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EXHIBIT 10.R
DATA SHARING AGREEMENT
THIS AGREEMENT dated the ___ day of October, 1996, between Fingerhut
Corporation (hereinafter referred to as "Fingerhut"), a corporation duly
organized under the laws of the State of Minnesota, with offices at 0000
Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, and Direct Merchants Credit
Card Bank, National Association, a national banking association
(hereinafter referred to as "Direct Merchants Bank") with offices at 0000
Xxxx 0000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx, 00000.
WHEREAS, Direct Merchants Bank and Fingerhut create and maintain
files on their customers (as defined herein); and
WHEREAS, Direct Merchants Bank and Fingerhut desire to exchange
certain customer data;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
I. DEFINITIONS
The following terms, as used herein, shall have the following
meanings whether used in the singular or plural:
"Account Booked" means a consumer credit account which meets
Direct Merchant Bank's underwriting criteria for approval with a credit line
opened greater than Direct Merchant Bank's minimum credit line in effect at
time of approval. Account Booked shall not mean an account which is
determined to be fraudulent.
"Behavior Model " means one or more attributes which rank a
Customer's credit performance with Fingerhut or Direct Merchants Bank, as the
case may be, with a credit score.
"Customer" means any consumer name and address which resides on the
data processing systems of Direct Merchants Bank or Fingerhut, as the
case may be.
"Customer File" means a name, address and other identifying
information of a Customer who has an account or other relationship
with Fingerhut or Direct Merchants Bank, as the case may be, and includes any
updates of such information.
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II. SERVICES
Section 2.1 File Access.
Fingerhut agrees to provide the Fingerhut Customer File to Direct
Merchants Bank for its use to solicit offers for all credit products issued
by Direct Merchants Bank. Fingerhut agrees to provide the requested
Customer File on a timely basis so as to ensure that Direct Merchants Bank
meets its production and solicitation dates for its credit product offers;
provided that Direct Merchants Bank has provided such production and
solicitation dates in writing to Fingerhut at least one week prior to the
date it needs such Customer File.
Section 2.2 Compensation.
Direct Merchants Bank agrees to pay Fingerhut (in immediately
available funds) in accordance with the terms and conditions set forth
in Exhibit A, attached hereto and incorporated herein by reference.
Payment of the fees shall be made not later than the thirtieth (30th)
business day of each month following the end of a calendar quarter,
within each calendar year during the Initial Term or subsequent Renewal Term.
Section 2.3 Use of Information.
Direct Merchants Bank and Fingerhut agree to provide to each other,
without charge, their own transaction and experience data on their own
Customer list which shall also include a Behavior Model derived from each
parties own transaction and experience data. The parties agree to update
such Customer list and Behavior Models in accordance with their own
business practices for updating such information. Other than as set forth in
this Agreement, Fingerhut agrees that it, any subsidiary or affiliate or on
behalf of third parties, will not directly or indirectly solicit via
direct mail or telemarketing Direct Merchants Bank Customers for any
products or services without the prior written consent of Direct Merchants
Bank. Subject to compliance with banking applicable laws and regulations
related to transactions with affiliates, Fingerhut and Direct Merchants Bank
agree that, during the term of this Agreement, Fingerhut will be the
exclusive provider of retail merchandise offers to the Customer list of
Direct Merchants Bank (excluding Direct Merchants Bank Customers that have a
cobrand, affinity, private label or other third party affiliation credit
account). The parties shall cooperate in good faith and mutually agree on
the parameters for merchandise offers. The parties confirm Direct Merchants
Bank may reasonably withhold approval of a merchandise offer if such offer
does not comply with applicable laws and regulations.
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Section 2.4 Restrictions on Use.
The Customer File and Behavior Models will only contain data on each
party's own transactions or experiences with its customers and shall not
contain any information provided by third parties, or other information, that
would cause either party in its reasonable interpretation, to be deemed a
consumer reporting agency as defined under applicable state or federal law.
Nothing in this Agreement shall require either party to disclose to the
other: (i) confidential information it received from third parties,
including without limitation, customer lists from third party sources, or
(ii) information which either party, in its reasonable interpretation, is
precluded from disclosing under any applicable laws, rules, regulations or
industry practices related to consumer privacy.
III. TERM
Section 3.1 Term and Termination.
Notwithstanding the execution date of this Agreement, the term of
this Agreement shall begin on January 1, 1995 and continue until September
23, 2003 ("Initial Term"). Unless otherwise terminated as provided
herein, at the end of the Initial Term, this agreement will
automatically renew for successive one year terms ("Renewal Term"). This
Agreement may also be terminated by either party under the
following conditions:
a. If either party materially breaches its obligations and
such breach is not cured within thirty (30) days of receipt of written
notice of breach by the non-breaching party.
b. Upon ninety (90) days' written notice prior to the end of the
Initial Term or any Renewal Term.
x. Xxxxxxxxx shall have the right to terminate this Agreement by
written notice to Direct Merchants Bank upon the occurrence of a Change of
Control (as defined below) with respect to Direct Merchants Bank. A "Change
of Control" shall be deemed to have occurred if (i) any person or group
(within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in
effect on the date hereof) other than Fingerhut shall own directly or
indirectly, beneficially or of record, shares representing more than 25% of
the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Direct Merchants Bank; (ii) a majority of the
seats (other than vacant seats) on the Board of Directors of Direct Merchants
Bank shall at any time be occupied by persons who were neither (a)
nominated by Fingerhut or by the Board of Directors of Direct Merchants Bank,
nor (b) appointed by directors so nominated; or (iii) any person or group
other than Fingerhut shall otherwise directly or indirectly have the
power to exercise a controlling influence over the management or policies of
Direct Merchants Bank.
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IV. CONFIDENTIALITY
Section 4.1 Confidential Information.
a. All Confidential Information (as hereinafter defined)
disclosed by any of the parties to any other party hereunder is
confidential and proprietary to such disclosing party. Each party, its
affiliates, and officers, directors, employees, agents, consultants and
contractors shall not use any of the Confidential Information for any
purpose other than as expressly permitted hereunder. Confidential
Information furnished by any of the parties to any other in connection with
this Agreement and the transactions contemplated hereby will be kept in
confidence by such other party, including its affiliates or subsidiaries, in
accordance with its policies for maintaining the confidence of its own
information of similar content. The term Confidential Information shall
mean and include: (i) Customer data, Customer Files and Behavior Models,
(ii) all trade secrets and other confidential business information learned
in the course of performance by any party of its obligations hereunder,
or (iii) any information or data which is disclosed by any party to the other
party under or in contemplation of this Agreement.
b. Confidential Information may be either the property of the
disclosing party or information provided to the disclosing party by a
corporate affiliate of the disclosing party or by a third party.
Notwithstanding the foregoing, the term "Confidential Information" shall not
include information which: (i) is already known to such other party when
received, except for information periodically disclosed which is identified
as confidential prior to execution of this Agreement, (ii) thereafter
becomes generally obtainable by a party other than as a result of an
unauthorized disclosure by the party taking advantage of this clause, (iii)
is required by law, regulation or court order to be disclosed by such party,
provided that in the case of this clause, prior notice of such disclosure
has been given to the party which furnished such information, when legally
permissible, and that such other party which is required to make the
disclosure uses its best efforts to provide sufficient notice to permit the
party which furnished such information to take legal action to prevent the
disclosure, or (iv) is reasonably necessary, in the opinion of counsel, to
be disclosed in the context of a legal proceeding or regulatory
investigation provided that prior notice shall be given to the party which
furnished the information. This Section 4.1 shall survive any termination
of this Agreement for two (2) years.
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V. REPRESENTATIONS & WARRANTIES
Section 5.1 Representations & Warranties of Fingerhut
Fingerhut hereby represents and warrants, as of the date of this
Agreement, as follows:
x. Xxxxxxxxx is a duly organized corporation, validly existing, and
in good standing under the laws of the State of Minnesota. Fingerhut is
duly qualified or licensed to perform any business necessary under this
Agreement and will be in good standing in each jurisdiction in which its
business or the exercise of its rights, powers or authority under this
Agreement renders such qualification necessary.
x. Xxxxxxxxx has the requisite corporate power and authority to
enter into, and to carry out its obligations under this Agreement.
c. The execution and delivery by Fingerhut of this Agreement and
the consummation by Fingerhut of the transactions contemplated hereby have
been duly authorized prior to the date of this Agreement by all necessary
corporate action on its part.
d. This Agreement has been duly executed and delivered by
Fingerhut and constitutes a valid and binding obligation of Fingerhut
enforceable against Fingerhut in accordance with its terms.
x. Xxxxxxxxx is not subject to, or obligated under any provision
of (i) its articles of incorporation, (ii) any material agreement,
arrangement or understanding, (iii) any license, franchise or permit, or
(iv) any law, regulation, order, judgment or decree that would be breached or
violated, or of which a right of termination or acceleration or any
encumbrance on any of its assets would be created by the execution, delivery
and performance of this Agreement by Fingerhut, or the consummation
by Fingerhut of the transactions contemplated by this Agreement.
f. No authorization, consent or approval of, waiver or exemption
by, or filing or registration with any public body, court, third party or
authority is necessary on the part of Fingerhut for the consummation by
Fingerhut of the transactions contemplated by this Agreement.
Section 5.2. Direct Merchants Bank Representations and
Warranties.
Direct Merchants Bank hereby represents and warrants, as of the date
of this Agreement, as follows:
a. Direct Merchants Bank is a national banking association
duly organized, validly existing, and in good standing under the laws of
the United States of America, and is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which its business or
the exercise of its rights, powers or authority under this Agreement renders
such qualification necessary.
b. Direct Merchants Bank has the requisite power and authority to
enter into, and to carryout its obligations under this Agreement.
c. The execution and delivery by Direct Merchants Bank of this
Agreement and the consummation by Direct Merchants Bank of the transactions
contemplated hereby have been duly authorized prior to the date of this
Agreement by all necessary action on its part.
d. This Agreement has been duly executed and delivered by
Direct Merchants Bank and constitutes a valid and binding obligation of
Direct Merchants Bank enforceable against Direct Merchants Bank in accordance
with its terms.
e. Direct Merchants Bank is not subject to, or obligated
under any provision of (i) its articles of incorporation or bylaws,
(ii) any material agreement, arrangement or understanding, (iii) any license,
franchise or permit, or (iv) any law, regulation, order, judgment or decree
that would be breached or violated, or which a right of termination
or acceleration or any encumbrance on any of its assets would be created
by the execution, delivery and performance of this Agreement by Direct
Merchants Bank, or the consummation by Direct Merchants Bank of the
transactions contemplated by this Agreement.
f. No authorization, consent or approval of, waiver or exemption
by, or filing or registration with any public body, court, third party or
authority is necessary on the part of Direct Merchants Bank for the
consummation by Direct Merchants Bank of the transactions contemplated by this
Agreement.
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VI. INDEMNIFICATION
Section 6.1 Indemnification Obligations
a. By Direct Merchants Bank. Direct Merchants Bank shall be liable
to and shall defend, indemnify and hold harmless, Fingerhut and its
affiliates, and its respective officers, directors, employees and permitted
assigns, from and against any and all Losses (as hereinafter defined)
incurred by any of them by reason of or related to Direct Merchants Bank's
failure to perform its obligations hereunder.
b. By Fingerhut. Fingerhut shall be liable to and shall defend,
indemnify and hold harmless, Direct Merchants Bank and its affiliates, and
its respective officers, directors, employees and permitted assigns, from
and against any and all Losses (as hereinafter defined) incurred by reason
of or related to Fingerhut's failure to perform its obligations hereunder.
c. "Losses" Defined. For purposes of this Section 6.1, the term
"Losses" shall mean any losses, liability, claims, damages, costs, and
expenses, including attorney's fees, disbursements and court costs,
reasonably incurred by an indemnified party, judgments, fines and other
amounts paid in settlement, incurred or suffered by an indemnified party
in connection with any threatened, pending or adjudicated claim, demand,
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by an unaffiliated third party arising out of or in connection
with any breach or alleged breach of this Agreement), without regard to
whether or not such Losses would be deemed material under this Agreement.
Section 6.2 Procedures
a. Notice of Claims. The parties agree that in case any claim is
made, or any suit or action is commenced which, if not corrected, may give
rise to a right of indemnification by a party hereunder ("Indemnified
Party") from one of the other parties ("Indemnifying Party"), the
Indemnified Party will give notice to the Indemnifying party as promptly as
practicable after receipt by the Indemnified party of such notice or knowledge
of such claim, suit, or action. On a best efforts basis, notice to the
Indemnifying Party shall be given no later than fifteen days after receipt by
the Indemnified Party in the event a suit or action has commenced or
thirty days under all other circumstances; provided, however, that the
failure to give prompt notice shall not relieve an Indemnifying Party of its
obligation to indemnify except to the extent that the Indemnifying Party is
materially prejudiced by such failure. The Indemnified Party shall make
available to the Indemnifying Party and its counsel and accountants at
reasonable times and for reasonable periods, during normal business hours,
all books and records of the Indemnified Party relating to any such
possible claim for indemnification, and each party will render to the
other such assistance as it may reasonably require of the other in order to
ensure prompt and adequate defense of any suit, claim or proceeding
based upon a statement of facts which may give rise to a right of
indemnification hereunder.
b. Selection of Counsel. The Indemnifying Party shall have the
right to defend, compromise and settle any suit, claim or proceeding in the
name of the Indemnified Party to the extent that the Indemnifying Party
may be liable to the Indemnified Party under Section 6 above in connection
therewith; provided, however, that the Indemnifying Party shall not
compromise or settle a suit, claim or proceeding unless it assumes the
obligation to indemnify for all Losses related thereto. The
Indemnifying Party shall notify the Indemnified Party within ten days of
having been notified pursuant to Section 6 of this Agreement if the
Indemnifying Party elects to assume the defense of any such claim, suit or
action and employ counsel in a reasonable exercise of its discretion. The
Indemnified Party shall have the right to employ its own counsel to
participate in such defense, compromise or settlement, but the fees and
expenses of such counsel shall be at the Indemnified Party's expense, unless
the Indemnifying Party shall not have employed counsel to take charge of the
defense thereof.
c. Settlement of Claims. The Indemnified Party may at any time
notify the Indemnifying Party of its intention to settle or compromise any
claim, suit or action against the Indemnified Party in respect of which
indemnification payments may be sought from the Indemnifying Party
hereunder, but shall not settle or compromise any matter for which
indemnification may be sought without the consent of the Indemnifying Party.
Any settlement or compromise of any claim, suit or action in
accordance with the preceding sentence, or any final judgment or decree
entered on or in any claim, suit or action which the Indemnifying Party
did not assume the defense of in accordance herewith, shall be deemed to have
been consented to by, and shall be binding upon, the Indemnifying Party as
fully as if the Indemnifying Party had assumed the defense thereof and a
final judgment or decree had been entered in such suit or action by a court
of competent jurisdiction for the amount of such settlement,
compromise, judgment or decree.
d. Subrogation. The Indemnified Party shall be subrogated to
any claims or rights of the Indemnifying Party as against any other persons
with respect to any amount paid by the Indemnifying Party under this Section
6. The Indemnified Party shall cooperate with the Indemnifying Party, at the
Indemnifying Party's expense, in the assertion by the Indemnifying Party of
any such claim against such other persons.
e. Indemnification Payments. Amounts owing under this Section
6.2 shall be paid promptly upon written demand for indemnification containing
in reasonable detail the facts giving rise to such liability; provided,
however, if the Indemnifying Party notifies the Indemnified Party within
thirty (30) days of receipt of such demand that it disputes its
obligation to indemnify and the Parties are not otherwise able to
reach agreement, the controversy shall be settled by final order entered
by a court of competent jurisdiction.
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Section 6.3. Survival of Indemnification.
The provisions of this Section shall expressly survive any termination
of this Agreement, under Section 3.1, or otherwise for a period of five
(5) years.
VII. MISCELLANEOUS
Section 7.1 Notices. Any notice provided for herein shall be in
writing and shall be hand delivered or mailed by first class, registered or
certified mail, postage prepaid return receipt requested, or sent by
electronic or facsimile transmission, addressed as follows:
If to Direct Merchants Bank:
Direct Merchants Credit Card Bank, National Association
1455 West 0000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: President
with a copy to:
Metris Companies Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 0000
Xx. Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: President
If to Fingerhut:
Fingerhut Corporation
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
With a copy to the General Counsel
Or at such other place as may be directed in writing by the party to
receive notice.
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Section 7.2. Assignment. This Agreement may be assigned by the
parties to any affiliate, subsidiary or successor of such party upon notice,
provided that any affiliate, subsidiary or successor agrees in writing to be
bound by the Terms of this Agreement. This Agreement may not otherwise be
assigned without the prior written consent of the non-assigning party.
Section 7.3 No Joint Venture. In performing the obligations under
this Agreement, the parties are independent contractors. This Agreement is
not intended to create and shall not be construed to create a
partnership, joint venture or agency relationship.
Section 7.4 Captions. The captions and headings used in this
Agreement have been inserted for convenience and for reference only and
shall not be deemed to limit or define the text of this Agreement.
Section 7.5 Validity. If any provision or portion thereof of this
Agreement is held invalid, illegal, void or unenforceable by reason of any
rule or law, administrative order, judicial decision or public policy, all
other provisions of this Agreement shall remain in full force and effect.
Section 7.6 Amendments. Except as provided herein, neither this
Agreement nor any of its provisions shall be amended or modified except in
writing executed by a duly authorized officer of each of the parties.
Section 7.7 Audit. Each party agrees to allow the other, upon
reasonable notice, to audit its performance under this agreement.
Section 7.8 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Minnesota without
giving effect to the principles of conflicts of laws thereof.
Section 7.9 Force Majeure. No party shall be liable for any
failure of or delay in the performance of this Agreement for the period that
such failure or delay is due to acts of God, public enemy, war, strikes or
labor disputes, or any other cause beyond the parties' reasonable control; it
being understood that lack of financial resources is not to be deemed a cause
beyond a party's control. Each party shall notify the other parties promptly
of the occurrence of any such cause and carry out this Agreement as promptly
as practicable after such cause is terminated; provided, however, that the
existence of any such cause shall not extend the term of this Agreement.
Section 7.10 Waiver. No party shall deemed to have waived any of
its rights, powers or remedies under this Agreement unless such waiver is
given in writing by such party.
Section 7.11 Entire Agreement. This Agreement constitutes the
entire agreement between the parties in connection with the services
hereunder and supersedes all prior agreements, negotiations and
communications on such subject matter.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement
effective as of the date and year first above written:
FINGERHUT CORPORATION
By
Title
DIRECT MERCHANTS CREDIT CARD
BANK, NATIONAL ASSOCIATION
By
Title
EXHIBIT A
Compensation
Direct Merchants Bank agrees to pay Fingerhut a fee of XXXX dollars
($X.XX) for each Fingerhut Customer name and address subject to the
following conditions: (i) the Fingerhut customer name and address was first
obtained from the Fingerhut Customer File, and (ii) such Fingerhut Customer
name and address results in a Direct Merchants Bank Account Booked,
notwithstanding whether such Account Booked was a jointly marketed
product between Direct Merchants Bank and an unaffiliated third party.
Direct Merchants Bank shall not pay such fee to Fingerhut for any Account
Booked pursuant to the Co-brand Credit Card Agreement between Fingerhut
and Direct Merchants Bank dated __________, 1996 and effective March 1,
1995. In addition, Direct Merchants Bank shall pay a non-cumulative fee of
XX basis points of net purchases on an Account Booked excluding any
Account Booked pursuant to the Co-brand Credit Card Agreement. Payment of
the $X.XX and XX basis points of net purchases terminates upon
termination of this Agreement.
