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Exhibit 10.l
EXTENDED SERVICE PLAN AGREEMENT
This Agreement (the "Agreement"), made and entered into
this __ day of October, 1996, by and between Fingerhut
Corporation and Infochoice USA, Inc. (collectively
"Fingerhut"), and Metris Direct, Inc. ("Metris").
WHEREAS, Fingerhut shall make available to purchasers
of its Merchandise (as defined herein), an Extended Service
Agreement (as defined below), providing coverage for defects
in materials and workmanship and for mechanical or
electrical failure of the Merchandise; and
WHEREAS, Metris shall coordinate and manage all of the
marketing activities for Fingerhut's sales of extended
warranties or service plans to purchasers of its
Merchandise.
WHEREAS, Metris shall also, either for itself or
through a third party underwriter, insure and service the
contractual obligations of the Extended Service Agreements
sold by Fingerhut; and
NOW THEREFORE, in consideration of the mutual promises
contained herein, the parties hereby agree as follows:
DEFINITIONS
The following terms, as used in this Agreement shall
have the following meanings whether used in the singular or
plural:
"Customer" shall mean a customer of Fingerhut who purchases
Merchandise for personal, family and household purposes
within the U.S. and its territories, where applicable.
"Extended Service Agreement" shall mean a repair or
replacement service agreement between Customer (as defined
herein) and the applicable service plan underwriter sold by
Fingerhut, and managed by Metris, covering mechanical or
electrical failure of Merchandise and defects in materials
and workmanship.
"Marketing Management Fee" shall mean the amount of the Net
Price, as noted in Exhibit A to this Agreement, which
Fingerhut is required to pay Metris for coordinating and
managing the marketing programs for each Extended Service
Agreement sold under this Agreement.
"Merchandise" shall mean any new goods (as identified in
Exhibit B) sold by Fingerhut which are sold to a Customer
during the term of this Agreement.
"Merchandise Warranty" shall mean the warranty of the
manufacturer with respect to the Merchandise.
"Net Price" shall mean the amount Fingerhut is required to
pay Metris for each Extended Service Agreement sold under
this Agreement.
"Sales Price" shall mean the retail sales cash price at
which Fingerhut sells each Service Agreement.
"Underwriting and Servicing Fee" shall mean the amount of
Net Price, as noted in Exhibit B to this Agreement, which
Fingerhut is required to pay Metris for performing, either
for itself or through a third party underwriter and
servicer, the contractual obligations of the Extended
Service Agreements sold by Fingerhut.
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ARTICLE 1. PROGRAM
Section 1.1. Service.
During the term of this Agreement, including any
renewals, Fingerhut shall sell the Extended Service
Agreement to any or all of its Customers who purchase
Merchandise eligible for extended service beyond the
Merchandise Warranty in accordance with this Agreement.
Section 1.2. Exclusivity.
During the term of this Agreement, Fingerhut shall
not make available to any Customer, any other agreement
providing for extended service which is competitive,
similar, or an alternative to the Extended Service Agreement
marketed and offered by Metris. Notwithstanding the
foregoing, in the event Metris notifies Fingerhut in writing
of its inability to provide an Extended Service Agreement on
Merchandise, Fingerhut may provide directly or contract with
a third party service provider to provide such Extended
Service Agreement.
Section 1.3. Coverage Under the Extended Service
Agreement.
Coverage for parts and labor for each component
protected by the Extended Service Agreement shall begin on
the date following expiration of the parts or labor
Merchandise Warranty applicable to each Merchandise
component indicated in the Merchandise Warranty. Coverage
will continue for the period shown in Exhibit B for each
product.
Section 1.4. Service Coverage.
Metris shall be responsible for the fulfillment of
the contractual obligations to the Customer either for
itself or through a third party underwriter, under each
Extended Service Agreement from the date sold to a Customer
by Fingerhut, provided however, that the Merchandise to be
covered under the Extended Service Agreement was received by
the Customer in an undamaged state. Metris shall become
contractually liable directly to the Customer and Metris
will pay the full amount of any claim provided that such
claim is within the terms of coverage of the Extended
Service Agreement. If Merchandise covered under the
Extended Service Agreement is to be replaced, Fingerhut
agrees to provide Customer with such replacement product.
In such case, Metris shall reimburse Fingerhut for the cost
of such product at Fingerhut's standard cost plus 20% to
cover shipping and handling. Additionally, if Fingerhut
repairs any Merchandise covered under the Extended Service
Agreement, Metris shall reimburse Fingerhut for the cost of
such repair. All such reimbursements shall be netted
against any remittances required by Fingerhut on a monthly
basis provided detail supporting such reimbursement has been
previously provided to and approved by Metris. Fingerhut
and Metris shall, in good faith mutually agree on the retail
sales cash price of the Extended Service Agreement. Metris
shall only be obligated to fulfill such obligations in
states that it is legally authorized to do so.
Section 1.5. Remittances Required by Fingerhut.
(a) Fingerhut shall have the right to offer
(either directly or through third parties) the Customer
financing for the Customer's warranty purchase using any
credit offer Fingerhut or its Customers may choose, however,
Metris shall have no collection risk with respect to any
Extended Service Agreement financed through a Fingerhut
offer.
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(b) Daily, Fingerhut shall send Metris via system
data transfer the names, addresses and other information
necessary for fulfillment of all Customers who purchased
Extended Service Agreements. Within ten (10) days after the
close of each Fingerhut accounting month, Fingerhut shall
remit the sales report and other information for that month
to Metris for each such Extended Service Agreement sold for
all cancellations, which will provide the net amount due to
Metris. Metris shall send Fingerhut an invoice which shall
be for the Marketing Management Fee and Underwriting and
Servicing Fee for all Extended Service Agreements sold as
set forth in Exhibit A, attached hereto and incorporated
herein by reference, for the number of Extended Service
Agreements sold in that month related to merchandise that
has been shipped, less cancellations or returns of such
Extended Service Agreements in that month. Terms shall be
30 days from the last day of the accounting month in which
the Service Agreements were sold or cancelled.
Section 1.6. Merchandise Covered.
The list of Merchandise in Exhibit B, attached
hereto and incorporated herein by reference shall constitute
the eligible goods for which an Extended Service Agreement
may be sold. The list may be amended by mutual written
agreement of the parties. Any Merchandise, other than
jewelry and furniture, which does not have any Merchandise
Warranty whatsoever, shall not be eligible goods for which
an Extended Service Agreement may be sold.
Section 1.7. Records/Audits.
Both parties shall maintain records related to the
Extended Service Agreements sold under this Agreement. The
parties shall each allow its auditors or other designees to
audit performance under this Agreement. Such audits shall
be subject to reasonable notice and conducted during normal
business hours.
Section 1.8. Solicitation.
Unless Metris and Fingerhut agree to use
Fingerhut's direct mail solicitation or telemarketing media,
Metris shall develop media sources for direct mail
solicitations or telemarketing. If Metris does use
Fingerhut's direct mail solicitation and telemarketing
media, Metris shall reimburse Fingerhut for the cost of such
catalog or other mail space that it directly utilizes and
the variable cost of telemarketing sources, plus a
reasonable allocation of fixed overhead, at a combined rate
per hour of telemarketing time used, all as mutually agreed
to at the beginning of each calendar year during this
Agreement by the parties to this Agreement. Metris and
Fingerhut agree to cooperate in good faith and use best
efforts to develop direct mail solicitations, and
telemarketing programs which meet all regulatory guidelines
and requirements and are designed to provide the most cost
effective use of customer service time.
Section 1.9. Ownership of Customer Names.
Metris agrees that Fingerhut has and shall have
exclusive ownership of all of its Customer names,
information, marketing methods and business practices
(collectively "Customer Names"). Metris shall not use or
provide to any other firm or entity, any names or
information developed in the course of this Extended Service
Agreement Program or furnished to Metris by Fingerhut, for
any purpose whatsoever except as contemplated herein.
Metris will hold all customer names and information as
confidential information and will provide appropriate
security measures to protect such information from
unauthorized use.
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Section 1.10. Program Literature.
Neither Fingerhut, nor anyone on its behalf, shall
in any document or advertising describe the coverage offered
under the Extended Service Agreement in terms other than
those used in the Extended Service Agreement itself or as
otherwise approved by Metris. Metris shall notify Fingerhut
in writing of its objections to any such advertising within
ten (10) business days of receipt of the advertising from
Fingerhut. However, Fingerhut shall allow its name to be
used in any advertising as long as such use is approved in a
timely basis by Fingerhut and does not imply that Fingerhut
has any contractual obligation under the Extended Service
Agreement.
ARTICLE 2. INDEMNIFICATION
Section 2.1. Obligations.
(a) By Metris. Metris 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 reason of or
related to Metris' breach of its obligations hereunder.
(b) By Fingerhut. Fingerhut shall be liable to
and shall defend, indemnify and hold harmless Metris 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 breach of any of its obligations
hereunder.
(c) "Losses" Defined. For purposes of this
Section 2.1., the term "Losses" shall mean any liability,
damages, costs, losses and expenses, including attorneys'
fees, disbursements and court costs, reasonably incurred by
Metris or Fingerhut 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) without regard
to whether or not such Losses would be deemed material under
this Agreement.
Section 2.2. 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 for a Party hereunder ("Indemnified Party")
from the other Party ("Indemnifying Party"), the Indemnified
Party will give notice to the Indemnifying Party as promptly
as practicable after the 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 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.
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(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 2.1. 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 relating thereto. The Indemnifying
Party shall notify the Indemnified Party within ten days of
having been notified pursuant to Section 2.2.(a) 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 if the
Indemnifying Party so elects to assume such defense, 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, or with regard to such claim, 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 Article 2. 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 Article 2 shall be paid promptly upon written
demand for indemnification containing in reasonable detail
the facts giving rise to such liability; provided, however,
that 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.
Section 2.3. Survival of Indemnification.
The provisions of this Article 2 shall expressly
survive any termination of this Agreement under Article 4
below or otherwise for a period of ten (10) years.
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ARTICLE 3. CONFIDENTIALITY
Section 3.1. Confidential Information.
Confidential Information will be kept in
confidence by such other party, including its subsidiaries,
affiliates, officers, directors, employees, agents,
consultants and contractors, 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) all trade secrets and other
confidential business information learned in the course of
performance by any party of its obligations hereunder, and
(ii) any information or data which is disclosed by a party
to the other party under or in contemplation of this
Agreement.
Notwithstanding the foregoing, the term
Confidential Information shall not include information
which: (i) is already known to such other party when
received, (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, or (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 by
the party which furnished the information.
ARTICLE 4. TERM AND TERMINATION
Section 4.1. Term and Termination.
This Agreement shall take effect upon the date
first written above, and shall remain in effect for seven
(7) years ("Initial Term"). Thereafter, this Agreement will
automatically renew for one term of three (3) years
("Renewal Term") unless either Party provides written notice
to the other, not less than twelve (12) months prior to the
end of the Initial Term or Renewal Term, of its intent to
terminate this Agreement. Either Party may terminate this
Agreement reserving all other remedies and rights hereunder
in whole or in part and otherwise available at law or in
equity, upon the occurrence of an Event of Default, as
defined herein. Upon the occurrence of an Event of Default,
the non-defaulting Party may terminate this Agreement by
giving notice of its intent to terminate. Such written
notice shall describe the Event of Default.
Fingerhut shall also have the right to terminate
this Agreement by written notice to Metris upon the
occurrence of a Change of Control (as defined below) with
respect to Metris. A "Change in Control" shall be deemed to
have occurred if (a) 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 Metris; (b) a majority of the seats (other than
vacant seats) on the Board of Directors of Metris shall at
any time be occupied by persons who were neither (1)
nominated by Fingerhut, or by the Board of Directors of
Metris, nor (2) appointed by directors so nominated; or (3)
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
Metris.
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Section 4.2 Event of Default.
An "Event of Default" shall be deemed to have
occurred upon the occurrence of any of the following:
(a) A material breach of a representation,
agreement, covenant or other obligation of any of the
parties to this Agreement (any such breach is herein
referred to as a "Material Breach"); provided, however, that
no Event of Default shall be deemed to have occurred unless
and until a non-breaching party provides the breaching party
with written notice of such Material Breach, describing in
reasonable detail the nature of such Material Breach, and
(i) the breaching party shall have had an opportunity to
cure such Material Breach (which is capable of being cured)
within sixty (60) days after such notice (unless such
Material Breach is with respect to a monetary matter, the
cure of which requires only the payment of a specified
amount of money pursuant to the terms of this Agreement, in
which case the breaching party shall have an opportunity to
cure within five (5) business days after such notice), (ii)
the breaching party does not cure such Material Breach
within the applicable time period, or, if such Material
Breach, other than a Material Breach relating to a monetary
matter, cannot reasonably be cured within sixty days, but is
curable, the breaching party does not; (x) undertake to cure
such Material Breach within such sixty day period and (y)
after such sixty day period, diligently and continuously use
all reasonable efforts to cure, and (iii) the notifying
party thereafter declares an Event of Default. In respect
of clause (ii) of this Section 4.2, such extended cure
period shall continue so long as the parties hereto
reasonably agree that the actions being taken by the
breaching party are reasonably expected to cure such
Material Breach.
(b) If, at any time within twelve (12) months
following the expiration of any cure period provided in
Section 4.2 above, there shall occur a Material Breach (the
"Second Material Breach") and such Second Material Breach is
of the same nature as the Material Breach (the "First
Material Breach") by the breaching party that gave rise to
such cure period, then an Event of Default shall be deemed
to have occurred upon the delivery of notice of such Second
Material Breach to the breaching party by the notifying
party referred to in Section 4.2 and upon such notifying
party declaring an Event of Default.
(c) If there shall occur a "Bankruptcy," as
hereinafter defined, of either Party, the non-Bankruptcy
party may declare an Event of Default. For purposes of this
Agreement, the term "Bankruptcy" shall mean: (i) the entry
of a decree or order for relief by a court of competent
jurisdiction in any involuntary case under any bankruptcy,
insolvency or similar law now or hereafter in effect and
such decree or order shall not be vacated, set aside or
stayed within ninety (90) days after its entry, (ii) the
entry of a decree or order appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
similar agent for any substantial part of the assets or
property of such party and such decree or order shall not be
vacated, set aside or stayed within ninety (90) days after
its entry, (iii) the ordering of the winding up or
liquidation of the affairs of a party and such order shall
not be vacated, set aside or stayed within one hundred
twenty (120) days after its entry, (iv) the filing of a
petition in any such involuntary bankruptcy case, which
petition remains undismissed for a period of ninety (90)
days or which is not dismissed or suspended pursuant to
Section 305 of Title 11 of the United States Code (or any
corresponding provision of any future United States
Bankruptcy law), (v) the commencement of a voluntary case
under any bankruptcy, insolvency or similar law now or
hereafter in effect, (vi) the consent to the entry of an
order for relief in an involuntary case under any such law
or to the appointment of or taking possession of any
substantial part of the assets or property by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or
similar agent, or (vii) the making of any general assignment
for the benefit of creditors.
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ARTICLE 5. MISCELLANEOUS
Section 5.1. Notices.
Any notice given in accordance with the provisions
of this Agreement must be in writing and sent by registered
or certified mail return receipt requested to the respective
addresses of the parties shown at the beginning of this
Agreement. Notices shall be sent to Metris and to
Fingerhut, shall be addressed as follows:
If to Metris:
Metris Direct, Inc.
Interchange Building
000 Xxxxx Xxxxxxx 000, Xxxxx 0000
Xx. Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
If to Fingerhut:
Fingerhut Corporation
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Senior Vice President
With a copy to the General Counsel
Section 5.2. Applicable Law.
This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the
internal laws of the State of Minnesota without giving
effect to the principles or conflicts of laws thereof.
Section 5.3. Severability.
If any provision of this Agreement or portion
thereof is held invalid, illegal, void or unenforceable by
reason of any rule of law, administrative or judicial
provision or public policy, such provision shall be
ineffective only to the extent invalid, illegal, void or
unenforceable, and the remainder of such provision and all
other provisions of this Agreement shall nevertheless remain
in full force and effect.
Section 5.4. No Partnership or Joint Venture.
This Agreement does not create a partnership or
joint venture between the Parties, and neither Party to this
Agreement shall have any authority whatsoever to bind the
other Party to any obligation.
Section 5.5. No Third Party Beneficiaries.
Nothing in this Agreement, express or implied, is
intended or shall be construed to confer upon any person or
entity, other than the Parties and their respective
successors and assigns permitted by this Agreement, any
right, remedy or claim under or by reason of this Agreement.
Section 5.6. Captions: Counterparts.
The captions in this Agreement are for convenience
only and shall not be considered a part of or affect the
construction or interpretation of any provision of this
Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
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Section 5.7. Amendments and Waivers.
Neither the waiver by any party hereto of a breach
of or a default under any of the provisions of this
Agreement, nor the failure of any party hereto, on one or
more occasions, to enforce any of the provisions of this
Agreement or to exercise any right, remedy or privilege
hereunder shall thereafter be construed as a waiver of any
such provisions, rights, remedies or privileges hereunder.
Any of the terms, covenants, representations, warranties, or
conditions hereof may be waived only by a written instrument
executed by the party waiving compliance. This Agreement
may only be amended or modified by a subsequent written
agreement by and among the parties hereto.
Section 5.8. Assignment.
No party to this Agreement shall have the right to
assign or otherwise transfer its rights or obligations under
this Agreement, except with the prior written consent of the
other; notwithstanding, either party may assign or otherwise
transfer its rights or obligations under this Agreement to a
subsidiary or affiliate (in the case of Fingerhut only a
subsidiary or affiliate that sells merchandise to Fingerhut
Customers) upon notice to the other. Regardless of the
party to whom an assignment is made pursuant to this
Section 5.8., the assignee shall, as a condition to such
assignment, by written undertaking satisfactory to the
other, represent and warrant that the assignment was made in
accordance with all applicable laws and regulations and
assume and agree to be bound by the terms, provisions and
conditions of this Agreement to the same extent as the
assignor; provided, however, that no such assignment shall
relieve the assignor of its obligations (which shall be
primary and which may be discharged in whole or in part by
the assignee) under this Agreement, to the extent
applicable. Any unauthorized assignment and any assignment
made in contravention of this Section 5.8. shall be null and
void.
Section 5.9 Governing Law.
This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the
internal laws of the State of Minnesota without giving
effect to the principles or conflicts of laws thereof.
Section 5.10 Execution In Counterparts.
To facilitate execution, this Agreement may be
executed in as many counterparts as may be required; and it
shall not be necessary that the signatures of, or on behalf
of, each party, or that the signatures of all Persons
required to bind any party, appear on each counterpart; but
it shall be sufficient that the signature of, or on behalf
of, each party, or that the signatures of the Persons
required to bind any party, appear on one or more of the
counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in
making proof of this Agreement to produce or account for
more than the number of counterparts containing the
respective signatures of, or on behalf of all of the parties
hereto.
Section 5.11 No Agency.
This Agreement shall not be deemed expressly or by
implication to create an agency, employee, or servant
relationship between or among any of the parties hereto, or
any affiliates of the parties hereto for any purpose
whatsoever.
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Section 5.12 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 5.13 Amendment and Modification.
This Agreement may only be amended or modified by
a subsequent written agreement by and among the parties
hereto.
IN WITNESS WHEREOF, the duly authorized
representatives of the parties have executed this Agreement
as of the day and year first above written.
FINGERHUT CORPORATION METRIS DIRECT , INC.
By: By:
Title: Title:
INFOCHOICE USA, INC.
By:
Title:
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EXHIBIT A
Upon Metris' receipt from Fingerhut of the electronic
data transmission or hard copy information necessary for
fulfillment of all Customers who purchased Service
Agreements, Metris will issue and mail an Extended Service
Agreement to the Customer. The Service Agreements will be
mailed to each Customer within ten (10) business days of
receipt of the fulfillment information.
Metris will calculate a percentage of the extended
service plan's retail sales cash price deducted from such
price in determining the amount payable by Fingerhut to
Metris for servicing the obligations under such plan. Such
percentage has been determined based on the marketing method
or advertising media used to solicit the sale and based on
the effort expended by Fingerhut in soliciting the sale
using certain of its advertising or offering media versus
other media conducted by Metris with little input or effort
conducted by Fingerhut or its representatives. Such
percentage schedule shall initially be as found below, based
on each sales method as further defined below:
On-Page (Any extended service
plan sale or order received by
Fingerhut at the same time as
the product order without the
inbound telemarketing XX%
representative offering the
warranty separately as an
addition to a customer's order.)
Add-On (An inbound or
outbound telemarketing
call made at or within
10 days of the
original product order
during which the
Fingerhut XX%
telemarketing
representative
specifically solicits
the customer for the
purchase of an
extended service plan
in addition to their
merchandise order.)
Stand-Alone (A telemarketing
call made by a Metris
telemarketing representative or
its agent offering a warranty X%
product greater than 10 days
after product purchase and/or
within 30 days of the
manufacturer's warranty
expiration.)
Renewal (An offer
conducted by Metris to XX%
renew warranty
coverage of the
original term of the
warranty.)
Any offers or methods of further offering extended
service plans developed subsequent to the execution of this
contract which do not meet any of the definitions noted
above shall be conducted under an amended percentage
schedule to be mutually agreed to by the parties based on
the marketing method or advertising media used to solicit
the sale and also determined based on the effort expended by
Fingerhut in soliciting the sale using certain of its
advertising or offering methods versus other methods
conducted by Metris with little input or effort conducted by
Fingerhut or its representatives as noted above.
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Metris shall pay to Fingerhut the amount of the Net
Price plus XX% on any Merchandise returned by a Customer to
Fingerhut within the relevant Merchandise Warranty period
and for which Fingerhut has given full refund of the Sales
Price to the Customer. Any such payment by Metris will be
made by Fingerhut deducting the amount of the Net Price in
question from the next premium payment(s) to be made in
accordance with the remittance provisions herein. Fingerhut
will provide Metris details in writing of any such refund.
In the event a Customer cancels a Service Agreement after
the Merchandise Warranty expires, Metris shall calculate and
reimburse Fingerhut for a pro rata portion of the Net Price
less any claims incurred by such Customer and paid by
Metris. The pro-rata portion shall be computed by dividing
the Net Price by the term of the Extended Service Agreement
period, and then multiplying that monthly rate times the
number of months until expiration. In no event shall the
amount reimbursed exceed the Net Price of the Customer
contract.
If a Customer fails to make any installment purchase
payment for a Service Agreement during the Merchandise
Warranty period and Fingerhut notices Metris, Metris shall
cancel the Service Agreement and pay back to Fingerhut the
amount of the Net Price paid to Metris. If cancelled after
expiration of the Merchandise Warranty, Metris shall pay
Fingerhut a pro-rata refund of the Net Price paid less any
claims. In no event shall Fingerhut be responsible for
claims in excess of the Net Price of the contract.
Metris shall reimburse Fingerhut for the advertising
cost it expended in directly offering extended service plans
through its own advertising media for the reasons previously
mentioned above. Such advertising cost reimbursements shall
be determined and calculated based on an advertising cost
standard developed specifically for Metris' warranty product
offers within each advertising media used. The method and
details of such calculation, including the basis for cost
reimbursement, (i.e., orders received within each media or a
flat charge per catalog shipped or telephone call made or
received) shall be provided to Metris representatives in
writing for their review and approval within a reasonable
time prior to the establishment of such a charge or
reimbursement. Additionally, such standard shall be
adjusted periodically, in conjunction with Fingerhut's
normal adjustment of all of its advertising cost standards,
based on actual cost data and experience with the
advertising for warranty products within the Fingerhut
media. This reimbursement will be calculated and determined
monthly and may be deducted from the monthly retail sales
remittance noted above.
Merchandise product returns, including the related
extended service plan, or cancellation of the extended
service plan only may be accepted by Fingerhut under its
normal return policy terms and conditions. If Fingerhut
provides such customer with a full refund of the sales
price, including the warranty sale, then Fingerhut may
deduct from its next monthly payment to Metris, the full
warranty retail sales price previously remitted or to be
remitted to Metris, less the applicable commission on such
warranty sale received or to be received by Fingerhut.
(Fingerhut shall provide monthly details of such refund to
Metris in writing). However, if a product and/or its
related extended service plan is accepted after the
expiration of the manufacturer's warranty period, and
therefore the extended service plan coverage has commenced,
then Metris shall calculate and allow deduction for only a
pro-rata portion of the retail sales price, less any claims
incurred by such customer during such extended service plan
coverage period. The pro-rata portion of the retail sales
price shall be computed by dividing the retail sales price
by the total monthly term of the extended service plan, and
then multiplying that monthly rate times the number of
months until expiration. In no even shall Fingerhut be
responsible for claims in excess of the Net Price of the
contract.
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Schedule 1
MERCHANDISE/PRICING RECOMMENDATIONS
1) First Purchase Prices
2) 5 Year Step-Up Appliance Prices
3) Renewal Prices
4) Incentive Package
Calendar year basis - Calculation to revert to 0 volume
January 1 of each year.
Limitations
All service agreements are inclusive of the manufacturer's
warranty and begin on date of purchase.
Commercial use is excluded.
Only those products with a manufacturer's warranty of at
least 90 days' parts and labor are eligible for extended
service.
Products with a 2 year manufacturer's labor and parts
warranty are not eligible for a 2 year service agreement and
products with a 3 year manufacturer's labor and parts
warranty are not eligible for a 3 year service agreement.
Quality Furniture Care
Service Plan provides stain coverage for upholstered
furniture; lifting, peeling, cracking of solid wood,
veneered or laminated furniture; structural defects to
frames; warpage, breakage, or bending of metal components on
recliners and sleeper mechanisms, glass coverage on tables,
wall units and cabinets; foam resiliency to cushions and
mattresses.
Term of coverage - 2 years from date of purchase.
Product Categories
Quality Jewelry Care
Service plan provides labor and materials necessary to
maintain the jewelry purchased for 2 years from date of
purchase, and if the item cannot be repaired it will be
replaced. Benefits include ring resizing, stone tightening,
prong retipping, polishing; chain and bracelet soldering,
earring and clasp repair.
Product Categories
14
EXHIBIT B
[To be completed]
