CO-BRAND CREDIT CARD AGREEMENT


     This Agreement is entered into as of the 31st day of October,
1996, by and among Direct Merchants Credit Card Bank, National
Association, a national banking association, with its offices at
1455 West 2200 South, Salt Lake City, Utah 84119 ("Direct
Merchants Bank"), Metris Direct, Inc., a Minnesota corporation,
with offices at 600 South Highway 169, Suite 1800, St. Louis Park,
Minnesota 55426 ("Metris") and Fingerhut Corporation, a Minnesota
corporation with offices at 4400 Baker Road, Minnetonka, MN 55343
("Fingerhut").
     
                            WITNESSETH:

     WHEREAS, Direct Merchants Bank, Metris, and Fingerhut desire
to market to Fingerhut customers the Fingerhut Card, as defined
herein; and
     
     WHEREAS, Fingerhut desires that Direct Merchants Bank be the
exclusive issuer of the Fingerhut Card and acknowledges that
Direct Merchants Bank has designated Metris as the exclusive
service provider of marketing, mail segmentation and such other
services as the parties may mutually agree for the Fingerhut Card;

     NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties agree as follows:
     
                            DEFINITIONS

     The following terms, as used herein shall have the following
meanings whether used in the singular or plural:

"Account" means an open-end line of credit (secured or unsecured),
owned by Direct Merchants Bank (including the receivable generated
thereunder), accessed through the use of the Fingerhut Card or
other access device and used by a Cardholder for personal, family
and household purposes.  Account does not mean open or closed end
credit accessed by a credit card or other access device which is a
private label credit card, issued by or on behalf of Fingerhut or
any Affiliate of Fingerhut.

"Account Booked" means an Account that meets Direct Merchants
Bank's underwriting criteria for approval and a credit line is
opened for the Cardholder greater than Direct Merchants Bank's
minimum credit line in effect at time of approval.  Account Booked
does not mean an Account which is determined to be fraudulent or
lost/stolen.

"Affiliate" means (i) with respect to Fingerhut any person or
entity directly or indirectly (including through any subsidiary)
owned or controlled by Fingerhut or under common ownership or
control with Fingerhut; (other than Metris and any person or
entity directly or indirectly owned or controlled by Metris) and
(ii) with respect to Direct Merchants Bank and Metris, any person
or entity directly or indirectly (including through any
subsidiary) owned or controlled by Direct Merchants Bank or
Metris.

"Affinity Participant" means a non-Party business that offers
special products or services directly to Cardholder in accordance
with terms agreed upon by Direct Merchants Bank and Metris.

"Agreement" means this Agreement including all Exhibits, as
amended from time to time, identified in this Agreement.

"Direct Merchants Bank" means Direct Merchants Credit Card Bank,
National Association, a national banking association and any
Affiliate of Direct Merchants Bank to which this Agreement is
assigned.

"Cardholder" means a Prospect who accepts a Fingerhut Card, and
for whom an Account is established.

"Cardholder Account Agreement" means the agreement between Direct
Merchants Bank and each Cardholder.

"Cardholder List" means a list of Cardholders.

"Card Enhancement Products" means one or more of the following
products: auto clubs, account protection and debt waiver products,
credit life insurance, credit card registration, legal services,
shopping services, dining clubs, bonus or rebate programs, retail
memberships, any other credit card value program developed by
Metris or Direct Merchants Bank, and any other products offered by
Metris or Direct Merchants Bank for which the Fingerhut Card (or
its successor product) is the primary billing or access device and
which are offered in conjunction with the Fingerhut Card.

"Direct Competitor of Fingerhut" means any unaffiliated third
party that sells merchandise through direct mail and/or
inbound/outbound telemarketing solicitations.

"Metris" means Metris and any Metris Affiliate to which this
Agreement is assigned or which otherwise become Party to this
Agreement.

"Fingerhut Card" means a general purpose credit card, plate or
other access device (including cash advance checks) issued by
Direct Merchants Bank that may be used from time to time to obtain
credit on the Account and that bears the name and logo of VISA,
MasterCard or other member association as well as the name and
logo of Fingerhut.

"Initial Term" has the meaning ascribed in Article 7.

"Net Purchases" means purchases of goods or services (including
cash advances) made by Cardholders or their authorized users
through the use of Fingerhut Cards (whether or not the purchases
are effected in person or via telephone, mail or other means),
less merchant credits, and reflecting appropriate purchase
adjustments posted to the Accounts.

"Party" or "Parties" means Direct Merchants Bank and/or Fingerhut
and/or Metris, and/or if the context so requires, any Affiliate
which is an assignee of the parties.

"Pre-Screened Prospect List" means a list of Prospects who have
been prescreened by Direct Merchants Bank for credit worthiness,
are approved by Direct Merchants Bank for solicitation, and will
be solicited by Direct Merchants Bank for the Fingerhut Card.

"Prospect" means an individual who may be solicited for or may
seek a Fingerhut Card.

"Renewal Term" has the meaning ascribed in Article 7.

"Securitization" means any transaction involving the pooling and
sale of the receivable and other assets arising under or through
the Accounts to an entity which may issue securities and fund such
purchases.  The term is to be construed broadly to include sales
to a trust which issues certificates or sales to corporations or
other institutions which may issue notes or commercial paper to
fund such purchases.

"Securitized Account"  means all Accounts whose receivable or
other assets have been transferred in a Securitization.
                                 
                                 
                     ARTICLE 1 - CARD PROGRAM

     1.1  General.

          (a)  Direct Merchants Bank and Fingerhut will develop,
as provided in this Agreement, a credit card program whereby
Direct Merchants Bank will offer a Fingerhut Card.  Direct
Merchants Bank will establish Accounts and issue Fingerhut Cards,
and Direct Merchants Bank or Metris will administer such Accounts.
Direct Merchants Bank, Metris and Fingerhut will also develop
mutually agreeable lists of Prospects for the Fingerhut Card.
Fingerhut reserves the right to develop a Cardholder "rewards" or
"incentive" program for the Fingerhut Card.  At such time, the
Parties agree to negotiate in good faith to develop such a program
to enhance the value of the Fingerhut Card and the terms and
conditions to fund such program.
     
          (b)  Notwithstanding anything else in this Agreement,
Fingerhut acknowledges that Direct Merchants Bank shall be solely
responsible for credit policy, including Account origination
credit criteria, credit approval, administration, billing,
collections, credit terms (including interest rate) and any other
areas of responsibility which applicable laws, regulations or
other member association rules require to be the sole
responsibility of Direct Merchants Bank.  Subject to the
conditions set forth in Section 4.3(b), Fingerhut further agrees
that Direct Merchants Bank may enter into any contract, agreement
or other arrangement with a Direct Competitor to issue, process or
manage a co-brand, affinity or other jointly branded credit card
or product.
     
     1.2  Responsibilities
     
          (a)  List Development.  The Parties shall, at Direct
Merchants Bank's expense, prepare lists of Prospects to be
solicited for the Fingerhut Card.  Fingerhut will provide Direct
Merchants Bank with lists of Prospects from its lists of customers
along with certain attributes regarding those customers.
Fingerhut will not provide any customer information that in its
sole discretion would cause it to become a consumer reporting
agency.
          
          (b)  Solicitations/Applications. Subject to the review
process in Section 1.2(k), Metris and Direct Merchants Bank will
each, at their own expense, develop and distribute credit
solicitations/applications for the Fingerhut Card.  Subject to
Fingerhut's prior written consent, such consent not to be
unreasonably withheld, Direct Merchants Bank may use Fingerhut's
or other advertising media (including direct mail, catalog, and
inbound/outbound telemarketing or other media) to solicit
Prospects.  Any such solicitations shall be upon terms and
conditions mutually agreed to by the Parties.
          
          (c)  Marketing/Response Fulfillment.  Metris and Direct
Merchants Bank agree to assume responsibility for all costs and
expenses of all marketing, advertising (including mass media), and
other marketing costs (including mailing of Fingerhut Cards, card
carriers and production of Cardholder Account Agreements) for
application fulfillment (including postage), associated with the
marketing of the Fingerhut Card.

          (d)  Account Origination.  Direct Merchants Bank agrees
to open an Account for each Prospect meeting its credit criteria.
Direct Merchants Bank, as owner and issuer of the Account, will
have sole discretion in developing and implementing credit
criteria for establishing an Account, including but not limited to
all on-going credit decisions for credit line increases or
decreases, overlimits, point-of-sale authorizations, Account
closures, and re-issuance of Fingerhut Cards.
          
          (e)  Pre-Screening.  Subject to the credit and other
criteria of Direct Merchants Bank, the Parties will develop a Pre-
Screened Prospect List from the lists of Prospects.  The Parties
agree that the Prospect List provided shall be considered
Confidential Information as such term is defined in Section 4.1
(b) hereof and agree to maintain the confidentiality of such
Prospect list.

          (f)  Card Enhancement Products.  Metris or Direct
Merchants Bank will develop, itself or through third parties, Card
Enhancement Products to offer Cardholders. Revenues from such Card
Enhancement Products will be for the sole benefit of Direct
Merchants Bank.  Metris or Direct Merchants Bank will not offer a
Card Enhancement Product to Cardholders that is provided for the
benefit of or in association with a Direct Competitor of Fingerhut
without Fingerhut's prior written consent, (such consent to be
provided within ten (10) days of request). The Parties confirm
that Fingerhut may reasonably withhold such consent if an offer
may have an adverse effect on Fingerhut's business or its
competitive position relative to a Direct Competitor.
          
          (g)  Statement Messages. Fingerhut shall have the right
to use, without cost, the space allocable to marketing messages on
Direct Merchants Bank's periodic billing statements to Cardholders
for up to four of the twelve periodic billing statements sent to
Cardholders within a calendar year but not more than once per
quarter.  Direct Merchants Bank shall have the right to use the
remaining space except such space will not be used to offer
products of Direct Competitors of Fingerhut.  The total space
allocable to marketing messages shall exclude space reasonably
required by Direct Merchants Bank to communicate credit
information to Cardholders, including but not limited to changes
in terms, annual fees, over-the-credit-limit and late payment
information and any information required by law or regulation.
     
          (h)  Inserts.  Fingerhut, at no cost, shall have the
right to place inserts in Cardholder periodic billing envelopes,
up to the standard postage weight limitations for statement
mailings with a maximum of up to six inserts per calendar year not
to exceed two per quarter or one per month.  Direct Merchants Bank
shall have the right to use other statement inserts (which
includes member association inserts such as MasterValues or other
similar member news items) for products and information, or if
applicable, for Affinity Participants (subject to the limitations
in Section 1.2(j)).  Notwithstanding the foregoing, Direct
Merchants Bank agrees not to mail statement inserts to Cardholders
that offer products or services of a Direct Competitor of
Fingerhut except for retailers or catalogues in Master Values or
other similar member news items.  Requests by Fingerhut for
additional space will be reviewed in good faith by Direct
Merchants Bank.  Notwithstanding, Direct Merchants Bank reserves
the right to decrease the number of inserts Fingerhut is allowed,
as provided herein, in the event applicable laws, rules or
regulations require Direct Merchants Bank to communicate
Cardholder changes via a statement insert.  In the event of such
insert decrease, Fingerhut's inserts will be inserted in the next
statement mailing so as not to reduce Fingerhut's total statement
insert to less than six.
          
          (i)  "Bangtails".  Fingerhut or Direct Merchants Bank,
subject to Direct Merchants Bank's discretion, may use space on
billing envelopes which is commonly referred to as the "bangtail";
provided, however, that such user pays for developing the
"bangtail", and for the corresponding remittance envelopes as well
as any other costs incurred or incident to this process including,
but not limited to, the cost of transmitting cardholder orders
from the "bangtail".

          (j)  Engagement of Affinity Participants.  Subject to
Fingerhut's prior written approval, not to be unreasonably
withheld, Direct Merchants Bank or Metris may enter into contracts
providing for the participation of Affinity Participants to
enhance the value of the Fingerhut Card.  Administration of the
relationship with Affinity Participants shall be the sole
responsibility of Direct Merchants Bank or Metris.  Except for
Affinity Participants permitted by Fingerhut prior to execution of
this Agreement, Direct Merchants Bank or Metris will not engage
Affinity Participants to market to the Cardholder which are Direct
Competitors of Fingerhut.  Metris or Direct Merchants Bank may
request Fingerhut's prior written consent to offer such product of
an Affinity Participant to a Cardholder.  The Parties confirm that
Fingerhut may reasonably withhold its consent for purposes of this
paragraph (j), if an offer or contract with an Affinity
Participant may have an adverse effect on the value or usefulness
of the Fingerhut name or reputation or on Fingerhut's business or
prospects or on its competitive position relative to a Direct
Competitor and the Fingerhut Card.
     
          Direct Merchants Bank and Metris agree that they will
not enter into any agreements with Affinity Participants which (i)
conflict with the terms of this Agreement, or (ii) impose any
additional obligations on any other Party without such other
Party's prior written consent.  In addition, neither Direct
Merchants Bank, Metris nor Fingerhut will be liable for any
obligations assumed by any other Party with Affinity Participants
in any agreement other than as contemplated by the preceding
sentence.
          
          (k)  Review of Solicitation, Advertising and Marketing
Materials.  All solicitation, advertising and marketing materials
(including statement inserts, "bangtails," and all other
communications to Cardholders) for the Fingerhut Card shall be
reviewed by the Parties for legal, regulatory compliance as well
as compliance with direct mail requirements.  Any  Party hereto
may withhold approval of any solicitation, advertisement or
marketing material which such Party, in its reasonable opinion,
considers a violation of any law, regulation or requirement
applicable to the Party or in its reasonable opinion would have an
adverse impact on the Fingerhut Card.  Direct Merchants Bank shall
be solely responsible for ensuring compliance with legal and
regulatory requirements applicable to the Fingerhut Card of all
solicitation, advertising and marketing materials approved by
Direct Merchants Bank.  Fingerhut shall be solely responsible for
ensuring compliance with legal and regulatory requirements
applicable to Fingerhut of all solicitation, advertising and
marketing materials approved by Fingerhut.  Each Party agrees to
provide comments on or approval of solicitation, advertising and
marketing materials within 5 business days after receipt.  All
solicitation, advertising or other marketing material shall
identify Direct Merchants Bank as the issuer of the Fingerhut
Card.
     
          (l)  Fingerhut agrees that Direct Merchants Bank, or
Metris may solicit, each at its own expense, the Cardholder List
for products offered by Direct Merchants Bank, or Metris.  Direct
Merchants Bank agrees that Fingerhut may solicit at its expense
the Cardholder List for merchandise offered by Fingerhut.  The
Cardholder List is subject to the confidentiality requirements of
Section 4.1(b).  Direct Merchants Bank and Metris agree that,
except as otherwise expressly provided in this Agreement or
otherwise agreed to in writing by the Parties, Fingerhut shall
have the exclusive right to offer merchandise sold by it to the
Cardholder List.
     
                    ARTICLE 2 - ADMINISTRATION
     
     2.1  Use of Fingerhut Name and Logo.  During the term of this
Agreement, Direct Merchants Bank shall have the nonexclusive right
to use the name "Fingerhut" and the "Fingerhut" logo which
Fingerhut has provided to Direct Merchants Bank for the limited
purposes described herein on the Fingerhut Card Cardholder
statements, Cardholder customer service letters and marketing
materials mailed to Cardholder, and for other purposes approved in
advance by Fingerhut in connection with the Fingerhut Card.
Fingerhut reserves the right to prohibit use of its name and logo
on collection letters or other collection communication from
Direct Merchants Bank.
     
     2.2  Right to Access.  Each Party will (i) permit the other
Party or Parties, as applicable and its authorized representatives
or regulatory auditors reasonable access, during normal business
hours, to audit the books and records of the other Party as they
relate to compliance of the other Party with the terms and
conditions of this Agreement, and (ii) cause its personnel to
provide the other Party with reasonable assistance in its
performance of such audit and investigation; provided, however,
that such audit and investigation will be conducted by such Party
in a manner which does not unreasonably interfere with the other
Party's normal operations; and provided further that the other
Party will not be required to divulge any records, including
certain customer information, to the extent prohibited by
applicable statutes or regulations or subject to attorney client
or other privilege.
     
     2.3  Compliance With Laws.  Direct Merchants Bank and Metris,
in accomplishing their duties under this Agreement, will, in
relation to the Cardholder Account Agreements and Accounts, comply
in all material respects with all applicable federal and state
laws, rules and regulations including (i) the Federal Consumer
Credit Protection Act and its implementing regulations and (ii)
all regulations of VISA, MasterCard or other member association.

     2.4  Securitization. Fingerhut agrees Direct Merchants Bank
shall have the right to (i) take any action required consistent
with industry practices to effect a Securitization of an Account,
(ii) engage in hedging transactions consistent with industry
practices including but not limited to interest rate swaps or
interest caps with respect to revenue anticipated or received from
such Securitized Account, and (iii) determine the terms,
conditions and provisions of any documentation, arrangements or
agreements relating to such Securitization and hedging
transactions.

                     ARTICLE 3 - COMPENSATION

     3.1  Compensation. Direct Merchants Bank will pay to
Fingerhut for each Account Booked the fees as specified in Exhibit
A.
     
     3.2  Settlement of Payment.  Direct Merchants Bank will pay
Fingerhut and Fingerhut will pay Direct Merchants Bank or Metris,
as applicable, in immediately available funds and not later than
the thirtieth (30th) business day following the end of each
calendar month, all amounts due and payable to the other pursuant
to this Agreement and Exhibit A.
     
                   ARTICLE 4 - CERTAIN COVENANTS
          
     Direct Merchants Bank, Metris and Fingerhut each covenant and
agree that:
          
     4.1  Cooperation.
     
          (a)  Cooperation.  Each Party will cooperate fully in
furnishing any information or performing any action reasonably
requested by the other Party or Parties, as applicable, which
information or action is necessary to the timely, and successful
consummation of the transactions contemplated by this Agreement.
          
     4.2  Confidentiality.

          (a)  Confidentiality.  Proprietary information furnished
prior to and after execution of this Agreement by one Party to the
other in connection with this Agreement and the transactions
contemplated hereby will be kept in confidence by such other
Party, including its Affiliates, in accordance with its policies
for maintaining the confidence of its own information of similar
content.  The term "Confidential Information" shall mean and
include (i) all trade secrets and other confidential business
information learned in the course of performance by either Party
of its obligations hereunder, (ii) the Fingerhut credit score and
any other information provided by Fingerhut with respect to
Prospects or data which is disclosed by a Party to the other Party
under or in contemplation of this Agreement.  "Confidential
Information" may be either the property of the disclosing Party or
information provided to the disclosing Party by a corporate
Affiliate of the disclosing Party or by a third party.

          (b)  Notwithstanding the foregoing, the term
"Confidential Information shall not include information which (i)
is already known to such other Party when received, (ii)
thereafter becomes generally obtainable by a Party other than as a
result of an unauthorized disclosure by the Party taking advantage
of this clause, (iii) is required by law, regulation or court
order to be disclosed by such Party, provided that in the case of
this clause, prior notice of such disclosure has been given to the
Party which furnished such information, when legally permissible,
and that such other Party which is required to make the disclosure
uses its best efforts to provide sufficient notice to permit the
Party which furnished such information to take legal action to
prevent the disclosure, or (iv) reasonably necessary, in the
opinion of counsel, to be disclosed in the context of a legal
proceeding or regulatory investigation provided that prior notice
shall be given to the party which furnished the information.  Any
Party may disclose information to VISA or MasterCard or other
member association pursuant to their respective requirements or to
either Party's respective Affiliates, auditors, counsel rating
agencies, or regulators.

          (c)  In addition, notwithstanding anything contained in
this Section 4.2 to the contrary, Direct Merchants Bank or Metris
may (i) with an appropriate confidentiality agreement in place,
disclose such information relating to this Agreement and the
transactions contemplated hereby as may be reasonably necessary to
Affinity Participants, and (ii) with an appropriate
confidentiality agreement in place, disclose such information to
others with a reasonable business need; provided, however, that
neither Direct Merchants Bank or Metris will disclose any of
Fingerhut's confidential information without Fingerhut's prior
written consent.  Direct Merchants Bank, Metris and Fingerhut
shall not be obligated to disclose to any of the others any
information relating to Cardholders which is required by
applicable law to be kept confidential or is otherwise prohibited
from disclosure by this Agreement, or would cause either party, in
its reasonable interpretation, to be deemed a credit reporting
agency as defined under applicable state or federal law.  This
Section 4.2 shall survive any termination of this Agreement for
five (5) years.

     4.3  Covenants.
     
          (a)  Covenant of Fingerhut.  Fingerhut agrees that,
during the term of this Agreement, including any renewals,
Fingerhut will not own (directly or indirectly) the credit card
(secured or unsecured) account or receivables on an account,
issue, process, manage or enter into an agreement with a third
party to own (directly or indirectly), issue, process, or manage
another Fingerhut Card (including a credit or charge card, or
travel and entertainment card or other general purpose credit
card).  Direct Merchants Bank and Metris agree Fingerhut or any of
its Affiliates may own, issue, manage or process itself a private
label open or closed end credit card which is not (x) a credit
card bearing the same logo as the Fingerhut Card, or (y) processed
for use as a general purpose credit card by or bearing the name
and logo of a member association as a general purpose credit card.

          (b)  Covenant of Direct Merchants Bank.  Direct
Merchants Bank agrees that during the term of this Agreement,
including any renewals, Direct Merchants Bank will not solicit the
Cardholder List to offer a co-branded, affinity or jointly branded
credit card or product of a Direct Competitor.
          
            ARTICLE 5 - REPRESENTATIONS AND WARRANTIES

     5.1  Representation and Warranties of Direct Merchants Bank.
Direct Merchants Bank hereby represents and warrants to Fingerhut
as follows:
     
          (a)  Organization.  Direct Merchants Bank is a national
banking association duly organized and validly existing under the
laws of the United States.
          
          (b)  Capacity; Authority; Validity.  Direct Merchants
Bank has all necessary corporate power and authority to enter into
this Agreement and to perform or cause to be performed all of its
obligations under this Agreement.  This Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action of
Direct Merchants Bank, and this Agreement has been duly executed
and delivered by Direct Merchants Bank and constitutes the valid
and binding obligation of Direct Merchants Bank, enforceable in
accordance with its terms (except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally
and by general equity principles).
          
          (c)  Conflicts; Defaults.  Neither the execution and
delivery of this Agreement by Direct Merchants Bank, nor the
consummation of the transactions contemplated hereby by Direct
Merchants Bank, will (i) result in a breach of, constitute a
material default under, or accelerate the performance required by
the terms of any contract, instrument or commitment to which
Direct Merchants Bank is a party or by which Direct Merchants Bank
is bound, (ii) violate the charter or by-laws of Direct Merchants
Bank, or any other equivalent organizational document of Direct
Merchants Bank, (iii) require any consent or approval under any
judgment, order,  decree, permit or license to which Direct
Merchants Bank is a party or by which Direct Merchants Bank is
bound, or (iv) require the consent or approval of any governmental
authority or other party to any contract, instrument or commitment
to which Direct Merchants Bank is a party or by which it is bound,
except as have been obtained or as contemplated by the Parties
with respect to MasterCard, VISA, or other member associations.

     5.2  Representation and Warranties of Fingerhut.  Fingerhut
hereby represents and warrants to Direct Merchants Bank as
follows:
     
          (a)  Organization.  Fingerhut is a business corporation
duly organized, validly existing and in good standing under the
laws of the State of Minnesota.
          
          (b)  Capacity; Authority; Validity.  Fingerhut has all
necessary corporate power and authority to enter into this
Agreement and to perform all of its obligations under this
Agreement.  This Agreement and the consummation by Fingerhut of
the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action of Fingerhut, and
this Agreement has been duly executed and delivered by Fingerhut
and constitutes the valid and binding obligation of Fingerhut,
enforceable in accordance with its terms (except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equity principles).
          
          (c)  Conflicts; Defaults.  Neither the execution and
delivery of this Agreement. by Fingerhut nor the consummation of
the transactions  contemplated hereby by Fingerhut will (i) result
in a material breach of, constitute a default under, or accelerate
the performance required by the terms of any contract, instrument
or commitment to which Fingerhut is a party or by which Fingerhut
is bound, (ii) violate the charter or by-laws of Fingerhut, or any
other equivalent organizational document of Fingerhut, (iii)
require any consent or approval under any judgment, order, decree,
permit or license to which Fingerhut is a party or by which
Fingerhut is bound, or (iv) require the consent or approval of any
other party to any contract, instrument or commitment to which
Fingerhut is a party or by which it is bound.

     5.3  Representation and Warranties of Metris.  Metris hereby
represents and warrants to Direct Merchants Bank as follows:
     
          (a)  Organization.  Metris is a business corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware.
          
          (b)  Capacity; Authority; Validity.  Metris has all
necessary corporate power and authority to enter into this
Agreement and to perform all of its obligations under this
Agreement.  This Agreement and the consummation by Metris of the
transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action of Metris, and this
Agreement has been duly executed and delivered by Metris and
constitutes the valid and binding obligation Metris, enforceable
in accordance with its terms (except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors rights, generally
and by general equity principles).
          
          (c)  Conflicts; Defaults.  Neither the execution and
delivery of this Agreement. by Metris nor the consummation of the
transactions contemplated hereby by Metris will (i) result in a
breach of, constitute a material default under, or accelerate the
performance required by the terms of any contract, instrument or
commitment to which Metris is a party or by which Metris is bound,
(ii) violate the charter or by-laws of Metris, or any other
equivalent organizational document of Metris, (iii) require any
consent or approval under any judgment, order, decree, permit or
license to which Metris is a party or by which Metris is bound, or
(iv) require the consent or approval of any other party to any
contract, instrument or commitment to which Metris is a party or
by which it is bound.

                    ARTICLE 6 - INDEMNIFICATION

     6.1  Indemnification Obligations
     
          (a)  By Direct Merchants Bank.  Direct Merchants Bank
shall be liable to and shall defend, indemnify and hold harmless
Fingerhut and its Affiliates, and their respective officers,
directors, employees and permitted assigns harmless from and
against any and all Losses (as hereinafter defined) incurred by
reason of or related to (i) Direct Merchants Bank's breach of any
representation, warranty or covenant hereunder, (ii) Direct
Merchants Bank's failure to perform its obligations hereunder, and
(iii) any claim by a Cardholder or an Affinity Participant based
on the act or omission of Direct Merchants Bank with respect to
the Fingerhut Card, except that Direct Merchants Bank shall not be
liable for any claim of a Cardholder or an Affinity Participant
caused by the act or omission of Fingerhut or a Fingerhut
Affiliate.
          
          (b)  By Fingerhut.  Fingerhut shall be liable to and
shall defend, indemnify and hold harmless Direct Merchants Bank,
Metris and their Affiliates, and their respective officers,
directors, employees and permitted assigns harmless from and
against any and all Losses (as hereinafter defined) incurred by
reason of or related to (i) Fingerhut's breach of any
representations, warranty or covenant hereunder, and (ii) failure
to perform its obligations hereunder; except that Fingerhut shall
not be liable for any claim of a Cardholder or an Affinity
Participant caused by the act or omission of Direct Merchants
Bank, Metris, or their Affiliates.
          
          (c)  Metris.  Metris shall be liable to and shall
defend, indemnify and hold harmless Direct Merchants Bank,
Fingerhut, and their Affiliates, and their respective officers,
directors, employees and permitted assigns harmless from and
against any and all Losses (as hereinafter defined) incurred by
reason of or related to (i) Metris' breach of any representations,
warranty or covenant hereunder, and (ii) failure to perform its
obligations hereunder; except any claim of a Cardholder or an
Affinity Participant caused by the act or omission of Direct
Merchants Bank.
          
          (d)  "Losses" Defined.  For purpose of this Section 6.1,
the term "Losses" shall mean any liability, damages, costs, losses
and expenses, including attorneys' fees, disbursements and court
costs, reasonably incurred by Direct Merchants Bank, Metris or
Fingerhut in connection with any threatened, pending, or
adjudicated claim, demands , action, suit or proceeding (whether
civil, criminal, administrative or investigated by an unaffiliated
third party without regard to whether or not such Losses would be
deemed material under this Agreement.
          
     6.2  Procedures.
     
          (a)  Notice of Claims.  The Parties agree that in case
any claim is made, or any suit or action is filed or served
(whichever is the earlier) which, if not corrected, may give rise
to a right of indemnification for a Party hereunder ("Indemnified
Party") from the other Party ("Indemnifying Party"), the
Indemnified Party will give notice to the Indemnifying Party as
promptly as practicable after the receipt by the Indemnified Party
of such notice or knowledge of such claim, suit, or action.  On a
best efforts basis, notice to the Indemnifying Party shall be
given no later than fifteen days after receipt by the Indemnified
Party in the event a suit or action has commenced or thirty days
under all other circumstances; provided, however, that the failure
to give prompt notice shall not relieve an Indemnifying Party of
its obligation to indemnify except to the extent the Indemnifying
Party is materially prejudiced by such failure.  The Indemnified
Party shall make available to the Indemnifying Party and its
counsel and accountants at reasonable times and for reasonable
periods, during normal business hours, all books and records of
the Indemnified Party relating to any such possible claim for
indemnification, and each Party will render to the other such
assistance as it may reasonably require of the other in order to
ensure prompt and adequate defense of any suit, claim or
proceeding based upon a statement of facts which may give rise to
a right of indemnification hereunder.

          (b)  Selection of Counsel.  The Indemnifying Party shall
have the right to defend, compromise and settle any suit, claim or
proceeding in the name of the Indemnified Party to the extent that
the Indemnifying Party may be liable to the Indemnified Party
under Section 6.1 above in connection therewith; provided,
however, that the Indemnifying Party shall not compromise or
settle a suit, claim or proceeding unless it assumes the
obligation to indemnify for all Losses relating thereto. In the
event two of the parties to this Agreement must indemnify the
third, the parties agree the two Indemnifying Parties must agree
to select one to be the Indemnifying Party to the third
Indemnified Party and the third Indemnified Party shall look to
one party to this Agreement for indemnification.  The Indemnifying
Party shall notify the Indemnified Party within ten days of having
been notified pursuant to Section 6.2(a) of this Agreement if the
Indemnifying Party elects to assume the defense of any such claim,
suit or action and employ counsel in a reasonable exercise of its
discretion.  The Indemnified Party shall have the right to
participate in such defense compromise or settlement through
counsel chosen by it, but the fees and expenses of such counsel
shall be at the Indemnified Party's expense, unless the
Indemnifying Party shall not have employed counsel to take charge
of the defense thereof.
          
          (c)  Settlement of Claims.  The Indemnified Party may at
any time notify the Indemnifying Party of its intention to settle
or compromise any claim, suit or action against the Indemnified
Party in respect of which indemnification payments may be sought
from the Indemnifying Party hereunder, but shall not settle or
compromise any matter for which indemnification may be sought
without the consent of the Indemnifying Party.  Any settlement or
compromise of any claim, suit or action in accordance with the
preceding sentence, or any final judgment or decree entered on or
in any claim, suit or action which the Indemnifying Party did not
assume the defense of in accordance herewith, shall be deemed to
have been consented to by, and shall be binding upon, the
Indemnifying Party as fully as if the Indemnifying Party had
assumed the defense thereof and a final judgment or decree had
been entered in such suit or action, or with regard to such claim,
by a court of competent jurisdiction for the amount of such
settlement, compromise, judgment or decree.
          
          (d)  Subrogation.  The Indemnified Party shall be
subrogated to any claims or rights of the Indemnifying Party as
against any other persons with respect to any amount paid by the
Indemnified Party under this Article 6. The Indemnified Party
shall cooperate with the Indemnifying Party, at the Indemnifying
Party's expense, in the assertion by the Indemnifying Party of any
such claim against such other persons.
          
          (e)  Indemnification Payments . Amounts owing under this
Article 6 shall be paid promptly upon written demand for
indemnification containing in reasonable detail the facts giving
rise to such liability; provided, however, if the Indemnifying
Party notifies the Indemnified Party within thirty (30) days of
receipt of such demand that it disputes its obligation to
indemnify and the Parties are not otherwise able to reach
agreement, the controversy shall be settled by final order entered
by a court of competent jurisdiction.
          
     6.3  Survival of Indemnification.  The provisions of this
Article 6 shall expressly survive any termination of this
Agreement under Article 7 below or otherwise for a period of ten
(10) years.
     
                 ARTICLE 7 - TERM AND TERMINATION
     
     7.1  Term.  This Agreement will continue until July 18, 2003
(the "Initial Term") . Thereafter, this Agreement will
automatically renew for one term of three (3) years ("Renewal
Term"), unless one Party provides written notice to the other
Party not less than twelve (12) months prior to the end of the
Initial Term or any Subsequent Renewal Term of its intent to
terminate this Agreement.  Six (6) months prior to the conclusion
of the Renewal Term, the Parties may extend this Agreement in
three (3) year increments upon mutual agreement.  In the event a
replacement agreement has not been agreed upon by the Parties at
the end of the Renewal Term or any other mutually agreed upon
extension, the Parties shall continue to cooperate and to carry
out their respective responsibilities and duties under the terms
of this Agreement for up to eighteen (18) months beyond such
Renewal Term or other mutually agreed upon extension to facilitate
an orderly transition.
     
          Notwithstanding anything contained in this Section 7.1
to the contrary, this Agreement may be terminated prior to the end
of the Initial Term or any Renewal Term upon the mutual written
agreement of the Parties.  The termination of this Agreement
pursuant to this Article 7 will not terminate, affect or impair
any rights (including the right to commence a suit or claim for
breach of this Agreement), obligations or liabilities of either
Party hereto which may accrue prior to such termination or which,
under the terms of this Agreement, continue after such
termination.
     
     7.2  Termination. Any Party may terminate this Agreement
reserving all other remedies and rights hereunder in whole or in
part and otherwise available in law or in equity, upon the
following conditions:
          
          (a)  Event of Default.  Upon the occurrence of an Event
of Default, (as hereinafter defined) the non-defaulting Party may
terminate this Agreement by giving no less than 120 days prior
written notice of its intent to terminate.  Such written notice
shall describe the Event of Default.  If the defaulting Party
corrects the condition which resulted in the Event of Default
within 90 days from the date of delivery of the notice from the
other Party, this Agreement shall remain in full force and effect.
For purposes of this Section 7.2, the following events shall be
"Events of Default": (i) any Party materially defaults in the
performance of any of its duties or obligations under this
Agreement and continues after notice, (ii) a breach by a Party of
its material covenants, representations and warranties set forth
herein which are not remedied, (iii) Direct Merchants Bank loses
its membership in either VISA, MasterCard, or any other member
association and such loss of membership materially adversely
impacts Direct Merchants Bank's issuance of the Fingerhut Card,
(iv) any Party acts in a manner which causes significant harm to
the goodwill of the other and adversely impacts the Fingerhut
Card, and (v) Direct Merchants Bank   sells the Accounts to a
third person; provided, however, it shall not be an Event of
Default if Direct Merchants Bank sells a Securitized Account or an
account for collection in the ordinary course of business, or any
other such sale of the Account which is necessary in the ordinary
course of business.
          
          (b)  Bankruptcy.  A Party may, to the extent permitted
by law, terminate this Agreement at any time upon written notice
to the other in the event a petition in bankruptcy or for
reorganization or debt consolidation under the federal bankruptcy
laws or under any comparable law, or other similar state or
federal banking regulatory action related to bankruptcy, is filed
by or against the other Party and not dismissed within 90 days, or
upon the other Party's making of an assignment of its assets for
the benefit of creditors, or upon the application of the other
Party for the appointment of a receiver or trustee of its assets
or if the other Party becomes insolvent or unable to pay its debts
as they mature.  The Party which becomes subject to any proceeding
under this Section 7.2(b) will promptly notify the other Parties
to this Agreement.
          
          (c)  Force Majeure.  In the event any Party fails to
perform its obligations under this Agreement in whole or in part
as a consequence of an act of God, including fire, explosion,
earthquake, public utilities failure, accident, flood, embargo,
war, nuclear disaster, or riot (a "Force Majeure Occurrence"),
such failure to perform shall not be considered a breach of this
Agreement during the period of such disability.  The disabled
Party shall promptly and in writing notify the other Parties to
this Agreement of the Force Majeure Occurrence and advise the
other Parties of the extent of the disabled Party's disability and
the expected duration of the disabled Party's inability to perform
its obligations hereunder.  This Agreement may be terminated by
either Party receiving such notice on or after the 180th day
following receipt of notice from the disabled Party if the failure
to perform has not been cured at the end of such 180 day period.

          (d)  Change in Law.  In the event there is a change in
law that materially impairs the goals and objectives of this
Agreement, any Party may terminate this Agreement by giving no
less than one hundred twenty (120) days prior written notice of
its intent to terminate.  Such written notice shall describe the
law which materially impairs the goals and objectives of this
Agreement.
          
          (e)  Change in Control.  Fingerhut shall have the right
to terminate this Agreement by written notice to Metris upon the
occurrence of a Change of Control (as defined below) with respect
to Metris.  A "Change in Control" shall be deemed to have occurred
if (a) any person or group (within the meaning or Rule 13d-5 of
the Securities Exchange Act of 1934 as in effect on the date
hereof) other than Fingerhut shall own directly or indirectly,
beneficially or of record, shares representing more than 25% of
the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Metris; (b) a majority of the seats
(other than vacant seats) on the board of directors of Metris
shall at any time be occupied by persons who were neither (i)
nominated by Fingerhut, or by the Board of Directors of Metris,
nor (ii) appointed by directors so nominated; or (c) any person or
group other than Fingerhut shall otherwise directly or indirectly
have the power to exercise a controlling influence over the
management or policies of Metris.
               
     7.3  Obligations Upon Termination.
     
          (a)  Ownership of Accounts.  Upon termination of this
Agreement pursuant to this Article 7, unless the accounts are
sold, Direct Merchants Bank shall continue to own the Accounts,
and shall have the right to re-issue the Fingerhut Card with a
card which does not use the Fingerhut name or logo or under any
other name or logo it may choose in its sole discretion.
          
          (b)  Remedies.  Each of the Parties hereto shall be
liable to the other for damages arising out of or in connection
with any breach of this Agreement, subject to the duty of the non-
breaching party to take all reasonable actions in order to
mitigate such damages.  The Parties agree that in no event shall
any Party to this Agreement be liable to the other for punitive,
indirect, special or consequential damages arising out of a breach
of this Agreement.  It is understood and agreed that monetary
damages may not be a sufficient remedy for breach with respect to
the respective obligations under this Agreement, and that monetary
damages would not be a sufficient remedy for any Event of Default.
Accordingly, the non-breaching Party shall, to the extent
permitted by law or equity, be entitled to specific performance
and injunctive or other equitable relief as a remedy for any
breach of, or Event of Default under this Agreement.  The remedies
described in this Section 7.3(b) shall not be deemed to be the
exclusive remedies for any breach of, or Event of Default under
this Agreement, but shall be in addition to all other remedies
available; to the parties at law or in equity, subject to the
limitations with respect to damages set forth in this Section
7.3(b).
          
     7.4  Purchase Upon Termination.
     
          (a)  Purchase Right.  Except for a termination resulting
from Section 7.2(a), (b), (d) or (e) at the end of the Initial
Term or any subsequent Renewal Term of this Agreement, Fingerhut
(including its permitted assigns under this Agreement), shall have
the right to purchase from Direct Merchants Bank the Accounts,
including Securitized Accounts, and the Cardholder List at a
purchase price determined in accordance with Section 7.4(b) below
and under the terms and conditions of a purchase and sale
agreement.  Such right may be exercised upon six months' written
notice to Direct Merchants Bank prior to the end of the Initial
Term or Renewal Term.  Notwithstanding the sale of the Accounts,
Securitized Accounts, and Cardholder List, Fingerhut agrees that
Metris and Direct Merchants Bank shall have the exclusive right,
for three years from the date of purchase of the Accounts,
Securitized Accounts, and Cardholder List by Fingerhut, to sell
Card Enhancement Products to the Cardholder List.  Such exclusive
right shall include (i) the right to renew any Card Enhancement
Product purchased by a Cardholder prior to the sale of the
Accounts (including Securitized Accounts) and Cardholder List to
Fingerhut; (ii) the right to offer Card Enhancement Products to
Cardholder(s) on the Cardholder List who have previously not
accepted an offer to purchase a Card Enhancement Product
(including renewals); and (iii) the right to offer Card
Enhancement Product (including renewals) to any new Cardholders
which are added to the Cardholder List, whether or not the
Fingerhut Card is reissued or rebranded by Fingerhut.  Income
(including renewal income) derived from the sale of Card
Enhancement Products to the Cardholder List shall be the sole
income of Metris and Direct Merchants Bank.
          
          (b)  Purchase Price.  Fingerhut agrees to pay Direct
Merchants Bank a purchase price for the Accounts and Cardholder
List as follows:  The sum of (i) the book value (excluding loan
loss reserves of the Accounts), plus (ii) any earned or unbilled
interest or fees, plus (iii) the preceding three year amortized
cost to acquire the Account(s), plus (iv) any premium assigned to
the Accounts based on an independent third party valuation of the
portfolio.
          
          (c)  Purchase Condition. Fingerhut agrees to purchase
the Accounts, subject to any Securitization agreements or
arrangements that Direct Merchants Bank or its Affiliate may have
entered into and subject to any necessary approvals of rating
agencies, trustees or other parties as set forth in such
Securitization transaction.  Fingerhut and Direct Merchants Bank
agree to cooperate to take the reasonable necessary actions to
effectuate an orderly transition of the Accounts, including the
Securitized Accounts, to Fingerhut.  Direct Merchants Bank further
agrees to take reasonable necessary actions to remove the
Securitized Accounts from the Securitization to enable Fingerhut
to complete the purchase of the Accounts.
          
                     ARTICLE 8 - MISCELLANEOUS
     
     8.1  Notices.  All notices and other communications by Direct
Merchants Bank, Metris and Fingerhut hereunder shall be in writing
to the other Party and shall be deemed to have been duly given
when delivered in person, or when sent via telecopy transmission
with hard copy sent via first class mail the same day, receipt
requested and mailed via first class mail, or four business days
after posting to the United States postal service registered or
certified mail, with postage prepaid, addressed as follows:
     
     If to Direct Merchants Bank:

          Direct Merchants Credit Card Bank, National Association
          1455 West 2200 South, Suite 300
          Salt Lake City, UT  84119
          Attention:  President

     If to Metris:

          Metris Companies Inc.
          Interchange Building
          600 South Highway 169, Suite 1800
          St. Louis Park, Minnesota  55426
          Attention:  President

     If to Fingerhut:

          Fingerhut Corporation
          4400 Baker Road
          Minnetonka, Minnesota  55343
          Attention:  President
          With a copy to the General Counsel

or to such other address as a Party may from time to time
designate by notice.

     8.2  Entire Agreement.  This Agreement, together with its
Exhibits identified in this Agreement, constitutes the entire
agreement between the Parties and supersedes any other agreement,
whether written or oral, that may have been made or entered into
by Direct Merchants Bank, Metris and Fingerhut (or by any officer
or officers of either of such Parties) relating to the matters
contemplated hereby.
     
     8.3  Amendments and Waivers.  This Agreement may be amended,
modified, superseded or canceled, and any of the terms,
representations, warranties or covenants hereof may be waived,
only by written agreement executed by each of the Parties or, in
the case of a waiver, by the Party waiving compliance.  In the
course of the negotiating, planning and coordination of this
Agreement, written documents have been exchanged between the
Parties.  Such written documents shall not be deemed to amend or
supplement this Agreement.  The failure of any Party at any time
or times to require performance of any provision hereof shall in
no manner affect the right at a later time to enforce the same.
No waiver by any Party of any condition or term, representation,
warranty or covenant under this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition
or breach or as a waiver of any other condition or any breach of
any other term, representation, warranty or covenant under this
Agreement.
     
     8.4  Assignment; Delegation of Duties.  This Agreement and
the rights and obligations created under it shall be binding upon
and inure solely to the benefit of the Parties hereto and their
respective successors and permitted assigns.  This Agreement shall
not be assigned or transferred by any Party, except to an
Affiliate or any successor upon written notice to the other
Parties hereto, provided that any such Affiliate or successor
agrees in writing to be bound by the terms of this Agreement,
without the prior written consent of the other.  Direct Merchants
Bank or Metris may at any time delegate any duties hereunder to an
Affiliate which normally performs such credit card related
services on behalf of Direct Merchants Bank or Metris.
     
     8.5  Audit Rights.  Fingerhut agrees that all records
relating to Direct Merchants Bank's Accounts at all times shall be
subject to inspection and review by the examiners of the Office of
the Comptroller of the Currency (the "OCC") and any other
regulatory agency having jurisdiction over Direct Merchants Bank
or any of its operations.  If Fingerhut receives any requests or
demands under authority of law (subpoenas, so called discovery
means, or audit demands of any taxing authority) for access to
information of Direct Merchants Bank, Fingerhut shall immediately
inform Direct Merchants Bank or Metris of such request or demand
and shall not grant access to such information without Direct
Merchants Bank's or Metris' permission not to be unreasonably
withheld.
     
     8.6  Expenses. Unless specifically provided for elsewhere in
this Agreement, each Party will bear all costs and expenses
incurred by it in connection with the transactions herein,
including legal fees, accounting fees and taxes which are imposed
upon that Party based upon its activities hereunder.
     
     8.7  Captions; Counterparts.  The captions in this Agreement
are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this
Agreement.  This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.
     
     8.8  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota
without giving effect to the principles of conflicts of laws
thereof.
     
     8.9  Severability.  If any provision of this Agreement or
portion thereof is held invalid, illegal, void or unenforceable by
reason of any rule of law, administrative or judicial provision or
public policy, such provision shall be ineffective only to the
extent invalid, illegal, void or unenforceable, and the remainder
of such provision and all other provisions of this Agreement shall
nevertheless remain in full force and effect.
     
     8.10 No Partnership or Joint Venture.  This Agreement does
not create a partnership or joint venture between the Parties, and
no Party to this Agreement shall have any authority whatsoever to
bind the other Parties to any obligation.
     
     8.11 No Third Party Beneficiaries.  Nothing in this
Agreement, express or implied, is intended or shall be construed
to confer upon any person or entity, other than the Parties and
their respective successors and assigns permitted by this
Agreement, any right, remedy or claim under or by reason of this
Agreement.

     IN WITNESS WHEREOF, Direct Merchants Bank, Metris and
Fingerhut have caused this Agreement to be duly executed as of the
date first written above;



DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL ASSOCIATION

By:

Title:


FINGERHUT CORPORATION

By:

Title:

METRIS DIRECT, INC.

By:

Title:

                             EXHIBIT A
                                 
                           COMPENSATION
                                 
                                 
Solicitation Fee

1.   Direct Merchants Bank will pay Fingerhut for each Prospect
     for whom there is an Account Booked:

     (i)  xxx for an unsecured credit line;

     (ii)  xxx for each secured credit line once the minimum
     deposit amount is deposited in an account by the Prospect;
     and

     (iii)     xxx for each secured Account Booked which
     subsequently is converted to an unsecured credit line.

     Payment of the above fees terminates upon termination of the
     Agreement.

Net Purchase Fee

2.   Direct Merchants Bank will also pay to Fingerhut a non-
     cumulative fee of xx basis points of Net Purchases,
     exclusively on Accounts Booked pursuant to this Agreement.
     Payment of the Net Purchase fee terminates upon termination
     of this Agreement.