SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
AMENDMENT NUMBER 1 TO
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
Commission File No. 1-11465
IDEON GROUP, INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 59-3293212
- -------------------------------- --------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
7596 Centurion Parkway, Jacksonville, Florida 32256
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (904) 218-1800
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
Common Stock, $.01 Par Value
Outstanding at August 11, 1995 28,496,132 Shares
Total Number of Pages 39
<PAGE>
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
(2) Plan of Reorganization and Agreement of Merger dated as of
January 23, 1995 between SafeCard, the Company and the Ideon
Merger Company, incorporated by reference to Appendix A of
SafeCard's 1995 definitive proxy statement which was included
in the Company's Registration Statement on Form S-4 (No.
33-58273) filed as of March 28, 1995.
3(a) The Company's Amended and Restated Certificate of
Incorporation, incorporated by reference to Appendix B of
SafeCard's 1995 definitive proxy statement which was included
in the Company's Registration Statement on Form S-4 (No.
33-58273) filed as of March 28, 1995.
3(b) Certificate of Amendment to the Company's Amended and
Restated Certificate of Incorporation, incorporated by
reference to Exhibit 3(b) of the Company's Registration
Statement on Form 8-B filed as of May 5, 1995.
3(c) The Company's By-Laws, incorporated by reference to
Appendix B of SafeCard's 1995 definitive proxy statement which
was included in the Company's Registration Statement on Form
S-4 (No. 33-58273) filed as of March 28, 1995.
Management Contracts and Compensatory Plans
10(a) Directors Deferral Plan, incorporated by reference to
Exhibit 10(a) of the Company's quarterly report on Form 10-Q
for the fiscal quarter ended June 30, 1995.
10(b) Directors Stock Plan, incorporated by reference to
Appendix D of SafeCard's definitive proxy statement which was
included in the Company's Registration Statement on Form S-4
(No 33-58273) filed as of May 5, 1995.
10(c) Form of Assignment and Amendment of Employment
Agreement, incorporated by reference to Exhibit 10(s) of the
Company's Registration Statement on Form 8-B filed as of May
5, 1995.
10(d) Amendment to Executive Deferred Compensation Plan,
incorporated by reference to Exhibit 10(u) of the Company's
Registration Statement on Form 8-B filed as of May 5, 1995.
10(e) Form of Amendment and Assignment of Executive Agreement,
incorporated by reference to Exhibit 10(w) of the Company's
Registration Statement on Form 8-B filed as of May 1995.
10(f) Form of Amendment and Assignment of Indemnification
Agreement with certain outside directors, incorporated by
reference to Exhibit 10(aa) of the Company's Registration
Statement on Form 8-B filed as of May 5, 1995.
Other Material Contracts
10(g)Agreement with Citibank (South Dakota), N.A.,
effective January 1, 1995, and executed in June 1995.
10(h) Purchase and Sale Agreement with American Express
Centurion Service Corporation and American Express Travel
Related Services Company, Inc., dated April 27, 1995,
incorporated by reference to Exhibit 10(h) to the Company's
Quarterly Report for the fiscal quarter ended June 30, 1995.
<PAGE>
11(a) Computation of Primary Earnings Per Share
11(b) Computation of Fully Diluted Earnings Per Share
15 Letter regarding unaudited interim financial
information
27 Financial Data Schedule
*Portions of Exhibit 10(g) have been omitted and filed
separately with the Commission pursuant to a confidential
treatment request.
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IDEON GROUP , INC.
--------------------------------------
(Registrant)
Date: April ____, 1996 /s/ G. Thomas Frankland
---------------------------------------
G. Thomas Frankland
Vice Chairman and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
EXHIBIT Pagination by Sequential
NUMBER DESCRIPTION Numbering System
(2) Plan of Reorganization and Agreement of Incorporated by reference to
Merger dated January 23, 1995, between Appendix A of SafeCard's 1995
SafeCard, the Company and Ideon definitive proxy statement which
Merger Company. was included in the Company's
Registration Statement on Form
S-4 (No. 33-58273) filed as of
March 28, 1995.
3(a) The Company's Amended and Restated Incorporated by reference to
Certificate of Incorporation. Appendix B of SafeCard's 1995
definitive proxy statement which
was included in the Company's
Registration Statement on Form
S-4 (No. 33-58273) filed as of
March 28, 1995.
3(b) Certificate of Amendment to the Incorporated by reference to
Company's Amended and Restated Exhibit 3(b) of the Registration
Certificate of Incorporation. Statement on Form 8-B filed as of
May 5, 1995.
3(c) The Company's By-Laws. Incorporated by reference to
Appendix B of SafeCard's 1995
definitive proxy statement which
was included in the Company's
Registration Statement on Form
S-4 (No. 33-58273) filed as of
March 28, 1995.
Management Contracts and Compensatory Plans
10(a) Directors Deferral Plan Incorporated by reference to Exhibit 10(a)
of the Company's Quarterly Report on
From 10-Q for the fiscal quarter ended
June 30, 1995.
10(b) Directors Stock Plan Incorporated by reference to
Appendix D of SafeCard's
definitive proxy statement which
was included in the Company's
Registration Statement on Form
S-4 (No. 33-58273) filed as of
May 5, 1995.
<PAGE>
10(c) Form of Assignment and Amendment Incorporated by reference to
of Employment Agreement. Exhibit 10(s) of the Company's
Registration Statement on Form
8-B filed as of May 5, 1995.
10(d) Amendment to Executive Deferred Incorporated by reference to
Compensation Plan. Exhibit 10(u) of the Company's
Registration Statement on Form
8-B filed as of May 5, 1995.
10(e) Form of Amendment and Assignment Incorporated by reference to
of Executive Agreement. Exhibit 10(w) of the Company's
Registration Statement on Form
8-B filed as of May 5, 1995.
10(f) Form of Amendment and Assignment Incorporated by reference to
of Indemnification Agreement with Exhibit 10(aa) of the Company's
certain outside directors. Registration Statement on Form
8-B filed as of May 5, 1995.
Other Material Contracts
10(g)* Agreement with Citibank (South Dakota), N.A., Page 7 through Page 24.
effective January 1, 1995 and executed in
June 1995.
10(h) Purchase and Sale Agreement with Incorporated by reference to
American Express Centurion Services Exhibit 10(h) of the Company's
Corporation and American Travel Related Quarterly Report on Form 10-Q for the
Services Company, Inc., dated April 27, 1995. fiscal quarter ended June 30, 1996.
</TABLE>
*Portions of Exhibit 10(g) have been omitted and filed separately with the
Commission pursuant to a confidential treatment request.
<PAGE>
SCHEDULE 1
(ACCOUNTS PROVIDED FOR SOLICITATION ACTIVITY)
Citibank Action [CONFIDENTIAL TREATMENT REQUESTED]
SafeCard Action [CONFIDENTIAL TREATMENT REQUESTED]
<PAGE>
SCHEDULE 2
(1995 PROTECTION PLUS MARKETING PLAN)
[CONFIDENTIAL TREATMENT REQUESTED]
<PAGE>
SCHEDULE 3
(REISSUE ACCOUNT TARGET MODELING)
(i)To promote marketing to [CONFIDENTIAL TREATMENT REQUESTED] CBSD
confirms its intent to [CONFIDENTIAL TREATMENT REQUESTED] in connection
with its [CONFIDENTIAL TREATMENT REQUESTED] to [CONFIDENTIAL TREATMENT
REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] of the Program. To
promote confidence on part of both parties in the [CONFIDENTIAL TREATMENT
REQUESTED] agrees to [CONFIDENTIAL TREATMENT REQUESTED] various aspects of
the process, such as the [CONFIDENTIAL TREATMENT REQUESTED] as the
[CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL TREATMENT REQUESTED]
and the Program [CONFIDENTIAL TREATMENT REQUESTED]. The parties agree
that, upon completion by [CONFIDENTIAL TREATMENT REQUESTED] they will
mutually agree upon a [CONFIDENTIAL TREATMENT REQUESTED] will always have
the right to [CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL
TREATMENT REQUESTED].
(ii) SafeCard may in its discretion [CONFIDENTIAL TREATMENT REQUESTED] to
be [CONFIDENTIAL TREATMENT REQUESTED] with [CONFIDENTIAL TREATMENT
REQUESTED]. The parties acknowledge that in [CONFIDENTIAL TREATMENT
REQUESTED] CBSD's assistance to SafeCard in [CONFIDENTIAL TREATMENT
REQUESTED] will [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL
TREATMENT REQUESTED] which the parties [CONFIDENTIAL TREATMENT REQUESTED].
Accordingly, SafeCard agrees to consult with and CBSD agrees to cooperate
with and assist SafeCard in determining the [CONFIDENTIAL TREATMENT
REQUESTED]. If CBSD requires the [CONFIDENTIAL TREATMENT REQUESTED] CBSD
agrees to [CONFIDENTIAL TREATMENT REQUESTED]. CBSD agrees to [CONFIDENTIAL
TREATMENT REQUESTED] of what are reasonably believed by it to be
[CONFIDENTIAL TREATMENT REQUESTED]. SafeCard will consult with CBSD in
determining [CONFIDENTIAL TREATMENT REQUESTED] will occur periodically
pursuant to a mutually agreed upon schedule.
(iii) Each model is acknowledged to be the intellectual property of its
originator. In addition, the parties may wish to [CONFIDENTIAL TREATMENT
REQUESTED] to be [CONFIDENTIAL TREATMENT REQUESTED]. The parties agree
that for [CONFIDENTIAL TREATMENT REQUESTED] the parties will [CONFIDENTIAL
TREATMENT REQUESTED] on an agreed upon [CONFIDENTIAL TREATMENT REQUESTED].
The parties agree that, when [CONFIDENTIAL TREATMENT REQUESTED] whichever
[CONFIDENTIAL TREATMENT REQUESTED] shall be [CONFIDENTIAL TREATMENT
REQUESTED] used until a [CONFIDENTIAL TREATMENT REQUESTED] is
[CONFIDENTIAL TREATMENT REQUESTED]. The [CONFIDENTIAL TREATMENT REQUESTED]
shall be determined by applying mutually agreed upon [CONFIDENTIAL
TREATMENT REQUESTED].
<PAGE>
SCHEDULE 3 (cont.)
(iv) The parties acknowledge that their [CONFIDENTIAL TREATMENT REQUESTED]
and cooperate in the [CONFIDENTIAL TREATMENT REQUESTED] will affect the
degree to which the process will be mutually meaningful and beneficial.
Such information shall be treated confidentially by the recipient in
accordance with this Agreement. For purposes of [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] may [CONFIDENTIAL
TREATMENT REQUESTED] those [CONFIDENTIAL TREATMENT REQUESTED] it
reasonably believes to be [CONFIDENTIAL TREATMENT REQUESTED] should it be
[CONFIDENTIAL TREATMENT REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED]
mutually considered to be crucial to the [CONFIDENTIAL TREATMENT
REQUESTED]. Due to the cost implications involved necessitated by
[CONFIDENTIAL TREATMENT REQUESTED] as well as the potential reduced
likelihood [CONFIDENTIAL TREATMENT REQUESTED] driven by [CONFIDENTIAL
TREATMENT REQUESTED] will [CONFIDENTIAL TREATMENT REQUESTED] without
[CONFIDENTIAL TREATMENT REQUESTED] the parties agree to [CONFIDENTIAL
TREATMENT REQUESTED] of [CONFIDENTIAL TREATMENT REQUESTED] might have on
the [CONFIDENTIAL TREATMENT REQUESTED] as described herein and mutually
determine the appropriate course of action.
(v)Performance by the parties in furtherance of the principles of this
Schedule shall be subject to any applicable obligations they may have
under the law.
<PAGE>
SCHEDULE 4
(OUTBOUND TELEMARKETING OPERATIONAL POLICY AND PROCEDURES)
Hours during which customers can be called:
Monday - Friday 09:00 AM - 09:00 PM local time
Saturday 10:00 AM - 05:00 PM local time
Calling not permitted on:
New Year's Eve (stop calling at 1 PM)
New Year's Day
Good Friday
Easter Sunday +
July 4th
Yom Kippur Eve (stop calling at 1 PM) +
Yom Kippur Day
Rosh Hashanah Eve (stop calling at 1 PM) +
Rosh Hashanah Day
Rosh Hashanah Day 2
Passover Eve (stop calling at 1 PM)
Passover - first day
Thanksgiving Day
Christmas Eve (stop calling at 1 PM)
Christmas Day +
Memorial Day
President's Day
Labor Day
+ These hours and holidays may change upon [CONFIDENTIAL TREATMENT
REQUESTED].
* [CONFIDENTIAL TREATMENT REQUESTED] of all sales must be
[CONFIDENTIAL TREATMENT REQUESTED] within [CONFIDENTIAL
TREATMENT REQUESTED] of original sale. [CONFIDENTIAL TREATMENT
REQUESTED] of those [CONFIDENTIAL TREATMENT REQUESTED] must be
attempted within [CONFIDENTIAL TREATMENT REQUESTED]. In the
event that a cardmember accepted an offer but the vendor later
deems the sale invalid (i.e., insufficient information) and
the vendor is unable to contact the cardmember [CONFIDENTIAL
TREATMENT REQUESTED] must be [CONFIDENTIAL TREATMENT
REQUESTED] to the cardmember requesting the information needed
to complete the enrollment. [CONFIDENTIAL TREATMENT
REQUESTED].
* [CONFIDENTIAL TREATMENT REQUESTED] If a prospect has received
[CONFIDENTIAL TREATMENT REQUESTED] and is still not
[CONFIDENTIAL TREATMENT REQUESTED] the call [CONFIDENTIAL
TREATMENT REQUESTED].
<PAGE>
SCHEDULE 4 (cont.)
* Citibank Marketing and operations manager must have the right
to [CONFIDENTIAL TREATMENT REQUESTED] of all [CONFIDENTIAL
TREATMENT REQUESTED].
* [CONFIDENTIAL TREATMENT REQUESTED] must obtain [CONFIDENTIAL
TREATMENT REQUESTED] of all [CONFIDENTIAL TREATMENT REQUESTED]
and [CONFIDENTIAL TREATMENT REQUESTED] specific to
[CONFIDENTIAL TREATMENT REQUESTED] must ensure that the
[CONFIDENTIAL TREATMENT REQUESTED] are [CONFIDENTIAL TREATMENT
REQUESTED] with all [CONFIDENTIAL TREATMENT REQUESTED] and
that [CONFIDENTIAL TREATMENT REQUESTED] are [CONFIDENTIAL
TREATMENT REQUESTED].
* SafeCard must send Protection Plus information kits to any
cardmember on request after first having referred cardmember
to the 800 number for further information.
* SafeCard will request that its Telemarketing Agents maintain
complete and accurate files on all telephone service
representatives including, but not limited to, [CONFIDENTIAL
TREATMENT REQUESTED]
* SafeCard shall retain for [CONFIDENTIAL TREATMENT REQUESTED]
any reports and invoices from a Telemarketing Agent. Upon
CBSD's request, SafeCard will have duplicate copies of any
such report or invoice also supplied directly to CBSD from the
Telemarketing Agent at time of preparation of such report or
invoice.
* [CONFIDENTIAL TREATMENT REQUESTED].
* SafeCard shall provide quality control to exert its best effort to
ensure that the offer is made truthfully.
* [CONFIDENTIAL TREATMENT REQUESTED].
* Outbound telemarketing will be conducted on telemarketing vendors'
business or institutional premises (not via homeworkers).
* SafeCard shall utilize established and mutually agreed upon
monitoring standards to attempt to assure the uniform
monitoring of telemarketing sales representatives.
* SafeCard shall monitor its programs [CONFIDENTIAL TREATMENT
REQUESTED] on a regular basis to ensure that telemarketing
sales representatives are thoroughly trained; professional
with their script adherence and presentation; have the ability
to address questions with appropriate response, diction,
courtesy and politeness.
<PAGE>
SCHEDULE 5
SafeCard (Communicators/Representatives) shall respond to all consumer's
questions or complaints regarding Telemarketing activities within twenty-four
(24) hours when such question or complaints are referred to SafeCard.
All SafeCard offers to business or consumers shall be legal, legitimate and have
value.
Scripts shall communicate all terms of the offer to the consumer and SafeCard
shall fulfill the offer according to those terms.
SafeCard shall not solicit through the use of prerecorded messages.
SafeCard shall require its telemarketing vendors to monitor and follow all
Federal and State Telemarketing laws and regulations.
SafeCard shall fulfill all Telemarketing requests for additional written
information relevant to the product offering made by the consumer prior to
his/her making a purchase decision.
SafeCard shall ensure that all consumers have access to customer service
communicators.
<PAGE>
SCHEDULE 6
(PROTECTION PLUS PROGRAM SERVICES
GENERAL DESCRIPTIONS TO WHICH SOME RESTRICTIONS APPLY)
a) SafeCard shall provide lost/stolen notification for all credit cards
registered with Protection Plus.
b) SafeCard shall be responsible for the Participating Cardholder's
liability for any and all fraudulent charges made on a Participating
Cardholder's credit card from the time the Participating Cardholder
notifies Protection Plus that the credit card is lost or stolen and for
which such Participating Cardholder is held liable (see Important
Notice concerning cardholder liability for fraudulent charges under
law).
c) SafeCard shall wire up to $1,500 in emergency cash advances, if
requested, to a Participating Cardholder charged to the Participating
Cardholder's CBSD Card (must have sufficient available balance on your
cash advance line on your Citibank card).
d) SafeCard shall provide emergency airline tickets, if requested, charged
to the Participating Cardholder's CBSD Card (must be traveling and have
a sufficient available balance on your Citibank card).
e) SafeCard shall provide a Participating Cardholder with change of
address notification to an unlimited number of magazines and up to five
(5) friends and relatives and to the Participating Cardholder's credit
card issuers whose policy is to accept such notifications.
f) SafeCard shall send Participating Cardholders confirmation letters
of the lost/stolen notification sent to the Participating
Cardholder's credit card issuers.
g) SafeCard shall provide "Warning Stickers" for a Participating
Cardholder's credit cards, as well as replacement of
the same.
h) SafeCard shall update a Participating Cardholder's credit card
registration whenever the Participating Cardholder notifies SafeCard of
additions and/or deletions of credit cards.
i) SafeCard shall provide Participating Cardholders with car rental
discounts.
j) SafeCard shall pay a Credit Card Theft Reward for information leading
to the arrest and conviction of someone fraudulently using a
Participating Cardholder's CBSD Card (participating Cardholder, his or
her spouse and law enforcement personnel not eligible for reward).
k) SafeCard shall provide Participating Cardholders with a document
registration service under which Participating Cardholders may list, on
the registration form provided, important documents.
l) SafeCard shall provide Emergency Communication Message Service under
which Participating Cardholders, if stranded while traveling, may call
the toll-free number to leave messages for relatives/associates, and
request that up to three (3) people be called anywhere in the U.S. to
inform them of an emergency message. If Participating Cardholders need
to speak directly with family or friends, they will be patched through.
<PAGE>
SCHEDULE 7
(COSTS AND EXPENSES CHARGEABLE)
Amounts subtractable, where applicable, from the total of the
Membership fees referenced in Article 3.2(a) are as follows:
(i) A [CONFIDENTIAL TREATMENT REQUESTED] for the first
time in the previous month, subject to the
following:
a. [CONFIDENTIAL TREATMENT REQUESTED] is
based upon [CONFIDENTIAL TREATMENT
REQUESTED] attached [CONFIDENTIAL TREATMENT
REQUESTED].
b. [CONFIDENTIAL TREATMENT REQUESTED] will
[CONFIDENTIAL TREATMENT REQUESTED] to
[CONFIDENTIAL TREATMENT REQUESTED].
(ii) [CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] in the previous month.
(iii) [CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] in the previous month.
(iv) [CONFIDENTIAL TREATMENT REQUESTED] equal to the
amount of any [CONFIDENTIAL TREATMENT REQUESTED] in
the previous month [CONFIDENTIAL TREATMENT REQUESTED]
to whom such adjustment was due.
(v) The [CONFIDENTIAL TREATMENT REQUESTED] in that month,
if any, for [CONFIDENTIAL TREATMENT REQUESTED] and
the [CONFIDENTIAL TREATMENT REQUESTED] of such
[CONFIDENTIAL TREATMENT REQUESTED] for the previous
month [CONFIDENTIAL TREATMENT REQUESTED] by
[CONFIDENTIAL TREATMENT REQUESTED] such as
[CONFIDENTIAL TREATMENT REQUESTED].
(vi) The [CONFIDENTIAL TREATMENT REQUESTED] in that
month, if any, [CONFIDENTIAL TREATMENT REQUESTED]
for the previous month as [CONFIDENTIAL
TREATMENT REQUESTED] by [CONFIDENTIAL TREATMENT
REQUESTED] described below) for (1) [CONFIDENTIAL
TREATMENT REQUESTED] and other [CONFIDENTIAL
TREATMENT REQUESTED] pursuant to [CONFIDENTIAL
TREATMENT REQUESTED] and the [CONFIDENTIAL
TREATMENT REQUESTED] and (2) for any [CONFIDENTIAL
TREATMENT REQUESTED] of Program membership,
the [CONFIDENTIAL TREATMENT REQUESTED] and (3) any
[CONFIDENTIAL TREATMENT REQUESTED] pursuant
to [CONFIDENTIAL TREATMENT REQUESTED] in
connection with Program [CONFIDENTIAL TREATMENT
REQUESTED] efforts.
(vii) [CONFIDENTIAL TREATMENT REQUESTED].
<PAGE>
SCHEDULE 7 (cont.)
Fees payable hereunder [as described in (i) through (vii)] may be
[CONFIDENTIAL TREATMENT REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] any
[CONFIDENTIAL TREATMENT REQUESTED] in [CONFIDENTIAL TREATMENT REQUESTED]
incurred by [CONFIDENTIAL TREATMENT REQUESTED] or other [CONFIDENTIAL TREATMENT
REQUESTED] with [CONFIDENTIAL TREATMENT REQUESTED] to any [CONFIDENTIAL
TREATMENT REQUESTED] (other than that [CONFIDENTIAL TREATMENT REQUESTED] from a
[CONFIDENTIAL TREATMENT REQUESTED] as referenced in [CONFIDENTIAL TREATMENT
REQUESTED] shall be [CONFIDENTIAL TREATMENT REQUESTED]. This Schedule shall be
further subject to periodic review by the parties every six (6) months.
<PAGE>
SCHEDULE 8
[CONFIDENTIAL TREATMENT REQUESTED]
The [CONFIDENTIAL TREATMENT REQUESTED] pursuant to [CONFIDENTIAL
TREATMENT REQUESTED] shall be [CONFIDENTIAL TREATMENT REQUESTED] by the
[CONFIDENTIAL TREATMENT REQUESTED] as applicable:
(i) [CONFIDENTIAL TREATMENT REQUESTED] in connection with
[CONFIDENTIAL TREATMENT REQUESTED] as defined in [CONFIDENTIAL
TREATMENT REQUESTED] with respect to [CONFIDENTIAL TREATMENT
REQUESTED].
(ii) In the event that in any [CONFIDENTIAL TREATMENT
REQUESTED] in accordance with [CONFIDENTIAL TREATMENT
REQUESTED] then for [CONFIDENTIAL TREATMENT REQUESTED] in any
[CONFIDENTIAL TREATMENT REQUESTED] during that [CONFIDENTIAL
TREATMENT REQUESTED] (a) [CONFIDENTIAL TREATMENT REQUESTED]
during that [CONFIDENTIAL TREATMENT REQUESTED] and the
[CONFIDENTIAL TREATMENT REQUESTED] for the [CONFIDENTIAL
TREATMENT REQUESTED] shall be [CONFIDENTIAL TREATMENT
REQUESTED] and (b) for [CONFIDENTIAL TREATMENT REQUESTED] the
[CONFIDENTIAL TREATMENT REQUESTED] shall be [CONFIDENTIAL
TREATMENT REQUESTED].
(iii) To [CONFIDENTIAL TREATMENT REQUESTED] during the
[CONFIDENTIAL TREATMENT REQUESTED] for the [CONFIDENTIAL
TREATMENT REQUESTED] for [CONFIDENTIAL TREATMENT REQUESTED]
the parties agree to [CONFIDENTIAL TREATMENT REQUESTED] and
[CONFIDENTIAL TREATMENT REQUESTED] in accordance with the
procedures described below:
a. By no later than [CONFIDENTIAL TREATMENT
REQUESTED] of [CONFIDENTIAL TREATMENT REQUESTED] the
parties will mutually [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] at
that [CONFIDENTIAL TREATMENT REQUESTED] to be
[CONFIDENTIAL TREATMENT REQUESTED] over the
[CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] will [CONFIDENTIAL TREATMENT
REQUESTED] when [CONFIDENTIAL TREATMENT REQUESTED] to
the [CONFIDENTIAL TREATMENT REQUESTED] over the
[CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] at [CONFIDENTIAL
TREATMENT REQUESTED] for [CONFIDENTIAL TREATMENT
REQUESTED] for the [CONFIDENTIAL TREATMENT
REQUESTED]. If the parties for the [CONFIDENTIAL
TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT
REQUESTED] (i) above on the [CONFIDENTIAL TREATMENT
REQUESTED] for each [CONFIDENTIAL TREATMENT
REQUESTED] with respect to [CONFIDENTIAL TREATMENT
REQUESTED] but the [CONFIDENTIAL TREATMENT REQUESTED]
over the [CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] for the
[CONFIDENTIAL TREATMENT REQUESTED] then (ii) above
shall be [CONFIDENTIAL TREATMENT REQUESTED] to the
[CONFIDENTIAL TREATMENT REQUESTED] the [CONFIDENTIAL
TREATMENT REQUESTED] of the
<PAGE>
SCHEDULE 8 (cont.)
[CONFIDENTIAL TREATMENT REQUESTED]. If the parties
for the [CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] (ii) above on the
[CONFIDENTIAL TREATMENT REQUESTED] for each
[CONFIDENTIAL TREATMENT REQUESTED] with respect to
[CONFIDENTIAL TREATMENT REQUESTED] but the
[CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL
TREATMENT REQUESTED] for [CONFIDENTIAL TREATMENT
REQUESTED] over the [CONFIDENTIAL TREATMENT
REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED]
for the [CONFIDENTIAL TREATMENT REQUESTED] then (i)
above shall be [CONFIDENTIAL TREATMENT REQUESTED] to
the [CONFIDENTIAL TREATMENT REQUESTED] the
[CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED].
b. By no later than [CONFIDENTIAL TREATMENT
REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED]
the parties will [CONFIDENTIAL TREATMENT REQUESTED]
with respect to the [CONFIDENTIAL TREATMENT
REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] the
[CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL
TREATMENT REQUESTED]. If the parties for the
[CONFIDENTIAL TREATMENT REQUESTED] or any
[CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] on the
[CONFIDENTIAL TREATMENT REQUESTED] as a result of
[CONFIDENTIAL TREATMENT REQUESTED] but the
[CONFIDENTIAL TREATMENT REQUESTED] for the
[CONFIDENTIAL TREATMENT REQUESTED] was [CONFIDENTIAL
TREATMENT REQUESTED] then the parties will
[CONFIDENTIAL TREATMENT REQUESTED] on the
[CONFIDENTIAL TREATMENT REQUESTED] to the
[CONFIDENTIAL TREATMENT REQUESTED] and on as
[CONFIDENTIAL TREATMENT REQUESTED] as may thereafter
be [CONFIDENTIAL TREATMENT REQUESTED] with a
[CONFIDENTIAL TREATMENT REQUESTED] on the
[CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT
REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED].
If the parties for the [CONFIDENTIAL TREATMENT
REQUESTED] or any [CONFIDENTIAL TREATMENT REQUESTED]
of the [CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] on the
[CONFIDENTIAL TREATMENT REQUESTED] as a result of
[CONFIDENTIAL TREATMENT REQUESTED] but the
[CONFIDENTIAL TREATMENT REQUESTED] for the
[CONFIDENTIAL TREATMENT REQUESTED] was [CONFIDENTIAL
TREATMENT REQUESTED] then the parties will
[CONFIDENTIAL TREATMENT REQUESTED] on the
[CONFIDENTIAL TREATMENT REQUESTED] to the
[CONFIDENTIAL TREATMENT REQUESTED] and on as
[CONFIDENTIAL TREATMENT REQUESTED] as may thereafter
be [CONFIDENTIAL TREATMENT REQUESTED] with a
[CONFIDENTIAL TREATMENT REQUESTED] on the
[CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT
REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED].
There shall be [CONFIDENTIAL TREATMENT REQUESTED] to
the [CONFIDENTIAL TREATMENT REQUESTED] applicable to
the [CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL
<PAGE>
SCHEDULE 8 (cont.)
TREATMENT REQUESTED] the [CONFIDENTIAL TREATMENT
REQUESTED] arising from the [CONFIDENTIAL TREATMENT
REQUESTED] pursuant to this (iii)b. For purposes of
this paragraph, [CONFIDENTIAL TREATMENT REQUESTED]
with a [CONFIDENTIAL TREATMENT REQUESTED] shall
[CONFIDENTIAL TREATMENT REQUESTED] either
[CONFIDENTIAL TREATMENT REQUESTED] after the
[CONFIDENTIAL TREATMENT REQUESTED] for the
[CONFIDENTIAL TREATMENT REQUESTED] is [CONFIDENTIAL
TREATMENT REQUESTED] in accordance with the
[CONFIDENTIAL TREATMENT REQUESTED].
(iv) Where the parties are [CONFIDENTIAL TREATMENT REQUESTED]
with [CONFIDENTIAL TREATMENT REQUESTED] of this [CONFIDENTIAL
TREATMENT REQUESTED] (other than for [CONFIDENTIAL TREATMENT
REQUESTED] the [CONFIDENTIAL TREATMENT REQUESTED] shall be
[CONFIDENTIAL TREATMENT REQUESTED] by the [CONFIDENTIAL
TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT REQUESTED]
for the [CONFIDENTIAL TREATMENT REQUESTED] to the
[CONFIDENTIAL TREATMENT REQUESTED] with the [CONFIDENTIAL
TREATMENT REQUESTED] as set forth in the [CONFIDENTIAL
TREATMENT REQUESTED]. In [CONFIDENTIAL TREATMENT REQUESTED]
the [CONFIDENTIAL TREATMENT REQUESTED] to be [CONFIDENTIAL
TREATMENT REQUESTED] from any [CONFIDENTIAL TREATMENT
REQUESTED] where the [CONFIDENTIAL TREATMENT REQUESTED] to
that [CONFIDENTIAL TREATMENT REQUESTED] has been [CONFIDENTIAL
TREATMENT REQUESTED] in accordance with (iii) above, the
[CONFIDENTIAL TREATMENT REQUESTED] which is [CONFIDENTIAL
TREATMENT REQUESTED] from the [CONFIDENTIAL TREATMENT
REQUESTED] shall be the [CONFIDENTIAL TREATMENT REQUESTED]
from that [CONFIDENTIAL TREATMENT REQUESTED].
<TABLE>
<CAPTION>
<S> <C> <C>
[CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED]
Vintage
Year
11/94-
10/95
11/95-
10/96
11/96-
10/97
11/97-
10/98
11/98-10/99
Renewal
Stream %
Post Term
</TABLE>
<PAGE>
SCHEDULE 9
(SERVICE QUALITY PERFORMANCE STANDARDS AND REQUIREMENTS)
TELEPHONE TIMELINESS/QUALITY STANDARDS FOR INBOUND 800 NUMBERS
Definition: Calls offered on new dedicated 800 numbers are defined as
calls which enter the switch to the assigned truck group. Vendors must
provide this measurement and it should not be construed as only those
calls which are answered.
[CONFIDENTIAL TREATMENT REQUESTED] Calls should be answered
[CONFIDENTIAL TREATMENT REQUESTED] within [CONFIDENTIAL TREATMENT
REQUESTED] (answered after the prompter is complete, and human
interaction begins; prompter being described as a front end Voice
Response Unit [VRU]).
[CONFIDENTIAL TREATMENT REQUESTED] No greater than [CONFIDENTIAL
TREATMENT REQUESTED] abandonment for all inbound telephone calls.
[CONFIDENTIAL TREATMENT REQUESTED] Inbound telephone inquiries must be
at or below [CONFIDENTIAL TREATMENT REQUESTED]. Peak time is defined as
the period of time between [CONFIDENTIAL TREATMENT REQUESTED].
CORRESPONDENCE/FULFILLMENT TIMELINESS/QUALITY STANDARDS
[CONFIDENTIAL TREATMENT REQUESTED] mailed within [CONFIDENTIAL
TREATMENT REQUESTED] of SafeCard's receipt of enrollment requests.
SafeCard will [CONFIDENTIAL TREATMENT REQUESTED] to require enrollments
from telemarketing vendors to arrive at SafeCard [CONFIDENTIAL
TREATMENT REQUESTED] after date of sale, except for [CONFIDENTIAL
TREATMENT REQUESTED].
[CONFIDENTIAL TREATMENT REQUESTED] All [CONFIDENTIAL TREATMENT
REQUESTED] (credits) to a customer's account should be provided to CBSD
[CONFIDENTIAL TREATMENT REQUESTED] within [CONFIDENTIAL TREATMENT
REQUESTED]. Credit tapes should be sent [CONFIDENTIAL TREATMENT
REQUESTED]. In the future credits can be submitted, as mutually agreed,
using alternative media, on a more frequent basis.
[CONFIDENTIAL TREATMENT REQUESTED] All correspondence or customer
service inquiries should be resolved [CONFIDENTIAL TREATMENT
REQUESTED].
All promotional solicitations and large volume customer service copy
printed for CBSD must be [CONFIDENTIAL TREATMENT REQUESTED].
SafeCard must send program-specific information kits to any customer
upon request within [CONFIDENTIAL TREATMENT REQUESTED] from SafeCard's
receipt of request.
<PAGE>
SCHEDULE 9 (cont.)
[CONFIDENTIAL TREATMENT REQUESTED] Those telemarketing cancellations
resulting from the sales verification process, [CONFIDENTIAL TREATMENT
REQUESTED] generally should not exceed [CONFIDENTIAL TREATMENT
REQUESTED]. If so, SafeCard will conduct an inquiry and submit a
recommendation within [CONFIDENTIAL TREATMENT REQUESTED].
[CONFIDENTIAL TREATMENT REQUESTED] Telephone representatives will have
terminals proximal to their work station with [CONFIDENTIAL TREATMENT
REQUESTED] access to cardholder's Protection Plus master record.
In determining SafeCard's compliance with the above standards, the
parties agree that a statistically relevant number of transactions will
be sampled.
<PAGE>
SCHEDULE 10
(MIS REPORTING)
TELEPHONE TIMELINESS STANDARDS
INBOUND. SafeCard shall submit MIS reports to the marketing and operations
managers in required format within the tracking period as set forth below:
[CONFIDENTIAL TREATMENT REQUESTED]
SALES/OUTBOUND. SafeCard shall submit MIS reports, for each segment currently
marketed or specifically targeted segments, to the marketing and operations
managers in required format within the tracking period as set forth below:
[CONFIDENTIAL TREATMENT REQUESTED]
CORRESPONDENCE/FULFILLMENT TIMELINESS STANDARDS
[CONFIDENTIAL TREATMENT REQUESTED]
SafeCard shall submit MIS reports to the CBSD Program Manager, in form, number
and within the tracking period as required.
EXHIBIT 10(g)
AGREEMENT
Agreement dated as of January 1, 1995, by and between CITIBANK (SOUTH
DAKOTA), N.A., a National Banking Association having its principal place of
business at 701 East 60th Street North, Sioux Falls, South Dakota 57117
("CBSD"), and SAFECARD SERVICES, INC., a Delaware corporation having its
principal place of business at 7596 Centurion Parkway, Jacksonville, Florida
32256 ("SafeCard").
WITNESSETH:
WHEREAS, CBSD issues MasterCard and Visa credit cards, including
co-branded credit cards ("CBSD Cards"), and provides marketing services for
MasterCard and Visa credit cards issued by CBSD; and
WHEREAS, pursuant to a long standing business and contractual
relationship between CBSD and SafeCard, SafeCard markets to and services a card
registration service denominated "Protection Plus" to holders of CBSD Cards; and
WHEREAS, the parties desire to transform their relationship to a
strategic alliance consistent with their respective corporate objectives in
which the parties will continue the marketing, servicing and billing of
Protection Plus (the "Program") to holders of CBSD Cards (collectively
"Cardholders"), and engage in agreeable cooperative endeavors with respect to
and apart from Protection Plus (including other mutually agreeable programs)
designed to enhance Cardholder and Program membership acquisition and retention,
subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained in this Agreement, CBSD and SafeCard agree as follows:
ARTICLE 1. DEFINITIONS
1.1 "CBSD Cardholder" - Means a holder of a CBSD Card, including any holders of
any new Visa or MasterCard cards CBSD introduces during the term of this
Agreement (excluding Diners Club and business and corporate cards).
1.2 "Participating Cardholder" - Means a CBSD Cardholder who has
accepted an offer to enroll as a member in the Program.
1.3 "New CBSD Accounts" - Means accounts of CBSD Cardholders' which are one
month old or less.
1.4 "Reissue CBSD Accounts" - Means accounts of CBSD Cardholders' which
are other than New CBSD Accounts.
1.5 "Solicitation Contact" - Means a CBSD Cardholder reached by a Program
solicitation. Outbound telemarketing solicitation contacts are defined as the
CBSD Cardholders who are called and are the subject of an outbound telemarketing
presentation. Outbound telemarketing solicitation contacts do not include CBSD
Cardholders who have not been reached. Direct mail solicitation contacts are
defined as the CBSD Cardholders who are mailed a solicitation mailer.
<PAGE>
Citibank/SafeCard Agreement
Page Two
1.6 "Contactable Leads" - Means those names of CBSD Cardholders furnished to
SafeCard which, [CONFIDENTIAL TREATMENT REQUESTED] otherwise qualify for a
solicitation pursuant to this Agreement. By way of illustration, Schedule 1 to
this Agreement describes the process by which Contactable Leads are to be
determined.
1.7 "Vintage Year" - Means each twelve (12) month period under this Agreement
from [CONFIDENTIAL TREATMENT REQUESTED] during which the amount of Contactable
Leads provided by CBSD to SafeCard to conduct [CONFIDENTIAL TREATMENT REQUESTED]
shall be measured in the manner provided for in this Agreement. The first such
Vintage Year shall run from [CONFIDENTIAL TREATMENT REQUESTED].
1.8 "Initial Term" - Means the term of the Agreement from its inception
(January 1, 1995) until December 31,2000
1.9 "Contract Year" - Means each calendar year period under this Agreement
from January 1, 1995.
ARTICLE 2. SOLICITATION AND ENROLLMENT
2.1 Solicitations
(a) SafeCard shall solicit CBSD Cardholders for membership in the
Program. CBSD shall provide SafeCard with lists of CBSD Cardholders in
a mutually acceptable format in order for SafeCard to solicit such
Cardholders for Program Membership. The scheduling, format and volume
of solicitation activity shall be mutually agreed upon by CBSD and
SafeCard, subject to Article 2.1(b), (c) and (d) below.
(b) CBSD has authorized SafeCard to conduct in 1995 the solicitations
which are described in the 1995 Marketing Plan incorporated as Schedule
2 to this Agreement. The parties agree that by no later than
[CONFIDENTIAL TREATMENT REQUESTED] of each year, they will agree upon a
Marketing Plan for the subsequent Contract Year. In connection
therewith, CBSD shall furnish such [CONFIDENTIAL TREATMENT REQUESTED]
information to SafeCard as will assist the parties in attempting to
reasonably forecast the expected file size of [CONFIDENTIAL TREATMENT
REQUESTED] for the next Contract Year. The Marketing Plan will describe
the solicitations to be made, the CBSD Cardholder Account files to be
the subject of such solicitations, the projected number of
[CONFIDENTIAL TREATMENT REQUESTED] for the forthcoming Contract Year,
as well as the projected number of [CONFIDENTIAL TREATMENT REQUESTED]
to be provided to SafeCard for [CONFIDENTIAL TREATMENT REQUESTED]
during the forthcoming Vintage Year. [CONFIDENTIAL TREATMENT
REQUESTED]. In connection therewith, the parties acknowledge and agree
to the following:
(i) CBSD agrees as a matter of policy in connection with
[CONFIDENTIAL TREATMENT REQUESTED] to use its good faith
efforts to try to provide SafeCard with and allow SafeCard the
opportunity each Contract Year [CONFIDENTIAL TREATMENT
REQUESTED] except that such commitment will not apply to those
Accounts which [CONFIDENTIAL TREATMENT REQUESTED]. If
requested, CBSD shall determine whether and under what
conditions it may reasonably try to elicit consent from such
third party, and where reasonably possible as solely
determined by CBSD, attempt in good faith to obtain such
consent.
<PAGE>
Citibank/SafeCard Agreement
Page Three
(ii) The parties acknowledge that their commitment to
[CONFIDENTIAL TREATMENT REQUESTED] will likely be
substantially driven by [CONFIDENTIAL TREATMENT REQUESTED] the
parties agree to work together in [CONFIDENTIAL TREATMENT
REQUESTED] in accordance with the principles set forth in
Schedule 3 to this Agreement.
(iii) [CONFIDENTIAL TREATMENT REQUESTED]
(c) In connection with proposals from SafeCard for marketing of the
Program not otherwise described in Schedule 2, and referenced in
Article 2.1(b), [CONFIDENTIAL TREATMENT REQUESTED] will be considered
by it in good faith and, [CONFIDENTIAL TREATMENT REQUESTED].
(d) CBSD acknowledges that it is crucial to SafeCard and to the success
of the parties' business relationship that SafeCard be given the
opportunity to conduct the solicitations set forth in this Article 2.1
[CONFIDENTIAL TREATMENT REQUESTED]. The parties therefore agree as
follows:
(i) In the event that the [CONFIDENTIAL TREATMENT REQUESTED]
in any given [CONFIDENTIAL TREATMENT REQUESTED] are
[CONFIDENTIAL TREATMENT REQUESTED] than set forth in
[CONFIDENTIAL TREATMENT REQUESTED], and [CONFIDENTIAL
TREATMENT REQUESTED] could have been [CONFIDENTIAL TREATMENT
REQUESTED] if the parties had [CONFIDENTIAL TREATMENT
REQUESTED] then the parties agree that for the succeeding
[CONFIDENTIAL TREATMENT REQUESTED] shall provide [CONFIDENTIAL
TREATMENT REQUESTED] to enable [CONFIDENTIAL TREATMENT
REQUESTED] to achieve [CONFIDENTIAL TREATMENT REQUESTED]
through any [CONFIDENTIAL TREATMENT REQUESTED] as mutually
agreed upon.
(ii) In the event that in [CONFIDENTIAL TREATMENT REQUESTED]
projected to [CONFIDENTIAL TREATMENT REQUESTED] for
[CONFIDENTIAL TREATMENT REQUESTED] the [CONFIDENTIAL TREATMENT
REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] shall be
[CONFIDENTIAL TREATMENT REQUESTED].
(iii) In computing the [CONFIDENTIAL TREATMENT REQUESTED] in
connection with (i) and (ii) above, [CONFIDENTIAL TREATMENT
REQUESTED] shall consider in its good faith discretion any
[CONFIDENTIAL TREATMENT REQUESTED] has [CONFIDENTIAL TREATMENT
REQUESTED] in accordance with [CONFIDENTIAL TREATMENT
REQUESTED] from those described in [CONFIDENTIAL TREATMENT
REQUESTED]. CBSD acknowledges that SafeCard's willingness to
enter into this Agreement is based upon CBSD's assurance that
the parties will work together now and in the future in a
spirit of partnership to ensure that the letter and intent of
Article 2.1 (b), (c) and (d) are fulfilled.
(iv) This Article 2.1 (d) shall not apply to the period of
this Agreement beyond [CONFIDENTIAL TREATMENT REQUESTED].
<PAGE>
Citibank/SafeCard Agreement
Page Four
(e) [CONFIDENTIAL TREATMENT REQUESTED] who had a listing of credit
cards on file with [CONFIDENTIAL TREATMENT REQUESTED] shall not be
[CONFIDENTIAL TREATMENT REQUESTED] which SafeCard is [CONFIDENTIAL
TREATMENT REQUESTED] provided that the [CONFIDENTIAL TREATMENT
REQUESTED] is the [CONFIDENTIAL TREATMENT REQUESTED] in which SafeCard
is [CONFIDENTIAL TREATMENT REQUESTED] to the [CONFIDENTIAL TREATMENT
REQUESTED] for which [CONFIDENTIAL TREATMENT REQUESTED].
(f) SafeCard shall, where telemarketing is authorized, cause its phone
agents to meet the Performance Standards for Telephone Solicitations as
set forth in Schedule 4 attached hereto and the Telemarketing Ethics
Statement attached hereto as Schedule 5. All telemarketing scripts
shall be adhered to; all telemarketing solicitations shall comply with
the laws and regulations applicable to telemarketing; the status of
pending telemarketing regulations shall be diligently monitored by
SafeCard and all adopted changes complied with.
(g) At its expense, where provided for or otherwise agreed upon
pursuant to this Agreement, SafeCard shall print and mail solo mailers,
print and supply inserts, envelopes or carriers to CBSD specifications
and conduct outbound telemarketing. Upon agreement in regard to expense
or other particulars by way of addendum to this Agreement, SafeCard
shall also conduct [CONFIDENTIAL TREATMENT REQUESTED] other agreed upon
direct response marketing. Solicitation materials shall include the
following:
(i) Reference to the Program as "Protection Plus" and
identification of SafeCard as the service provider
responsible for arranging the Program;
(ii) Notification of the applicable membership fee
("Membership Fee"), which shall be $15.00 for a
one-year membership and $45.00 for a three-year
membership (except that for testing purposes the
parties may agree to test different price points);
and
(iii) Notification that Membership Fees shall automatically
be charged to Participating Cardholder's account for
the year in which they are due and shall renew
automatically, unless the Participating Cardholder
notifies SafeCard or CBSD of his/her desire to cancel
membership in the Program; and
(iv) Notification that the Participating Cardholder may
cancel membership in the Program at any time and
receive a full refund of his/her membership fee
billed for the then current membership period; and
(v) An endorsement or introduction from CBSD in letter
form for mailings and verbally for Telemarketing.
(h) SafeCard shall develop at its expense, all materials necessary to
operate the Program, including membership kits and ongoing customer
service correspondence. In addition, SafeCard agrees to develop an
annual communication piece to be mailed to Participating Cardholders
which will be designed to improve Program membership awareness and
retention by informing them as members about the Program and
encouraging utilization of the Program features and benefits. SafeCard
further agrees to develop a renewal notice to be mailed to
Participating Cardholders prior to the expiration of their current
membership period which will inform them that their Program membership
will be renewed and their account billed, the timing of the billing and
of the amount to be billed if different from the membership fee
previously billed and which will describe how the
<PAGE>
Citibank/SafeCard Agreement
Page Five
Participating Cardholder may cancel his or her Program membership
without further obligation. SafeCard may format the annual
communication piece referred to in this paragraph to serve, where
appropriate, as the renewal notice.
2.2 CBSD Approval.
(a) SafeCard shall submit to CBSD for timely written approval: (i) all
the materials it proposes to use in connection with the Program at a
reasonable time prior to production, based upon a milestone plan to be
established by the parties, which will include written proposals of
marketing objectives and strategies, pricing, marketing programs and
creatives, solicitation materials, enrollment forms, membership kits,
renewal notice and membership retention materials, customer
correspondence and the like; and (ii) the names of any agents it
desires to hire to help meet the requirements of this Agreement. CBSD's
approval shall not be unreasonably withheld. However, if CBSD requires
any reasonable changes to such materials as a condition of its
approval, SafeCard shall promptly make such changes at its sole
expense. CBSD agrees that where its approval is required in accordance
with this paragraph, it will use its best efforts to render its
decision to SafeCard within five (5) business days following the
submission. Any agent hired by SafeCard shall permit CBSD to audit its
operations periodically.
(b) Mailing pieces and telemarketing scripts approved by CBSD for use
by SafeCard as solicitations during the term of this Agreement shall be
subject to periodic review on a yearly basis and to any modification
that may be required to conform such materials to applicable legal
requirements and to the CBSD Graphics Standards normally used for all
CBSD solicitations.
2.3 Enrollments.
(a) Enrollment in the Program in response to a mailing solicitation is
effective when the Cardholder completes and returns the appropriate
form to SafeCard or calls SafeCard. Where enrollment in the Program is
by response to a telemarketing solicitation, enrollment shall take
effect only if the Cardholder verbally agrees to enroll and SafeCard
informs the Cardholder: (i) of the amount of the Membership Fee and
that CBSD will bill it to his/her account; and (ii) that the fee will
renew at expiration unless the Cardholder cancels.
(b) SafeCard shall keep imaged copies of enrollment forms and
telemarketing enrollment records for a period of at least four (4)
years after their receipt and will periodically supply CBSD with copies
thereof (for Participating Cardholders) upon its reasonable request,
provided such request is for a limited number of Participating
Cardholders and is only in connection with customer service issues or
for marketing purposes.
(c) CBSD acknowledges that Participating Cardholders as members in the
Program are to be considered SafeCard's customers to the full extent
necessary for SafeCard to perform its obligations and exercise the
rights accorded to it in its agreement with the member, including the
obligation to implement and service the member on an on-going basis and
the right to receive payment therefrom deriving from Program membership
in accordance with the terms of this Agreement.
2.4 Program Services.
(a) SafeCard will provide the Program services set forth in Schedule 6
attached hereto to all Participating Cardholders, including the
Preferred Cardholders referenced in Article 2.1(e).
<PAGE>
Citibank/SafeCard Agreement
Page Six
(b) The Program shall conform to the specifications, representations,
warranties and covenants contained in this Agreement, including
Schedule 6 hereto, and to the solicitation and fulfillment materials
regarding the Program.
(c) All information concerning the Program contained in the
solicitation and fulfillment materials provided and utilized by
SafeCard pursuant to this Agreement is and will be, at the time of
dissemination, true and accurate. All claims, statements and
representations therein shall, upon CBSD's request, be substantiated by
SafeCard to the reasonable satisfaction of CBSD.
2.5 Participating File.
(a) No later than the [CONFIDENTIAL TREATMENT REQUESTED] during the
term of this Agreement, SafeCard will provide CBSD with a tape
containing the name, address and CBSD number of each Cardholder who
became a Participating Cardholder since the last updated participation
file was provided. Such file will also contain any other information
reasonably requested by CBSD which is on SafeCard's computer records.
(b) CBSD will on a [CONFIDENTIAL TREATMENT REQUESTED] compare all
Participating Cardholder accounts provided on such tapes against the
CBSD Card file and provide to SafeCard a tape that indicates
[CONFIDENTIAL TREATMENT REQUESTED] which are no longer valid (i.e.,
accounts that are closed) [CONFIDENTIAL TREATMENT REQUESTED].
2.6 Operations Policy and Procedures Manual. The Operations Policy and
Procedures Manual for Customer Service used in connection with the
Program is currently undergoing revision. The parties shall consult
with each other in connection with such revisions which shall be
mutually agreed upon. Modifications to the revised Manual may
thereafter be made at the request of either party, which approval by
the other shall not be unreasonably withheld.
ARTICLE 3. BILLING: PAYMENTS
3.1 Participating Cardholder Billing.
(a) [CONFIDENTIAL TREATMENT REQUESTED] SafeCard shall provide to CBSD's
designated merchant processor, [CONFIDENTIAL TREATMENT REQUESTED] at a
location which CBSD shall identify to SafeCard and in accordance with
CBSD's specifications, the data CBSD reasonably deems necessary to bill
or credit Participating Cardholders. SafeCard may at its election
provide this data to [CONFIDENTIAL TREATMENT REQUESTED] through
electronic data transmission or via a magnetic billing and/or credit
tape (referred to as the "Billing Transmission") in a format acceptable
to CBSD and compatible with [CONFIDENTIAL TREATMENT REQUESTED]
operational systems.
(b) SafeCard shall respond to any written request from CBSD or
[CONFIDENTIAL TREATMENT REQUESTED] for an explanation or additional
information relating to the data contained in the Billing Transmission
within [CONFIDENTIAL TREATMENT REQUESTED] of SafeCard's receipt of the
request.
(c) SafeCard warrants that: (i) the amounts contained on
Billing Transmissions and other media delivered [CONFIDENTIAL
TREATMENT REQUESTED] shall represent balances legally due; and (ii)
subject to Article 8.7 herein, it will not [CONFIDENTIAL TREATMENT
<PAGE>
Citibank/SafeCard Agreement
Page Seven
REQUESTED]. CBSD reserves the right to exclusively determine each
Cardholder's credit line and eligibility. Accordingly, [CONFIDENTIAL
TREATMENT REQUESTED] may refuse to bill an amount on a Billing
Transmission to a Participating Cardholder who does not then meet
CBSD's credit standards. If [CONFIDENTIAL TREATMENT REQUESTED] cannot
bill an amount to a CBSD Account, CBSD shall promptly notify SafeCard
of such Account [CONFIDENTIAL TREATMENT REQUESTED].
(d) Within [CONFIDENTIAL TREATMENT REQUESTED] after the delivery by
SafeCard of each such Billing Transmission, [CONFIDENTIAL TREATMENT
REQUESTED] shall: (i) calculate the total amount of Membership Fees
listed thereon; (ii) remit such amount to SafeCard [CONFIDENTIAL
TREATMENT REQUESTED]; and (iii) commence its normal process to bill the
amount of such fee to Participating Cardholders within its
[CONFIDENTIAL TREATMENT REQUESTED].
(e) Should a Participating Cardholder terminate his/her participation
in the Program by writing to or calling SafeCard, or by contacting a
CBSD customer service representative who so notifies SafeCard, and
retention efforts as provided for under the Agreement are otherwise
unsuccessful, SafeCard shall stop future renewal charges and provide
the Participating Cardholder with a full refund or credit of the
Participating Cardholders' current paid membership fee in the Program.
3.2 Payments.
(a) SafeCard will be responsible for preparing and calculating the
amount it will pay to CBSD from initial and renewal Program membership
billings pursuant to a [CONFIDENTIAL TREATMENT REQUESTED]
reconciliation statement (the "Reconciliation Statement"). For purposes
herein, an initial Program membership billing is recognized as covering
the period from initial membership enrollment by the Participating
Cardholder through the expiration of the first full price membership
period (one or three years). A renewal Program membership billing is
recognized as covering any succeeding sequential full price membership
period (one or three years) occurring subsequent to the expiration of
the initial full price membership period and applies herein regardless
of when the Participating Cardholder initially enrolled (whether prior
or subsequent to the date of this Agreement). SafeCard will deliver the
Reconciliation Statement to CBSD [CONFIDENTIAL TREATMENT REQUESTED].
(b) On the Reconciliation Statement, [CONFIDENTIAL TREATMENT REQUESTED]
shall [CONFIDENTIAL TREATMENT REQUESTED] the amount determined pursuant
to [CONFIDENTIAL TREATMENT REQUESTED] hereof by the [CONFIDENTIAL
TREATMENT REQUESTED] and pay CBSD within [CONFIDENTIAL TREATMENT
REQUESTED] of the date of each Reconciliation Statement the resultant
amount. This paragraph shall apply [CONFIDENTIAL TREATMENT REQUESTED].
(c) SafeCard shall verify to CBSD with appropriately detailed
documentation all of the amounts, costs, calculations, and the like,
covered by each Reconciliation Statement.
(d) [CONFIDENTIAL TREATMENT REQUESTED] will pay [CONFIDENTIAL TREATMENT
REQUESTED] applied in [CONFIDENTIAL TREATMENT REQUESTED] increments for
each [CONFIDENTIAL TREATMENT REQUESTED] who had a listing of credit
cards on file with [CONFIDENTIAL TREATMENT REQUESTED] and who still has
a listing on file and remains an [CONFIDENTIAL TREATMENT REQUESTED] as
of the [CONFIDENTIAL TREATMENT REQUESTED] to which a Reconciliation
Statement applies.
<PAGE>
Citibank/SafeCard Agreement
Page Eight
3.3 Payment for CBSD Solicitation Costs. SafeCard shall reimburse CBSD,
within thirty (30) days of billing, for any costs CBSD reasonably
incurs in connection with a Solicitation, provided: (i) such cost is
not otherwise covered by this Agreement; (ii) CBSD supports its billing
invoice with appropriate detailed information; (iii) the cost was
incurred by CBSD in good faith in pursuit of the objectives of this
Agreement; (iv) SafeCard has agreed to such cost in advance, but
SafeCard will not unreasonably deny approval; and (v) SafeCard will
then include such cost in the next Reconciliation as a Solicitation
cost.
3.4 Reimbursement for Cancelled Solicitations. CBSD may delay or cancel any
solicitation for any reason. If CBSD cancels a solicitation, it shall
within thirty (30) days of receipt of invoice from SafeCard reimburse
SafeCard its reasonable expenses in producing the materials prepared
for that solicitation, unless CBSD's decision, made in good faith, was
in response to a failure by SafeCard to meet Citibank's Graphic
Standards or to unacceptable performance by SafeCard, which SafeCard
failed to cure promptly after notice from CBSD.
3.5 [CONFIDENTIAL TREATMENT REQUESTED] will [CONFIDENTIAL TREATMENT
REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL
TREATMENT REQUESTED] of a [CONFIDENTIAL TREATMENT REQUESTED] to
[CONFIDENTIAL TREATMENT REQUESTED] under and [CONFIDENTIAL TREATMENT
REQUESTED] shall [CONFIDENTIAL TREATMENT REQUESTED] to [CONFIDENTIAL
TREATMENT REQUESTED] by no later than the [CONFIDENTIAL TREATMENT
REQUESTED] of [CONFIDENTIAL TREATMENT REQUESTED].
ARTICLE 4. SERVICING AND RETENTION
4.1 Cardholder Servicing Facility. SafeCard shall maintain a Cardholder
servicing facility to which Cardholders may communicate any complaints
or inquiries regarding the Program. A dedicated 24-hour 800 toll-free
telephone number and address shall be set forth in all membership kits.
CBSD may, at its expense, conduct an on-site audit of any such customer
servicing facility from time to time during normal business hours.
4.2 Service Quality. SafeCard shall continue to meet the on-going Service
Quality Levels set forth in Schedule 9. If at any time SafeCard fails
to meet such Service Levels, upon written notice to SafeCard by CBSD,
SafeCard shall have [CONFIDENTIAL TREATMENT REQUESTED] in which to cure
the problem, unless such problem was caused by CBSD or by a force
majeure event, whereupon the parties will cooperate to resolve the same
promptly.
4.3 Claims and Disputes. All claims and disputes of any kind and for any
reason whatsoever by any Participating Cardholder concerning Program
services covered hereunder shall be resolved directly between SafeCard
and the Participating Cardholder member. Credits and adjustments shall
not be paid in cash, but by means of SafeCard crediting the
Participating Cardholder's credit card account as evidenced by a
properly completed credit memorandum. CBSD may debit SafeCard for the
amount of any dispute concerning Program services which SafeCard cannot
resolve within forty-five (45) days. CBSD will credit the account of
the applicable Participating Cardholder within five (5) days. If
SafeCard fails to resolve a legitimate dispute, and if the Cardholder
requests, SafeCard shall refund at its own expense the membership fee
paid by that Cardholder within five (5) days of receipt of the request.
<PAGE>
Citibank/SafeCard Agreement
Page Nine
4.4 Retention Efforts.
(a) To promote retention of Program membership by Participating
Cardholders, CBSD will include a [CONFIDENTIAL TREATMENT REQUESTED] by
[CONFIDENTIAL TREATMENT REQUESTED] as part of the [CONFIDENTIAL
TREATMENT REQUESTED] for Participating Cardholders to [CONFIDENTIAL
TREATMENT REQUESTED] will [CONFIDENTIAL TREATMENT REQUESTED] to
[CONFIDENTIAL TREATMENT REQUESTED] such [CONFIDENTIAL TREATMENT
REQUESTED] including such [CONFIDENTIAL TREATMENT REQUESTED] made to
[CONFIDENTIAL TREATMENT REQUESTED] which shall be [CONFIDENTIAL
TREATMENT REQUESTED]. SafeCard will attempt to convince Participating
Cardholders who call the [CONFIDENTIAL TREATMENT REQUESTED] to retain
their membership in the Program, [CONFIDENTIAL TREATMENT REQUESTED].
The [CONFIDENTIAL TREATMENT REQUESTED] of the [CONFIDENTIAL TREATMENT
REQUESTED] shall be as mutually determined by CBSD and SafeCard. If
requested, SafeCard [CONFIDENTIAL TREATMENT REQUESTED] to CBSD on a
[CONFIDENTIAL TREATMENT REQUESTED] basis regarding the [CONFIDENTIAL
TREATMENT REQUESTED] received by the [CONFIDENTIAL TREATMENT REQUESTED]
and if the [CONFIDENTIAL TREATMENT REQUESTED] resulted in [CONFIDENTIAL
TREATMENT REQUESTED].
(b) To promote retention of CBSD Cardholder status and Program
membership in regard to Program members who have [CONFIDENTIAL
TREATMENT REQUESTED] chosen to [CONFIDENTIAL TREATMENT REQUESTED] the
parties shall, through their [CONFIDENTIAL TREATMENT REQUESTED] upon
and [CONFIDENTIAL TREATMENT REQUESTED] a [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL
TREATMENT REQUESTED] that will [CONFIDENTIAL TREATMENT REQUESTED] in
attempting to [CONFIDENTIAL TREATMENT REQUESTED] them to [CONFIDENTIAL
TREATMENT REQUESTED] and that will [CONFIDENTIAL TREATMENT REQUESTED]
in continuing [CONFIDENTIAL TREATMENT REQUESTED] of such Program
members with [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL
TREATMENT REQUESTED].
ARTICLE 5. TRADEMARKS AND TRADE NAMES
5.1 Trademarks and Tradenames. Each party hereto: (i) acknowledges the
other's proprietary interest in and to all of their own logos,
trademarks, trade names and service marks (collectively, the "Marks");
(ii) grants to the other, to the extent necessary to meet its and the
other party's responsibilities under this Agreement, a limited license
to use the other's Marks, subject to the prior approval in writing of
such party; (iii) acknowledges that it acquires no right in the Marks
of the other party by virtue of such use; and (iv) acknowledges and
hereby ratifies their respective current uses of such Marks. SafeCard's
use of the "Protection Plus" service mark shall be subject to the
requirements of this Section.
<PAGE>
Citibank/SafeCard Agreement
Page Ten
ARTICLE 6. INDEMNIFICATION, INSURANCE AND BONDING
6.1 Indemnification. Each party (the "Indemnitor") hereby agrees to
indemnify, defend, and hold harmless the other party, and its parents,
subsidiaries and affiliates, and their officers, directors and
employees (the "Indemnitees") from and against any and all claims,
damages, losses, costs or expenses (including any and all reasonable
attorneys' and experts' fees), which the Indemnitee might suffer, incur
or be subjected to by reason of any legal action, proceeding,
arbitration or other claim, whether commenced or threatened, arising
out of or as a result of the Indemnitor's performance under this
Agreement; provided, however, that, (i) the Indemnitee notifies the
Indemnitor promptly of any such claim or action; and (ii) such claims,
damages, losses, costs or expenses are not attributable to any
negligent act or omission by the Indemnitee, its partners, affiliates,
subsidiaries or any of their employees or agents; and (iii) the
Indemnitee provides the Indemnitor with all assistance and information
necessary for the Indemnitor to prosecute its defense of the action.
The Indemnitor shall bear all expenses in connection with the defense
and/or settlement of any such claim or suit. The Indemnitee shall have
the right, at its own expense, to participate in the defense of any
claim against which it is indemnified and which has been assumed by the
obligation or indemnity hereunder; however, it shall have no right to
control the defense, consent to judgment, or agree to settle any such
claim without the consent of the Indemnitor.
The Indemnitor, in the defense of any such claim, except with the
written consent of the Indemnitee, shall not consent to entry of any
judgment or enter into any settlement which either (A) does not
include, as an unconditional term, the grant by the claimant to the
Indemnitee of a release of all liabilities in respect of such claims;
or (B) otherwise adversely affects the rights of the Indemnitee. This
provision shall survive the termination or expiration of this
Agreement.
6.2 Insurance. During the term of this Agreement, SafeCard shall maintain
general liability and umbrella insurance policies in a form and
substance satisfactory to CBSD (acting in good faith) in the aggregate
amount of at least twenty million dollars ($20,000,000). Such policies
shall name CBSD as beneficiary. Each policy shall provide for thirty
(30) days notice to CBSD by the insurance company of intent to change,
not to renew, or modify the policy. In the event such insurance lapses,
SafeCard shall immediately notify CBSD and shall promptly secure
comparable replacement insurance.
6.3 Bonding. SafeCard will maintain fidelity bonding covering all its
employees with a limit of $1,000,000. In the event of any lapse in
coverage, SafeCard shall secure replacement coverage, if available at
reasonable cost and shall promptly notify CBSD in the event it is
unable to secure replacement coverage. No lapse of coverage shall be
considered a material breach.
ARTICLE 7. MUTUAL OBLIGATIONS AND REPRESENTATIONS
7.1 Deadlines. The parties hereto shall inform each other of their
deadlines for submitting material for approval and shall assist each
other in meeting such deadlines or in obtaining variances from such
deadlines as may be necessary from time to time.
7.2 Preservation of Good Will. Neither party shall intentionally publish
any inappropriate statement or undertake any inappropriate activity
which would maliciously demean or tarnish the products and image of the
other party (including its parents, affiliates, and subsidiaries).
<PAGE>
Citibank/SafeCard Agreement
Page Eleven
7.3 Confidentiality.
(a) The parties agree that all information provided by the other party
is confidential and proprietary to such party and that neither party
shall use any information provided by the other party for any purpose
other than as permitted or required for performance under this
Agreement. The parties further agree not to disclose or provide any
information provided by the other party to any third party (with the
exception of an affiliate or subsidiary) and agree to take all
reasonable measures, including, without limitation, measures taken by
each party to safeguard its own confidential information, to prevent
any such disclosure by its employees, registered representatives,
agents or contractors. Nothing provided herein shall prevent SafeCard
or CBSD from disclosing information which: (i) is or hereafter becomes
part of the public domain through no fault of its own; (ii) is received
from a third party; (iii) is independently developed by it; (iv) is
disclosed pursuant to the requirements of a law upon giving notice to
the other party; or (v) either party already knew prior to January 1,
1981. This provision shall survive the termination or expiration of
this Agreement.
(b) SafeCard recognizes the value of the Cardholder lists to CBSD and
that any improper use of the same will cause irreparable injury to
CBSD. SafeCard shall not assign, sell or otherwise transfer names or
lists of names of Cardholders or other information relating to
Cardholders, provided to it by CBSD to any person or entity and shall
not use such names or lists of names or other Cardholder information
provided to it by CBSD, except as otherwise expressly authorized
pursuant to this Agreement, and , except as otherwise provided in this
Agreement, such right or usage will terminate upon termination or
expiration of this Agreement. In the event of unauthorized use of such
names, or lists of names by SafeCard, [CONFIDENTIAL TREATMENT
REQUESTED] SafeCard shall be obligated to pay CBSD's actual damages,
plus any pecuniary gain realized by SafeCard from the unauthorized use
if applicable. This provision shall survive the termination or
expiration of this Agreement.
(c) SafeCard shall, when reasonably possible, keep all CBSD related
records segregated from its other business in accordance with
procedures which may be reasonably requested by CBSD. Notwithstanding
the above, SafeCard will keep the list of Cardholders provided to it by
CBSD and Participating Cardholder lists segregated from its other
business files. SafeCard also agrees that any dissemination of CBSD
records within its own business entity shall be on a "need to know"
basis for the purpose of performance hereunder.
(d) If either party hires another party to assist it in the performance
of any term of this Agreement, it shall cause such other party to meet
the terms of this Article in full, as applicable.
7.4 Authority. Each party represents and warrants to the other that it has
the authority to enter into and perform this Agreement according to its
terms and that its performance will not violate any federal, state or
local laws and regulations applicable to it, including Visa and
MasterCard Rules and Merchant Regulations and Federal Trade Commission
Rules, Guides and Interpretations nor contravene the terms of any other
contract, agreement or instrument to which it is a party.
7.5 Licenses, Permits, Patents, Etc. The parties each have obtained, now
hold, and shall preserve and protect all licenses, permits,
certifications, trade marks, approvals and the like required by
applicable law for the purpose of performing this Agreement. SafeCard
will make all registrations and filings which may be required to do
business and to carry out its obligations under this Agreement under
the laws of each state in which the Program shall be provided.
<PAGE>
Citibank/SafeCard Agreement
Page Twelve
7.6 Regulatory Inquiries. SafeCard will submit initially to CBSD for its
review and approval, which approval shall not be unreasonably withheld,
the relevant portions of filings or communications it submits to any
regulatory authority in connection with any Program inquiry that refers
to the respective roles of CBSD or its affiliates in connection with
the services provided hereunder. In the event any regulatory authority
determines (after providing SafeCard with notice and opportunity to be
heard) that the (Protection Plus) Program violates federal, state or
local laws or regulations, SafeCard may, with CBSD's approval which may
not be unreasonably withheld, make such changes as are necessary in the
Program to comply with such laws or regulations or at its option make
or cause to be made the necessary filing to bring the Program into
compliance with such laws or regulations at the sole expense of
SafeCard or the permitted subcontractor. In the event SafeCard fails to
make such changes or filings, CBSD, at its option, may require SafeCard
to cease marketing the Program in the applicable jurisdiction.
7.7 Sales Or Use Tax. To the extent required by applicable law, SafeCard
shall file in a timely manner all sales or use tax returns and remit to
the appropriate tax authorities all such sales and use taxes in
connection with sales arising out of this Agreement. SafeCard shall be
solely responsible for all sales or use taxes arising out of this
Agreement regardless of the party against whom such taxes may be
assessed. This paragraph shall survive the termination of this
Agreement and remain in effect until the statute of limitations on such
sales or use tax expires.
7.8 Litigation Against Each Other; Jury Trial Waiver. In the event of
litigation arising out of this Agreement (whether for violation of law,
breach of contract, or otherwise), each party agrees: (i) the
prevailing party shall be entitled to recover the attorney fees it
reasonably incurs in pursuit of its claim; and (ii) to waive its right
to a jury trial of such litigation.
7.9 Meetings. The parties shall endeavor to meet periodically: (i) to
discuss operations under this Agreement and provide detailed
information with respect to the performance of both parties concerning
their respective responsibilities hereunder; (ii) to discuss and
exchange information about promotional and planning programs; (iii) to
assess the performance of the marketing programs for the Program and to
recommend improvements thereof; and (iv) to discuss systems and
customer service matters and the improvements thereof.
ARTICLE 8. TERMINATION
8.1 Termination Without Cause. Either party may terminate this Agreement
for any reason whatsoever on December 31, 2000, or [CONFIDENTIAL
TREATMENT REQUESTED]. This Agreement shall not be subject to
termination prior to said December 31, 2000 date, unless by mutual
agreement or by reason of Article 8.2, 8.3, 8.4 or 8.5.
8.2 Termination for Bankruptcy; Going Out of Business. In the event either
party shall:
(i) elect to be wound up and dissolved;
(ii) become insolvent;
(iii) make any involuntary assignment for the benefit of creditors;
(iv) file a voluntary petition in bankruptcy for reorganization
or be adjudicated as bankrupt or insolvent;
(v) have a liquidator or trustee appointed over its affairs and
such appointment shall not have been terminated and discharged
within thirty (30) days; or
(vi) go out of business,
then the other party may terminate this Agreement upon
written notice to the other.
<PAGE>
Citibank/SafeCard Agreement
Page Thirteen
8.3 Termination for Judicial or Regulatory Constraints. If any governmental
body with legislative, rule making, prosecutional, or judicial
authority enacts a new rule or law or issues an order or the like which
in CBSD's good faith opinion will prevent CBSD from substantially
performing this Agreement, or which materially restricts CBSD's ability
to freely bill and collect Program fees, the parties will endeavor, if
mutually agreed upon, to restructure the arrangement called for by this
Agreement in such agreed upon manner as will alleviate the relevancy
and impact of the constraint. In the absence of such, CBSD may
terminate this Agreement upon written notice to SafeCard. Such
termination shall be effective the earlier of thirty (30) days from
such notice or the date CBSD must cease performance pursuant to law. In
such event, CBSD shall reimburse SafeCard upon billing for any
reasonable out-of-pocket printing and related expenses incurred by
SafeCard in connection with any planned solicitation pursuant to this
Agreement, provided such expenses had been previously consented to by
CBSD in writing. Such reimbursement shall be the exclusive remedy for
such a termination, subject to Article 8.7 hereof.
8.4 Termination for Material Breach.
(a) If SafeCard fails to perform any of its material obligations
hereunder and such failure remains uncured after ninety (90) days prior
written notice provided to it by CBSD, then CBSD may terminate this
Agreement upon providing prior written notice to SafeCard.
(b) SafeCard shall have the right to terminate this Agreement upon
prior written notice to CBSD, if CBSD fails to perform any of its
material obligations hereunder and CBSD fails to cure the breach to the
reasonable satisfaction of SafeCard within ninety (90) days after being
so notified of the breach by SafeCard. In such event, Article 8.7 shall
apply with respect to the servicing and billing of existing Program
members, except that SafeCard will not be required to pay CBSD as
otherwise set forth in Article 3.2.
8.5 Termination for Change in Control. In the event of a sale of a majority
of the shares of SafeCard to an unaffiliated third party, SafeCard
shall promptly notify CBSD. If CBSD reasonably disapproves of such
party and SafeCard nevertheless completes the sale, then CBSD shall
have the right to terminate this Agreement upon written notice to
SafeCard as of the date of such sale except that CBSD's right to
terminate herein will apply only if the third party acquiring SafeCard:
(a) is American Express, Discover, Sears, any Visa or MasterCard
issuer, or a bank or a corporate affiliate thereof, or (b) does not
have equity of at least $25,000,000.
8.6 Substitute Vendors: Return of Records. Upon [CONFIDENTIAL TREATMENT
REQUESTED] due to [CONFIDENTIAL TREATMENT REQUESTED] or [CONFIDENTIAL
TREATMENT REQUESTED] shall have the right to [CONFIDENTIAL TREATMENT
REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] shall comply in all
respects with the [CONFIDENTIAL TREATMENT REQUESTED] of the
[CONFIDENTIAL TREATMENT REQUESTED] to any [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] shall have
[CONFIDENTIAL TREATMENT REQUESTED] unless otherwise agreed in writing,
to [CONFIDENTIAL TREATMENT REQUESTED] nor any [CONFIDENTIAL TREATMENT
REQUESTED] which are [CONFIDENTIAL TREATMENT REQUESTED]. SafeCard also
shall return to CBSD all records, in whatever form maintained, on all
Participating Cardholders. For a period of eight (8) months after
SafeCard has returned the Protection Plus file to CBSD, SafeCard shall
reimburse CBSD for SafeCard's share of any membership cancellations for
active Participating Cardholders who were billed for Protection Plus
within four (4) months prior to termination and who paid SafeCard any
membership fees.
<PAGE>
Citibank/SafeCard Agreement
Page Fourteen
8.7 Continued Servicing by SafeCard. Upon termination of this Agreement by
SafeCard for cause by reason of CBSD's bankruptcy, going out of
business or material breach, or by CBSD for any reason other than
SafeCard's bankruptcy or going out of business, material breach or
change of control as defined in this Article 8, SafeCard shall have the
right thereafter to continue the service to Participating Cardholders
who enrolled in the Program as members until [CONFIDENTIAL TREATMENT
REQUESTED] except that [CONFIDENTIAL TREATMENT REQUESTED] with respect
to Participating Cardholders [CONFIDENTIAL TREATMENT REQUESTED] shall
[CONFIDENTIAL TREATMENT REQUESTED] from the [CONFIDENTIAL TREATMENT
REQUESTED] of [CONFIDENTIAL TREATMENT REQUESTED] which [CONFIDENTIAL
TREATMENT REQUESTED] to those [CONFIDENTIAL TREATMENT REQUESTED] will
[CONFIDENTIAL TREATMENT REQUESTED]. Such servicing shall be under the
Protection Plus name or under SafeCard's "Hot-Line" name, as mutually
agreed upon. SafeCard shall have the right to continue billing such
Participating Cardholder's respective CBSD Accounts subject to the
terms of this Agreement, either via sending Billing Transmissions to
CBSD at CBSD's merchant processor as set forth herein or via processing
through SafeCard's merchant bank. As such, CBSD shall continue to bill
Cardholders enrolled as members in the Program on the termination date
for the period so defined above, provided: (i) all of the other
Articles of this Agreement, subject to Article 8.4(b), shall remain in
effect, except for those Articles which pertain to solicitation
activity no longer applicable by reason of the termination of this
Agreement; and (ii) [CONFIDENTIAL TREATMENT REQUESTED] shall not
[CONFIDENTIAL TREATMENT REQUESTED] the [CONFIDENTIAL TREATMENT
REQUESTED] or [CONFIDENTIAL TREATMENT REQUESTED] the [CONFIDENTIAL
TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] in effect
on the [CONFIDENTIAL TREATMENT REQUESTED] after [CONFIDENTIAL TREATMENT
REQUESTED] provided however, that [CONFIDENTIAL TREATMENT REQUESTED]
will not [CONFIDENTIAL TREATMENT REQUESTED].
8.8 Use of Trademarks.
(a) The parties acknowledge that their respective names, logos and
marks (the "Marks") possess a special, unique and extraordinary
character which makes difficult the assessment of the monetary damage
which would be sustained by unauthorized use and, as such, recognize
that irreparable injury would be caused to the other party, and its
affiliates and subsidiaries, by unauthorized use of such marks. The
parties agree that injunctive and other equitable relief would be
appropriate in the event of a breach of this undertaking, and that such
remedy would not be exclusive of other legal remedies available to the
injured party. Therefore, after the termination of the Agreement, the
parties shall refrain from the use of any such Marks of the other
party, except if such use is necessary to: (i) convert or sell the
Cardholder accounts during the period after termination; (ii) wind down
the Program; (iii) bill and collect outstanding Program fees; or (iv)
implement the continued servicing pursuant to Article 8.7 hereof.
(b) SafeCard may continue to use the Protection Plus mark after a
termination covered by Article 8.7 where so permitted in accordance
therewith, provided: (i) the name of "Citibank" or any of its
affiliates is not used in connection with the mark or the related
product or service; (ii) if it is used in connection with a
solicitation of any kind, that such solicitation is not directed to any
Cardholder who has previously refused or cancelled membership or whose
name SafeCard received from a list provided to SafeCard by CBSD; or
(iii) if a Participating Cardholder cancels enrollment in the Program,
SafeCard promptly processes the cancellation and will not institute a
proactive solicitation to re-enroll such Cardholder (in response to the
cancellation) in the Program.
<PAGE>
Citibank/SafeCard Agreement
Page Fifteen
ARTICLE 9. EXCLUSIVITY AND NEW PROGRAM OPPORTUNITIES
9.1 Protection Plus Exclusivity.
(a) During the term of this Agreement, CBSD agrees not to offer the
Program or any other substantially similar Program, under the
Protection Plus name or any other trade name, to CBSD Cardholders which
is sold or operated by an entity other than SafeCard (including by
itself).
(b) During the period of continued servicing by SafeCard (Article 8.7),
CBSD agrees that any CBSD Cardholder being serviced by SafeCard shall
be [CONFIDENTIAL TREATMENT REQUESTED].
9.2 Other Programs.
(a) It is the intention of the parties that proposals from SafeCard for
marketing of new products and services as additional program offerings
to CBSD's Cardholders be encouraged by CBSD, and that where reasonably
possible based upon a good faith analysis of the proposal, the new
product and/or service be tested to CBSD's Cardholders as a new program
pursuant to such terms as the parties may in good faith agree. The
parties shall use their good faith efforts to test, if available, at
least one new product or service a year to CBSD Cardholders, including
to those Cardholders who were [CONFIDENTIAL TREATMENT REQUESTED] who
were, [CONFIDENTIAL TREATMENT REQUESTED]. In connection therewith,
[CONFIDENTIAL TREATMENT REQUESTED] CBSD will keep an open mind in
conducting such tests and will seriously consider the results thereof
regarding each of the new services or products it may wish to roll out
beyond said test based on a good faith analysis of the test results.
(b) Should [CONFIDENTIAL TREATMENT REQUESTED] wish to [CONFIDENTIAL
TREATMENT REQUESTED] to its Cardholders or replace the [CONFIDENTIAL
TREATMENT REQUESTED] of an [CONFIDENTIAL TREATMENT REQUESTED] shall
[CONFIDENTIAL TREATMENT REQUESTED] in any [CONFIDENTIAL TREATMENT
REQUESTED] and, if [CONFIDENTIAL TREATMENT REQUESTED] to provide
[CONFIDENTIAL TREATMENT REQUESTED] at the time [CONFIDENTIAL TREATMENT
REQUESTED] agrees, unless not otherwise reasonably possible, to
[CONFIDENTIAL TREATMENT REQUESTED] to [CONFIDENTIAL TREATMENT
REQUESTED] including the [CONFIDENTIAL TREATMENT REQUESTED]. In doing
so, [CONFIDENTIAL TREATMENT REQUESTED] acknowledges [CONFIDENTIAL
TREATMENT REQUESTED] to protect any obligation of confidentiality it
may have with respect to third parties. [CONFIDENTIAL TREATMENT
REQUESTED] is [CONFIDENTIAL TREATMENT REQUESTED] subject to
[CONFIDENTIAL TREATMENT REQUESTED] to [CONFIDENTIAL TREATMENT
REQUESTED] it is the intention of the parties that [CONFIDENTIAL
TREATMENT REQUESTED] be [CONFIDENTIAL TREATMENT REQUESTED] to
[CONFIDENTIAL TREATMENT REQUESTED] and the [CONFIDENTIAL TREATMENT
REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED].
(c) CBSD and SafeCard agree to mutually explore opportunities for
incorporating the travel services of National Leisure Group ("NLG") and
SafeCard Travel Services, Inc. ("STS") as an enhancement to existing
CBSD program offerings to CBSD Cardholders or as the basis for a new
service offering to CBSD Cardholders (including beyond what, at the
execution of this Agreement, is the present relationship between CBSD
and NLG). [CONFIDENTIAL TREATMENT REQUESTED] agrees that should it wish
to [CONFIDENTIAL TREATMENT REQUESTED] to
<PAGE>
Citibank/SafeCard Agreement
Page Sixteen
its Cardholders which will [CONFIDENTIAL TREATMENT REQUESTED] with the
[CONFIDENTIAL TREATMENT REQUESTED] and will [CONFIDENTIAL TREATMENT
REQUESTED] provided the arrangement with [CONFIDENTIAL TREATMENT
REQUESTED] is in regard to a [CONFIDENTIAL TREATMENT REQUESTED] of at
least [CONFIDENTIAL TREATMENT REQUESTED] and [CONFIDENTIAL TREATMENT
REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] at least approximately
the [CONFIDENTIAL TREATMENT REQUESTED].
ARTICLE 10. GENERAL PROVISIONS
10.1 MIS / Reporting. SafeCard shall meet the MIS Reporting Specifications
set forth in Schedule 10.
10.2 Independent Contractor. Nothing in this Agreement or in the
performance thereof shall be construed to create a sales, agency,
dealer or employment relationship between SafeCard and CBSD. CBSD and
SafeCard are and shall remain independent contractors.
10.3 [CONFIDENTIAL TREATMENT REQUESTED] shall make [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] of [CONFIDENTIAL
TREATMENT REQUESTED] during each contract year, [CONFIDENTIAL TREATMENT
REQUESTED] of which may be [CONFIDENTIAL TREATMENT REQUESTED] will be
upon [CONFIDENTIAL TREATMENT REQUESTED] will be [CONFIDENTIAL TREATMENT
REQUESTED] on [CONFIDENTIAL TREATMENT REQUESTED] during [CONFIDENTIAL
TREATMENT REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] that
appropriate [CONFIDENTIAL TREATMENT REQUESTED] are [CONFIDENTIAL
TREATMENT REQUESTED] to [CONFIDENTIAL TREATMENT REQUESTED] or its
affiliates [CONFIDENTIAL TREATMENT REQUESTED] will [CONFIDENTIAL
TREATMENT REQUESTED] will [CONFIDENTIAL TREATMENT REQUESTED] to its
[CONFIDENTIAL TREATMENT REQUESTED] will [CONFIDENTIAL TREATMENT
REQUESTED] and [CONFIDENTIAL TREATMENT REQUESTED] and will
[CONFIDENTIAL TREATMENT REQUESTED] a copy thereof to [CONFIDENTIAL
TREATMENT REQUESTED] will [CONFIDENTIAL TREATMENT REQUESTED] in good
faith and will [CONFIDENTIAL TREATMENT REQUESTED].
10.4 Access to SafeCard's Records. Until the expiration or termination of
this Agreement, SafeCard shall give CBSD and its duly authorized
representatives full and complete access to any records reasonably
related to the performance of this Agreement, upon reasonable notice
during normal business hours.
10.5 Force Majeure. SafeCard shall not be liable for or deemed to be in
default of this Agreement for any delay or failure in performance
resulting from circumstances beyond its control, including but not
limited to accidents, fires, explosions, riots, acts of God, utilities
failures and work stoppage (other than those of employees or agents of
SafeCard provided that SafeCard has acted in due diligence as the
circumstances require). Notwithstanding the above, SafeCard shall use
its best efforts to implement a contingency plan to limit any break in
service to Participating Cardholders to seventy-two (72) hours.
10.6 Applicable Law. The laws of the State of South Dakota shall govern
the enforcement and interpretation of this Agreement and the rights,
duties and obligations of the parties hereto.
<PAGE>
Citibank/SafeCard Agreement
Page Seventeen
10.7 Merger Clause. The parties acknowledge that this Agreement, together
with the attached Schedules, is the complete and exclusive statement
and understanding between the parties with respect to the subject
matter hereof, supersedes all prior agreements and understandings
between the parties with respect to such subject matter (including, but
not limited to, the agreement between SafeCard and CBSD dated January
1, 1989, and amendments thereto, concerning Protection Plus) and no
change or modification to this Agreement shall be made except in
writing duly signed by the parties hereto.
10.8 Severability. If any part of this Agreement shall be held to be
void or unenforceable, such part shall be severable from the rest,
leaving valid the remainder of this Agreement, notwithstanding the part
or parts found to be void or unenforceable, and effect shall be given
to the intent manifested by the portion held invalid or inoperative.
10.9 Notices. All notices or other documents required to be given pursuant
to this Agreement shall be effective when received and shall be
sufficient if given in writing, hand delivered, sent by telegraph or
certified United States Mail, return receipt requested, addressed as
follows:
Citibank (South Dakota), N.A.
701 E. 60th Street North
Sioux Falls, SD 57117
Attention: General Counsel
SafeCard Services, Inc.
7596 Centurion Parkway
Jacksonville, FL 32256
Attention: Robert M. Frechette
President and Chief Executive Officer
With a duplicate copy to: Marc F. Joseph
General Counsel
The parties hereto may at any time change the name and
addresses of persons to whom must be sent all notices or other
documents required to be given under this Agreement by giving written
notice to the other party.
10.10 Binding Nature of Agreement. This Agreement is and shall be binding
upon and inure to the benefit of the parties hereto, and their
respective legal representatives, successors and permitted assigns.
10.11 Headings. The paragraph headings used herein do not form a part of this
Agreement, but are for convenience only and shall not limit or be
deemed or construed in any way to affect or limit the meaning of the
language of the paragraph.
10.12 Coordination of Public Statements. Neither party will make any public
announcement of the Program or provide any information concerning the
Program to any representative of any news media without the prior
approval of the other, and will not respond to any inquiry from any
public or governmental authority concerning the Program without prior
consultation and coordination with the other unless and as required
under SEC or NYSE rules and regulations.
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Citibank/SafeCard Agreement
Page Eighteen
10.13 Assignment. This Agreement may not be assigned or transferred by either
party without the prior written consent of the other party, except that
either party may assign or transfer this Agreement to a corporate
parent, subsidiary, or affiliate upon notice to the other. The party
effecting such assignment shall continue to remain fully responsible to
the other for the performance of the contractual obligations so
assigned.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CITIBANK (SOUTH DAKOTA), N.A. SAFECARD SERVICES, INC.
By: By:
(Signature) (Signature)
Name: Name: Robert M. Frechette
Title: Title: President and Chief
Executive Officer
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