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Home My WebLink About07-3459( OMMOWWEALTH OF PENNSYLVANIA COURT OF COMMON PLEAS JUDICIAL DISTRICT 67-3gS9 NOTICE OF APPEAL FROM DISTRICT JUSTICE JUDGMENT COMMON PLEAS No. b 7" 3q 5 q a i V l NOTICE OF APPEAL Notice is given that the appellant has filed in the above Court of Common Pleas an appeal from the judgment rendered by the Dis- trict Justice on the date and in the case mentioned below. NAME OF APPELLANT MAG. DIST. NO. OR NAME OF D.J. _ 3-- i tr'L -a /- Q /fin _ _ t y . _ " W ADDRESS OF APPELLANT CITY STATE I ZIP CODE r DATE OF JUDGMENT q IN THE CASE UF (PLAINTIFF) ! (DEFENDANT V X90 1N l?L • s. - -k-) C NO. CV YEAR ?-0 O SIGNATURE A ELLANT OR HIS ATTORNEY OR AGENT 7 LT YEAR\ \ 4 ) Y „? _ O eq This block will be signed ONLY when this notation is required under PA. R.C.P.J.P. No. 10088. This notice of Appeal, when received by the District Justice, will operate as A SUPERSEDEAS to the Judgment for possession in this case. na ure o roor ep If appellant was Claimant (see PA R.C.P.J.P. No. 1001(6)) in action before district Justice, he MUST FILE A COMPLAINT within twenty (20) days after filing his NOTICE of APPEAL. PRAECIPE TO ENTER RULE TO FILE COMPLAINT AND RULE TO FILE (This section of form to be used ONLY when appellant was DEFENDANT (see PA R.C.P.J.P. No. 1001(7) in action before District Justice. IF NOT USED, detach from copy of notice of appeal to be served upon appellee. PRAECIPE: To Prothonotary ?-?c D p Enter rule upon `? P(?tJ2? ae(s), to file a complaint in this appeal Name o appellee(s) (Common Pleas No. _ 7-3469 &Vi ) within twenty (20) days after service r suffer entry of judgment of non pros. ?? ?g Sig ure of a ant or his attorney or agent RULE: To ? t7rl._L4.-co ?"DE, appellee n ??? Name of appel/ee(s) /n a (DPK ly6f?- "° (v r ART/ S' T l ?d (1) You are notified that a rule is hereby entered upon you to file a complaint in this appeal within twenty(20) days 'GD after the date of service of this rule upon you by personal service or by certified or registered mail. 11 kc, (2) If you do not file a complaint within this time, a JUDGMENT OF NON PROS WILL BE ENTERED AGAINST YOU PA UPON PRAECIPE. A (3) The date of service of this rule if service was by mail is the date of the mailing. Date: - J UAS a , Year _C2007_ L S1 Signature of P honotary or Deputy White - Prothonotary Copy Green - Court File Copy Yellow - Appelant's Copy Pink - Appellee Copy Gold - D. J. Copy Proth. - 76 PROOF OF SERVICE OF NOTICE OF APPEAL AND RULE TO FILE COMPLAINT (This proof of service MUST BE FILED WITHIN TEN (10) DAYS AFTER filing the notice of appeal. Check applicable boxes) COMMONWEALTH OF PENNSYLVANIA COUNTY OF ; ss AFFIDAVIT: I hereby swear or affirm that I served a copy of the Notice of Appeal, Common Pleas No. (date of service) upon the District Justice designated therein on year ? by personal service L? (certified) (registered) mail, sender's receipt attached hereto, and upon the appellee, (name , on , year , ? by personal service ? by (certified) (registered) mail, sender's receipt attached hereto. and further that I served the Rule to File a Complaint accompanying the above Notice of Appeal upon the appellee(s) to whom the Rule was addressed on , year _, [] by personal service []by (certified) (registered) mail, sender's receipt attached hereto. SWORN (AFFIRMED) AND SUBSCRIBED BEFORE ME THIS DAY OF , YEAR S#nafwe of offidal beWe whom affidM was made Me of oftial My commission expires on , year r) Signin of A Of ° 'ba C T) r ? -' '"rl 00 : r z ; - C._ C:- -j Z .? .'. M ?-_ ={C) C . C7 M Z :? w JUN 12,2007 11:03A 000-000-00000 page 1 [. )flu'`°•1L'?-? OF PPNNS"LVANfA 09-3-05 MARK MARTIN 51 07 N YORK ST MECHANICSBURG, PA 7171 766-4575 DE130RAR GRAHAM p2 A.LLEWIZIN DRIVE XECEANICSBUIXG, PA 17055 17055 NOTICE OF JUDGMENT/TRANSCRIPT CIVIL CASE Pf AINTIFF: r,, ?." „ ,, ,;;, r'WORLDWIDE ASSET PURCHASING LLC ? 1060 ANDREW DR APT/STE 170 C/O BURTON NRIL & ASSOC [!EST' CHESTER, PA 19380 i VS. DEFENDANT; v•+tat rnis:rrrs r4RAHM, DEBORAH 902 ALLENVXNW DRIVR MRCHANICSBURG PA 17055 Lw Docket No. CV-0000109-07 Date Filed. 4/03/07 vy?i- . THIS IS TO NOTIFY YOU THAT: FOR PLAINTIFF 5/17f07 I ?nI< nr (Date of Judgment) Xi Irr urit vv I; nterecl toi (Name) yPORLDNIDB ASSIST PURCHASING LLC C j " i vv enter <icaa rst: (?larYiel GRAHAM, DEBORAH :r?ourttoF? 4.521.32- Amount of Judgment are olntly and sevc4!l ' liable. Judgment Costs ra,;s will be assessed on Date & Time Interes on Judgment Attorney Fees s, erase dismissed without prejudice. Total y, 4, 521 321; ?j A 0t rat of Ju lgment Subject to Attachment/42 Pa.C.S. § 8127 Post Judgment Credits Post Judgment Costs $ Fo .,f Judgmeni for physical damages arising out of :renti?tl leases?__?_ Certified Judgment Total $ ,I Y PARTY HAS THE RIGHT TO APPEAL WITHIN 90 DAYS AFTER THE ENTRY OF JUDGMENT BY FILING A NOTICE OF APPI AL v,ITH THE PROTHONOTARY;CLERK OF THE COURT OF COMMON PLEAS, CIVIL DIVISION, YOU I U: r ;,`ICI_UDE A COPY OF THIS NOTICE OF JUDGMENTrr'RANSCRIPT FORM WITH YOUR NOTICE O APPEAL, k C t_PT AS C! THERNIISE PROVIDED IN THE RULES OF CIVIL PROCEDURE FOR MAGISTERIAL DISTRICT JUDGES, IF THE t«r ' `0 NT i ickDEk ELECTS TO ELATE R THE JUDGMENT IN THE COURT OF COMMON PLEAS, ALL FURTHER PROCESS MUST COME FROM THE COURT OF COMMON PLEAS AND NO FURTHER PROCESS MAY BE ISSUED BY THE MAGISTERIAL DISTRICT JUDGE, UNLESS THE JUDGMENT IS ENTERED IN THE COURT OF COMMON PLEAS. ANYONE INTERESTED IN THE JUDGMENT MAY FILE A REOUFST FOR ENTRY GF SATISFACTION WITH THE MAGISTERIAL DISTRICT JUDGE IF THE JUDGMENT DEBTOR PAYS IN FULL, SETTLES. OR OTHERWISE COMPLIES WITH THE JUDGPIIEN s`. r fn i II)v ecot"d of 'he ,pr L?site - ... Magisterial District Judge eed ngs containinq tiles judgment. _ ?.. Magisterial District Jung(, t ' .,pins first Monday of January, 2012 DATE PRINTED: 5/17/07 10:24:00 AM SEAL, 7C GEHTIFIED MAIL,. RECEIPT Fat (Domestic Mail Only; No Insurance Coverage Provided) v>r? r- PA 110',i 5 rr C3 Postage $ 0 • 1 x)419 r-1 C3 Certified Fee $2.65 9 Q Return Receipt Fee t2 (Endorsement Required) C7 c:1 Restricted Delivery Fee (Endorsement Required) $ N d C3 r-q O Total Postage & Fees ? ?• 4j20j O Sent ro --- • w. t C,, 4 r\- ? Street, Apt. No t or PO Box NO } t . $ City, State, ZIP+4 "•"-'-' m r,-I ru M1 lt K l n.t Q Postage $ j Q Certified Fee 05? C3 Return Receipt Fee (Endorsement Required) Q3 Post rk a Q - Restricted Delivery Fee (Endorsement Required) } sta. He Q r q ? C3 Total Postage & Fees $ $5.21 > ( J ?. C3 Sent Street, Apt No.; //`? L? V ? ?----- ---------- ? orPOBOxNo.?j?/„ x1 SSikkk: v ?????V77 Y V -- -- Crty State, z +a 'j` H - 1Z.. PROOF OF SERVICE OF NOTICE OF APPEAL AND RULE TO FILE COMPLAINT (This proof of service MUST BE FILED WITHIN TEN (10) DAYS AFTER filing the notice of appeal. Check applicable boxes) COMMONWEALTH OF PENNSYLVANIA COUNTY OF • ss AFFIDAVIT: I hereby swear or affirm that I served ?p a copy of the Notice of Appeal, Common Pleas No. (-) J 3/" CJ (date of service) ?,. ? ,r '16 year A-QZ`) , receipt attached hereto, and upon the appellee, (name Lk z- J. - 2b , year 2 ?t , ? by personal service upon the Dist i Justice designated therein on by personal service Pqb (certified) egistered) mail, sender's fa C , on (certified) egistered) mail, sender's receipt attached hereto. 1P and further that I served the Rule to File a Complaint accompanying the above Notice of Appeal upon the appellee(s) to whom the Rule was addressed on ?? 1 year -, by personal service y certified), registered) mail, sender's receipt attached hereto. r SWORN (AFFIRMED) AND SUBSCRIBED BEFORE ME THIS f DAY OF , YEAR '14n Slpne dolRdef before whom &%-M it WW made r y1D?r" The of olMckl My commission expires on .+-'-' , year COMMONWEALTH OF PENNSYLVANUI Notarial Seat Rametta S. Rider, Notary FFW4 Dgsburg BM, York Mll Corm?abn Expires o I:, M?rnbe?, Pennsylvania Association of Notaries 1 ), --V 1-1 , r SyMftrrs orAffiwt r-4 0 r+ "o C t- 4 3 COMMONWEALTH OF PENNSYLVANIA COURT OF COMMON PLEAS JUDICIAL DISTRICT NOTICE OF APPEAL FROM DISTRICT JUSTICE JUDGMENT COMMON PLEAS No. 67 (g ?y I VI a i1 NOTICE OF APPEAL Notice is given that the appellant has filed in the above Court of Common Pleas an appeal from the judgment rendered by the Dis- trict Justice on the date and in the case mentioned below. NAME OF APPELLANT 1 ESS OF APPELLANT rC) NO. t7U ?) CV YEAR LT YEAR MAG. DIST. NO. OR NAME OF D.J. C." 3-ct !'Y\ u (f4 CITY STATE ZIP CODE t (DEFENDANT) Q?i SIGNATURE OF, AI ELLANT OR HIS ATTORNEY OR AGENT This block will be signed ONLY when this notation is required under PA. R.C.P.J.P. No. 10086. This notice of Appeal, when received by the District Justice, will operate as A SUPERSEDEAS to the Judgment for possession in this case. gna re o ro ono ry or epu If ap Ilant was Claimant (see PA R.C.P.J.P. No?glt Justice, he MUST FILE A COMPLAINT within twenty (20) days after filing his NOTICE of APPEAL. PRAECtPE TO ENTER RULE TO FILE COMPLAINT AND RULE TO FILE (This section of form to be used ONLY when appellant was DEFENDANT (see PA R.C. P.J. P. No. 1001(7) in action before District Justice. IF NOT USED, detach from copy of notice of appeal to be served upon appellee. PRAECIPE: To Prothonotary Enter rule upon } t7{Lr.- > `L r. '( 2, t , app e(s), to file a complaint in this.appeal Name of appellee(s) (Common Pleas No. o-. ; 5 9 6VI I ) within twenty (20) days after service r suffer entry of judgment of non pros. Sign ure of a Want or his attorney or agent RULE: To (.t_Ac_( L appellee(sj-' Name of appellee(s) 6 A N&+ (1) You are notified that a rule is hereby entered upon you to file a complaint in this appeal within twenty(20) days r . after the date of service of this rule upon you by personal service or by certified or registered mail. {a (2) If you do not file a complaint within this time, a JUDGMENT OF?NON'PAO.S WILL BE LNTE?MED AGAINST YOU - UPON PRAECIPE.? .... (3) The date of service of this rule if service was by mail is the date of the mailing. Date: tk.f)E I Year X007 .aC/? Signature of Pr honotary or Deputy White - Prothonotary Copy Green - Court File Copy Yellow - Appelant's Copy Pink - Appellee Copy Gold - D. J. Copy Prnf , - ,a Ar'.0 A Burton Neil & Associates, P.C. By: Yale D. Weinstein, Esquire ID. NO. 89678 1060 Andrew Drive, Suite 170 West Chester, PA 19380 (610) 696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING,LLC 9911 Covington Cross Dr. Las Vegas NV 89144 Plaintiff V. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DEBORAH GRAHAM : NO. 07-3459 902 Allenview Drive, Mechanicsburg PA 17055 Defendant CIVIL ACTION -LAW Complaint - Notice You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claim set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. LAWYER REFERENCE AND INFORMATION SERVICE Cumberland County Bar Assoc. 32 South Bedford Street Carlisle, PA 17013 Telephone No. 717-249-3166 or 800-990-9108 83423 Burton Neil & Associates, P.C. By: Yale D. Weinstein, Esquire ID. NO. 89678 1060 Andrew Drive, Suite 170 West Chester, PA 19380 (610) 696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING,LLC 9911 Covington Cross Dr. Las Vegas NV 89144 V. Plaintiff DEBORAH GRAHAM 902 Allenview Drive, Mechanicsburg PA 17055 Defendant IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA NO. 07-3459 CIVIL ACTION - LAW Complaint 1. The plaintiff is WORLDWIDE ASSET PURCHASING,LLC, a business corporation, with place of business located at 9911 Covington Cross Dr., Las Vegas NV. 2. The defendant is Deborah Graham, who resides at 902 Allenview Drive, Mechanicsburg, Cumberland County, Pennsylvania. 3. At the defendant's request, Direct Merchants Bank furnished consumer credit to defendant bearing account number 5458002406376279 hereinafter referred to as the credit card account. 4. The defendant accepted the credit card account by making purchases, balance transfers and/or cash advances. 5. Monthly statements were sent to defendant each month which detailed the charges and credits made to the credit card account for the prior month. 6. The balance due on the credit card account is $4,397.32. 7. Defendant did not pay the balance due on the credit card account in full upon receipt of the monthly billing statements and also did not make the required minimum monthly payment J0. I A ? set forth in the monthly billing statement. As such, defendant is in default on the credit card account. 8. Plaintiff purchased the defendant's account from Direct Merchants Bank and is now the holder and owner of the account. 9. Although demand has been made by plaintiff upon defendant to pay the sum of $4,397.32, the defendant failed and refused to pay all or any part thereof. Wherefore, plaintiff demands judgment against the defendant in the sum of $4,397.32 and the costs of this action. P.C. By: Y e D-.-Weinstein, Esquire A ornev for Plaintiff The law firm of Burton Neil & Associates, P.C. is a debt collector. t' Verification Yale D. Weinstein, Esquire, attorney for plaintiff, WORLDWIDE ASSET PURCHASING,LLC , makes this statement on its behalf as to the truthfulness of the facts set forth in the foregoing Complaint subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. Counsel, rather than an officer or other representative of plaintiff is verifying the foregoing Complaint because plaintiff s officers and/or representatives are outside the jurisdiction of the court and the verification of none of them could be obtained within the time required to file this pleading. Plaintiff's counsel is verifying plaintiff's Complaint based upon information and belief from information in his file. Date Yale Ill. Weinstein, Esquire N GD Burton Neil & Associates, P.C. By: Yale D. Weinstein, Esquire ID. NO. 89678 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING,LLC Plaintiff V. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 07-3459 DEBORAH GRAHAM Defendant : CIVIL ACTION - LAW Praecipe to Reinstate To the Prothonotary: Please reinstate the Complaint. Yale The law firm of Burton Neil & Associates is a debt collector. & MsociWs, P.C. Weinstein, Esquire for Plaintiff 83423 }?` C 1 ? 0 at t ??` I IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff V. DEBORAH GRAHAM, Defendants CIVIL ACTION - LAW NO. 07-3469 NOTICE TO PLEAD TO: Yale D. Weinstein, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff You are hereby noted to file a written response to the enclosed DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT within twenty (20) days from service hereof or a judgment may be entered against you. Dated: ??lil C-D 9.--, --, De ora Graham 902 Allenview Drive Mechanicsburg, PA 17055 Defendant 1 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff V. DEBORAH GRAHAM, Defendants CIVIL ACTION - LAW NO. 07-3459 DEFENDANT'S PRELIMINARY OBJECTIONS Defendant, Deborah Graham, preliminarily objects to Plaintiff's Complaint, as follows: 1. Plaintiff commenced this civil action against Defendant Deborah Graham before a local District Justice on April 3, 2007 and an appeal was timely filed by Defendant on June 12, 2007. 2. Plaintiff filed its complaint thereafter in the Court of Common Pleas of Cumberland County on July 2, 2007, which complaint was reinstated on August 6, 2007. 3. The verification attached to the complaint is signed by Plaintiffs counsel, Yale D. Weinstein, who has represented Plaintiff and has been prosecuting this case since at least April 3, 2007 and, thus, has had almost five (5) months to obtain a proper verification but failed to so. 4. Plaintiff alleges in paragraph 1 of its complaint that it is a business corporation with a place of business located at 9911 Covington Cross Dr., Las Vegas Nevada. 5. Plaintiff does not allege that it is registered to do business in Pennsylvania as required by 15 Pa. C. S. § 4141(a), but claims that Defendant is indebted to Direct Merchants Bank for a credit card account in the amount of $4,397.32 2 based on monthly statements which detail the charges and credits made to the credit card account. 6. Plaintiff also alleges in paragraph 8 of its complaint that it purchased the account from Direct Merchant Bank but fails to attach either any contract or agreement between Direct Merchant Bank and Defendant Deborah Graham, or any contract or agreement between Direct Merchant Bank and itself. 1. PRELIMINARY OBJECTION RAISING LACK OF CAPACITY TO SUE 7. Paragraphs one through six are incorporated by reference as if set forth at length herein. 8. Plaintiff, a Nevada business corporation, fails to allege that it is registered in the Commonwealth of Pennsylvania or that it has obtained a certificate of authority. 9. Plaintiff, a foreign business corporation, is not permitted to maintain any action or proceeding in any court of this Commonwealth until the corporation has obtained a certificate of authority. 15 Pa. C. S. § 4141(a). 10. Plaintiff is precluded from bringing this action until proper registration is completed. WHEREFORE, defendant respectfully requests that this Court dismiss plaintiffs complaint. ll. PRELIMINARY OBJECTION LACK OF CONFORMITY TO LAW OR RULE OF COURT 11. Paragraphs one through six are incorporated by reference as if set forth at length herein. 12. As a general rule, an action must be brought "by and in the name of the real party in interest." Pa. R.C.P. No. 2002(a). 13. A real party in interest is one who can discharge a given right, obligation, or liability and control an action brought to enforce it. 14. Plaintiff alleges in paragraph 8 of its complaint that it "purchased defendant's account from Direct Merchant Bank and is now the holder and owner 3 of the account"; however, Plaintiff fails to attach a copy of any assignment or contract with Direct Merchant Bank. 15. Rule 1019(i) of the Pennsylvania Rules of Civil Procedure requires that where a claim or defense is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing. 16. Plaintif fails to produce a cardholder agreement and statement of account, as well as evidence of the assignment. 17. Plaintiffs complaint is silent about the substance of these writings and whether each writing is accessible. 18. Plaintiffs pleading is insufficient and Plaintiff has not established that it is a real party in interest or that it has capacity to sue in its own name. WHEREFORE, defendant respectfully requests that this Court dismiss plaintiff's complaint. Ill. PRELIMINARY OBJECTION RAISING FAILURE TO CONFORM TO APPLICABLE RULES OR LAW. 19. Paragraphs one through six are incorporated by reference as if set forth at length herein. 20. The verification to plaintiffs complaint was not made by one of the plaintiffs, but rather was made by plaintiffs attorney, Yale D. Weinstein, Esq. 21. Pa. R.C.P. 1024(c) requires that: The verification shall be made by one or more of the parties filing the pleading unless all the parties (1) lack sufficient knowledge or information, or (2) are outside the jurisdiction of the court and the verification of none of them can be obtained within the time allowed for filing the pleading. In such cases, the verification may be made by any person having sufficient knowledge or information and belief and shall set forth the source of his information as to matters not stated upon his own knowledge and the reason why the verification is not made by a party. 22. The verification to plaintiff's complaint does not set forth the source of plaintiffs attorney's information as to the matters contained in the complaint. 4 23. Further, the reason given by plaintiff's attorney why the verification could not be taken by the plaintiff is a follows: "... plaintiff is verifying the foregoing Complaint because plaintiff's officers and/or representatives are outside the jurisdiction of the court and the verification of none of them could be obtained within the time required to file this pleading." 24. This action commenced on April 3, 2007, nearly five (5) months ago, and was appealed to this Court on June 12, 2007. Although the complaint was filed on July 2, 2007, it was reinstated on August 6, 2007. Counsel's claim that a verification could not be obtained within that time frame and the fact that no substitution of verification has been made as of this date is implausible. 25. The verification to plaintiffs' complaint is defective under Rule 1024(c). 26. The verification being defective, plaintiffs' complaint is not properly verified as required of a pleading under Rule 1024(a), and must be stricken. WHEREFORE, defendant respectfully requests that plaintiffs' complaint be stricken. IV. PREL?MINARY OBJECTION RAISING FAILURE TO CONFORM TO APPLICABLE RULES OR LAW. 27. Paragraphs one through six are incorporated by reference as if set forth at length herein. 28. Plaintiff s Complaint fails to set forth sufficient facts as to time, place and items of special damages with specificity, as required by Pa. R.C.P. 1019(f). 29. Plaintiff alleges in paragraph 3 of its complaint that Defendant Merchant Bank furnished consumer credit to defendant bearing account number 5458992496376279. Plaintiff fails to attach or to explain the absence of its alleged statement of account as required by Pa. R.C.P. 1019(h). 30. The Complaint purports to state a claim against Defendant for default under the terms and conditions of a written agreement governing the use of a 5 credit card. Further, Plaintiff alleges that it "purchased" the account and is the "holder or owner". 31. Paragraphs 4 and 5 of the complaint allege that Defendant accepted the credit card account by making purchases, balance transfers and/or cash advances and that monthly statements contain details of the charges and credits. Plaintiff fails to attach a signed contract, the charge slips, the application for the credit card, or any statements of account. 32. Plaintiff fails to identify those specific dates of use or terms under the contract that substantiate the alleged balance or amount owed. 33. The Complaint does not comply with Pa. R.C.P. 1019(a), which requires that "the material facts on which a cause of action or defense is based shall be stated in a concise and summary form'. 34. As a result, plaintiffs complaint is vague and general and does not specifically state the debt incurred or what, if any, payments are due and the nature of the charges included as part of the amount Plaintiff claims to be owed. 35. Under Pa. R.C.P. No. 1028(a)(2), a party may preliminarily object by way of a motion to strike off a pleading because of lack of conformity to law or rule of court. 36. The substance of Plaintiffs Complaint violates the Pennsylvania Rules of Civil Procedure and must be dismissed. WHEREFORE, Defendant respectfully requests that Plaintiff's Complaint against her be dismissed for lack of conformity to the Pennsylvania Rules of Civil Procedure. V. INSUFFICIENT SPECIFICITY OF A PLEADING. 37. Paragraphs one through six are incorporated by reference as if set forth at length herein. 38. Plaintiff's complaint lacks sufficient specificity to apprise defendant of the issues to be litigated or to allow her to adequately prepare and assert defenses to plaintiffs allegations. Moreover, the deficient averments prevent her from being able to identify and join any potentially responsible parties as additional defendants such as a primary signer who may have the sole obligation to repay the alleged credit account. 39. Additionally, Defendant is entitled to more specific information to be able to answer intelligently and determine if she is even obligated for such credit card and what items she can admit and what she must contest. 40. The Complaint generally asserts a breach of contract and other failures of performance against Defendant, contrary to Rule 1019(f). 41. The Complaint fails to state any facts upon which the amount of damages may be calculated, in violation of Pennsylvania Rule of Civil Procedure 1019(a), which requires that "the material facts on which a cause of action or defense is based shall be stated in a concise and summary form." WHEREFORE, Defendant respectfully requests this Court to require that Plaintiff plead more specifically the averments of its complaint relating to damages and the nature of the default. Dated: q1Y10 -? Respectfully submitted QLA'?? Deborah Graham 902 Allenview Drive Mechanicsburg, PA 17055 Defendant 7 CERTIFICATE OF SERVICE 1 HEREBY CERTIFY that a true and correct copy of the foregoing Preliminary Objections was furnished by U.S. Mail, first class, postage prepaid on this day of , 2007, to: Yale D. Weinstein, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff Dated: iyo-? Deborah Graham Defendant 8 -Ti '? 7 SHERIFF'S RETURN - REGULAR CASE NO: 2007-03459 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND WORLDWIDE ASSET PURCHASING LLC VS GRAHAM DEBORAH MARK CONKLIN , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT & NOTICE was served upon GRAHAM DEBORAH the DEFENDANT , at 1115:00 HOURS, on the 22nd day of August 2007 at 902 ALLENVIEW DRIVE MECHANICSBURG, PA 17055 by handing to nrlm 1DTV P?DTUTM a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge 910(.10 1 q- -? Sworn and Subscibed to before me this So Answers: 18.0 9.660 .00 10.00 R. Thomas Kline .00 37.60 08/23/2007 BURTON NEIL & ASSOCIA S By: day D puty Sheriff of A. D. 0 r*'v M I -- ?_- t.0 CA BURTON NEIL & ASSOCIATES, P.C. cn Derek Blasker, Esquire, Id. No. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC : IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. DEBORAH GRAHAM : NO. 07-3459 Defendant : CIVIL ACTION -LAW ANSWER TO DEFENDANT'S PRELIMINARY OBJECTIONS TO THE COMPLAINT 1. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 2. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 3. Admitted in part, denied in part. It is admitted that Yale D. Weinstein signed the verification of the complaint. It is further admitted that Yale D. Weinstein has been representing plaintiff since April 3, 2007. It is denied that Yale D. Weinstein "has had almost five (5) months to obtain a proper verification but failed to so." By way of further denial, the complaint that required verification was not created or prepared until June 29, 2007 and only after defendant filed an appeal to the Magisterial District Justice judgment. 4. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 5. Admitted in part, denied in part. It is admitted that plaintiff does not allege that it is registered to do business in Pennsylvania. It is denied that plaintiff claims that defendant is indebted to Direct Merchants Bank for a credit card account in the amount of $4,397.32. To the contrary, complaint paragraph 8 avers that plaintiff purchased the account from Direct Merchants Bank, therefore the debt of $4,397.32 is owed to plaintiff and not Direct Merchants Bank. It is denied that 15 Pa. C. S. § 4141(a) requires a pleading party to allege that it is registered to do business in Pennsylvania. This Code section establishes that a foreign business corporation cannot maintain an action until it has obtained a certificate of authority. Plaintiff is a limited liability company collecting a debt in the State of Pennsylvania and is excluded from these registration requirements. Plaintiff's registration requirements are set forth in 15 Pa.C.S.A. 8981(a). 6. Admitted in part, denied in part. It is admitted that in complaint paragraph 8, plaintiff alleges that it purchased defendant's account from Direct Merchants Bank. It is denied that plaintiff is required to attach a copy of a contract between Direct Merchants Bank and defendant. It is further denied that plaintiff is required to attach a copy of a contract or agreement between Direct Merchants Bank and plaintiff. Plaintiff did not set forth a claim or defense that is based upon a writing, and therefore is not required by Rule 1019(i) to attach any writing. Pennsylvania is a fact pleading state, and evidence is not to be included in a pleading, unless specifically required by Law or Rule of Court. I. Answer to Preliminary Objection Raising Lack of Capacity to Sue 7. Paragraphs 1 through 6 are incorporated herein by reference, as if fully set forth at length. 8. Admitted in part, denied in part. It is admitted that plaintiff did not allege that it is registered in the Commonwealth of Pennsylvania or that it has obtained a certificate of authority. It is denied that plaintiff is a Nevada business corporation. Plaintiff is a Nevada limited liability company. Plaintiff denies that it is required to obtain a certificate of authority to engage in the collection of a debt. 9. Denied. It is denied that plaintiff is a foreign business corporation. By way of further response, plaintiff is a limited liability company, not subject to 15 Pa. C.S. § 4141(a). It is denied that plaintiff is prohibited from maintaining this action in any court of the Commonwealth until it has obtained a certificate of authority. Plaintiff is specifically excluded from the foreign registration requirements of 15 Pa. C.S.A. Section 8582, which does govern limited liability companies. 10. Denied. It is denied that plaintiff is precluded from bringing this action until proper registration is complete. As stated above, plaintiff is excluded from the registration requirements claimed by defendant. Wherefore, plaintiff requests this court dismiss defendant's preliminary objection for lack of capacity to sue. II. Preliminary Objection Lack of Conformity to Law or Rule of Court 11. Paragraphs 1 through 6 are incorporated herein by reference, as if fully set forth at length. 12. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 13. Admitted 14. Admitted in part, denied in part. It is admitted that plaintiff alleged in complaint paragraph 8 that it purchased defendant's account from Direct Merchants Bank and is now the holder and owner of the account. It is denied that plaintiff is required to attach a copy of any assignment or contract with Direct Merchants Bank. Plaintiff did not set forth a claim that is based upon a writing, and therefore is not required to attach such. By way of further response, Pennsylvania is a fact pleading state, and evidence is not properly submitted in the pleading stages. 15. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 16. Denied. It is denied that plaintiff is required to produce a cardholder agreement and a statement of account, as well as evidence of the assignment. Plaintiff did not plead either the terms of a cardholder agreement or the contents of a statement of account. It is further denied that plaintiff is required to produce evidence of an assignment in the pleadings stage. Rule 1019(i) only requires a party to attach such writings when a claim or defense is based on the writing. 17. Admitted in part, denied in part. It is admitted that plaintiff did not plead the substance of an alleged cardholder agreement, statement of account, and assignment. It is denied that plaintiff is required to plead the contents of a cardholder agreement, since none of plaintiff's averments are based on an alleged cardholder agreement. Complaint paragraph 5 does set forth that monthly statements were sent, which detailed the charges and credits. This was an averred fact. Defendant's demand for evidence is premature. It is denied that plaintiff is required to plead if the stated writings are accessible, since the claim is not based on these writings. 18. Denied. It is denied that plaintiff's pleading is insufficient and that plaintiff has not established that it is the real party in interest or that it has the capacity to sue in its own name. The complaint did not make averments to the contents of writings which needed to be attached to the complaint. Plaintiff has established its standing by alleging that it purchased defendant's account and is now the holder and owner of the account. Wherefore, plaintiff requests this court dismiss defendant's preliminary objections for failure to conform to applicable rules or law. III. Answer to Preliminary Objection Raising Failure to Conform to Applicable Rules of Law. 19. Paragraphs 1 through 6 are incorporated herein by reference, as if fully set forth at length. 20. Admitted. It is admitted that Yale D. Weinstein signed the verification of the complaint. Any inference defendant makes from that signature is specifically denied. 21. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 22. Denied. It is denied that the verification of the complaint does not set forth the source of plaintiff s attorney's information. The last sentence of the verification states; "Plaintiff s counsel is verifying plaintiff' s complaint based upon information and belief from information in his file." 23. Admitted in part, denied in part. Plaintiff admits that the statement in preliminary objection paragraph 23 was set forth in plaintiff's verification. Plaintiff denies the context in which defendant placed the statement. Prior to the three periods, was the phrase, "Counsel, rather than an officer or other representative of," which establishes counsel's context. 24. Denied. This objection paragraph is denied as stated. Plaintiff did not have nearly (5) months to obtain a verification. The complaint, which required the verification, was not prepared until June 29, 2007. It was not until defendant appealed the District Justice judgment in favor of plaintiff that plaintiff s counsel had need to prepare the complaint. At the time the appeal was filed with the complaint, verification by an officer or other representative was not obtainable. 25. Denied. It is denied that the verification by plaintiffs counsel is defective under Rule 1024(c). The verification by plaintiff's counsel was made in strict conformity with Rule 1024(c) and set forth the basis of counsel's information and that an officer or other representative was outside of the jurisdiction and their verification could not be obtained within the time required to file the pleading. 26. Denied. It is denied that the verification is defective and it is further denied that plaintiff s complaint is not properly verified. As stated above, the verification by plaintiff s counsel does qualify as valid in the instant circumstances. Wherefore, plaintiff requests this court dismiss defendant's preliminary objections for failure to conform to applicable rules or law. IV. Answer to Preliminary Objection Raising Failure to Conform to Applicable Rules or Law 27. Paragraphs 1 through 6 are incorporated herein by reference, as if fully set forth at length. 28. Denied. It is denied that the complaint fails to set forth sufficient facts as to time, place and special damages with specificity, as required by Pa R.C.P. 1019(f). Plaintiff did not make averments of time, place or special damages in the complaint, and the rule only requires specificity when making such an averment. 29. Admitted in part, denied in part. It is admitted that complaint paragraph 3 alleges that Direct Merchants furnished consumer credit to defendant bearing the referenced account number. It is denied that such an averment, pleading no document or agreement, required plaintiff to attach or explain the absence of a statement of account. 30. Admitted in part, denied in part. It is admitted that plaintiff alleges that it purchased the account and is the holder and owner. It is denied that the complaint purports to state a claim against defendant for default under the terms and conditions of a written agreement. It is denied that plaintiff's complaint is based on breach of any written contract. To the contrary, plaintiff's complaint states that defendant is in default on the credit card account, not under an alleged credit card agreement. 31. Admitted in part, denied in part. It is admitted that plaintiff alleged that defendant accepted the credit card account by making purchases, balance transfers, and /or cash advances and monthly statements contain details of those charges and credits. It is denied that plaintiff is required to attach a signed contract, the charge slips, the application for the credit card, or any statements of account. Plaintiff did not plead the contents of a signed contract or the contents of charge slips. Further, plaintiff did not make an averment based on the contents of an application or statement of account. Plaintiff's averment of acceptance is based on defendant's acceptance by performance. It is averred that defendant performed by using the credit card account. 32. Denied. It is denied that plaintiff is required to identify specific dates the card was used. Plaintiff did not make an averment of time, therefore such need not be plead specifically. It is further denied that plaintiff is required to identify terms of an alleged contract that substantiate the balance owed. Plaintiff did not set forth a breach of contract cause of action, therefore no terms need be plead. 33. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 34. Denied. It is denied that the complaint does not specifically state the debt incurred or what payments are due. The complaint sets forth the balance due on the credit card account in complaint paragraph 6. It is denied that plaintiff is required to plead the nature of the charges included as part of the amount claimed. Rule 1019(a) requires a party to plead the material facts in a concise and summaryform. Plaintiff averred the fact of the amount owed and the material fact that the balance is the result of defendant making charges, balance transfers, and/or cash advances. This averment does not need to be plead specifically. 35. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 36. Denied. Plaintiff's pleading conforms with the Pennsylvania Rules of Civil Procedure and all such contentions listed in this objection should fail for lack of substance. Wherefore, plaintiff requests this court dismiss defendant's preliminary objections for failure to conform to applicable rules or law. V. Answer to Insufficient Specificity of a Pleading 37. Paragraphs 1 through 6 are incorporated herein by reference, as if fully set forth at length. 38. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 39. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d) 40. Denied. Plaintiff did not set forth a breach of contract cause of action. It is further denied that such alleged breach would be a violation of Rule 1019(f), which pertains to averments of time, place, or special damages being specifically stated. 41. Denied. It is denied that the complaint fails to state sufficient facts upon which the amount of damages may be calculated. Complaint paragraph 4 set forth the averment that defendant made purchases, balance transfers, and/or cash advances. Further, plaintiff averred in complaint paragraph 5 that statements were sent to defendant which detailed the charges. These two paragraphs set forth the material facts of plaintiff's complaint. NEIL & ASSOCIATES, P.C. Attorney for Plaintiff In making this communication, we advise our firm is a debt collector. a i i r Lrl Praecipe for Listing Case for Argument (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. WORLDWIDE ASSET PURCHASING, LLC Plaintiff V. DEBORAH GRAHAM Defendant NO. 07-3459 State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): Defendant's Preliminary Objections 2. Identify counsel who will argue case: (a) for plaintiff. Derek C. Blasker, Esquire c/o Burton Neil & Associates, P.C. address: 1060 Andrew Drive, Suite 170, West Chester, PA 19380 b) for defendant: Deborah Graham, Pro Se address: 902 Allenview Drive, Mechanicsburg PA 17055 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: November 21, 20 Derek C. Blasker, Esquire Attorney for the Plaintiff The law firm of Burton Neil & Associates is a debt collector. 101,10111 111011110 ?? ° G r,-; cr t'*i r-n G tt? - BURTON NEIL & ASSOCIATES, P.C. Derek Blasker, Esquire, Id. No. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorne fy_or Plaintiff WORLDWIDE ASSET PURCHASING, LLC Plaintiff v. c7 C rv ° ' mot My C A K tO 6 cn -c IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA : NO. 07-3459 DEBORAH GRAHAM Defendant : CIVIL ACTION -LAW Certificate of Service I, Derek C. Blasker, Esquire do hereby certify that I served a true and correct copy of the within plaintiff s Answer to Defendant's Preliminary Objections, proposed Order, Praecipe to List and Certificate of Service on pro se defendant, Deborah Graham at his/her address of record via first class mail, postage prepaid on the date set forth below. Date: Z0T The law firm of Burton Neil & Associates is a debt collector. 83423 Attorney for Plaintiff C7 C o Utr C MU, m F r : co - 73T ?- y c,n En Burton Neil & Associates, P.C. By: Derek C. Blasker, Esquire ID. NO. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING,LLC IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 07-3459 DEBORAH GRAHAM Defendant : CIVIL ACTION - LAW Praecipe to Substitute Verification To the Prothonotary: Kindly substitute the attached verification for the attorney verification filed with the Complaint. In making this communication, we advise that our firm is a debt collector. Attorney for Plaintiff Verification I, -AM(Q-j am an employee of Gerald E. Moore & Associates, -baAlp Ile, ( P.C. by contract the service provider for plaintiff Worldwide Asset Purchasing retained to perform services including but not primarily limited to collecting delinquent debt, custodian of records and execution of documents. I am authorized to make this verification as attorney-in- fact for plaintiff under powers of attorney from plaintiff to Gerald E. Moore & Associates, P.C. and to me. The foregoing averments of fact in the within pleading are true and correct to the best of my information and belief. I understand that the statements made herein are subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn ification to a authorities. Dater O 1 • • Name Deborah Graham 5458002406376279 W M=l r- 'Q IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff : CIVIL ACTION - LAW V. DEBORAH GRAHAM, Defendant : NO. 07-3459 CERTIFICATE OF SERVICE I hereby certify that I served the foregoing DEFENDANT'S REQUEST FOR PRODUCTION OF DOCUMENTS ADDRESSED TO PLAINTIFF, consisting of 6 pages and 14 requests, by placing a true and correct copy thereof in the United States ,A r) z_ mail, first class postage prepaid, addressed as follows: ?n Derek C. Blasker, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff Dated: D ( _ CI-1 -d Deborah Graham 902 Allenview Drive Mechanicsburg, PA 17055 Defendant Pro se ?, t? ? ?= ?? - ~' - ?; ' "' ?- , -_ ; , .r• _) . '':+.? ?? ?...... _ ?'?J .:,? f e IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff CIVIL ACTION - LAW V. DEBORAH GRAHAM, : NO. 07-3459 Defendant CERTIFICATE OF SERVICE I hereby certify that I served the foregoing DEFENDANT'S FRIST SET OF INTERROGATORIES ADDRESSED TO PLAINTIFF, consisting of 11 pages and 16 interrogatories, by placing a true and correct copy thereof in the United States mail, first class postage prepaid, addressed as follows: Derek C. Blasker, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff Dated: ca Er I . r 51.99 0055 P- Postage $ 65 $2 1RG p? M Certified Fee . Postmark s O O Return Receipt Fee $2.15 r ? Here (Endorsement Required) C3 Restricted Delivery Fee $0,00 Q p (Endorsement Required) - r-9 r' R F $ 56.79 09128!2007 ' '771 C3 ees Total Postage C3 r fib - -`-- 2---` ° -- ---- - --- -- p ;: -- - ------- ---- reet,_ Apt _No.; n n , .. ??\ ) ( A 902 Allenview Drive Mechanicsburg, PA 17055 Defendant Pro se c? ? r_ _-? ? ? _- - ? .? r -;r= "-- ?_ , ? ,.? , ,a , ?. w_! e.? ?7 --< #6 WORLDWIDE ASSET PURCHASING, LLC, V. DEBORAH GRAHAM IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2007 - 3459 CIVIL TERM IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS BEFORE OLER, JR., GUIDO, EBERT, JJ. ORDER OF COURT AND NOW, this 5TH day of DECEMBER, 2007, after review of the briefs filed by the parties, Defendant's Preliminary Objections are SUSTAINED in part and OVERRULED in part. They are sustained insofar as Defendant has failed to comply with Pa. Rule of Civil Procedure 1019(i) with respect to the alleged card agreement between Direct Merchant Bank and Plaintiff as well as the assignment between Direct Merchant Bank and Defendant. In all other respects, Defendant's Preliminary Objections are OVERRULED. Plaintiff is given twenty (20) days after receipt of this order to file an amended complaint in compliance with Rule of 1019(i). the Court, Edward E. Guido, J. " Derek Blasker, Esquire ?Deborah Graham, pro se 902 Allenview Drive Mechanicsburg, Pa. 17055 Court Administrator C 6i" ma c LiL ik jU lo7 rs; C.,J --- Li..? Le..I _?ttJ CV BURTON NEIL & ASSOCIATES, P.C. By: Derek C. Blasker, Esquire Identification No. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 (610) 696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC 9911 Covington Cross Dr., Las Vegas, NV 89144 Plaintiff V. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DEBORAH GRAHAM NO. 07-3459 902 Allenview Drive, Mechanicsburg, PA 17055 Defendant CIVIL ACTION -LAW Amended Complaint - Notice You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claim set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. LAWYER REFERENCE AND INFORMATION SERVICE Cumberland County Bar Assoc. 32 South Bedford Street Carlisle, PA 17013 Telephone No. 717-249-3166 or 800-990-9108 83423 BURTON NEIL & ASSOCIATES, P.C. By: Derek C. Blasker, Esquire Identification No. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 (610) 696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC 9911 Covington Cross Dr., Las Vegas, NV 89144 Plaintiff V. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA DEBORAH GRAHAM NO. 07-3459 902 Allenview Drive, Mechanicsburg, PA 17055 Defendant CIVIL ACTION -LAW Amended Complaint 1. The plaintiff is Worldwide Asset Purchasing, LLC with place of business located at 9911 Covington Cross Drive, Las Vegas, Nevada. 2. The defendant is Deborah Graham, who resides at 902 Allenview Drive, Mechanicsburg, Cumberland County, Pennsylvania. 3. Direct Merchants Bank furnished consumer credit to defendant bearing account number 5458002406376279 hereinafter referred to as the credit card account. 4. The defendant made purchases, balance transfers and/or cash advances on the credit card account. 5. The balance due on the credit card account is $4,397.32 which represents the balance less payments. 6. Defendant did not pay the balance due on the credit card account as required by the credit card agreement. As such, defendant is in default on the credit card account. A true and correct copy of the terms and conditions of the account is attached hereto, marked Exhibit A, and incorporated herein by reference. 7. HSBC Card Services (III) Inc. successor in interest to Direct Merchants Bank sold the defendant's account to plaintiff, who is now the holder and owner of the account. A true and correct copy of the Bill of Sale is attached hereto, marked Exhibit B, and incorporated herein by reference. 8. Although demand has been made by plaintiff upon defendant to pay the sum of $4,397.32 the defendant failed and refused to pay all or any part thereof. 9. Pursuant to the terms set forth in the aforesaid Exhibit A, defendant is also liable to plaintiff for reasonable attorneys fees. Wherefore, plaintiff demands judgment against the defendant in the sum of $4,397.32 plus reasonable attorneys fees and the costs of this action. In making this communication, we advise our firm is a det collector. Attorney for Plaintiff ntcrtara L NOTICE OF ARBITRATION AGREEMENT This Agreement provides that all disputes between you and Direct Merchants Credit Card Bank, National Association and/or our affiliates may be resolved by ARBITRATION. Under certain circumstances (which are described in greater detail below) you or we may elect to have a dis- pute heard by a neutral arbitrator rather than by a judge or jury. In such circumstances you Gl VE UP YOLTR RIGHT TO GO TO COURT to assert or defend your rights under this Agreement. Arbitration provides for a fair hearing, but arbitration procedures are both simpler- and more limited than most comparable court proceedings. Decisions -made by an arbitrator are enforceable and are 'subject to very limited review by a court. The following terms and conditions shall be effective on cycle beginning on or after February 26, 200unless otherwise na et ding AGREEMENT TO TERMS.- USE OF YOUR ACCOUNT_.... DEFINITION OF PARTIES. This is the Agreement which covers your credit card account (called your "Account") with us. If your Account is a joint Account, you and your joint Account holder each promise to pay and are jointly and individually respon- sible for all amounts due under this Agreement. In this Agreement, and in your monthly statements, the words."you " and "your" refer to all persons mined on the credit card application, credit card or acceptance form, and the words "we", "us", and "our" refer to Direct Merchants Credit Card Bank, National Association. You can use your Account to purchase goods and services at participating merchants and to take cash' advances as described in this Agreement. You agree not to use your Account for any unlawful purpose. If you use, or allow someone else to use, the credit card or Account for any other purpose, you will be responsible for such use and may be required to reimburse Direct Merchants Credit Card Bank, National Association and MasterCard* International Incorporated for all amounts or expenses either Direct Merchants Credit Card. Bank, N.A. or MasterCard* pays as a result of such use. Arbitration Provision: Any claim, dispute or controversy-(whether in con- tract, regulatory, tort, or otherwise, whether pre-existing, present or future (I EXHIBIT and including constitutional, statutory, common.law, intentional tort and equitable claims) arising from or relating to this Account or application. for your Account, or advertisements, promotions, or oral or written statements related to the Account, goods or services financed under the Account or the terms of-financing, the relationships which result from this Agreement (including, to the full extent permitted by applicable law, relationships with third parties) or the validity, enforceability or scope of this Arbitration Provision or the entire Agreement (collectively "Claim") shall be resolved, upon the election of you .or us or said third. parties, by 6inding arbitration pursuant to this Arbitration Provision and the Code of Procedure of the National Arbitration Forum (or other appropriate organization as provided for below) in effect at the time the Claim is filed. A party who has asserted a claim in a lawsuit in court may elect arbitration with respect to any claim(s) subsequently asserted in that lawsuit by any other party or parties. The Code of Procedure, rules and forms of the National Arbitration Forum may be obtained by calling the National Arbitration Forum at (800) 474-2371, through their website at ?!ww.arb-forumicom, or by mailing your request to P.O. Box 50191, Minneapolis, Minnesota 55405. All claims shall be filed at any National Arbitration Forum office, or as otherwise specified in the Code of Procedure. If, for any reason, the National Arbitration Forum is unable or unwilling or ceases to serve as arbitration administrator, (or upon the rea- sonable objection of any party subject to arbitration of the Claim) an equiva- lent national arbitration organization utilizing similar arbitration rules shall be substituted by the party asserting a Claim. Claims shall be filed as pro- vided under the Code of Procedure of the National Arbitration Forum or the substitute arbitration organization. There shall be no authority for any claims to be arbitrated on a class action basis. Further, an arbitrator can only decide our or your Claim and may not consolidate or join the claims of other persons who may have similar claims. Any participatory arbitration hearing that you attend will take place in the federal judicial district of your resi- dence. Upon your written request to P.O. Box 550999, Jacksonville, FL 32255-0999, we will advance the first $500.00 of the arbitration filing and hearing fees- for any Claim which you may file against us. The arbitrator will decide whether we or you will ultimately be responsible for paying any fees in connection with the arbitration. Unless inconsistent with applicable _law, each party shall bear the expense of their respective attorneys', experts', and witness fees, regardless,of which party prevails in the arbitration. This arbitration agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act ("FAA"), 9 U.S.C. Sections 1-16. The arbitrator shall apply applicable substantive law consistent with. the FAA and applicable statutes of limitations and shall honor claims of privilege recognized at law. Judgment upon the award ren- dered by the arbitrator may bd entered in any court having jurisdiction. This Arbitration Provision shall survive repayment of your loan or extension of credit anal termination of your Account. If any portion of this Arbitration Provision is deemed invalid or unenforceable under the FAA, it should not invalidate the remaining portions of this Arbitration Provision. USB-WA-2$.99 (2/02) (2) PROMISE TO PAY You promise to pay for: (a) credit extended by Direct Merchants Credit Card. Bank, National Association, to you or to anyone whom you permit to use this Account; (b) finance charges, late charges, and other administrative charges (e.g., returned check charges, research charges) provided in this Agreement;. and (c) collection costs and attorneys' fees as permitted by appli- cable law if your Account should go into default. CASH ADVANCES The Term cash advance is defined as and includes the following transactions: (1) Automated Teller Machine (ATM) transactions; (2) transfers and conven- "iende check transactions; (3) money orders, cashiers checks, travelers checks, wire transfers, foreign currency" or other in-bank transactions; (4) tax pay- ments; (5) legalized garbling transactions; and (6) court costs, bail Bonds and fines. Convenience checks are used the same as personal checks. Both transfers and convenience checks are drawn. from your Account and billed to your statement There is a cash advance transaction fee applied to every-cash advance trans- action. The cash advance transaction fee for an A'I'M transactions, transfers and convenience check transactions is equal to $5 per transaction for transac- tions of $100 or less and 4% of the cash advance, with a minimum of $15 per transaction when the transaction is greater than $100. The cash advance transaction fee for money orders, cashiers checks, travelers checks, wire transfers, foreign currency or other in-bank transactions, tax payments, legal- ized gambling transactions, courtcosts,•bail bonds and fines is equal to 4% of the cash advance with a minimum fee of $15. The cash advance transac- tion fee will increase the APR appearing on the monthly statement in which the cash advance is posted to your Account- MAMMUM CREDIT LINE You may obtain credit by any means approved by us until the total unpaid balance of your Account reaches your maximuin credit line. The amount of your credit limi.t.wilI be established by us and ` • ' ' • Y may change at any time. You will be notified should we raise or lower your credit limit. The portion of your total credit line that may be used to make a cash advance ("Cash - Advance Credit Line") is established by us and is disclosed on your billing' statement We may change your Cash Advance Credit Limit at any time. You agree not to allow your total unpaid balance, including finance charges and other charges, to exceed your maximum credit line. We are not required to make cash advances (including accepting transfers or convenience checks or ATM transactions) or extend- credit for purchases at your request if you have exceeded your credit -line, or if such advances or purchases would, when added to your existing balance, exceed your credit line, but if we do, you agree to pay us that excess amount, plus applicable finance charges and an over limit charge immediately. Your credit line amount is defined on the document holding your card and on your billing statement- (3) STATI,MENTS we will send you a statement covering each billing-cycle in whit a balance in excess of $1. The statement will include: a h you have ) pa, purchases, cash advances, finance charges, and all other ch argesemade to credits, your Account during the billing cycle- (b) the make (called the "minimum minimum payment you must payment") and the date by which the minimum payment must be paid in order to avoid late charges; and (c) your available credit. PAYMENT We will not impose any late charges if you pay at least the pay- ment reflected in your statement by the date specified, which will alum ways be 25 days from the statement date. If you wish, you may pay more than the nunimum payment and at any firm you may pay the entire amount due for the current billing cycle (called "new balance payments to Payment Center, P.O. Box 17W, Baltimore, MD 21297-1660. The minimum payment each month will be or the amount of your monthly finance charge if the monthly finance hargee is greater than 2.5% of the new balance or $15, whichever is greater, or the amount of the new balance if less than "$15, plus any past due amounts appearing on your statement. = A11 payments by mail must be made by check or money order. All automatic payments will be withdrawn from the account of your designation on-the payment due date. Payments may not be made by attempting to effect a transfer or by using a convenience check from this Account or from- any- - " other Direct Merchants Batik Account. You agree - make may be, but is not required to be, returneto you v, thou aen i in it to your Account and without presentment or protest, for reasons incl ding, but not limited to, that the check or money order: (1) is not drawn on the U.S- Post Office or a financial institution located in the United States; (2) is mussing a signature; (3) is drawn with different numeric and written amounts; (4) contains a restrictive endorsement; payable to Direct Merchants Bank Mastercard, Direct Meehan dated; (6) ,not . Direct Merchants Credit Card Bank N. A.- 7 is not payable in U_S dollars; (8) is not paid upon presentment; or (9) results from an attempted transfer or is drawn on a convenience check. You agree to a we incur for any check payments made in U.S. dollars drawn on 1a financial s institution not located in the United States. All payments under this Agreement must be received at the address specified on your billing state- ment. Any conditional check, money order or any other-instrument tendered as full satisfaction of a disputed debt or as an accord and satisfaction or contai ' a restrictive endorsement must be sent to us at the Cardrnernber Service ng Center address provided in the "NO'T'IFY USIN CASE OF ERRORS OR QUESTIONS ABOUT YOUR BILL" section. You must note conspicuous) on the face of the payment that it is tendered for this u y payment in any other manner and we accept it, we will not hse. If you make ave waived oura rights to collect any amounts owed under this Agreement. C41 Even though your payment may be posted to your Account, we may not restore your available credit or cash advance available credit immediately. ANNUAL FEE' There is an Annual Fee of '$29 for the Account per year. The Annual Fee will be billed in -the month in which your Account was opened HOW WE FIGURE FINANCE CHARGES The periodic FINANCE CHARGE is calculated separately for-purchase -and cash balances. To calculate the FINANCE CHARGE for purchases, on each day of the billing cycle we multiply'the daily balance for purchases times the daily periodic rate for purchases. At the end of the billing cycle we add together the FINANCE CHARGES calculated for each day of the billing cycale. To calculate the FINANCE CHARGE for cash advances, on each day of the billing cycle we multiply-the daily balance for cash advances times the daily. periodic rate for cash advances. At the end of the billing cycle we add together the FINANCE CHARGES calculated for each day of the billing -cycle. This Account is subject to a minimum monthly finance charge of $_50 if any finance charges accrue in any such month. DAILY BALANCES We calculate the daily balances separately -for purchases and for cash " - advances. The daily balance for purchases for any given day is equal to the previous day's daily balance for purchases plus any new purchases, and any unpaid FINANCE CHARGES on purchases, and any other fees and charges that we add that day and minus any payments and credits we apply to the purchase balance that day. We add new purchases to the daily balance on the purchase date, unless we elect to use a later date. The daily balance for cash advances on any day is equal to the previous day's cash advance. daily balance, plus any new cash advances made that day, any cash advance transaction fees that we add that day and any unpaid FINANCE CHARGES on cash advances, and minus any payments and cred- its applied to the cash advance balance that -day. We treat any cash advances obtained as having been made on the transacdion date shown on your period- ic statement, unless we elect to use a later date. The daily balance is considered to be zero for any day on which your Account has a credit balance. On the Account statement, we may provide information about an average daily balance,. You understand and agree that since FINANCE CHARGES are calculated on each day's daily balance, the "aver- age daily balance" box on your statement will constitute only an approxima- tion (for informational purposes only) for the applicable billing cycle. DAILY PERIODIC RATES As of February, 2002, the daily periodic rate on your Account for purchases is 0.07395% ("Purchase Rate"), which corresponds to an ANNUAL PER- jE r• CENTAGE RATE ("APR") of 26.99%. The daily periodic rate on your ' Account for cash advances is 0.08216% ("Cash Rate"), which corresponds to an APR of'29.99%. The Purchase Rate, Cash Rate and Penalty Rates are variable rates. These rates are calculated by adding a margin to the highest prime rate published in The Wall Street Journal during the last three calendar months ("Prime Rate") preceding the month in which the billing period ends. The respective daily periodic rate is calculated by dividing each rate by 365. The margin'for the Purchase Rate is 20.99%. The margin for the Cash Rate is 23.99%. Regardless of the Prime Rate, your Account is subject to a minimum and maximum daily periodic rate. If the minimum or maximum rate is applied to your Account, it is because the appropriate margin disclosed above plus the Prime Rate is either less than the minimum rate or exceeds the maximum rate applicable to your Account. The minimum • daily' periodic. rate for pur- chases is 0.07395%, which corresponds to an APR of 26.99%. The mini- mum daily periodic rate for cash advances is 0.08216%, which corresponds to an APR of 29.99%. The maximum daily periodic rate for purchases and cash advances is 0.08216%, which. corresponds to an APR of 29.99%. An increase or decrease in the Prime Rate may result in an increase or decrease in your daily periodic rate in your next billing cycle. If your daily periodic rate increases, it may increase the minimum payment due on your Account. PENALTY RATES Should your Account become past due, "Penalty Rates" may be imposed. Once imposed, all new and outstanding purchase and cash balances will be subject to the applicable Default and Delinquency Rates. In the event that you fail to make your payment by the "Pay By" date on your billing statement two tithes in a rolling six-month period, "Default Rates" will be imposed on your Account. The daily periodic Default Rate for purchases as of February, 2002, is 0.08216%, which corresponds to an. APR of 29.99%. The daily periodic Default Rate for cash advances as of February, 2002,-is 0.08216%. which corresponds to an APR of 29:99%. The Default Rates are derived by adding a margin to the Prime Rate. The margins for the Default Rates are 24.99%• for purchases and 27.99% for cash advances. If the Default Rate margin plus -the Prime Rate exceeds the 29.99% maximum rate Aisclosed above, the Default Rate applicable to your Account will be the maximum rate of 29.99%. Purchase and cash balances will be returned' to their respective Purchase and Cash Rates when your Account is current ten out of twelve months in a rolling twelve-month peri- od, five out of six months in a rolling six-month period; and is current in the last month. In the event that you fail to make your payment by the "Pay By" date on your billing statement threw times in any six-month period or if your Account is ever two cycles past dua, "Delinquency Rates" will be unposed. on your Account. The daily periodic Delinquency Rate for purchases as of February, (6) 2002, is 0.08216%, which corresponds to an APR of 29.99%. The dail periodic Delinquency Rate for cash advances as of February, 2 y 002, is 0.08216%. which corresponds to an APR of 29.99%.' The Delinq uency Rates are derived by adding a margin to the Prime Rate. The margins Delinquency Rates are 28.99% for purchases and 31.99%o cash dvances. If the Delinquency Rate margin plus the Prune Rate exceeds the 29.99% maximum rate disclosed above, theDelinquency Rate applicable to your . Account will be the maximum rate of 29.99%. Purchase and cash balances will be returned to their respective Default Rates when your Account is cur- rent five out of six months in a rolling six-month period, and is current in sixth month. the PROMOTIONAL OFFERS 7be Terms and Conditions of any special promotional offers will be sent under separate cover and will be considered an addendum to this ADJUSTING FOR GRACE PERIODS Agreement. "Grace periods" are periods during which we impose no finance charges on purchases. We impose no finance charge on a purchase added to our daily during the billing cycle covered by the periodic statement if thatly statement shows no previous balance or shows that the previous balance. was paid in full within -25 days, Also, we impose no additional finance charge on any purchases included in the new balance of a monthly periodic statement if you pay the new balance in full. on or before the date specified in your state- ment. LATE CHARGE Your account is subject to this fee effective March 20, 2002: At least the minimum payment amount shown on your statement is due each month when you receive your statement. We may .impose a $35 late charge if you do not pay at least the minimum payment by the date statement, which will always be 25 days from the statement date.tfied in your OVER- THE LBMT CHARGE Your account is subject to this fee effective On any day you exceed your credit limit during your bi 1 nO2. be billed an over limit fee of $35. This fee will only be imposcycle, you ed once per may billing cycle, but may be imposed in each billing cycle that you remain over your credit limit, RETURNED PAYMENT CHARGE Your account is subject to this fee effective March 20, 2002: You agree to pay $29 each time a payment you make to us in any means -is retuned unsatisfied by your bank or other financial institution. ELECTRONIC CHECK RE-PRESSNTNiEN In the event that your check is returned T POLICY fiends, we may re-present your check electronicall . In theca dinr uncollected business, your check will not be provided.to you with our b y course znen of t, but a copy can b&,retrieved by contacting your financial institution. 7) RETURNED CONVENIENCE .CHECK CHARGE If you are issued convenience checks to use with your Account, you agree to pay a $15 charge each time you use a convenience check that we are unable to honor because it would exceed your Credit Line when added to your existing balance on the date it is presented for payment, or your Account is . otherwise blocked or frozen. RESEARCH CHARGES You agree to. pay $5 for each sales slip, statement, transfer of convenience check copy, or our records of your transfers you request if more than one copy is requested per calendar year. ADMINISTRATIVE CHARGES We may charge you a fee to take advantage of certain optional administrative services we provide our Cardmembers such as automatic payment services, additional credit cards, express delivery services or payment date selection services. Each time an adminis'trativ`e service is offered to you, a fee for the. service will be disclosed. You -agree to pay the fee disclosed each time you opt to take advantage of an administrative service. These services are option- al and are not required to be exercised by you. APPLICATION OF PAYMENTS Subject to any applicable law, we may choose the order in which tb apply payments to the Account at the time the payment is made. You may not request or instruct us how payments are to be applied and we are not .• required to follow any such requests or instructions. . CHANGE OF TERMS (including finance charges) - SUBJECT TO APPLICABLE LAW, WE MAY CHANGE OR TERMINATE ANY TERM OF THIS AGREEMENT OR ADD NEW TERMS AT ANY TIME, WITHOUT LIMITATION, INCLUDING ADDING OR INCREAS- ING FEES, INCREASING YOUR MONTHLY MIMMUM PAYMENT -AND INCREASING THE RATE OR AMOUNT OF FINANCE CHARGES, OR CHANGING THE METHOD OF COMPUTING THE BALANCE UPON WHICH FINANCE CHARGES ARE ASSESSED. PRIOR WRIT- TEN NOTICE WILL BE PROVIDED TO YOU WHEN REQUIRED BY APPLICABLE LAW. CHANGES MAY APPLY TO BOTH NEW AND OUTSTANDING BALANCES. DEFAULT AND TERMINATION CREDIT PRIVILEGES You will be in default under this Agreement u on: (a) your failure to least the minimum payment by the date specified on your statement (b)make your violation of any other provision of this Agreement; (c) your death; (d) ' your becoming the subject of bankruptcy or insolvency proceedings; (e) you or your property becoming the subject of attachment, foreclosure, reposses- sion, lien, judgment or garnishment proceedings; (f) -your failure to supply us with any information we reasonably deem necessary; with misleading, false, incomplete or incorrect information; (h) our-receipt of information that you are unwilling or unable to perform the Terms or Conditions of this Agreement; (i) our receipt of information from third par- , (8) ties, including credit reporting agencies, which indicates a serious delinquen= cy or charge-off with other creditors; or (j) your moving out of the U.S. After your default, 'your Account balance will continue to accrue finance charges at the contract rate. Balances outstanding under this Agreement when your credit line is reduced or terminated will continue to accrue finance charges until paid in full and are subject"to all Terms and Conditions' of this Agreement. Upon default, we. have the right to terminate or suspend your credit privileges under this Agreement; to change the Terms of your Account and this Agreement, to require you. to. pay your entire Account bal- ance including all. accrued but unpaid charges immediately, and to sue you for what you owe. You will pay our court costs, reasonable attorneys' fees and other collection costs related to the default to the extent permitted by applicable law. Upon default, we will apply your payments firgt to attor- neys' fees and then in the order set forth under Application of Payments. We may continue to impose finance charges after default (including charge-off). CREDII` AUTHORIZATIONS Some transactions will require our prior authorization and you. may be asked to provide identification. If our authorization system is not working, we may not be able to authorize a transaction, even if you have sufficient available credit. We will not be -liable to you if any of these events•happen. We are not responsible for any refusal to accept or honor your card. We can cancel your Account, refuse to allow further transactions, or revoke your card at any time. CARD RENEWAL Cards are issued with an expiration date. We have the right not to renew your card for any reason. CLOSING YOUR ACCOUNT You can cancel or close your Account by calling us at 1 800'379-7999 or by writing to us at Cardmember Service Center, P.O. Box 21550, Tulsa, OK 74121-1550. Your notice becomes effective within five days after we receive it. If you cancel the Account, you-must immediately pay everything you owe us, including any amounts owed -but not yet billed to you. If you . do not pay us immediately, outstanding balances will continue to accrue finance and other charges and be subject to the Terms and Conditions of this Agreement. We will not honor any-transfer or convenience check written on your Account if we receive the check. after your Account is canceled. LIABILITY FOR. UNAUTHORIZED USE You should retain your copies of all-charge slips until you receive your state- ment, at which time you should verify that the charges are true and the amounts unaltered. You may be liable for the unauthorized-use of your cred- it card. You will not be liable for unauthorized use that occurs after you noti- fy us of the loss, theft or possible unauthorized use. Notification must be given by you immediately upon learning of the loss, theft or possible unau- ' thorized use by calling us at 1800 379-7999 or writing us at Cardmember Service Center, P.O. Box 2155b, Tulsa, OK 74121-1550. (9) In any case, your-liability for unauthorized use of your credit card will not exceed $50. However, unauthorized use does not include use by a person to whom you have given the credit card or authority to use your Account. and you will be liable for all use by such a user. To terminate this authority, you must retrieve the credit-card from the previously authorized user and return it to us at the aforementioned address along with a letter explaining why you are doing so. LOST OR STOLEN CREDIT CARD(S) AND/OR CHECKS You agree to notify us immediately if your card(s) or any transfer or conven- ience checks are lost or stolen. You may notify us by calling 1 800 379- 7999. CHANGE OF NAME, ADDRESS, TELEPHONE NUMBER OR EMPLOYMENT ° You agree to give us prompt notice of any change in your name, mailing address, telephone number or place of employment. Send changes to Ca.rdmeinber Service Center, P.O. Box 21550, Tulsa, OK 74121-1550.. FOREIGN TRANSACTIONS If you effect a transaction at a merchant that settles in a currency other than U. S. dollars, MasterCardm International Incorporated will convert the charge into a U.S. dollar amount- MasterCardO International will use its currency conversion procedure, which is disclosed to institutions that issue MasterCard-cards. Currently, the currency conversion rate used to determine the transaction amount in U.S. dollars is generally either a government-man- dated rate or the wholesale rate in effect the day before the transaction pro- cessing date, increased by one percent. The currency conversion rate used on the processing date may differ from the rate that would have been used on the purchase date or Cardmember statement posting date. APPLICABLE LAW This Agreement and your Account will be governed by federal law, and the laws of Arizona, whether or not you live in Arizona., and whether or not your Account is used outside of Arizona. You agree that: (1) this Agreement is entered into in Arizona; (2) all credit under this Agreement will be extended from Arizona; and (3) all credit extended under this Agreement is subject to, and governed by. Section 44-1205(C) of the Arizona Revised Statutes. All Terms and Conditions of this Agreement provision, this Applicable Law provision, and !he Finance Charge, Terms ( Charge, Returned Payment Charge and Over Limit Charge provisions) are deemed to be material to a determination of the finance charge. _ ASSIGNMENT OF ACCOUNT We may sell, assign or transfer your Account or any portion thereof without notice to you. You may not sell, assign or transfer your Account. In addi- tion, we may refer the Account to a collection agency or attorney who shall -be entitled to enforce this Agreement according to its -terms, and any -of our rights shall apply to those persons. 10) CREDIT BUREAU REPORTING AND INFORMATION GATHERING If you fail to-fulfill the Terms of your credit obligation, a negative report reflecting on your credit record may be submitted to a credit reporting agency(ies). IF YOU BELIEVE WE HAVE INACCURATE INFORMA= TION ABOUT YOU OR HAVE REPORTED INACCURATE INFORMA- TION ABOUT YOU TO A CONSUMER REPORTING AGENCY, YOU CAN NOTIFY US AT DIRECT MERCHANTS BANK, 17600 NORTH PERIMETER DRIVE, SCOTTSDALE, A.Z.85255-5440. - You agree that any government agency may release your residence address to us, should it become necessary to locate you. You agree that our supervi- sory personnel may listen or tape telephone calls between you and our repre- sentatives in order to better serve you and other Cardmembers. You agree that we have the right to obtain a current credit report in connection with your Account at any time. UPDATED FINANCIAL AND OTHER INFORMATION - Upon request, you agree to prdrnptly give us accurate financial and other information about yourself. SEVERABILITY If any provision of this Agreement is finally determined to be void or unen- forceable under any law, rule, qr regulation, all other provisions of this Agreement will remain valid and enforceable. Your credit card is issued under this Agreement by Direct Merchants Credit Card Bank, National Association. First Data Resources provides processing. services for Direct Merchants Credit Card Bank, National Association. YOUR BILLING RIGHTS - KEEP ISIS NOTICE FOR FUTURE USE This notice contains important information about your rights and our respon- sibilities under the Fain- Credit Billing Act. NOTIFY US IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR BILL If you think your bill is wrong, or if you need more information about a transaction on your bill, you can call us at 1 800 379-7999 or write us on a - separate sheet at Cardmember Service Center, P.O. Box 22124, Tulsa, OK 74121-2124 as soon as possible- We must hear from you no later than 60 --days .after:we sent you the fast bill on which the error or problem appeared. You can telephone. us, but doing so will not.preserve your rights.... In your letter, give us the following information: • Your name and Account number. • The dollar amount of the suspected error. - Describe the error and explain, if you can, why you believe there is an error. If you need more information, describe the item you are unsure-of. I1) YOUR RIGHTS AND OUR RESPONSIBEL,ITIES AFTER WE RECEIVE YOUR WRITTEN NOTICE We must acknowledge your letter within 30 days, unless we have corrected the error "by then. Within 90 days, we must either correct the error or explain why we believe the bill was correct. After we receive your letter, we cannot try to collect any amount you ques- tion, or report you as delinquent. We can continue to bill you for the amount you question, including finance charges, and we can apply any unpaid amount against your credit line. You do not have to pay any questioned amount while we are investigating; but you are still obligated to pay the parts of your- bill that are not in question. If we find that we made a miAtake on your bill, you will not have to pay any finance charge related to any questioned amount. If we didn't make a mis- take, you may have to pay finance charges, and you will have to make up any missed payments on the questioned amount. In either case, we will send you a statement of the amount you owe and the date that it is due. If you fail to pay the amount that we think you owe, we may report you as delinquent. However, if our explanation does not satisfy you and you write to us within ten days telling us that you. still refuse to pay, we must tell any- one to whom we furnished credit. information about you that you have a question about your bill. And we must tell you the name of anyone to whom we gave this information.. We must"tell anyone we report to that the matter has been settled between us when it finally is. If we don't follow these rules, we can't collect the first $50-of the questioned amount, even if your bill was correct. SPECIAL RULE FOR CREDIT CARD PURCHASES If you have a problem with the quality of property or services that you pur- chased with a credit card, and you have tried in good faith to correct the problem with the merchant, you may have the right not to pay the remaining amount due on the property or services. There are two limitatiouLs on this right: (a) You must have made the purchase in your home state or, if not within your home state, within 100 miles of your current mailing address; and (b) The purchase price must have been more than $50. These limitations do not apply if we own or operate the merchant, or if we mailed you the advertisement for the property or services. use-?s.o 26.99%/29.99%/$29 USB-WA?-26.99 (2/02) (I2) (S? +eoycbd paper BILL OF SALE HSBC CARD SERVICES (111) INC. ("Seller"), for value received and pursuant to the terms and conditions of the Receivables Purchase Agreement ("Agreement.") dated January 30th, 2006 between Seller and WORLDWIDE ASSET PURCHASING, LLC, a limited liability company ("Purchaser"), does hereby sell, assign and convey to Purchaser, its successor and assigns, all right, title and interest of Seller in and to those certain purchased receivables listed on the Sale File attached as Exhibit A, without recourse and without representation of, or warranty of, collectibility, or otherwise, except to the extent provided for within the Agreement. EXECUTED this 31st day of,lanuary, 2006. HSBC CARD SERVICES (Ill) INC. By: Name: St hen . Basilotto Title?Exec. Vice President G;?Iv EXHIBIT Danielle Moore Verification is -1c. (k? for (Name of authorized representative) (Title or Position) WORLDWIDE ASSET PURCHASING, LLC, the within Plaintiff, and makes this statement on its behalf as to the truthfulness of the facts set forth in the foregoing pleading subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. Date: ell '/?' /'o I Name Danielle Moore Deborah Graham 5458002406376279 !lv?t ? ;. 1,.. BURTON NEIL & ASSOCIATES, P.C. By: Derek C. Blasker, Esquire Identification No. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 (610) 696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC 9911 Covington Cross Dr., Las Vegas, NV 89144 IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. DEBORAH GRAHAM : NO. 07-3459 902 Allenview Drive, Mechanicsburg, PA 17055 Defendant CIVIL ACTION -LAW Certificate of Service I, Derek C. Blasker, Esquire do hereby certify that I served a true and correct copy of the within Plaintiff's Amended Complaint on pro se defendant, Deborah Graham at his/her address of record via first class mail, postage prepaid on the date set forth below. Date: <?1 Z6/ The law firm of Burton Neil & Associates is a debt collector. 83423 ijerex L. Masker, Esquire Attorney for Plaintiff C7 C= O c -Ti rri iv - -13 rv -c IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff V. DEBORAH GRAHAM, Defendants TO: Derek C. Busker, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff CIVIL ACTION - LAW NO. 07-3469 NOTICE TO PLEAD You are hereby notified to file a written response to the enclosed DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S AMENDED COMPLAINT within twenty (20) days from service hereof or a judgment may be entered against you. Dated: 1/00? r IQ orah Graham 902 Allenview Drive Mechanicsburg, PA 17055 Defendant ,: ,;:: IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff : CIVIL ACTION - LAW V. DEBORAH GRAHAM, : NO. 07-3459 Defendants DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S AMENDED COMPLAINT Defendant, Deborah Graham, preliminarily objects to Plaintiffs Amended Complaint, as follows: 1. Plaintiff filed this Amended Complaint as a resin of the Court sustaining, in part, Defendant's preliminary objections to Plaintiffs first complaint. 2. The Order of Court sustaining the objections of Defendant to Plaintiffs first complaint reads as follows: AND NOW, this 57" day of DECEMBER, 2007, after review of the briefs filed by the parties, Defendant's Preliminary Objections are SUSTAINED in part and OVERRULED in part They are sustained Insofar as Defendant has failed to comply with Pa. Rule of Civil Procedure 1019(1) with respect to the alleged card agreement between Direct Merchant Bank and Defendant as well as the assignment between Direct Merchant Bank and Plaintiff. In all other respects, Defendant's Preliminary Objections are OVERRULED. Plaintiff is given twenty (20) days after receipt of this order to file an amended complaint in compliance with Rule of 1019(1). 3. Contrary to this Court's Order dated December 5, 2007, the Amended Complaint filed by Plaintiff does not correct the deficiencies of its previous pleading nor does the amended pleading comply with Rule 1019(i). 2 4. More specifically, Plaintiff fails to attach a signed card agreement or application by Defendant or the actual assignment made by Direct Merchant Bank. 5. Additionally, the verification attached to the amended complaint is not signed by a party but by Danielle Moore, a Jr. Attorney Relationship Manager for Worldwide. 6. Danielle Moore's verification does not make any statement based on her "personal knowledge or information and belief" as to the truthfulness of any factual allegations within the complaint 1. PRELIMINARY OBJECTION LACK OF CONFORMITY TO LAW OR RULE OF COURT 7. Paragraphs one through six are incorporated by reference as if set forth at length herein. 8. Plaintiff alleges in paragraph 6 of its Amended Complaint that the following: "Defendant did not pay the balance due on the credit card account as required by the credit card agreement. As such, defendant is in default on the credit card account. A true and correct copy of the terms and condidons of the account is attached hereto marked Exhibit A and Incorporated herein by refeerence." 9. Contrary to the Courts Order and the mandate of Rule 1019(i), Exhibit A is not a complete or signed application. Plaintiff fails to attach the purported written application signed and submitted by the Defendant, the alleged cardholder. Plaintiff fails to attach the signed application for a credit card or anything signed by Defendant that she would be bound by provisions set forth in the application and possibly other terms and conditions that are furnished to the cardholder at the time the card is issued. 10. In paragraph 7 of the Amended Complaint, Plaintiff goes on to state: "HSBC Card Services (111) Inc. successor in interest to Direct Merchants Bank sold the defendant's account to plaintiff, who is now the holder and owner of the account. A true and correct copy of the 3 Bill of Sale is attached hereto, marked Exhibit B, and incorporated herein by reference." 11. Attached to Plaintiff's Amended Complaint, marked Exhibit B, is a document titled, "Bill of Sale and Assignment of Accounts." This document purportedly transfers certain unnamed and unidentified accounts from HSBC CARD SERVICE (111) INC. to WORLDWIDE ASSET PURCHASING LLC, and appears to be signed only by a representative of HSBC. The purported Assignor, HSBC, is identified by Plaintiff as "successor in interest to Direct Merchants Bank"; however, Plaintiff did not include this allegation in its original complaint and Plaintiff fails to attach the assignment from Direct Merchants Bank to HSBC CARD SERVICE (111) INC. In addition, Plaintiff claims that it is the Assignee of the credit account with Direct Merchants Bank but the "proof" of such "assignment" consists of a single printed page that does not contain any information about the alleged debt owed but rather, generally identifies a sale consisting of "certain purchased receivables listed on the Sale File" [a copy of which Plaintiff does not include with its Exhibit A]. It has no documentation or evidence of the existence of a contract with Direct Merchants bank, contract terms, interest rate, allowable fees, payments or charges. 12. Plaintiff fails to include any writing or substantive documentation regarding the alleged account between Direct Merchants Bank and the Defendant. It is impossible for Defendant to determine the correct amount of the debt or, indeed, whether any debt is owed. 13. The lack of any contract or other writing makes it impossible for Defendant to determine whether correct or allowable interest, late fees, over limit fees and attorney's fees were being assessed, with the lack of any account history making such a determination impossible as well. 14. Defendant cannot determine whether the claim at issue would be barred by the applicable statute of limitations (or even which state's statute of limitations might apply) because of the lack of information about the date of last payment and the signed cardholder agreement. 4 15. Plaintiffs pleading is insufficient and Plaintiff has not established that it is a real party in interest or that it has capacity to sue in its own name. I&WEREFORE, defendant respectfully requests that this Court dismiss plaintiffs complaint. it. PRELIMINARY OBJECTION RAISING FAILURE TO CONFORM TO APPLICABLE RULES OR LAW. 16. Paragraphs one through six are incorporated by reference as if set forth at length herein. 17. The verification to plaintiffs amended complaint was not made by one of the parties, but rather by a Danielle Moore and reads as follows: Danielle More is Jr. ARM for WORLDWIDE ASSET PURCHASING, LLC, the within Plaintiff, and makes this statement on its behalf as to the truthfulness of the facts set forth in the foregoing pleading subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. 18. Plaintiff identifies "Danielle Moore" as a Junior Attorney Relationship Manager with an address of Gerald E. Moore & Associates, P.C. 2221 Newmarket Parkway, Suite 120, Marietta, GA. 19. Pa. R.C.P. 1024(a) requires a pleading containing an averment of fact not appearing of record to state "that the averment or denial is true upon the signer's personal knowledge or information and belief." 20. Plaintiffs verification does not make any statement based on her "personal knowledge or information and belief" as to the truthfulness of any factual allegations within the complaint the verification simply states that Danielle Moore, Jr. ARM [i.e. Attorney Relationship Manager for Worldwide], "makes this statement on its behalf as to the truthfulness of the facts set forth in the foregoing Complaint." 21. Consequently, the verification is defective and both it and the Amended Complaint should be stricken. 5 WHEREFORE, Defendant respectfully requests that Plaintiffs Amended Complaint be stricken. Respectfully submitted Dated: O Deborah Graham 902 Allenview Drive Mechanicsburg, PA 17055 Defendant 6 1 CERTIFICATE OF SERVICE 1 HEREBY CERTIFY that a true and correct copy of the foregoing Preliminary Objecti s was furnished by U.S. Mail, first class, postage prepaid on this day of , 2008, to: Derek C. Blasker, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff Dated: rah Graham Defendant 7 ?r IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff : CIVIL ACTION - LAW V. DEBORAH GRAHAM, Defendants : NO. 07-3469 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Defendant's Preliminary Objections to Plaintiffs Amended Complaint was fumished by U.S. Mail, first class and certified 70071490 0001 7951 2876, postage prepaid on this 18th day of January, 2008, and previously mailed on the 8t' day of January 2008 as addressed in the letter attached hereto: Derek C. Blasker, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff Dated: 0 ?f bd6orah Graham 902 Allenview Drive Mechanicsburg, PA 17055 Defendant DEBORAH L. GRAHAM 902 Allenview Drive Mechanicsburg, PA 17055 (717) 766-5618 January 17, 2008 Certified and Regular Mail 7007 1490 0001 7951 2876 Derek C. Blasker, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Re: WORLDWIDE ASSET PURCHASING, LLC, Civil No. 07-3459 Dear Mr. Blasker: On January 8, 2008 I filed and mailed to you Defendant's Preliminary Objections to Plaintiffs Amended Complaint. Thus, I timely filed in writing with the court my defenses and objections to your Amended Complaint. I received your "Notice of Intention to File Praecipe for Default Judgment" dated January 14, 2008. Your notice and intent to enter judgment by default is improper and in violation of the rules. Should you fail to recognize and respond to the Preliminary Objections that have already been filed by attempting to enter judgment by default, I will contact the Prothonotary's office about your ploy and also ask the court to sanction you for vexatious conduct and a frivolous filing. I am filing on the docket a copy of this letter along with another Certificate of Service indicating that you have been served twice with the Preliminary Objections to Plaintiffs Amended Complaint that were filed on January 8, 2008. Very truly yours, Deborah L. Graham Encl - c e?y CX) .? ???.tr •UAA ? { l S cn a Burton Neil & Associates, P.C. By: Derek C. Blasker, Esquire ID. NO. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC Plaintiff v. DEBORAH GRAHAM Defendant To the Prothonotary: : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA : NO. 07-3459 : CIVIL ACTION -LAW Praecipe to Substitute Verification Kindly substitute the attached verification for the verification filed with plaintiffs Amended Complaint. In making this communication, we advise that our firm is a debt collector. Attorney for Plaintiff 4 . b Verification I, Danielle Moore am an employee of Gerald E. Moore & Associates, P.C. by contract the service provider for plaintiff Worldwide Asset Purchasing, LLC retained to perform services including but not primarily limited to collecting delinquent debt, custodian of records and execution of documents. I am authorized to make this verification as attorney-in-fact for plaintiff under powers of attorney from plaintiff to Gerald E. Moore & Associates, P.C. and to me. The foregoing averments of fact in the within Amended Complaint are true and correct to the best of my information and belief. I understand that the statements made herein are subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to the authorities. Date: Signature {? r_,-% ''-,? r .., c>> ? :a ? ` C ?' 1 , ?. ? ?" 17 ' , ?-- . . J -..„ i-_- " ' -: ?? BURTON NEIL & ASSOCIATES, P.C. Derek C. Blasker, Esquire, Id. No. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. DEBORAH GRAHAM NO. 07-3459 Defendant : CIVIL ACTION -LAW ANSWER TO DEFENDANT'S PRELIMINARY OBJECTIONS TO THE AMENDED COMPLAINT 1. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d). 2. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d). 3. Denied. It is denied that the amended complaint does not comply with this Court's Order dated December 5, 2007 and it is further denied that the amended complaint fails to comply with Rule 1019(i). This Court's Order sustained only two of defendant's preliminary objections to plaintiff's complaint. This Court sustained defendant's objection to plaintiff not attaching a credit card agreement, and sustained defendant's objection to plaintiff not attaching an assignment between Direct Merchants Credit Card Bank and defendant. "In all other Respects, Defendant's Preliminary Objections are OVERRULED." (Order, dated December 5, 2007). Plaintiff attached to the Amended Complaint both the Cardmember Agreement and the Bill of Sale, as required by this Court's Order dated December 5, 2007. 4. Admitted in part, denied in part. It is admitted that plaintiff did not attach a signed credit card agreement or application. It is denied that plaintiff is required to attach a signed agreement or application. This Court's Order dated December 5, 2007 required plaintiff to attach the credit card agreement for defendant's account, which plaintiff did attach. Pa R.C.P. 1019(i) does not state or require that a party attach a signed writing. It is admitted that plaintiff did not attach an assignment made by Direct Merchants Bank. It is denied that plaintiff failed to attach the assignment for defendant's account. At the time the Bill of Sale was signed, January 31, 2006, defendant's account was no longer owned by Direct Merchants Credit Card Bank, but was instead owned by HSBC Card Services (III) Inc. Attached hereto as Exhibit "A" is the Agreement and Plan of Merger, dated August 4, 2005, as filed with the Securities and Exchange Commission. 5. Admitted in part, denied in part. It is admitted that the verification is signed by Danielle Moore, Junior Attorney Relationship Manager for Gerald E. Moore & Associates, P.C. by contract the service provider for plaintiff Worldwide Asset Purchasing, LLC. It is denied that the verification was not signed by a party. Worldwide Asset Purchasing, LLC is a company and cannot sign documents on its own, therefore verifications must be signed by an agent of Worldwide Asset Purchasing, LLC. Danielle Moore is an agent signing on behalf of Worldwide Asset Purchasing, LLC. 6. Admitted. I. Preliminary Objection Lack of Conformity to Law or Rule of Court 7. Plaintiff incorporates preliminary objection answer paragraphs 1 through 6 as if more fully set forth at length herein. 8. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d). 9. Admitted in part, denied in part. It is admitted that plaintiff did not attach an alleged written application signed and submitted by defendant. It is denied that plaintiff is required by Pa R.C.P. 1019(i) to attach a signed application or any other document signed by defendant. Pa R.C.P. 1019(i) only requires a parry to attach a writing upon which a claim or defense is based. The terms and condition attached to the complaint are those terms which governed defendant's credit card account. The terms do not require either party to sign the agreement. Defendant's use of the credit card account was her assent to the terms and conditions of the account, and assent to an agreement by performance is an established form of acceptance of an agreement in Pennsylvania. 10. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d). 11. Admitted in part, denied in part. It is admitted that the "Bill of Sale" is attached as Exhibit "B". It is admitted that the Bill of Sale document transfers defendant's account along with other accounts from HSBC Card Services (III) LLC to Worldwide Asset Purchasing, LLC. It is admitted that the document is signed by a representative of HSBC. It is further admitted that plaintiff did not attach an alleged assignment from Direct Merchants Credit Card Bank to HSBC Card Services (III) LLC. It is denied that plaintiff can or should attach an assignment from Direct Merchants Credit Card Bank to HSBC Card Services (III) LLC, because Direct Merchants Credit Card Bank did not assign their right in defendant's account to HSBC Card Services (III) LLC. HSBC Card Services (III) LLC merged with Direct Merchants Credit Card Bank and the surviving entity was HSBC. (As evidenced by Exhibit "A"). It is specifically denied that plaintiff has no documentation regarding defendant's account, terms, interest rate, fees, payments, and charges. Attached to the amended complaint was the cardholder agreement which set forth the terms, interest rates, fees, payments, and charges. 12. Denied. Defendant's preliminary objection paragraph fails to set forth a recognizable objection. Such a claim is properly raised as a defense in a responsive pleading. By way of further response, the Cardholder Agreement would meet defendant's statement in this paragraph. 13. Denied. Defendant's preliminary objection paragraph fails to set forth a recognizable objection. Defendant has failed to set forth a Law or Rule which plaintiff failed to conform to. Such a claim is properly raised as a defense in a responsive pleading. By way of further response, the Cardholder Agreement would meet defendant's statement in this paragraph. 14. Denied. Defendant's preliminary objection paragraph fails to set forth a recognizable objection. Defendant has failed to set forth a Law or Rule which plaintiff failed to conform to. By way of further response, this action was brought in Pennsylvania and as such the Pennsylvania statute of limitations would apply. 15. Denied. It is denied that plaintiff has failed to establish that it is the real party in interest or that it has the capacity to sue in its own name. As set forth in the complaint and the Bill of Sale, Worldwide Asset Purchasing, LLC is the holder of this account and purchased the account from HSBC Card Services (III) LLC. As such, plaintiff is the party in interest and has the capacity to sue in its own name. II. Preliminary Objection Raising Failure to Conform to Applicable Rules of Law 16. Plaintiff incorporates preliminary objection answer paragraphs 1 through 6 as if more fully set forth at length herein. 17. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d). 18. Denied. It is denied that plaintiff identifies "Danielle Moore" as a Junior Attorney Relationship Manager with an address of Gerald E. Moore & Associates, P.C., 2221 Newmarket Parkway, Suite 120, Marietta, GA. Plaintiff identified Danielle Moore with the title Jr. ARM for Worldwide Asset Purchasing, LLC and did not set forth any address. 19. Denied. There are no facts set forth or alleged in the averment to which a responsive pleading is required. The allegation is denied pursuant to Pa R.C.P. 1029(d). 20. Admitted. 21. Admitted in part, denied in part. It is admitted that the verification failed to set forth the basis of Danielle Moore's verification. It is denied that both the verification and amended complaint should be stricken. Plaintiff has attached to this answer to defendant's preliminary objections a copy of plaintiff's praecipe to substitute the verification to the amended complaint as Exhibit B. WHEREFORE, plaintiff requests this Honorable Court Dismiss defendant's objections and cause defendant to answer the complaint. By: In making this communication, we advise our firm is a det collector. Page 1 of 66 <DOCUMENT> <TYPE>EX-2.1 <SEQUENCE>2 <FILENAME>c97404exv2wl.txt <DESCRIPTION>MERGER AGREEMENT <TEXT> <PAGE> EXHIBIT 2.1 AGREEMENT AND PLAN OF MERGER DATED AS OF AUGUST 4, 2005 BY AND AMONG HSBC FINANCE CORPORATION, HSBC CORPORATION I AND METRIS COMPANIES INC. <PAGE> TABLE OF CONTENTS <Table> <Caption> <S> ARTICLE I THE MERGER ............................................................................ Section 1.1 Effective Time of the Merger .............................................. Section 1.2 Closing ................................................................... Section 1.3 Effects of the Merger ..................................................... Section 1.4 Certificate of Incorporation and Bylaws ................................... Section 1.5 Directors and officers .................................................... Section 1.6 Bank Merger ............................................................... ARTICLE II CONVERSION OF SECURITIES; PAYMENT OF MERGER CONSIDERATION ............................ Section 2.1 Conversion of Securities .................................................. Section 2.2 Payment of Merger Consideration ........................................... Section 2.3 Dissenters' Rights .................................................. ... ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY ................................. .. Section 3.1 Organization, Standing and Power ................ ..... ....... . ... . Section 3.2 Capital Structure ................................ ?T1II17"" ' • . Section 3.3 Authority ..................................... fx Section 3.4 SEC Documents; Regulatory Reports ......................................... Section 3.5 Compliance with Applicable Laws ........................................... http://sec.gov/Archivesledgar/data/ 1021061 /000095013405014814/c97404exv2w l .txt 7/17/2007 ?4 a ?? Page 2 of 66 Section 3.6 Section 3.7 Section 3.8 Section 3.9 Section 3.10 Section 3.11 Section 3.12 Section 3.13 Section 3.14 Section 3.15 Section 3.16 Section 3.17 Section 3.18 Section 3.19 Section 3.20 Section 3.21 Section 3.22 Section 3.23 Section 3.24 </Table> <PAGE> <Table> <S> Section 3.25 Section 3.26 Section 3.27 Section 3.28 Legal Proceedings ......................................................... Taxes ..................................................................... Certain Agreements ........................................................ Benefit Plans ............................................................. Subsidiaries .............................................................. Agreements with Regulators ................................................ Absence of Certain Changes or Events ...................................... Board Approval ............................................................ Vote Required ............................................................. Properties ................................................................ Company Information ....................................................... Intellectual Property ..................................................... Securitization Matters .................................................... Covered Receivables ....................................................... Servicing Rights .......................................................... Environmental Matters ..................................................... Brokers or Finders ........................................................ Derivative Transactions ................................................... Opinions .................................................................. i Controls .................................................................. Insurance ................................................................. No Undisclosed Liabilities; Reserves ...................................... Insurance Matters ......................................................... ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB .............................. Section 4.1 Organization, Standing and Power .......................................... Section 4.2 Authority ................................................................. Section 4.3 Information Supplied ...................................................... Section 4.4 Legal Proceedings ......................................................... Section 4.5 Ownership of Merger Sub; No Prior Activities .............................. Section 4.6 Compliance with Applicable Laws ........................................... Section 4.7 Financing ................................................................. Section 4.8 Brokers or Finders ........................................................ Section 4.9 Ownership of Company Capital Stock ........................................ ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS ............................................. Section 5.1 Covenants of the Company .................................................. Section 5.2 Investigation ............................................................. ARTICLE VI ADDITIONAL AGREEMENTS ................................................................ Section 6.1 Preparation of Proxy Statement; Stockholders Meeting ...................... Section 6.2 Advice of Changes; Government Filings ..................................... Section 6.3 Control of the Company's Business ......................................... Section 6.4 Access to Information ..................................................... Section 6.5 Reasonable Best Efforts ................................................... Section 6.6 Acquisition Proposals ..................................................... Section 6.7 Employees; Employee Benefit Plans ......................................... Section 6.8 Fees and Expenses ......................................................... Section 6.9 Indemnification; Directors' and Officers' Insurance ....................... Section 6.10 Public Announcements ...................................................... Section 6.11 Additional Agreements ..................................................... Section 6.12 Other Actions by Parent ................................................... ARTICLE VII CONDITIONS PRECEDENT ................................................................ http://sec.gov/Archives/edgarldataII0210611000095013405014814lc97404exv2wl .txt 7/17/2007 Page 3 of 66 Section 7.1 Conditions to Each Party's Obligation To Effect the Merger ................ Section 7.2 Conditions to obligations of Parent and Merger Sub ........................ Section 7.3 Conditions to Obligations of the Company .................................. ARTICLE VIII TERMINATION AND AMENDMENT .......................................................... Section 8.1 Termination ............................................................... Section 8.2 Effect of Termination ..................................................... Section 8.3 Amendment ................................................................. Section 8.4 Extension; Waiver ......................................................... </Table> ii <PAGE> <Table> <S> ARTICLE IX GENERAL PROVISIONS .......................................... Section 9.1 Non-Survival of Representations, Warranties and Agreements ................ Section 9.2 Notices ................................................................... Section 9.3 Interpretation ............................................................ Section 9.4 Counterparts .............................................................. Section 9.5 Entire Agreement; No Third Party Beneficiaries ............................ Section 9.6 Governing Law ........................................................... Section 9.7 .. Severability .............................................................. Section 9.8 Assignment ................................................................ Section 9.9 Submission to Jurisdiction .............................................. . Section 9.10 . Enforcement ....................................................... . Section 9.11 .... ... Waiver of Jury Trial .............................................. . </Table> ..... .. <PAGE> iii DEFINED TERMS <Table> <Caption> Term <S> 2005 Company Budget ............................................................ . Acquisition Proposal ........................................................... . . .............. Acquisition Transaction ................................................ ............... Affiliate .................................................... ............. Agreement .............................................................. ................. AIP ................................................... ................ Bank ........................................................................................... Bank Merger ..................................................................................... Bank RAP Documents ...................................... ........... Bank Servicing Rights ........................................................................... ............................................................................. Banking Authorities Benefit Arrangement .................................................. ........................ Benefit Plan ....................................... .. BHCA ........................................... .......................... Bylaws ............................................................ :........................... Cause ........................................................................................... http://sec.gov/A,rchives/edgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 4 of 66 Certificate of Incorporation .................................................................... Certificate of Merger ........................................................................... Certificates .................................................................................... Closing ......................................................................................... Closing Date .................................................................................... COBRA ..........................................................................................S Code ............................................................................................ Company ......................................................................................... Company Actuarial Analyses ...................................................................... Company Benefit Arrangement ..................................................................... Company Board Approval .......................................................................... Company Capital Stock ........................................................................... Company Common Stock ............................................................................ Company Contracts ............................................................................... Company Disclosure Schedule ..................................................................... Company Employees ............................................................................... Company Intellectual Property ................................................................... Company Permits ................................................................................. Company Plan .................................................................................... Company Restricted Stock Unit Agreement ......................................................... Company SEC Documents ........................................................................... Company Series C Preferred Stock ................................................................ Company Sponsored Asset Securitization Transaction .............................................. Company Stock Option ............................................................................ </Table> 2 <PAGE> <Table> <S> Company Stock Plans ............................................................. Company Stockholders Meeting .................................................... Company Termination Fee ......................................................................... Company's Current Premium ....................................................................... Confidentiality Agreement ....................................................................... Covered Employees ............................................................................... Covered Receivables ............................................................................. Derivative Transactions ......................................................................... DGCL ............................................................................................ Dissenting Shares ............................................................................... Dissenting Stockholder ................................... ...................................... Effective Time .................................................................................. Environmental Laws .............................................................................. ERISA ........................................................................................... ERISA Affiliate ................................................................................. Exchange Act .................................................................................... Exchange Fund ................................................................................... FDIC ............................................................................................ Florida DFS ..................................................................................... Governmental Entity ............................................................................. Hazardous Materials ................................................... Holders ......................................................................................... HSR Act ......................................................................................... ICOM ............................................................................................ Indemnified Liabilities ......................................................................... Indemnified Parties ............................................................................. Injunction ...................................................................................... Insurance and Warranty Subsidiaries ............................................................. Insurance Authorities ........................................................................... Insurance or Warranty Subsidiary ................................................................ http://sec.gov/Archives/edgar/data/ 1021061 /0000950134050I 4814/C97404exv2w l .txt 7/17/2007 Page 5 of 66 Insurance Policies ....................................... Insurance SAP Documents .................................. IRS ............................................................................................. Knowledge of Parent ............................................................................. Knowledge of the Company ........................................................................ Law ............................................................................................. Liability ....................................................................................... material ........................................................................................ Material Adverse Effect ......................................................................... MBOs ............................................................................................ Merger .......................................................................................... Merger Consideration ............................................................................ Merger Sub ...................................................................................... MES ............................................................................................. </Table> <PAGE> 3 <Table> <S> Minnesota DOC ................................................................................... MIP ............................................................................................. MRI ............................................................................................. MWSE ............................................................................................ MWSI ............................................................................................ Notice of Superior Proposal ..................................................................... OCC ............................................................................................. Organizational Documents ........................................................................ Parent .......................................................................................... Parent Bank Sub ................................................................................. Parent Benefit Plan ............................................................................. Parent Disclosure Schedule ...................................................................... Parent SEC Report ............................................................................... Paying Agent .................................................................................... Pension Plan ...................................................................................S Per Common Share Price .......................................................................... Person .......................................................................................... Proxy Statement ................................................................................. PTO ............................................................................................. Qualified Plan .................................................................................. RAP ............................................................................................. Receivables ..................................................................................... Regulatory Agreement ............................................................................ Related Employer ................................................................................ Required Company Vote ........................................................................... Requisite Regulatory Approvals .................................................................. SAP ............................................................................................. SEC ............................................................................................. SEC Investigation ............................................................................... Securities Act .................................................................................. Securitization Disclosure Documents ............................................................. SERP ............................................................................................ Stockholder Agreement ........................................................................... Stub Period ..................................................................................... Subsidiary ...................................................................................... Superintendent .................................................................................. Superior Proposal ............................................................................... Surviving Bank .................................................................................. Surviving Corporation ........................................................................... tax ............................................................................................. taxable ......................................................................................... http://see.govIArchivesledgarldata/1021061/000095013405014814lc97404exv2wi .txt 7/17/2007 Page 6 of 66 taxes ........................................................................................... Trust Account Shares ............................................................................ U.S. Affiliates ................................................................................. Violation ....................................................................................... Voting Debt ..................................................................................... WARN Act ........................................................................................ </Table> <PAGE> AGREEMENT AND PLAN OF MERGER dated as of AUGUST 4, 2005 (this "Agreement") by and among HSBC FINANCE CORPORATION, a Delaware corporation ("Parent"), HSBC CORPORATION I, a Delaware corporation and directly wholly owned subsidiary of Parent ("Merger Sub"), and METRIS COMPANIES INC., a Delaware corporation (the "Company"). WHEREAS, the Boards of Directors of each of Parent, Merger Sub and the Company have approved, and deem it advisable and in the best interests of their respective stockholders to consummate, the business combination transaction provided for herein in which (i) Merger Sub would merge with and into the Company (the "Merger") and, as a result of the Merger, the Company would be the surviving entity and a wholly owned subsidiary of Parent and (ii) immediately following the Merger, the Company's Subsidiary, Direct Merchants Credit Card Bank, National Association (the "Bank") would be merged with and into HSBC Bank Nevada, N.A. ("Parent Bank Sub") (the "Bank Merger") and, as a result of the Bank Merger, Parent Bank Sub would be the surviving entity and a wholly owned subsidiary of Parent. WHEREAS, concurrently with the execution and delivery of this Agreement and as a condition and inducement to Parent's willingness to enter into this Agreement, the stockholders of the company listed on Schedule I have entered into a Stockholder Agreement, dated as of the date of this Agreement, in the form attached hereto as Exhibit I (the "Stockholder Agreement"), pursuant to which the stockholders have, among other things, agreed to give Parent a proxy to vote all of the shares of capital stock of the Company that such stockholders beneficially own or otherwise have the right to vote in favor of adoption of this Agreement and approval of the Merger and against any Acquisition Proposal; and WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties and agreements in connection with the Merger and the other transactions contemplated herein (including the Bank Merger) and also to prescribe various conditions to the Merger. NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows: ARTICLE I THE MERGER Section 1.1 Effective Time of the Merger. Subject to the provisions of this Agreement, a certificate of merger (the "Certificate of Merger") shall be duly prepared, executed and acknowledged by the Surviving Corporation (as defined in Section 1.3) and thereafter delivered to the Secretary of State of the State of Delaware for filing, as provided in the Delaware General http://see.gov/Archives/edgar/data/1021061/000095013405014814/c97404"v2wl .txt 7/17/2007 Page 7 of 66 Corporation Law (the "DGCL"), on the Closing Date (as defined in Section 1.2). The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware or at such time thereafter as is provided in the Certificate of Merger (the "Effective Time"). <PAGE> Section 1.2 Closing. The closing of the Merger (the "Closing") will take place at 10:00 a.m. on the date (the "Closing Date") that is the second business day after the satisfaction or waiver (subject to applicable Law) of the conditions set forth in Article VII (excluding conditions that, by their terms, are to be satisfied on the Closing Date), unless another time or date is agreed to in writing by the parties hereto. The Closing shall be held at the offices of Dorsey & Whitney LLP, 50 South Sixth Street, Minneapolis, Minnesota, 55402, unless another place is agreed to in writing by the parties hereto. Section 1.3 Effects of the Merger. At the Effective Time, Merger Sub shall be merged with and into the Company and the separate existence of Merger Sub shall cease, and the Company shall be the surviving corporation (the "Surviving Corporation") and shall continue its existence under the laws of the State of Delaware. As a result of the Merger, the Company shall become a wholly owned subsidiary of Parent. The Merger will have the effects set forth in the DGCL. Section 1.4 Certificate of Incorporation and Bylaws. The Certificate of Incorporation of the Company shall be the Certificate of Incorporation of the Surviving Corporation. The Bylaws of Merger Sub, as set forth in Exhibit 1.4 hereto, shall be the Bylaws of the Surviving Corporation. - Section 1.5 Directors and Officers. The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation as of the Effective Time. The officers of the Surviving Corporation shall be elected by the directors of the Surviving Corporation as of the Effective Time. Section 1.6 Bank Merger. A bank merger agreement shall be entered into immediately following the Effective Time and shall provide that (i) the Bank shall be merged with and into Parent Bank Sub and the separate existence of the Bank shall cease, and Parent Bank Sub shall be the surviving bank (the "Surviving Bank") and shall continue its existence under the laws of the United States, (ii) the Articles of Association of Parent Bank Sub shall be the Articles of Association of the Surviving Bank, and (iii) the Bylaws of Parent Bank Sub shall be the Bylaws of the Surviving Bank. ARTICLE II CONVERSION OF SECURITIES; PAYMENT OF MERGER CONSIDERATION Section 2.1 Conversion of Securities. As of the Effective Time, by virtue of the Merger and without any action on the part of any holder of any shares of Company Capital Stock (as defined in this Section 2.1(g)): (a) Conversion of Merger Sub Stock. Each issued and outstanding share of common stock, par value $1.00 per share, of Merger Sub shall be converted into one validly issued, fully paid and nonassessable share of common stock, par value $.01 per share, of the Surviving Corporation and shall constitute the only shares of capital stock of the Surviving Corporation outstanding immediately after the Effective Time. <PAGE> 2 http://sec.gov/Archives/edgar/data/102106I /000095013405014814/c97404exv2wl .txt 7/17/2007 Page 8 of 66 (b) Cancellation of Treasury Stock. All shares of Company Common Stock (as defined in Section 2.1(c)) that are owned by the Company as treasury stock and all shares of Company Common Stock that are owned, directly or indirectly, by Parent or Company (other than shares of Company Common Stock held directly or indirectly in trust accounts, managed accounts and the like or otherwise held in a fiduciary capacity for the benefit of third parties ("Trust Account Shares")) shall be cancelled and retired and shall cease to exist, and no stock of Parent, cash or other consideration shall be delivered in exchange therefor. (c) Conversion of Common Stock. Subject to Section 2.3 with regard to Dissenting Shares (as defined in Section 2.3(a)), each share of Common Stock, par value $.01 per share, of the Company (the "Company Common Stock") issued and outstanding immediately prior to the Effective Time (other than as provided in Section 2.1(b)), shall be converted into the right to receive $15.00 in cash to be distributed in accordance with Section 2.2, without interest (the "Per Common Share Price"); provided, however, that if the Effective Time occurs after December 9, 2005, then the Per Common Share Price shall instead be the amount set forth in Annex 2.1. All such shares of Company Common Stock shall otherwise no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist. The Company will amend the terms of any existing restricted stock agreements with respect to outstanding shares of Company Common Stock that do not provide for acceleration of termination of restrictions in connection with the Merger such that all such restrictions will terminate as of the Effective Time. (d) Conversion of Company Series C Preferred Stock. Subject to Section 2.3 with regard to Dissenting Shares, all of the shares of Series C Perpetual Convertible Preferred Stock, par value $.01 per share, of the Company (the "Company Series C Preferred Stock") issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive in the aggregate $682,561,140.00 in cash to be distributed in accordance with Section 2.2, without interest; provided, however, that if the Effective Time occurs after December 9, 2005, then all of the shares of Company Series C Preferred Stock issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive in the aggregate the amount set forth in Annex 2.1. All such shares of the Company Series C Preferred Stock shall otherwise no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist. (e) Cancellation and Conversion of Company Stock Options. Each option to purchase Company Common Stock (a "Company Stock Option") that is outstanding immediately prior to the Effective Time (whether or not exercisable) shall be cancelled as of the Effective Time, in exchange for the right to receive a single lump sum cash payment equal to the excess, if any, of (i) the product of the Per Common Share Price and the number of shares of Company Common Stock subject to such Company Stock Option over (ii) the product of the exercise price per share with respect to each share of Company Common Stock subject to such Company Stock Option and the number of shares of Company Common Stock subject to such Company Stock Option, such lump sum cash payment to be made less any applicable withholding tax at the Effective Time <PAGE> or, if consent or approval of the Office of the Comptroller of the http://see.govIArchivesl6dgaz/dataI 10210611000095013405014814lc97404exv2w i .txt 7/17/2007 Currency ("OCC") or the Federal Deposit Insurance Corporation ("FDIC") is required for such lump sum cash payment, at such time as such consent or approval is obtained (but in no event before the Effective Time), and subject in that case to any conditions, requirements or restrictions imposed by the OCC or the FDIC; provided, that if the exercise price per share of any such Company Stock Option is equal to or greater than the Per Common Share Price, such Company Stock Option shall be cancelled without any cash payment being made in respect thereof. Prior to the Closing, the Company, in consultation with Parent, shall take or cause to be taken any and all actions reasonably necessary, including the amendment of the Company Stock Plans (as defined in Section 3.2(a)) and, as necessary, any stock option agreements entered into under the Company Stock Plans, and shall use reasonable best efforts to obtain any necessary consent of each holder of a Company Stock Option, to give effect to the treatment of Company Stock Options pursuant to this Section 2.1(e), to the extent such treatment is not expressly provided for by the terms of the applicable Company Stock Plan and related award agreements. (f) Cancellation and Conversion of Company Stock Units. Each right to be issued shares of Company Common Stock pursuant to a restricted stock unit agreement of the Company (a "Company Restricted Stock Unit Agreement") that is outstanding immediately prior to the Effective Time (whether vested or unvested) shall be cancelled as of the Effective Time, in exchange for the right to receive a single lump sum cash payment equal to the product of (i) the Per Common Share Price and (ii) the number of shares of Company Common Stock subject to issuance upon settlement of such Company Restricted Stock Unit Agreement, such lump sum cash payment to be made less any applicable withholding tax. Payments with respect to the Company Restricted Stock Unit Agreements shall be made at the Effective Time or, if consent or approval of the OCC or the FDIC is required for such lump sum cash payment, at such time as such consent or approval is obtained (but in no event before the Effective Time), and subject in that case to any conditions, requirements or restrictions imposed by the OCC or the FDIC. Prior to the Closing, the Company, in consultation with Parent, shall take or cause to be taken any and all actions reasonably necessary, including the amendment of the Company Stock Plans and, as necessary, any Company Restricted Stock Unit Agreements, and shall use reasonable best efforts to obtain any necessary consent of each holder of a Company Restricted Stock Unit Agreement, to (x) provide that all shares of Company Common Stock issuable pursuant to outstanding Company Restricted Stock Unit Agreements will vest in connection with the Merger and (y) give effect to the treatment of Company Restricted Stock Unit Agreements pursuant to this Section 2.1(f), to the extent such treatment is not expressly provided for by the terms of the applicable Company Stock Plan and related Company Restricted Stock Unit Agreements. (g) Merger Consideration. The aggregate consideration payable by Parent pursuant to Sections 2.1(c), (d), (e) and (f) is referred to herein as the "Merger Consideration." The components of the Merger Consideration are detailed on Annex 2.1. The Merger Consideration will in no event exceed the sum of $1,593,667,377 plus the aggregate amount of cash received by the Company, if any, on or after the date hereof up <PAGE> to the Effective Time from the exercise of Company Stock Options (it being understood that the maximum number of shares subject to Company Page 9 of 66 http://sec.govIArchivesle,dgarldata/1021061/000095013405014814lc97404exv2wl .txt 7/17/2007 Page 10 of 66 Stock Options which will become exercisable during such period is 2,326,556 and the maximum cash proceeds to the Company from such exercises, assuming all such Options were exercised for cash, would be $19,124,290.32). At the Effective Time, each holder of Company Common Stock and Company Series C Preferred Stock (the Company Common Stock and the Company Series C Preferred Stock are collectively referred to as the "Company Capital Stock") shall cease to have any rights (other than Dissenting Shares as set forth in Section 2.3) with respect to such issued and outstanding shares of Company Capital Stock (including, without limitation, the right to vote), except for the right to receive his, her or its respective portion of the Merger Consideration. Section 2.2 Payment of Merger Consideration. (a) Paying Agent. Prior to the Effective Time, Parent shall appoint a commercial bank or trust company reasonably acceptable to the Company as a paying agent (the "Paying Agent") for the benefit of the holders of Company Common Stock that are not Dissenting Shares and who are entitled to receive the Merger Consideration (collectively, the "Holders"). At the Effective Time, Parent shall make available to the Paying Agent an amount of cash sufficient to permit payment of the Merger Consideration to the Holders (other than the cash portion of the Merger Consideration to be paid by Parent as provided in Section 2.2(h)) (the "Exchange Fund"). The Paying Agent shall invest the Exchange Fund as directed by Parent, and any interest and other income resulting from such investments shall be paid to Parent. The Paying Agent shall exchange the shares of Company Common Stock for the Merger Consideration in accordance with the terms of this Article II, through such reasonable procedures as the Paying Agent or Parent may adopt. (b) Payment Procedures. As soon as practicable after the Effective Time, Parent or the Paying Agent shall cause to be mailed to each record holder of a certificate or certificates that immediately prior to the Effective Time represented Company Capital Stock converted in the Merger (the "Certificates") a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon actual delivery of the Certificates to the Paying Agent, and shall contain instructions for use in effecting the surrender of the Certificates and payment of the Merger Consideration). The Paying Agent shall accept Certificates upon compliance with such reasonable terms and conditions as the Paying Agent may impose to effect an orderly exchange thereof in accordance with normal exchange practices. Upon surrender for cancellation to the Paying Agent of a Certificate held by any Holder or holder of a Certificate of Company Series C Preferred Stock, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Paying Agent, the Holder of such Certificate or holder of a Certificate of Company Series C Preferred Stock shall be entitled to receive in exchange therefor that amount of cash equal to the Per Common Share Price for each share of Company Common Stock or, in the case of a holder of a Certificate of Company Series C Preferred Stock, such holder's <PAGE> ratable portion of the aggregate cash amount payable pursuant to Section 2.1(d) hereof. Any Certificate so surrendered shall forthwith be cancelled. (c) No Further ownership Rights in Company Capital Stock. All amounts paid upon conversion of shares of Company Capital Stock in http://sec.gov/Archives/edgarldata/1021061 /000095013405014814/097404exv2w l .txt 7/17/2007 Page II of 66 <PAGE> accordance with the terms hereof (including any cash paid pursuant to Section 2.2(e)) shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares of Company Capital Stock. At the Effective Time, there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Capital Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Article II. (d) Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person (as defined below) claiming such Certificate to be lost, stolen or destroyed and, if required by Parent or the Paying Agent, the posting by such Person of a bond, in such reasonable amount as Parent or the Paying Agent may direct as indemnity against any claim that may be made against them with respect to such Certificate, Parent will pay in exchange for such lost, stolen or destroyed Certificate the amounts to which the holders thereof are entitled pursuant to Section 2.1. As used in this Agreement, "Person" means any person, employee, individual, corporation, limited liability company, partnership, trust, joint venture or any other non-governmental entity or any governmental or regulatory authority or body. (e) Termination of Exchange Fund. Any portion of the Exchange Fund which remains undistributed to the stockholders of the Company for six months after the Effective Time shall be delivered to Parent, upon demand, and any stockholders of the Company who have not theretofore complied with this Article II shall thereafter look only to Parent for payment of their claim for Merger Consideration. (f) No Liability. None of Parent, the Company or the Surviving Corporation shall be liable to any holder of shares of Company Capital Stock for cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. If any Certificate shall not have been surrendered prior to eighteen months after the Effective Time (or immediately prior to such earlier date on which any cash payable to the holder of such Certificate pursuant to this Article II would otherwise escheat to or become the property of any Governmental Entity), any such cash in respect of such Certificate shall, to the extent permitted by applicable Law, become the property of Parent, free and clear of all claims or interest of any person previously entitled thereto. (g) Withholding. Parent, the Surviving Corporation or the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Capital Stock or Dissenting Shares such amounts as it is required to deduct and withhold with respect to the making of such 6 payment pursuant to the Internal Revenue Code of 1986, as amended (the "Code") and the rules and regulations promulgated thereunder, or any provision of state, local or foreign tax Law, and to collect such tax forms, including Form W-9, the appropriate series of Form W-8 or any other forms, as may be necessary to prevent or reduce any such deduction or withholding. To the extent that amounts are so withheld by Parent, the Surviving Corporation or the Paying Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Capital Stock or http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2w l .pct 7/17/2007 Page 12 of 66 <PAGE> Dissenting Shares in respect of which such deduction and withhc:lding was made by Parent, the Surviving Corporation or the Paying Agent. (h) Payment to Holders of the Company Series C Preferred Stock. On the Closing Date, immediately following the Effective Time and upon the surrender to Parent of the Certificates representing all shares of the Company Series C Preferred Stock, Parent shall pay to the holders of the Company Series C Preferred Stock, by wire transfer of immediately available funds to an account designated by such holders, that amount of cash constituting the Merger Consideration which such holders are entitled to receive pursuant to Section 2.1(d). Section 2.3 Dissenters' Rights. (a) Shares of Company Capital Stock with respect to which a demand for payment and appraisal has been properly made and perfected in accordance with Section 262 of the DGCL ("Dissenting Shares") will not be converted into the right to receive from Parent the portion of the Merger Consideration otherwise payable with respect to such shares at or after the Effective Time and the holder thereof shall be entitled only to such rights as are granted by Section 262 of the DGCL. If a holder of Dissenting Shares (a "Dissenting Stockholder") shall withdraw, in accordance with Section 262 of the DGCL, such holder's demand for such appraisal or shall become ineligible for such appraisal, then, as of the later of the Effective Time or the occurrence of such event, such holder's Dissenting Shares shall cease to be Dissenting Shares and shall be converted into the right to receive from Parent the Merger Consideration into which such holder's Company Capital Stock was converted as of the Effective Time pursuant to this Agreement. (b) The Company shall give Parent notice of any demand received by the Company from a holder of Dissenting Shares for appraisal of shares of Company Capital Stock, withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company, and copies of any correspondence received by the Company relating to any such demand or potential demand, and Parent shall have the right to participate in and, after the Effective Time, to direct, all negotiations and proceedings with respect to such demand. The Company agrees that, except with the prior written consent of Parent, or as required under the DGCL, it will not voluntarily make any payment with respect to, or settle or offer or agree to settle, any such demand for appraisal. Each Dissenting Stockholder who, pursuant to the provisions of Section 262 of the DGCL, becomes entitled to payment of the value of the Dissenting Shares will 7 receive payment therefor after the value therefor has been agreed upon or finally determined pursuant to such provisions, and any Merger Consideration that would have been payable with respect to such Dissenting Shares will be retained by Parent. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set forth in the disclosure schedule delivered by the Company to Parent and Merger Sub concurrently herewith (the "Company Disclosure Schedule"), the Company represents and warrants to Parent and Merger Sub as set forth below. Information disclosed in any section of the Company Disclosure hnp://sec.gov/Archives/edgar/data/1021061 /000095013405014814/c97404exv2w ] .txt 7/17/2007 Page 13 of 66 Schedule shall be deemed to be disclosed with respect to such other subsections of this Agreement or the Company Disclosure Schedule only to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other subsections. As used in this Agreement, (i) any reference to any event, change or effect being "material" with respect to any entity means an event, change or effect which is material in relation to the business, assets, liabilities, capitalization, financial condition or results of operations of such entity and its Subsidiaries (as defined in Section 3.1(b)) taken as a whole; and (ii) the term "Material Adverse Effect" means, with respect to any entity, an effect which (A) is materially adverse to the business, assets, liabilities, capitalization, financial condition or results of operations of such entity and its Subsidiaries taken as a whole, or (B) materially impairs the ability of such entity to perform its obligations hereunder; provided that, in any such case referred to in clause (i) or (ii)(A) the following shall not be deemed "material" or to have a Material Adverse Effect: any change or event caused by or resulting from (1) changes, after the date hereof, in prevailing interest rates, currency exchange rates or other economic or monetary conditions in the United States, (2) changes, after the date hereof, in United States securities markets, including changes in price levels or trading volumes, (3) changes or events, after the date hereof, affecting the credit card industry, the consumer finance industry, and/or financial services industry generally and not specifically relating to the Company or any of its Subsidiaries, as the case may be, (4) changes, after the date hereof, in U.S. generally accepted accounting principles or regulatory accounting requirements applicable to companies operating in the U.S. credit card industry, the U.S. consumer finance industry and/or the U.S. financial services industry generally; (5) changes, after the date hereof, in Laws of general applicability or interpretations thereof by any Governmental Entity (as defined in Section 3.3(c)), (6) the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby or the announcement thereof or (7) any outbreak, after the date hereof, of major hostilities in which the United States is involved or any act of terrorism within the United States or directed against its facilities or citizens wherever located; other than, in the case of clauses (1), (2), (4), (5) and (7), to the extent that any such change or outbreak has a disproportionate adverse effect (other than a disproportionate adverse effect where the disproportion is de minimis) on the Company and its Subsidiaries relative to comparable businesses generally. Section 3.1 Organization, Standing and Power. <PAGE> (a) The Company is a Delaware corporation duly organized, validly existing and in good standing under the Laws of Delaware. The Bank is a limited purpose credit card bank chartered as a national banking association. The Company has not registered as a bank holding company under the Bank Holding Company Act of 1956, as amended ("BHCA"). The business and activities conducted by the Bank qualify it as a credit card bank exempt from the definition of "bank" under the BHCA pursuant to Section 2(c)(2)(F) thereof. The Company's Subsidiary, MES Insurance Agency, LLC, a Minnesota limited liability company, is an insurance agency licensed and located in Minnesota ("MES"), the Company's Subsidiary, ICOM Limited, a Bermuda company, is a Class 2 Insurer licensed and located in Bermuda ("ICOM"), the Company's Subsidiary, Metris Warranty Services, Inc., a Delaware corporation, is a service contract obligor organized in Delaware, located in Minnesota and licensed in various states ("MWSI"), and the Company's Subsidiary, Metris Warranty Services of Florida, Inc., a Florida corporation, is a service contract obligor organized and licensed in Florida and located http://sec.gov/Archivesledgarldata/1021061/000095013405014814/C97404exv2wl.txt 7/17/2007 Page 14 of 66 in Minnesota ("MWSF" and together with MES, ICOM, and MWSI, the "Insurance and Warranty Subsidiaries" and, each individually, an "Insurance or Warranty Subsidiary "). Each of the Company's Subsidiaries (as defined in Section 3.1(b)) is an organization duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization. Each of the Company and its Subsidiaries has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, other than in such jurisdictions where the failure so to qualify, either individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. True, complete and correct copies of the Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation") and Amended and Restated Bylaws (the "Bylaws") of the Company and the certificate of incorporation and bylaws or other comparable organizational documents of the Company's Subsidiaries (the "Organizational Documents") as in effect on the date of this Agreement have been provided to Parent. (b) As used in this Agreement, the word "Subsidiary" when used with respect to any party means any corporation or other organization, whether incorporated or unincorporated, (i) of which such party or any other Subsidiary of such party is a general partner (excluding partnerships, the general partnership interests of which held by such party or any Subsidiary of such party do not have a majority of the voting interests in such partnership), or (ii) at least a majority of the securities or other interests of which that have by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party, or by such party and one or more of its Subsidiaries. Section 3.2 Capital Structure. <PAGE> (a) The authorized capital stock of the Company consists of three hundred million (300,000,000) shares of Company Common Stock, and ten million (10,000,000) shares of preferred stock, of which two million (2,000,000) shares have been designated Company Series C Preferred Stock. As of August 2, 2005 (i) 58,461,687 shares of Company Common Stock were issued and outstanding, 10,904,381 shares of Company Common Stock were reserved for issuance upon the exercise or payment of stock options, stock units or other awards granted or subject to grant under the Metris Companies Inc. Amended and Restated Long-Term Incentive and Stock Option Plan, Metris Companies Inc. Amended and Restated Non-Employee Directors Stock Option Plan, Metris Companies Inc. Employee Stock Purchase Plan, the Non-Qualified Employee Stock Purchase Plan, Metris Companies Inc. Management Stock Purchase Plan and Metris Companies Inc. Annual Incentive Bonus Plan for Designated Corporate Officers (such stock options, units and other awards and plans, collectively, the "Company Stock Plans"), and 7,055,300 shares of Company Common Stock were held by the Company in its treasury or by its Subsidiaries; and (ii) 1,444,186 shares of Company Series C Preferred Stock were issued and outstanding and 57,599 shares of Company Series C Preferred Stock that will accrue through December 9, 2005 with respect to the payment-in-kind dividends thereon. All outstanding shares of Company Common Stock and Company Series C h4:llsec.govlArchivesledgar/data/1021061/000095013405014814lc97404exv2wl .txt 7/17/2007 Page 15 of 66 <PAGE> Preferred Stock have been duly authorized and validly issued and are fully paid and non-assessable. Such outstanding shares of Company Common Stock and Company Series C Preferred Stock (x) are not subject to and (y) were not issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company's Certificate of Incorporation or Bylaws or any agreement to which the Company is a party or is otherwise bound. (b) No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders of the Company may vote ("Voting Debt") are issued or outstanding. (c) Except for (i) this Agreement, (ii) options, restricted stock units or awards issued or to be issued under the Company Stock Plans which represented, as of August 2, 2005, the right to acquire up to an aggregate of 5,326,039 shares of Company Common Stock (1,227,685 restricted stock units, 2,323,982 stock options with an exercise price less than the Per Common Share Price, and 1,776,372 stock options with an exercise price equal to or greater than the Per Common Share Price), (iii) the declaration and payment of regular quarterly payment-in-kind dividends on the Company Series C Preferred Stock in accordance with the Series C Certificate of Designation and (iv) agreements entered into and securities and other instruments issued after the date of this Agreement as permitted by Section 5.1(c), there are no options, warrants, calls, rights, commitments or agreements of any character to which the Company or any Subsidiary of the Company is a party or by which it or any such Subsidiary is bound obligating the Company or any Subsidiary of the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or any - - Voting Debt or stock appreciation rights of the Company or of any Subsidiary of the Company or 10 obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. There are no outstanding contractual obligations of the Company or any of its Subsidiaries (x) to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries, or (y) pursuant to which the Company or any of its Subsidiaries is or could be required to register shares of Company Capital Stock or other securities under the Securities Act of 1933, as amended (the "Securities Act"). (d) Since March 31, 2005, other than regular quarterly payment in kind dividends on the Company Series C Preferred Stock in accordance with the Series C Certificate of Designation, the Company has not (i) issued or permitted to be issued any shares of capital stock, stock appreciation rights or securities exercisable or exchangeable for or convertible into shares of capital stock of the Company or any of its Subsidiaries, other than pursuant to the Company Stock Plans, any Company Stock Options, Company Restricted Stock Units and other awards issued prior to the date hereof under the Company Stock Plans (or issued after the date hereof in compliance with Section 5.1(c) and -- Section 5.1(i)); (ii) repurchased, redeemed or otherwise acquired, directly or indirectly through one or more of the Company's Subsidiaries, any shares of capital stock of the Company or any of its Subsidiaries; or (iii) declared, set aside, made or paid to the stockholders of the Company, dividends or other distributions on the outstanding shares of capital stock of the Company. http://sec.gov/Archivesledgarldata/1021061 /000095013405014814/C97404exv2wl .txt 7/17/2007 Page 16 of 66 <PAGE> Section 3.3 Authority. (a) The Company has all requisite corporate power and authority to enter into this Agreement and, subject in the case of the consummation of the Merger to the adoption of this Agreement by the requisite vote of the holders of Company Capital Stock, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Company, subject in the case of the consummation of the Merger to the adoption of this Agreement by the stockholders of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equitable principles. (b) The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, (i) conflict with, or result in any violation of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or the loss of a benefit under, or constitute a change in control under, require the payment of a penalty under, or result in the creation of a lien, pledge, security interest, charge or other encumbrance on any assets pursuant to (any such conflict, violation, default, right of termination, cancellation or acceleration, loss, change in-control, 11 requirement or creation, a "Violation"), any provision of the Certificate of Incorporation or Bylaws of the Company or any of the Organizational Documents of any Subsidiary of the Company, or (ii) subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in subsection (c) of this Section 3.3, result in any Violation of any Law or any loan or credit agreement, note, mortgage, indenture, lease, Company Plan (as defined in Section 3.9(a)), or agreement entered into in connection with a Company Sponsored Asset Securitization Transaction, or other agreement, obligation, instrument, permit, concession, franchise or license, applicable to the Company or any Subsidiary of the Company or their respective properties or assets, except in the case of clause (ii) of this Section 3.3(b), for any such Violations that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. (c) No consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, or industry self-regulatory organization (a "Governmental Entity") or any other Person is required by or with respect to the Company or any Subsidiary of the Company in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby (including the Bank Merger), except for (i) the filing of applications and notices with the OCC and FDIC and approval http://sec.gov/Archives/edgar/data/1021061/000095013405014814/C97404exv2wl .bct 7/17/2007 Page 17 of 66 <PAGE> thereof, (ii) the filing of applications and notices with the Board of Governors of the Federal Reserve, (iii) the filing of applications and notices with the Superintendent of the Arizona State Banking Department ("Superintendent"), (iv) the filing of notices with the Minnesota Department of Commerce ("Minnesota DOC"), (v) the filing of applications and notices with the Florida Department of Financial Services, including any department thereof ("Florida DFS") and approval thereof, (vi) the filing of applications and notices with the Bermuda Monetary Authority and approval thereof, (vii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, (viii) the filing with the Securities and Exchange Commission (the "SEC") of (A) the Proxy Statement (as defined in Section 6.1(b) and (B) such reports under Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby, (ix) the Required Company Vote (as defined in Section 3.14), (x) notices or filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), if applicable, and (xi) such other consents, approvals, waivers, orders, authorizations, registrations, declarations and filings the failure of which to obtain or make would not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. Section 3.4 SEC Documents; Regulatory Reports. (a) Each of the Company and its Subsidiary, Metris Receivables, Inc., a Delaware corporation ("MRI"), has filed all required reports, schedules and other documents with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since December 31, 2001 (such reports, schedules and other documents, the 12 "Company SEC Documents"). The Company SEC Documents (i) were filed on a timely basis, (ii) as of their respective dates of filing with the SEC (or, if amended or superseded by a filing prior to the date hereof, as of the date of such filing), complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC thereunder applicable to such Company SEC Documents, and (iii) did not at the time they were filed (or, if amended or superseded by a filing prior to the date hereof, as of the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company and its Subsidiaries (including any related notes and schedules) included in the Company SEC Documents as of their respective dates of filing with the SEC (or, if amended or superseded by a filing prior to the date hereof, as of the date of such filing), complied in all material respects with all applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC), have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods- involved (except as may be disclosed therein) and fairly presented in all material respects the consolidated financial position of Company and its consolidated Subsidiaries and the consolidated results of operations, changes in stockholders' equity and cash flows of such companies as of the dates and for the periods shown. No Subsidiary of the Company other than MRI is subject to the reporting requirements of http://sec.gov/Archives/edgar/data/1021061 /000095013405014814/c97404exv2wl .txt 7/17/2007 Page 18 of 66 <PAGE> Section 13(a) or Section 15(d) of the Exchange Act. (b) Other than the Company SEC Documents, which are addressed in subsection (a), the Bank RAP Documents, which are addressed in subsection (c), and the Insurance SAP Documents, which are addressed in subsection (d), each of the Company and its Subsidiaries has (i) timely filed all reports, registrations and statements, together with any amendments required to be made with respect thereto, that it was required to file since December 31, 2001 with any Governmental Entity, (ii) paid all fees and assessments due and payable in connection therewith and (iii) made available, to the extent permitted by applicable Law, to Parent copies of all such reports, registrations and statements (and amendments thereto). (c) The Bank has filed all reports, registrations, statements and other documents, together with any amendments required to be made with respect thereto and any exhibits and other information required to be incorporated therein, that it was required to file with the OCC, the Superintendent, the Board of Governors of the Federal Reserve, and the FDIC (collectively, the "Banking Authorities") since December 31, 2001 (the "Bank RAP Documents"). The Bank RAP Documents (i) were filed on a timely basis, (ii) were prepared in conformity with regulatory accounting practices prescribed or permitted by the Banking Authorities ("RAP") consistently applied, for the periods covered thereby (or, if amended or superseded by a filing prior to the date hereof, as of the date of such filing) and (iii) fairly present in all material respects the statutory financial position of the Bank in accordance with RAP as at the respective dates thereof and the results of operations of the Bank for the respective periods then ended. No material deficiency has 13 been asserted with respect to any Bank RAP Documents by the Banking Authorities or any other Governmental Entity. The audited annual balance sheets and income statements of the Bank as of and for the years ended December 31, 2001, 2002, 2003 and 2004 have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be disclosed therein) and fairly presented in all material respects the financial position of the Bank and the results of operations, changes in stockholder's equity and cash flows of the Bank as of the dates and for the periods shown. The Company or the Bank has provided to Parent true and complete copies of (i) all Bank RAP Documents for the years ended December 31, 2001, December 31, 2002, December 31, 2003 and December 31, 2004 and the quarterly periods ended March 31, 2005 and June 30, 2005, and (ii) to the extent permitted by applicable Law and subject to regulatory approval, all examination reports of any Banking Authorities conducted since December 31, 2001 and relating to the Bank. (d) Each of the Company and the Insurance and Warranty Subsidiaries has filed all required annual and quarterly statements and other documents (including exhibits and all other information incorporated therein) required to be filed with the Minnesota DOC, the Florida DFS, and the Bermuda Monetary Authority (collectively, the "Insurance Authorities") since December 31, 2001 -(the "Insurance SAP Documents"). The Insurance SAP Documents (i) were filed on a timely basis, (ii) were prepared in conformity with regulatory accounting practices prescribed or permitted by the Insurance Authorities, including the Bermuda generally accepted auditing standards ("SAP"), consistently applied, for the periods covered thereby (or, if amended or superseded by a filing prior to the date hereof, as of the date of http://sec.gov/Archives/edgaz/dataII021061/000095013405014814lc97404exv2wl .txt 7/17/2007 such filing) and (iii) fairly present in all material respects the statutory financial position of the Company and the relevant Insurance and Warranty Subsidiaries in accordance with applicable SAP as at the respective dates thereof and the results of operations of the Company and the relevant Insurance and Warranty Subsidiaries for the respective periods then ended. No material deficiency has been asserted with respect to any Insurance SAP Documents by the Insurance Authorities or any other Governmental Entity. The Company has provided to Parent true and complete copies of (i) all Insurance SAP Documents for the years ended December 31, 2001, December 31, 2002, December 31, 2003 and December 31, 2004 and the quarterly periods ended March 31, 2005 and June 30, 2005, and (ii) to the extent permitted by applicable Law and subject to regulatory approval, all examination or other supervisory reports of the Insurance Authorities conducted since December 31, 2001 and relating to the Company or any Insurance or Warranty Subsidiary. <PAGE> (e) Except as disclosed in the Company SEC Documents filed prior to the date of this Agreement, neither the Company nor any of its Subsidiaries has entered into any transaction that would be subject to disclosure pursuant to Item 404 of Regulation S-K. All agreements and transactions between or among any of the Company and any of its Subsidiaries are, to the extent required, in compliance with the terms of any applicable Laws and agreements with Governmental Entities. As used in this Agreement, "Affiliate" of any Person means another Person that directly or indirectly, through one or 14 more intermediaries, controls, is controlled by, or is under common control with, such first Person. Section 3.5 Compliance With Applicable Laws. (a) Each of the Company and its Subsidiaries holds all permits, licenses, variances, exemptions and approvals of all Governmental Entities that are material to the operation of its business (the "Company Permits"). Each of the Company and its Subsidiaries is and has been in compliance with the terms of the Company Permits, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. To the Knowledge of the Company (as defined in Section 3.5(b)), no Company Permit shall cease to be effective as a result of the consummation of the transactions contemplated by this Agreement. Each of the Company and its Subsidiaries is and has been in compliance in all material respects with all federal, state, local or foreign laws, statutes, ordinances, codes, rules, regulations, judgments, orders, injunctions, decrees, writs or operating or written agreements of any Governmental Entity (individually, a "Law" and collectively, the "Laws") applicable to the conduct of its business or the ownership or operation of its properties or assets, including state usury Laws, consumer lending and insurance Laws, the Truth in Lending Act, the Consumer Credit Protection Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the USA-Patriot Act of 2001, the Securities Act, the Exchange Act, the Sarbanes-Oxley Act of 2002, the rules and regulations under any of the foregoing, and the rules and regulations of the New York Stock Exchange (all as amended from time to time). Each of the Company and its Subsidiaries is and has been in compliance in all material respects with all applicable Laws with respect to collection practices in seeking payment under any loan or Page 19 of 66 http://sec.gov/Archives/edaar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 ..,,._ , -- -_.. Page 20 of 6C credit extension of the Company or the Bank. Except for normal examinations conducted by a Governmental Entity in the ordinary course of the business of the Company and its Subsidiaries, no investigation, examination, audit, review or disciplinary proceeding by any Governmental Entity with respect to the Company or any of its Subsidiaries is pending or, to the Knowledge of the Company, threatened. (b) As used in this Agreement, "Knowledge of the Company" means the actual knowledge of (i) the executive officers of the Company and its Subsidiaries and (ii) the individuals with the primary responsibility over operational or functional areas of the Company and its Subsidiaries. Section 3.6 Legal Proceedings. Except as disclosed in the Company SEC Documents filed prior to the date of this Agreement, there is no suit, action, claim, investigation or proceeding (whether judicial, arbitral, administrative or other) pending or, to the Knowledge of the Company, threatened, against or affecting the Company or any Subsidiary of the Company as to which there is a substantial possibility of a material adverse outcome. Except as disclosed in the Company SEC Documents filed prior to the date of this Agreement, there is no judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company or any Subsidiary of Company that is material to the Company. <PAGE> 15 Section 3.7 Taxes. (a) The Company and each of its Subsidiaries have filed, or caused to be filed, on a timely basis (taking into account any extension of time within which to file), all material tax returns required to be filed by any of them and have paid in full (or the Company has paid in full on behalf of any of its Subsidiaries), or have set up an adequate reserve for the payment of, all material taxes required to be paid. All such tax returns were true, complete and correct in all material respects. The most recent financial statements contained in the Company SEC Documents filed prior to the date of this Agreement reflect an adequate reserve, in accordance with generally accepted accounting principles, for all taxes payable by the Company and its Subsidiaries accrued through the date of such financial statements. No material deficiencies or other claims for any taxes have been proposed, asserted or assessed in writing against the Company or any of its Subsidiaries that are not adequately reserved for. As used in this Agreement, the term "tax" (including, with correlative meaning, the terms "taxes" and "taxable") shall mean (i) all Federal, state, local and foreign income, profits, franchise, gross receipts, payroll, sales, employment, use, property, withholding, excise, occupancy and other taxes, duties or assessments of any nature whatsoever, together with all interest, penalties and additions imposed with respect to such amounts, (ii) liability for the payment of any amounts of the type described in clause (i) as a result of being or having been a member of an affiliated, consolidated, combined or unitary group, and (iii) liability for the payment of any amounts as a result of being party to any tax sharing agreement or as a result of any express or implied obligation to indemnify any other Person with respect to the payment of any amounts of the type described in clauses (i) or (ii). (b) The Company (i) has delivered to Parent or made available to Parent for inspection complete and correct copies of all material http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl txt 7/17/2007 Page 21 of 66 <PAGE> tax returns of the Company or any Subsidiary of the Company relating to taxes for the taxable periods ending December 31, 2002 and December 31, 2003, and (ii) has retained and will deliver or make available to Parent, on Parent's reasonable request, complete and correct copies of material tax returns of the Company or any Subsidiary of the Company relating to taxes for all taxable periods for which the applicable statute of limitations has not yet expired, as well as all related books and records so as to meet the requirements of Section 6001 of the Code. (c) The federal income tax returns of the Company and each Subsidiary of the Company have been audited by the Internal Revenue Service or are closed by the applicable statute of limitations for all taxable years through 1997. No examination or audit of any tax return of the Company or any Subsidiary of the Company by any Governmental Entity is currently in progress. Neither the Company nor any Subsidiary of the Company has been informed in writing by any jurisdiction where the Company or any Subsidiary of the Company does not file a tax return that the jurisdiction believes that the Company or any Subsidiary of the Company was required to file any material tax return that was not filed. Neither the Company nor any Subsidiary of the Company has (i) waived any statute of limitations with respect to taxes or agreed to extend the period for assessment or collection of any taxes, (ii) requested any extension of time within 16 which to file any tax return, which tax return has not yet been filed, or (iii) executed or filed any power of attorney with any taxing authority. (d) Neither the Company nor any Subsidiary of the Company is or has ever been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary tax returns other than (i) the group of which the Company is the common parent, and (ii) the group of which Fingerhut Companies, Inc. and its successors and assigns is the common parent. (e) Neither the Company nor any Subsidiary of the Company is a party to any tax sharing agreement or arrangement other than with each other and with Fingerhut Companies, Inc. and its successors and assigns. (f) Neither the Company nor any Subsidiary of the Company: (i) is a "consenting corporation" within the meaning of former Section 341(f) of the Code, and none of the assets of the Company or any Subsidiary of the Company is subject to an election under former Section 341(f) of the Code; or (ii) has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897 (c) (1) (A) (ii) of the Code. (g) Neither the Company nor any Subsidiary of the Company has distributed to itsstockholders or security holders stock or securities of a controlled corporation, nor has stock or securities of the Company or any Subsidiary of the Company been distributed, in a transaction to which Section 355 of the Code applies (i) in the two years prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) that includes the http://sec.gov/Archivesledgarldata11021061 /000095013405014814/c97404exv2wl .txt 7/17/2007 Page 22 of 6(_ transactions contemplated by this Agreement. (h) There are no material liens or other encumbrances with respect to taxes upon any of the assets or properties of the Company or any Subsidiary of the Company, other than with respect to taxes not yet due and payable. (i) Neither the Company nor any of its Subsidiaries has entered into a transaction that is identified by published guidance as a listed transaction under Treas. Reg. Section 1.6011-4(b)(2). (j) The Company and each of its Subsidiaries have withheld from amounts owing to any employee, creditor or other person all taxes required by Law to be withheld and have paid over to the proper governmental authority in a timely manner all such withheld amounts to the extent due and payable, except for immaterial failures to withhold and pay over. Section 3.8 Certain Agreements. Except for this Agreement, neither the Company nor any of its Subsidiaries is a party to or bound by any contract, arrangement, commitment or understanding (i) with respect to the employment of any directors or executive officers, or with <PAGE> 27 any consultants that are natural persons, involving the payment of $250,000 or more per annum, (ii) which involves the payment or receipt of payment of $1 million or more per annum or is otherwise material to the conduct of the business of the Company and its Subsidiaries, taken as a whole, as currently conducted or currently contemplated to be conducted by the Company and its Subsidiaries, (iii) which limits the ability of the Company or any of its Subsidiaries to compete in any line of business, in any geographic area or with any Person, or which requires referrals of business or requires the Company or any of its Affiliates to make available investment opportunities to any Person on a priority, equal or exclusive basis, and in each case which limitation or requirement would reasonably be expected to be material to the Company and its Subsidiaries taken as a whole, (iv) with or to a labor union or guild (including any collective bargaining agreement), (v) in the case of a Company Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement, (vi) which relates to indebtedness of the Company or any of its Subsidiaries in the principal amount of $5 million or more, or (vii) which would prohibit or delay the consummation of any of the transactions contemplated by this Agreement. The Company has made available to Parent complete and accurate copies of each contract, arrangement, commitment or understanding of the type described in this Section 3.8 (collectively referred to herein as the "Company Contracts"). All of the Company Contracts are valid and in full force and effect, except to the extent they have previously expired in accordance with their terms, and are enforceable against the Company or the applicable Subsidiary of the Company and, to the Company's Knowledge, against the other parties thereto, in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equitable principles. Neither the Company nor any of its Subsidiaries has, and to the Knowledge of the Company, none of the other parties thereto has, violated any material provision of, or committed or failed to perform any material act, and no event or condition exists, which with or without notice, lapse of time or both would constitute a material default under the provisions of, any Company http://sec.gov/Archives/edgarldata/1021061 /0000950134005014814lc97404exv2wl .txt 7/17/2007 Page 23 of 66 Contract. Section 3.4 Benefit Plans. (a) Definitions. <PAGE> (i) "Benefit Arrangement" means any benefit arrangement, obligation, custom, or practice to provide benefits (other than merely as salary or under a Benefit Plan) as compensation for services rendered, to present or former directors, employees, agents, or independent contractors, including employment or consulting agreements, severance agreements or pay policies, stay or retention bonuses or compensation, executive or incentive compensation programs or arrangements, sick leave, vacation pay, plant closing benefits, patent award programs, salary continuation for disability, workers' compensation, retirement, deferred compensation, bonus, equity compensation, stock option or purchase plans or programs, tuition reimbursement or scholarship programs, employee discount programs, meals, travel, or vehicle allowances, any plans subject to Code 18 Section 125 and any plans providing benefits or payments in the event of a change in control, change in ownership or effective control, or sale of a substantial portion (including all or substantially all) of the assets of any business or portion thereof, in each case with respect to any present or former employees, directors, independent contractors, or agents. (ii) "Benefit Plan" has the meaning given in ERISA Section 3(3), together with plans or arrangements that would be so defined if they were not (A) otherwise exempt from ERISA by that or another section, (B) maintained outside the United States, or (C) individually negotiated or applicable only to one person. (iii) "Company Benefit Arrangement" means any Benefit Arrangement any Related Employer sponsors or maintains or with respect to which any Related Employer has or may have any current or future Liability, in each case with respect to any present or former directors, employees, officers, or agents of, or service providers to, any Related Employer. (iv) "Company Plan" means any Benefit Plan any Related Employer sponsors or maintains or to which any Related Employer is obligated to make payments or has or may have any Liability, in each case with respect to any present or former employees of any Related Employer, and any Qualified Plan that was terminated on or after January 1, 1995. (v) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and all regulations and rules issued thereunder, or any successor Law. (vi) "ERISA Affiliate" means any Person that, together with any Related Employer, would be or was at any time treated as a single employer under Section 414 of the Code or Section 4001 of ERISA. http://sec.gov/Archives/edgar/data/1021061/0000950134050148l4/C97404exv2wl .txt 7/17/2007 Page 24 of 66 (vii) "Liability" means any direct or indirect liability, indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, whether accrued, absolute, contingent, mature, unmature or otherwise and whether known or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured (individually, a "Liability" and collectively, the "Liabilities"). (viii) "Pension Plan" means any Benefit Plan subject to Code Section 412 or ERISA Section 302 or Title IV (including any multiemployer plan as described in Section 3(37) of ERISA) or any comparable plan not covered by ERISA. <PAGE> 19 (ix) "Qualified Plan" means any Benefit Plan that is intended to meet the requirements of Section 401(a) of the Code, including any such Benefit Plan that was terminated on or after January 1, 1995. (x) "Related Employer" means the Company and any Subsidiary of the Company employing any non-Company employee or service provider. (b) Section 3.9(b) of the Company Disclosure Schedule contains a complete and accurate list of all Company Plans and Company Benefit Arrangements and other employment contracts. (c) With respect, as applicable, to Benefit Plans and Benefit Arrangements: (i) The Company has delivered to Parent true and complete copies of the following documents with respect to each Company Plan and Company Benefit Arrangement, to the extent applicable: (A) all plan or arrangement documents (or, if no plan document exists, a written description of the Company Plan or Company Benefit Arrangement), including trust agreements, insurance policies, service agreements and formal and informal amendments to each; (B) the most recent Form 5500 or other comparable documents and any attached financial statements and those for the prior three years and any related actuarial reports; (C) the last Internal Revenue Service ("IRS") determination or opinion letter and the last IRS determination or opinion letter that covered the qualification of the entire plan (if different); (D) summary plan descriptions, summaries of material modifications, any prospectuses that describe the Company Plans or Company Benefit Arrangements, and Statement of Financial Accounting Standards Nos. 87, 106, 112, and 123R reports or other comparable documents; (E) the most recent written descriptions of all non-written agreements relating to any such plan or arrangement; (F)-allmaterial notices the IRS, Department of Labor, or any other domestic or foreign Governmental Entity issued to the Related Employers within the four years preceding the date of this Agreement; and (G) employee manuals or handbooks containing personnel or employee relations policies. http://sec.gov/Archives/edgar/data/1021061 /000095013405014814/C97404exv2w l .txt 7/17/2007 Page 25 of 66 <PAGE> (ii) Each Company Plan and each company Benefit Arrangement has been maintained in all material respects in accordance with its constituent documents and with all applicable provisions of domestic and foreign Laws, including federal and state securities Laws and any reporting and disclosure requirements. With respect to any Company Plan or Company Benefit Arrangement that is subject to Section 409A of the Code, the Company will adopt amendments by December 31, 2005 (or such other extended deadline as the Treasury may permit under Section 409A of the Code), so that no such Company Plan or Company Benefit Arrangement is likely to result in any participant's incurring income acceleration or penalties under Section 409A of the Code. Section 3.9(c)(ii) of the Company Disclosure Schedule lists all Company Plans or Company Benefit Arrangement that are or may be subject to Section 409A of the 20 Code. The only Qualified Plan currently in operation is the 401(k) Retirement Benefit Plan. No Related Employer has maintained or contributed to another Qualified Plan. The Company has received a favorable determination letter from the IRS that has not been revoked, no Qualified Plan has been amended since the date of its most recent determination letter or application therefor in any material respect, and, to the Knowledge of the Company, nothing has occurred with respect to the operation of any Qualified Plan that could cause the loss of such qualification or exemption or the imposition of any Liability, lien, penalty or Tax under ERISA or the Code or materially increase its cost; with respect to each Company Plan, to the Knowledge of the Company, no transactions prohibited by Code Section 4975 or ERISA Section 406 and no breaches of fiduciary duty described in ERISA Section 404 have occurred; the Related Employers have fiduciary liability insurance of at least $55.0 million in effect covering the fiduciaries of the Company Plans with respect to whom the Related Employers could have Liability; no Qualified Plan has experienced a termination or partial termination; no act or omission has occurred and, to the Knowledge of the Company, no condition exists with respect to any Company Plan that would subject the Related Employers to any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Company Plan, nor, to the Knowledge of the Company, will any of the transactions contemplated by this agreement give rise to such an obligation; and the Related Employers have never sponsored an employee stock ownership plan. Each Qualified Plan that provides for compliance with ERISA Section 404(c), or is intended to comply with such provision, so complies. (iii) Neither any Related Employer nor any ERISA Affiliate has ever sponsored or maintained or had any Liability with respec-t to-any Pension Plan. (iv) There are no pending claims (other than routine benefit claims) or lawsuits that have been asserted or instituted by, against, or relating to, any Company Plans or Company Benefit Arrangements nor, to the Knowledge of the Company, is there any basis for any such claim or lawsuit. No http://sec.gov/Archivesledgaz/data/1021061/000095013405014814/c97404exv2wl.txt 7/17/2007 Company Plans or Company Benefit Arrangements are or have been under audit or examination (nor has notice been received of a potential audit or examination) by any Governmental Entity; and no matters are pending under the IRS's Employee Plans Compliance Resolutions System or any successor or predecessor program. (v) No Company Plan or Company Benefit Arrangement contains any provision or is subject to any Law that would (A) increase, accelerate, or vest any benefit; (B) require severance, termination or other payments; (C) provide any term of employment or compensation guarantee; (D) trigger any Liabilities (including any obligation to provide a tax gross-up); or (E) measure any values of benefits on the basis of any of the transactions contemplated by this Agreement. Any payments that would be treated as change in control payments for purposes of bank regulation under 12 CFR 359.4(a)(3) will comport with such regulation <PAGE> 21 Page 26 of 66 and, prior to being made, will have received proper approval from the OCC and, as may be required, with the concurrence of the FDIC. No stockholder, employee, officer, or director of any Related Employer has been promised or paid any bonus or incentive compensation related to the transactions contemplated pursuant to this Agreement. The Related Employers have provided to Parent such accurate information as Parent would reasonably be expected to need to enable Parent to calculate any excise tax due under Code Section 4999 as a result of the transactions contemplated by this Agreement for which any Related Employer or Parent may directly or indirectly become liable, and the amount of deductions that may be disallowed under Code Section 280G as a result of the transactions contemplated by this Agreement. (vi) Each Company Plan and Company Benefit Arrangement is amendable and terminable unilaterally by the applicable Related Employer at any time without liability or expense to the Related Employers or such plan or arrangement as a result thereof (other than for benefits accrued through the date of amendment or termination and reasonable administrative expenses related thereto), and no plan documentation or agreement or communication distributed generally to employees by its terms prohibits the Related Employers from amending or terminating such Company Plan or Company Benefit Arrangement. (vii) Each Related Employer has paid all amounts it is required to pay as contributions to the Company Plans as of the date hereof; all benefits accrued under any unfunded Company Plan or Company Benefit Arrangement will have been paid, accrued, or otherwise adequately reserved in accordance with generally accepted accounting principles and records of -such Related Employer; all monies withheld from employee paychecks for Company Plans have been transferred to the relevant plan within the time applicable regulations specify; the assets of each Company Plan that is funded are reported at their fair market value on the books and records of such Company Plan; within the preceding three (3) fiscal years, no Related Employer has, as a result of a retroactive rate http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 adjustment or loss sharing arrangement, incurred any material liability with respect to a Company Plan or state workers' compensation arrangement that is funded wholly or partially through an insurance policy or public or private fund. (viii) All group health plans of the Related Employers and their ERISA Affiliates materially comply with the requirements of Part 6 of Title I of ERISA ("COBRA"), Code Section 5000, the Health Insurance Portability and Accountability Act, and any other comparable domestic or foreign Laws; no Related Employer has any Liability under or with respect to COBRA for its own actions or omissions or those of any predecessor or ERISA Affiliate; no Related Employer provides benefits through a voluntary employee beneficiary association as defined in Code Section 501(c)(9); no current or former employee or director (or beneficiary of any of the foregoing) of any Related Employer is now, or after completing additional service or applying at a future date will be, entitled to <PAGE> 22 Page 27 of 66 receive any post-employment benefits from any Related Employer, including death or medical benefits (whether or not insured) beyond retirement or other termination of employment, other than as applicable Law or the terms of the Qualified Plan require and there have been no written or oral commitments inconsistent with the foregoing. (ix) No Related Employer has taken any action since March 31, 2005 that would have required consent under Section 5.1(i) if Section 5.1(i) had been in effect beginning as of such date. (x) No Related Employer has had any Benefit Plan or Benefit Arrangement covering any employee which plan or arrangement is subject to the Laws of any jurisdiction outside the United States. (xi) All actions to be taken under this Agreement with respect to equity or equity-based compensation (A) are permitted by the terms of the applicable Company Benefit Arrangements (or appropriate consents have been or will be obtained from the affected participants); (B) will be consistent with material communications to recipients of such compensation; and (C) will comply in all material respects with applicable Law. (d) With respect to employees of and independent contractors to the Related Employers: (i) Each Related Employer has complied in all material respects with all applicable domestic and foreign Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including any y such Laws respecting employment discrimination, employee classification, workers' compensation, family and medical leave, the Immigration Reform and Control Act, and occupational safety and health requirements, and has complied in all material respects with all employment agreements, and no claims, controversies, investigations or suits are pending http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 28 of 66 <PAGE> or, to the Knowledge of the Company, threatened, with respect to such Laws or agreements, either by private individuals or by Governmental Entities; and all employees are at-will. (ii) No labor union has ever represented the Related Employer's employees and no collective bargaining agreement has been binding against the Related Employers; the Related Employers have not engaged in any unfair labor practice, and there is not now, nor within the past three years has there been, any unfair labor practice complaint against the Related Employers pending or, to the Knowledge of the Company, threatened, before the National Labor Relations Board or any other comparable foreign or domestic authority or any workers' council. 23 (iii) All persons who have performed services for the Related Employers while classified as independent contractors have satisfied the requirements of Law to be so classified, and the applicable Related Employer has fully and accurately reported their compensation on IRS Forms 1099 or other applicable Tax forms for independent contractors when required to do so. (iv) Since January 1, 2004, no Related Employer has effectuated (A) a plant closing as defined in the Worker Adjustment and Retraining Notification Act of 1988, as amended from time to time (the "WARN Act") affecting any site of employment or one or more operating units within any site of employment of the Company or (B) a mass layoff as defined in the WARN Act, nor has any Related Employer been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state or local Law. Since January 1, 2004, the Related Employers have provided notices under the WARN Act as described in Section 3.9(d)(iv) of the Company Disclosure Schedule. (v) There are no loans or extensions of credit (other than (A) for routine business expenses or (B) under credit cards issued by the Bank, in either case, in compliance with Regulation 0 under 12 C.F.R. Part 215) between the Related Employers and any current director, officer, or employee in excess of $1,000, and any such loans or extensions comply with applicable Law. United States are 3. 9 (d) (vi) of the immigration status States who are not (vi) All employees of the employed within the United States. citizens of the Company Disclosu of any persons citizens of the Related Employers are All persons employed United States. Section re Schedule indicates employed in the United United States. in the the (vii) The Company has provided to Parent a complete and accurate list, as of the date hereof, of (A) all employees of a Related Employer who earned more than $100,000 in 2004 or who it is reasonably expected will earn more than $100,000 in 2005; (B) all officers and all directors of the Related Employers; (C) all employment agreements with any employees, hap://sec.gov/Archives/Cdgarldata/1021061/000095013405014814/C97404exv2wl .txt 7/1712007 officers, and directors; and (D) the current annual compensation (and the portions thereof attributable to salary, bonus, and other compensation respectively) of each such employee, officer or director as of (x) the date of this Agreement and (y) as of the Closing Date. Any accruals for incentive bonuses to employees of the Company for the fiscal year 2005 are accurately reflected on the Company's financial statements and will be accurately reflected on the Company's financial statements through the Closing Date. The Company has provided to Parent a complete and accurate list as of July 28, 2005 of the totals accrued for paid time off for all employees. Section 3.10 Subsidiaries. Section 3.10 of the Company Disclosure Schedule sets forth a complete and accurate list, as of the date of this Agreement, of the Company's Subsidiaries and <PAGE> 24 the Company's direct or indirect equity interest therein. All of the shares of capital stock or other equity interests of each of the Subsidiaries held by the Company or by a Subsidiary of the Company are owned by the Company or a Subsidiary of the Company free and clear of any claim, lien, charge, security interest or encumbrance of any nature whatsoever and, in the case of shares of capital stock, are fully paid and non-assessable. Section 3.11 Agreements with Regulators. Neither the Company nor any Subsidiary of the Company (i) is a party to any operating or other written agreement, consent decree or memorandum of understanding with, or any commitment letter or similar undertaking to, or is subject to any cease-and-desist or other order or directive by, or is a recipient of any extraordinary supervisory letter from, or has adopted any policies, procedures or board resolutions at the request of, any Governmental Entity which restricts in any material respect the conduct of its business, or in any manner relates to its capital adequacy, its policies, its management or its business (each, a "Regulatory Agreement"), or (ii) has, since December 31, 2001, been advised by any Governmental Entity that it is considering issuing or requesting any such Regulatory Agreement. Section 3.12 Absence of Certain Changes or Events. Except as permitted by Section 5.1, since March 31, 2005 (a) the Company and its Subsidiaries have conducted their respective businesses in the ordinary course consistent with their past practices and (b) there has not been (i) any change, circumstance or event which has had, or would reasonably be expected to have, a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, or (ii) any other action or event that would have required the consent of Parent pursuant to Section 5.1 had such action or event occurred after the date of this Agreement. Section 3.13 Board Approval. The Board of Directors of the Company, by resolutions duly adopted by unanimous vote of those voting at a meeting duly called and held (the "Company Board Approval"), has (i) determined that this Agreement and the Merger are fair to and in the best interests of Company and its stockholders and declared the Merger to be advisable, (ii) approved this Agreement and the Merger in accordance with the provisions of the DGCL, and (iii) recommended that the stockholders of Company approve this Agreement (including the Merger) and directed that such matter be submitted for consideration by Company stockholders at the Company Stockholders Meeting (as defined in Section 6.1(a)), and (iv) to the extent necessary, assuming the accuracy of Parent's representations in Section 4.9, adopted a resolution or taken such action having the effect of causing the Company not to be subject to any state takeover Law or similar Law or similar provision in the Certificate of Incorporation that might otherwise apply to this Agreement, the Stockholder Page 29 of 66 http://sec.gov/Archivesledgarldata/1021061/0000950134050148l4lc97404exv2wl .txt 7/17/2007 Page 30 of 6 6 Agreement, the Merger or the Bank Merger or any other transactions contemplated by this Agreement or the Stockholder Agreement. Section 3.14 Vote Required. Assuming the accuracy of Parent's representations in Section 4.9, the affirmative vote of the holders of a majority of the voting power of the outstanding Company Common Stock and the outstanding Company Series C Preferred Stock (voting on an as converted to Company Common Stock basis), voting together as a single class (the "Required Company Vote"), is the only vote of the holders of any class or series of <PAGE> 25 Company Capital Stock necessary to approve and adopt this Agreement and the transactions contemplated hereby (including the Merger). Section 3.15 Properties. The Company or oni good and marketable title to all the properties and latest audited balance sheet included in the Compan,. to the date of this Agreement as being owned by the Subsidiaries or acquired after the date thereof that Company's business on a consolidated basis (except 7 disposed of since the date thereof in the ordinary clear of all claims, liens, charges, security inters nature whatsoever, except (A) statutory liens secur: liens on assets of Subsidiaries of the Company whicl ordinary course of their banking business, (C) lien: payable or for taxes being contested in good faith : have been made and (D) such imperfections or irregu. liens, charges, security interests or encumbrances of its Subsidiaries W has assets reflected in the SEC Documents filed prior Company or one of its are material to the roperties sold or otherwise ourse of business), free and sts or encumbrances of any ng payments not yet due, (B) are banks incurred in the for taxes not yet due and or which adequate reserves arities of title, claims, s do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, and (ii) is the lessee of all leasehold estates reflected in the latest audited financial statements included in such Company SEC Documents or acquired after the date thereof which are material to its business on a consolidated basis (except for leases that have expired by their terms since the date thereof) and is in possession of the properties purported to be leased thereunder, and each such lease is, to the Knowledge of the Company, valid and in full force and effect without material existing default thereunder by the lessee or the lessor, and enforceable against the Company or the applicable Subsidiary of the Company and, to the Company's Knowledge, against the other parties thereto, in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equitable principles. Section 3.16 Company Information. The information relating to the Company and its Subsidiaries that is provided by the Company or any of its Affiliates or representatives for inclusion in the Proxy Statement or any other document filed with any Governmental Entity in connection with the transactions contemplated by this Agreement will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Proxy Statement will comply in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by the_Company with respect to statements made or incorporated by reference therein based on information supplied by Parent specifically for inclusion or incorporation by reference in the Proxy Statement. Section 3.17 Intellectual Property. The Company and its Subsidiaries own or have a valid license to use all trademarks, service marks and trade names (including any registrations or applications for registration of any of the http://sec. gov/Archivesledgar/data/ 1021061 /000095013405014814/c97404exv2w l .txt 7/17/2007 Page 31 of 66 foregoing) necessary to carry on their businesses substantially as currently conducted (collectively, the "Company Intellectual Property"). Neither the Company nor any such Subsidiary has received any written notice of infringement of or <PAGE> 26 conflict with, and to the Knowledge of the Company, there are no infringements of or conflicts with, the rights of others with respect to the use of any of the Company Intellectual Property. Section 3.18 Securitization Matters. (a) No registration statement, prospectus, private placement memorandum or other offering document, or any amendments or supplements to any of the foregoing (collectively, "Securitization Disclosure Documents"), utilized in connection with the offering of securities in any Company Sponsored Asset Securitization Transaction (as defined below), as of its effective date (in the case of a registration statement) or its issue date (in the case of any other such document), contained any untrue statement of any material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. Each Securitization Disclosure Document complied, as of its effective date (in the case of a registration statement) or its issue date (in the case of any other such document), in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC thereunder applicable to such Securitization Disclosure Document. As used in this Agreement, "Company Sponsored Asset Securitization Transaction" means any loan or other asset securitization transaction in which the Company or any of its Subsidiaries was an issuer, sponsor, depositor or transferor. (b) Section 3.18(b) of the Company Disclosure Schedule sets forth a true and correct list as of the date hereof of all outstanding Company Sponsored Asset Securitization Transactions, and for each such transaction a list of all outstanding securities issued therein, including securities retained by the Company and its Subsidiaries, and includes the original and current rating (where such ratings exist) and the principal amount as of the most current reporting date for each security listed thereon. (c) Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any trustee, servicer or issuer with respect to any Company Sponsored Asset Securitization Transaction has taken or failed to take any action which would reasonably be expected to affect adversely the intended tax characterization or tax treatment for federal, state or local income or franchise tax purposes of the issuer or any securities issued in any such Company Sponsored Asset Securitization Transaction. To the Knowledge of the Company, all federal, state and local income or franchise tax and information returns and reports required to be filed by the issuer, servicer or trustee relating to any Company Sponsored Asset Securitization Transactions,-and-all tax elections required to-be made in connection therewith, have been properly filed or made. Section 3.19 Covered Receivables. All currently outstanding secured or unsecured loans, advances, credit lines or credit card receivables that were originated by the Company or any of its Subsidiaries (whether or not currently held by the Company or its Subsidiaries) or acquired by the Company or any of http://sec.gov/Archivesledgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 32 of 66 its Subsidiaries from third parties (collectively, the "Receivables") were originated, solicited or acquired, as the case may be, in all material respects <PAGE> 27 in accordance with the Bank's written policies regarding such matters as in effect at the time of such origination, solicitation or acquisition, which policies are listed on Section 3.19 of the Company Disclosure Schedule, and true and complete copies of which have been provided to Parent. Each note, credit agreement or security instrument related to the Covered Receivables (as defined below) is in full force and effect and constitutes a valid, legal and binding obligation of the obligor thereunder, enforceable against such obligor in accordance with the terms thereof, except, in the case of enforceability, as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar Laws affecting creditors' rights and remedies generally and except for failures to be in full force and effect or enforceable that, individually or in the aggregate, would not reasonably be expected to have more than a de minimis effect on the Company or any of its Subsidiaries. The Company has in all material respects kept complete and accurate books and records in connection with the Covered Receivables. To the Knowledge of the Company, there are no oral modifications or amendments related to the Covered Receivables that are not reflected in the Company's records. To the Knowledge of the Company, no defenses as to the enforceability of any Covered Receivables have been asserted that are not reflected in the Company's records. To the Knowledge of the Company, there have been no acts or omissions which would give rise to any claim or right of rescission, set-off, counterclaim or defense. As used in this Agreement, "Covered Receivables" means those receivables that are currently owned by the Company, any of its Subsidiaries or the Metris Master Trust. Section 3.20 Servicing Rights. (a) The Bank is the sole owner and holder of the Bank Servicing Rights (as defined below), subject to the terms and conditions relating to servicing in the Company Sponsored Asset Securitization Transaction documents, with respect to the Covered Receivables that have been sold to the Metris Master Trust. The Bank Servicing Rights have not been assigned or pledged, and the Bank has good and marketable interest in and to the Bank Servicing Rights. The Bank does not service any receivables other than the Covered Receivables. As used in this Agreement, "Bank Servicing Rights" means, with respect to each Covered Receivable, any and all of the following: (i) all rights to service such Covered Receivable; (ii) all rights to receive servicing fees, reimbursements or indemnification for servicing such Covered Receivable; (iii) possession and use of any and all servicing files pertaining to such Covered Receivable; and (iv) all rights, powers and privileges incident to any of the foregoing. (b) No document under any Company Sponsored Asset Securitization Transaction contains any provisions under which any party has recourse against the Bank or any of its Affiliates for losses relating to their servicing of the Covered Receivables or the performance of the Covered Receivables being serviced; provided that the fact that the Bank or any of its-Affiliates-holds a residual or subordinate interest that may experience reduced payments as a result of such losses or a cash collateral account or similar account subject to reduction as a result of such losses shall not be deemed to represent a right of recourse against the Bank or any of its Affiliates by any party. http://sec.govIArchivesledgarldata/102106110000950134050148l 4lc97404exv2w 1.txt 7/17/2007 Page 33 of 6C <PAGE> 28 Section 3.21 Environmental Matters. (a) Each of the Company and its Subsidiaries is and has been in compliance in all material respects with all applicable Laws and with all applicable permits, licenses, variances, exemptions and approvals, in each case relating to (i) the protection, investigation or restoration of the environment, human health and safety, or natural resources or (ii) the handling, use, storage, treatment, manufacture, transportation, presence, disposal, release or threatened release of any Hazardous Materials (as defined below) in the environment or workplace ("Environmental Laws"). (b) There is no suit, claim, action or proceeding pending or, to the Knowledge of the Company, threatened, before any Governmental Entity or other forum in which the Company or any of its Subsidiaries has been or, with respect to threatened proceedings, is reasonably likely to be, named as a defendant (i) for alleged noncompliance (including by any predecessor) with any Environmental Laws or (ii) relating to the release, threatened release or exposure of any Hazardous Material whether or not occurring at or on a site owned, leased or operated by the Company or any of its Subsidiaries (or any of their predecessors). any of their respective current or former properties, there was no release or threatened release of Hazardous Materials in, on, under or affecting any such property which could reasonably be expected to require remediation by the Company or any Subsidiary of the Company pursuant to any Environmental Law. (c) To the Knowledge of the Company, during the period of the Company's or any of its Subsidiaries' ownership or operation of any of their respective current or former properties, there has been no release of Hazardous Materials in, on, under or affecting any such property, which could reasonably be expected to require remediation by the Company or any Subsidiary of the Company pursuant to any Environmental Law. To the Knowledge of the Company, prior to the period of the Company's or any of its Subsidiaries' ownership or operation of (d) Section 3.21(d) of the Company Disclosure Schedule sets forth a complete and accurate list of all Phase I .environmental investigations and reports relating to premises currently or previously owned or operated by the Company or any of its Subsidiaries (whether conducted by or on behalf of the Company or any of its Subsidiaries or a third party, and whether done at the initiative of the Company or any of its Subsidiaries or directed by a Governmental Entity or other third party) which were issued or conducted during the past five years and of which the Company or any of its Subsidiaries has possession or to which the Company or any of its Subsidiaries has access. A complete and accurate copy of each such report has been provided to Parent. Other than those items listed in Section 3.21(d) of the Company Disclosure Schedule, there are no other documents that contain any environmental, human health and safety, or natural resources reports, investigations or audits relating to premises-currently or previously owned or operated by the Company or any of its Subsidiaries (whether conducted by or on behalf of the Company or any of its Subsidiaries or a third party, and http://sec.govIArchivesledgarldata/1021061/000095013405014814lc97404exv2wl.txt 7/17/2007 Page 34 of 6C <PAGE> 29 whether done at the initiative of the Company or any of its Subsidiaries or directed by a Governmental Entity or other third party) which were issued or conducted during the past five years and of which the Company or any of its Subsidiaries has possession or to which the Company or any of its Subsidiaries has access. (e) As used in this Agreement, "Hazardous Materials" means any substance that is (i) listed, classified, regulated or which falls within the definition of a "hazardous substance," "hazardous waste" or "hazardous material" pursuant to any Environmental Law, (ii) any petroleum product or by-product, asbestos-containing material, lead-containing paint, pipes or plumbing, polychlorinated biphenlys, radioactive materials or radon, or (iii) any other chemicals, pollutants, contaminants, wastes or toxic substances or materials which are the subject of regulatory action by any Governmental Entity pursuant to any Environmental Law. Section 3.22 Brokers or Finders. No agent, broker, investment banker, financial advisor or other firm or Person retained by the Company and/or any Subsidiary of the Company is or will be entitled to any broker's or finder's fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement, except Goldman, Sachs & Co. and UBS Securities LLC, all of whose fees and expenses shall be paid by the Company. The Company has delivered to Parent a complete and accurate copy of all agreements pursuant to which Goldman, Sachs & Co. or UBS Securities LLC is entitled to any fees and expenses in connection with any of the transactions contemplated by this Agreement. Section 3.23 Derivative Transactions. All Derivative Transactions (as defined below) entered into by the Company or any of its Subsidiaries were entered into in accordance with applicable rules, regulations and policies of relevant Governmental Entities and in accordance with the applicable investment, securities, commodities, risk management and other policies, practices and procedures of the Company and its Subsidiaries. The Company and each of its Subsidiaries have duly performed in all material respects all of their obligations under the Derivative Transactions to the extent that such obligations to perform have accrued. There are no material breaches, violations or defaults by the Company or any of its Subsidiaries under any Derivative Transactions, and, to the Knowledge of the Company, there are no material breaches, violations or defaults by any counterparty to the Company or any of its Subsidiaries under any Derivative Transaction. There are no allegations or assertions by the Company or any of its Subsidiaries of any material breach, violation or default by any counterparty to the Company or any of its Subsidiaries under any Derivative Transactions, and to the Knowledge of the Company, there are no allegations or assertions by the counterparty to the Company or any of its Subsidiaries of any material breach, violation or default by the Company or any of its Subsidiaries under any Derivative Transaction. As used in this Agreement, "Derivative Transactions" means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, credit-related events or conditions or any indexes, or any other similar transaction or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any <PAGE> 30 debt or equity instruments evidencing or embedding any such types of http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl .tKt 7/17/2007 Page 35 of 6C transactions, and any credit support, collateral or other similar arrangements related to such transactions. Section 3.24 Opinions, The Board of Directors of the Company has received the opinions of Goldman, Sachs & Co. and UBS Securities LLC, each dated the date of this Agreement, to the effect that, as of such date, the Per Common Share Price is fair, from a financial point of view, to the holders of Company Common Stock, signed copies of which opinions will be delivered to Parent solely for informational purposes following receipt thereof by the Company. Section 3.25 Controls. (a) Since December 31, 2004, the Company and each of its Subsidiaries has had in place "disclosure controls and procedures" (as defined in Rule 13a-15(e) promulgated under the Exchange Act) designed to ensure that information required to be disclosed by each of the Company and MRI in the reports that it files or submits to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to the Company's and MRI's management as appropriate to allow timely decisions regarding required disclosure. (b) Each of the Company and MRI (i) maintains a system of "internal control over financial reporting" (as defined in Rule 13a-15(f) promulgated under the Exchange Act) designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including policies and procedures that (A) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of each of the Company's and MRI's assets, (B) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and, in the case of the Bank, RAP, and that receipts and expenditures are being made only in accordance with authorizations of each of the Company's and MRI's management and directors and (C) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's or MRI's assets that could have a material effect on their financial statements and (ii) has disclosed, based on its most recent evaluation prior to the date hereof, to its independent auditors and its audit committee (A) any significant deficiencies or material weaknesses in the design or operation of its internal control over financial reporting that are reasonably likely to adversely affect its ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in its internal control over financial reporting. Section 3.26 Insurance. Each of the Company and its Subsidiaries maintains insurance with reputable insurance carriers against such risks and in such amounts as management of the <PAGE> 31 Company reasonably believes to be prudent in accordance with industry practice, adequate for all normal risks incident to the current businesses of the Company and its Subsidiaries and their respective properties and assets, and appropriate for the businesses currently conducted by the Company and its Subsidiaries. Section 3.26 of the Company Disclosure Schedule sets forth a list of all insurance policies maintained by the Company and its Subsidiaries as of the date http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 36 of 6C hereof (the "Insurance Policies") and the coverages under each Insurance Policy. The Company has provided to Parent a true and complete list of the history of any claims (other than de minimis claims) made and claims (other than de minimis claims) paid under the Insurance Policies since December 31, 2001. Each Insurance Policy is outstanding and in full force and effect (other than due to the ordinary expiration of the term thereof) and enforceable, to the Company's Knowledge, against the insurers thereto in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equitable principles. All premiums due on each Insurance Policy have been paid in full. Each of the Company and its Subsidiaries has complied in all material respects with the provisions of each Insurance Policy under which it is the insured party. No insurer under any Insurance Policy has cancelled or disclaimed liability under any such policy or indicated any intent to do so or not to renew any such policy. To the Knowledge of the Company, all material claims under the Insurance Policies have been filed in a timely fashion. Section 3.27 No Undisclosed Liabilities; Reserves. Except as disclosed in the Company SEC Documents filed prior to the date of this Agreement, and except for normal recurring liabilities incurred since June 30, 2005 in the ordinary course of business, the Company and its Subsidiaries do not have any liabilities, either accrued, contingent or otherwise (whether or not required to be reflected in the financial statements in accordance with generally accepted accounting principles, RAP or SAP, as applicable), and whether due or to become due that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole. The reserves, allowances and other liabilities established or reflected on the financial statements contained in the Company SEC Documents, the Bank RAP Documents and the Insurance SAP Documents were, as of the respective dates of such documents, (i) determined in accordance with generally accepted accounting principles, RAP or SAP, as applicable, and (ii) established based on good business judgment and industry practice and with past practices and experiences of the Company and its Subsidiaries. Section 3.28 Insurance Matters. <PAGE> (a) To the extent required under applicable Law regulating the business of insurance, all policies, binders, slips, certificates, annuity contracts and participation agreements and other agreements of insurance (including all applications, supplements, endorsements, riders and ancillary agreements in connection therewith), whether individual or group, that are issued by the Company or any Insurance or Warranty Subsidiary, and any and all marketing materials related thereto, are on forms that comply in all material respects with such applicable Laws and, as to premium rates established by the Company or any Insurance or Warranty Subsidiary that are required to be filed with 32 or approved by any applicable Insurance Authority, the premiums charged conform in all material respects, with such applicable Law. (b) With respect to reinsurance and coinsurance treaties or agreements, including retrocessional agreements, to which the Company or any Insurance or Warranty Subsidiary is a party or under which the Company or any Insurance or Warranty Subsidiary has any existing rights, obligations or liabilities, the Company and the Insurance and Warranty Subsidiaries were entitled to take credit in their most recent Insurance SAP Document for that portion of their ceded liabilities under each such reinsurance or coinsurance treaty as to which credit was taken in such Insurance SAP Document. http://sec.gov/Archivesledgarldata/1021061/000095013405014814lc97404exv2wl .txt 7/17/2007 Page 37 of 66 (c) The Company has provided to Parent a true and complete copy of any actuarial reports prepared by actuaries, independent or otherwise, with respect to the Insurance and Warranty Subsidiaries since December 31, 2001, and all attachments, addenda, supplements and modifications thereto (the "Company Actuarial Analyses"). The information and data furnished by the Company or any Insurance or Warranty Subsidiary to its independent actuaries in connection with the preparation of the Company Actuarial Analyses were complete and accurate in all material respects. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB Except as set forth in the disclosure schedule delivered by Parent and Merger Sub to the Company concurrently herewith (the "Parent Disclosure Schedule"), Parent and Merger Sub hereby, jointly and severally, represent and warrant to the Company as set forth below. Information disclosed in any section of the Parent Disclosure Schedule shall be deemed to be disclosed with respect to such other subsections of this Agreement or the Parent Disclosure Schedule only to the extent that it is reasonably apparent from a reading of such disclosure that it also qualifies or applies to such other subsections. Section 4.1 Organization, Standing and Power. Each of Parent and Merger Sub is an organization duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, other than in such jurisdictions where the failure so to qualify, either individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole. True, complete and correct copies of the Certificate of Incorporation and Bylaws of Merger Sub as in effect on the date of this Agreement have been provided to the Company. Section 4.2 Authority. <PAGE> (a) Each of Parent and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent and Merger Sub. This Agreement has been duly executed and delivered by Parent and Merger Sub and constitutes a valid and binding obligation of each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equitable principles. (b) The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, (i) result_in.any Violation pursuant to any provision of the Certificate of Incorporation or Bylaws of Parent or Merger Sub, or (ii) subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in subsection (c) of this Section 4.2, result in any Violation of any Law or any loan or credit agreement, note, mortgage, indenture, lease, employee benefit plan of Parent or other agreement, obligation, instrument, permit, http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 38 of 6E concession, franchise or license applicable to Parent or any of its Subsidiaries or their respective properties or assets except in the case of clause (ii) of this Section 4.2(b) for any such Violations that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole. (c) No consent, approval, waiver, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any other Person is required by or with respect to Parent or any of its Subsidiaries in connection with the execution and delivery of this Agreement by Parent and Merger Sub or the consummation by Parent and Merger Sub of the transactions contemplated hereby (including the Bank Merger), except for (i) the filing of applications and notices with the OCC, FDIC, and approval thereof, (ii) the filing of applications and notices with the Board of Governors of the Federal Reserve, (iii) the filing of applications and notices with the Superintendent, (iv) the filing of notices with the Minnesota DOC, (v) the filing of applications and notices with the Florida DFS and approval thereof, (vi) the filing of applications and notices with the Bermuda Monetary Authority and approval thereof, (vii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, (viii) the filing with the SEC of (A) the Proxy Statement and (B) such reports under Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby, (ix) notices or filings under the HSR Act, if applicable and (x) such other consents, approvals, waivers, orders, authorizations, registrations, declarations and filings the failure of which to obtain or make would not reasonably be expected to have a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole. <PAGE> 34 Section 4.3 Information Supplied. The information relating to Parent and its Subsidiaries that is provided by Parent for inclusion in the Proxy Statement or any other document filed with any Governmental Entity in connection with the transactions contemplated by this Agreement will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Section 4.4 Legal Proceedings. Except as disclosed in any Parent SEC Report filed prior to the date of this Agreement, there is no suit, action, claim, investigation or proceeding (whether judicial, arbitral, administrative or other) pending or, to the Knowledge of Parent (as defined below), threatened, against or affecting Parent or any Subsidiary of Parent which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against Parent or any Subsidiary of Parent that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole. As used in this Agreement, "Knowledge of Parent" means the actual knowledge of the executive officers of the Parent and the individuals with primary responsibility over operational or functional areas of the Parent. "Parent SEC Report" means all required reports, schedules and other documents Parent has filed with the SEC pursuant to the Exchange Act since December 31, 2001. Section 4.5 Ownership of Merger Sub; No Prior Activities. Merger Sub is a direct wholly owned subsidiary of Parent. Merger Sub has not conducted any activities other than in connection with the organization of Merger Sub, the http://sec.gov/Archives/edgar/data/1021061/000095013405014814/C97404exv2wl .txt 7/17/2007 Page 39 of 66 negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. Merger Sub has no Subsidiaries. Section 4.6 Compliance with Applicable Laws. Since January 1, 2004, Parent has not (i) violated in any material respect any Laws applicable to the conduct of its business or the ownership or operation of its properties or assets or (ii) received any written or, to the Knowledge of Parent, oral notice from any Governmental Entity that alleges any material noncompliance (or that Parent is under investigation by any such Governmental Entity for such alleged noncompliance) with any Laws applicable to the conduct of its business or the ownership or operation of its properties or assets. Section 4.7 Financing. As of the date hereof, Parent has, and will have at the Closing Date, sufficient cash or other sources of immediately available funds to enable it to pay the Merger Consideration as required by this Agreement. Section 4.8 Brokers or Finders. No agent, broker, investment banker, financial advisor or other firm or Person retained by Parent and/or Merger Sub is or will be entitled to any broker's or finder's fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement, except HSBC Securities (USA) Inc., all of whose fees and expenses shall be paid by Parent. <PAGE> 35 Section 4.9 Ownership of Company Capital Stock. Except for the Stockholder Agreement, (i) neither Parent nor any of its "affiliates" or "associates" (as such terms are defined for purposes of the Exchange Act), (A) "beneficially owns" (as such term is defined for purposes of section 13(d) of the Exchange Act), directly or indirectly, or (B) is a party to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, in each case, shares of Company Capital Stock representing in excess of 15% of the voting power of the shares of Company Capital Stock outstanding, and (ii) Parent does not "beneficially own" (as such term is defined for purposes of Section 13(d) of the Exchange Act), directly or indirectly, shares of Company Capital Stock representing in excess of 5% of the voting power of the shares of Company Capital Stock outstanding. ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS Section 5.1 Covenants of the Company. During the period from the date of this Agreement and continuing until the Effective Time, the Company agrees as to itself and its Subsidiaries that, except (i) as expressly contemplated or permitted by this Agreement, (ii) in connection with any Company Sponsored Asset Securitization Transaction in the ordinary course of business consistent with past practice, (iii) as set forth in Section 5.1 of the Company Disclosure Schedule, or (iv) to the extent that Parent shall otherwise consent in writing: (a) Ordinary Course. The Company shall and shall cause its Subsidiaries to carry on their respective businesses in the ordinary course consistent with past practice since January 1, 2003 and use commercially reasonable efforts to (x) preserve intact their respective business organizations, (y) maintain their rights, franchises, licenses and other authorizations issued by Governmental Entities and (z) preserve their relationships with employees, customers, suppliers and others having business dealings with them to the end that their goodwill and ongoing businesses shall not be impaired in any material respect at the Effective Time. The Company shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new material line http://sec.gov/Archives/edgar/data/i 021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 40 of 66 of business, (ii) change its or any of its Subsidiaries' lending, investment, underwriting, risk and asset-liability management and other material banking or operating policies in any respect which is material to the Company or such Subsidiary, except as required by Law or by policies imposed by a Governmental Entity, (iii) make any changes in significant accounting methods, principles or practices, except to the extent required by a change in generally accepted accounting principles, RAP or SAP, (iv) incur or commit to any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $250,000 in the aggregate for the Company and its Subsidiaries, taken as a whole, other than as provided in the Company's 2005 annual budget, a true and complete copy of which the Company has provided to Parent (the "2005 Company Budget"), (v) except as otherwise permitted by this Section 5.1, enter into, modify, amend, extend or terminate any agreement or agreements for goods, property, property rights, or services between the Company or any of its Subsidiaries and (A) any director, officer, or any Affiliate of such Person, or (B) any other Person which agreement obligates the Company, or any Affiliate of the Company, to pay in excess of $500,000 in any twelve month period, other than, in 36 <PAGE> the case of agreements covered by clause (v)(B), actions that are provided for in the 2005 Company Budget, (vi) knowingly waive, release or assign any material right or claims (including any write-off or other compromise of accounts receivable of the Company or any of its Subsidiaries), (vii) initiate, compromise or settle any material investigation, litigation, arbitration proceeding or other proceeding with any Government Entity, provided that the foregoing shall only apply to a compromise or settlement if it would (A) involve amounts that exceed the corresponding reserves as of the date of this Agreement or (B) result in a material restriction on the Company's or any of its Subsidiaries' business, (viii) open or close any facility or office, (ix) fail to maintain insurance at levels substantially comparable to levels existing as of the date of this Agreement, (x) fail to pay accounts payable and other obligations in the ordinary course of business, or (xi) enter into any new co-branding or secondary issuer arrangement under which the Company or any of its Subsidiaries reasonably expects to (A) originate more than 50,000 accounts in any twelve-month period or (B) make payments to the counterparty to such co-branding or secondary issuer arrangement in amounts in excess of $5 million in any twelve-month period. (b) Dividends; Changes in Stock. Except for declaration and payment of regular quarterly dividends on the Company Series C Preferred Stock in accordance with the Series C Certificate of Designation, the Company shall not, and shall not permit any of its Subsidiaries to, (i) declare or pay any dividends on or make other distributions in respect of any Company Capital Stock, except for dividends or distributions paid by wholly-owned Subsidiaries of the Company to the Company, or to other wholly-owned Subsidiaries of the Company, (ii) split, combine, reclassify, subdivide, recapitalize or exchange any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or any other of its securities, or (iii) repurchase, redeem or otherwise acquire, or permit any Subsidiary of the Company to redeem, repurchase or otherwise acquire any shares of its capital stock or any of its other securities or any securities convertible into or exercisable for any shares of its http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl.txt 7/17/2007 Page 41 of 66 <PAGE> capital stock or any of its other securities. (c) Issuance of Securities. The Company shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, grant, pledge or authorize or propose the issuance, delivery, sale, grant or pledge of, any shares of its capital stock, any Voting Debt, any stock appreciation rights, or any securities convertible into or exercisable or exchangeable for, or any rights, warrants or options to acquire, any such shares or Voting Debt, or enter into any agreement with respect to any of the foregoing, other than (i) the issuance of Company Common Stock upon the exercise or settlement of Company Stock Options, Company Restricted Stock Units or other equity rights or obligations under grants made on or before March 31, 2005 under the Company Stock Plans or Company Plans in accordance with the terms of the applicable Company Stock Plan or Company Plan in effect on the date of this Agreement, (ii) the declaration and payment of regular quarterly dividends on the Company Series C Preferred Stock in accordance with the Series C Certificate of Designation, and (iii) issuances by one of the Company's wholly- 37 owned Subsidiaries of such Subsidiary's capital stock to its parent or to another wholly-owned Subsidiary of the Company. (d) Governing Documents, Etc. The Company shall not amend or propose to amend the Certificate of Incorporation or Bylaws and shall not permit any of-its-Subsidiaries to amend or propose to amend its Organizational Documents. The Company shall not enter into, and, except as permitted by Section 5.1(e), (f) or (j), shall not permit any of its Subsidiaries to enter into, a plan of consolidation, merger or reorganization with any Person other than a wholly-owned Subsidiary of the Company. (e) No Acquisitions. The Company shall not, and shall not permit any of its Subsidiaries to, acquire or agree to acquire, by merging or consolidating with, by purchasing a substantial equity interest in or a substantial portion of the assets of, by forming a partnership or joint venture with, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any material amount of assets; provided, however, that the foregoing shall not prohibit (i) foreclosures and other debt-previously-contracted acquisitions in the ordinary course of business or (ii) acquisitions of financial assets and securitization activities in the ordinary course of business consistent with past practice. (f) No Dispositions. Other than (i) dispositions referred to in the Company SEC Documents filed prior to the date of this Agreement and (ii) securitization activities and other activities in the ordinary course of business consistent with past practice, the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, license, pledge, assign, encumber or otherwise dispose of, or agree to sell, lease, license, pledge, assign, encumber or otherwise dispose of, any of_its assets (including capital stock of its Subsidiaries and indebtedness of others held by the Company and its Subsidiaries) which are material, individually or in the aggregate, to the Company. (g) Indebtedness. The Company shall not, and shall not permit any of its Subsidiaries to, incur, create, suffer to exist or assume any indebtedness for borrowed money (or modify any of the material http://sec.govIArchivesledgaz/data/1021061/000095013405014814IC97404exv2wl .tct 7/17/2007 terms of any such outstanding indebtedness), guarantee any such indebtedness or issue or sell any debt securities or any warrants or rights to acquire any debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of others, other than (i) indebtedness of any Subsidiary of the Company to the Company or to another Subsidiary of the Company, or (ii) debt securities maturing not more than 90 days after the date of issuance that are sold in the ordinary course of business consistent with past practice. <PAGE> (h) Other Actions. The Company shall not, and shall not permit any of its Subsidiaries to, take any action that would, or would reasonably be expected to, result in any of its representations and warranties set forth in this Agreement being or becoming untrue, subject to such exceptions as do not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, or in any of the conditions to the Merger set forth in 38 Page 42 of 66 Article VII not being satisfied or in a violation of any provision of this Agreement, or (unless such action is required by applicable Law) which would adversely affect the ability of the parties to obtain any of the Requisite Regulatory Approvals. The Company shall not, and shall not permit any of its Subsidiaries to, (i) other than as permitted pursuant to Section 5.1(a)(vii), pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business or in accordance with their terms as in effect on the date of this Agreement, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company SEC Documents filed prior to the date of this Agreement (to the extent so reflected or reserved against) or incurred since the date of such financial statements in the ordinary course of business or (ii) waive any material benefits of, modify in any adverse respect, fail to enforce, or consent to any matter with respect to which its consent is required under, any confidentiality, standstill or similar agreements to which the Company or any of its Subsidiaries is a party. (i) Compensation and Benefit Plans. During the period from the date of this Agreement and continuing until the Effective Time, the Company agrees as to itself and its Subsidiaries that it will not, without the prior written consent of Parent, (i) other than in the ordinary course of business or as otherwise provided in this Agreement, enter into, adopt, amend (except for such amendments as may be required by Law) or terminate any Company Plan or Company Benefit Arrangement, (ii) except for normal payments, awards and increases in the ordinary course of business or as required by any Company Plan or Company Benefit Arrangement as in effect as of March 31, 2005, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any Company Plan or Company Benefit Arrangement as in effect as of March 31, 2005, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing, and (iii) enter into or renew any contract, agreement, commitment or arrangement (other than a renewal occurring in accordance with the terms thereof) providing for the payment to any director, officer or employee of such party of compensation or benefits contingent, or the terms of which are materially altered, upon the http://sec.gov/Archives/edgar/data/I 021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 43 of 66 <PAGE> occurrence of any of the transactions contemplated by this Agreement. (j) No Liquidation or Reorganization. Other than the execution and delivery of a merger agreement and related documents with respect to the Bank Merger, the Company shall not, and shall not permit any of its Subsidiaries to, enter into an agreement with respect to any merger, consolidation or business combination, or any acquisition or disposition of all or substantially all of the assets or securities of the Company or any of its Subsidiaries, or adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, restructuring, recapitalization or reorganization. (k) Taxes. Except as consistent with past practices or to the extent that Parent shall otherwise consent in writing (which consent shall not be unreasonably delayed or 39 withheld), the Company shall not, and shall not permit any of its Subsidiaries to, make or rescind any material tax election (except as required by Law), settle or compromise any material tax liability or amend any material tax return. (1) Other Agreements. The Company shall not, and shall not permit any of its Subsidiaries to, agree to, or make any commitment to, take, or authorize, any of the actions prohibited by this Section 5.1. Section 5.2 Investigation. During the period from the date of this Agreement and continuing until the Effective Time, the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (a) obtain notice from the Staff of the SEC that it will not recommend that charges be brought against the Company and its Subsidiaries with respect to the allegations against the Company set forth in the "wells Notices" dated as of July 12, 2005 with respect to the Company and one or more of its Subsidiaries (the "SEC Investigation") and (b) in the event the notice referred to in clause (a) is not obtained by September 30, 2005 and is not reasonably likely to be obtained in the Company's good faith determination after consultation with its outside legal counsel, obtain a final court or administrative order as to the Company and its Subsidiaries with respect to the SEC Investigation. The Company shall use commercially reasonable efforts to confer and consult on a regular basis with Parent with respect to the SEC Investigation, to keep the Parent apprised of the status of the SEC Investigation and to promptly advise Parent of any material event, change, circumstance or development relating to or arising from the SEC Investigation. ARTICLE VI ADDITIONAL AGREEMENTS Section 6.1 Preparation of Proxy Statement; Stockholders Meeting. (a) In accordance with the Company's Certificate of Incorporation and Bylaws, the Company shall promptly call, give notice of, convene and hold a meeting of its stockholders as promptly as reasonably practicable--for the purpose of obtaining the Required Company Vote with respect to the transactions contemplated by this Agreement (the "Company Stockholders Meeting"). (b) The Company will promptly prepare and file all materials required to be filed under the Exchange Act as well as all other applicable state or foreign securities Laws and the rules and http://sec.goy/Archives/edgar/data/1021061/0000950134050148 I4/c97404exv2w l .txt 7/17/2007 regulations thereunder, and Parent and Merger Sub will cooperate with the Company in the preparation of such materials. Such materials shall include a proxy statement in the form mailed by the Company to its stockholders, together with any and all amendments or supplements thereto, which materials are herein referred to as the "Proxy Statement." The Company will use reasonable best efforts to file the initial Proxy Statement with the SEC within twenty-one (21) days of the date hereof and to respond promptly to any comments of the SEC with respect to the Proxy Statement, and will cause the Proxy Statement to be mailed to the Company's stockholders as promptly as reasonably practicable following completion of any SEC review of the Proxy Statement. <PAGE> 40 If at any time prior to the Effective Time any fact or event relating to the Company or any of its Affiliates which causes the Company to determine to prepare a supplement to the Proxy Statement should be discovered by the Company or should to the Knowledge of the Company occur, the Company shall promptly inform Parent of such fact or event. Page 44 of 6C (c) Parent and Merger Sub will furnish the Company with such information concerning Parent and its Subsidiaries as is necessary in order to cause the Proxy Statement, insofar as it relates to Parent and its Subsidiaries, to comply with the applicable provisions of the Exchange Act and the rules and regulations thereunder. Parent and Merger Sub agree to promptly advise the Company if, at any time prior to the Company Stockholders Meeting, any information provided by them or the Company in the Proxy Statement is or becomes incorrect or incomplete in any material respect and to provide the Company with the information needed to correct such inaccuracy or omission. Parent and Merger Sub will furnish the Company with such supplemental information as may be necessary in order to cause the Proxy Statement, insofar as it relates to Parent and Merger Sub, to comply with the Exchange Act and the rules and regulations thereunder after the mailing thereof to the stockholders of the Company. (d) The Company will, through its Board of Directors, recommend to its stockholders the approval and adoption of this Agreement and the consummation of the transactions contemplated hereby; provided, however, that the Company's Board of Directors may withdraw, modify, condition or refuse to make such recommendation if it determines in good faith after consultation with its outside legal counsel that its fiduciary obligations require it to do so. Notwithstanding anything to the contrary contained herein, unless this Agreement has been terminated, this Agreement shall be submitted to the stockholders of the Company at the Company Stockholders Meeting for the purpose of voting on the approval and adoption of this Agreement and the consummation of the transactions contemplated hereby, and nothing contained herein shall be deemed to relieve the Company of such obligations. Section 6.2 Advice of Changes; Government Filings. Each party shall confer on a regular basis with the other, report on operational matters and promptly advise the other orally and in writing of any change or event which has or would reasonably be expected to have, a-Material-Adverse-Effect on such party, would materially impair or delay completion of the transactions contemplated herein or would cause or constitute a material breach of any of the representations, warranties or covenants of such party contained herein; provided, however, that any noncompliance with the foregoing shall not constitute the failure to be satisfied of a condition set forth in Article VII or give rise to any right of termination under Article VIII unless the http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl.txt 7/17/2007 Page 45 of 6C underlying breach shall independently constitute such a failure or give rise to such a right. In exercising the foregoing right, each of the parties hereto agrees to act reasonably and as promptly as practicable. Each party hereto agrees that to the extent practicable it will consult with the other parties hereto with respect to the obtaining of all permits, consents, approvals and authorizations of all third parties and Governmental Entities necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the other <PAGE> 41 parties apprised of the status of matters relating to completion of the transactions contemplated hereby. Section 6.3 Control of the Company's Business. Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' operations. Section 6.4 Access to Information. (a) Upon reasonable notice, the Company shall afford to the representatives of Parent reasonable access at reasonable times, during normal business hours during the period prior to the Effective Time, to the Company-Employees and the Company's properties, books, contracts and records and, during such period, the Company shall not be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of its customers, jeopardize the attorney-client privilege of the institution in possession or control of such information or contravene any Law or binding agreement to which the Company is subject. The parties will make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply, including, to the extent possible, entering into appropriate agreements for the disclosure of non-public information of any Governmental Entity, including OCC examination reports of the Bank, as may be required by such Governmental Entity. (b) Parent will hold any such information which is nonpublic in confidence to the extent required by, and in accordance with, the provisions of the letter dated January 25, 2005, between Company and HSBC North America Holdings Inc. (the "Confidentiality Agreement"), which Confidentiality Agreement will remain in full force and effect. Section 6.5 Reasonable Best Efforts. (a) Each of the Company and Parent shall, and shall cause its respective Subsidiaries to, use reasonable best efforts as promptly as practicable (i) to take, or cause to be taken, all actions necessary to comply promptly with all legal requirements which may be imposed on such party or its Subsidiaries with respect to the Merger and to consummate the transactions contemplated by this Agreement (including the Bank MergerY,_(ii) to-obtain (and to cooperate with each other party to obtain) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity and/or any other public or private third party which is required to be obtained or made by such party or any of its Subsidiaries in connection with the Merger and the transactions contemplated by this Agreement (including the Bank Merger), provided, that this clause (ii) shall not apply to the SEC http://sec.gov/A.rchivesledgarldata/1021061 /000095013405014814/c97404exv2wl .txt 7/17/2007 Page 46 of 66 <PAGE> Investigation, which is covered by Section 5.2, (iii) to make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement, the Merger and the Bank Merger required (A) under the 42 Exchange Act and any other applicable federal and state securities Laws, (B) under the HSR Act and any related governmental request thereunder, if applicable, (C) with the Secretary of State of the State of Delaware, SEC, OCC, FDIC, Board of Governors of the Federal Reserve, Superintendent, Minnesota DOC, Florida DFS and Bermuda Monetary Authority and (D) under any other applicable Law, and (iv) to execute or deliver any additional instruments that the other parties, or any of them, may reasonably request that are necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement (including the Merger and the Bank Merger). Each of the Company and Parent will promptly cooperate with and furnish information to the other in connection with any such efforts by, or requirement imposed upon, any of them or any of their Subsidiaries in connection with the foregoing. In furtherance of the foregoing, each of the Company and Parent shall, and shall cause its respective Subsidiaries to, use reasonable best efforts to cause to be made all filings under the HSR Act, if applicable, no later than ten (10) business days after the date hereof and all other filings contemplated by clause (iii) no later than thirty (30) days after the date hereof. (b) Parent agrees to execute and deliver, or cause to be executed and delivered by or on behalf of the Surviving Corporation, at or prior to the Effective Time, those supplemental indentures and other instruments listed in Section 6.5(b) of the Company Disclosure Schedule, which supplemental indentures and other instruments are required for the due assumption of the Company's outstanding debt, guarantees and other securities to the extent required by the terms of such debt, guarantees and securities and the instruments and agreements relating thereto. (c) Each of the Company and Parent and their respective Boards of Directors shall, if any state takeover statute, similar statute or similar provision in the Certificate of Incorporation becomes applicable to this Agreement, the Stockholder Agreement, the Merger, the Bank Merger or any other transactions contemplated hereby and thereby, use reasonable best efforts to ensure that the Merger, the Bank Merger and the other transactions contemplated by this Agreement and the Stockholder Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise to minimize the effect of such statute or provision on this Agreement, the Stockholder Agreement, the Merger, the Bank Merger and any other transactions contemplated hereby and thereby. (d) The Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to take all actions necessary and appropriate to cause the Metris Companies Foundation and the Metris Companies Inc. Political Action Committee to be fully liquidated and dissolved in accordance with applicable Laws. The Company shall, and .shall cause its Subsidiaries to, continue using-commercially reasonable efforts to work toward the liquidation and dissolution of MWSI and MWSF in accordance with applicable Laws. 43 http://sec.gov/Archivesledgarldata/1021061/000095013405014814lc97404exv2wl .txt 7/17/2007 Page 47 of K <PAGE> Section 6.6 Acquisition Proposals. (a) The Company agrees that neither it nor any of its Subsidiaries nor any of the officers and directors of it or its Subsidiaries shall, and that it shall use best efforts to cause its and its Subsidiaries' employees, agents and representatives (including any investment banker, attorney or accountant retained by it or any of its Subsidiaries) not to, directly or indirectly, (i) initiate, solicit, encourage or knowingly facilitate any inquiries or the making of any proposal or offer with respect to, or a transaction to effect, a merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving it or any of its Subsidiaries (other than any such transaction permitted by Section 5.1 (e), (f) or (j)) or any purchase or sale of 10% or more of the consolidated assets (including, without limitation, stock of its Subsidiaries) of it and its Subsidiaries, taken as a whole, or any purchase or sale of, or tender or exchange offer for, its voting securities that, if consummated, would result in any Person (or the stockholders or equity holders of such Person) beneficially owning securities representing 10% or more of its total voting power (or of the surviving parent entity in such transaction) or any of its Subsidiaries (any such proposal, offer or transaction (other than a proposal or offer made by Parent or an Affiliate thereof) being hereinafter referred to as an "Acquisition Proposal"), (ii) have any discussions with or provide any confidential information or data to any Person relating to an Acquisition Proposal, or engage in any negotiations concerning an Acquisition Proposal, or (iii) approve or recommend, or propose to approve or recommend, or execute or enter into, any letter of intent, agreement in principle, merger agreement, asset purchase or share exchange agreement, option agreement or other similar agreement related to any Acquisition Proposal. (b) Notwithstanding the foregoing, the Board of Directors of the Company shall be permitted, prior to the Company Stockholders Meeting to be held pursuant to Section 6.1, and subject to compliance with the other terms of this Section 6.6 and to first entering into a customary confidentiality agreement, to engage in discussions and negotiations with, or provide any nonpublic information or data to, any Person in response to an unsolicited bona fide written Acquisition Proposal by such Person made after the date of this Agreement which the Board of Directors of the Company concludes in good faith, after consultation with a nationally recognized financial advisor and legal counsel, constitutes or is reasonably likely to result in a Superior Proposal (as defined in Section 6.6(e)), if and only to the extent that the Board of Directors of the Company determines in good faith (after consultation with outside legal counsel) that its fiduciary obligations require it to do so. (i) The Company shall notify Parent promptly (but in no event later than 24 hours) after receipt of any Acquisition Proposal, or any request for nonpublic information relating to the Company or any of its Subsidiaries by any Person that informs the Company or any of its Subsidiaries that it is considering making, or has made, an Acquisition Proposal, or any inquiry from any Person seeking to have discussions or negotiations with the Company relating to a <PAGE> 44 http://sec.gov/Archives/edgar/data/1021061/000095013405014814/C97404exv2wi .txt 7/17/2007 Page 48 of 66 possible Acquisition Proposal. Such notice shall be made orally and confirmed in writing, and shall indicate the identity of the Person making the Acquisition Proposal, inquiry or request and the material terms and conditions of any inquiries, proposals or offers. The Company shall also promptly, and in any event within 24 hours, notify Parent, orally and in writing, if it enters into discussions or negotiations concerning any Acquisition Proposal or provides nonpublic information or data to any Person in accordance with this Section 6.6(b). (ii) Nothing contained in this Section 6.6 shall prohibit the Company from taking and disclosing to its stockholders a position required by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act; provided, however, that compliance with such rules shall not in any way limit or modify the effect that any action taken pursuant to such rules has under any other provision of this Agreement, including Section 8.1(f). (c) Notwithstanding anything in this Agreement to the contrary, at any time prior to obtaining the Required Company Vote, the Board of Directors of the Company may, in response to a Superior Proposal, cause the Company to terminate this Agreement pursuant to Section 8.1(g) and concurrently or promptly thereafter enter into a definitive agreement with respect to a Superior Proposal; provided, however, that the Company shall not exercise its right to terminate this Agreement pursuant to Section 8.1(g) until the third business day following Parent's receipt of written notice (a "Notice of Superior Proposal") from the Company advising Parent that the Board of Directors of the Company has received a Superior Proposal specifying the terms and conditions of the Superior Proposal, identifying the Person making such Superior Proposal and stating that the Board of Directors of the Company intends to exercise its right to terminate this Agreement pursuant to Section 8.1(g). (d) The Company agrees that it will and will cause its Subsidiaries, and its and their officers, directors, agents, representatives and advisors to, cease immediately and terminate any and all existing activities, discussions or negotiations with any third parties conducted heretofore with respect to any proposal that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal. (e) For purposes of this Agreement, "Superior Proposal" means a bona fide written Acquisition Proposal which the Board of Directors of the Company, concludes in good faith (after consultation with its legal advisors and a nationally recognized financial advisor) (i) is more favorable to the stockholders of the Company, from a financial point of view, than the transactions contemplated by this Agreement, taking into account all the terms and conditions of such proposal and this Agreement (including any proposal by Parent to amend the terms of the Agreement) and (ii) is fully financed or reasonably capable of being fully financed, reasonably likely to receive all required approvals on a timely basis and otherwise reasonably capable of being completed on the terms proposed; provided that, for purposes of this definition of "Superior Proposal," -- - the term Acquisition Proposal shall have the meaning assigned to such term in Section 6.6(a), except that the 45 http://sec.gov/Archives/edgar/data/1021061/000095013405014814/C97404exv2wl .txt 7/17/2007 Page 49 of 66 <PAGE> reference to "10% or more" in the definition of "Acquisition Proposal" shall be deemed to be a reference to "a majority." Section 6.7 Employees; Employee Benefit Plans. (a) Through the six month anniversary of the Effective Time (except as applicable Law or third party providers require otherwise), Parent and the Surviving Corporation will provide persons employed by the Related Employers at the Effective Time ("Company Employees") annual base compensation, incentive compensation (other than equity based compensation), and Benefit Plans and Benefit Arrangements (other than equity based compensation) that are, in the aggregate, at least as favorable as those in effect immediately before the Effective Time. For purposes of.comparability, the parties agree that the determination shall not take into account any equity, equity-based, or equity measured compensation nor the level of employee contributions in effect before the Effective Time, provided any contributions required after the Effective Time and during 2005 shall not be in excess of prevailing market levels. For purposes of any seniority or length of service requirements, waiting periods, vesting periods, or differential benefits based on length of service in any such plan or policy of Parent as of the Effective Time for which a Company Employee may be eligible after the Effective Time, Parent and the Surviving Corporation shall treat service by such employee with the Company as though it had been service with Parent for all purposes under any such plan or policy to the extent the Company credited such service under its similar plans, excluding vesting, benefit accruals, or accrual or account formulas under any Pension Plan maintained by Parent, so long as this crediting of service does not violate applicable Laws and is consistent with the rules governing Benefit Plans qualified under Section 401(a) of the Code and permitted by third-party administrators and insurers. Notwithstanding any other provision herein, no provision of this Agreement shall obligate any of Parent, the Surviving Corporation or any of its Affiliates to continue the employment of any Company Employee for any period following the Effective Time or to refrain from revising the terms of any such Company Employee's employment or transferring any such Company Employees, nor shall it prevent those entities from amending or terminating any Benefit Plan or Benefit Arrangement. (b) In addition: <PAGE> (i) Any Company Employee covered by the Management Incentive Plan ("MIP") or the Annual Incentive Plan ("AIP") for Designated Corporate Officers ("Covered Employees") (each of the MIP and the AIP, as provided to Parent on May 11, 2005) shall receive a 2005 bonus payable as follows. As of the Effective Time, all Covered Employees shall be credited with a bonus based on Payout Achievement Level as set forth on Section 6.7(b) of the Company Disclosure Schedule based on the Company's Net Income, as set forth in the MIP and the AIP, with payment of such bonuses to be made on or before March 15, 2006 (or such earlier date as may be required by applicable state Law), which payment shall be made whether or not a particular Covered Employee who is 46 entitled to such bonus payment is employed at the time of http://sec.gov/Archives/edgar/data/1021061/000095013405014814/C97404exv2wl .txt 7/17/2007 Page 50 of 66 <PAGE> payment, provided that such Covered Employee has not been terminated for Cause (as defined in Section 6.7(b)(vi)) before the time of payment. In addition, all Covered Employees shall receive a prorated bonus on or before March 15, 2006 (or such earlier date as may be required by applicable state Law), to reflect the achievement of Individual Management Bonus Objectives ("MBOs") through the Effective Time, which shall be determined at the Effective Time by the Company in a manner consistent with the Company's past practice and agreed to by Parent (which agreement shall not be unreasonably withheld). By March 15, 2006 (or such earlier date as may be required by applicable state Law), all Covered Employees who are employed by Parent or its Affiliates with operations in the United States (the "U.S. Affiliates") as of December 31, 2005 shall receive a prorated bonus to cover the period from the Effective Time through December 31, 2005 ("Stub Period") and persons whose employment was terminated without cause will receive a prorated bonus for the shorter period during which the persons were employed during the Stub Period. Such prorated bonus will reflect the achievement of MBOs achieved by the Covered Employee during the Stub Period as determined by the Surviving Corporation in a manner consistent with the Company's past practice and agreed to by Parent (which agreement shall not be unreasonably withheld). (ii) For a period of 12 months following the Effective Time, any Company Employees who are offered employment with Parent or its U.S. Affiliates that would require them to relocate to a different work location that is more-than 40 miles from their current work location will be allowed to choose one of the following two options: (i) accept the position, in which case each such relocated Company Employee will be entitled to receive relocation benefits under the Company's relocation policy as in effect March 31, 2005, or (ii) decline the position and receive the severance benefit under the Company's Severance Plan as in effect on March 31, 2005, or, if applicable, as outlined in such employee's Change of Control Severance Agreement or Key Employee Severance Protection Agreement. (iii) Any Company Employee terminated without Cause within 12 months following the Effective Time who is not otherwise covered by an individual agreement with respect to severance shall be eligible to receive severance under the Company's Severance Pay Plan (including, but not limited to, outplacement benefits) as in effect on March 31, 2005. For those Company Employees who receive severance benefits under this clause (iii) and who are then eligible for COBRA coverage, Parent, the Surviving Corporation, or their Affiliates will, during the months in which each such severed Company Employee receives severance payments, pay that portion of the severed Company Employee's monthly COBRA insurance coverage costs equal to the amount of the monthly difference between (1) the severed employee's monthly COBRA cost and (2) the monthly amount that the severed employee would have paid to obtain 47 medical and dental coverage under the applicable plans if the severed employee were an active employee. http://see.gov/Archivesledgarldata/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 51 of 66 (iv) Following the Effective Time, all Company Employees shall be credited with the amount of their accrued but unused paid time off ("PTO") under the paid time off program (or equivalent) of Parent in effect at the Effective Time; provided that any Company Employee who has accrued but unused PTO in excess of the amount that may be credited under Parent's paid time off program (or equivalent) shall receive payment, as soon as reasonably practical after the Effective Time, equal to the value of such excess accrued but unused PTO. (v) Participants in the Company's Supplemental Executive Retirement Plans ("SERP") who are age 55 or older will receive a pro-rata payment to their SERP account at the Effective Time based on the expected Company annual contribution for 2005. <PAGE> (vi) For purposes of this Section 6.7(b), "Cause" shall mean a Company Employee's (A) failure to perform his/her material duties, which failure continues for ten (10) days after the Parent or Surviving Corporation has given written notice to the employee specifying in reasonable detail the manner in which the employee has failed to perform such duties; (B) commission of an act or omission constituting (x) a felony, (y) embezzlement, theft or material dishonesty with respect to the Surviving Corporation, Parent, or their Affiliates, or (z) fraud; (C) commission of an act or omission that (x) could adversely and materially affect the Surviving Corporation's, Parent's, or their Affiliates' business or _ reputation, or (y) involves moral turpitude; or (D) breach, non-performance or non-observance of any restrictive covenant or any other written agreement with the Surviving Corporation, Parent, or their Affiliates prohibiting any or all of (x) the disclosure of confidential trade secrets and other information, (y) competitive activities or the solicitation of customers, or (z) the solicitation of employees or former employees. (c) Parent shall cause any and all pre-existing condition (or actively at work or similar) limitations, eligibility waiting periods and evidence of insurability requirements under each employee medical plan of Parent ("Parent Benefit Plan") in which Company Employees participate after the Effective Time to be waived with respect to such Company Employees and their eligible dependents who were covered under comparable Company Plans and shall provide them with credit for any co-payments, deductibles, and offsets (or similar payments) made during the plan year including the Effective Time for the purposes of satisfying any applicable deductible, out-of-pocket, or similar requirements under any of Parent's Benefit Plans in which they are eligible to participate during the plan year including the Effective Time. Parent or the Surviving Corporation shall continue the life insurance and disability coverage for at least six months following the Effective Time for Company Employees who are covered by Company Plans providing such coverage immediately prior to the Effective Time. 48 (d) Any communications proposed to be delivered by the Company or Parent to the Company Employees before the Effective Time regarding the matters contained in or the transactions contemplated by this Agreement or otherwise respecting any changes or potential changes in http://sec.gov/Archives/edgar/data/1021061 /000095013405014814/c97404exv2wl .txt 7/17/2007 Page 52 of 66 employee benefit plans, practices, or procedures that may or will occur in connection with the transactions contemplated by this Agreement, shall be subject to the prior approval of Parent and the Company, respectively, which approval shall not be unreasonably withheld. Each of Parent and the Company shall be deemed to have approved a proposed communication absent objection provided within 72 hours of receipt of that proposed communication. (e) Parent and the Surviving Corporation shall be entitled to deduct and withhold from any compensatory payments otherwise payable to any Company Employee pursuant to this Section 6.7 such amounts as they are required to deduct and withhold under any applicable tax Laws. Section 6.8 Fees and Expenses. In the event the Merger is not consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense, provided, however, that the costs and expenses of printing and mailing the Proxy Statement to the stockholders of the Company, and all filing and other fees paid to the SEC in connection with the Proxy Statement or any other Governmental Entity in connection with the Merger and the other transactions contemplated hereby, shall be borne equally by Parent and the Company. In the event the Merger is consummated, the Surviving Corporation shall pay all then unpaid costs and expenses incurred by the Company in connection with the Agreement. Nothing contained in this Section 6.8 shall limit either party's rights to recover any liabilities or damages arising out of the other party's breach of any provision of this Agreement. Section 6.9 Indemnification; Directors' and Officers' Insurance. <PAGE> _(a) From and after the Effective Time Parent shall, and shall cause the Surviving Corporation to, to the fullest extent permitted by applicable Law, indemnify, defend and hold harmless, and provide advancement of expenses to, each person who is now, or has been at any time prior to the date hereof or who becomes prior to the Effective Time, a director, officer employee or agent of the Company or any of its Subsidiaries or who is or was serving at the request of the Company or any of its Subsidiaries as a director, officer, employee or agent of another Person (the "Indemnified Parties") against all losses, claims, damages, costs, expenses, liabilities or judgments or amounts that are paid in settlement of or in connection with any claim, action, suit, proceeding or investigation based in whole or in part on or arising in whole or in part out of the fact that such person is or was an Indemnified Party, and pertaining to any matter existing or occurring, or any acts or omissions occurring, at or prior to the Effective Time, whether asserted or claimed prior to, or at or after, the Effective Time (including matters; acts or omissions occurring in connection with the approval of this Agreement and the consummation of the transactions contemplated hereby) ("Indemnified Liabilities") to the same extent such persons are indemnified or have the right to advancement of expenses as of the date of 49 is Agreement by the Company pursuant to the Company's Certificate of Incorporation, Bylaws and those indemnification agreements with directors, officers and employees of the Company and its Subsidiaries that are listed on Section 6.9(a) of the Company Disclosure Schedule. To the extent permitted by applicable Law, Parent's and Surviving Corporation's obligations under this Section 6.9(a) shall be limited to a period of six years from and after the Effective Time. hnp:Hsec.gov/A rchives/edgar/data/1021061/000095013405014814/C97404exv2wl .txt 7/17/2007 Page 53 of 66 <PAGE> (b) For a period of six years after the Effective Time, the Surviving Corporation shall cause to be maintained in effect the current policies of directors' and officers' liability insurance maintained by the Company (provided that the Surviving Corporation may substitute therefor policies with a substantially comparable insurer of at least the same coverage and amounts containing terms and conditions which are no less advantageous to the insured) with respect to claims arising from facts or events which occurred at or before the Effective Time; provided, however, that the Surviving Corporation shall not be obligated to make annual premium payments for such insurance to the extent such premiums exceed 300% of the premiums paid as of the date hereof by the Company for such insurance (the "Company's Current Premium"), and if such premiums for such insurance would at any time exceed 300% of the Company's Current Premium, then the Surviving Corporation shall cause to be maintained policies of insurance which, in the Surviving Corporation's good faith determination, provide the maximum coverage available at an annual premium equal to 300% of the Company's Current Premium. (c) Until six years from the Effective Time, unless otherwise required by applicable Law, the certificate of incorporation and bylaws of the Surviving Corporation shall contain provisions no less favorable with respect to the elimination of liability of directors and the indemnification of Indemnified Parties (including as to advancement of expenses) than those set forth in Article X of the Certificate of Incorporation and Article V of the Bylaws, as in effect on the date hereof. (d) The Surviving Corporation shall pay (as incurred) all expenses, including reasonable fees and expenses of counsel, that an Indemnified Person may incur in the successful enforcement of the indemnity and other obligations provided for in this Section 6.9. (e) If the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 6.9. (f) The provisions of this Section 6.9 are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party, his or her heirs and representatives and 50 are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such person may have by contract or otherwise. Section 6.10 Public Announcements. At all times at or before the Closing, neither party shall, without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed, issue or make, directly or indirectly, any reports, statements or releases to the public with respect to (a) this Agreement or the transactions contemplated hereby or (b) (except to the extent disclosed in or consistent with the Proxy Statement in http://Sec.gov/Archivesledgarldata/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 54 of 66 accordance with the provisions of Section 6.1 or as otherwise permitted under Section 6.2) the other party or the other party's business, financial condition or results of operations; provided, however, that either party and its Affiliates may, without the prior written consent of the other, issue or make, directly or indirectly, any report, statement or release required by Law (including any periodic reports required to be filed under the Exchange Act or the rules and regulations thereunder with the SEC) or any listing agreement or arrangement with a national securities exchange or national market system (including the NYSE, the London Stock Exchange, the Hong Kong Stock Exchange, the Bermuda Stock Exchange, and Euronext Paris) to which such party or any of its Affiliates is subject, provided, however, that, to the extent practicable, the other parties to this Agreement are so notified as soon as possible in advance of such report, statement or release and, to the extent practicable, given a reasonable opportunity to review and comment on the report, statement or release. The parties will agree to the text of the press releases announcing the signing of this Agreement. Section 6.11 Additional Agreements. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full title to all properties, assets, rights, approvals, immunities and franchises of the Company and its Subsidiaries, the proper officers and directors of each party to this Agreement shall take all- such necessary action. Section 6.12 Other Actions by Parent. Parent shall not, and shall not permit any of its Subsidiaries to, take any action that would, or would reasonably be expected to, result in any of its representations and warranties set forth in this Agreement being or becoming untrue, subject to such exceptions as do not have, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse-Effect on Parent and its Subsidiaries, taken as a whole, or in any of the conditions to the Merger set forth in Article VII not being satisfied or in a violation of any provision of this Agreement, or (unless such action is required by applicable Law) which would adversely affect the ability of the parties to obtain any of the Requisite Regulatory Approvals. ARTICLE VII CONDITIONS PRECEDENT Section 7.1 Conditions to Each Party's Obligation To Effect the Merger. The respective obligation of each party to effect the Merger shall be subject to the satisfaction prior to the Closing Date of the following conditions: <PAGE> 51 (a) Stockholder Approval. The Company shall have obtained the Required Company Vote in connection with the adoption of the Merger Agreement. (b) Other Approvals. Other than the filing provided for by Section 1.1, all authorizations, consents, orders or approvals of, or declarations or filings with, and all expirations of waiting periods required from, any Governmental Entity which are necessary for the consummation of the Merger and the Bank Merger or those the failure of which to be obtained would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Surviving Corporation or the Surviving Bank, shall have been filed, have occurred or been obtained (all such authorizations, consents, orders, approvals, declarations and filings and the lapse of all such waiting periods being referred to as the "Requisite Regulatory Approvals") and all such Requisite Regulatory Approvals shall be in full force and effect. The parties specifically agree that the http://see.gov/Archives/edgarldataII02106I /000095013405014814/c97404exv2w l .txt 7/17/2007 Page 5 5 of 66 Requisite Regulatory Approvals include the filing of all appropriate applications and notices with the OCC and the approval thereof with respect to the Merger and the Bank Merger. (c) No Injunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition (an "Injunction") preventing the consummation of the Merger or the Bank merger shall be in effect. There shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Merger or the Bank Merger, by any Governmental Entity of competent jurisdiction which makes the consummation of the Merger or the Bank Merger illegal. Section 7.2 Conditions to Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to effect the Merger are subject to the satisfaction of the following conditions unless waived by Parent and Merger Sub: <PAGE> (a) Representations and Warranties. The representations and warranties of the Company set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties are specifically made as of an earlier date, in which case such representations and warranties shall be true and correct as of such date; provided, that for purposes of determining the satisfaction of this condition, no effect shall be given to any exception or qualification in such representations and warranties relating to materiality or a Material Adverse Effect and, instead, for purposes of this condition (i) such representations and warranties (other--than-the representations and warranties-in Section 3.2 (Capital- Structure), the last three sentences of Section 3.5(a) (Compliance with Applicable Laws) solely with respect to the business or operations of the Bank or MRI, Section 3.8 (Certain Agreements) solely with respect to Regulatory Agreements, and Section 3.11 (Agreements with Regulators), which are addressed in clause (ii)) shall be deemed to be true and correct unless the failure or failures of such representations and warranties to be so true and correct, individually or in the aggregate, 52 has had, or would reasonably be expected to have, a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, and (ii) the representations and warranties in Section 3.2 must be true and correct in all but de minimis respects, and the representations and warranties in the last three sentences of Section 3.5(a) solely with respect to banking or consumer lending Laws, the Securities Act or Exchange Act as applicable to the business or operations of the Bank or MRI, the representations and warranties in Section 3.8 solely with respect to Regulatory Agreements and the representations and warranties in Section 3.11 must be true and correct in all material respects. Each of Parent and Merger Sub shall have received from the Company a certificate signed on behalf of Company by the Chief Executive Officer and Chief Financial Officer of the Company to such effect. _ (b) Performance of-Obligations of the-Company. The Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and each of Parent and Merger Sub shall have received a certificate signed on behalf of the Company by the Chief Executive Officer and Chief Financial Officer of the Company to such effect. http://sec.gov/Archivesledgarldata/1021061/000095013405014814/C97404exv2wl.txt 7/17/2007 Page 56 of 66 <PAGE> (c) Third Party Consents. The Company shall have obtained all consents and approvals of third parties listed in Section 7.2(c) of the Company Disclosure Schedule. (d) Resignations. Parent shall have received copies of the resignations, effective as of the Effective Time, of each director of the Company and its Subsidiaries. (e) Stockholders Agreement. The Stockholders Agreement shall not have been terminated without the consent of Parent and shall be in full force and effect. (f) Senior Notes. The Company shall have repurchased, redeemed or otherwise paid in full all of the outstanding 10 1/8% Senior Notes due 2006, and have paid any prepayment penalties associated therewith. (g) SEC Investigation. The Company shall have either (i) received notice from the Staff of the SEC that it will not recommend that charges be brought against the Company and its Subsidiaries with respect to the SEC Investigation or (ii) in the event the notice referred to in clause (i) is not obtained by September 30, 2005 and is not reasonably likely to be obtained in the Company's good faith determination after consultation with its outside legal counsel, obtained a final court or administrative order as to the Company and its Subsidiaries with respect to the SEC Investigation, which order may include fines, penalties or settlement; provided, however that the aggregate of any such fines, penalties or settlement is not substantial in relation to the Company's consolidated financial condition, assets or stockholders' equity and shall not include provisions that impose adverse restrictions or limitations on the-business or operations of - the Company or any of its Subsidiaries (it being understood that (i) nothing herein shall require that any order shall have been entered with respect to any investigation, action, claim or proceeding against any director, officer or employee of the Company in his or 53 her individual capacity as such in order for this condition to be satisfied and (ii) administrative or supervisory obligations or restrictions imposed upon the Company and its Subsidiaries shall not constitute adverse restrictions or limitations on the business or operations of the Company or any of its Subsidiaries). (h) Liquidation and Dissolution of Certain Entities. Metris Companies Foundation and the Metris Companies Inc. Political Action Committee shall have been fully liquidated and dissolved. Section 7.3 Conditions to Obligations of the Company. The obligation of the Company to effect the Merger is subject to the satisfaction of the following conditions unless waived by the Company: (a) Representations and Warranties. The representations and warranties of Parent and Merger Sub set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the _ Closing-Date as though-made an and-as of the Closing Date except to the extent such representations and warranties are specifically made as of an earlier date, in which case such representations and warranties shall be true and correct as of such date; provided, that for purposes of determining the satisfaction of this condition, no effect shall be given to any exception or qualification in such representations and warranties relating to materiality or a Material Adverse Effect and, http://see.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 57 of 66 <PAGE> instead, for purposes of this condition such representations and warranties (other than the representations and warranties in Section 4.9 (ownership of Company Capital Stock), which must be true and correct in all respects) shall be deemed to be true and correct unless the failure or failures of such representations and warranties to be so true and correct, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole. The Company shall have received a certificate from each of Parent and Merger Sub signed on behalf of each of Parent and Merger Sub by their respective Chief Executive Officers and Chief Financial Officers to such effect. (b) Performance of Obligations of Parent and Merger Sub. Each of Parent and Merger Sub shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and the Company shall have received a certificate signed on behalf of each of Parent and Merger Sub by their respective Chief Executive Officers and Chief Financial Officers to such effect. 59 ARTICLE VIII TERMINATION AND AMENDMENT Section 8.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, by action taken or authorized by the Board of Directors of the terminating party or parties, whet-her before or after approval - -- -" of the Merger by the stockholders of the Company: (a) by mutual consent of Parent and Merger Sub and the Company in a written instrument; (b) by either Parent or the Company, upon written notice to the other party, if (i) a Governmental Entity of competent jurisdiction which must grant a Requisite Regulatory Approval has denied approval of the Merger and such denial has become final and non-appealable; or (ii) any Governmental Entity of competent jurisdiction shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the Merger, and such order, decree, ruling or other action has become final and nonappealable; provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any party whose failure to comply with any provision of this Agreement has been the cause of, or has resulted in, the denial described in clause (i) above or the issuance described in clause (ii) above; (c) by either Parent or the Company, upon written notice to the other party, if the Merger shall not have been consummated on or before March 31, 2006; provided, however, that the right to terminate this Agreement under this Section 8.1(c) shall not be available to any party whose failure to comply with any provision of this Agreement has been the cause of, or has resulted in, the failure of the Effective Time to occur on or before such date; (d) b_y either Parent or-the-Company, if the Required Company Vote shall not have been obtained upon a vote taken thereon at the duly convened Company Stockholders Meeting; (e) by either Parent and Merger Sub on the one hand or the Company on the other hand, upon written notice to the other party, if there shall have been a breach by the other party of any of the http://sec.gov/Archives/edgar/data/i 021061/000095013405014814/c97404exv2w l .txt 7/17/2007 Page 58 of 66 <PAGE> covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of such other party, which breach, either individually or in the aggregate, would result in, if occurring or continuing on the Closing Date, the failure of any of the conditions set forth in Section 7.2 or Section 7.3, as the case may be, and which breach has not been cured within 30 days following written notice thereof to the breaching party or, by its nature, cannot be cured within such time period; (f) by Parent upon written notice to the Company, if (x) the Company shall have (i) failed to recommend adoption of this Agreement at the Company Stockholders Meeting, or withdrawn, modified or qualified in any manner adverse to Parent such 55 recommendation, whether or not permitted by the terms hereof, or (ii) materially breached its obligations under this Agreement by reason of a failure to call the Company Stockholders Meeting in accordance with Section 6.1(a) or (y) the Stockholder Agreement has been breached in any material manner by any stockholder that is a party thereto; or (g) by the Company, upon written notice to the Parent, in accordance with the terms of Section 6.6. Section 8.2 Effect of Termination. (a) In the event of termination of this Agreement by either the Company or Parent as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Parent or the Company or their respective officers or directors, except with respect to Section 6.4(b), Section 6.8, this Section 8.2 and Article IX, which shall survive such termination and except that no party shall be relieved or released from any liabilities or damages arising out of its willful and material breach of this Agreement. (b) The Company shall pay Parent, by wire transfer of immediately available funds, the sum of $57.4 million (the "Termination Fee") if this Agreement is terminated as follows: (i) if Parent shall terminate this Agreement pursuant to Section 8.1(f)(x), and within 12 months after the date of such termination, the Company or any of its Subsidiaries consummates an Acquisition Transaction (as defined in Section 8.2(c)), then the Company shall pay Parent the Termination Fee on the date of such consummation; and (ii) if the Company shall terminate this Agreement pursuant to Section 8.1(g) and within 12 months after the date of such termination, the Company or any of its Subsidiaries consummates an Acquisition Transaction, then the Company shall pay Parent the Termination Fee on the date of such consummation. (c) For purposes of this Agreement, the term "Acquisition Transaction" shall mean (i) the direct or indirect acquisition, purchase or assumption of all or substantially all of the assets of the Company or its Subsidiaries, (ii) the acquisition by any Person of direct or indirect beneficial ownership (including by way of merger, consolidation, share exchange or otherwise) of voting stock http://sec.gov/ArchivesledgarldataII021061 /000095013405014814/C97404exv2wl .txt 7/17/2007 Page 59 of 66 <PAGE> representing 50% or more of the voting power of the outstanding shares of voting stock of the Company, or (iii) a merger, consolidation, business combination, liquidation, dissolution or similar transaction of or involving the Company, other than a merger, business combination or similar transaction if the stockholders of the Company immediately before such transaction own at least 60% of 56 the voting stock of the entity surviving such transaction (or the parent thereof) immediately following such transaction. (d) The Company acknowledges that the agreements contained in Section 8.1 and this Section 8.2 are integral parts of the transactions contemplated by this Agreement, and that, without these agreements, Parent would not have entered into this Agreement; accordingly, if the Company fails to promptly pay any amounts due pursuant to this Section 8.2 and, in order to obtain such payment, Parent commences a suit which results in a judgment against the Company for the fee set forth in this Section 8.2, the Company shall pay to Parent its reasonable costs and expenses (including reasonable attorney's fees and expenses) in connection with such suit, together with interest from the date of termination of this Agreement on the amounts owed at the prime rate of The Bank of New York as in effect from time to time during such period. Section 8.3 Amendment. This Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors, - at any time before or after approval of the matters presented in connection with the Merger by the stockholders of the Company, but, after any such approval, no amendment shall be made which by Law requires further approval by such stockholders without such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. Section 8.4 Extension; Waiver. At any time prior to the Effective Time, the parties hereto, by action taken or authorized by their respective Board of Directors, may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other party hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of a party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. No single or partial exercise of any right, remedy, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Any waiver shall be effective only in the specific instance and for the specific purpose for which given and shall not constitute a waiver to any subsequent or other exercise of any right, remedy, power or privilege hereunder. ARTICLE IX GENERAL PROVISIONS Section 9.1 Non-Survival of Representations Warranties and Agreements. None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, and agreements, shall survive the Effective Time, except for those covenants and agreements contained herein and therein that by their terms apply or are to be performed in whole or in part after the Effective Time. http://sec.gov/Archivesledgaz/data/1021061/000095013405014814lc97404exv2wl .txt 7/17/2007 Page 60 of 66 <PAGE> 57 Section 9.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or by telecopy or telefacsimile, upon confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice. (a) if to Parent, to HSBC Finance Corporation 2700 Sanders Road Prospect Heights, Illinois 60070 Attention: General Counsel Telecopy No.: (847) 564-6366 with a copy to Wilmer Cutler Pickering Hale and Dorr LLP 2445 M Street, NW ... DC 20037 Attention: Russell J. Bruemmer, Esq. Telecopy No.: (202) 663-6363 (b) if to Merger Sub, to HSBC Corporation I 2700 Sanders Road Prospect Heights, Illinois 60070 Attention: General Counsel Telecopy No.: (847) 564-6366 with a copy to Wilmer Cutler Pickering Hale and Dorr LLP 2445 M Street, NW Washington, DC 20037 Attention: Russell J. Bruemmer, Esq. Telecopy No.: (202) 663-6363 and <PAGE> 58 - ( c ) if to Company, to Metris Companies Inc. 10900 Wayzata Boulevard Minnetonka, Minnesota 55305 Attention: General Counsel Telecopy No.: (952) 593-4884 http://sec.gov/Archivestedgar/data/ 1021061 /000095013405014814/C97404exv2w l .txt 7/17/2007 Page 61 of 66 with copies to Dorsey & Whitney LLP 50 South Sixth Street Minneapolis, Minnesota 55402 Attention: Matthew J. Knopf, Esq. Telecopy No.: (612) 340-7800 Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036 Attention: Fred B. White, III, Esq. Telecopy No.: (212) 735-2000 Section 9.3 Interpretation. When a reference is made in this Agreement to Sections, Exhibits or Schedules, such reference shall be to a Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The phrase "made available" in this Agreement shall mean that the information referred to has been made available if requested by the party to whom such information is to be made available. The phrases "herein," "hereof," "hereunder" and words of similar import shall be deemed to refer to this Agreement as a whole, including the Exhibits and Schedules hereto, and not to any particular provision of this Agreement. Any pronoun shall include the corresponding masculine, feminine and neuter forms. Section 9.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be considered one and the same agreement and shall become effective when both counterparts have been signed by each of the parties and delivered to the other party, it being understood that both parties need not sign the same counterpart. Section 9.5 Entire Agreement; No Third Party Beneficiaries. This Agreement (including the documents and the instruments referred to herein, (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, other than the Confidentiality Agreement, which shall <PAGE> 59 survive the execution and delivery of this Agreement and (b) except as provided in Section 6.9, is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. Section 9.6 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof). Section 9.7 Severability. Any term or provision of this Agreement which -is. invalid or unenforceable in- any jurisdiction--shall,- as to that jdrsdictioii, be ineffective to the extent of such invalidity or unenforceability and, unless the effect of such invalidity or unenforceability would prevent the parties from realizing the major portion of the economic benefits of the Merger that they currently anticipate obtaining therefrom, shall not render invalid or unenforceable the remaining terms and provisions of this Agreement or affect the validity or enforceability of any of the terms or provisions of this Agreement http://sec.govIArchivesledgarldata/10210611000095013405014814lc97404exv2wl.txt 7/17/2007 Page 62 of 66 in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. Section 9.8 Assignment. This Agreement shall not be assignable by operation of Law or otherwise without the prior written consent of the other party, and any attempt to make any such assignment without such consent shall be null and void; provided, however, that Parent and Merger Sub may designate, by written notice to the Company, another wholly-owned subsidiary of Parent to effect the Merger in lieu of Merger Sub, in which event all reference herein to Merger Sub shall be deemed references to such other subsidiary, except that all representations and warranties made herein with respect to Merger Sub as of the date of this Agreement shall be deemed representations and warranties made with respect to such other subsidiary as of the date of such designation, provided further, however, that Parent and Merger Sub shall not have the benefit of designation set forth in the foregoing proviso unless such designation will not affect the consideration to be received by the stockholders of the Company in the Merger or the treatment of the Merger for federal income tax purposes and will not delay the completion of the Merger or the satisfaction of the conditions set forth in Article VII. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns. Section 9.9 Submission to Jurisdiction. Each party hereby irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of the Delaware Court of Chancery, the Delaware Superior Court or any federal court sitting in the City of Wilmington, and any appellate court from any such court, in any suit, action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment resulting from any such suit, action or proceeding, and each party hereby irrevocably and unconditionally agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in the Delaware Court of Chancery, the Delaware Superior Court or, to the extent permitted by Law, by removal or otherwise, in such federal court. The Parties further agree, to the extent permitted by Law, that final and unappealable judgment against any of them in any action or proceeding contemplated above shall be conclusive and may be enforced in any other <PAGE> 60 jurisdiction within or outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment. Section 9.10 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court identified in Section 9.9 above, this being in addition to any other remedy to which they are entitled at law or in equity. Section 9.11 Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY, IN ANY MATTERS (WHETHER SOUNDING-IN TORT, -CONTRACT -OR-OTHERWISE) IN-ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] http://sec.govIArchivesledgarldataII021061 /000095013405014814lc97404exv2wl .txt 7/17/2007 Page 63 of 66 <PAGE> 61 IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first set forth above. HSBC FINANCE CORPORATION By: /s/ SIDDHARTH N. METHA ----------------------------- Name: Siddharth N. Metha Title: Chairman and Chief Executive Officer HSBC CORPORATION I By: /s/ LOREN C. KLUG ---------------------------- Name: Loren C. Klug Title: Vice President METRIS COMPANIES INC. By: /s/ DAVID D. WESSELINK ---------------------------- Name: David D. Wesselink Title: Chairman and CEO <PAGE> 62 EXHIBIT I STOCKHOLDER AGREEMENT <PAGE> EXHIBIT 1.4 BYLAWS OF MERGER SUB <PAGE> http://sec.gov/Archives/edgar/data/1021061/000095013405014814/c97404exv2wl .txt 7/17/2007 Page 64 of 66 ANNEX 2.1 <Table> <Caption> TO COMMON STOCKHOLDERS, PER COMMON RESTRICTED STOCK UNITS TO SERIES C DATE -------- -- SHARE PRICE ------------ AND ------ STOCK OPTIONS -------- - -- PRE FERRED STOCK CON <S> <C> <C> -- - -- --- <C> ------------ <C> 8/4-12/9 $ 15.000000 $ 911,106,237 $ 682,561,140 $1, 12/10 $ 14.998413 $ 911,007,820 $ 682,659,557 $1, 12/11 $ 14.996826 $ 910,909,430 $ 682,757,947 $1, 12/12 $ 14.995240 $ 910,811,061 $ 682,856,316 $1, 12/13 $ 14.993654 $ 910,712,713 $ 682,954,664 $1, 12/14 $ 14.992069 $ 910,614,386 $ 683,052,991 $1, 12/15 $ 14.990483 $ 910,516,079 $ 683,151,298 $1, 12/16 $ 14.988899 $ 910,417,793 $ 683,249,583 $1, 12/17 $ 14.987314 $ 910,319,528 $ 683,347,849 $1, 12/18 $ 14.985730 $ 910,221,284 $ 683,446,093 $1, 12/19 $ 14.984146 $ 910,123,060 $ 683,544,316 $1, 12/20 $ 14.982562 $ 910,024,858 $ 683,642,519 $1, 12/21 $ 14.980979 $ 909,926,676 $ 683,740,701 $1, 12/22 $ 14.979396 $ 909,828,515 $ 683,838,862 $1, 12/23 $ 14.977814 $ 909,730,374 $ 683,937,003 $1, 12/24 $ 14.976231 $ 909,632,254 $ 684,035,122 $1, 12/25 $ 14.974649 $ 909,534,155 $ 684,133,221 $1, 12/26 $ 14.973068 $ 909,436,077 $ 684,231,300 12/27 $ 14.971487 $ 909,338,020 $ 684,329,357 $1, 12/28 $ 14.969906 $ 909,239,983 $ 684,427,394 $1, 12/29 $ 14.968325 $ 909,141,967 $ 684,525,410 $1, 12/30 $ 14.966745 $ 909,043,971 $ 684,623,406 $1, 12/31 $ 14.965165 $ 908,945,996 $ 684,721,380 $1, 1/1 $ 14.963585 $ 908,848,042 $ 684,819,334 $1, 112 $ 14.962006 $ 908,750,109 $ 684,917,268 $1, 1/3 $ 14.960427 $ 908,652,196 $ 685,015,181 $1, 1/4 $ 14.958849 $ 908,554,304 $ 685,113,073 $1, 1/5 $ 14.957271 $ 908,456,433 $ 685,210,944 $1, 116 $ 14.955693 $ 908,358,582 $ 685,308,795 S1, 1/7 $ 14.954115 $ 908,260,752 $ 685,406,625 $1, 1/8 $ 14.952538 $ 908,162,942 $ 685,504,435 $1, 1/9 $ 14.950961 $ 908,065,153 $ 685,602,223 $1, 1/10 $ 14.949384 $ 907,967,385 $ 685,699,992 $1, 1/11 $ 14.947808 $ 907,869,637 $ 685,797,739 $1, 1/12 $ 14.946232 $ 907,771,910 $ 685,895,466 $1, 1/13 $ 14.944657 $ 907,674,204 $ 685,993,173 $1, 1/14 $ 14.943081 $ 907,576,518 $ 686,090,659 $1, 1/15 $ 14.941507 $ 907,478,853 $ 686,188,524 $1, 1/16 $ 14.939932 $ 907,381,208 $ 686,286,168 $1, 1/17 $ 14.938358 $ 907,283,584 $ 686,383,792 $1, 1/18 $ 14.936784 $ 907,185,981 $ 686,481,396 $1, 1/19 $ 14.935210 $ 907,088,398 $ 686,578,979 $1, 1/20 $ 14.933637 $ 906,990,835 $ 686,676,541 $1, 1/21 $ 14.932064 $ 906,893,294 $ 686,774,083 $1, 1/22 $ 14.930491 $ 906,795,772 $ 686,871,604 $1, -1/23_ _ $ 14.928919- $ 906,698,272 -$-- 686,969,105 1/24 $ 14.927347 $ 906,600,791 $ 687,066,585 $1, 1/25 $ 14.925776 $ 906,503,332 $ 687,164,045 $1, 1/26 $ 14.924204 $ 906,405,893 $ 687,261,484 $1, 1/27 $ 14.922633 $ 906,308,474 $ 687,358,903 $1 1/28 $ 14.921063 $ 906,211,076 $ 687,456,301 , $1, 1/29 $ 14.919493 $ 906,113,698 $ 687,553,678 $1, http.*//sec.gov/Archivesledgar/data/i 021061 /000095013405014814/c97404exv2wl .txt 7/17/2007 Page 65 of 66 1/30 $ 14.917923 $ 906,016,341 $ 687,651,036 $1, 1/31 $ 14.916353 $ 905,919,004 $ 687,748,372 $1, 2/1 $ 14.914784 $ 905,821,688 $ 687,845,688 $1, 2/2 $ 14.913215 $ 905,724,393 $ 687,942,984 $1, 2/3 $ 14.911646 $ 905,627,117 $ 688,040,259 $1, 2/4 $ 14.910078 $ 905,529,863 $ 688,137,514 $1, 2/5 $ 14.908510 $ 905,432,628 $ 688,234,748 $1, 2/6 $ 14.906942 $ 905,335,414 $ 688,331,962 $1, 2/7 $ 14.905375 $ 905,238,221 $ 688,429,156 $1, 2/8 $ 14.903808 $ 905,141,048 $ 688,526,329 S1, 2/9 $ 14.902241 $ 905,043,895 $ 688,623,481 $1, 2/10 $ 14.900675 $ 904,946,763 $ 688,720,613 $1, 2/11 $ 14.899109 $ 904,849,652 $ 688,817,725 $1, 2/12 $ 14.897544 $ 904,752,560 $ 688,914,816 S1, 2/13 $ 14.895978 $ 904,655,489 $ 689,011,887 $1, 2/14 $ 14.894413 $ 904,558,439 $ 689,108,938 $1, </Table> <PAGE> <Table> <Caption> PER COMMON RESTRICTED STOCK UNITS TO SERIES C DATE -------- - SHARE PRICE ------------- AND -- -- STOCK OPTIONS - PREFERRED STOCK CON <S> <C> - - <C> --------------- --- <C> ------------ --- <C> 2/-15 $ - 14.892849 - $ 904, 461, 409 $ - 689, 205, 968 $1,- 2/16 $ 14.891284 $ 904,364,399 $ 689,302,978 $1, 2/17 $ 14.869720 $ 904,267,410 $ 689,399,967 $1, 2/18 $ 14.888157 $ 904,170,441 $ 689,496,936 $1, 2/19 $ 14.886593 $ 904,073,492 $ 689,593,885 $1, 2/20 $ 14.885030 $ 903,976,564 $ 689,690,813 $Z, 2/21 $ 14.683467 $ 903,879,656 $ 689,787,721 $1, 2/22 $ 14.881905 $ 903,782,768 $ 689,884,608 $1, 2/23 $ 14.880343 $ 903,685,901 $ 689,981,476 $1, 2/24 $ 14.878781 $ 903,589,054 $ 690,078,323 $1, 2/25 $ 14.877220 $ 903,492,228 $ 690,175,149 $1, 2/26 $ 14.875659 $ 903,395,421 $ 690,271,955 $1, 2/27 $ 14.874098 $ 903,298,635 $ 690,368,741 $1, 2/28 $ 14.872538 $ 903,201,870 $ 690,465,507 $1, 3/1 $ 14.870978 $ 903,105,124 $ 690,562,252 $1, 3/2 $ 14.869418 $ 903,008,399 $ 690,658,977 $1, 3/3 $ 14.867859 $ 902,911,695 $ 690,755,682 $1, 3/4 $ 14.866299 $ 902,815,010 $ 690,852,367 $1, 3/5 $ 14.864741 $ 902,718,346 $ 690,949,031 $1, 3/6 $ 14.863182 $ 902,621,702 $ 691,045,675 $1, 3/7 $ 14.861624 $ 902,525,078 $ 691,142,298 $1, 3/8 $ 14.860066 $ 902,428,475 $ 691,238,902 $1, 3/9 $ 14.858509 $ 902,331,892 $ 691,335,485 $1, 3/10 $ 14.856951 $ 902,235,303 $ 691,432,074 S1, 3/11 $ 14.855394 $ 902,138,734 $ 691,528,643 $1, 3/12 $ 14.853837 $ 902,042,185 $ 691,625,192 $1, 3/13 $ 14.852281 $ 901,945,657 $ 691,721,720 $Z, 3/14 $ 14.850724 $ 901,849,149 $ 691,816,228 $1, - -3/15 - -$ - ---14:-8491-68 - -$-- 901, 752, 661 $ -691, 914, 716 $1; 3/16 $ 14.847613 $ 901,656,193 $ 692,011,184 $1, 3/17 $ 14.846058 $ 901,559,745 $ 692,107,631 $1, 3/18 $ 14.844503 $ 901,463,318 $ 692,204,059 S1, 3/19 $ 14.842948 $ 901,366,911 $ 692,300,466 $1, 3/20 $ 14.841394 $ 901,270,524 $ 692,396,853 $1, 3/21 $ 14.839840 $ 901,174,157 $ 692,493,220 $1, http://sec.govIArchivesledgarldata/10210611000095013405014814lc97404cxv2wl .txt 7/17/2007 Page 66 of 66 3/22 $ 14.838286 $ 901,077,810 $ 692,589,566 $1, 3/23 $ 14.836733 $ 900,981,484 $ 692,685,893 $1, 3/24 $ 14.835180 $ 900,885,178 $ 692,782,199 $1, 3/25 $ 14.833627 $ 900,788,892 $ 692,878,485 $1, 3/26 $ 14.832075 $ 900,692,626 $ 692,974,751 $1, 3/27 $ 14.830523 $ 900,596,380 $ 693,070,997 $1, 3/28 $ 14.828971 $ 900,500,154 $ 693,167,222 $1, 3/29 $ 14.827420 $ 900,403,949 $ 693,263,428 $1, 3/30 $ 14.825869 $ 900,307,763 $ 693,359,613 $1, 3/31 $ 14.824318 * $ 900,211,598 $ 693,455,779 ** $1, </Table> * In the event the Effective Time occurs after March 31, 2006, appropriate adjustment will be made to the Per Common Share Price, determined in a manner consistent with the foregoing. ** In the event the Effective Time occurs after March 31, 2006, appropriate adjustment will be made to the amount payable to the holders of Company Series C Preferred, determined in a manner consistent with the foregoing. </TEXT> </DOCUMENT> hnp://sec.gov/Archives/edgar/data/1021061/000095013405014$14/c97404exv2wl.txt 7/17/2007 Burton Neil & Associates, P.C. By: Derek C. Blasker, Esquire 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff ID. NO. 202150 WORLDWIDE ASSET PURCHASING, LLC Plaintiff V. DEBORAH GRAHAM Defendant To the Prothonotary: IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA : NO. 07-3459 CIVIL ACTION - LAW Praecipe to Substitute Verification Kindly substitute the attached verification for the verification filed with plaintiffs Amended Complaint. In making this communication, we advise that our firm is a debt collector. EXHIBIT ._,.._..... Attorney for Plaintiff Verification Danielle Moore am an employee of Gerald E. Moore & I, Associates, P.C. by contract the service provider for plaintiff Worldwide Asset Purchasing, LLC retained to perform services including but not primarily limited to collecting delinquent debt, custodian of records and execution of documents. I am authorized to make this verification as attorney-in-fact for plaintiff under powers of attorney from plaintiff to Gerald E. Moore & Associates, P.C. and to me. The foregoing averments of fact in the within Amended Complaint are true and correct to the best of my information and belief. I understand that the statements made herein are subject to the penalties of 18 Pa. C.S. Section 4904, relaxing to unworn falsification to the authorities. Date: Signature Verification am an employee of Gerald E. Moore & Associates, P.C. by contract the service provider for plaintiff Worldwide Asset Purchasing, LLC retained to perform services including but not primarily limited to collecting delinquent debt, custodian of records and execution of documents. I am authorized to make this verification as attorney-in-fact for plaintiff under powers of attorney from plaintiff to Gerald E. Moore & Associates, P.C. and to me. The foregoing averments of fact in the within Answer to Preliminary Objections are true and correct to the best of my information and belief. I understand that the statements made herein are subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to the authorities. Joilb f Date: ignature Deborah Graham BURTON NEIL & ASSOCIATES, P.C. Derek Blasker, Esquire, Id. No. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC : IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. DEBORAH GRAHAM NO. 07-3459 Defendant : CIVIL ACTION -LAW Certificate of Service I, Derek C. Blasker, Esquire do hereby certify that I served a true and correct copy of the within Plaintiff's Answer to Defendant's Preliminary Objections to the Amended Complaint, proposed Order and Certificate of Service on pro se defendant, Deborah Graham at his/her address of record via first class mail, postage prepaid on the date set forth below. Burtoil Nell & Associates,1A.C. Date: G" By: Derek C. Blasker, Esquire Attorney for Plaintiff The law firm of Burton Neil & Associates is a debt collector. 83423 II11BIN IIIII IIIII 11fl1 IIII IIII 11111111 IN 1111111111111111111111111111111111111111 IN 11111111111 IIII III 11111111 IIII IN 1111111111111111111 1111 WORLDNIDE ASSET PURCHASING.LLC Plaintiff V. DEBORAH GRAHAM Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 07-3459 CIVIL ACTION - LAW Notice of Intention to File Praecipe for Default Judgment TO: Derek C. Blasker, Esquire C/O Burton, Neil & Associates, P.C. Attorney for Plaintiff 1060 Andrew Drive, Suite 170 West Chester, PA 19380 IMPORTANT NOTICE You are in default because you have failed to enter a written appearance personally or by attorney and file in writing with the court your response to the Preliminary Objections to the claims set forth against you. Unless you act within ten (10) days from the date of this notice, a judgment may be entered against you without a hearing and you may lose your property or other important rights. You should take this notice to your lawyer at once. If you do not have a lawyer or cannot afford one, go to or telephone the following office to find out where you can get legal help. This office can provide you with information about hiring a lawyer. If you cannot afford to hire a lawyer, this office may be able to provide you with information about agencies that may offer legal services to eligible persons at a reduced fee or no fee. LAWYER REFERENCE AND INFORMATION SERVICE Cumberland County Bar Assoc. 32 South Bedford Street Carlisle, PA 17013 Telephone No. 717-249-3166 or 1-800-990-9108 DATE OF NOTICE: January 28, 2008 By: Deborah Graham, Pro Se 902 Allenview Drive Mechanicsburg PA 17055 (717) 766-5618 a IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA WORLDWIDE ASSET PURCHASING, LLC, Plaintiff : CIVIL ACTION - LAW V. DEBORAH GRAHAM, Defendants NO. 07-3459 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Notice of Intention to File Preacipe for Default Judgment was fumished by U.S. Mail, first class and certified postage prepaid on this 28th day of January, 2008 as addressed hereto: Derek C. Blasker, Esquire Burton Neil & Associates, P.C. 1060 Andrew Drive, Suite 170 West Chester, PA 19380 Attorneys for Plaintiff Dated: k-)- Debora Graha ro Se 902 Allenview Drive Mechanicsburg, PA 17055 Defendant 'ei ,3 : -a? .?? -n °:+ I -Y r ?7 ' f`;' -?' ._ x? ..? a,.?: ._ ;' t. l .tt 6 ICE ?ioflo At' '2311 SEA' - 2 Phi 2, 6 'J pENNSYLVANIjN T`€` Burton Neil & Associates, P.C. By: Derek C. Blasker, Esquire ID. NO. 202150 1060 Andrew Drive, Suite 170 West Chester, PA 19380 610-696-2120 Attorney for Plaintiff WORLDWIDE ASSET PURCHASING, LLC Plaintiff V. DEBORAH GRAHAM Defendant To the Prothonotary: IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA NO. 07-3459 : CIVIL ACTION - LAW Praecipe to Discontinue Kindly discontinue the above-captioned action B By: The law firm of Burton Neil & Associates is a debt collector. prejudice. & Associates, P.C. Blasker, Esquire Forne or Plaintiff 83423