the series
of transactions contemplated hereby which could reasonably be expected to have a
material adverse effect on the transactions contemplated hereby and no order of any
court shall have been entered which reasonably could be expected to have a material
adverse effect on the transactions contemplated hereby;
	 
	 	7.	 	All pre-Closing covenants, obligations and other matters to be performed on the
part of Seller shall have been fulfilled in all material respects;




 Page 18









 












	8.	 	If required by Purchaser, Seller and Purchaser shall have entered into the
Interim Servicing Agreement;
	 
	9.	 	The acquisition of the Assets to be Sold shall not violate any applicable
statute, rule or regulation in effect on the Closing Date;
	 
	10.	 	Seller shall have paid to Purchaser any amount due by Seller pursuant to
Section VIII.A.






	B.	 	Conditions Precedent to Seller’s Obligations. The obligation of Seller to close
under this Agreement is subject to the fulfillment of each of the following conditions which
shall be deemed waived if the parties complete Closing:






	 	1.	 	The representations and warranties made by Purchaser herein shall be true and
correct in all material respects as of the Closing Date, as though such representations
and warranties were restated and made at and as of the Closing Date;
	 
	 	2.	 	Seller and Purchaser shall have entered into the Joint Marketing Agreement;
	 
	 	3.	 	No claim, action, suit proceeding or governmental investigation shall have been
threatened or instituted challenging the validity of this Agreement or the series of
transactions contemplated hereby which could reasonably be expected to have a material
adverse effect on the transactions contemplated hereby and no order of any court shall
have been entered which reasonably could be expected to have a material adverse effect
on the transactions contemplated hereby;
	 
	 	4.	 	All applicable waiting periods (and extensions thereof), if any, with respect
to any application filed with the OCC or under the Hart-Scott-Rodino Act shall have
expired or otherwise been terminated and Seller and Purchaser shall have received all
other necessary permits or consents;
	 
	 	5.	 	All pre-Closing covenants, obligations and other matters to be performed on the
part of Purchaser shall have been fulfilled; and
	 
	 	6.	 	The sale of the Assets to be Sold shall not violate any applicable statute,
rule or regulation in effect on the Closing Date.






	C.	 	Closing. The Closing shall be deemed to have occurred on the Closing Date specified
in the second Recital of this Agreement, unless one of the parties notifies the other in
writing prior thereto that in its reasonable determination not all of the conditions precedent
to its obligation to close under this Agreement have been satisfied; provided, that if such
determination is not accurate, the Closing Date shall be deemed to have occurred as specified
in the second Recital of this Agreement if so elected by the other party.






	D.	 	Filing. Seller authorizes Purchaser to file Uniform Commercial Code financing
statements (as Purchaser may deem necessary) naming Seller as “debtor” and Purchaser as
“secured party” and describing the Accounts to be Sold, the Related Receivables and related
assets as collateral.





XI. ADDITIONAL CONTRACT PROVISIONS





	A.	 	Successors and Assigns. This Agreement benefits and binds the parties hereto and
their respective successors and assigns. Neither party may assign or transfer its rights or
obligations under this Agreement without the other party’s prior written permission, which
permission shall not be unreasonably withheld, except that Purchaser may make such an
assignment or delegation to an affiliate of Purchaser that has the ability to fulfill the
obligations of Purchaser hereunder without Seller’s written consent.






	B.	 	Survival of Obligations, Rights and Remedies. In addition to the survival of
specific clauses as set forth in the terms of this Agreement, the obligations and remedies of
the parties as specified in the provisions described below shall survive termination of this
Agreement as follows:




 Page 19









 












	 	1.	 	in the case of termination of this Agreement by reason of the Conversion Date
having occurred, the obligations and remedies of the parties set forth in Sections
II.B., II.C., II.F., II.G., II.I., II.J., II.K., II.L., III.B., III.C.2., and III.C.3.,
and Articles V, VI, VII, VIII, IX and XI of this Agreement;
	 
	 	2.	 	in the case of termination of this Agreement after Closing and prior to
Conversion having occurred, the obligations and remedies of the parties set forth in
Sections II.I.5., II.J, II.K., XI.C., XI.H., and XI.J., and Articles V., VI., VII.,
VIII. and IX of this Agreement; and
	 
	 	3.	 	in the case of termination of this Agreement prior to Closing, the obligations
and remedies of the parties set forth in Section XI.C., XI.H., and XI.J., and Articles
V., VI., VII., VIII. and IX. of this Agreement.






	 	 	All rights and obligations of either party which may have arisen or accrued prior to
termination shall survive termination of the Agreement.
	 
	C.	 	Notices. All communications or notices required or permitted under this Agreement
shall be deemed to have been given on the date when (i) delivered in person or by a nationally
recognized overnight delivery service, (ii) sent via telecopy transmission to the telecopy
number specified below with a hard copy sent via first class mail the following day, or
(iii) deposited in the United States mail, postage prepaid, and addressed as follows:





	 	 	 	 	 	 	 
	 

	 	1. if to Purchaser:
	 	Elan Financial Services	 	 
	 

	 	 	 	777 East Wisconsin Avenue — 6th floor	 	 
	 

	 	 	 	Milwaukee, Wisconsin 53202	 	 
	 

	 	 	 	Attention: Credit Card Portfolio Acquisition Manager	 	 
	 

	 	 	 	Telecopy No. 414-765-6134	 	 
	 
	 	 	 	 	 	 
	 

	 	with a copy to:
	 	Elan Financial Services	 	 
	 

	 	 	 	800 Nicollet Mall, BC-MN-H21N	 	 
	 

	 	 	 	Minneapolis, Minnesota 55402	 	 
	 

	 	 	 	Attention: Corporate Counsel, Retail Payment Solutions	 	 
	 

	 	 	 	Telecopy No. 612-303-7888	 	 
	 
	 	 	 	 	 	 
	 

	 	2. if to Seller:
	 	Columbia River Bank	 	 
	 

	 	 	 	401 East Third Street, Suite 200	 	 
	 

	 	 	 	The Dalles, OR 97058	 	 
	 

	 	 	 	Attention: Brian Devereux	 	 
	 

	 	With a copy to:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Attention:	 	 
	 
	 	 	 	
 
	 	 
	 
	 	 	 	Telecopy No.	 	 
	 
	 	 	 	
 
	 	 






	 	 	Each party may change its address or telecopy number for communications and notices
hereunder by written notice to the other party hereto.
	 
	D.	 	Severability. The invalidity or unenforceability of any term or provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement.
	 
	E.	 	Waivers and Amendments. No delay, omission, or neglect with respect to the exercise
of any right under this Agreement shall constitute a waiver of such right. No waiver or
amendment of this Agreement shall be valid unless agreed upon in writing by both parties.





 Page 20








 












	F.	 	Entire Agreement, Section Headings and Counterparts. This Agreement constitutes the
entire agreement between the parties with respect to matters covered by this Agreement, and
supersedes any contract, agreement, or oral understanding with respect to such matters which
may have been in existence between the parties prior to the date of this Agreement. All
section headings herein are included for convenience only and are not to be construed as a
part of this Agreement or in any way limiting or amplifying its terms. This Agreement may be
signed in any number of counterparts, each of which shall be deemed an original.






	G.	 	Excusable Delays and Force Majeure. Any delay hereunder shall be excused to the
extent approved in writing by the parties. Any delay in the performance by either party
hereto of its obligations hereunder shall be excused when such delay in performance is due to
any cause or event of any nature whatsoever beyond the reasonable control of such party,
including without limitation any act of God; any fire, flood or weather condition; any
earthquake; any epidemic or pandemic; act of a public enemy, war, insurrection, riot,
explosion, terrorist attack or strike; provided, however, that written notice thereof must be
given by such party to the other party within thirty (30) days after the occurrence of such
cause or event.






	H.	 	Governing Law. This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of Minnesota, without regard to conflict of law issues.






	I.	 	Relationship of Parties. Nothing herein contained shall be deemed or construed to
create a partnership or joint venture between the parties. The duties and responsibilities of
the Seller shall be rendered by the Seller as an independent contractor and not as an agent of
Purchaser. The Seller shall have full control of all of its acts, doings, proceeding,
relating to or requisite in connection with the discharge of its duties and responsibilities
under this Agreement.






	J.	 	WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE EXTENT
PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.






	K.	 	Attached Exhibits and Schedules. Each Exhibit and each Schedule referred to in this
Agreement is expressly incorporated in its entirety and made a part of this Agreement.





[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




 Page 21









 





     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.




	 	 	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION ND,	 	COLUMBIA RIVER BANK
	D/B/A ELAN FINANCIAL SERVICES	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	By:	 	 
	
 
	 	
 

	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 






 








 








Exhibit A

Definitions





	1.	 	“Account” means revolving lines of credit issued to individuals and Business Entities and
accessed through the use of a Credit Card bearing the marks of a National Association.
	 
	2.	 	“Account(s) to be Sold” means those Accounts to be sold and transferred to Purchaser,
identified in Section II.A.1., including all Principal Balances thereunder.
	 
	3.	 	“Account Benefits” means the ancillary benefits available to Cardholders, including but not
limited to credit insurance, debt cancellation programs, and rewards programs, which benefits
may be offered to Cardholders by Seller or a third party who has contracted with Seller to
provide such services.
	 
	4.	 	“Account Documentation” means all existing books, materials, records, Account applications,
Cardholder Agreements, documents, disclosure statements, credit information files, credit card
slips, receipts, drafts, checks, instruments, mailing lists, customer lists, monthly billing
statements, customer correspondence, Cardholder master files and other records relating to the
Accounts to be Sold, whether on paper, microfilm, microfiche, magnetic tape, computer disc or
in any other form, including, without limitation, statement fiche and billing dispute records.
	 
	5.	 	“Affected Party” shall have the meaning set forth in Section V.G.
	 
	6.	 	“Assumed Liabilities” shall have the meaning set forth in Section II.D.2.
	 
	7.	 	“Audited Closing Statement” shall have the meaning set forth in Section II.B.6.
	 
	8.	 	“Audited Preliminary Closing Statement” shall have the meaning set forth in Section II.B.6.
	 
	9.	 	“Business Day” shall mean any day (other than Saturday, Sunday or legal holiday in North
Dakota) in which national banks are permitted to be open in North Dakota.
	 
	10.	 	“Business Entity” or “Business Entities” means a business organization, including but not
limited to a municipality, governmental agency, partnership, corporation, limited liability
company or sole proprietor.
	 
	11.	 	“Cardholder” means singly or as a group, a Person who holds an Account (which Account is
designated as either a consumer or business Account) issued by Seller.
	 
	12.	 	“Cardholder Agreement” means the agreement between the Cardholder and Seller that governs use
of an Account.
	 
	13.	 	“Closing” means the closing of the sale, purchase and assignment of the Accounts to be Sold
by and between Seller and Purchaser and the transfer of all of Seller’s right, title and
interest in and to the Accounts to be Sold and other Assets to be Sold to Purchaser.
	 
	14.	 	“Closing Date” means the date first stated above in the second Recital on which the Closing
is to be consummated, or such later date as Closing may occur.
	 
	15.	 	“Closing Payment” means the difference between the Closing Purchase Price, set forth in
Schedule A-1, and the Preliminary Purchase Price, as set forth in Schedule A-1.
	 
	16.	 	“Confidential Information” shall have the meaning as set forth in Article V.
	 
	17.	 	“Conversion Date” means the date that all Accounts to be Sold that are transferred hereunder
are converted to Purchaser or Purchaser’s representative for record keeping and servicing
functions related to the ongoing activity of such Accounts to be Sold. The Conversion Date
may be the same as the Closing Date.




A-1









 












	18.	 	“Correspondent Account” shall mean a depository account established by Seller with a
financial institution designated or approved by Purchaser for the purpose of receiving or
making payments and settling transactions pursuant to this Agreement.
	 
	19.	 	“Customer Information” shall have the meaning as set forth in Section V.A.1.
	 
	20.	 	“Credit Card” means any card, plate or other access device (including cash advance checks and
balance transfer checks) that may be used from time to time to obtain open-end credit pursuant
to an Account.
	 
	21.	 	“Customer Base” means the proprietary information that relates specifically to the Accounts
to be Sold, including the customer lists containing names and the most recent street
addresses, telephone numbers, social security numbers and the credit data of the Cardholders
with respect to such Accounts.
	 
	22.	 	“Cut-Off Time” means the time of the close of processing on the Closing Date by Seller or
Seller’s processor, if any, in accordance with past custom and practice of the Accounts to be
Sold.
	 
	23.	 	“Effective Date” shall mean the date first set forth in the introductory paragraph of the
Agreement.
	 
	24.	 	“Excluded Damages” shall have the meaning set forth in Section VIII.B., hereof.
	 
	25.	 	“Full Recourse Account” shall mean an Account that has a credit limit or balance that exceeds
$50,000, and Seller has agreed to enter into a separate Full Recourse Agreement in order to
assume all risk of credit, fraud or other loss with respect to such Account and indemnify and
hold Purchaser harmless from any loss, claim or damage arising from, or relating to, the
Account.
	 
	26.	 	“Full Recourse Agreement” shall mean a separate agreement between Purchaser and Seller with
respect to a Full Recourse Account, which agreement is in a form supplied by or approved by
Purchaser.
	 
	27.	 	“Ineligible Account” shall have the meaning set forth in Section II.A.2.
	 
	28.	 	“Interim Servicing Agreement” shall mean an agreement between Seller and Purchaser whereby
Seller, or Seller’s representative, will provide for the servicing of the Accounts to be Sold
from the Closing Date to the Conversion Date.
	 
	29.	 	“Interim Servicing Period” shall mean the period during which Seller provides interim
servicing for the Accounts to be Sold and Related Receivables.
	 
	30.	 	“Joint Marketing Agreement” shall have the meaning set forth in Section X.A.5.
	 
	31.	 	“National Association” means Visa and MasterCard and such other national card association
with respect to which Purchaser may become an issuer during the term of this Agreement.
	 
	32.	 	“Person” means a natural person, corporation, partnership, limited partnership, limited
liability company, joint venture, firm, association, trust, unincorporated organization,
government or governmental agency or political subdivision or any other entity, whether acting
in an individual, fiduciary or other capacity.
	 
	33.	 	“Preliminary Purchase Price” shall be the amount set forth in Schedules A and A-1.
	 
	34.	 	“Premium” means that certain percentage or dollar amount, as set forth in Schedules A and
A-1, that is added to the Principal Balances that are being purchased to make up the Purchase
Price of the Accounts to be Sold.
	 
	35.	 	“Principal Balance” means the net amount, including interest, fees, and any other charges
owing by a Cardholder to Seller on the Cardholder’s Account, of any credit balance in favor of
the Cardholder, and less disputed items as recorded in the periodic statement of such Account
most recently rendered prior to the




A-2









 












	 	 	Cut-Off Time, plus all debits and less any credit properly posted to such Account pursuant
to the terms of the Cardholder Agreement on or before the Cut-Off Time.
	 
	36.	 	“Purchase Price” shall have the meaning set forth in Section II.B.1.
	 
	37.	 	“Related Receivables” means, with respect to each Account to be Sold, all amounts owing to
Seller by the related Cardholders on such Account as of the Cut-Off Time, including
outstanding extensions of credit, Unposted Accrued Finance Charges, billed finance charges,
annual fees, and any other charges and fees assessed on said Account.
	 
	38.	 	“Requirements of Law” means, with respect to any party hereto, any law, ordinance, statute,
treaty, rule, judgment, regulation or other determination or finding of any arbitrator or
governmental authority applicable to or binding upon such party or to which such party is
subject, whether federal, state, county, local or otherwise (including, without limitation,
usury laws, the Bank Secrecy Act, the Federal Truth-In-Lending Act, the Fair Debt Collection
Practices Act, the Federal Equal Credit Opportunity Act, the Fair Credit Reporting Act, the
National Bank Act, the Federal Credit Union Act, Gramm-Leach-Bliley, the USA PATRIOT Act, and
Regulations B, E, P and Z of the Board of Governors of the Federal Reserve System).
	 
	39.	 	“Secured Account” means an Account that is secured by a deposit account or other secured
method as established by Seller.
	 
	40.	 	“Security Agreement” means the agreement executed by a Cardholder, which creates a security
interest in funds held in a savings account as security for the Secured Account.
	 
	41.	 	“Seller Marks” means all registered and unregistered trademarks, services marks, trade name,
service name, trade dress and internet address or domain name including, without limitation,
the Seller’s name and logo(s), owned and used by Seller.
	 
	42.	 	“Seller’s Policies and Procedures” means Seller’s policies and normal, day-to-day operating
procedures and practice in compliance with such policies and Seller’s normal financial
accounting guidelines for the conduct of the business of issuing credit cards, all existing as
of the date of execution of this Agreement that are in use by Seller for all of Seller’s
credit card portfolio without regard to ownership of the Accounts, as modified from time to
time.
	 
	43.	 	“Unearned Program Fees” means the pro-rata portion of any scheduled fees that have been
billed to Cardholders for services associated with the Accounts to be Sold including, but not
limited to an annual fee for use of the card, identity theft protection, and reward program,
but have not yet been earned as of the Closing Date of this Agreement, according to an assumed
twelve-month, straight-line amortization period that is applied at the Account level beginning
at the time at which the annual fee is posted to the Account.
	 
	44.	 	“Unposted Accrued Finance Charges” means the aggregate amount of finance charges that have
been earned but not yet posted and billed to each Account to be Sold from the last cycle date
of each Account to be Sold up to and including the Cut-Off Time.






A-3









 








Credit Card Account Purchase Agreement

Schedule A

Preliminary Closing Statement




TO: COLUMBIA RIVER BANK



This Preliminary Closing Statement is delivered to you (“Seller”) by Elan Financial Services
(“Purchaser”) pursuant to Section II.B.3 of the Credit Card Account Purchase Agreement dated as of
                    , 2008 between Seller and Purchaser (the “Agreement”). Unless otherwise defined
herein, all capitalized terms used in this Schedule A shall have the meaning defined for them under
the Agreement.




	 	 	 	 	 
	1. 100% of the Principal Balance of the Accounts to be
Sold as of the Cut-Off Time
	 	$	                    	 
	 
	 	 	 	 
	Plus
	 	 	 	 
	 
	 	 	 	 
	2. A Premium of 11%
	 	$	                    	 
	 
	 	 	 	 
	Minus
	 	 	 	 
	 
	 	 	 	 
	3. Unearned Program Fees
	 	$	                    	 
	 
	 	 	 	 
	Equals
	 	 	 	 
	 
	 	 	 	 
	4. Preliminary Purchase Price (1 plus 2 minus 3)
	 	$	                    	 





The Preliminary Purchase Price shall be paid as provided in Section II.B.5 of the Agreement.
Seller and Purchaser hereby acknowledge and accept the foregoing this ___
day of                     , 200___.




	 	 	 	 	 	 	 
	 	 	 	 	Accepted by:
	 
	 	 	 	 	 	 
	U.S BANK NATIONAL ASSOCIATION ND, D/B/A	 	 	 	 
	ELAN FINANCIAL SERVICES	 	COLUMBIA RIVER BANK
	 
	 	 	 	 	 	 
	By:

	 	 
	 	By:
	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 





 








 





Credit Card Account Purchase Agreement

Schedule A-1

Closing Statement




TO: COLUMBIA RIVER BANK



This Closing Statement is delivered to you (“Seller”) by Elan Financial Services (“Purchaser”)
pursuant to Section II.B.4 of the Credit Card Account Purchase Agreement dated as of                     ,
2008 between Seller and Purchaser (the “Agreement”). Unless otherwise defined herein, all
capitalized terms used in this Schedule A-1 shall have the meaning defined for them under the
Agreement.




	 	 	 	 	 
	1. 100% of the Principal Balance of the Accounts to
be Sold as of the Cut-Off Time
	 	$	                    	 
	 
	 	 	 	 
	Plus
	 	 	 	 
	 
	 	 	 	 
	2. A Premium of 11%
	 	$	                    	 
	 
	 	 	 	 
	Minus
	 	 	 	 
	 
	 	 	 	 
	3. Unearned Program Fees
	 	 	 	 
	 
	 	 	 	 
	Equals
	 	 	 	 
	 
	 	 	 	 
	4. Closing Purchase Price (1 plus 2 minus 3)
	 	$	                    	 
	 
	 	 	 	 
	Less
	 	 	 	 
	 
	 	 	 	 
	5. Preliminary Purchase Price as calculated in line
4 of Schedule A
	 	$	                    	 
	 
	 	 	 	 
	Equals
	 	 	 	 
	 
	 	 	 	 
	6. Closing Payment
	 	$	                    	 





The Closing Payment shall be paid as provided in
Section II.B.5. of the Agreement.


(If the Closing Payment is positive, Purchaser owes
Seller the Closing Payment. If the Closing
Payment is negative, Seller owes Purchaser the Closing Payment.)



Seller and Purchaser hereby acknowledge and accept
the foregoing this ___ day of                     , 200___.




	 	 	 	 	 	 	 
	 	 	 	 	Accepted by:
	 
	 	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION ND,	 	 	 	 
	D/B/A ELAN FINANCIAL SERVICES	 	COLUMBIA RIVER BANK
	 
	 	 	 	 	 	 
	By:
	 	 	 	By:	 	 
	
 
	 	
 

	 
	 	 	 	 	 	 
	Title:
	 	 	 	Title:	 	 
	
 
	 	
 






 









 





Credit Card Account Purchase Agreement

Schedule B

Timeline




     As set forth in the Agreement, Seller shall perform the following acts and provide the following
items to Purchaser on the dates listed below*:



	 	 	 
	Item:	 	Between these dates:
	 
	 	 
	Kick-off Meeting between Seller and Purchaser

	 	Approximately 10 Business Days after the Closing Date.
	 
	 	 
	First Master File Information Transfer

	 	Approximately 12 weeks prior to Conversion Date; this
information shall also designate Accounts to be Sold
that are Secured Accounts and Accounts held by
employees of Seller.
	 
	 	 
	List of Accounts with unique payment
arrangements (i.e., altered payment
arrangements made between Cardholder and
Seller)

	 	With the First Master File Information Transfer
	 
	 	 
	Second Master File Information Transfer

	 	Approximately 8 weeks prior to Conversion Date; as of
the date the Second Master File Information transfer
is provided to Purchaser, Seller shall discontinue
selling its credit card product(s) and begin selling
Purchaser’s credit card product(s) pursuant to the
terms of the Joint Marketing Agreement
	 
	 	 
	Third Master File Information Transfer

	 	To be transferred as of the close of business on the
day before the Conversion Date; shall be transferred
to Purchaser in a format prescribed by Purchaser , to
be received by Purchaser no later than three (3) days
after the Conversion Date, at Seller’s expense
	 
	 	 
	Other actions or items required 

by Purchaser:
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 







 




			
	 	 	*The timeline described herein sets forth the expected timing if Seller’s Accounts are processed by
Certegy, FDR or Total Systems. If Seller’s Accounts are processed by Seller or another processor
other than Certegy, FDR or Total Systems, the timing may need to be altered. Seller shall follow
the above timing as established or altered and communicated by Purchaser.