Exhibit 10.10.8
EIGHTH AMENDMENT TO THE STRATEGIC MODELING AGREEMENT
THIS EIGHTH AMENDMENT TO THE STRATEGIC MODELING AGREEMENT is entered into
effective as of January 26, 2002, by and between RiskWise, L.L.C., a Delaware
limited liability company ("RiskWise"), and The Credit Store, Inc., a Delaware
corporation ("TCS");
RECITALS:
A. BTE and TCS entered into a Strategic Modeling Agreement on the 18th day
of March, 1999 ("Agreement"), Amendment to the Strategic Modeling
Agreement on the 16th day of March 2001; Second Amendment to the
Strategic Modeling Agreement on the 29th day of May 2001; and Third
Amendment to the Strategic Modeling Agreement on August 16, 2001;
Fourth Amendment to the Strategic Modeling Agreement on September 13,
2001; and Fifth Amendment to the Strategic Modeling Agreement on
October 12, 2001; Sixth Amendment to the Strategic Modeling Agreement
on November 12, 2001; and Seventh Amendment to the Strategic Modeling
Agreement on December 26, 2001 (collectively, the "Strategic Modeling
Agreement") under which BTE provided certain development services to
TCS;
B. Subsequent to entering into the Strategic Modeling Agreement, BTE was
involved in a reorganization and RiskWise became a successor to BTE;
C. Effective as of May 1, 1999, the Strategic Modeling Agreement was
assigned from BTE to RiskWise pursuant to an Assignment and Assumption
Agreement dated as of May 1, 1999;
D. TCS consented to such assignment and assumption as of May 1, 1999;
E. The Strategic Modeling Agreement, as amended, is set to terminate on
January 26, 2002; and
F. The parties hereto desire to amend the Strategic Modeling Agreement.
THEREFORE, in consideration of the mutual promises and covenants set forth
herein, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties intend to be legally bound and do
hereby agree as follows:
1. The Strategic Modeling Agreement is amended by substituting RiskWise
for BTE as the party to such agreement. Wherever the term BTE appears
in the agreement, it shall be replaced by the term RiskWise.
2. Section 1 of the Strategic Modeling Agreement is hereby amended as
follows:
(a) The "Data Processing Term" definition is amended in its
entirety to read as follows: "Data Processing Term" means the
period beginning on the date hereof and ending at 11:59 p.m.
on December 31, 2002. Unless either party gives the other
party written notice at least thirty (30) days prior to the
end of the initial Data Processing Term (or any successive
term), the Data Processing Term shall automatically renew for
successive one-year periods commencing on January 1 of each
subsequent year.
(b) The "Modeling Term" definition is amended in its entirety
to read as follows: "Modeling Term" means the period beginning
on the date hereof and ending at 11:59 p.m. on December 31,
2002. Unless either party gives the other party written notice
at least thirty (30) days prior to the end of the initial
Modeling Term (or any successive term), the Modeling Term
shall automatically renew for successive one-year periods
commencing on January 1 of each subsequent year.
(c) The term "Contract Year" is added and is defined as
follows: "Contract Year" means the period commencing on
January 1, 2002 and ending on December 31, 2002 and each
twelve (12) month period thereafter commencing on January 1 of
each subsequent year in which the Modeling Term or Data
Processing Term is in effect.
(d) The term "RiskWise Affililate" is added and is defined as
follows: "RiskWise Affiliate" means (i) RiskWise
International, or (ii) any person or entity directly or
indirectly controlled by RiskWise International.
3. Section 2.1 of the Strategic Modeling Agreement is hereby deleted and
replaced by a new Section 2.1 to read as follows:
Section 2.1 Services. During the Modeling Term, RiskWise will
provide such services to TCS as TCS may reasonably request to
build, implement, monitor, test and update Models and related
Software useful to the conduct of TCS' business, including but
not limited to, developing and updating the Models described
in Exhibit A (as amended by this Eighth Amendment to the
Strategic Modeling Agreement). TCS acknowledges that RiskWise
has delivered, and TCS has accepted, a version of each such
Model set forth on Exhibit A on or prior to the date hereof.
Notwithstanding the foregoing, TCS may not require RiskWise to
provide more than 2.5 FTE days of support with respect to any
calendar month.
4. Section 2.2 of the Strategic Modeling Agreement is hereby deleted and
replaced by a new Section 2.2 to read as follows:
Section 2.2 Payment for Services. In consideration of the
Services to be performed under Section 2.1, TCS will pay to
RiskWise on or before the 30th day of each calendar month
during the Modeling Term, the sum of $5,000. The parties agree
to evaluate and adjust the amount of such monthly payment for
calendar months after December, 2002. If the parties, after
negotiating in good faith, are unable to agree upon any
adjustment in such amount, the monthly payment will remain
$5,000.
RiskWise shall pay all expenses incurred by RiskWise or its
employees in providing the Services under this Section 2,
including, but not limited to, all travel and related
expenses. TCS shall pay separately for all Data provided in
accordance with Section 3.
5. Section 2.5 of the Strategic Modeling Agreement is hereby deleted.
6. Section 2.8 of the Strategic Modeling Agreement is hereby deleted and
replaced by a new Section 2.8 to read as follows:
Section 2.8 Uses of Data. (a) TCS certifies that it will use
the Services (including the Models) only in connection with
one of the following needs with respect to a consumer: (i) for
use as necessary to effect, administer or enforce a
transaction requested or authorized by the consumer; (ii) to
protect against or prevent actual or potential fraud,
unauthorized transactions, claims or other liabilities; (iii)
for required institutional risk control; (iv) for resolving
consumer disputes or inquiries; (v) due to holding a legal or
beneficial interest relating to the consumer; (vi) for use by
persons acting with the consumer's consent in a fiduciary or
representative capacity on behalf of the consumer; (vii) for
use in complying with federal, state or local laws, rules and
other applicable legal requirements; or (viii) for use and to
the extent specifically permitted or required under other
provisions of law and in accordance with the Right to
Financial Privacy Act of 1978, to law enforcement agencies
(including a Federal functional regulator, the Secretary of
Treasury, a State insurance authority or the Federal Trade
Commission), self-regulatory organizations or for an
investigation on a matter related to public safety. TCS
further certifies that its use of RiskWise products will be
limited, on a product-by-product basis, to that purpose (or
purposes) set forth next to such product on Exhibit A of the
Strategic Modeling Agreement. TCS will comply with all
applicable laws in connection with its use of the RiskWise
information services.
(b) RiskWise does not intend for a Model or other Services
generated under this Agreement to constitute a "consumer
report" as defined in the Fair Credit Reporting Act, 15 U.S.C.
ss. 1681 et. seq. ("FCRA"). TCS is specifically prohibited
from using RiskWise's Models or other Services, in whole or
part, as a factor in establishing any consumer's eligibility
for credit, insurance, employment purposes, or any other
permissible purpose of consumer reports as defined by the
FCRA. It is expressly forbidden for TCS to take "adverse
action" as defined by the FCRA on any customer request using
information supplied by RiskWise pursuant to this Agreement.
TCS represents and warrants to RiskWise that any "adverse
action" taken with respect to a consumer request will be based
solely on information received from sources other than
RiskWise. Furthermore, TCS warrants that it will not identify
RiskWise in any declination
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communication with the consumer as having provided information
to TCS upon which such declination was based, in whole or in
part.
7. Section 3.2 of the Strategic Modeling Agreement is deleted and replaced
by a new Section 3.2 to read as follows:
3.2. Cost and Payment.
(a) Cost.
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(1) Pre-Purchase Assessment Services.
RiskWise will provide data for a
pre-purchase assessment of potential account
purchases at the cost of $0.03 per account,
but not less than $1,000 for each portfolio
of accounts processed.
(2) Post-Purchase Assessment Services.
RiskWise will provide data for a
post-purchase assessment of potential
account purchases at the cost of $0.08 per
account, but not less than $1,000 for each
portfolio of accounts processed, plus, in
each case, actual credit bureau costs.
(3) Skip-Tracing Services. RiskWise will
provide skip-tracing services at the cost
of:
Product Price
------- -----
InfoTrace Non-EDA* $0.27 per input for
the first 1.1
million records
during a Contract
Year.
$0.25 per input for
all records in
excess of 1.1
million during a
Contract Year.
*An additional charge of $0.12 per input
shall be added whenever EDA (electronic
directory assistance) is used with respect
to an input record.
(4) Application Processing and Other Models.
RiskWise will provide Data required by the
Models and the Software at a cost equal to
RiskWise's own cost for such Data (as
reasonably determined by RiskWise) plus a
margin to be agreed upon by the parties,
provided, however, that any credit bureau
Data required by the Models or the Software
must be obtained by TCS at TCS' sole cost.
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(b) Payment. During each Contract Year, TCS commits to
purchase a minimum of $300,000 worth of Skip-Tracing Services
from RiskWise at the cost set forth in Section 3.2(a)(3) (the
"Guaranteed Minimum"). Such Guaranteed Minimum shall be billed
by RiskWise to TCS at the rate of $25,000 per month during
each month of a Contract Year commencing with January, 2002.
Payment shall be due within thirty (30) days of receipt of the
invoice by TCS. TCS shall not be entitled to any refund of the
Guaranteed Minimum in the event it does not actually use
$300,000 of skip-tracing services in any Contract Year. Within
thirty (30) days after the close of each Contract Year,
RiskWise shall provide an accounting to TCS detailing its
actual usage during the Contract Year of skip-tracing
services. To the extent that TCS' actual usage of skip-tracing
services exceeds the Guaranteed Minimum for such Contract
Year, such accounting shall include an invoice for such excess
services over the Guaranteed Minimum, and such invoice shall
be due within thirty (30) days after receipt by TCS.
8. Section 5.1 of the Strategic Modeling Agreement is deleted in its
entirety.
9. Section 5.2 of the Strategic Modeling Agreement is deleted and replaced
by a new Section 5.2 to read as follows:
5.2 Non-Competition. Commencing on the date hereof and
continuing through January 26, 2005, RiskWise will not, and
will not permit any RiskWise Affiliate to, (i) engage in the
business of targeting credit card offers to consumers as a
means of settling their defaulted consumer debt, or (ii)
provide consulting, modeling or other services to any entity
engaged in such business if such entity grants RiskWise or any
RiskWise Affiliate any equity interest, participation or other
interest representing a right to twenty percent (20%) or more
of such entity's equity or profits, however measured.
10. Section 6.6 of the Strategic Modeling Agreement is amended by replacing
the first sentence of such Section with the following:
If any court of competent jurisdiction determines for any
reason that the provision of Data by RiskWise hereunder
violates applicable law, then, if such violation can be
corrected by RiskWise without degradation in the Data and
Services provided hereunder (for example, by substituting one
provider of Primary Data for another or by modifications to
any Models and Software), RiskWise shall take such corrective
action at no cost to
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TCS; provided, however, that (i) any increase in out-of-pocket
costs to RiskWise as a result of such corrective action (for
example, a substitute Primary Data provider charges more for
such data) may be passed through to TCS and (ii) if the
Modeling Term has expired, TCS shall pay the costs of any
adjustments to the Models and Software required therefore,
determined at RiskWise's standard hourly rates.
11. Section 6 of the Strategic Modeling Agreement is amended by adding a
new Section 6.9 to read as follows:
Section 6.9 Right to Audit. TCS agrees that RiskWise may, from
time to time, after reasonable notice and during normal
business hours audit TCS solely with respect to TCS' use of
the RiskWise services to verify compliance with Section 2.1
above and TCS will reasonably cooperate in such audits. TCS
further agrees to cooperate in any audits of TCS' use of the
RiskWise services requested by any of RiskWise's third-party
data providers.
12. Exhibit A to the Strategic Modeling Agreement is amended by deleting
Section 3 "Skip-Tracing Process Optimization Model" in its entirety.
Exhibit A is further amended by deleting from such Exhibit, any
reference to a "Target date."
13. TCS and RiskWise agree that pursuant to the Warrant dated March 18,
1999 RiskWise is entitled to purchase 750,000 shares of TCS common
stock, par value $.01 per share, as a result of having successfully
completed and delivering a Pre-Purchase Assessment Model, a
Post-Purchase Assessment Model and an Application Assessment Model. TCS
and RiskWise further agree that the parties have mutually agreed to
abandon the development of a Skip-Tracing Process Optimization Model
and, as a result, RiskWise will not become entitled to subscribe for
and purchase the remaining 250,000 shares of common stock pursuant to
such Warrant.
14. To the extent that any provisions of the Strategic Modeling Agreement
are in conflict with the provisions of this Eighth Amendment to the
Strategic Modeling Agreement, the provisions of this Eighth Amendment
to the Strategic Modeling Agreement shall govern. All other provisions
of the Strategic Modeling Agreement not inconsistent with this are
Eighth Amendment to the Strategic Modeling Agreement are unchanged by
this Eighth Amendment to the Strategic Modeling Agreement.
15. This Eighth Amendment may be executed in any number of counterparts,
and by different hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same original.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized representative as of the day and year
first above written.
RISKWISE, L.L.C. THE CREDIT STORE, INC.
By: /s/ Gordon O. Meyer By: Kevin T. Riordan
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Gordon O. Meyer Kevin T. Riordan
Its: President Its: President
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