Direct Marketing Agreement

DIRECT MARKETING AGREEMENT


This AGREEMENT, dated effective as of December 15, 1999 by and among Advanta Bank Corp. ("ABC"), a corporation having a place of business at 11850 Election Road, Salt Lake City, Utah, 84020 and CFM DIRECT ("CFM"), having a place of business at Oakbrook Terrace Tower, One Tower Lane, Suite 2400, Oakbrook Terrace, IL 60181.


WITNESSETH


WHEREAS, CFM is in the business of providing direct mail and other marketing services; and


WHEREAS, ABC is in the commercial credit card business, seeks to attract customers interested in obtaining commercial credit cards ("Customers") and markets its commercial credit cards in a manner consistent with CFM's business; and


WHEREAS, ABC wishes to retain CFM to perform various services in connection with ABC's direct marketing program for originating its commercial credit cards, and CFM is willing to undertake to perform such services, as more particularly set forth below;


NOW THEREFORE, the parties hereto, in consideration of the mutual premises and covenants herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows:


SECTION 1. PERFORMANCE OF SERVICES BY CFM
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A. CFM shall develop and execute marketing programs for the origination of MasterCard credit cards from prospective commercial Customers, including, but not limited to, creative development, list sourcing, list processing and file audits. Prospective commercial Customers to whom CFM mails promotional material applications will be selected by CFM in accordance with criteria established by ABC. The particulars of each mail campaign, including the number of prospective Customers to be solicited, shall be documented in the form attached hereto as Schedule A (the "Schedule"). The parties hereby acknowledge that the actual number of prospective Customers to be solicited in any mail campaign may be larger or smaller than that listed written approval before using any particular type or form of marketing material (such as layout and copy, paper, envelopes and the like), and CFM shall obtain ABC's prior written approval with respect to all mailing lists CFM proposes to use with respect to such mailings, which approval shall not be unreasonably withheld.


B. CFM may, in its discretion, seek and retain one or more subcontractors, agents or other representatives ("Outside Agents") to perform all or any portion of the services it has undertaken to perform hereunder. CFM shall obtain ABC's prior written approval before utilizing the services of any such Outside Agents, and CFM shall cause such Outside Agents to execute a confidentiality agreement in the form attached hereto as Exhibit "A-1".


C. CFM shall perform its obligations hereunder and shall complete the mailings for the origination of ABC credit cards as agreed pursuant to each Schedule provided, however, that the completion of such mailings may be delayed up to 60 days without constituting a breach of this Agreement by CFM, to the extent that such delay: 1) is caused by a subcontractor engaged by CFM on the recommendation of ABC and/or 2) is specifically requested in writing by ABC.


D. ABC will cooperate fully with CFM in CFM's performance of its duties hereunder and, upon request, will provide such advice and render such assistance as CFM may reasonably request; provided, however, that nothing in this Section 1.D. shall be deemed to impose any obligation upon ABC to provide any financial contribution or assistance to CFM. CFM may, but shall not be obliged to, rely upon any advice provided by ABC, it being agreed and understood that CFM and ABC are completely independent and unrelated parties and that CFM is free to exercise its own discretion and judgment in fulfilling its obligations hereunder.


E. At the request of ABC from time to time, CFM will inform ABC as to what steps it has taken, is taking and is intending to take to fulfill, or to cause to be fulfilled, CFM's obligations hereunder.


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SECTION 2. PAYMENT FOR SERVICES
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A. ABC shall compensate CFM for performance of its obligations under this Agreement in the manner specified below, which compensation may be amended only in writing by the parties hereto.


B. ABC will make progress payments to CFM as outlined in each Schedule. These payments are intended as progress payments and are not to be construed as guarantees or compensation by ABC to CFM. Subject to the following paragraph, ABC will pay CFM for each credit card "Account Booked". An "Account Booked" is a properly established credit card account which meets ABC's credit underwriting and other standard criteria and which is opened as a result of marketing programs developed by CFM and which is reflected on the report furnished to CFM by ABC. Compensation to CFM, if any, with respect to properly established credit card accounts opened shall be determined as agreed to by the parties within sixty (60) days of the date the final statement of compensation to CFM is rendered pursuant to each Schedule.


C. On the dates stated in each Schedule (or if any such date is not a business date for ABC, on the next succeeding business day), ABC shall prepare, certify and deliver to CFM a statement setting forth CFM's Compensation (as defined in each Schedule), and based on a statement from ABC setting forth the total number of Accounts Booked as of the previous month end resulting from the origination of credit cards under the programs developed by CFM. In order to calculate the above accurately, the responses received and credit cards issued by ABC will be coded by the application processor so as to identify them as resulting from the marketing programs developed by CFM. Notwithstanding the foregoing, however, in the event that the completion of mailings for the origination of credit cards is delayed pursuant to Paragraph C of Section 1 of this Agreement, the preparation of statements, and any payments due as a result thereof shall be delayed by the same amount of time as the aforesaid delay in the completion of mailings.


D. The parties hereto have used their experience and best efforts to accurately and fully anticipate the costs, and thereby the appropriate payments


3 associated with the program contemplated hereunder. The parties acknowledge that the pricing in each Schedule reflects expenditures which are anticipated to be incurred by CFM in performing its obligations under this Agreement. Nevertheless, in the event that any material cost-related discrepancies occur and/or such expenditures are materially larger or smaller than those anticipated (unless due to the negligence of or willful breach by CFM), the parties hereto agree to resolve such in good faith and through fair dealing within sixty (60) days of the date the final statement of compensation to CFM is rendered pursuant to each Schedule.


SECTION 3. RELATIONSHIP BETWEEN THE PARTIES


Each of the parties hereto is acting as a principal and not as an agent of the other, and the relationship and arrangements created hereunder shall not create, and shall not be deemed to create, a partnership, joint venture or any similar relationship or arrangements between the parties hereto. In carrying out its duties and performing its obligations hereunder, each of the parties hereto is acting as an independent contractor, and the employees, subcontractors, agents or other representatives of one of them shall not be deemed to be employees, subcontractors, agents or other representatives of the other.


SECTION 4. REPRESENTATIONS AND WARRANTIES


A. ABC represents, warrants and covenants to CFM that:


1. ABC is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah; it has the power and authority to conduct all of the activities conducted by it and to own or lease all of the assets owned or leased by it; and it is duly licensed or qualified to do business and in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted by it and/or the character of the assets owned or leased by it makes such qualification or licensing necessary. All corporate action necessary to authorize the execution, delivery a ...