Document:

Unassociated Document

Exhibit 10.4

[EXECUTION COPY]

 

PRIVATE LABEL CREDIT CARD ACCESS AND MONITORING AGREEMENT

 

This PRIVATE LABEL CREDIT CARD ACCESS AND MONITORING AGREEMENT (this “Agreement”) is dated as of April 7, 2010 and is entered into by and among (a) THE TALBOTS, INC., a Delaware corporation (the “Company”), (b) each other Credit Party under and as defined in the Credit Agreement referred to below, (c) TALBOTS CLASSICS NATIONAL BANK, a national banking association (“Talbots Bank” and together with the Company and the other Credit Parties, collectively, the “PLCC Parties”), and (d) GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE Capital”), as Agent for the several financial institutions from time to time party to the Credit Agreement (collectively, the “Lenders” and individually each a “Lender”) and for itself as a Lender (including as Swingline Lender).

 

WHEREAS, the Company, the other Credit Parties, the Agent and the Lenders entered into that certain Credit Agreement, dated as of the date hereof (as the same may be amended, amended and restated, modified, supplemented, refinanced or replaced (in whole or in part) and in effect from time to time, and including any financing provided by the Agent to any of the Credit Parties, including any such financing provided in any bankruptcy or insolvency proceeding involving any of the Credit Parties, the “Credit Agreement”);

 

WHEREAS, Talbots Bank, the Company and the PLCC Parties are a group of interrelated corporations and entities, the success of any of which depends upon the success of the others;

 

WHEREAS, this Agreement is a condition precedent to the effectiveness of the Credit Agreement and the other Loan Documents;

 

WHEREAS, each of the parties hereto expects to receive substantial direct and indirect benefits from the entering into of the Credit Agreement and the other Loan Documents by the Company and the other Credit Parties;

 

NOW, THEREFORE, in consideration of the foregoing, and in consideration of the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that:

 

1.    Definitions.  Capitalized terms used but not otherwise defined in this Agreement shall have the meaning set forth in the Credit Agreement.  The term “including” is not limiting and means “including without limitation.”  For purposes of this Agreement, the following terms shall have the following meanings ascribed thereto:

 

“PLCC Books and Records” is defined in Section 2 hereto.

 

  

  

  

 

“Private Label Credit Card Infrastructure” means (a) PLCC Books and Records (including all credit applications, account documentation and charge slips), (b) all information technology systems (including mainframe servers, other computer systems and related software), (c) all owned, leased, or controlled property of any PLCC Parties (including all collection centers, customer service centers, remittance centers, statement preparation, and locations where PLCC Books and Records are maintained), (d) any bank product services utilized from time to time in connection with operating, collections, other depository or disbursement accounts, including automatic clearinghouse, controlled disbursement, depository, electronic funds transfer, information reporting, lockbox, stop payment, overdraft and/or wire transfer services, (e) all personnel (IT, Customer Service, Collections, Remit, Operations) in each case, in any way relating to the Private Label Credit Card Program, and (f) other servicing arrangements relating to the Private Label Credit Card Program.

 

“Private Label Credit Card Program” means the Private Label Credit Card program(s) established from time to time by the PLCC Parties (or certain of them) pursuant to the Private Label Credit Card Agreements.

 

“PLCC Receivables” means all of the PL Credit Card Receivables of the PLCC Parties that arise from Private Label Credit Cards, and including any late fees, charges, interest and other amounts thereon.

 

2.    Maintenance of the Private Label Credit Card Program.  Each PLCC Party shall maintain, and shall cause each of its Subsidiaries to maintain, (a) proper books of record and account in which full, true and correct entries shall be made of all financial transactions and matters involving or relating to the Private Label Credit Card Program and the PLCC Receivables (collectively, “PLCC Books and Records”) and (b) the Private Label Credit Card Infrastructure in a manner substantially similar to that maintained by the PLCC Parties on the Closing Date.  Without limiting the foregoing, each of the PLCC Parties shall maintain each of the following in accordance with reasonable and prudent industry standards and practices and, in any event, with a level of standards and practices as least as high as those maintained by the PLCC Parties on the Closing Date:

 

(i) access to all systems and centers;

 

(ii) adequate receivables information and applicable screens, customer service and collection notes and records of transactions;

 

(iii) adequate interactive voice response systems and customer service dialers;

 

(iv) adequate collections center;

 

(v) adequate customer service center;

 

(vi) adequate remittance center;

 

(vii) ACH transmission capability;

 

(viii) data backup and recovery capability;

 

  

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(ix) adequate personnel (including related to information technology, collections, remittances, customer service and other operations);

 

(x) adequate access to account information and backup documentation; and

 

(xi) adequate account collection and recovery systems and processes.

 

3.    Access to Private Label Credit Card Program.  Each PLCC Party shall, and shall cause each of its Subsidiaries to, with respect to each owned, leased, or controlled property, during normal business hours and upon reasonable advance notice (unless an Event of Default shall have occurred and be continuing, in which event no notice shall be required and Agent and its Related Persons shall have access at any and all times during the continuance thereof): (a) provide access to such property to Agent and any of its Related Persons; (b) provide access to the Private Label Credit Card Infrastructure to Agent and any of its Related Persons for the purpose of reviewing and monitoring the Private Label Credit Card Program and the PLCC Receivables, (c) permit Agent and any of its Related Persons to conduct field examinations, appraisals, valuations, audit, inspect and make extracts and copies (or take originals if reasonably necessary) from all of such PLCC Party’s Books and Records, and (d) evaluate and make verifications of the Private Label Credit Card Program and the PLCC Receivables in any manner and through any medium that Agent or such Related Person considers advisable, in each instance, at the Credit Parties’ expense; provided that the PLCC Parties shall only be obligated to reimburse Agent pursuant to this Section 3 for any costs incurred (A) with respect to not more than three (3) such field examinations, appraisals, valuations and audits in any twelve consecutive month period in the event that (x) no Event of Default has occurred and is continuing and (y) Availability shall not have been less than an amount equal to twenty percent (20%) of the Maximum Borrowing Availability (based upon the applicable Borrowing Base Certificate received by Agent at such time) at any time during such twelve consecutive month period, (B) with respect to not more than four (4) such field examinations, appraisals, valuations and audits in any twelve consecutive month period, in the event that (x) no Event of Default has occurred and is continuing and (y) Availability shall have been less than an amount equal to twenty percent (20%) of the Maximum Borrowing Availability (based upon the applicable Borrowing Base Certificate received by Agent at such time) at any time during such twelve consecutive month period, and (C) for an unlimited number of such field examinations, appraisals, valuations and audits at any time an Event of Default has occurred and is continuing.  Each PLCC Party hereby irrevocably authorizes the Agent and its Related Persons to at any time and from time to time communicate directly with each of the agents, advisors, professionals and employees of the PLCC Parties regarding any aspect of the Private Label Credit Card Program, the PLCC Receivables and the Private Label Credit Card Infrastructure, and each of the PLCC Parties shall direct each of such Persons to so communicate with the Agent and its Related Persons.  Each of the  PLCC Parties shall, and shall instruct and authorize its respective agents, advisors, professionals and employees to, cooperate in all respects with Agent and its Related Persons with respect to any matters relating to the Private Label Credit Card Program, the PLCC Receivables and/or the Private Label Credit Card Infrastructure.

 

  

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4.    Reporting Regarding Private Label Credit Card Program.  Each PLCC Party shall, and shall cause each of its Subsidiaries to, provide the Agent and its Related Persons with the following information and materials:

 

(a)   Monthly Reporting.  Each Fiscal Month, but in no event later than the 10th day of each Fiscal Month (or such other times as a Borrowing Base Certificate may be delivered pursuant to the Credit Agreement), the following information, in each case, consistent with the reporting delivered to the Agent on or before the Closing Date, and otherwise in form and substance reasonably satisfactory to the Agent:

 

(i)   An updated Portfolio Data Spreadsheet, reflecting Private Label Credit Card Program data through the end of the most recently ended Fiscal Month and data for the prior 12 months (which Portfolio Data Spreadsheet shall include, without limitation, a summary of new accounts, credit approvals, gross sales, returns and fees and interest);

 

(ii)   An updated Application Data Spreadsheet, reflecting Private Label Credit Card Program data through the end of the most recently ended Fiscal Month and data for the prior 12 months;

 

(iii)   An updated Credit Statistics Spreadsheet, reflecting Private Label Credit Card Program data through the end of the most recently ended Fiscal Month and data for the prior 12 months (which report shall include, without limitation, a summary of net sales (with a comparison sales summary for credit cards of major credit card issuers), outstanding account balances, new accounts write-off analysis, and an aging of PLCC Receivables);

 

(iv)   An updated Population Stability Spreadsheet, reflecting (A) distribution of Private Label Credit Card Program customer population by same score bands as Private Label Credit Card Program applicant population and (B) average credit line for Private Label Credit Card Program customer by applicant score band, in each case, reflecting Private Label Credit Card Program data through the end of the most recently ended Fiscal Month and data for the prior 12 months (or, in the event that continuous score band data is not available for a complete 12-month period, updated Population Stability Spreadsheets, reflecting such data for each applicable score band in effect during such 12-month period);

 

(v)   A monthly Collections Activity Report, setting forth the following information with respect to the Private Label Credit Card Program:

 

(1)   number of outbound phone attempts (including automated dialer, manual dial, and interactive voice response); and

 

(2)   number of inbound calls received, and collections production statistics (including numbers for responsible party contacts, promises, kept promises, and kept promise average payment size);

 

  

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(vi) A monthly report, setting forth the percentage of abandoned calls to any customer service center with respect to the Private Label Credit Card Program for the most recently ended Fiscal Month; and

 

(vii) A report of credit card disputes showing the total number of accounts in dispute, the amount in dispute and the number of days the dispute has been outstanding.

 

(b)   Quarterly Reporting.  On a quarterly basis, not later than the 30th day of each Fiscal Quarter, the following information, in each case, consistent with the reporting delivered to the Agent on or before the Closing Date, and otherwise in form and substance reasonably satisfactory to the Agent:

 

(i)   An updated Final Reserve Report, reflecting Private Label Credit Card Program data through the end of the most recently ended Fiscal Quarter and for the prior four (4) Fiscal Quarters (which report shall set forth, without limitation, delinquent balances and a calculation of reserves established on account of PLCC Receivables);

 

(ii)   A current Master File Extract, reflecting Private Label Credit Card Program data at the end of the calendar month closest to the most recently ended Fiscal Quarter;

 

(1) An updated AMBS (Account Base Segment), reflecting Private Label Credit Card Program data as at the end of the calendar month closest to the most recently ended Fiscal Quarter;

 

(2) An updated AMHB (Behavior History - Statement Data), reflecting Private Label Credit Card Program data for the most recently ended calendar month closest to the most recently ended Fiscal Quarter; and

 

(3) An updated AMPS (Account Plan Segment - Charge-Off Data), reflecting Private Label Credit Card Program data for the most recently ended calendar month closest to the most recently ended Fiscal Quarter.

 

(c)   Additional Reporting.  Promptly upon the occurrence of the same, and as may be requested by Agent or its Related Persons, provide the Agent and its Related Persons with:

 

(i)   written copies of any material changes (which shall include, without limitation, any such changes that could reasonably be expected to affect the credit quality or the economic or realizable value of the Private Label Credit Card Program) to any Credit Policy or Procedures relating to the Private Label Credit Card Program;

 

  

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(ii)   written copies of any material changes to the risk management strategies or criteria relating to the Private Label Credit Card Program;

 

(iii)   written copies of any changes to Reserves Policy or Level relating to Private Label Credit Card Program;

 

(iv)   notice, together with any relevant written information, of any material compliance issues relating to the Private Label Credit Card Program; and

 

(v)   any other information or reports reasonably requested by Agent.

 

(d)   From time to time on each date that the representation and warranties under the Credit Agreement are made or deemed to be made, the PLCC Parties hereby represent and warrant to the Agent that each payment made in respect of PLCC Receivable is processed by the PLCC Parties on a daily basis and posted by the PLCC Parties to the relevant PLCC Receivable account on the next calendar day after such payment is received by the PLCC Parties.

 

(e)   All reports furnished above shall be clear of all personal information (name, address, social security number, date of birth, etc.) and shall be delivered with all relevant copy books for the associated files.

 

5.    Certain Events.  In addition to, and without limiting the other rights provided herein,

 

(a)   At any time that (i) an Event of Default has occurred and is continuing or (ii) Availability shall have been less than twenty percent (20%) of the Maximum Borrowing Availability for a period of at least 5 consecutive days (an “Availability Trigger Event”), the PLCC Parties shall assist and cooperate in good faith with the Agent and any of its Related Persons in Agent’s efforts to, at the written election of the Agent, (A) perform a high level evaluation of program functionality (e.g. identifying systems and processes, high level process flows and data mapping and including a collections file) and/or (B) plan for the potential conversion of the Private Label Credit Card Program (including the Private Label Credit Card Infrastructure) from a program administered by the PLCC Parties to a program administered by the Agent or its designee (which may be an Affiliate of the Agent), or for such other administration of the Private Label Credit Card Program as the Agent may determine, including providing the Agent and its Related Persons with updated information of the type specified in Section 4 hereof, with such frequency as may reasonably be requested by the Agent.

 

The provisions of this Section 5(a) may, at the election of the Agent, involve some or all of the following steps:

 

(i) identification of a transition manager which could be appointed by the Agent in order to manage the Private Label Credit Card Program; and

 

(ii) receipt of file copybooks including receivables and collections, with recovery files for relevant accounts.

 

  

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(b)   At any time that (i) an Event of Default has occurred and is continuing or (ii) Availability shall have been less than twenty percent (20%) of the Maximum Borrowing Availability for a period of at least 5 consecutive days, the PLCC Parties shall assist and cooperate in good faith with the Agent and any of its Related Persons in Agent’s efforts to, at the written election of the Agent, (A) provide an in-depth evaluation of program functionality (e.g. identifying systems and processes, detailed process flows and data mapping, and the creation and testing of a collections file to be dialed by Agent onto a system provided by the Agent), and/or (B) provide enhanced monitoring of the Private Label Credit Card Program by the Agent, and/or (C) provide enhanced planning  for the conversion of the Private Label Credit Card Program (including the Private Label Credit Card Infrastructure) from a program administered by the PLCC Parties to a program administered by the Agent or its designee (which may be an Affiliate of the Agent), including circuit or “VPN” connectivity implementation, building of software architecture on the Agent’s system, and file transfer activities, collection file integration, additional reporting on daily settlement activities and PLCC Receivables and a full and complete evaluation of the PLCC Parties processes and compliance to assess and review weaknesses and other deficiencies in the Private Label Credit Card Infrastructure and development of a remediation plan around identified vulnerabilities.

 

(c)   At any time that an Event of Default has occurred and is continuing, the PLCC Parties shall, at the written election of the Agent, assist and cooperate in good faith with the Agent and any of its Related Persons in Agent’s efforts to implement the full conversion of the Private Label Credit Card Program (including the Private Label Credit Card Infrastructure) from a program administered by the PLCC Parties to a program administered by the Agent and its Related Persons, including the administration and operation by the Agent and its Related Persons of the Private Label Credit Card Program.

 

(d)   Any election of the Agent hereunder may be rescinded and revoked by the Agent upon written notice to the PLCC Parties, and such revocation shall be effective upon receipt of such written notice.

 

6.   Allocation of Collections of PLCC Receivables.  In the event of collection of payments or other remittances in respect of PLCC Receivables from the account debtors thereunder, the Credit Parties and the Agent agree that such payments or other remittances will be allocated first to those PLCC Receivables of such account debtor, if any, which constitute Collateral under the Credit Agreement and second, to those PLCC Receivables of such account debtor, if any, which do not constitute Collateral under the Credit Agreement.

 

7.            Further Assurances.  Promptly upon request by Agent, the PLCC Parties shall (and shall cause each of their Subsidiaries to) take such additional actions and execute such documents as Agent may reasonably require from time to time in order to carry out more effectively the purposes of this Agreement (as determined by the Agent) and (ii) to better assure, convey, grant, assign, transfer, preserve, protect and confirm to the Agent and the other Secured Parties the rights granted or now or hereafter intended to be granted under this Agreement.

 

  

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8.    Expenses; Indemnification by the Credit Parties.

 

(a)   The Credit Parties agree to pay or reimburse upon demand Agent for all reasonable out-of pocket costs and expenses incurred by it, its designee, and each of its Related Persons, in connection with the matters contemplated herein (including, without limitation, the review and analysis of reports provided by the PLCC Parties hereunder), in each case including Attorney Costs of Agent and its Related Persons; provided, however, that at any time (i) after the occurrence and during the continuation of an Event of Default or (ii) following the occurrence of an Availability Trigger Event, the Credit Parties agree to pay or reimburse upon demand Agent for all costs and expenses incurred by it, its designee, or any of its Related Persons, in connection with the matters contemplated herein, in each case including Attorney Costs of Agent and its Related Persons and internally generated and/or allocated costs and expenses of the Agent and its Related Persons.

 

(b)   Without limiting Section 9.6 of the Credit Agreement or the provisions of any other Loan Document, each Credit Party agrees, jointly and severally to indemnify, hold harmless and defend Agent, each Lender and each of their respective Related Persons (each such Person being an “Indemnitee”) from and against all Liabilities that may be imposed on, incurred by or asserted against any such Indemnitee (other than as a result of such Indemnitee’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final non-appealable judgment or order) in any matter relating to or arising out of, in connection with or as a result of (i) this Agreement, (ii) the Private Label Credit Card Program and/or the Private Label Credit Card Infrastructure (including any such claim relating to security breaches, disclosure or release of data (including personal data of any card holder) or similar breaches relating thereto) or (iii) any other act, event or transaction related, contemplated in or attendant to any of the foregoing.

 

9.    Miscellaneous.

 

(a)   The parties hereto desire and intend that this Agreement survive and persist after the commencement and during the continuation of any Insolvency Proceeding.

 

(b)   The parties hereto agree and acknowledge that monetary damages may be an inadequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement.

 

(c)   Neither the terms hereof, nor any action or inaction by the Agent or any of its Related Persons pursuant to this Agreement shall be deemed to be an assumption by the Agent or any Related Person of any obligation under the Private Label Credit Card Agreements and neither the Agent nor any Related Person shall have any obligation to any Person under any such Private Label Credit Card Agreement.  The provisions hereof shall inure to the benefit of the Agent and its Related Persons, but shall not bind or obligate the Agent or its Related Persons to take any action or assume any responsibilities.

 

  

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(d)   None of Agent or any of its Related Persons shall be liable for any action taken or omitted to be taken by any of them hereunder or in connection with the Private Label Credit Card Program, and each PLCC Party (other than Talbots Bank to the extent prohibited by any Requirement of Law) hereby waives and shall not assert any right, claim or cause of action based thereon, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly set forth herein.

 

(e)   This Agreement and the rights and obligations of the parties hereto and thereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

 

(f)   Any legal action or proceeding with respect to this Agreement may be brought in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution and delivery of this Agreement, each party hereto hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The parties to this Agreement hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.

 

(g)   All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)   if to any Credit Party or the Agent, to the address, telecopier number or telephone number specified for such Person as set forth in Section 9.2 of the Credit Agreement; or

 

(ii)   if to Talbots Bank, to the address, telecopier number or telephone number specified for the Borrowers as set forth in Section 9.2 of the Credit Agreement.

 

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Transmissions made by electronic mail or E-Fax to Agent shall be effective only (x) if such transmission is delivered in compliance with procedures of Agent applicable at the time and previously communicated to the PLCC Parties and (y) if receipt of such transmission is acknowledged by Agent.  Transmissions made by electronic mail or E-Fax by Agent shall be effective only (x) if such transmission is delivered to an email address previously communicated to the Agent by the PLCC Parties and (y) if receipt of such transmission is acknowledged by a relevant PLCC Party.

 

  

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(h)   THE PARTIES HERETO, TO THE EXTENT PERMITTED BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY.  THIS WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.  Each PLCC Party hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with this Agreement by any means permitted by applicable Requirements of Law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of the Borrowers specified in the Credit Agreement (and shall be effective when such mailing shall be effective, as provided therein).

 

(i)   This Agreement shall constitute a Loan Document under the Credit Agreement, and all obligations (including cost and expense reimbursement obligations) included in this Agreement shall constitute Obligations under the Credit Agreement and shall be secured by the Collateral for such Obligations.

 

(j)   This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement.  Delivery of an executed signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart thereof.

 

(k)   The headings in this Agreement are included herein for convenience only, and shall not constitute a part of this Agreement for any other purpose, and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

 

(l)   This Agreement may not be amended, modified or changed in any respects except by an agreement in writing signed by the parties hereto.  No waiver of any provision of this Agreement, nor consent to any departure by any party herefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.  No course of dealing among the PLCC Parties and the Agent, the Lenders, or any of their respective Related Persons and no act or failure to act from time to time on the part of any party shall constitute a waiver, amendment or modification of any provision of this Agreement or any right or remedy under this Agreement or under applicable laws.

 

[Signature Page Follows]

 

 

 

  

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IN WITNESS WHEREOF, this Agreement has been executed as of the date set forth above.

 

 

	 	 THE PLCC PARTIES:
	 	 
	 	 THE TALBOTS, INC.
	 	 
	 	 By:  	/s/ Michael Scarpa
	 	 Name:  Michael Scarpa
	 	 Title:  Chief Operating Officer, Chief Financial Officer and Treasurer
	 	 
	 	 
	 	 TALBOTS CLASSICS FINANCE COMPANY, INC.
	 	 
	 	  By:  	/s/ Richard T. O'Connell, Jr.
	 	 Name:  Richard T. O'Connell, Jr.
	 	 Title:  Vice President
	 	 
	 	 
	 	 THE TALBOTS GROUP, LIMITED PARTNERSHIP
	 	 
	 	 By: 	/s/ Michael Scarpa
	 	 Name:  Michael Scarpa
	 	 Title:  Chief Operating Officer, Chief Financial Officer and Treasurer
	 	 
	 	 
	 	 TALBOTS CLASSICS, INC.
	 	 
	 	 By: 	/s/ Richard T. O'Connell, Jr.
	 	 Name:  Richard T. O'Connell, Jr.
	 	 Title:  Vice President 
	 	 
	 	 
	 	 TALBOTS IMPORT, LLC
	 	 
	 	 By: 	/s/ Richard T. O'Connell, Jr.
	 	 Name:  Richard T. O'Connell, Jr.
	 	 Title:  Vice President
	 	 

 

  

  

  

 

 

	 	 
	 	 BIRCH POND REALTY CORPORATION
	 	 
	 	 By:	/s/ Richard T. O'Connell, Jr.
	 	 Name:  Richard T. O'Connell, Jr.
	 	 Title:  Vice President
	 	 
	 	 
	 	 TALBOTS INTERNATIONAL RETAILING LIMITED, INC.
	 	 
	 	 By:	/s/ Richard T. O'Connell, Jr.
	 	 Name:  Richard T. O'Connell, Jr.
	 	 Title:  Vice President
	 	 
	 	 
	 	 TALBOTS (U.K.) RETAILING LIMITED
	 	 
	 	 By:	/s/ Richard T. O'Connell, Jr.
	 	 Name:  Richard T. O'Connell, Jr.
	 	 Title:  Vice President
	 	 
	 	 
	 	 TALBOTS (CANADA), INC.
	 	 
	 	 By: 	/s/ Richard T. O'Connell, Jr.
	 	 Name:  Richard T. O'Connell, Jr.
	 	 Title:  Vice President
	 	 
	 	 
	 	 TALBOTS CLASSICS NATIONAL BANK
	 	 
	 	 By:	/s/ Michael Scarpa
	 	 Name:  Michael Scarpa
	 	 Title:  President
	 	 

 

  

  

  

 

	 	 
	 	 AGENT:
	 	 
	 	 GENERAL ELECTRIC CAPITAL CORPORATION, as Agent
	 	 
	 	 
	 	 
	 	 
	 	 By: 	/s/ Mark J. Forti
	 	 Name:  Mark J. Forti
	 	 Title: Duly Authorized Signatoryex10_1.htm

SHARE EXCHANGE AGREEMENT

THIS SHARE EXCHANGE AGREEMENT (this “Agreement") is entered into as of

7/18/2005 by and between Midwest E.S.W.T. Corp., a Nevada corporation (“MDWE”), on the one hand, and Direct Success, Inc., a California corporation (“Direct Success"), and the shareholders of Direct Success identified on the signature page hereof (the "Shareholders”), on the other hand.

RECITALS

WHEREAS, the Shareholders are the owners of 100% of the issued and outstanding shares of common stock of Direct Success as set forth in Exhibit A (the "Direct Success Shares");

WHEREAS, MDWE desires to purchase from the Shareholders and the Shareholders desire to sell to MDWE, all the Direct Success Shares in accordance with the provisions of this Agreement.

NOW, THEREFORE, in consideration of the premises and respective mutual agreements, covenants, representations and warranties contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

AGREEMENTS

1.           Purchase and Sale. At the Closing, subject to terms and conditions contained in this Agreement, and on the basis of the representations, warranties and agreements herein contained, the Shareholders shall sell to MDWE, and MDWE shall purchase from the Shareholders, the Direct Success Shares.

2.           Purchase Price. As consideration for the purchase of the Direct Success Shares, MDWE shall issue to the Shareholders, as set forth in Exhibit A, a total of seventy million (70,000,000) shares of MDWE common stock (the "MDWE Shares").

3.           Closing. The closing of the sale and purchase of the Direct Success Shares (the “Closing") shall take place on July 15, 2005 at Newport Beach, or at such other date, time and place as may be agreed upon in writing by the parties hereto, but not later than August 15,2005 (the "Termination Date"). The date of the Closing is sometimes herein referred to as the "Closing Date."

 

3.1.           Items to be Delivered Immediately Prior to or at Closing. At the Closing:

 

A.           The Shareholders shall deliver to MDWE:

	
  

	
(i)

	
the Direct Success Shares, fully paid and non-assessable and subject to no liens, security interests, pledges, encumbrances, charges, restrictions, demands or claims in any other party whatsoever, except as set forth in the legend on the certificate(s), which legend shall provide substantially as follows:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT8EEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT”'), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOTSE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF FOR A PERIOD OF ONE YEAR FROM THEISSUANCE THEREOF EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS OR (ii) UPON THE EXPRESS WRITTEN AGREEMENT OF THE COMPANY AND COMPLIANCE, TO THE EXTENT APPLICABLE, WITH RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES).

 

 

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B.           MDWE shall deliver to the Shareholders:

 

	
(i)  

	
the MDWE Shares, in amounts and issued as set forth in Exhibit A, fully paid and non-assessable and subject to no liens, security interests, pledges, encumbrances, charges, restrictions, demands or claims in any other party whatsoever, except as set forth in the legend on the certificate(s) asset forth in Section3.1(A).

C.           MDWE shall deliver to Direct Success:

	
(i)  

	
written confirmation of the approval of the herein described transactions by MDWE's Board of Directors;

	
(ii)  

	
an officers certificate, executed by the President and Secretary of MDWE, in the form attached hereto as Exhibit B;

 

D.           Direct Success shall deliver to MDWE:

(i) written confirmation of the approval of the herein described transactions by Direct Success's Board of Directors;

 

(ii) an officers certificate, executed by the President and Secretary of Direct Success, in the form attached hereto as Exhibit C;

4.           Representations and Warranties of Direct Success. To induce MDWE to enter into this Agreement and to consummate the transactions contemplated hereby, Direct Success represents and warrants as of the date hereof and as of the Closing, as follows:

 

4.1.           Corporate Status. Direct Success is a corporation duly organized, validly existing and in good standing under the Laws of the State of California and is qualified to do business in any jurisdiction where it is required to be so qualified. The articles and bylaws of Direct Success that have been delivered to MDWE as of the date hereof are current, correct and complete.

 

 

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4.2.           Authorization. Direct Success has the requisite power and authority to execute and deliver this Agreement and to perform the transactions hereunder. This Agreement, and all of the exhibits attached hereto, constitutes the legal, valid and binding obligation of Direct Success.

4.3.           Consents and Approvals. Except for the filings, permits, authorizations, consents and approvals under federal and/or state securities laws, and applicable stock exchange regulations which may be applicable, neither the execution and delivery by Direct Success of this Agreement, nor the performance by it of the transactions contemplated hereby, require any filing, consent or approval.

4.4.           Capitalization. The authorized capital stock of Direct Success consists of one hundred million (100,000,000) shares of common stock, with no par value, of which twenty one million, eight hundred and seventy two thousand, four hundred and eighty seven (21,872,487) shares are issued and outstanding.

4.5.           Books and Records. Direct Success keeps its books, records and accounts (including, without limitation, those kept for financial reporting purposes and for tax purposes) in accordance with good business practice and in sufficient detail to reflect the transactions and dispositions of their assets, liabilities and equities. The minute books of Direct Success contain records of their shareholders' and directors' meetings and of action taken by such shareholders and directors.  The meetings of directors and shareholders referred to in such minute books were duly called and held, and the resolutions appearing in such minute books were duly appointed. The signatures appearing on all documents contained in such minute books are the true signatures of the persons purporting to have signed the same.

4.6.           Financial Statements;Contracts. Attached hereto as Exhibit D is (a) an income statement and a balance sheet as of and for the year ended December 31, 2004, (b) an income statement and a balance sheet as of March 31, 2005 and for the quarter then ended. Attached hereto as Exhibit E is a list of all contracts to which Direct Success is a party or obligated as of the Closing Date, and Direct Success hereby represents and warrants that there are no other material contracts or agreements in existence as of the Closing Date.

4.7.           Taxes.

A.           All taxes, assessments, fees, penalties, interest and other governmental charges with respect to Direct Success which have become due and payable on the date hereof have been paid in full or adequately reserved against by Direct Success, (including without limitation, income, property, sales, use, franchise, capital stock, excise, added value, employees' income withholding, social security and unemployment taxes), and all interest and penalties thereon with respect to the periods then ended and for all periods thereto;

B.           There are no agreements, waivers or other arrangements providing for an extension of time with respect to the assessment of any tax or deficiency against Direct Success, nor are there any actions, suits, proceedings, investigations or claims now pending against Direct Success, nor are there any actions, suits, proceedings, investigations or claims now pending against Direct Success in respect of any tax or assessment, or any matters under discussion with any federal, state, local or foreign authority relating to any taxes or assessments, or any claims for additional taxes or assessments asserted by any such authority, and there is no basis for the assertion of any additional taxes or assessments against Direct Success; and

 

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C.           The consummation of the transactions contemplated by this Agreement will not result in the imposition of any additional taxes on or assessments against Direct Success.

4.8           Subsidiaries. Direct Success does not own, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, limited liability company, trust, joint venture or other legal entity other than as follows: 75% interest in Direct Success LLP 3 (dba “Banjo Minnow") and 100% interest in Direct Success LLC 1 (dba “Torso-T”).

4.9.           Legal Proceedings and Compliance with Law. There is no litigation that is pending or, to Direct Success's knowledge, threatened against Direct Success. To Direct Success's knowledge, there has been no default under any laws applicable to Direct Success, Direct Success has not received any notices from any governmental entity regarding any alleged defaults under any laws, and there has been no default with respect to any court order applicable to Direct Success.

4.10           Intellectual Property. Direct Success has good and valid title to and ownership of all intellectual property (defined herein as trademarks, trade names or copyrights, patents, domestic or foreign, collectively the "Intellectual Property") necessary for its business and operations (as now conducted and as proposed to be conducted). Other than as set forth in Exhibit E, there are no outstanding options, licenses or agreements of any kind to which Direct Success is a party or by which it is bound relating to any Intellectual Property, whether owned by Direct Success or another person. To the knowledge of Direct Success, the business of Direct Success as formerly and presently conducted did not and does not conflict with or infringe upon any Intellectual Property right owned or claimed by another.

4.11.           Finder's Fees. Other than as set forth in a contract disclosed in Exhibit E. no person retained by Direct Success is or will be entitled to any commission or finder's or similar fee in connection with the transactions contemplated by this Agreement.

4.12.           Accuracy of Information.  To Direct Success's knowledge, no representation or warranty by Direct Success made herein contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained herein not misleading in light of the circumstances under which such statements were made;

5.           Representations and Warranties of MDWE. To induce Direct Success and the Shareholders to enter into this Agreement and to consummate the transactions contemplated hereby, MDWE represents and warrants as of the date hereof and as of the Closing, as follows:

 

5.1.           Corporate Status.  MDWE is a corporation duly organized, validly existing and in good standing under the Laws of the State of Nevada and is qualified to do business in any jurisdiction where it is required to be so qualified. The articles and bylaws of MDWE that have been delivered to Direct Success as of the date hereof are current, correct and complete.

 

 

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5.2.           Authorization. MDWE has the requisite power and authority to execute and deliver this Agreement and to perform the transactions hereunder. This Agreement and all of the exhibits attached hereto, constitutes the legal, valid and binding obligation of MDWE.

5.3.           Consents and Approvals. Except for the filings, permits, authorizations, consents and approvals under federal and/or state securities laws, and applicable stock exchange regulations which maybe applicable, neither the execution and delivery by MDWE of this Agreement, nor the performance by it of the transactions contemplated hereby require any filing, consent or approval.

5.4.           Capitalization. The authorized capital stock of MDWE consists of one hundred million (100,000,000) shares of common stock, par value $.001, and ten million (1 0,000,000) shares of preferred stock, par value $.001, of which thirty two million (32,000,000) restricted shares and sixteen million, seven hundred and thirty six thousand (16,736,000) shares, respectively, are issued and outstanding.

5.5.           Books and Records. MDWE keeps its books, records and accounts (including, without limitation, those kept for financial reporting purposes and for tax purposes) in accordance with good business practice and in sufficient detail to reflect the transactions and dispositions of their assets, liabilities and equities. The minute books of MDWE contain records of their shareholders' and directors' meetings and of action taken by such shareholders and directors. The meetings of directors and shareholders referred to in such minute books were duly called and held, and the resolutions appearing in such minute books were duly adopted. The signatures appearing on all documents contained in such minute books are the true signatures of the persons purporting to have signed the same.

5.6.           Financial Statements; Contracts. MDWE hereby represents and warrants that the financial statements included in its filings with the Securities and Exchange Commission are complete and accurately represent its current financial condition. Attached hereto as Exhibit F is a list of all contracts to which MDWE is a party or obligated as of the Closing Date which are not included in its filings with the SEC, and MDWE hereby represents and warrants that there are no other material contracts or agreements in existence as of the Closing Date.

5.7.           Taxes.

A.           All taxes, assessments,. fees, penalties, interest and other governmental charges with respect to MDME which have become due and payable on the date hereof have been paid in full or adequately reserved against by MDWE (including without limitation, income, property, sales, use, franchise, capital stock, excise, added value, employees' income withholding, social security and unemployment taxes) and all interest and penalties thereon with respect to the periods then ended and for all periods thereto;

B;           There are no agreements, waivers or other arrangements providing for an extension of time with respect to the assessment of any tax or deficiency against MDWE. nor are there any actions, suits, proceedings, investigations or claims now pending against MDWE, nor are there any actions, suits, proceedings, investigations or claims. now pending against MDWE in respect of any tax or assessment, or any matters under discussion with any federal, state, local or foreign authority relating to any taxes or assessments, or any claims for additional taxes or assessments asserted by any such authority, and there is no basis for the assertion of any additional taxes or assessments against MDWE ; and

 

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C.           The consummation of the transactions contemplated by this Agreement will not result in the imposition of any additional taxes on or assessments against MDWE.

5.8.           Subsidiaries. MDWE does not own, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, limited liability company, trust, joint venture or other legal entity.

 

5.9.           Legal Proceedings and Compliance with Law. There is no litigation that is pending or, to MDWE's knowledge, threatened against MDWE. To MDWE's knowledge, there has been no default under any laws applicable to MDWE, MDWE has not received any notices from any governmental entity regarding any alleged defaults under any laws, and there has been no default with respect to any court order applicable to MDWE.

5.10.           Intellectual Property. MDWE has good and valid title to and ownership of all Intellectual Property necessary for its business and operations (as now conducted and as proposed to be conducted). Other than as set forth in Exhibit F, there are no outstanding options, licenses or agreements of any kind to which MDWE is a party or by which it is bound relating to any Intellectual Property, whether owned by MDWE or another person.  To the knowledge of MDWE, the business of MDWE as formerly and presently conducted did not and does not conflict with or infringe upon any Intellectual Property right owned or claimed by another.

5.11.           Finder's Fees. Other than as set forth in a contract disclosed in Exhibit F, no person retained by MDWE is or will be entitled to any commission or finder's or similar fee in connection with the transactions contemplated by this Agreement.

5.12. Accuracy of Information. To MDWE’s knowledge, no representation or warranty by MDWE made herein contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained herein not misleading in light of the circumstances under which such statements were made.

6.           Covenants of Direct Success.  To induce MDWE to enter into this Agreement and to consummate the transactions contemplated hereby, and without limiting any covenant, agreement, representation or warranty made, Direct Success covenants and agrees as follows:

6.1.           Conduct of the Business. Except as contemplated or otherwise consented to by MDWE in writing, after the date of this Agreement and until the date of Closing, Direct Success shall carry on its business in the ordinary course.

 

6.2.           Access to Information. From the date of this Agreement to the Closing Date, Direct Success shall give to MDWE and its officers, employees, counsel, accountants and other representatives access to and the right to inspect, during normal business hours, all of the assets, records, contracts and other documents relating to Direct Success as the other party may reasonably request.  MDWE shall not use such information for purposes other than in connection with the transactions contemplated by this Agreement and shall otherwise hold such information in confidence until such time as such information otherwise becomes publicly available and will sign such standard and customary non-disclosure agreements as are reasonably requested by Direct Success.

 

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6.3.           No Solicitation. From and after the date hereof until the Termination Date, Direct Success will not, and will not authorize or permit any Direct Success representatives to, directly or indirectly, solicit or initiate (including by way of furnishing information) or take any other action to facilitate knowingly any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to an acquisition proposal from any person, or engage in any discussion or negotiations relating thereto or accept any acquisition proposal.

 

6.4.           Delivery of Financial Statements. Direct Success will use its best efforts to deliver to MDWE audited financial statements as of December 31, 2003 and 2004 and for the two years then ended, audited by a firm acceptable to MDWE, prior to the date which is sixty (60) days following the Closing.

 

7.           Covenants of MDWE. To induce Direct Success and the Shareholders to enter into this Agreement and to consummate the transactions contemplated hereby, and without limiting any covenant, agreement, representation or warranty made, MDWE covenants and agrees as follows:

 

7.1.           Conduct of the Business. Except as contemplated or otherwise consented to by Direct Success in writing, after the date of this Agreement and until the date of Closing, MDWE shall carryon its business in the ordinary course.

 

7.2.           Access to Information. From the date of this Agreement to the Closing Date, MDWE shall give to Direct Success and the Shareholders, and each of their officers, employees, counsel, accountants and other representatives access to and the right to inspect during normal business hours, all of the assets, records, contracts and other documents relating to MDWE as the other party may reasonably request. Direct Success and the Shareholders shall not use such information for purposes other than in connection with the transactions contemplated by this Agreement and shall otherwise hold such information in confidence until such time as such information otherwise becomes publicly available and will sign such standard and customary non-disclosure agreements as are reasonably requested by MDWE.

 

7.3.           No Solicitation.  From and after the date hereof until the Termination Date, MDWE will not, and will not authorize or permit any MDWE representatives to, directly or indirectly, solicit or initiate (including by way of furnishing information) or take any other action to facilitate knowingly any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to an acquisition proposal from any person, or engage in any discussion or negotiations relating thereto or accept any acquisition proposal.

 

8.           Mutual Covenants. Without limiting any covenant, agreement, representation or warranty made, each of the parties covenants and agrees as follows:

8.1.           Fulfillment of Closing Conditions. At and prior to the Closing, each party shall use commercially reasonable efforts to fulfill, and to cause each other to fulfill, the conditions specified in this Agreement to the extent that the fulfillment of such conditions is within its or his control.

 

 

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8.2.           Disclosure of Certain Matters. Direct Success on the one hand, and MDWE, on the other hand, shall give MDWE and Direct Success, respectively, .prompt notice of any event or development that occurs that (a) had it existed or been known on the date hereof would have been required to be disclosed by such party under this Agreement, (b) would cause any of the representations and warranties of such party contained herein to be inaccurate or otherwise misleading, except as contemplated by the terms hereof, or (c) gives any such party any reason to believe that any of the conditions set forth in this Agreement will not be satisfied prior to the Termination Date.

 

8.3.           Public Announcements. Direct Success and MDWE shall consult with each other before issuing any press release or making any public statement with respect to this Agreement and the transactions contemplated hereby and, except as maybe required by applicable law, neither party shall issue any such press release or make any such public statement without the consent of the other parties hereto.

 

8.4.           Confidentiality.  If the transactions contemplated hereby are not consummated, each party shall treat all information obtained in its investigation of the other party or any affiliate thereof, and not otherwise known to them or already in the public domain, as confidential and shall not use or otherwise disclose such information to any third party and shall return to such other party or affiliate all copies made by it or its representatives of confidential information provided by such other party or affiliate.

 

9.           Conditions Precedent. This Agreement, and the transactions contemplated hereby, shall be subject to the following conditions precedent:

 

9.1.           The obligations of Direct Success and the Shareholders to deliver the Direct Success Common Shares and to satisfy their other obligations hereunder shall be subject to the fulfillment (or waiver by Direct Success and the Shareholders), at or prior to the Closing, of the following conditions, which MDWE agrees to use its best efforts to cause to be fullfilled:

 

A.           Representations and Warranties.  The representations and warranties of MDWE contained in this Agreement shall be true and correct on the date hereof and (except to the extent such representations and warranties speak as of an earlier date) shall also be true and correct on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date.

B.           Agreements, Conditions and Covenants.  MDWE shall have performed or complied with all agreements, conditions and covenants required by this Agreement to be performed or complied with by it on or before the Closing Date.

 

C.           Legality. No Law or Court Order shall have been enacted, entered, promulgated or enforced by any court or governmental authority that is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise prohibiting the consummation of such purchase and sale.

9.2.           The obligations of MDWE to pay the Purchase Price and to satisfy their other obligations hereunder shall be subject to the fulfillment (or waiver by MDWE), at or prior to the Closing, of the following conditions, which Direct Success agrees to use its best efforts to cause to be fulfilled:

 

 

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A.           Representations and Warranties. The representations and warranties of Direct Success contained in this Agreement shall be true and correct on the date hereof and (except to the extent such representations and warranties speak as of an earlier date) shall also be true and correct on and as of the Closing Date with the same force and effect as if made on and as of the Closing Date.

B.           Agreements, Conditions and Covenants. Direct Success shall have performed or complied with all agreements, conditions and covenants required by this Agreement to be performed or complied with by it on or before the Closing Date.

 

C.           Legality. No Law or Court Order shall have been enacted, entered, promulgated or enforced by any court or governmental authority that is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise prohibiting the consummation of such purchase and sale.

10.           Termination.

10.1.           Notwithstanding anything to the contrary contained in this Agreement, this Agreement may be terminated and the transactions contemplated hereby may be abandoned prior to the Closing Date only by the mutual consent of all of the Parties. Following the Closing Date, in the event the Closing does occur within ten (10) days of the Closing Date, this Agreement may be terminated by either Party upon delivery of written notice to the other Party.

10.2.           If this Agreement is terminated pursuant to Section 10.1, the agreements contained in Section 8 shall survive the termination hereof and any party may pursue any legal or equitable remedies that may be available if such termination is based on a breach of another party.

11.           General.

11.1.           Expenses.  Except as otherwise specifically provided for herein, whether or not the transactions contemplated hereby are consummated, each of the parties hereto shall bear the cost of all fees and expenses relating to or arising from its compliance with the various provisions of this Agreement and such party's covenants to be performed hereunder, and except as otherwise specifically provided for herein, each of the Parties hereto agrees to pay all of its own expenses (including, without limitation, attorneys and accountants' fees and printing expenses) incurred in connection with this Agreement, the transactions contemplated hereby, the negotiations leading to the same and the preparations made for carrying the same into effect, and all such fees and expenses of the Parties hereto shall be paid prior to Closing.

 

11.2.           Notices.  Any notice, request, instruction or other document required by the terms of this Agreement, or deemed by any of the Parties hereto to be desirable, to be given to any other Party hereto shall be in writing and shall be delivered by facsimile or overnight courier to the following addresses:

 

 

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To Direct Success:

Direct Success, Inc.

575 Anton Blvd., Suite 300

Costa Mesa, CA 92626

 

with a copy to:

Marc R. Tow & Associates

3920 Birch Street, Suite 102

Newport Beach, CA 92660

To MDWE:

Midwest E.S.W.T. Corp.

1605 Park Ave., Suite B

Bismark, ND 58504

The persons and addresses set forth above may be changed from time to time by a notice sent as aforesaid. Notice shall be conclusively deemed given at the time of delivery if made during normal business hours, otherwise notice shall be deemed given on the nextbusiness day.

11.3.           Entire Agreement. This Agreement, together with the schedules and exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof. No understanding, promise, inducement, statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any Party hereto which is not embodied in this Agreement, or exhibits hereto or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no Party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not so set forth.

 

11.4.           Survival of Representations. All statements of fact (including financial statements) contained in the schedules, the exhibits, the certificates or any other-Instrument delivered by or on behalf of the Parties hereto, or in connection with the transactions contemplated hereby, shall be deemed representations and warranties by the respective Party hereunder. All representations, warranties, agreements, and covenants hereunder shall survive the Closing and remain effective regardless of any investigation or audit at any time made by or on behalf of the Parties or of any information a Party may have in respect thereto. Consummation of the transactions contemplated hereby shall not be deemed or construed to be a waiver of any right or remedy possessed by any Party hereto, notwithstanding that such Party knew or should have known at the time of Closing that such right or remedy existed.

 

 

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11.5.           Incorporated by Reference. All documents (including, without limitation, all financial statements) delivered as part hereof or incident hereto are incorporated as a part of this Agreement by reference.

11.6.           Remedies Cumulative. No remedy herein conferred upon any Party is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

11.7.           Execution of Additional Documents. Each Party hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.

11.8.           Finders' and Related Fees. Each of the Parties hereto is responsible for, and shall indemnify the other against any claim by any third party to a fee, commission. bonus or other remuneration arising by reason of any services alleged to have been rendered to or at the instance of said Party to this Agreement with respect to this Agreement or to any of the transactions contemplated hereby.

11.9.           Governing Law. This Agreement has been negotiated and executed in the State of California and shall be construed and enforced in accordance with the laws of such state.

11.10.           Forum. Each of the Parties hereto agrees that any action or suit which may be brought by any Party hereto against any other Party hereto in connection with this Agreement or the transactions contemplated hereby may be brought only in a federal or state court in Orange County, California.

11.11.           Attorneys' Fees.  Except as otherwise provided herein, if a dispute should arise between the Parties including, but not limited to arbitration, the prevailing Party shall be reimbursed by the nonprevai1ing Party for all reasonable expenses incurred in resolving such dispute, including reasonable attorneys' fees exclusive of such amount of attorneys' fees as shall be a premium for result or for risk of loss under a contingency fee arrangement.

11.12.           Binding Effect and Assignment. This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, legal representatives and assigns.

11.13.           Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

{remainder of page intentionally left blank]

 

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written hereinabove. 

 

	
“Direct Success” 

	“MDWE”
	 	 
	
Direct Success, Inc. 

	Midwest E.S.W.T. Corp.
	
A California corporation   

	a Nevada Corporation
	  	 
	  	 
	
/s/                                            

	/s/ Justin Nieters
	
By: 

	By: Justin Nieters
	
Its: President                                                                

	Its: President
	  	 
	
“Shareholders”

	 
	  	 
	__________________	 
	  	 
	__________________	 

 

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