EXHIBIT 10.1

THIS DOCUMENT HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

PRIVATE LABEL CREDIT CARD PROGRAM AGREEMENT

BETWEEN

WORLD FINANCIAL NETWORK BANK

AND

THE BON-TON STORES, INC.

DATED AS OF DECEMBER 16, 2011

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TABLE OF CONTENTS

 

SECTION 1. DEFINITIONS

     1   

1.1 Certain Definitions

     1   

1.2 Rules of Interpretation

     11   

SECTION 2. ESTABLISHMENT OF THE PLAN

     12   

2.1 Transition of Program

     12   

2.2 Establishment and Operation of the Program; Program Scope

     12   

2.3 Applications for Credit Under the Program; Internet Features

     13   

SECTION 3. MARKETING AND PROMOTION OF PROGRAM

     13   

3.1 Program Documents

     13   

3.2 Establishment of Joint Marketing Plan

     15   

3.3 Promotion of Program Generally

     15   

3.4 Retailer Channels

     15   

3.5 Bank Support

     15   

3.6 Marketing Fund

     15   

3.7 Use of Customer Lists

     17   

3.8 Costs

     17   

3.9 Development of Program Website

     18   

3.10 Retailer Websites

     19   

SECTION 4. ADMINISTRATION OF THE PLAN

     20   

4.1 Governance

     20   

4.2 Loyalty Programs

     21   

4.3 Account Underwriting, Credit Policy and Card Issuance

     22   

4.4 Account Terms and Conditions

     23   

4.5 Certain Retailer Responsibilities

     24   

4.6 Certain Bank Responsibilities

     24   

4.7 Ownership of Information and Accounts

     26   

4.8 Use of Cardholder Information

     27   

4.9 Servicing of Accounts by Bank

     28   

4.10 Cross-Marketing of Ancillary Products and Services

     31   

4.11 Communication with Customers

     31   

4.12 Cardholder Communications

     32   

 

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4.13 Systems Interface; Technical Support

     32   

SECTION 5. LICENSE OF MARKS; TECHNOLOGY

     33   

5.1 Retailer License Grant and Limitations

     33   

5.2 Bank License Grant and Limitations

     34   

5.3 Retailer Marks Quality Control

     36   

5.4 Bank Marks Quality Control

     36   

5.5 Rights in Technology

     36   

5.6 Cross-Licenses of Technology

     37   

5.7 Change in Systems

     37   

SECTION 6. OPERATION OF THE PLAN

     38   

6.1 Honoring Credit Cards

     38   

6.2 Cross Acceptance

     38   

6.3 Operating Procedures

     38   

6.4 Cardholder Disputes Regarding Accounts and Goods and/or Services

     39   

6.5 Cardholder Disputes Regarding Violations of Applicable Law

     39   

6.6 Payment by Retailer; Ownership of Accounts; Fees; Accounting

     39   

6.7 Cardholder Payments on Accounts

     40   

6.8 Chargebacks

     41   

6.9 Non-Competition

     42   

6.10 Second Look Program

     42   

6.11 Reports

     43   

6.12 Sale of Charged Off Accounts

     44   

6.13 Retailer Acquisitions

     44   

6.14 Additional Co-Branded Program

     45   

SECTION 7. CONFIDENTIALITY; OWNERSHIP OF CARDHOLDER INFORMATION

     45   

7.1 Confidentiality

     45   

7.2 Privacy and Data Security

     48   

7.3 Public Announcements

     52   

SECTION 8. REPRESENTATIONS AND WARRANTIES OF RETAILER

     52   

8.1 Organization and Qualification

     52   

8.2 Corporate Authority

     52   

8.3 No Default

     53   

 

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8.4 Litigation

     53   

8.5 Validity of Charge Slips

     53   

8.6 Compliance with Law

     53   

8.7 Retailer Marks

     54   

8.8 Intellectual Property Rights

     54   

8.9 Sharing of Customer Information

     54   

8.10 Accuracy of Information

     54   

8.11 No Reliance

     54   

SECTION 9. COVENANTS OF RETAILER

     54   

9.1 Notices of Changes

     54   

9.2 Retailer Locations

     54   

9.3 Retailer’s Business

     54   

9.4 Insurance

     55   

9.5 True and Correct Information

     55   

9.6 Books and Records

     55   

9.7 Cooperation

     55   

9.8 Affiliates

     55   

SECTION 10. REPRESENTATIONS AND WARRANTIES OF BANK

     55   

10.1 Organization and Qualification

     55   

10.2 Corporate Authority

     55   

10.3 Accuracy of Information

     56   

10.4 No Default

     56   

10.5 Litigation

     56   

10.6 Compliance with Law

     56   

10.7 Bank Marks

     56   

10.8 Intellectual Property Rights

     57   

10.9 Sharing of Cardholder Information

     57   

10.10 No Reliance

     57   

SECTION 11. COVENANTS OF BANK

     57   

11.1 Notices of Changes

     57   

11.2 Bank’s Business

     57   

11.3 Insurance

     57   

11.4 True and Correct Information

     57   

 

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11.5 Books and Records

     57   

11.6 Cooperation

     57   

11.7 Securitization

     58   

11.8 Affiliates

     58   

SECTION 12. AUDIT RIGHTS

     58   

12.1 Audit

     58   

12.2 Limitations

     59   

12.3 SSAE-16 Reports

     59   

SECTION 13. INDEMNIFICATION

     59   

13.1 Indemnification by Retailer

     59   

13.2 Indemnification by Bank

     60   

13.3 Notice

     61   

13.4 Right to Defend Claims; Coordination of Defense

     61   

13.5 Indemnifying Party Election

     62   

13.6 Settlement of Claims

     62   

13.7 Subrogation

     62   

13.8 Indemnification Payments

     62   

13.9 Limitation on Indemnified Losses and Damages

     63   

SECTION 14. TERM AND TERMINATION

     63   

14.1 Term

     63   

14.2 Termination with Cause by Bank; Bank Termination Events

     63   

14.3 Termination with Cause by Retailer; Retailer Termination Events

     64   

14.4 Force Majeure Event

     66   

SECTION 15. EFFECTS OF TERMINATION

     66   

15.1 General Effects

     66   

15.2 Bank Payment Obligations

     66   

15.3 Continuing Performance

     66   

15.4 Retailer Account Purchase

     66   

15.5 Treatment of Portfolio Assets if Retailer Does Not Exercise Purchase Option

     67   

15.6 Use of Retailer Marks

     67   

SECTION 16. MISCELLANEOUS

     68   

16.1 Entire Agreement

     68   

 

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16.2 Amendment

     68   

16.3 Successors and Assigns

     68   

16.4 Waiver

     68   

16.5 Severability

     68   

16.6 Notices

     69   

16.7 Captions and Cross-References

     69   

16.8 GOVERNING LAW / WAIVER OF JURY TRIAL

     69   

16.9 Counterparts

     69   

16.10 Force Majeure

     69   

16.11 Relationship of Parties

     70   

16.12 Survival

     70   

16.13 Mutual Drafting

     70   

16.14 Independent Contractor

     70   

16.15 No Third Party Beneficiaries

     71   

16.16 Taxes

     71   

 

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List of Schedules

 

Schedule 2.1.1

   Transition Plan Parameters

Schedule 2.1.3

   Transition Costs

Schedule 2.3

   Operating Procedures

Schedule 2.3.2

   Quick Credit and Instant Credit

Schedule 3.6.1

   Marketing Fund

Schedule 4.1.3

   Management Committee

Schedule 4.3.1

   Approved Rates and Credit Limits

Schedule 4.3.5

   Promotional Programs

Schedule 4.3.6

   Specialty Credit Programs

Schedule 4.4.1-A

   Account Terms

Schedule 4.4.1-B

   Changes to Rates and Fees

Schedule 4.4.1-C

   Special Fee Policies

Schedule 4.4.2

   Competitor Card Programs

Schedule 4.6.15

   Internet Applications

Schedule 4.6.16

   Bank Program Team Specifications

Schedule 4.9.3

   Service Level Standards

Schedule 4.9.8

   Authorized Service Providers

Schedule 4.10

   Cross-Marketing of Ancillary Products and Services

Schedule 4.13.5

   Management Committee Program Projections

Schedule 5.1.1

   Retailer Marks

Schedule 5.2.1

   Bank Marks

Schedule 6.6.6

   Payments by Bank

Schedule 6.8.1

   Chargebacks and Retailer Presentment Warranties

Schedule 6.9.2

   Additional Non-Competition Terms

Schedule 6.11.1

   Reports

Schedule 7.2.1(b)

   Privacy Policy

Schedule 7.2.3

   Notification Procedures

Schedule 14.1

   Term

Schedule 14.2.3

   Additional Bank Termination Events

Schedule 14.3.7

   Additional Retailer Termination Events

Schedule 15.4.1

   Program Data

Schedule 15.4.2

   Portfolio Purchase Option

Schedule 15.5.1(b)

   Restricted Card Programs

 

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PRIVATE LABEL CREDIT CARD PLAN AGREEMENT

THIS PRIVATE LABEL CREDIT CARD PLAN AGREEMENT is made as of the 16th day of
December, 2011 (the “Effective Date”), by and between The Bon-Ton Stores, Inc.,
with its principal office at 2801 East Market Street, York, Pennsylvania 17402
(“Retailer”), and World Financial Network Bank, with its principal office at One
Righter Parkway, Suite 100, Wilmington, DE 19803 (“Bank”). Retailer and Bank are
sometimes hereinafter referred to individually as a “Party” or collectively as
“Parties.”

WITNESSETH:

WHEREAS, Retailer owns and operates retail department stores under the
nameplates Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman,
Herberger’s, Parisian (in the Detroit area) and Younkers (collectively, the
“Retailer Nameplates”); and

WHEREAS, Bank, inter alia, establishes credit card programs to extend credit to
qualified individuals for the purchase of goods and/or services;

WHEREAS, Retailer and Bank desire to enter into the Program whereby Bank shall
extend credit and issue Credit Cards to qualifying individuals in the form of
private label open-end credit card accounts for the purchase of Goods and/or
Services from Retailer through its Retailer Channels in the United States
(“Territory”);

WHEREAS, Bank would own all the Accounts, and Cardholder payments would be made
to Bank as provided in this Agreement;

WHEREAS, Bank shall support all aspects of the Retailer’s private label credit
card operations, including different card types, special financing programs and
debt cancellation; and

WHEREAS, Bank shall operate the Program subject to the terms and conditions as
more fully set forth herein; and

WHEREAS, Bank also intends to purchase from the Current Provider the existing
private label credit card accounts for Retailer subject to a Purchase Agreement
(the “Purchase Agreement”) and convert such Purchased Accounts to the Program.

NOW THEREFORE, in consideration of the terms and conditions hereof, and for
other good and valuable consideration, the receipt of which is hereby mutually
acknowledged by the parties, Retailer and Bank agree as follows:

SECTION 1. DEFINITIONS

1.1 Certain Definitions. As used herein and unless otherwise required by the
context, the following terms shall have the following respective meanings.

“Account” shall mean an individual open-ended revolving line of credit which is
(i) established by Bank for a Customer pursuant to the terms of a Credit Card
Agreement, and (ii) marketed with a Retailer Mark and shall include the
Purchased Accounts upon acquisition of such accounts by Bank.

 

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“Accounts Receivable” shall mean, as to any Account at the time of reference,
any and all amounts owing on such Account, including, without limitation,
principal balances from Purchases, fees related to protection programs and
Enhancement Marketing Services, accrued finance charges (whether or not posted
or billed to an Account), late fees, and all other fees and charges assessed on
the Accounts, less any payments received by Bank and credits issued by Bank with
respect to the Accounts. This definition specifically excludes any amounts which
have been written-off by Bank with respect to such Accounts.

“Account Underwriting Criteria” shall mean the underwriting of new Accounts,
including credit line assignments.

“Account Terms” shall have the meaning set forth in Schedule 4.4.1-A.

“Ad-Hoc Reports” shall have the meaning set forth in Section 6.11.2.

“Affiliate” shall mean with respect to a party any entity that is owned by,
owns, or is under common control with such party.

“Agreement” shall mean this Private Label Credit Card Program Agreement,
including any schedules, exhibits, addenda, and future amendments and
supplements hereto.

“Applicable Discount Rate” shall have the meaning set forth in Schedule 4.3.5.

“Applicable Law” shall mean all laws (including common law), codes, statutes,
ordinances, rules, regulations, regulatory bulletins or guidance, regulatory
examinations or orders, decrees and orders of any Governmental Authority as may
be amended and in effect from time to time during the Term, including: (i) the
Truth in Lending Act and Regulation Z; (ii) the Equal Credit Opportunity Act and
Regulation B; (iii) the Fair Debt Collection Practices Act; (iv) the Fair Credit
Reporting Act; (v) the GLBA; (vi) the Foreign Corrupt Practices Act; and
(vii) the USA PATRIOT Act and its implementing regulations.

“Applicant” shall mean a Customer who applies for an Account under the Program.

“Approved Promotional Programs” shall mean those preapproved promotional
programs set forth in Schedule 4.3.5.

“Average Accounts Receivable” shall mean, (i) for Program Year One, the average
of the Retailer Fiscal Month end Accounts Receivable commencing with the
Retailer Fiscal Month of the Program Commencement Date and ending simultaneously
with the then current Retailer Fiscal Year; (ii) for each subsequent complete
Program Year, the thirteen (13) month average of Retailer Fiscal Month end
Accounts Receivable, starting with the last Retailer Fiscal Month of the
previous Program Year; and (iii) for the period of time preceding the
termination or expiration of this Agreement and commencing with the last
Retailer Fiscal Month of the period ending in (ii) above, the average of
Retailer Fiscal Month end Accounts Receivable during such time period.

 

2

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“Bank” shall mean the party to this Agreement identified in the first paragraph
on Page 1 of this Agreement.

“Bank Created Technology” shall have the meaning set forth in Section 5.5.3.

“Bank Designee” shall have the meaning set forth in Schedule 4.1.3, Paragraph
1(b).

“Bank License” shall have the meaning set forth in Section 5.2.1.

“Bank Mark” shall mean a trademark, service mark, or name owned by or licensed
(and capable of being sublicensed) to Bank and designated by Bank to Retailer
for use in connection with the Program.

“Bank Matters” shall have the meaning set forth in Schedule 4.1.3, Paragraph
3(d).

“Bank Owned Modifications” shall have the meaning set forth in Section 5.5.3.

“Bank Program Manager” shall have the meaning set forth in Section 4.1.1(a).

“Bank Technology” shall have the meaning set forth in Section 5.5.3.

“Bank Termination Event” shall have the meaning set forth in Section 14.2.

“Benchmark Rate” shall mean the closing 12-month LIBOR rate on the Program
Commencement Date plus 0.50% (i.e., 50 bps).

“Billing Statement” shall mean Bank’s periodic statement listing the amounts of
Purchases made, credits received, and other information, as required by
Applicable Law.

“Breach” shall have the meaning set forth in Section 7.2.3(a).

“Breached Party” shall have the meaning set forth in Section 7.2.3(b).

“Business Day” shall mean any day, except Saturday, Sunday or a day on which
banks in Delaware are required to be closed under Applicable Law.

“Cardholder” shall mean any natural person to whom an Account has been issued by
Bank and/or any authorized user of the Account.

“Cardholder Data” shall have the meaning set forth in Section 4.8.4.

“Cardholder Information” shall have the meaning set forth in Section 4.7.1.

“Cardholder Loyalty Program” shall have the meaning set forth in Section 4.2.1

“Charge Slip” shall mean a sales receipt, register receipt tape, invoice or
other documentation, whether in hard copy or electronic form (such as, but not
limited to, that which is part of the Transaction Data), and in each case
evidencing a Purchase that is to be charged to a Cardholder’s Account.

 

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“Chargeback” shall have the meaning set forth in Section 6.8.1.

“Claim” means any lawsuit, legal proceeding, arbitration proceeding, claim,
dispute, complaint or setoff.

“Closing Date” means the date that the Purchase Agreement is executed and
delivered to Bank.

“Collateral” shall have the meaning set forth in Section 3.1.3.

“Competitor Card Program” shall have the meaning set forth in Section 4.4.2.

“Confidential Information” shall have the meaning set forth in Sections 7.1.1(a)
and (b).

“Credit Card” shall mean the private label credit card issued by Bank to
Cardholders under the terms of this Agreement, subject to the Credit Card
Agreement, which card corresponds to a related Account for the purpose of
purchasing Goods and/or Services pursuant to this Agreement.

“Credit Card Agreement” shall mean the open-end revolving credit agreement
between a Cardholder and Bank governing the Account and Cardholder’s use of the
Credit Card, together with any modifications or amendments that may be made to
such agreement.

“Credit Card Application” shall mean Bank’s credit application which must be
completed by Applicants who wish to become Cardholders under the Program and
submitted (or the information contained therein electronically transmitted) to
Bank for review by Bank. For the avoidance of doubt, the Parties acknowledge
that Credit Card Applications may be in paper or electronic form, and include
information submitted electronically by Applicants through kiosks, electronic
devices (mobile), registers or over the internet.

“Credit Policy” shall mean Bank’s establishment, implementation and
administration of its collective practices, policies, guidelines and
implementation procedures for the issuance of Credit Cards and the extension of
credit thereunder, including Account credit activities (including application
criteria, application procedures, score cutoff strategies, and line assignment
strategies) and Account management activities (excluding Account Underwriting
Criteria), including authorizations, line management, delinquency management,
plastic reissue strategies, credit line increases and decreases, portfolio
management terms including fraud criteria; and fee waivers.

“Credit Sales Day” shall mean any day, whether or not a Business Day, on which
Goods and/or Services are sold by Retailer through the Retailer Channels.

“Credit Slip” shall mean a sales credit receipt or other documentation, whether
in hard copy or electronic form (such as, but not limited to, that which is part
of the Transaction Data), in each case evidencing (i) a return or exchange of
Goods, or (ii) a credit on an Account as an adjustment by Retailer for goodwill
or for Services rendered or not rendered by Retailer to a Cardholder.

 

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“Critical SLA” shall have the meaning set forth in Schedule 4.9.3.

“Cross Acceptance” shall have the meaning set forth in Section 6.2.

“Current Provider” shall mean the financial institution currently operating
Retailer’s existing private label credit card program or its successor. As of
the Effective Date, such financial institution is HSBC Bank Nevada, N.A.

“Customer” shall mean any Person who was (prior to the Effective Date), is (as
of the Effective Date), or becomes (after the Effective Date), a patron of
Retailer.

“Customer List” shall have the meaning set forth in Section 3.7.1.

“Decline” shall have the meaning set forth in Section 6.10.1.

“Disclosing Party” shall have the meaning set forth in Section 7.1.1(c).

“Dispute” shall have the meaning set forth in Schedule 4.1.3, Paragraph 3(a).

“Effective Date” shall mean the date set forth in the first paragraph on Page 1
of this Agreement.

“Enhancement Marketing Services” shall mean membership programs and insurance
services offered by Bank to Cardholders as permitted under Schedule 4.10,
Paragraph 2.

“Escalation Executive” shall have the meaning set forth in Schedule 4.1.3,
Paragraph 3(b).

“Force Majeure Event” shall have the meaning set forth in Section 16.10.1

“Forms” shall have the meaning set forth in Section 3.1.1.

“GLBA” shall have the meaning set forth in Section 7.2.1(a).

“Good Industry Practice” shall mean the exercise of reasonable skill, care,
prudence, quality and efficiency which would be expected from a skilled person
with experience and qualified in the provision of services similar to the
services being provided under this Agreement.

“Goods and/or Services” shall mean those goods and/or services sold at retail by
Retailer through its Retailer Channels to the general public for individual,
personal, family or household use.

“Governmental Authority” shall mean any government, any state or any political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, whether
federal, state, local or territorial.

“Governmental Request” shall have the meaning set forth in Section 7.1.2(c).

 

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“Indemnified Losses” means any and all losses, liabilities, costs, and expenses
(including reasonable fees and expenses for attorneys, experts and consultants,
reasonable out-of-pocket costs, interest and penalties), settlements, equitable
relief, judgments, damages, claims (including counter and cross-claims and
allegations, whether or not proven), demands, offsets, defenses, actions, or
proceedings by whomsoever asserted.

“Indemnified Party” shall have the meaning set forth in Section 13.3.

“Indemnifying Party” shall have the meaning set forth in Section 13.3.

“Initial Term” shall have the meaning set forth in Schedule 14.1.

“Inserts” shall have the meaning set forth in Section 4.11.1.

“Instant Credit” shall have the meaning set forth in Schedule 2.3.2.

“In-Store Failure” shall have the meaning set forth on Schedule 4.3.1.

“In-Store Target Termination Event” shall have the meaning set forth on
Schedule 4.3.1.

“Internet Failure” shall have the meaning set forth in Schedule 4.3.1.

“IVR” shall mean an interactive voice response system and/or procedure.

“Joint Marketing Plan” shall have the meaning set forth in Section 3.2.1.

“Management Committee” shall have the meaning set forth in Section 4.1.3.

“Management Committee Matters” shall have the meaning set forth in
Schedule 4.1.3, Paragraph 1(c).

“Marketing Fund” shall have the meaning set forth in Section 3.6.1.

“Minimum Purchase Amount Requirements” shall have the meaning set forth in
Schedule 4.3.5.

“Monthly Targeted Approval Rate” shall have the meaning set forth in
Schedule 4.3.1.

“Monthly Targeted Average Credit Limit” shall have the meaning set forth in
Schedule 4.3.1.

“Net Credit Sales” shall mean Purchases, less credits or refunds for Goods
and/or Services, all as shown in the Transaction Data (as corrected by Bank in
the event of any computational error), calculated each Business Day.

“Net Proceeds” shall mean Purchases less: (i) credits to Accounts for either the
return or exchange of Goods, or as an adjustment by a Retailer Channel for
goodwill or for Services rendered or not rendered through a Retailer Channel to
a Cardholder, all as shown in the Transaction Data (as corrected by Bank in the
event of any computational error), calculated each Business Day;
(ii) Chargebacks; and (iii) any applicable royalty/discount fees in effect on
the date of calculation.

 

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“Net Promotional Program Credit Sales” shall mean Net Credit Sales solely with
respect to Promotional Program Purchases.

“Net Revenues” shall mean gross billed Cardholder fees less waivers less
charge-off expenses less direct fulfillment expenses.

“New Bank Mark” shall have the meaning set forth in Section 5.2.2.

“New Retailer Mark” shall have the meaning set forth in Section 5.1.2.

“Next Generation Marketing” shall mean marketing targeted at Cardholders aged 31
to 50 and shall focus on new channel and underpenetrated customer marketing and
utilization.

“Non-Critical SLA Failure” shall have the meaning set forth in Schedule 4.9.3.

“Nonpublic Personal Information” shall have the meaning set forth in
Section 7.2.1(a)

“Object Code” shall have the meaning set forth in Section 5.6.

“Operating Procedures” shall mean instructions and procedures established by
Bank applicable to the Program and set forth in Schedule 2.3.

“Person” shall mean any individual, firm, company, corporation, unincorporated
association, partnership, limited liability company, trust or other entity.

“Point of Sale” (or “POS”) shall mean the physical or electronic location at
which transactions (sales, credits, and returns) take place. This includes but
is not limited to a cash register, point of order entry, or website (as
applicable).

“Portfolio” shall mean the Accounts, Accounts Receivable (whether held by Bank
or a third party, including the face amount of the balances that have not been
written off by Bank), any and all Program Documents, Cardholder Information, the
master file maintained by Bank with respect to the Accounts, Program Marketing
Materials and any Program related dedicated toll-free access telephone numbers.

“Preapproved Protection Programs” shall have the meaning set forth in
Schedule 4.10.

“Prescreen” shall mean a process where Bank offers credit made to certain
Customers pre-qualified by Bank (per its Account Underwriting Criteria), in a
real-time pre-approved manner, through Retailer’s Channels at the time of a
transaction, or through Bank’s batch prescreen process for pre-approved batch
offers for Customers.

“Primary Customer Service” shall have the meaning set forth in Section 4.9.8.

“Priority Materials” shall mean privacy notices, disclosures, Cardholder
notices, Billing Statements, new Credit Card mailers, personal identification
number mailers, and Credit Card Agreement terms and notices sent by Bank, and
any materials required to be provided to Cardholders by Applicable Law.

 

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“Privacy Policy” shall have the meaning set forth in Section 7.2.1(b).

“Program” shall mean the private label credit card plan established and
administered by Bank for Customers pursuant to this Agreement.

“Program Commencement Date” shall have the meaning set forth in Section 2.2.1.

“Program Data” shall have the meaning set forth in Section 15.4.1.

“Program Documents” shall mean those items comprised of Forms and Collateral as
such terms are defined in Section 3.1.

“Program Managers” shall have the meaning set forth in Section 4.1.1(d)(i).

“Program Marketing Materials” shall have the meaning set forth in Section 3.1.1.

“Program Projections” shall have the meaning set forth in Section 4.13.5.

“Program Re-launch Fund” shall mean the fund, as set forth in Schedule 2.1.3,
provided by the Bank and used to re-launch the Program and to ensure an orderly
program transition.

“Program Website” shall have the meaning set forth in Section 3.9.1.

“Program Year” shall mean: (i) the period of time commencing on the Program
Commencement Date and ending simultaneously with the then current Retailer
Fiscal Year (“Program Year One”); (ii) as to each subsequent full Retailer
Fiscal Year during the Term, such Retailer Fiscal Year; or (iii) the time period
preceding the termination or expiration of this Agreement and commencing with
the first day of the then current Retailer Fiscal Year.

“Program Year One” shall have the meaning set forth in subsection (i) of the
definition of Program Year.

“Promotional Financing Cap” shall have the meaning set forth on Schedule 4.3.5.

“Promotional Program” shall have the meaning set forth in Section 4.3.5.

“Promotional Program Purchases” shall have the meaning set forth in
Section 4.3.5

“Program Quarter” shall mean each quarterly period within a Retailer Fiscal Year
for which Retailer submits a Form 10-Q quarterly report or, in the alternative,
a Form 10-K to the SEC, beginning with Program Year One.

“Purchase” shall mean, in each case, a purchase of Goods and/or Services,
including, without limitation, all applicable taxes and shipping costs, with a
specific extension of credit by Bank to a Cardholder using an Account as
provided for under this Agreement. The term shall be interpreted to include
Regular Revolving Purchases as well as Promotional Program Purchases unless the
context of the reference clearly indicates otherwise.

 

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“Purchased Accounts” shall mean those certain private label credit card accounts
related to Retailer that Bank and the Current Provider have agreed upon in their
Purchase Agreement as eligible accounts.

“Purchase Agreement” shall have the meaning given to it in the recitals.

“Purchase Option” shall have the meaning set forth in Schedule 15.4.2, Paragraph
1.

“Quick Credit” shall have the meaning set forth in Schedule 2.3.2.

“Receiving Party” shall have the meaning set forth in Section 7.1.1(c).

“Regular Revolving Purchases” shall mean Purchases that are not subject to any
Promotional Program.

“Regulations” shall have the meaning set forth in Section 7.2.1(a).

“Renewal Term” shall have the meaning set forth in Schedule 14.1.

“Reports” shall have the meaning set forth in Section 6.11.1.

“Repurchase Closing Date” shall have the meaning set forth in Section 15.1.2.

“Restricted Card Program” shall have the meaning set forth in Section 15.5.1(b).

“Retailer” shall mean the party identified by such name in the first paragraph
on Page 1 of this Agreement jointly and severally with its Affiliates, if any,
doing business under the Retailer Nameplates, including The Bon-Ton Department
Stores, Inc., Bon-Ton Distribution, Inc., The Bon-Ton Stores of Lancaster, Inc.,
The Elder-Beerman Stores Corp. and Carson Pirie Scott II, Inc., as well as
McRIL, LLC.

“Retailer Channels” shall mean the sales channels used by Retailer, including
Retailer Locations, Retailer Websites, internet, mobile applications, kiosks and
mailed marketing publications and, for purposes of the Program, any others as
mutually agreed upon in writing by the Parties.

“Retailer Created Technology” shall have the meaning set forth in Section 5.5.2.

“Retailer Deposit Account” shall have the meaning set forth in Section 6.6.1.

“Retailer Designee” shall have the meaning set forth in Schedule 4.1.3,
Paragraph 1(b).

“Retailer Fiscal Month” shall mean a period of time as determined by Retailer,
but in any event no longer than thirty-five (35) days or shorter than
twenty-eight (28) days.

 

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“Retailer Fiscal Year” shall mean the fifty-two (52) or fifty-three (53) week
period of time ending on the Saturday nearest to January 31st of each calendar
year.

“Retailer License” shall have the meaning set forth in Section 5.1.1.

“Retailer Locations” shall mean those certain physical retail locations selling
Goods and/or Services that are owned and operated by Retailer.

“Retailer Mark” shall mean a trademark, service mark, or trade name owned by or
licensed (and capable of being sublicensed) to Retailer and designated by
Retailer to Bank for use in connection with the Program.

“Retailer Matters” shall have the meaning set forth in Schedule 4.1.3, Paragraph
3(c).

“Retailer Nameplates” shall have the meaning given to it in the recitals.

“Retailer Owned Modifications” shall have the meaning set forth in
Section 5.5.2.

“Retailer Program” shall mean the legacy Current Provider/Retailer private label
credit account program.

“Retailer Program Accounts” shall mean the private label credit accounts issued
under the Retailer Program.

“Retailer Program Manager” shall have the meaning set forth in Section 4.1.1(b).

“Retailer Re-issuance” shall have the meaning set forth in Section 3.8.2(a).

“Retailer Technology” shall have the meaning set forth in Section 5.5.2.

“Retailer Termination Event” shall have the meaning set forth in Section 14.3.

“Retailer Websites” shall mean, collectively, the internet websites with the
internet addresses www.bonton.com, www.bergners.com, www.bostonstore.com,
www.carsons.com, www.elder-beerman.com, www.herbergers.com, www.younkers.com.

“Second Look Program” shall have the meaning set forth in Section 6.10.1.

“Service Failure” shall have the meaning set forth in Schedule 4.9.3.

“Service Level Standards” shall have the meaning set forth in Schedule 4.9.3.

“Servicing Transition Date” shall have the meaning set forth in Schedule 2.1.1.

“Shopper Information” shall have the meaning set forth in Section 4.7.2.

“Signing Bonus” shall have the meaning set forth in Schedule 6.6.6.

“SLA Failure Cure Period” shall have the meaning set forth Schedule 4.9.3.

 

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“SLA Termination Event” shall have the meaning set forth in Schedule 4.9.3.

“Systems” shall mean software, databases, computers, related peripheral devices,
systems and networks.

“Systems Transition Date” shall have the meaning set forth in Schedule 2.1.1.

“Term” shall mean the period of time between the Effective Date and the
Agreement Termination Date.

“Termination Date” (or “Agreement Termination Date”) shall have the meaning set
forth in Section 15.1.2.

“Territory” shall have the meaning set forth in the recitals.

“Transition Plan” shall have the meaning set forth in Section 2.1.1.

“Transaction Data” shall mean the Account/Cardholder identification and
transaction information with respect to each Purchase or with respect to a
credit or return related to a Purchase (as applicable), and each payment
received by Retailer from a Cardholder on Bank’s behalf.

“United States” (or “U.S.”) shall mean the geographic area consisting of the
fifty states of the United States, District of Columbia, Puerto Rico and any
other U.S. commonwealth or territory.

“Web Application” shall mean a web based new Account application procedure made
available by Bank.

1.2 Rules of Interpretation. Except as otherwise expressly provided in this
Agreement, the following rules shall apply hereto: (a) the singular includes the
plural and the plural includes the singular; (b) all references to the masculine
gender shall include the feminine gender (and vice versa); (c) “include”,
“includes” and “including” are not limiting; (d) unless the context otherwise
requires or unless otherwise provided herein, references to a particular
agreement, instrument, document, law or regulation also refer to and include all
renewals, extensions, modifications, amendments and restatements of such
agreement, instrument, document, law or regulation; (e) a reference in this
Agreement to an Article, Section or Schedule is to the Article of, Section of or
Schedule to this Agreement unless otherwise expressly provided; (f) a reference
to an Article or Section in this Agreement shall, unless the context clearly
indicates to the contrary, refer to all sub-parts or sub-components of any said
article or section; (g) words such as “hereunder,” “hereto,” “hereof,” and
“herein,” and other words of like import shall, unless the context clearly
indicates to the contrary, refer to the whole of this Agreement and not to any
particular section, subsection or clause hereof; and (h) a reference in this
Agreement to a “party” or “Party” (whether in the singular or the plural) shall
(unless otherwise indicated herein) include both natural persons and unnatural
persons (including corporations, partnerships, limited liability companies,
trusts, joint ventures, governments or any department or agency thereof).

 

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SECTION 2. ESTABLISHMENT OF THE PLAN

2.1 Transition of Program.

2.1.1 Generally. Subject to the timing set forth in Schedule 2.1.1, the Parties
shall agree upon a mutually acceptable transition plan that contemplates a
seamless, but timely transition of the Retailer Program (“Transition Plan”) as
set forth in Schedule 2.1.1.

2.1.2 Impact on Current Retailer Business. The Transition Plan shall carefully
consider and minimize any adverse impact on Retailer’s retail business based on
the timing of the transition, existing and planned promotional campaigns and the
Account Terms set forth in Schedule 4.4.1-A.

2.1.3 Transition Costs. As set forth in Schedule 2.1.3, Bank shall pay all costs
associated with the transition of the Retailer Program, including the re-launch
of the Retailer Program as part of the Program.

2.1.4 Interim Services Agreement. If applicable, the transition of the Program
shall be coordinated with an interim services agreement that shall set forth the
interim services that the Current Provider shall provide between the Effective
Date and the Program Commencement Date. In the event that such an interim
services agreement is entered into: (i) the following provisions shall not apply
until a substantial majority of the Purchased Accounts are converted to the
Bank’s Systems: Section 2.3.2, Section 2.3.3, Section 3.9, Section 4.3.5,
Section 4.6.1, Section 4.6.5, Section 4.6.15, Section 4.9.3, Section 6.11,
Schedule 4.3.5, Schedule 4.9.3 and Schedule 6.11.1; and (ii) the following
provisions shall not apply until the conversion of any Purchased Account to the
Bank’s Systems: Section 2.3.1, Section 4.3.1, Section 4.6.10, Section 4.6.14,
Section 4.6.17, Section 4.6.18, Section 4.8.4, Section 4.9.11, Schedule 4.3.1
and Bank’s obligation with respect to the timing of Settlement, including,
without limitation, as described in Sections 6.6.1, 6.6.5 and Schedule 6.6.6.

2.2 Establishment and Operation of the Program; Program Scope.

2.2.1 The Parties shall use commercially reasonable efforts to commence the
Program on or before June 21, 2012 (the “Program Commencement Date”), or such
other date as the Parties mutually agree upon. Subject to the terms and
conditions of this Agreement, Bank and Retailer hereby establish the Program and
shall participate in the Program in the Territory beginning on the Program
Commencement Date for the primary purposes of providing Customer financing for
purchasing Goods and/or Services and providing a means to promote increased
Retailer sales of Goods and/or Services, in a manner that is mutually beneficial
to the Parties. Qualified Applicants shall be granted an Account by Bank with a
credit line in an amount to be determined by Bank pursuant to Schedule 4.3.1 in
its discretion for each individual Applicant. Subject to Section 4.4 and
Applicable Law, Bank shall determine the terms and conditions of the Account to
be contained in a Credit Card Agreement.

 

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2.2.2 The Program is undertaken by Retailer on a non-recourse basis so that
Retailer, throughout the term of the Agreement, shall bear no credit losses with
respect to Accounts, subject to (i) the Chargeback provisions in this Agreement
and (ii) Retailer’s indemnification obligations in this Agreement.

2.2.3 Subject to Section 2.1.4, Bank shall perform in accordance with the
Service Standards as set forth in Section 4.9.3 and shall otherwise perform all
operations of the Program using reasonable care consistent with not less than
Good Industry Practices and in accordance with the terms of this Agreement,
including providing receivables funding, rewards program administration,
customer service, application processing, credit authorizations, statement
production and mailing, collections, fraud prevention, recovery operations,
legal compliance and all other necessary functions. Bank’s performance of the
services hereunder shall be reviewed by the Management Committee.

2.3 Applications for Credit Under the Program; Internet Features.

2.3.1 Credit Card Applications shall be offered at all Retailer Channels,
including Retailer Locations and, at Retailer’s request, through Retailer
Websites. Customers who wish to apply for an Account under the Program must
submit a completed Application on a form or in an electronic format approved by
Bank, and Bank shall grant or deny the request for credit based solely upon
Bank’s Account Underwriting Criteria. In the case of in-store Credit Card
Applications, Retailer shall (i) provide a copy of the Credit Card Agreement to
the Applicant and (ii) follow any applicable Operating Procedures. When
facilitating any other method of application, Retailer shall use commercially
reasonable efforts to follow all applicable Operating Procedures. The Credit
Card Application shall be submitted to Bank by the Applicant or submitted by
Retailer on behalf of the Applicant, as required in the Operating Procedures. If
Bank grants the request for an Account, Bank shall issue a Credit Card to the
Applicant to access an individual line of credit in an amount determined by
Bank.

2.3.2 Prescreen, Quick Credit and Instant Credit. Pursuant to Schedule 2.3.2 and
the Operating Procedures, Bank shall make Prescreen, Quick Credit and Instant
Credit available throughout the Term of this Agreement.

2.3.3 Web Application. Subject to Retailer’s request that Credit Card
Applications be offered through Retailer’s Websites as set forth in
Section 2.3.1, Bank shall make available Web Application in accordance with
Section 3.9.

SECTION 3. MARKETING AND PROMOTION OF PROGRAM

3.1 Program Documents.

3.1.1 Forms. Subject to Sections 3.1.2 and 4.4, Bank shall fund, design,
determine the terms and conditions of, and generate the form of the Credit Card
Agreement, Credit Card Applications, Credit Card, card mailers, Privacy Policy,
Billing Statements (including backers), Cardholder letters, templates, and other
documents and forms to be used under the Program that (i) relate to the Program,
(ii) relate to Bank’s

 

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and/or the Cardholder’s obligations, (iii) are used by Bank in maintaining and
servicing the Accounts; or (iv) are required by Applicable Law (collectively,
“Forms”). All Forms shall be in the English language and, at the request of
Retailer, in the Spanish language, and otherwise as agreed by the Parties in
writing, and there shall be only one design for each Form; provided, however,
that at the request of Retailer such Forms shall be customized by Retailer
Nameplate. Bank shall be responsible for ensuring that Forms prepared on behalf
of or at the direction of Bank and all activities undertaken by Bank in
connection with its administration and servicing of the Program (including the
Account Underwriting Criteria and Credit Policy) comply with Applicable Law.
Bank also shall design and develop the template for all marketing materials used
by Bank in connection with the Program (the “Program Marketing Materials”) in
consultation with Retailer as set forth in Section 3.1.2. The desired “look and
feel” of the Forms and the Program Marketing Materials shall be consistent with
the Retailer marketing materials, including similar colors and content, provided
that such “look and feel” are attainable within Bank’s customary operational
capabilities and consistent with Bank’s standard Form and Collateral
specifications. Bank shall be solely responsible for the legal and contractual
content of such Program Marketing Materials and Forms. Bank shall have the right
to use, subject to Retailer’s written approval, the Retailer Marks on Billing
Statements, customer service and other Forms related to the administration of
the Program and Retailer shall have the right to request to review the use of
Retailer Marks on such Forms. Bank shall not use space on any Forms (including
return envelopes, and space on “bang tails”) for marketing purposes without
Retailer’s prior written consent.

3.1.2 Retailer Consultation and Approval. Program Marketing Materials and other
Forms used by Bank that contain Cardholder marketing aspects shall be subject to
Retailer review and approval with respect to the desired look and feel and other
Cardholder marketing aspects. Bank shall: (i) notify and consult with Retailer
with respect to any material changes to the desired look and feel and marketing
aspects of such Forms or Program Marketing Materials prior to the implementation
of changes; and (ii) if Retailer objects to any material change, escalate any
Dispute regarding the changes pursuant to Schedule 4.1.3, Paragraph 3.

3.1.3 Retailer Collateral. Retailer may design and produce promotional material,
direct mail pieces, catalog, newspaper, radio, TV and internet advertisements,
and other collateral documents (collectively, “Collateral”) that reference the
Program. Retailer shall submit all Collateral to Bank for its review and
approval of the Program disclosures, as well as references to the Program and
use of Bank Marks. Bank shall review and approve the Collateral, such approval
not to be unreasonably withheld, within the timeframe specified by Retailer but
in no event less than two (2) Business Days, and Retailer shall make all changes
that Bank reasonably requests. Once Bank has approved form Program disclosures,
to be used in a particular Retailer Channel and that are applicable to specific
Collateral, Retailer may use such form disclosures verbatim for such specific
Collateral in the Retailer Channel with respect to which they were approved,
without further review by Bank, unless Bank notifies Retailer that such form
disclosures require change to remain in compliance with Applicable Law.

 

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3.2 Establishment of Joint Marketing Plan.

3.2.1 Generally. The Parties shall design and develop a marketing plan (the
“Joint Marketing Plan”), mutually agree to its content on an annual basis, and
present it to the Management Committee for approval. Pursuant to this
Section 3.2, Bank, in consultation with Retailer, shall present to the
Management Committee a proposed Joint Marketing Plan by October 31 of each year
for the following Program Year. The initial Joint Marketing Plan shall be
established no later than ninety (90) days after the Effective Date.

3.2.2 Joint Marketing Plan Content; Funding. The Joint Marketing Plan shall
contain the details of the Program marketing to be conducted during the relevant
Program Year, including the Parties’ respective plans regarding the contemplated
frequency, timing, size and methods of marketing to be conducted. The Joint
Marketing Plan will specify those marketing initiatives to be funded by the
Marketing Fund, as further described in Section 3.6.1 and Schedule 3.6.1.

3.3 Promotion of Program Generally. Beginning on the Program Commencement Date,
the Parties shall actively and consistently market, promote, participate in and
support the Program in accordance with the terms of this Agreement and Retailer
shall do so in accordance with its past practices. In accordance with the Joint
Marketing Plan and Retailer’s past marketing practices, Bank and Retailer shall
cooperate with each other and actively support and promote the Program and
promote Credit Cards to Cardholders, both existing and potential, in order to
encourage the acquisition and usage of Accounts by Cardholders. Parties, as
applicable, shall administer, implement, and (to the extent required by this
Agreement) fund from the Marketing Fund, acquisition, retention, activation and
usage. To promote the success of the Program, a variety of strategic marketing
programs shall be offered and supported by both Parties and funded as set forth
in Section 3.2.2, except as otherwise provided in this Agreement, or as the
Parties agree otherwise. Strategic marketing program initiatives may include:
(i) special Credit Card marketing events, including holiday promotions;
(ii) payment of incentives for new Accounts; and (iii) displaying of marketing
materials in a prominent manner.

3.4 Retailer Channels. Beginning on the Program Commencement Date, Retailer
shall actively promote the Program within the Retailer Channels and shall
present its Retailer Channel Program marketing initiatives to Bank for its
review.

3.5 Bank Support. Bank shall provide a single point of contact for Retailer with
respect to all Program marketing and promotional matters. Subject to Applicable
Law, Bank shall provide Retailer with reasonable access to (i) real-time
Cardholder information necessary to address customer inquiries, research
transactions and resolve Chargebacks and/or disputes and (ii) analytic tools,
market research and marketing support services.

3.6 Marketing Fund.

3.6.1 Bank Contribution. Bank shall establish a marketing fund on its books and
allocate to the marketing fund as set forth in Schedule 3.6.1, or as mutually
agreed upon in writing by the Parties (the “Marketing Fund”).

 

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3.6.2 Marketing Fund Expenses.

(a) Generally. Bank and Retailer shall use the Marketing Fund to fund those
marketing initiatives set forth on Schedule 3.6.1, as set forth in the Joint
Marketing Plan or as approved by the Management Committee. The Marketing Fund
shall not be used for plastics and embossing, Forms, new account processing or
any servicing expenses. As applicable, Bank shall pay from the Marketing Fund
such expenses incurred in connection with the foregoing initiatives that are
paid to third parties without any markup and shall provide documentation to
Retailer supporting such payments.

(b) Bank or Retailer Incurred Marketing Fund Expenses. Each of Bank and
Retailer, as applicable, shall pay its marketing and promotion expenses directly
as such expenses are incurred and, to the extent that such expenses have
received funding approval in the relevant Program Year Joint Marketing Plan or
have otherwise been approved by the Management Committee, then, as applicable:
(i) Retailer shall send Bank an invoice for the aggregate amount of its
expenditures, together with copies of paid invoices or other supporting
documentation reasonably satisfactory to Bank for such expenses and, upon Bank’s
approval of such expenses, Bank shall promptly reimburse Retailer for such
expenses but in no event later than thirty (30) days after Retailer’s invoice
submission; or (ii) Bank shall send Retailer an invoice for the aggregate amount
of its expenditures, together with copies of paid invoices or other supporting
documentation reasonably satisfactory to Retailer for such expenses and, upon
Retailer’s approval of the invoice (or thirty (30) days after Bank’s invoice
submission, whichever first occurs), Bank shall be reimbursed from the Marketing
Fund for such expenses.

3.6.3 Marketing Fund Reports. On a quarterly basis, Bank shall provide to the
Management Committee a detailed accounting of all payments made from the
Marketing Fund.

3.6.4 Unused Funds. Any unused amounts in the Marketing Fund as of the end of
any Program Year during the Term of this Agreement shall be carried forward to
the subsequent Program Year.

3.6.5 Marketing Upon Notice of Termination. In the event of any notice of
termination or non-renewal by either Party, Bank shall continue to reimburse the
Parties pursuant to Section 3.6.2 for expenses incurred prior to the date of
such notice; provided, however, that after the date of such notice, Bank shall
only be obligated to reimburse for expenses that are incurred in order to drive
sales across the Portfolio. For the avoidance of doubt, after the date of such
notice, Bank shall not be obligated to reimburse for expenses that are incurred
for the prospecting of new cardholders.

3.6.6 Termination. The Marketing Fund shall be available to Retailer beginning
on the Program Commencement Date and for the remainder of the Term, as set forth
above. Upon termination of this Agreement, Bank shall retain all amounts
remaining in the Marketing Fund. The Marketing Fund shall otherwise have no cash
value upon termination of this Agreement. Within ninety (90) days after the date
of termination for any reason, Bank shall provide to Retailer a detailed
accounting of payments from the Marketing Fund for the Program Year preceding
such notice and shall promptly pay from the Marketing Fund all marketing costs
incurred by either Party prior to the date of such notice of termination or
non-renewal.

 

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3.7 Use of Customer Lists.

3.7.1 Customer List. In the event that Retailer provides Bank with a list of
Customers for any reason (a “Customer List”), the Customer List shall remain the
sole property of Retailer and shall be treated as Confidential Information of
Retailer pursuant to Section 7.1. Bank shall ensure that any unaffiliated third
party use of such Customer List shall comply with Bank’s obligations under this
Agreement. Subject to Applicable Law, Bank shall, upon the expiration or
termination of this Agreement, dispose of such Customer List(s) as set forth in
Section 7.1.4. Bank may maintain separately all information that it obtains as a
result of an Account relationship or from a Credit Card Application with any
such Customer (a) for so long as Bank retains ownership of the Accounts, (b) as
required by Applicable Law, (c) pursuant to Bank’s record retention policies,
and/or (d) as may be otherwise agreed, provided that if Bank maintains such
Customer information after Retailer has exercised its option to purchase under
Section 15.4.2, such Customer information shall be treated as Confidential
Information of Retailer pursuant to Section 7.1.

3.7.2 No Solicitation. Subject to Applicable Law, Retailer shall promptly notify
Bank of any Customers who have requested to be on Retailer’s “do not call” and
“do not mail” lists (or other similar lists), and Bank shall promptly comply
with such requests with respect to all marketing using the Retailer Marks,
including any Enhancement Marketing Services. The Parties will mutually agree
upon the process for implementing this Section 3.7.2 in the Transition Plan.

3.8 Costs.

3.8.1 Bank Costs. In addition to any other costs and expenses set forth herein
that are the obligations of Bank, Bank also shall pay all costs (excluding any
overhead incurred by Retailer) associated with (i) creating the Credit Card
itself (including all embossing and encoding); (ii) Credit Card mailers and
Billing Statements; (iii) any envelopes, postage and other related costs
regarding the generation and mailing of Billing Statements showing a balance due
or a credit balance and the cost of producing and mailing any Priority
Materials; (iv) any re-issuance of Credit Cards to Cardholders (other than
re-issuance requested by Retailer pursuant to Section 3.8.2); and (v) costs
related to the Program Marketing Materials as set forth in Section 3.2.2 and
subject to Section 3.6.2. If Bank requires Retailer to reissue any Collateral
that Bank has previously approved, including as a result of Bank’s decisions to
alter Bank Marks, Bank shall reimburse Retailer for the costs arising as a
consequence of any such requirement. In addition, Bank shall be responsible for
Retailer’s out-of-pocket expenses for any materials that are made obsolete as a
result of Bank’s requested alterations. The Parties shall cooperate to minimize
all such costs.

3.8.2 Retailer Costs.

(a) Subject to Section 3.8.2(b), in addition to any other costs and expenses set
forth herein that are the obligations of Retailer, Retailer shall pay all costs
(excluding any overhead incurred by Bank) related to any re-issuance of Credit
Cards to

 

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Cardholders that Retailer expressly requests and/or that is necessitated by
Retailer’s decision to alter the Retailer Marks used on the Credit Cards or
alter the Credit Card design (collectively “Retailer Re-issuance”). The costs
associated with a Retailer Re-issuance shall include Bank’s actual cost of
developing any new template for the Credit Card itself, Credit Card mailers,
and, if applicable, Credit Card Agreements, other Forms and Program Marketing
Materials. In addition, Retailer shall be responsible for Bank’s reasonable
out-of-pocket expenses for any materials that are made obsolete as a result of
Retailer’s requested alterations. The Parties shall cooperate to minimize all
costs associated with a Retailer Re-issuance. As a point of clarification, none
of the following constitutes a Retailer Re-issuance: Bank’s replacement (on an
Account-by-Account basis) of lost or stolen Credit Cards, defective Credit
Cards, Credit Cards that must be issued or reissued in response to some other
non-marketing related Cardholder request.

(b) Bank shall pay for individual Credit Card reissuances related to Cardholders
earning a new upgraded Credit Card tier (but Bank shall not pay for downgraded
reissues); provided, however, that Retailer must pay for any such reissuances in
the following circumstances: (i) the upgrade package (including Credit Card
plastics, collateral, processing and/or postage) used for a new upgrade and/or
tier are not within Bank’s normal specifications; (ii) Retailer changes or adds
one or more tiers in such a manner that the numbers of Cardholders in the
upgraded tiers is substantially increased; or (iii) Retailer changes the rewards
structure and/or point system in such a manner that the numbers of Credit Cards
reissued for upgraded tiers is substantially increased.

3.9 Development of Program Website.

3.9.1 Program Website. Bank shall develop and maintain, in a form and manner
acceptable to Retailer, a Program website with an independent URL, dedicated
exclusively to the Program (the “Program Website”). The Program Website shall
have the “look and feel” of Retailer’s Website to the extent consistent with the
Bank’s customary systemic and operational capabilities. Bank shall provide
access to online account servicing, and the ability to access such site through
a URL reflecting the Credit Card name. Retailer shall have the right to approve
the marketing content within the Program Website. If any website’s domain name,
including utilizing any Retailer Marks, is purchased for these purposes, then
ownership of the domain name shall be transferred to Retailer upon expiration or
termination of this Agreement if Retailer exercises its option to purchase the
Accounts. Subject to Bank’s use of Retailer Marks as set forth in Section 15.6,
if Retailer does not exercise its option to purchase the Accounts, the Parties
shall cooperate to affect the transition from the Program Website domain to a
website designated by Bank. The Parties shall cooperate in good faith to
customize the Program Website, including allowing links to Retailer Websites
from such page.

3.9.2 Customer Service. Bank shall make available internet based Cardholder
customer service by establishing a website for such purpose, which shall be
accessible via a link from the Retailer Websites and the Program Website.

3.9.3 Retailer Websites. Retailer shall be responsible for integrating and
maintaining on the Retailer Websites, at its expense, a link to the Program
Website. Retailer agrees that, in connection with the link, it shall use Bank’s
name, or any logo, statements, or any other information that is related to Bank
only as directed by Bank, or as previously approved by Bank in writing. Retailer
shall appropriately monitor the link(s) to ensure proper functioning.

 

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3.9.4 Program Website Changes. Bank shall not make material changes or otherwise
materially modify the Program Website without at least sixty (60) days prior
written notice to Retailer unless required by Applicable Law, in which case Bank
shall provide Retailer notice of such change as soon as is practicable. In the
event Bank changes or otherwise modifies the Program Website, Retailer shall
update or modify the link(s) thereto, as required.

3.9.5 Web Application.

(a) As of the Program Commencement Date, Bank shall make available a Web
Application by establishing a website for such purpose, which shall be
accessible from Retailer’s website. Bank shall bear the entire cost of those
components involving its Systems that are required to make the Web Application
available. Bank shall be responsible for maintaining the security of the Web
Application. At Retailer’s sole expense, Retailer shall be responsible for the
initial integration and the ongoing maintenance of an access link from
Retailer’s website to Bank’s Web Application. Further changes that are necessary
to maintain Retailer’s ability to access the Web Application from Retailer’s
website shall be at Bank’s sole expense, unless such changes are caused by
Retailer’s change to its website. Retailer shall monitor its website to ensure
proper functioning. The Parties agree that, in connection with the Web
Application, each Party shall use the other Party’s name, or any logo,
statements, or any other information that is related to the other Party, only as
directed by the other Party, or as previously approved by the other Party in
writing. Without limiting the generality of the scope of required approvals, but
by way of example, Retailer shall seek Bank’s approval, which shall not be
unreasonably withheld, not only with respect to content, but also with respect
to any typestyle, color, or abbreviations used in connection with the Web
Application.

(b) Bank represents and warrants that, to integrate and maintain the Web
Application, to ensure access to the Bank’s designated website, and to reduce
technical errors, Bank shall use commercially reasonable efforts to ensure that
Bank’s software providing the Web Application shall function, and continue to
function, in a sound technical manner. Bank shall appropriately monitor the Web
Application and its website to ensure proper functioning. In the event Bank
changes or otherwise modifies the website address or other features for its
designated website, Bank shall provide at least sixty (60) days prior written
notice and Retailer shall, at Bank’s expense, either update or modify its
website thereto, as directed by Bank.

3.10 Retailer Websites. Within six (6) months of Retailer’s request, Bank shall
make available on Retailer websites the following Program features:
(a) pre-approved offers of credit to online Customers; (b) Quick Credit (or
Instant Credit, as applicable); (c) promotional financing offers in connection
with specific product types (e.g., furniture); and (d) a general invitation to
apply for credit.

 

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SECTION 4. ADMINISTRATION OF THE PLAN

4.1 Governance.

4.1.1 Program Managers.

(a) Bank Program Manager. Bank shall designate, as set forth in
Section 4.1.1(c), one (1) employee that is dedicated full time to the Program
and the Retailer relationship as its Program relationship manager with
responsibility for the day-to-day management and administration of the
Bank/Retailer relationship and the Program (“Bank Program Manager”). For the
avoidance of doubt, the Bank Program Manager shall not manage any other programs
for Competitor Card Programs, and Bank shall implement internal mechanisms
(safeguards, firewalls, etc.) to shield Retailer data from other Bank program
managers handling accounts for Competitor Card Programs, excluding executives to
whom Competitor Card Programs’ managers report. Bank shall make commercially
reasonable efforts not to reassign the first Bank Program Manager for a period
of eighteen (18) months following the Effective Date.

(b) Retailer Program Manager. Retailer shall designate, as set forth in
Section 4.1.1(c), one full-time employee as its Program relationship manager
with responsibility for the day-to-day management and administration of the
Bank/Retailer relationship and the Program (“Retailer Program Manager”).

(c) Approval of Program Managers. If a Party expresses concerns over the
performance of the other Party’s Program Manager, the other Party shall act to
address such concerns, subject to Applicable Law as well as such Party’s
applicable policies and procedures. In the event that Retailer’s reasonable
concerns over the performance of the Bank Program Manager are not successfully
addressed, then the Retailer shall, acting reasonably, have the right to require
replacement of the Bank Program Manager. Retailer shall have the right to
approve any initial and any new Bank Program Manager.

(d) Duties of Program Managers.

(i) Generally. Each of the Bank Program Manager and the Retailer Program Manager
(collectively, the “Program Managers”) shall manage the Program’s day-to-day
responsibilities, shall execute the operation of the Program, shall serve as the
other Party’s principal point of contact on Program-related issues and shall
lead the Program Managers’ respective teams in executing its Party’s obligations
under this Agreement, other than those that are to be executed through the
Management Committee (i.e., those issues referred to the Management Committee in
accordance with Section 4.1.1(d)(ii) and as otherwise expressly set forth in
this Agreement). Each of the Program Managers shall have sufficient authority to
facilitate decision-making on behalf of his or her respective Party and shall
have sufficient knowledge and experience to effectively and efficiently perform
his or her responsibilities. The Program Managers shall collaborate to determine
regular meeting dates, management process and critical business issues to bring
to the Management Committee. Each Party shall endeavor to provide stability and
continuity in the Program Manager positions. Each Party shall have appointed the
respective initial Program Managers no later than sixty (60) days following the
Effective Date.

 

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(ii) Management Committee Matters. Each of the Bank Program Manager and the
Retailer Program Manager shall have, in its respective sole discretion, the
ability to refer critical business issues, which are within the Management
Committee’s functions as set forth in Schedule 4.1.3, Paragraph 1, to the
Management Committee for Management Committee action pursuant to Schedule 4.1.3.

4.1.2 Field Sales Resources. Bank shall provide a field team consisting of
market credit managers to provide support to Retailer Channels in collaboration
with Retailer. Bank shall maintain a field team staff of no less than two
(2) individuals.

4.1.3 Management Committee. The Parties hereby establish a Management Committee
(“Management Committee”) that will operate in accordance with Schedule 4.1.3.

4.2 Loyalty Programs.

4.2.1 Generally. Retailer shall offer a Cardholder loyalty program or programs
that will enable Cardholders to obtain discounts for purchase through Retailer
Channels and drive Retailer sales, as is more particularly set forth in
Section 4.2.2 (“Cardholder Loyalty Program”). Retailer shall cooperate with Bank
to develop and implement a compelling value proposition that will integrate the
Credit Card and Cardholder Loyalty Program, and drive sales of Goods and/or
Services. Retailer shall own and operate and be responsible for all aspects of
the Cardholder Loyalty Program including its compliance with Applicable Law,
provided, however, Bank shall administer the Cardholder Loyalty Program within
Bank’s current or future functionality for loyalty programs.

4.2.2 Cardholder Loyalty Program. Bank shall support the re-design and re-launch
of the Cardholder Loyalty Program at such time as to coincide with the Program
Commencement Date:

(a) Subject to Schedule 4.1.3, Paragraph 3(d)(iv) Bank will administer the
systems and operational components of Retailer’s Cardholder Loyalty Program both
in its current and its re-designed form.

(b) Retailer reserves the right to change the value proposition or the structure
associated with any Cardholder Loyalty Program; provided, however that Retailer
shall provide Bank with reasonable lead times and specifications for any such
changes in the Cardholder Loyalty Program.

(c) For avoidance of doubt, Bank may not make changes to any Cardholder Loyalty
Program except to the extent Retailer has provided written approval for such
changes.

 

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(d) Retailer will maintain a competitive Cardholder Loyalty Program.

4.2.3 Initial Cardholder Discount. Retailer shall fund the initial Cardholder
incentive.

4.3 Account Underwriting, Credit Policy and Card Issuance.

4.3.1 Account Underwriting Criteria.

(a) Generally. As set forth in Schedule 4.3.1, Bank shall evaluate applications
for Accounts, regardless of the Retailer Channel by which the application was
received, and take account risk actions solely on the basis of Bank’s Credit
Policy.

(b) Underwriting. Subject to Schedule 4.3.1, Bank will set its cutoffs at the
highest level of credit risk among similarly profiled credit Applicants that are
adjudicated by Bank across its retail credit card business that results in a
marginal amount of estimated profitability. Therefore, Applicants with lower
levels of credit risk (this generally means higher credit scores) would pass the
profitability cutoff review and shall continue through the remaining
adjudication process. Except to the extent required by Applicable Law, any risk
action, including Credit Card Application approvals and credit line assignments
proposed by Bank to be taken on any segment of Accounts will be no less
favorable than the actions taken by Bank on segments of similar creditworthiness
across similar Bank portfolios, excluding portfolios pursuant to which the Bank
is directly compensated by its partner to apply underwriting criteria that are
less stringent than Bank’s standard underwriting criteria.

(c) Material Risk Actions. Bank shall, at least on a quarterly basis, provide
the Management Committee with prior notice of any expected material risk actions
that may impact key performance indicators such as open-to-buy, approval rates,
authorization rates, Net Credit Sales and voluntary and involuntary account
attrition (to the extent known and based upon historical analysis and
forecasts).

4.3.2 Credit Policy. Prior to the Program Commencement Date, Bank shall prepare
and implement the Credit Policy, which Bank may modify from time to time subject
to this Section 4.3. Accounts shall be reviewed regularly and may receive a
credit line increase or decrease, as appropriate based on the Credit Policy.

4.3.3 Approval Rate and Credit Limit Standard. Bank shall be subject to target
approval rates and credit lines in accordance with Schedule 4.3.1.

4.3.4 Card Issuance. Bank shall issue Credit Cards to, and establish Accounts
for, qualifying Customers in accordance with Account Underwriting Criteria and
Applicable Law. All decisions in respect of the Program concerning the
creditworthiness of any Customer shall be made at the sole discretion of Bank in
accordance with the Account Underwriting Criteria. Subject to Applicable Law,
the Credit Policy and Bank’s reasonable safety and soundness standards, Bank
shall issue Credit Cards to approved Cardholders.

 

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4.3.5 Promotional Programs. Bank shall work in good faith with Retailer to
develop business strategies with respect to the issuance of Credit Cards that
are intended to maximize the potential of the Program, and which are mutually
beneficial to Retailer and Bank. Retailer may offer Cardholders special
promotional programs in which special Cardholder payment terms for certain
Purchases, including deferred interest or equal payment programs (“Promotional
Programs”). Retailer and Bank shall mutually agree upon any special terms and
fees associated with such Promotional Programs. The initial Promotional Programs
are as set forth in Schedule 4.3.5. Retailer shall be responsible for ensuring
that all Purchases subject to any Promotional Programs (“Promotional Program
Purchases”) are properly designated as such on the Transaction Data in
accordance with Bank’s Operating Procedures.

4.3.6 Specialty Credit Program. As mutually agreed upon by the Parties, Bank
shall offer the specialty credit programs set forth on Schedule 4.3.6.

4.4 Account Terms and Conditions.

4.4.1 Initial Terms and Changes. The initial core Account terms and conditions
(“Account Terms”) are set forth in Schedule 4.4.1-A; the terms regarding Account
changes in rates and fees are set forth in Schedule 4.4.1-B, and other fee
policies are set forth in Schedule 4.4.1-C. Subject to prior discussion of the
Management Committee and Schedule 4.4.1-B, Bank may make changes in the terms
and conditions of the Credit Card Agreement. Notwithstanding the foregoing, Bank
shall not change, other than as required by Applicable Law, the initial Account
Terms until the date that is twelve (12) months after the Program Commencement
Date, subject to the special fee policies in Schedule 4.4.1-C.

4.4.2 Program Competitiveness. Bank acknowledges Retailer’s desire to operate
the Program in a competitive manner. Bank shall maintain, via publicly available
information, a matrix of fees and benefits, including rewards, for the
competitor private label credit card programs listed on Schedule 4.4.2
(“Competitor Card Programs”) and for a reasonable sampling of other similarly
situated retailers as determined by the Management Committee. As part of the
responsibilities of the Program Managers, such information shall be presented on
an annual basis to the Management Committee. At Retailer’s request, the
Management Committee shall discuss material discrepancies between the Program
and such Competitor Card Programs, and Bank’s analysis thereof. The Management
Committee shall monitor the Account Terms to benchmark the competitiveness of
the Program. Bank shall present publicly available information about such other
programs to the Management Committee for its consideration in reviewing pricing.
The Management Committee shall engage in discussions with respect to the
competitiveness of the Program based on the market as a whole that are presented
to the Management Committee by Bank relating to: (i) material, foreseeable,
Program–specific changes in pricing and other terms and conditions;
(ii) proposed material changes to the Cardholder Loyalty Program; and
(iii) proposed material product features. Bank and Retailer shall seek to keep
the Program competitive, giving consideration to the specific segment targeted,
by continually monitoring publicly available information concerning certain
characteristics of certain credit cards similar in nature to the Program. The
Management Committee shall consider benchmarking information collected pursuant
to Schedule 4.4.1-B hereof in reviewing pricing for the Program.

 

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4.5 Certain Retailer Responsibilities. Retailer shall take commercially
reasonable steps to conduct all activities of Retailer in respect of the Program
in a high quality manner. In addition to its other obligations hereunder,
Retailer shall, at its own expense and consistent with its obligations
hereunder:

4.5.1 In accordance with the Joint Marketing Plan, develop in consultation with
Bank, programs to properly train Retailer employees in the strategy, product
features, and benefits of the Program and compliance with the Operating
Procedures;

4.5.2 Market the Program in accordance with its past marketing practices.

4.5.3 Cooperate in the development, implementation and administration of the
Joint Marketing Plan;

4.5.4 Provide promptly to Bank complaints that are related to the Program that
could have a material adverse effect on Bank and that are addressed to senior
executives at Retailer or are from any Governmental Authority;

4.5.5 In accordance with the Joint Marketing Plan, solicit new Accounts through
display of promotional materials through Retailer Locations in visually
appropriate locations to attract Applicants;

4.5.6 Integrate and interface the Parties’ information technology systems,
including the coordination and cooperation with Bank’s information technology
team in order to implement the Program and maintain such integrations and
interfaces;

4.5.7 Execute the Program in Retailer Channels; and

4.5.8 Notify Bank at least sixty (60) days in advance of any change to the
Retailer Fiscal Month.

4.6 Certain Bank Responsibilities. In addition to its other obligations
hereunder, Bank shall, at its own expense and consistent with its obligations
hereunder:

4.6.1 Review and process Credit Card Applications and prepare and provide
Cardholder Agreements, notices of changes in Account Terms and Privacy Policy
notifications of Bank, all in compliance with Applicable Law, and Retailer’s
consultation right as provided herein;

4.6.2 Prepare and provide all other Forms and Program Marketing Materials
(except for Collateral prepared by Retailer at its initiative pursuant to the
terms of this Agreement) and provide Retailer with an adequate supply of the
same;

 

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4.6.3 Administer the Program in compliance with Applicable Law, and provide
advance notice to Retailer of changes to Applicable Law affecting Bank’s
administration and servicing of the Program that will require action on the part
of Retailer, whether or not such required actions result in a revision to the
Operating Procedures. Notwithstanding the preceding sentence, in no event shall
Bank be required to provide notice of any change in Applicable Law that affects
Retailer or Retailer’s retail sales business generally, nor shall Bank provide
any legal advice as to how Retailer should comply with Applicable Law pertaining
to Retailer;

4.6.4 As set forth in Section 4.4.2 , monitor the competitiveness of the Program
with other programs offered by Competitor Card Programs and a reasonable
sampling of other similarly situated retailers as determined by the Management
Committee;

4.6.5 Comply with the terms of the Cardholder Agreements, extend credit on newly
originated and existing Accounts, process remittances from Cardholders;

4.6.6 Integrate and interface the Parties’ information technology systems,
including coordinating and cooperating with Retailer’s information technology
team in order to implement the Program and maintain such integrations and
interfaces;

4.6.7 Cooperate in the development, implementation and administration of the
Joint Marketing Plan;

4.6.8 Fund the Program Marketing Fund as provided in Section 3.6.1.

4.6.9 Bear the costs of benchmarking;

4.6.10 Prepare, process and mail Billing Statements, including customer
correspondence and statement Inserts in accordance herewith;

4.6.11 Maintain adequate computer and communications systems and other equipment
and facilities necessary or appropriate for servicing the Accounts;

4.6.12 As deemed necessary and agreed upon by the Management Committee, conduct
customer research and focus groups;

4.6.13 Provide sufficient training to its personnel regarding the Program and
Retailer’s business, including promotions and sales, in order to properly
fulfill Bank’s responsibilities under this Agreement;

4.6.14 Provide monthly summaries to Retailer of all complaints related to the
Program addressed to senior executives of Bank and any correspondence related to
the Program from any Governmental Authority and any other complaints that could
have a material adverse effect on Retailer;

4.6.15 Provide internet services for the Program as set forth in
Schedule 4.6.15;

 

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4.6.16 Provide human resources to the Program at no cost to Retailer as set
forth in Schedule 4.6.16;

4.6.17 Provide a periodic review to Retailer or the Management Committee of
complaints received related to the Program; and

4.6.18 Administer the Cardholder Loyalty Program on behalf of Retailer within
Bank’s current or future functionality for loyalty programs.

4.7 Ownership of Information and Accounts.

4.7.1 Ownership and Use of Cardholder Information. Subject to Applicable Law,
Bank is the owner of all information pertaining to Cardholders and Applicants
generated by the Program (including names, addresses, telephone numbers, e-mail
addresses, dates of birth, social security and similar numbers, and account and
similar access numbers) and Transaction Data (the “Cardholder Information”).

4.7.2 Ownership and Use of Shopper Information. Subject to Applicable Law,
Retailer is the owner of all personally identifiable information regarding:
(i) a purchaser of Retailer goods that is obtained by Retailer in connection
with such purchase, including Transaction Data (excluding Account number)
related to the purchase of Retailer goods, and (ii) any Customer information or
mailing list maintained by Retailer in the course of its business (“Shopper
Information”). Nothing herein shall limit Retailer’s ownership rights in or use
of Shopper Information.

4.7.3 Transaction Data. Retailer and Bank shall each own all Transaction Data
arising out of Goods and/or Services transactions.

4.7.4 Overlap. The Parties acknowledge that the same or similar information may
be included in Cardholder Information and Shopper Information and, to the extent
that Cardholder Information and Shopper Information overlap, Retailer shall
retain its ownership rights in, and use of, such Shopper Information and Bank
shall retain its ownership rights in, and use of, such Cardholder Information.

4.7.5 Information Sharing. The Cardholder Agreement and all other relevant Forms
shall disclose that Cardholder Information and Bank’s experience and transaction
information may be shared between and among Retailer and Bank and its Affiliates
and other third parties subject to Applicable Law. Each Party’s privacy notices
shall, subject to Applicable Law, make such disclosures as shall be necessary to
enable the other Party to use and share Cardholder Information as contemplated
by this Agreement; provided, however, that neither Party shall share information
with the other Party that would be inconsistent with the Parties’ intent that
neither Bank nor Retailer be deemed to be a “consumer reporting agency” within
the meaning of Section 603 of the Fair Credit Reporting Act (15 U.S.C.
§ 1681a(d)); and provided, further, that neither Party shall be required to
attempt to obtain a Cardholder’s consent, “opt-in” or similar response before
such use or sharing may occur. Prior to transferring or disclosing Cardholder
Information to any third party (except pursuant to the specific requirement of
Applicable Law), Retailer and Bank shall perform due diligence with respect to
such third party to confirm that such

 

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third party shall be able to comply with a written contract in which such third
party agrees to privacy and security provisions substantially similar to those
herein. In the event the contracting Party becomes aware of noncompliance by
such third party, the contracting Party shall promptly notify the other Party
and, as may be agreed by the Parties, shall either implement a cure agreed by
such Parties or shall terminate the contract, recover all data transferred
pursuant to it, and re-transfer all such data to such other Party, in each
instance providing prompt notice to such other Party of the completion of each
stage of the process. Information transferred by one Party on behalf of, at the
direction of, or to a contractor of the other shall be considered information
transferred by such Party. Each Party shall use the same degree of care in
protecting Cardholder Information against unauthorized disclosure as it accords
to its own confidential customer information, and, without limiting any other
provision hereof, shall be liable to the other Party for any damages caused to
such Party as a result of unauthorized use or disclosure by any third party to
whom it has transferred such Cardholder Information.

4.7.6 Bank Account Ownership Rights. Bank shall own all Accounts and shall have
the right to extend credit with respect to all such Accounts, and Retailer shall
not be considered a creditor with respect to any such Account for any purpose
whatsoever. Retailer acknowledges and agrees that it does not have any right,
title and interest in or to any of the Accounts or any proceeds of the
foregoing, except for: (i) Retailer’s right, title and interest in the Retailer
Marks, and (ii) Retailer’s option to purchase the Accounts pursuant to
Section 15.4.2. Except as expressly provided herein, Bank shall be entitled to
receive all payments made by Cardholders on Accounts and retain for its account
all amounts charged and owing to Bank by Cardholders with respect to Accounts
and all other fees and income authorized by the Cardholder Agreements and
collected with respect to the Accounts.

4.7.7 Credit Card Losses. Bank shall be responsible for all credit and fraud and
other losses on such Accounts including fraud, credit, deceased, bankruptcy, or
unauthorized transactions on Accounts, except to the extent subject to
Chargeback pursuant to Section 6.8. Bank may cancel or suspend credit privileges
of any Cardholder if Bank determines such action is warranted in accordance with
the Credit Policy.

4.8 Use of Cardholder Information.

4.8.1 Marketing by Bank. Without the prior written consent of Retailer, Bank
shall not, directly or indirectly through an Affiliate or third party,
(i) directly target Customers or solicit Cardholders (or indirectly target
through the use of criteria designed to target Customers or Cardholders) for any
product (including any credit cards, general financial services products, or
retail merchandise and services not provided by Retailer) that is not offered
pursuant to this Agreement; or (ii) use any Cardholder Information, or any other
information obtained from Retailer in connection with the Program, for any
purpose other than to carry out its obligations and exercise its rights in
connection with the Program, or as otherwise permitted herein, and shall not use
such information to engage in any marketing efforts.

 

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4.8.2 Credit Reports. Bank shall be the sole and exclusive owner of any credit
bureau report obtained by or on behalf of Bank pertaining to a Customer or
Cardholder, any credit scoring and decision information, any analyses of credit
quality and credit risk, analyses prepared for the purpose of fraud or
suspicious activity monitoring or any other similar analyses prepared by or on
behalf of Bank and maintained in Bank’s credit file pertaining to a Cardholder
or Customer.

4.8.3 Limitation on Bank Use. In no event shall Bank utilize any Cardholder
Information for a purpose that would reasonably be expected to have a material
adverse effect on the Program, or in any manner that competes directly with the
marketing or sale of Goods and Services. Bank shall use the information
described in this Section 4.8 only in accordance with the Privacy Policy,
subject to the terms and conditions of this Agreement and Applicable Law.

4.8.4 Retailer Use. Bank’s ownership of the Cardholder Information
notwithstanding, and to the extent permitted by Applicable Law and the Privacy
Policy, Bank shall provide Retailer with access to all Cardholder Information at
the individual account level including, but not limited to, data attributes
(demographic data, new mover lists, change of address information) and
analytical output that exist on or can be derived from the Bank’s database that
might enhance Retailer’s understanding of its Customers and enhance marketing of
the Program and Retailer (“Cardholder Data”). The sharing of Cardholder Data as
set forth in this Section 4.8.4 shall occur on a regular basis as mutually
agreed upon by the Program Managers. Bank also shall provide data attributes and
analytical output on a quarterly basis.

4.9 Servicing of Accounts by Bank.

4.9.1 Bank Responsibility to Service Accounts. At Bank’s sole expense, including
any increases in servicing costs over the Term, Bank shall directly or through
an Affiliate or a named service provider, service and administer the Accounts,
including making all necessary credit investigations, notifying Applicants in
writing of acceptance or rejection of credit under the Program, preparing and
mailing Billing Statements, making collections, handling Cardholder inquiries
and processing payments. Retailer shall not be responsible for reimbursing Bank
for any servicing costs, including postage.

4.9.2 Retailer Branded Servicing. Bank shall adequately train appropriate
personnel to provide Retailer branded customer service.

4.9.3 Service Standards. Bank shall provide industry leading customer servicing
for the Program as set forth in Schedule 4.9.3. Bank shall perform its Account
servicing obligations in accordance with the Service Standards and shall be
subject to penalty payments for performance shortfalls. As set forth in
Schedule 4.9.3, Bank shall provide Retailer with a monthly summary of Bank’s
performance regarding the Service Standards.

 

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4.9.4 Servicing Personnel. Bank shall designate a manager-level individual
within its customer service operations to act as a liaison between the Parties
and to respond to Servicing Standard related questions. Bank also shall
designate such trained personnel as are necessary or appropriate for servicing
the Accounts in accordance with the Service Standards set forth in
Schedule 4.9.3.

4.9.5 Changes to Service Standards. Any material changes to the customer service
levels set forth in Schedule 4.9.3 shall be discussed with and approved by the
Management Committee.

4.9.6 Adequate Resources and Hours of Operation.

(a) Adequate Resources. Bank shall, directly or through an Affiliate, maintain
adequate computer and communications systems and other equipment and facilities
necessary or appropriate for servicing the Accounts in accordance therewith.

(b) Hours of Operation.

(i) Generally. Bank shall conform its hours of operation for Program live
operator support and authorizations as follows:

(1) Normal store services hours:

 

  a. Monday through Saturday, 9:30AM – 11:00PM Eastern time

 

  b. Sundays, 10:00AM – 9:00PM Eastern time

(2) Holiday Period store services hours:

 

  a. Monday through Saturday, 9:30AM – 1:00AM Eastern time

 

  b. Sundays, 10:00AM – 11:00PM Eastern time

 

  c. “Holiday Period” is the period beginning on Thanksgiving Day and ending at
the close of business on New Year’s Day

(3) Customer service: 9:00AM – 9:00PM Eastern time Monday through Saturday.

(ii) Additional Extended Hours. Upon not less than thirty (30) days prior
written notice from Retailer (or five (5) Business Days prior written notice
with respect to the Holiday Period), Bank shall offer additional extended hours
of operation to support certain Retailer promotional events and requirements
such as early Retailer Location openings and late Retailer Location closures.
With respect to requests for additional extended hours for which Retailer
provides Bank with less notice than set forth in this paragraph, Bank shall use
commercially reasonable efforts to support Retailer’s events and requirements.

 

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(iii) Internet. Internet service and authorizations shall be available
twenty-four (24) hours per day, seven (7) days a week, as set forth in
Schedule 4.9.3.

(iv) IVR. The IVR shall (i) be available twenty-four (24) hours per day, seven
(7) days a week via a dedicated toll free number, and (ii) provide easy access
to live operator support during Retailer operating hours as set forth in this
Section 4.9.6(b). Bank shall use commercially reasonable efforts to purchase
from the Current Provider each customer service-related toll-free number
actually in use with respect to the Retailer Program on the Closing Date that is
dedicated solely to the Retailer Program, and shall use any such purchased
toll-free number with respect to the Program.

4.9.7 Monitoring. Retailer may, subject to Applicable Law, monitor customer
calls, emails, and other communication on a random, periodic basis (either
onsite or to the extent Bank makes available to any other credit card program,
remotely).

4.9.8 Service Providers. Except for those material service providers set forth
on Schedule 4.9.8, Bank shall not utilize any service provider that is not an
Affiliate for cardholder and store-facing voice-based customer service/contact
(“Primary Customer Service”) of Accounts without the prior written consent of
Retailer. Notwithstanding any arrangement whereby Bank provides services set
forth herein through an Affiliate or third party, Bank shall remain obligated
and liable to Retailer for the provision of such services without diminution of
such obligation or liability by virtue of such arrangement.

4.9.9 Offshoring. Except for those service providers set forth on
Schedule 4.9.8, Bank shall not, without the prior written consent of Retailer,
offshore any Primary Customer Service; provided, however, that Retailer approval
of proposals that meet Retailer’s reasonable expectations for customer service
quality and that apply to non-dedicated resources and functions would not be
unreasonably withheld. Retailer shall evaluate any proposal to outsource
customer or store facing services on its financial and strategic benefits.

4.9.10 Disaster Recovery Program. Bank shall, directly or through an Affiliate,
maintain a disaster recovery plan and have in place sufficient back-up systems,
equipment, facilities and trained personnel to implement such disaster recovery
plan so as to service the Accounts continuously through a disaster. Bank shall,
upon Retailer’s request, provide a summary of its disaster recovery plan to
Retailer for review, and shall address any issues reasonably raised by Retailer
within thirty (30) days of a written notice from Retailer. Bank shall provide
notice to Retailer of any material changes to the disaster recovery plan that
would impact the Program or Retailer.

4.9.11 Collections. Bank shall handle all stages of collections on Accounts in
accordance with Applicable Law and the Operating Procedures. Bank shall provide
collectors who shall collect delinquent Accounts in a professional manner. Bank
collection letters to Cardholders shall not bear Retailer Marks, but may use
Retailer’s name as may be required to identify the Account to the Cardholder.

 

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4.10 Cross-Marketing of Ancillary Products and Services. Provisions regarding
cross-marketing of ancillary products and services by Bank or its Affiliates are
set forth in Schedule 4.10.

4.11 Communication with Customers.

4.11.1 Inserts. Retailer shall have the right to communicate with Cardholders
regarding Goods and/or Services as well as other programs/services deemed
appropriate by Retailer by inserting Collateral into Billing Statements (print
and electronic) and other materials (print or electronic) (“Inserts”), and
through use of bangtails and return envelopes. Retailer shall bear the cost of
preparing and printing Inserts. At Retailer’s request, Bank shall include with
the Billing Statements and new Credit Card mailers such Inserts provided by
Retailer, so long as the materials: (i) are provided to Bank at least thirty
(30) days prior to the scheduled mailing date of such statements or notices and
pursuant to an insert schedule that Retailer provided to Bank at least sixty
(60) days in advance; (ii) have been approved as to content by Bank, such
approval not to be unreasonably withheld or delayed, with respect to any manner
of reference to Bank or the Program; (iii) meet all size, weight, or other
specifications for such Inserts as shall be reasonably set by Bank from time to
time; (iv) would not require the removal (in Bank’s standard envelope) of
Priority Materials; and (v) are paid for by Retailer.

4.11.2 Increased Postage Costs. If Retailer’s Inserts alone should cause an
increase in postage with respect to statements or other material Bank shall
provide Retailer the option to reduce the number of Inserts in an appropriate
manner to reduce postage to the standard rate; provided, however, that Retailer
shall not incur increased postage costs if Retailer’s Inserts alone would not
have caused an increase in postage costs.

4.11.3 Bank Limitations. Bank may not insert any advertising or promotional
materials with the Billing Statements or any other materials that are mailed to
or form the basis of a communication with Cardholders or Applicants, whether it
is provided by Bank, its Affiliates, or any parties other than Retailer, without
Retailer’s prior written consent.

4.11.4 Billing Statements. Subject to Section 4.11.2, Bank shall make available
to Retailer a space for two (2) customized messages on each Billing Statement
and five (5) Cardholder segments for each Billing Statement cycle; provided that
Bank shall have the right with respect to the Billing Statements to utilize
statement messages to send notices to protect Bank’s interest in, or collect,
the Accounts or to provide notices required by Applicable Law.

4.11.5 Retail Messages. Retail messages in the customer service call center,
including through the IVR, may be provided by Retailer to Bank; provided,
however, that the lead time, subject matter and length of message shall be
approved by Bank, such approval not to be unreasonably withheld or delayed.

 

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4.11.6 Generated Revenues. Retailer shall retain all revenues it receives from
responses to Inserts or retail messages in customer service calls. Any Inserts
requiring Bank processing (other than as a point of sale transaction) or
fulfillment shall be subject to mutual agreement regarding the processing or
fulfillment cost to be paid by Retailer.

4.12 Cardholder Communications. Retailer shall have full approval rights over
all Cardholder communications with the exception of notifications required by
Applicable Law and Bank’s standard Account servicing communications with
Cardholders; provided, however, that Bank shall permit Retailer to review such
notifications for content and positioning with other Cardholder communications.

4.13 Systems Interface; Technical Support.

4.13.1 Connectivity. Retailer and Bank shall identify within the Transition Plan
the systems interfaces required to be sustained between Retailer and Bank.
Retailer and Bank shall maintain such interfaces and cooperate in good faith
with each other in connection with any modifications to such interfaces as may
be requested by either Party from time to time. Any changes to the computer and
telecommunications protocols shall only be made by Bank after prior consultation
with Retailer. Retailer may Dispute, in accordance with Schedule 4.1.3,
Paragraph 3, any changes that may have a material adverse effect on the Program
or Retailer. Each of Retailer and Bank agrees to maintain at its own expense its
respective systems interfaces.

4.13.2 Modification. All requests for new interfaces, modifications to existing
interfaces and terminations of existing interfaces involving material costs to
the other Party shall be presented to the Management Committee for approval.
Upon approval, the Parties shall work in good faith to establish the requested
interfaces or modify or terminate the existing interfaces, as applicable, on a
timely basis. Except as otherwise provided herein, all cost and expenses with
respect to any new interface or interface modification or termination shall be
borne by the requesting Party, unless otherwise determined by the Management
Committee. Notwithstanding the foregoing, each Party will bear its own costs and
expenses in connection with any new interface or interface modification or
termination required by Applicable Law.

4.13.3 Secured Transmissions. The Parties shall use secure protocols consistent
with Good Industry Practices for the transmission of data from Bank and its
Affiliates, on the one hand, to Retailer on the other hand, and from Retailer
and the Retailer Channels to Bank and its Affiliates.

4.13.4 New Business Concepts. In the event that either Party desires to
introduce a new business concept related to the Program, Bank and Retailer shall
prior to undertaking the development of such new business concept mutually agree
in writing with respect to the development, ownership and implementation of the
terms and conditions governing the new business concept.

 

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4.13.5 Program Projections. Bank shall prepare and deliver to the Management
Committee annual written projections relating to the aggregate performance of
the Program (collectively, the “Program Projections”) containing the elements
set forth in Schedule 4.13.5. Retailer and Bank agree that it is in both of
their interests to manage the Program and in the case of Retailer, its promotion
and support of the Program, consistent with the Program Projections and in a way
that balances the desire to minimize expenses while achieving each Party’s
respective goals and objectives under this Agreement.

SECTION 5. LICENSE OF MARKS; TECHNOLOGY

5.1 Retailer License Grant and Limitations.

5.1.1 Retailer Marks. Subject to the terms and conditions set forth herein,
including the obligation to obtain Retailer’s prior written consent in each
instance pursuant to Section 5.3, Retailer hereby grants to Bank a
non-exclusive, non-transferable, non-sublicensable (except as set forth below)
right and license to use the Retailer Mark(s) owned by Retailer set forth in
Schedule 5.1.1 solely as and to the extent necessary to (i) prepare and print
Program Documents (including on the internet) and Credit Cards, in each case in
connection with the Program and in accordance with the terms of this Agreement,
(ii) otherwise carry out Bank’s responsibilities hereunder, and (iii) authorize
others to do any of the foregoing on Bank’s behalf solely in connection with the
Program (the “Retailer License”). Bank shall use the trademark designations “®”
or “TM” or such other designation as Retailer may specify or approve in
connection with the Retailer Marks on the Credit Cards, Program Documents and
promotional materials.

5.1.2 New Marks. If Retailer or its Affiliates adopts a trademark, trade name,
corporate name or logo not specified in Schedule 5.1.1, in lieu of or in
addition to any then-existing Retailer Mark (“New Retailer Mark”), Retailer may
add such New Retailer Mark to Schedule 5.1.1 by giving Bank written notice
thereof and, upon such notice, such New Retailer Mark shall be added to
Schedule 5.1.1 and subject to the same rights and licenses as are set forth
herein for Retailer Marks.

5.1.3 Use Limitations. Bank’s rights under the Retailer License are limited to
using the Retailer Marks in the identical style, typeface and graphic appearance
as are set forth in Schedule 5.1.1 or as otherwise approved in writing by
Retailer in its discretion. Retailer shall, at its own expense, have the
unilateral right, upon reasonable notice to Bank, to amend the style, typeface
or graphic appearance of any Retailer Mark owned by it if such amended mark is
adopted by Retailer for all or a substantial portion of its business, and to
cause Bank to adopt within thirty (30) days (or as soon as reasonably
practicable thereafter if the change cannot be implemented within thirty
(30) days) such amended style, typeface or appearance in connection with all
uses of such mark after such period. In no event may Bank combine any Retailer
Mark with any other mark or alter the design of any Retailer Mark.

 

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5.1.4 License Term. The Retailer License shall remain in force during the Term
and shall automatically terminate upon the termination or expiration of this
Agreement; provided, however, that Bank shall be entitled to use the name of
Retailer to identify the Account in any collection activity with respect to the
Accounts at any time during the Term of, and after termination or expiration of,
this Agreement. Except as set forth in Section 15.6, upon the termination of the
Retailer License, Bank shall immediately cease any and all use of, and cause any
permitted sublicensee to cease any and all use of, each Retailer Mark and, at
Retailer’s option, either return to Retailer or destroy any material bearing any
applicable Retailer Mark in its or any of its permitted sublicensee’s possession
or under its control and provide Retailer with reasonable assurances thereof.

5.1.5 Rights to Retailer Marks. Except as expressly set forth in this
Section 5.1.5, Bank shall have no right, title, or interest in or to the
Retailer Marks, and any goodwill arising from the use of the Retailer Marks by
Bank shall inure solely to the benefit of Retailer. Ownership of such goodwill
shall vest in Retailer, and otherwise hereby is assigned to Retailer, without
the need for any further action by any Party.

5.1.6 Infringement. Bank shall notify Retailer if it becomes aware of: (i) any
use or registration of any trademark that is reasonably likely to constitute
infringement of any Retailer Mark; (ii) any claim by a third party (A) of any
right in any Retailer Mark or in any confusingly similar trademark or (B) that
use of any Retailer Mark infringes the rights of any other Person; or (iii) any
action that is, or is reasonably likely to be, detrimental to Retailer’s rights
in a Retailer Mark. Retailer shall have the exclusive right, at its sole cost
and expense, to commence or prosecute any action on account of infringement,
dilution or unauthorized use of any Retailer Mark. Bank further agrees not to
assert any interest in, or take any action reasonably likely to adversely affect
the validity or enforceability of any Retailer Mark and to comply with
Applicable Law in connection with its use of Retailer Marks.

5.2 Bank License Grant and Limitations.

5.2.1 Bank Marks. Subject to the terms and conditions set forth herein, Bank
hereby grants to Retailer a non-exclusive, non-transferable, non-sublicensable
(except as set forth below) right and license to use Bank Mark(s) owned by Bank
and its Affiliates set forth in Schedule 5.2.1 solely as and to the extent
necessary to (i) prepare and print Program Documents (including on the
internet), in each case in connection with the Program and in accordance with
the terms of this Agreement, (ii) otherwise carry out Retailer’s
responsibilities hereunder, and (iii) authorize others to do any of the
foregoing on Retailer’s behalf solely in connection with the Program (the “Bank
License”). Retailer shall use the trademark designations “®” or “TM” or such
other designation as Bank may specify or approve in connection with Bank Marks
on Program Documents and promotional materials. Subject to Applicable Law, Bank
shall not place Bank Marks on the front of Credit Cards.

5.2.2 New Marks. If Bank or its Affiliates adopts a trademark, trade name,
corporate name or logo not specified in Schedule 5.2.1, in lieu of or in
addition to any then-existing Bank Mark (“New Bank Mark”), Bank may add such New
Bank Mark to Schedule 5.2.1 by giving Retailer written notice thereof and, upon
such notice, such New Bank Mark shall be added to Schedule 5.2.1 and subject to
the same rights and licenses as are set forth herein for Bank Marks.

 

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5.2.3 Use Limitations. Retailer’s rights under the Bank License are limited to
using Bank Marks in the identical style, typeface and graphic appearance as are
set forth in Schedule 5.2.1 or as otherwise approved in writing by Bank in its
discretion. Bank shall, at its expense, have the unilateral right, upon
reasonable notice to Retailer, to amend the style, typeface or graphic
appearance of any Bank Mark owned by it if such amended mark is adopted by Bank
for all or a substantial portion of its business, and to cause Retailer to adopt
within thirty (30) days (or as soon as reasonably practicable thereafter if the
change cannot be implemented within thirty (30) days) such amended style,
typeface or appearance in connection with all uses of such mark after such
period. In no event may Retailer combine any Bank Mark with any other mark
(other than Retailer Mark as permitted hereunder) or alter the design of any
Bank Mark.

5.2.4 License Term. The Bank License shall remain in force during the Term and
shall automatically terminate upon the termination or expiration of this
Agreement; provided, however, that if Retailer acquires the Accounts, Retailer
shall be entitled to use the Bank Name as required by Applicable Law in any
collection activity, if any, with respect to the Accounts at any time during the
termination or expiration of this Agreement. Except as set forth herein, upon
the termination of the Bank License, Retailer shall immediately cease any and
all use of, and cause any permitted sublicensee to cease any and all use of,
each Bank Mark and, at Bank’s option, either return to Bank or destroy any
material bearing any applicable Bank Mark in its or any of its permitted
sublicensee’s possession or under its control and provide Bank with reasonable
assurances thereof, provided, however, Retailer shall, as applicable, replace
plastic Credit Cards containing Bank name or Bank Marks within twelve
(12) months after termination.

5.2.5 Rights to Bank Marks. Except as expressly set forth in this Section 5.2,
Retailer shall have no right, title, or interest in or to Bank Marks, and any
goodwill arising from the use of Bank Marks by Retailer shall inure solely to
the benefit of Bank or its Affiliates. Ownership of such goodwill shall vest in
Bank or its Affiliates, and otherwise hereby is assigned to Bank or its
Affiliates, without the need for any further action by any Party.

5.2.6 Infringement. Retailer shall notify Bank if it becomes aware of: (i) any
use or registration of any trademark that is reasonably likely to constitute
infringement of any Bank Mark; (ii) any claim by a third party (A) of any right
in any Bank Mark or in any confusingly similar trademark or (B) that use of any
Bank Mark infringes the rights of any other person; or (iii) any action that is,
or is reasonably likely to be, detrimental to Bank’s rights in a Bank Mark. Bank
shall have the exclusive right, at its sole cost and expense, to commence or
prosecute any action on account of infringement, dilution or unauthorized use of
any Bank Mark. Retailer further agrees not to assert any interest in, or take
any action reasonably likely to adversely affect the validity or enforceability
of any Bank Mark and to comply with Applicable Law in connection with its use of
Bank Marks.

 

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5.3 Retailer Marks Quality Control. Bank acknowledges that Retailer Marks have
established valuable goodwill and are well recognized among the customers of
Retailer and that it is of great importance that these high standards and
reputation be maintained. Accordingly, in its use, including the form and manner
of use, of the Retailer Marks, Bank shall at all times maintain quality control
standards that are equivalent to those standards used by Bank and its Affiliates
with respect to Bank Marks. Subject to Section 3.1.2, Bank shall ensure that no
artwork, copy, advertising, promotional materials, direct mail, press release,
newsletter or any other communication to the public, including Program
Documents, that specifically references this Agreement, Retailer, the Program,
any Credit Card, or uses any Retailer Mark, is distributed, published,
circulated or otherwise communicated to the public by Bank unless Retailer shall
have given its prior written consent to such materials (which may be given by
Retailer on a standing basis for one or more categories of communications) and
the Parties shall mutually agree on the timing and contents of such materials.
Retailer shall have the right, in its sole and absolute discretion, to prohibit
the use of any of Retailer Marks in any Forms or Program Marketing Materials, or
other materials proposed to be used by Bank which Retailer in its reasonable
business judgment deems objectionable or improper.

5.4 Bank Marks Quality Control. Retailer acknowledges that Bank Marks have
established valuable goodwill and are well recognized among the customers of
Bank and its Affiliates, and that it is of great importance that these high
standards and reputation be maintained. Accordingly, in its use, including the
form and manner of use, of Bank Marks, Retailer shall at all times maintain
quality control standards that are equivalent to those standards used by
Retailer with respect to Retailer’s Marks. Subject to Section 3.1.3, Retailer
shall ensure that no artwork, copy, advertising, promotional materials, direct
mail, press release, newsletter or any other communication to the public,
including Collateral that specifically references this Agreement, Bank or any of
its Affiliates, the Program, any Credit Card, or uses any Bank Mark, is
distributed, published, circulated or otherwise communicated to the public by
Retailer unless Bank shall have given its prior written consent to such
materials (which may be given by Bank on a standing basis for one or more
categories of communications) and the Parties shall mutually agree on the timing
and contents of such materials. Bank shall have the right, in its sole and
absolute discretion, to prohibit the use of any of Bank Marks in any Collateral
or other materials proposed to be used by Retailer which Bank in its reasonable
business judgment deems objectionable or improper.

5.5 Rights in Technology.

5.5.1 Technology Enhancements. In the event that Retailer and Bank mutually
decide that the Program should incorporate additional payment technology, Bank
shall be responsible for evaluating this mutual decision and determining the
cost associated with implementation of such technology into the Program, and the
Parties shall mutually determine the business arrangement to proceed, if
appropriate. Technology that Bank makes available to any of its other credit
card programs primarily at Bank’s cost shall be made available for the Program
primarily at Bank’s cost, and other technology that is either not available to
Bank’s other credit card programs or not primarily at Bank’s cost may be made
available for the Program subject to mutual agreement of the Parties, including
agreement regarding cost allocation.

 

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5.5.2 Retailer Ownership. Retailer shall own exclusively: (i) any and all
technology that is provided or created by Retailer for use in establishing,
developing or administering the Program (the “Retailer Technology”); (ii) any
and all changes or other modifications made by Retailer to the Retailer
Technology (the “Retailer Owned Modifications”); and (iii) any and all new
technology created by Retailer in connection with establishing, developing or
administering the Program (the “Retailer Created Technology”); in each case,
including any technology created by Retailer and paid for by Retailer from any
of the Transition or Marketing Funds.

5.5.3 Bank Ownership. Bank and its Affiliates shall own exclusively: (i) any and
all technology that is provided or created by Bank or any of its Affiliates for
use in establishing, developing or administering the Program (the “Bank
Technology”); (ii) any and all changes or other modifications made by Bank or
any of its Affiliates to the Bank Technology (the “Bank Owned Modifications”);
and (iii) any and all new technology created by Bank or any of its Affiliates in
connection with establishing, developing or administering the Program (the “Bank
Created Technology”).

5.6 Cross-Licenses of Technology. Retailer grants to Bank a non-exclusive,
royalty-free, fully paid-up, non-assignable, non-sublicensable, worldwide right
and license to use, install, execute, copy, display and perform the Retailer
Technology, Retailer Owned Modifications and the Retailer Created Technology in
Object Code solely to the extent necessary for Bank to perform Bank’s
obligations under this Agreement. Bank grants to Retailer a non-exclusive,
royalty-free, fully paid up, worldwide right and license to use install,
execute, copy, display and perform the Bank Technology, the Bank Owned
Modifications and the Bank Created Technology in Object Code solely to the
extent necessary for Retailer to perform Retailer’s obligations under this
Agreement. Both of the foregoing licenses shall expire upon the termination or
expiration of this Agreement. Upon the expiration of this license, each licensee
Party shall return to the licensor Party (or, at the licensor Party’s option,
shall destroy) the licensor’s technology then in the licensee’s possession or
control. “Object Code” shall mean the computer software code generated by a
compiler or assembler that has been translated from the source code of a
program. Neither Party shall have any right to reverse engineer, decompile or
disassemble the technology licensed to it hereunder. In no event shall either
Party modify, revise or enhance a licensor’s technology. Neither Party shall
transfer, lend, rent, lease or make available to third parties, the other
Party’s technology or allow third parties to use such technology. The limited
licenses granted under this Section 5 are AS IS and without any express or
implied warranty of any kind. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EACH LICENSING PARTY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF TITLE,
NON-INFRINGEMENT, AGAINST INTERFERENCE OF ENJOYMENT, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, LACK OF REASONABLE EFFORT AND LACK OF NEGLIGENCE.

5.7 Change in Systems. Each Party reserves the right from time to time to change
the specifications or designs of its Systems. Each Party shall notify the other
of any proposed material changes in its Systems that may materially impact the
Program or the other Party’s Systems at least ninety (90) days or such other
period of time as the Parties mutually agree (or as may be required by
Applicable Law) before such changes are commercially used, released or made
commercially available, or necessary to address security issues or changes
implemented as

 

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a result of a change in Applicable Law. Following such notice, the Parties shall
discuss any corresponding modifications to the Program that may be required as a
result of such change and the cost, schedule and responsibility for implementing
such change. In no event shall either Party modify Systems affecting the Program
that would materially affect the other Party without the prior written consent
of the other Party, unless required to address security issues or as a result of
changes in Applicable Law, in which case notice shall be given as soon as
practicable.

SECTION 6. OPERATION OF THE PLAN

6.1 Honoring Credit Cards. Retailer agrees that beginning on the Program
Commencement Date, Retailer Channels shall honor Credit Cards properly issued
and then-currently authorized by Bank pursuant to the Program. Furthermore,
Retailer shall deliver to Bank all Transaction Data evidencing transactions made
under the Program, in accordance with the provisions of this Agreement and the
Operating Procedures, as applicable.

6.2 Cross Acceptance. As of the Program Commencement Date, there shall be cross
acceptance between and among the Retailer Channels, meaning Retailer shall
accept for payment at all Retailer Channels, Credit Cards properly issued and
currently authorized by Bank (“Cross Acceptance”). Bank shall also facilitate
acceptance at all future Retailer Channels as designated by Retailer from time
to time. Nothing herein shall require Retailer to accept or honor any credit
card of Bank other than a Credit Card.

6.3 Operating Procedures. Retailer shall use commercially reasonable efforts to
observe and comply in all material respects with the Operating Procedures, as
set forth in Schedule 2.3, and such other reasonable procedures as may be agreed
upon by the Management Committee from time to time. Such initial Operating
Procedures have been reviewed and approved by Retailer. Notwithstanding any
contrary provision of this Agreement, Bank shall have the right to determine and
amend those portions of the Operating Procedures and other Program procedures
that are necessary to comply with Applicable Law. In all other respects, the
Operating Procedures may be amended or modified by the Management Committee from
time to time. In the event Bank requested changes to the Operating Procedures
would increase Retailer’s costs of complying with the Program (including,
without limitation, increased costs of training employees) or otherwise
adversely affect Retailer’s operations, the parties shall negotiate in good
faith the implementation of such changes and the responsibility for the costs
thereof; provided, however, that (i) if such changes are being made by Bank
solely to comply with Applicable Law, and are being implemented by Bank with
respect to all Bank clients, then Bank shall be permitted to make such changes
as are necessary to enable such compliance (and shall use its commercially
reasonable efforts to effectuate such changes in the most cost-effective manner)
and Retailer shall bear all costs related to Retailer’s compliance thereof (to
the extent all such Bank clients are so required) and/or (ii) if such changes
are being implemented by Bank with respect to all other Bank clients, and if
after implementation of such changes Bank shall continue to utilize industry
standard methods of communications with Retailer, then Bank shall be permitted
to make such changes (and shall use its commercially reasonable efforts to
effectuate such changes in the most cost-effective manner) and Retailer shall
bear all reasonable costs related to Retailer’s compliance thereof (to the
extent all such Bank clients are so required).

 

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6.4 Cardholder Disputes Regarding Accounts and Goods and/or Services.

6.4.1 Bank shall promptly notify Retailer regarding any Cardholder dispute
regarding an Account that requires Retailer action. This includes but is not
limited to claims related to outstanding balances, Bank reports to credit
bureaus, finance charges, fees, and collection efforts (e.g., notification that
the Cardholder has filed bankruptcy or wants collection communications directed
to legal counsel, etc.).

6.4.2 Retailer shall act promptly to investigate and work to resolve disputes
with Cardholders regarding Goods and/or Services obtained through Retailer
pursuant to the Program. Retailer shall timely process credits or refunds for
Cardholders utilizing the Program.

6.5 Cardholder Disputes Regarding Violations of Applicable Law. Retailer shall
assist Bank in further investigating and using its reasonable efforts to help
resolve any Applicant or Cardholder claim, dispute, or defense that may be
asserted under Applicable Law.

6.6 Payment by Retailer; Ownership of Accounts; Fees; Accounting.

6.6.1 Settlement. There shall be one settlement for all Retailer Channels as set
forth in this Section 6.6. Each day (not just Business Days), Retailer shall
electronically transmit all Transaction Data to Bank within a reasonable period
of time and in a format acceptable to Bank. Upon receipt, Bank shall promptly
verify and process such Transaction Data and, in the time frames specified
herein, Bank will remit to Retailer an amount equal to the Net Proceeds
(provided, however, that Chargebacks and other amounts as set forth in Schedule
6.6.6 shall be processed by Bank in the following Business Day’s settlement
file) indicated by such Transaction Data for the Credit Sales Day(s) for which
such remittance is made. Bank shall transfer funds via wire transfer to the one
(1) deposit account maintained by Retailer and designated in writing by Retailer
to Bank as the account to which Bank should direct its payments (the “Retailer
Deposit Account”). For Transaction Data received by Bank’s processing center
before 8:00 AM Eastern time on a Business Day, Bank will provide notice to
Retailer of the amount of the Net Proceeds to be transmitted for such Business
Day no later than 11:00 AM Eastern time on such Business Day, and shall initiate
the wire transfer of such amount on such Business Day. For Transaction Data
received by Bank’s processing center either (i) after 8:00 AM Eastern time on a
Business Day, or (ii) on a non-Business Day, Bank will provide notice to
Retailer of the amount of the Net Proceeds to be transmitted for such day no
later than 11:00 AM Eastern time on the following Business Day, and shall
initiate the wire transfer of such amount on such following Business Day.

6.6.2 Interest Transfer. Effective upon the delivery of Transaction Data to Bank
and payment to Retailer by Bank pursuant to Section 6.6.1, Retailer and Retailer
Channels shall be deemed to have transferred, conveyed, assigned and surrendered
to Bank all right, title or interest in payments reflected in such Transaction
Data and in all other rights and writings evidencing such Purchases, if any.

 

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6.6.3 Review of Transaction Data. All Transaction Data are subject to review by
Bank. In the event of a computational or similar error of an accounting or
record keeping nature with respect to such Transaction Data, Bank may credit to
the Retailer Deposit Account or net against the Net Proceeds (as the case may
be) the proper amount as corrected. If the Net Proceeds are insufficient,
Retailer shall remit the proper amount to Bank upon written demand, subject to
Retailer’s right to Dispute such amount in good faith. Upon any such correction,
Bank shall give Retailer prompt notice of same, including details of the
discrepancy and correction. Bank shall provide Retailer with documentation
explaining any adjustments upon Retailer’s reasonable request.

6.6.4 Equipment. Retailer shall obtain and maintain at its own expense such
Point of Sale terminals, cash registers, network (electronic communication
interchange system), telephone or other communication lines, software, hardware
and other items of equipment as are necessary for it to request and receive
authorizations, transmit Charge Slip and Credit Slip information and perform its
obligations under this Agreement. The computer programs and telecommunications
protocols necessary to facilitate communications between Bank and Retailer shall
be determined and supplied by Bank from time to time subject to reasonable prior
notice of any change in such programs, equipment or protocols.

6.6.5 Failure to Pay. Bank may, if Retailer fails to pay Bank any settlement
amounts due to Bank pursuant to this Agreement for more than two (2) days after
the due date, or if Retailer fails to pay Bank any other invoiced amounts due to
Bank pursuant to this Agreement for more than thirty (30) days, other than any
amounts (including settlement amounts) Disputed by Retailer in good faith,
offset such amounts against the Net Proceeds or any other amounts owed by Bank
to Retailer under this Agreement. Retailer may, if Bank fails to pay Retailer
any amounts due to Retailer pursuant to this Agreement for more than two
(2) days after the due date, other than amounts Disputed by Bank in good faith,
offset such amounts against any other amounts owed by Retailer to Bank under
this Agreement.

6.6.6 Payments by Bank. Bank shall calculate and pay royalties to Retailer on a
daily basis as set forth in Schedule 6.6.6.

6.7 Cardholder Payments on Accounts.

6.7.1 Bank Payments. Any Cardholder payments on Accounts not made at Retailer
stores pursuant to Section 6.7.2 shall be made directly to Bank in accordance
with the instructions of Bank and at the location or address (physical or
electronic, as applicable) specified by Bank. By way of clarification, Bank has
the sole right to receive and retain all payments made with respect to all
Accounts and to pursue collection of all amounts outstanding, unless a Purchase
is charged back to Retailer pursuant to the provisions of Sections 6.8.1 and
6.8.2.

6.7.2 In-Store Payments. Subject to the provisions of this Section 6.7, Bank
hereby authorizes Retailer to accept, on Bank’s behalf, Cardholder payments on
Accounts at Retailer Locations within the Territory utilizing technology that
exists prior to

 

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the Effective Date. Upon receipt of such payments, Retailer (on Bank’s behalf)
shall hold the payment in trust (in the sense that Retailer is obligated to pay
such amount to Bank, not that such amount be held in a separate Retailer
account) for Bank and shall transmit record of such payment to the Bank at the
time of payment using Bank’s transaction specifications. Payments made by
Cardholders at Retailer stores shall be deemed received by Bank when Retailer
receives the payment in-store and Bank shall provide immediate credit toward a
Cardholder’s open-to-buy limit. Bank shall deduct the amount of such payment
from the Net Proceeds (to the extent not previously deducted); or if the Net
Proceeds are insufficient, Retailer shall remit the amount of such payment or
any unpaid portion thereof, to Bank, immediately upon written demand from Bank.
For purposes of this Section 6.7.2, Bank hereby authorizes Retailer, or any of
its employees or agents, to endorse “World Financial Network Bank” upon all or
any checks, drafts, money orders or other evidence of payment, made payable to
Bank and intended as payment on an Account, that may come into Retailer’s
possession from Cardholders.

6.7.3 Notwithstanding any provision to the contrary elsewhere in this
Section 6.7 or elsewhere in this Agreement, Retailer shall comply with any
written instruction by Bank that Retailer cease accepting Cardholder payments on
all Accounts when such instruction is required by Applicable Law; provided,
however, that Bank shall notify Retailer in writing of the desired date for
cessation of such acceptance of Cardholder payments, which written notice shall
be provided to Retailer as far in advance of the subject cessation date as is
commercially reasonable under the circumstances. Retailer may cease accepting
Cardholder payments on Accounts upon sixty (60) days prior written notice to
Bank.

6.7.4 Retailer hereby authorizes Bank, or any of its employees or agents, to
endorse the applicable Retailer Nameplate upon all or any checks, drafts, money
orders or other evidence of payment, made payable to Retailer and intended as
payment on an Account, that may come into Bank’s possession from Cardholders and
to credit said payment against the appropriate Cardholder’s Account.

6.8 Chargebacks.

6.8.1 Bank may charge back to Retailer any Credit Card transaction for any of
the reasons identified on Schedule 6.8.1 (any such transaction charged back
being referred to as a “Chargeback”). Bank shall be responsible for establishing
that any amount to be charged back qualifies as a Chargeback pursuant to the
provisions of this Section 6.8 and Schedule 6.8.1. Chargebacks will be
communicated to Retailer by Bank and shall include the reason for the Chargeback
and such relevant documentation as Retailer may reasonably request. No
Chargeback shall be charged back to Retailer after the later of: (i) one hundred
eighty (180) days after receiving the related Transaction Data; (ii) forty-five
(45) days after receiving the Credit Slip if the dispute was initiated within
one hundred eighty (180) days; (iii) with respect to charges for the purchase of
Goods and/or Services requiring delivery one hundred eighty (180) days after the
delivery; (iv) one hundred eighty (180) days from date of cancellation or return
or date credit/delivery promised; or (v) where the applicable Cardholder is
allowed a longer period under Applicable Law to contest the applicable
transaction, such longer period.

 

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6.8.2 Retailer may contest any amount presented as a Chargeback in accordance
with Section 10.3 of the Operating Procedures.

6.9 Non-Competition.

6.9.1 Except with respect to the Program and as otherwise set forth in this
Agreement, beginning on the Program Commencement Date and for the remainder of
the Term and within the Territory, unless Bank shall otherwise consent in
writing, Retailer shall not, on its own or under agreement with any other
Person, promote, originate, issue or provide (or assist in promoting,
originating, issuing or providing) any consumer private label open-end credit
cards branded or bearing a Retailer Mark or a Retailer Nameplate.

6.9.2 Additional Non-Competition Terms. The Parties agree to comply with the
terms set forth on Schedule 6.9.2.

6.9.3 Nothing in this Section 6.9 shall limit or restrict the ability of
Retailer to:

(a) Subject to Sections 6.9.1 and 6.9.2, participate in promotions for any
Retailer branded or non-Retailer branded payment products or accept any
non-Retailer branded payment products, including prepaid cards, debit cards,
internet only debit or credit products and general purpose credit cards, in any
Retailer Channel during the Term of this Agreement;

(b) Promote, originate, or assist in the origination of Retailer branded
internet only private label credit products but only if Bank’s internet approval
rate falls below the threshold set forth in Schedule 4.3.1;

(c) Subject to Sections 6.9.1 and 6.9.2, provide advertisements on a Retailer
website for Goods and/or Services that do not include a promotion for
origination of an open end credit product; and

(d) Accept any and all forms of payment at any time and at any location and in
any medium and the display of customary acceptance identification in Retailer
Channels.

6.10 Second Look Program.

6.10.1 Notwithstanding Section 6.9, Retailer may, by itself or through
designated third party providers, offer a source of credit, including the
issuance of another credit card pursuant to another credit card program to those
Customers whose Credit Card Applications have been declined by Bank or
involuntarily closed in any channel (each, a “Decline”) in accordance with this
Section 6.10; provided, however, that (i) any such offer may only be made to a
Person after such Person has become a Decline (“Second Look Program”), and
(ii) Retailer shall have provided Bank an opportunity to participate in the
bidding process for the Second Look Program.

 

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6.10.2 To the extent Retailer offers a Second Look Program as set forth in
Section 6.10.1, either itself or through a third party, at Retailer’s sole
expense, Retailer shall take commercially reasonable steps to ensure that
(i) the Second Look Program does not materially interfere with the Program and
(ii) the cards issued in connection with the Second Look Program are not
confusingly similar to the Credit Card and advertisements, forms and collateral
are conducted and designed in a way to avoid customer confusion between the
Second Look Program issuer and Bank as the issuer of the Credit Card.
Furthermore, to the extent Retailer offers a Second Look Program via a third
party, in order to present a seamless presentation of the Second Look Program to
a Customer, Bank shall, to the extent permitted by Applicable Law, cooperate
with Retailer and provide such support as is reasonably necessary for Retailer
to establish and implement such Second Look Program, and the Parties shall work
in good faith through the Management Committee to determine the preferred
functions and processes in an attempt to make a seamless presentation of the
Second Look Program to Declines. Retailer shall be responsible for providing the
third party with all application data. Bank shall cooperate with Retailer in
connection with the provision of such information to the third party including
by adding any necessary disclosures on Applications that would allow for
Retailer’s sharing of Credit Card Application data with the Second Look Program
provider. Retailer shall be responsible for all incremental expenses of Bank
associated with the Second Look Program, including any necessary systems
development.

6.11 Reports.

6.11.1 Generally. Retailer and Bank shall collaborate to develop standards and
ad hoc reporting packages to monitor Program performance, key operating metrics,
service levels, and marketing effectiveness. In such connection the respective
Party shall provide the following reports (collectively, the “Reports”):

(a) at its expense, Bank shall provide to Retailer reports as set forth in
Schedule 6.11.1;

(b) upon Retailer’s reasonable request, Bank shall provide to Retailer any other
reports specified by Retailer; and

(c) Retailer shall provide to Bank, on a monthly basis and in a format
reasonably determined by Retailer, a report showing Retailer’s total sales of
Goods and/or Services for the immediately preceding Retailer Fiscal Month,
categorized and broken down in such manner as is consistent with Retailer’s
customary procedures, as well as any additional information as may be agreed
between the Parties.

6.11.2 Ad Hoc Reports. In addition to the Bank’s Reports, upon Retailer’s
reasonable request, Bank shall also provide to Retailer any customized reports
related to the Program (“Ad-Hoc Reports”) within ten (10) days of such request.
In the event that Retailer requests additional Reports, Ad-Hoc Reports or
information pursuant to this Section 6.11 that will require Bank to incur
additional costs, Bank shall provide such requested Reports or information if
Retailer pays, or agrees to pay, such reasonable additional costs.

 

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6.11.3 Explanation of Variances. Reports shall include explanations of any
significant variances.

6.11.4 Electronic Delivery of Reports. Bank agrees to provide all reports,
including Ad-Hoc Reports and the Reports, electronically and Bank agrees to
provide on-line access to key Program metrics and Reports.

6.12 Sale of Charged Off Accounts. Bank may sell charged-off Accounts, as
permitted by Applicable Law, to a reputable debt buyer, screened and approved
for such sales by Bank or one of its Affiliates, to whom the Bank has sold or is
selling charged-off Accounts with respect to multiple card programs owned or
managed by Bank for its account or the account of others. Bank shall be
responsible, as between Retailer and Bank, for such Person’s compliance with
Applicable Law. Retailer shall not be required to provide any additional
documentation to support Bank’s sale of charged-off Accounts.

6.13 Retailer Acquisitions.

6.13.1 If Retailer acquires, whether by purchase or otherwise, another retailer
with a private label open-end credit program that Retailer seeks to re-brand
with a Retailer Mark that is covered by this Agreement, the following shall
apply:

(a) If, during the Term, Retailer or any of its Affiliates acquires (including
by merger, consolidation or other business combination) a retail business that
through Bank issues a private label credit program in the Territory, Retailer
may elect to (i) continue to operate this Program and the acquired credit card
business under each respective existing program agreement or (ii) upon mutually
agreed upon terms, integrate the two (2) credit programs.

(b) If the acquired retailer already operates a private label open end credit
program through an unaffiliated issuer, Retailer shall permit Bank to negotiate
to purchase the portfolio from the unaffiliated issuer for a period of sixty
(60) days. If Bank is unable to agree to the terms of the purchase of such
portfolio acceptable to Retailer during the designated time period, Retailer may
continue operating such program under the existing arrangement (and such third
party or issuer) and may renew such existing arrangement or select another third
party issuer provided that the renewal or third party arrangement is more
favorable than Bank’s offer.

(c) If the acquired retailer already operates a private label open end credit
program on its own account, Retailer may permit Bank to negotiate the purchase
of the portfolio and elect for the terms of this Agreement to cover such
acquired portfolio or to continue operating such portfolio under the existing
arrangement; provided, however, that if Retailer chooses to offer such portfolio
to a third party issuer, Bank shall have the right of first offer; provided,
further, that Bank must make such an offer within thirty (30) days of Retailer’s
notice to Bank and, provided, further, that in the event Bank exercises its
right of first offer Retailer shall be under no obligation to award such
portfolio to Bank and instead may keep such portfolio or offer it for sale to a
third party, provided that such sale to a third party must be on terms more
favorable in the aggregate than the terms offered by Bank.

 

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(d) If the acquired retailer does not offer a private label open end credit
program, Retailer is under no obligation to offer such a program; provided,
however, that if Retailer chooses to operate such a program portfolio through
the acquired retailer’s business, such program shall be subject to the terms of
this Agreement if the acquired retailer’s business is reasonably consistent with
Retailer’s current business. Otherwise, Bank will support such program on terms
to be mutually agreed by the Parties.

(e) If, pursuant to Retailer’s acquisition of a new retailer similar in nature
to Retailer two (2) or more separate private label credit programs are offered
by Retailer (one being the Program), Retailer may elect to have the credit
products offered pursuant to each of the programs accepted as payment in
Retailer Channels; provided, however, that Retailer shall reimburse Bank for any
and all out-of-pocket costs and expenses incurred by Bank in connection with the
acceptance of such additional credit products.

6.14 Additional Co-Branded Program. If Retailer acquires, whether by purchase or
otherwise, another retailer with a co-branded open-end credit program, then
Retailer may, at its sole discretion, continue to operate such acquired program
under its existing program agreement through the end of the then current term of
such program agreement, after which time such credit program shall become
subject to Section 6.9.2 but only to the extent that the application of
Section 6.9.2 does not conflict with the express terms of such program
agreement.

SECTION 7. CONFIDENTIALITY; OWNERSHIP OF CARDHOLDER INFORMATION

7.1 Confidentiality.

7.1.1 Definitions.

(a) “Confidential Information” of a Party means (i) information that is provided
by or on behalf of such Party to the other Party or its agents in connection
with the Program, or (ii) information about such Party or its Affiliates, or
their respective businesses or employees, that is otherwise obtained by the
other Party in connection with the Program, in each case including:
(A) information concerning marketing plans, marketing philosophies, objectives
and financial results; (B) information regarding business systems, methods,
processes, financing data, programs and products; (C) information unrelated to
the Program obtained by the other Party in connection with this Agreement,
including by accessing or being present at the business location of the other
Party; (D) proprietary technical information, including source codes;
(E) competitive advantages and disadvantages, technological development, sales
volume(s), merchandise mix, business relationships and methods of transacting
business, operational and data processing capabilities, and systems software and
hardware and the documentation thereof; (F) other information regarding the
business or affairs of the other Party or its Affiliates or the transactions
contemplated by this Agreement that such other Party or its Affiliates
reasonably considers confidential or proprietary; and (G) any copies, excerpts,
summaries, analyses or notes of the foregoing. The Parties agree that the terms
of this Agreement shall be Confidential Information of both Parties.

 

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(b) Notwithstanding Section 7.1.1(a), “Confidential Information” of a Party
shall not include information: (i) already in the possession of the other Party
(other than in connection with the structuring, negotiation and execution of
this Agreement and the other related documents and the transactions contemplated
herein) that is not otherwise subject to an agreement as to confidentiality;
(ii) that is obtained in the public domain and which became available in the
public domain other than as a result of an unauthorized disclosure by the other
Party or its directors, officers, employees or agents in violation of this
Agreement; (iii) that is lawfully received by the other Party on a
non-confidential basis from a third party authorized to disclose such
information without restriction and without breach of this Agreement; and
(iv) that is developed by the other Party without the use of any Confidential
Information of such Party.

(c) “Receiving Party” means the Party that receives Confidential Information of
the other Party, and “Disclosing Party” means the other Party whose Confidential
Information is received by the Receiving Party.

7.1.2 Limits on Use and Disclosure.

(a) Each Party shall comply with, and use commercially reasonable efforts to
cause its respective Affiliates, directors, officers, employees, representatives
and other agents to comply with, the provisions of this Section 7.1.

(b) A Receiving Party shall: (i) keep all Confidential Information of the
Disclosing Party secure and confidential; (ii) treat all Confidential
Information of the Disclosing Party with the same degree of care as it accords
its own Confidential Information, but in no event less than a reasonable degree
of care; and (iii) implement and maintain commercially reasonable physical,
electronic, administrative and procedural security measures to protect all
Confidential Information of the other Party.

(c) A Receiving Party shall not use or disclose Confidential Information of the
Disclosing Party except: (i) to perform its obligations or enforce its rights
with respect to the Program; (ii) as expressly permitted by this Agreement;
(iii) with the prior written consent of the Disclosing Party; (iv) pursuant to a
subpoena, summons or other order requesting information that is issued through
any judicial, executive or legislative process (“Governmental Request”); (v) by
Bank to a bank regulatory agency; or (vi) as otherwise required by Applicable
Law.

(d) A Receiving Party shall use commercially reasonable efforts to: (i) limit
access to the Disclosing Party’s Confidential Information to those employees,
authorized agents, vendors, consultants, service providers and contractors who
have a reasonable need to access such Confidential Information in connection
with the Program or other purposes permitted by this Agreement, and (ii) obtain
contractual confidentiality commitments substantially similar to those set forth
in this Section 7.1 from each authorized agent, vendor, consultant, service
provider or contractor to which the Receiving Party provides access to the
Disclosing Party’s Confidential Information.

 

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(e) Notwithstanding anything else contained in this Agreement, a Party shall not
be obligated to take any action with respect to the collection, use or
disclosure of information in the Program that such Party believes in good faith
would cause, or is reasonably likely to cause, either Party to violate any
Applicable Law (including privacy and security laws and the reuse and
re-disclosure provisions of the GLBA).

7.1.3 Government Requests and Reports.

(a) If a Receiving Party receives a Governmental Request to disclose any
Confidential Information of the Disclosing Party, excluding requests received
from a bank regulatory agency with jurisdiction over Bank, the Receiving Party
shall, to the extent allowed: (i) notify the Disclosing Party thereof promptly
after receipt of such request; (ii) consult with the Disclosing Party on the
advisability of taking steps to resist or vary such request; and (iii) if
disclosure is required or deemed advisable, cooperate with the Disclosing Party
in any attempt by the Disclosing Party to obtain a protective order or other
reliable assurance that confidential treatment shall be accorded to the
Confidential Information of the Disclosing Party. The Disclosing Party shall
reimburse the Receiving Party for reasonable out-of-pocket expenses incurred by
the Receiving Party as a result of any attempt by the Disclosing Party to resist
or vary the Receiving Party’s response to a Governmental Request.

(b) Each Party agrees, prior to filing any copy of this Agreement with any
Governmental Authority, to consult with the other Party with respect to
redacting, to the maximum extent practical and consistent with Applicable Law,
portions of this Agreement. Notwithstanding the foregoing, the provisions of
Sections 7.1.3(a) and (b) shall not apply to disclosures made by Bank to a bank
regulatory agency, except in the event that a bank regulatory agency notifies
Bank that such agency is initiating a material inquiry regarding the Program and
disclosure to Retailer of such notification and related communications by Bank
to such agency are not prohibited by Applicable Law.

(c) If a Party or its Affiliate intends to file this Agreement or any other
documents related to the Program as an exhibit to any report or other filing
with the SEC, such Party or Affiliate shall file with the Secretary of the SEC
an application requesting confidential treatment pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, at or about the time of such filing; provided,
however, that no such filing shall be deemed to violate this Section 7.1. If any
Party or its Affiliate thereof intends to file or files this Agreement or any
other documents related to the Program with any other Governmental Authority,
such Party or Affiliate shall take all commercially reasonable efforts to obtain
confidential treatment for this Agreement or such other documents; provided,
however, that no such filing shall be deemed to violate this Section 7.1. Each
Party shall use commercially reasonable efforts to cooperate with the other
Party’s or its Affiliates’ attempts to obtain confidential treatment for this
Agreement in accordance with this Section 7.1.

7.1.4 Disposition of Confidential Information. The Receiving Party shall comply
with the Disclosing Party’s reasonable instructions regarding the disposition of
the Disclosing Party’s Confidential Information after the Repurchase Closing
Date (if Retailer purchases or arranges for the purchase of the Accounts) or the
Termination Date (if Retailer does not purchase or arrange for the purchase of
the Accounts). Such instructions may include, to the extent reasonably
practicable, the return or destruction of any and all of the Disclosing Party’s
Confidential Information (including any electronic or

 

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paper copies, reproductions, extracts or summaries thereof) and certification of
compliance with this Section 7.1.4 of such return or destruction by an officer;
provided, however, that such return or destruction shall not be required for
Confidential Information (a) required to be retained pursuant to the Receiving
Party’s disaster recovery plan, (b) that has been submitted to the Receiving
Party’s board of directors or a Governmental Authority, or (c) directly related
to Bank Technology or Retailer Technology that the Receiving Party is permitted
to retain pursuant to Section 5.5; and provided, further, that the Receiving
Party in possession of the Disclosing Party’s Confidential Information may
retain a copy of such Confidential Information to the extent required by
Applicable Law, which copy shall be used solely to comply with such Applicable
Law.

7.1.5 Injunctive Relief. Each Receiving Party agrees that any unauthorized use
or disclosure of Confidential Information of the Disclosing Party might cause
immediate and irreparable harm to the Disclosing Party for which money damages
might not constitute an adequate remedy. In that event, the Receiving Party
agrees that injunctive relief may be warranted in addition to any other remedies
the Disclosing Party may have.

7.2 Privacy and Data Security.

7.2.1 Privacy.

(a) Each Party shall comply with the Applicable Law pertaining to privacy and
data security, including Title V, Subtitle A of the Gramm-Leach-Bliley Act, 15
U.S.C. 6801 et seq., as it may be amended from time to time (“GLBA”) and the
regulations issued by the Bank’s regulator pursuant to the Act, as the same may
be amended from time to time (“Regulations”), including the provisions of the
GLBA and the Regulations regarding the use and re-use, and the disclosure and
re-disclosure, of “nonpublic personal information” as such term is defined in
the GLBA and the Regulations (“Nonpublic Personal Information”). Without
limiting the foregoing, each Party shall implement and maintain appropriate
administrative, technical and physical safeguards to protect the security,
confidentiality and integrity of all Nonpublic Personal Information received in
connection with the Program.

(b) Each Party shall comply with the privacy policy for the Program as amended
from time to time (the “Privacy Policy”). Bank represents and warrants to
Retailer that the Program Privacy Policy permits Bank to share Cardholder
Information with Retailer and that Retailer may use such information for the
purposes contemplated under this Agreement. Bank further covenants that, except
to the extent required by Applicable Law, it will not change the Privacy Policy
in any way that would restrict or limit the Bank’s ability to share such
information with Retailer.

(c) Each Party shall ensure that any third party to whom Nonpublic Personal
Information is transferred or made available by or on behalf of either Party
signs a written contract with the contracting Party in which such third party
agrees: (i) to restrict its use of Nonpublic Personal Information to the use
specified in the agreement between the Retailer or Bank and the third party
(which use must be in conjunction with the Party’s permitted uses of the
information); (ii) to comply with all Applicable Law, Rules and the Privacy
Policy; and (iii) to

 

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implement and maintain appropriate administrative, technical and physical
safeguards to protect the security, confidentiality and integrity of all
Nonpublic Personal Information as provided with respect to Retailer and Bank in
this Section 7.2. Without limiting the foregoing, in the event the contracting
Party is Retailer, Retailer shall ensure that Nonpublic Personal Information it
receives from Bank under the exception found at Section 502(e)(1)(B) of the GLBA
and accompanying provisions of the Regulations that Bank would not otherwise
have been permitted to provide to Retailer under the GLBA and the Regulations is
used only in connection with the Program and for no other purpose. Additionally,
Retailer shall only transfer or make available to such third party such
Nonpublic Personal Information as is reasonably necessary for the third party to
carry out its contemplated task.

(d) The Parties will use commercially reasonable efforts to use and share
information as broadly as possible to foster their relationships with customers,
Cardholders and Applicants, while respecting and honoring their privacy rights.
Accordingly, notwithstanding the other provisions of this Agreement, a Party
shall not be obligated to take any action that such Party reasonably believes in
good faith would cause, or is reasonably likely to cause, any Party to violate
the Privacy Policy, or the GLBA, the Regulations or any other Applicable Law, or
that would cause any Party or its Affiliates, service providers or agents to
become a “consumer reporting agency” for purposes of the Fair Credit Reporting
Act.

(e) Nothing in this Agreement shall restrict the disclosure by Bank of
information relating to its relationship with a Cardholder to a credit reporting
agency (consistent with Applicable Law). Subject to this Agreement, Bank may
disclose information relating to its relationship with a Cardholder to a Credit
Card processor and Bank or Retailer may disclose such information to any service
provider that requires such information in order to carry out its duties or
permitted activities in relation to the Program; provided, however, that such
Credit Card processor or service provider enters into a written agreement with
the applicable Party in which it agrees to implement and maintain appropriate
administrative, technical and physical safeguards to protect the security,
confidentially and integrity of the information which is disclosed to it and,
provided, further, that the contracting Party shall be responsible for the
functions performed by such Credit Card processor or service provider to the
same extent that the contracting Party would be responsible if it performed such
obligation itself.

(f) Bank and Retailer agree to negotiate in good faith an amendment if
necessary, in the reasonable business judgment of either Bank or Retailer (i) to
the provisions of this Agreement related to the use and disclosure of
information pertaining to Cardholders and Credit Card Applicants, and (ii) to
any other applicable documents such as privacy policies and privacy guidelines,
for the purpose of aligning the privacy policies and practices of Bank and
Retailer, and assuring continued compliance with Applicable Law.

7.2.2 Data Security.

(a) Each Party shall develop, implement and maintain an information security
program that is designed to meet the objectives of the Interagency Guidelines
Establishing Standards for Safeguarding Customer Information. Each Party shall
have the right to request information on the other Party’s security program and
request annual certifications of the other Party that it is in compliance with
this Section 7.2.2(a).

 

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(b) Each Party agrees to use up-to-date antivirus tools designed to remove known
malicious functionalities from any transmitted data and to prevent the
transmission of attacks on the other Party via the network connections between
the Parties and to prevent unauthorized access to the other Party’s Systems.

(c) Each Party agrees that it shall maintain reasonable training programs to
ensure that its employees and any others acting on its behalf are aware of and
adhere to its information security program.

(d) Bank accepts full responsibility for adequately securing any Cardholder
Information and Confidential Information in its possession, and shall hold
Retailer harmless from any breach of such data from Bank’s Systems or any system
of any service provider of Bank. Retailer accepts full responsibility for
adequately securing any Cardholder Information and Confidential Information in
its possession, and shall hold Bank harmless from any breach of such data from
Retailer’s Systems.

7.2.3 Security Breach.

(a) For purposes of this Agreement, a “Breach” with respect to a Party means
(i) any event with respect to such Party that is deemed to be a security breach
or similar event under any Applicable Law, or (ii) any unauthorized access to or
acquisition of, or any loss or misplacement of, either (A) any personally
identifiable information relating to a Cardholder, Applicant or Retailer
Customer, whether in paper, electronic or other form, in the possession of such
Party or its service providers or agents, or (B) any computer or other
electronic or physical storage system of such Person or its service providers or
agents that contains such information, in each case in a manner that renders
misuse of such information reasonably possible. A “Breach” shall not include a
de minimis data security event, and neither Party shall be obligated to perform
the obligations described in this Section 7.2.3 in the event of such de minimis
data security event.

(b) In the event a Party (or one of its agents, subcontractors, or service
providers) suffers or believes a Breach has occurred (the “Breached Party”), the
Breached Party shall immediately, but in no event more than seventy-two
(72) hours, after discovery notify the other Party of any such actual or
believed Breach: (i) to Systems maintained by the Breached Party or its service
providers or agents that contains any Cardholder Information or Retailer
Information, or (ii) with respect to any such Cardholder Information or Retailer
Information in the possession of the Breached Party or its service providers or
agents. The Breached Party shall follow the notification procedures listed in
Schedule 7.2.3.

 

 

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(c) As promptly as possible, but in no event more than [***], after the
discovery of any such actual or believed Breach, provide to the other Party:
(i) an estimate of the data security event’s effect on the other Party; (ii) the
corrective action taken by the Breached Party; and (iii) all available
information regarding such Breach to assist the other Party in implementing its
information security response program. The Breached Party shall follow the
notification procedures listed in Schedule 7.2.3.

(d) In close coordination with the non-Breached Party, the Breached Party agrees
to take action immediately, at its own expense, to investigate the incident and
to identify, prevent and mitigate the effects of the Breach, and to carry out
any recovery necessary to remedy the impact, subject to any delay occasioned by
law enforcement requests. While coordinating closely with the non-Breached
Party, it remains the responsibility of the Breached Party to provide an
appropriate notice to the individuals that are or may be affected if the
Breached Party is required by Applicable Law to provide such notice or the
circumstances of the Breach lead the Breached Party to determine that such
notice is required for business or reputational reasons. If the non-Breached
Party is required under Applicable Law to provide notice to individuals that are
or may be affected, the non-Breached Party may opt to give the actual notice to
the customer, provided that the Breached Party has given its prior written
approval of the form and content of such notice. In such event, the costs of
issuing such notice shall be borne by the Breached Party, and the Breached Party
shall provide additional notice only in consultation with the non-Breached
Party.

7.2.4 Proper Disposal of Records. In connection with any disposal of information
under this Agreement, Retailer and Bank, respectively, shall use reasonable
measures designed to properly dispose of all records containing personally
identifiable information relating to Cardholders, whether in paper, electronic,
or other form, including adhering to policies and procedures that require the
destruction or erasure of electronic media containing such personally
identifiable information so that the information cannot practicably be read or
reconstructed. Upon reasonable notice, a Party shall provide the requesting
party a certification by an officer of compliance with this Section 7.2.4.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

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7.3 Public Announcements.

7.3.1 Neither Party shall make, or cause to be made, any press release or public
announcement in respect of the Program or this Agreement or the transactions
contemplated hereby, or otherwise communicate with any news media regarding the
Program or this Agreement, without the prior written consent of the other Party
(such consent not to be unreasonably withheld) and the Parties shall mutually
agree on the timing and contents of any such press release or public
announcement and prior to issuing any press releases or making any public
announcements concerning this Agreement or the transactions specified herein,
the Parties shall consult and mutually agree as to the substance and timing of
such releases and announcements.

7.3.2 Notwithstanding Section 7.3.1, a Party shall not be required to consult
with or obtain consent from the other Party with regard to (i) press releases
and other announcements as may be required by Applicable Law or the applicable
rules and regulations of any stock exchange, and (ii) publications prepared
solely by and for employees of such Party, or its respective Affiliates, solely
for distribution among employees of such Party and its respective Affiliates;
and if the Parties consult regarding a response to a press inquiry received by
either Party, but are not able to agree upon such response, Retailer may respond
if the inquiry relates to Retailer’s business other than participation in the
Program and Bank may respond if the inquiry relates to Bank’s business, provided
that in either case the Party responding shall do so in its reasonable
discretion after due consideration to considerations raised by the other Party.

SECTION 8. REPRESENTATIONS AND WARRANTIES OF RETAILER

Retailer hereby makes the following representations and warranties to Bank
during the Term, each and all of which shall survive the execution and delivery
of this Agreement, and each and all of which shall be deemed to be restated and
remade on each day on which Accounts are opened, any Transaction Data (or
modifications thereto) are transmitted, or any action taken by Retailer with
respect to the Program:

8.1 Organization and Qualification. Retailer is duly organized, validly existing
and in good standing under the laws of the state of Pennsylvania. Retailer is
duly qualified and in good standing to do business in all jurisdictions where
Retailer is located, except where the failure to so qualify would not have a
material adverse effect on the business of Retailer, or where the failure to so
qualify would not have a material adverse effect on Retailer or Bank’s ability
to continue operation of the Program.

8.2 Corporate Authority.

8.2.1 Corporate Power. Retailer has all necessary corporate power and authority
to enter into this Agreement and to perform all of the obligations to be
performed by it under this Agreement, including to sublicense the Retailer
Marks.

 

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8.2.2 Authorization. This Agreement has been duly authorized by all necessary
corporate proceedings, has been duly executed and delivered by Retailer and is a
valid and legally binding agreement of Retailer duly 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).

8.2.3 Approvals. No consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority having jurisdiction over
Retailer is required for, and the absence of which would adversely affect, the
legal and valid execution and delivery of this Agreement, and the performance of
the transactions contemplated by this Agreement.

8.2.4 No Conflict. The execution and delivery of this Agreement by Retailer
hereunder and the compliance by Retailer with all provisions of this Agreement
shall not: (i) conflict with, result in the breach of, constitute a default
under or accelerate, terminate, modify or cancel or require any notice or
consent under any agreement, contract, lease, license, instrument or other
arrangement to which Retailer or Bank is a party or by which it is bound or to
which any of its assets is subject, except for such violations, conflicts,
breaches, defaults, accelerations, terminations or modifications that would not
have a material adverse effect on its ability to fulfill its obligations under
this Agreement; or (ii) violate the certificate of incorporation, bylaws, or any
other equivalent organizational document of Retailer.

8.3 No Default. Retailer is not in default with respect to any material
contract, agreement, lease or other instrument, including with respect to debt
or securitization arrangements, except for defaults which would not
(individually or in the aggregate) result in a material adverse effect on its
ability to perform its obligations hereunder.

8.4 Litigation. There are no actions, suits or proceedings existing or pending
against or affecting Retailer before any Governmental Authority which would have
a material adverse effect on its ability to perform its obligations hereunder
except for proceedings which it is defending and challenging in good faith and
which it does not reasonably believe shall result in a final order or judgment
materially affecting its ability to perform this Agreement.

8.5 Validity of Charge Slips. As of the date any Transaction Data are presented
to Bank in accordance with the provisions of this Agreement, (a) each Charge
Slip relating to such Transaction Data shall represent the obligation of a
Cardholder in the respective amount set forth therein for Goods or Services sold
or rendered, together with applicable taxes, if any, and shall not involve any
element of credit for any other purpose, and (b) Retailer has no knowledge or
notice of any fact or matter which would immediately or ultimately impair the
validity of any Charge Slip relating to such Transaction Data, the transaction
evidenced thereby, or its collectability.

8.6 Compliance with Law. Any action or inaction taken by Retailer, Retailer
employees and Retailer Locations (where Retailer, Retailer employees or Retailer
Locations have a duty to act) in connection with the Program, Bank, and the
sales of Goods and/or Services shall be in compliance with all Applicable Law,
except where the failure to so comply does not or will not have an adverse
effect on Retailer, Bank or the Program.

 

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8.7 Retailer Marks. Retailer has the legal right to use and to permit Bank to
use, to the extent set forth herein, Retailer Marks.

8.8 Intellectual Property Rights. In the event Retailer provides any software or
hardware to Bank, Retailer has the legal right to such software or hardware and
the right to permit Bank to use such software or hardware, and such use shall
not violate any intellectual property rights of any third party.

8.9 Sharing of Customer Information. Nothing in Retailer’s current policies and
procedures restrict Retailer from entering into the covenants contained in this
Agreement that relate to the sharing of Retailer Customer Information.

8.10 Accuracy of Information. All factual information furnished by Retailer to
Bank in writing at any time pursuant to any requirement of, or furnished in
response to any written request of Bank under this Agreement or any transaction
contemplated hereby has been, and all such factual information hereafter
furnished by Retailer to Bank shall be, to Retailer’ best knowledge and belief,
true, accurate and complete in every respect material on the date as of which
such information has or will be provided.

8.11 No Reliance. Retailer acknowledges and agrees that Bank has not made, and
Retailer is not relying on any representation or warranty, express or implied,
with respect to the subject matter hereof, except as expressly set forth in this
Agreement.

SECTION 9. COVENANTS OF RETAILER

Retailer hereby covenants and agrees with Bank as follows:

9.1 Notices of Changes. Retailer shall as soon as reasonably possible notify
Bank of any: (a) change in the name or form of business organization of
Retailer, change in the location of its chief executive office or the location
of the office where its records concerning the Program are kept; and (b) merger
or consolidation of Retailer or the sale of a significant portion of its stock
or of any substantial amount of its assets not in the ordinary course of
business. Retailer shall furnish such additional information with respect to any
of the foregoing as Bank may reasonably request for the purpose of evaluating
the effect of such transaction on the financial condition and operations of
Retailer and on the Program.

9.2 Retailer Locations. Retailer shall cause all employees and independent
contractors of Retailer and all Retailer Channels to comply with the
obligations, restrictions and limitations of this Agreement as such are
applicable at the Point of Sale of Goods and/or Services.

9.3 Retailer’s Business. Retailer shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
in order to conduct its business.

 

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9.4 Insurance. Retailer shall maintain insurance policies with insurers and in
such amounts and against such types of loss and damage as are customarily
maintained by other companies within Retailer industry engaged in similar
businesses as Retailer, which may include reasonable self-insured retention
limits.

9.5 True and Correct Information. Retailer covenants that all information
furnished by it to Bank for purposes of or in connection with this Agreement is
true and correct in all material respects and no such information omits to state
a material fact necessary to make the information so furnished not misleading.
Except as disclosed to Bank, there is no fact known to Retailer (including
threatened or pending litigation) that could materially and adversely affect the
financial condition, business, property, or prospects of Retailer.

9.6 Books and Records. Retailer covenants that it shall keep, or cause to be
kept, and shall maintain for twenty-four (24) months prior to archiving, proper
records, files and books of account in which full, true and correct entries
shall be made of all Retailer’s dealings and transactions in relation to the
Accounts and the Program.

9.7 Cooperation. Retailer covenants that it shall use commercially reasonable
efforts to cooperate with Bank in the operation of the Program and its
obligations under this Agreement, including in respect of the settlement of
disputes with Cardholders.

9.8 Affiliates. Retailer shall cause each of its Affiliates to perform its
respective obligations under this Agreement.

SECTION 10. REPRESENTATIONS AND WARRANTIES OF BANK

Bank hereby makes the following representations and warranties to Retailer
during the Term, each and all of which shall survive the execution and delivery
of this Agreement, and each and all of which shall be deemed to be restated and
remade on each day on which Accounts are opened, any Transaction Data (or
modifications thereto) are transmitted, or any action taken by Bank with respect
to the Program:

10.1 Organization and Qualification. Bank is a state bank duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Bank is duly qualified and in good standing to do business in all jurisdictions
where such qualification is necessary for Bank to carry out its obligations
under this Agreement.

10.2 Corporate Authority.

10.2.1 Corporate Power. Bank has all necessary corporate power and authority to
enter into this Agreement and to perform all of the obligations to be performed
by it under this Agreement.

10.2.2 Authorization. This Agreement has been duly authorized by all necessary
proceedings, has been duly executed and delivered by Bank and is a valid and
legally binding agreement of Bank duly 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).

 

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10.2.3 Approvals. No consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority having jurisdiction over
Bank is required for, and the absence of which would materially adversely
affect, the legal and valid execution and delivery of this Agreement, and the
performance of the transactions contemplated by this Agreement.

10.2.4 No Conflicts. The execution and delivery of this Agreement by Bank
hereunder and the compliance by Bank with all provisions of this Agreement shall
not: (i) conflict with, result in the breach of, constitute a default under or
accelerate, terminate, modify or cancel or require any notice or consent under
any agreement, contract, lease, license, instrument or other arrangement to
which Bank is a party or by which it is bound or to which any of its assets is
subject, except for such violations, conflicts, breaches, defaults,
accelerations, terminations or modifications that would not have a material
adverse effect on its ability to fulfill its obligations under this Agreement;
or (ii) violate the charter, bylaws, or any other equivalent organizational
document of Bank.

10.3 Accuracy of Information. All factual information furnished by Bank to
Retailer in writing at any time pursuant to any requirement of, or furnished in
response to any written request of Retailer under this Agreement or any
transaction contemplated hereby has been, and all such factual information
hereafter furnished by Bank to Retailer shall be, to Bank’s best knowledge and
belief, true, accurate and complete in every respect material on the date as of
which such information has or will be provided.

10.4 No Default. Bank is not in default with respect to any material contract,
agreement, lease or other instrument, including with respect to debt or
securitization arrangements, except for defaults which would not (individually
or in the aggregate) result in a material adverse effect on its ability to
perform its obligations hereunder.

10.5 Litigation. There are no actions, suits or proceedings existing or pending
against or affecting Bank before any Governmental Authority which would have a
material adverse effect on its ability to perform its obligations hereunder
except for proceedings which it is defending and challenging in good faith and
which it does not reasonably believe shall result in a final order or judgment
materially affecting its ability to perform this Agreement.

10.6 Compliance with Law. Any action or inaction taken by Bank (where Bank has a
duty to act) in connection with the Program shall be in compliance with all
Applicable Law except where the failure to so comply does not or will not have
an adverse effect on Bank, Retailer or the Program.

10.7 Bank Marks. Bank has the legal right to use and to permit Retailer to use,
to the extent set forth herein, the Bank Marks.

10.8 Intellectual Property Rights. In the event Bank provides any software or
hardware to Retailer, Bank has the legal right to such software or hardware and
the right to permit Retailer to use such software or hardware, and such use
shall not violate any intellectual property rights of any third party.

 

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10.9 Sharing of Cardholder Information. Nothing in Bank’s current policies and
procedures restrict Bank from entering into the covenants contained in this
Agreement that relate to the sharing of Bank Cardholder Information.

10.10 No Reliance. Bank acknowledges and agrees that Retailer has not made, and
Bank is not relying on, any representation or warranty, express or implied, with
respect to the subject matter hereof, except as expressly set forth in this
Agreement.

SECTION 11. COVENANTS OF BANK

Bank hereby covenants and agrees with Retailer as follows:

11.1 Notices of Changes. Bank shall as soon as reasonably possible notify
Retailer of any: (a) change in the name or form of business organization of
Bank, change in the location of its chief executive office or the location of
the office where its records concerning the Program are kept; and (b) merger or
consolidation of Bank or the sale of a significant portion of its stock or of
any substantial amount of its assets not in the ordinary course of business.
Bank shall furnish such additional information with respect to any of the
foregoing as Retailer may request for the purpose of evaluating the effect of
such transaction on the financial condition and operations of Bank and on the
Program.

11.2 Bank’s Business. Bank shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence in order to
conduct its business.

11.3 Insurance. Bank shall maintain insurance policies with insurers and in such
amounts and against such types of loss and damage as are customarily maintained
by other banks engaged in similar businesses as Bank, which may include
reasonable self-insured retention limits.

11.4 True and Correct Information. Bank covenants that all information furnished
by Bank to Retailer for purposes of or in connection with this Agreement is true
and correct in all material respects and no such information omits to state a
material fact necessary to make the information so furnished not misleading.
Except as disclosed to Retailer, there is no fact known to Bank (including
threatened or pending litigation) that could materially and adversely affect the
financial condition, business, property, or prospects of Bank.

11.5 Books and Records. Bank covenants that it shall keep, or cause to be kept,
and shall maintain for twenty-four (24) months prior to archiving, proper
records, files and books of account in which full, true and correct entries
shall be made of all dealings and transactions in relation to the Accounts and
the Program.

11.6 Cooperation. Bank covenants that it shall use commercially reasonable
efforts to cooperate with Retailer in the operation of the Program and its
obligations under the Agreement, including in respect of the settlement of
disputes with Cardholders.

 

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11.7 Securitization.

11.7.1 Bank’s Right to Securitize. Subject to the provisions of this
Section 11.7, Bank shall have the right to securitize, pledge or participate the
Accounts Receivables or any part thereof by itself or as part of a larger
offering at any time. Such securitization, pledge or participation shall not
affect Retailer’s rights or Bank’s obligations hereunder. Bank shall not
securitize, pledge or participate the Accounts Receivables in any manner that
will encumber any of Retailer’s rights hereunder to purchase the Portfolio.
Notwithstanding anything herein to the contrary, Bank may, at any time and from
time to time, sell any of the Accounts Receivables pursuant to a securitization
of such receivables. Nothing contained herein shall be deemed to require the
prior written approval of Retailer in connection with any such securitization
transaction. In connection with a securitization of the Accounts Receivables,
Retailer agrees to provide Bank with such information and to execute and deliver
such documents as may reasonably be requested by Bank with respect to any such
securitization transaction in order to facilitate compliance by Bank with
Applicable Law.

11.7.2 Limitations. Notwithstanding the foregoing, (i) Bank shall not purport to
grant any rights under this Agreement to a third party in connection with any
such securitization, nor shall any third party have any recourse against
Retailer with respect to any such securitization transaction, (ii) Bank shall
securitize only on terms and conditions that permit such arrangements to be
unwound or that allow removal or substitution of Portfolio assets in the event
that Retailer purchases the Portfolio pursuant to the terms hereof or in the
event Bank’s securitization arrangements are terminated for any reason, and
(iii) neither Bank nor any Person who is a party to such securitization,
participation, or other financing arrangement involving Accounts Receivable or
any legal or beneficial interest therein shall have the right to use the
Retailer Marks or otherwise refer to Retailer or its Affiliates in connection
with any securitization, participation, or financing in any disclosure material
other than in accordance with traditional and customary standards, or as
required or advisable under Applicable Law. Retailer agrees that Bank shall have
ninety (90) days from Retailer’s notice that it will exercise its purchase
option to unwind a securitization in accordance with the foregoing clause (ii).

11.8 Affiliates. Bank shall cause each of its Affiliates to perform its
respective obligations under this Agreement.

SECTION 12. AUDIT RIGHTS

12.1 Audit. No more than once a year, or at any time there is a Dispute between
the Parties as to monies owed hereunder by either Party to the other, or in the
event of a security breach, upon reasonable prior notice to the other Party,
each Party shall have the right to conduct, or at the request of the Party to be
audited, select a third party reasonably acceptable to the other Party to
conduct audits of the other Party’s records, files and books of account
(including nonfinancial information) that relate to any calculation to be made
pursuant to the terms of this Agreement. Such audit shall be at the auditing
Party’s sole cost and expense, conducted during normal business hours with an
employee of the audited Party present and shall minimize interference with the
audited Party’s normal business operations. In addition, Retailer shall permit
regulatory bodies having jurisdiction over Bank to visit Retailer’s facilities
related to the Program during normal business hours with prior written advance
notice.

 

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12.2 Limitations. Notwithstanding the foregoing audit rights, a Party shall not
be required to provide access to records to the extent that: (a) such access is
prohibited by Applicable Law; (b) such records are legally privileged; (c) such
records are company planning documents of such Party or any of its Affiliates,
operating budgets, management reviews or employee records; or (d) such records
relate to other customers or operations of such Party other than the Program or
to personnel records not normally disclosed in connection with audits.

12.3 SSAE-16 Reports. In the event Bank undertakes any SSAE-16 audit, Bank shall
provide Retailer copies of such audit reports within thirty (30) days of the
issuance of the report.

SECTION 13. INDEMNIFICATION

13.1 Indemnification by Retailer. Retailer agrees to protect, indemnify, defend
and hold harmless Bank, its Affiliates, and the shareholders, employees,
officers, and directors of each of Bank and its Affiliates, from and against any
and all Indemnified Losses, to the extent such Indemnified Losses arise out of,
are connected with, or result from:

13.1.1 Bank’s commercially reasonable acts or omission to act consistent with
Retailer’s written instructions;

13.1.2 any false or misleading representation by Retailer to a Cardholder or
Applicant for a Credit Card (other than at the direction of Bank) relating to an
Account;

13.1.3 any breach by Retailer of any of the terms, covenants, representations,
warranties, or other provisions contained in this Agreement or any other
instrument or document delivered by Retailer to Bank in connection herewith or
therewith.

13.1.4 other than at the written direction of Bank, the failure by Retailer to
comply with Applicable Law in connection with its obligations under this
Agreement;

13.1.5 any and all advertising, promotions and marketing programs, documents or
materials conducted by or on behalf of Retailer (including Inserts), other than
references to or descriptions of the Program, including its terms and
conditions, which have been approved in writing by Bank prior to their use;

13.1.6 any other act, or omission where there was a duty to act, by Retailer or
its employees, officers, directors, shareholders, agents or licensees or any
independent contractors hired by Retailer relating to an Account, a Cardholder,
an Applicant or Accounts Receivable;

13.1.7 infringement of the intellectual property of a third party by the
Retailer Technology, Retailer Owned Modifications, and any Retailer Created
Technology;

 

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13.1.8 the operation of a Second Look Program by a Person other than Bank,
excluding any breach by Bank of its obligations under this Agreement in
connection with such Second Look Program;

13.1.9 Bank’s use of the Retailer Marks in accordance with the terms of this
Agreement;

13.1.10 any and all Claims relating to Goods and/or Services; or

13.1.11 any administration of, or work or services performed on, any Retailer
Website on behalf of Retailer;

13.1.12 provided, however, that in no event shall Retailer be obligated to
indemnify Bank under this Section 13.1 against any Indemnified Losses to the
extent such Indemnified Losses result from (a) the willful or negligent acts or
omissions of Bank, (b) any violation by Bank of any term of any Credit Card
Agreement or any other agreement, understanding, or representation between Bank
and any Cardholder relating to such Cardholder’s Account, or (c) Bank’s failure
to comply with Applicable Law to the extent required by this Agreement in
operation of the Program.

13.2 Indemnification by Bank. Bank agrees to protect, indemnify, defend and hold
harmless Retailer and its shareholders, employees, officers, and directors, from
and against any and all Indemnified Losses to the extent such Indemnified Losses
arise out of, are connected with, or result from:

13.2.1 Retailer’s commercially reasonable acts or omission to act consistent
with Bank’s written instructions;

13.2.2 Bank’s failure of any of its compliance obligations under this Agreement,
(b) the failure by Bank to comply with its obligations under this Agreement with
respect to the Credit Cards, Credit Card Applications and Credit Card
Agreements; and (c) any credit or other products and services, including any
documentation related thereto (other than those related to the Program), offered
or sold by Bank, or its agents and independent contractors, to Cardholders;

13.2.3 any transaction, contract, understanding, promise, representation or
relationship, actual, asserted, or alleged, between Bank and any Cardholder
relating to an Account (other than for the sale of Goods and/or Services);

13.2.4 any and all descriptions of the Program, including its terms and
conditions, in any advertising, promotions and marketing programs, documents or
materials relating to the Program that have been approved in writing by Bank
prior to their use;

13.2.5 any administration of, or work or services performed on, any Bank
webpage;

 

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13.2.6 any breach by Bank of any of the terms, covenants, representations,
warranties or other provisions contained in this Agreement or any other
instrument or document delivered by Bank to Retailer in connection herewith or
therewith.

13.2.7 any other act, or omission where there was a duty to act, by Bank or its
employees, officers, directors, shareholders, agents or licensees or any
independent contractors hired by Bank relating to an Account, a Cardholder, an
Applicant or Accounts Receivable;

13.2.8 the failure of Bank to comply with Applicable Law in connection with the
Program or the matters contemplated by this Agreement;

13.2.9 infringement of the Intellectual Property of a third party by the Bank
Technology, Bank Owned Modifications, and any Bank Created Technology; or

13.2.10 account collections or Bank’s collection procedures; provided, however,
that in no event shall Bank be obligated to indemnify Retailer under this
Section 13.2 against any Indemnified Losses to the extent such Indemnified
Losses result from (a) the willful or negligent acts or omissions of Retailer,
(b) the operation of a Second Look Program by a Person other than Bank, or
(c) Retailer’s failure to comply with Applicable Law to the extent required by
this Agreement in operation of the Program.

13.3 Notice. If a Party receives notice of any Claim for which indemnification
may be available under this Agreement (the “Indemnified Party”), the Indemnified
Party must promptly notify the other Party (the “Indemnifying Party”) in writing
of the Claim, including, if possible, the amount or estimate of the amount of
liability arising from it. The Indemnified Party shall use its commercially
reasonable efforts to provide notice to the Indemnifying Party no later than
fifteen (15) days after receipt by the Indemnified Party in the event a suit or
action has commenced, or thirty (30) days under all other circumstances;
provided, however, that the failure to give such 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.

13.4 Right to Defend Claims; Coordination of Defense. The Indemnifying Party
shall have the right to defend any such Claim at its expense and in the name of
the Indemnified Party, and shall select the counsel for the defense of such
Claim as approved by the Indemnified Party, such approval not to be unreasonably
withheld, conditioned or delayed, and shall reasonably cooperate with the
Indemnified Party in the conduct of the defense against such Claim.
Notwithstanding the foregoing, the Indemnifying Party shall not have the right
to defend any such Claim if: (a) it refuses to acknowledge fully its obligations
to the Indemnified Party (but only as to the obligations specific to the
Indemnifying Party in the event a Claim gives rise to indemnification
obligations of more than one Party); (b) it contests (in whole or in part), its
indemnification obligations (but only as to the obligations specific to the
Indemnifying Party in the event a Claim gives rise to indemnification
obligations of more than one (1) Party); (c) it fails to employ appropriate
counsel approved by the Indemnified Party to assume the defense of such Claim or
refuses to replace such counsel upon the Indemnified Party’s reasonable request,
as provided for herein; (d) the Indemnified Party reasonably determines that
there are issues which could raise possible conflicts of interest between the
Indemnifying Party and the Indemnified

 

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Party or that the Indemnified Party has claims or defenses that are separate
from or in addition to the claims or defenses of the Indemnifying Party; or
(e) such Claim seeks an injunction, cease and desist order, or other equitable
relief against the Indemnified Party. In each such case described in clauses
(a) – (e) above, the Indemnified Party shall have the right to direct the
defense of the Claim and retain its own counsel, and the Indemnifying Party
shall pay the cost of such defense, including reasonable attorneys’ fees and
expenses. The Parties agree to cooperate in good faith to coordinate the defense
of any Claim that may give rise to indemnification obligations of more than one
(1) Party or that may include allegations that are not subject to
indemnification.

13.5 Indemnifying Party Election. If the Indemnifying Party elects and is
entitled to compromise or defend such Claim, it shall within thirty (30) days
(or sooner, if the nature of the Claim so requires) notify the Indemnified Party
of its intent to do so, and the Indemnified Party shall, at the expense of the
Indemnifying Party, reasonably cooperate in the defense of such Claim. In such
case, the Indemnified Party shall have the right to participate in the defense
of any Claim with counsel selected by it. Except as provided in Section 13.4,
the fees and disbursements of such counsel shall be at the expense of the
Indemnified Party.

13.6 Settlement of Claims. The Indemnifying Party shall have no obligation to
pay the monetary amount of the settlement of any claim entered into by the
Indemnified Party without the prior written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld or delayed). Notwithstanding
the Indemnifying Party’s right to direct the defense against any Claim, the
Indemnifying Party shall not have the right to compromise or enter into an
agreement settling any Claim without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld or delayed)
which imposes liability or obligations on the Indemnified Party without the
prior written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed) and shall not compromise or enter into an
agreement settling any Claim, which does not impose liability or obligations,
without prior written notice to, and consultation with, the Indemnified Party.
Notwithstanding the foregoing, the Indemnifying Party may, upon prior written
notice to and consultation with, the Indemnified Party, compromise or enter into
a settlement agreement that involves solely the payment of money by the
Indemnifying Party, provided such settlement includes a complete, unconditional,
irrevocable release of the Indemnified Party with respect to such Claim and such
settlement is not likely to establish a precedential custom or practice adverse
to the continuing business interests of the Indemnified Party.

13.7 Subrogation. The Indemnifying Party shall be subrogated to any Claims or
rights of the Indemnified Party as against any other Persons with respect to any
amount paid to the Indemnifying Party under this Section 13. The Indemnified
Party shall reasonably 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.

13.8 Indemnification Payments. Amounts owing under this Section 13 shall be paid
promptly upon written demand for indemnification containing in reasonable detail
the facts giving rise to such liability.

 

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13.9 Limitation on Indemnified Losses and Damages. A Party shall not be liable
to the other Party under or in connection with this Agreement or the Program for
any liquidated, special, consequential, punitive and exemplary damages;
provided, however, this Section13.9 shall not apply to any Indemnified Losses or
damages arising out of (i) a knowing and intentional breach of this Agreement
due to the actions (or inactions) of the senior management of a Party; (ii) the
gross negligent actions (or inactions) of a Party; (iii) the failure of a Party
to comply with Section 4.8 [Use of Cardholder Information], Section 7.1
[Confidentiality], Section 7.2 [Privacy and Data Security] or a Party’s misuse
of the other Party’s Marks; or (iv) third party damages claims to the extent
such third party claims otherwise fall under a Party’s indemnity obligations
hereunder.

SECTION 14. TERM AND TERMINATION

14.1 Term. The Term of this Agreement shall be as set forth on Schedule 14.1.

14.2 Termination with Cause by Bank; Bank Termination Events. Each of the
following conditions or events shall constitute a “Bank Termination Event,”
pursuant to which Bank may terminate this Agreement by providing Retailer
written notice of its intent to terminate the Agreement as provided herein.

14.2.1 Insolvency; Financial Condition.

(a) If Retailer shall: (i) file, or consent by answer or otherwise to the filing
against it, of a petition for relief, reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction; (ii) make an assignment for the benefit
of its creditors; (iii) consent to the appointment of a custodian, receiver,
trustee or other officer with similar powers of itself or of any substantial
part of its property; (iv) be adjudicated insolvent or be liquidated; (v) take
corporate action for the purpose of any of the foregoing and such event shall
materially adversely affect the ability of Retailer to perform under this
Agreement or the Program; or (vi) receive an adverse opinion by its auditors or
accountants as to its viability as a going concern. Upon the occurrence of such
an event, Bank shall have the right to terminate this Agreement by providing
written notice to Retailer of its intent to terminate; provided, however, that
any such notice must be delivered within ninety (90) days after Bank becomes
aware of such event. This Agreement shall terminate upon one hundred and eighty
(180) days after delivery of Bank’s termination notice.

(b) Notwithstanding anything in Section 14.2.1(a) to the contrary, no
termination shall occur, as long as Retailer continues to be: (a) engaging in
its ordinary course of business in at least seventy percent (70%) of Retailer
Locations, including in the case of any Chapter 11 bankruptcy through
debtor-in-possession operations permitted by Applicable Law; (b) not in material
default of any of its other material obligations under this Agreement beyond any
applicable cure period, exclusive of defaults excused by 11 U.S.C. § 365(e)(1);
and (c) has reasonably sufficient financing or operating capital to continue
such ordinary course operations in at least seventy percent (70%) of Retailer
Locations for the next calendar month, including in the event of any Chapter 11
bankruptcy through debtor-in-possession financing pursuant to 11 U.S.C. § 364.
In the event of any involuntary bankruptcy case against Retailer, termination

 

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shall be deferred for a reasonable period either (i) not to exceed sixty
(60) days while Retailer is diligently disputing the involuntary bankruptcy
petitions, or (ii) not to exceed ten (10) days while Retailer is arranging to
convert that involuntary case to a voluntary Chapter 11 case in which Retailer
would be entitled to continue the Agreement as described above.

14.2.2 Breach. If Retailer shall materially default in the performance of or
compliance with any term or materially violates any of the covenants,
representations, warranties or agreements contained in this Agreement and
Retailer shall not have remedied such default within thirty (30) days after
written notice thereof from Bank. Upon the occurrence of such an event, Bank
shall have the right to terminate this Agreement by providing written notice to
Retailer of its intent to terminate. This Agreement shall terminate upon sixty
(60) days after delivery of Bank’s termination notice. In the event that this
Agreement terminates pursuant to this Section 14.2.2, Retailer shall reimburse
Bank the unamortized portion of the Signing Bonus in accordance with
Schedule 6.6.6, Paragraph 2.

14.2.3 Additional Bank Termination Event. Bank shall have the right to terminate
this Agreement as described in Schedule 14.2.3.

14.3 Termination with Cause by Retailer; Retailer Termination Events. Each of
the following conditions or events shall constitute a “Retailer Termination
Event” hereunder, and Retailer may terminate this Agreement by providing Bank
written notice of its intent to terminate as provided herein.

14.3.1 Adequate Capitalization. Retailer shall have the right to terminate this
Agreement upon not less than sixty (60) days’ prior written notice if Bank shall
fail to be at least “adequately capitalized,” as that term (or any replacement
term therefore) is defined from time to time in regulations applicable to Bank’s
capital, and Bank’s failure to be “adequately capitalized” is not cured by the
end of the next Fiscal Quarter after the quarterly date Bank is determined to
have failed to meet such requirement.

14.3.2 Insolvency; Financial Condition.

(a) If Bank shall: (i) file or consent by answer or otherwise to the filing
against it, of a petition for relief, reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction; (ii) make an assignment for the benefit
of its creditors; (iii) consent to the appointment of a custodian, receiver,
trustee or other officer with similar powers for itself or of any substantial
part of its property; (iv) be adjudicated insolvent or be liquidated; (v) take
corporate action for the purpose of any of the foregoing and such event shall
materially adversely affect the ability of Bank to perform under this Agreement
or the operation of the Program; or (vi) receive an adverse opinion by its
auditors or accountants as to its viability as a going concern. Upon the
occurrence of such an event, Retailer shall have the right to terminate this
Agreement by providing written notice to Bank of its intent to terminate;
provided, however, that any such notice must be delivered within ninety
(90) days after Retailer becomes aware of such event. This Agreement shall
terminate upon one hundred and eighty (180) days after delivery of Retailer’s
termination notice.

 

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(b) Notwithstanding anything in Section 14.3.2(a) to the contrary, no
termination shall occur, as long as Bank continues to be: (a) engaging in its
ordinary course of business, including in the case of any Chapter 11 bankruptcy
through debtor-in-possession operations permitted by Applicable Law; (b) not in
material default of any of its other material obligations under this Agreement
beyond any applicable cure period, exclusive of defaults excused by 11 U.S.C.
§ 365(e)(1); and (c) has reasonably sufficient financing or operating capital to
continue such ordinary course operations for the next calendar month, including
in the event of any Chapter 11 bankruptcy through debtor-in-possession financing
pursuant to 11 U.S.C. § 364. In the event of any involuntary bankruptcy case
against Bank, termination shall be deferred for a reasonable period either
(i) not to exceed sixty (60) days while Bank is diligently disputing the
involuntary bankruptcy petitions, or (ii) not to exceed ten (10) days while Bank
is arranging to convert that involuntary case to a voluntary Chapter 11 case in
which Bank would be entitled to continue the Agreement as described above.

14.3.3 Breach. Except with respect to the Service Standards and failure to pay
Retailer in conformance with Section 6.6, if Bank shall materially default in
the performance of or compliance with any term or materially violates any of the
covenants, representations, warranties or agreements contained in this Agreement
and Bank shall not have remedied such default within thirty (30) days after
written notice of the default thereof shall have been received by Bank from
Retailer. Upon the occurrence of such an event, Retailer shall have the right to
terminate this Agreement by providing written notice to Retailer of its intent
to terminate. This Agreement shall terminate upon one hundred eighty (180) days
after delivery of Retailer’s termination notice.

14.3.4 Service Level Standards Default. Retailer shall have the right to
terminate as set forth in Schedule 4.9.3. This Agreement shall terminate upon
one hundred and eighty (180) days after delivery of Retailer’s termination
notice.

14.3.5 Bank Payments. If Bank fails to pay Retailer in full as required under
Section 6.6, other than payments Disputed by Bank in good faith, or Bank
repeatedly fails to make timely payment as set forth in Section 6.6, then within
ten (10) days after receipt of written notice of such default. Upon the
occurrence of such an event, Retailer shall have the right to terminate this
Agreement by providing written notice to Bank of its intent to terminate. This
Agreement shall terminate upon a time period determined by Retailer, in its sole
discretion. Notwithstanding the foregoing, in the event that Bank fails to pay
Retailer in full within the time periods set out in Section 6.6, Retailer may
immediately, without being in default of this Agreement or causing a Bank
Termination Event, suspend performance of any of its duties under this Agreement
in whole or in part. By means of illustration, if Bank fails to pay Retailer in
full for customer transactions according to the time such payment is due under
Section 6.6, Retailer may immediately cease to honor the Credit Card for some or
all transactions at any or all Retailer Locations during the ten (10) day cure
period.

14.3.6 Change in Credit Policy or Account Underwriting Criteria. Retailer shall
have the right to terminate this Agreement as set forth in Schedule 4.3.1. This
Agreement shall terminate upon one hundred and eighty (180) days after delivery
of Retailer’s termination notice, as set forth in Schedule 4.3.1.

 

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14.3.7 Additional Retailer Termination Events. Retailer shall have the rights to
terminate this Agreement as described in Schedule 14.3.7.

14.4 Force Majeure Event. Either Bank or Retailer shall have the right to
terminate the Agreement upon fifteen (15) days written notice to the other
Party, if the performance by the other Party of its obligations under this
Agreement is prevented or materially impeded, without ability to cure, for a
period of not less than sixty (60) consecutive days by a Force Majeure Event.

SECTION 15. EFFECTS OF TERMINATION

15.1 General Effects.

15.1.1 Rights of the Parties. Upon termination of this Agreement, the Parties
shall have any rights or remedies available to such Party under this Agreement
or in law or equity.

15.1.2 Effective Termination Date. The effective termination date of this
Agreement (the “Termination Date”) shall be the later of the closing date for a
purchase as set forth in Schedule 15.4.2 (“Repurchase Closing Date”) or:

(a) in the event a notice of termination is delivered pursuant to Schedule 14.1,
the expiration date of the Initial Term or Renewal Term, as applicable; and

(b) in the event a notice of termination is delivered pursuant to Sections 14.2
or 14.3, the date specified in such notice in accordance with this Agreement.

15.2 Bank Payment Obligations. Other than payments incurred prior to the
Termination Date that may be paid by Bank after the Termination Date, Bank’s
obligations to pay Retailer amounts due after the Termination Date shall cease
upon the Termination Date.

15.3 Continuing Performance. Except as otherwise expressly provided in this
Agreement, Bank and Retailer shall perform their respective obligations under
this Agreement through the Termination Date. Without limiting the generality of
the foregoing, during the period between the issuance of a notice of termination
and the Termination Date: (a) Bank shall continue to offer new Accounts but
neither Retailer nor Bank shall solicit any Cardholders, as such, or any
individual on the Cardholder List, as such, for any credit card (other than a
Credit Card) to replace a Credit Card; provided, however, that nothing in this
Section 15.3 shall be deemed to prohibit or otherwise preclude Retailer or Bank
from conducting general solicitations irrespective of whether such general
solicitations may include Cardholders or any individual on the Cardholder List,
so long as the fact that any such included Persons are Cardholders or on the
Cardholder List shall not be a criteria for inclusion in such general
solicitations; (b) Bank shall continue to pay Retailer all Net Proceeds as
provided in Section 6.6; and (c) Retailer and Bank shall mutually agree on all
Customer communications relating to termination of this Agreement; provided,
however, that Retailer may not withhold its consent from any communications that
Bank may be required by Applicable Law to make to Cardholders.

 

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15.4 Retailer Account Purchase.

15.4.1 Provision of Program Data. Upon the issuance of a notice of termination
or non-renewal, Retailer may request and Bank shall disclose to Retailer, or any
Person designated by Retailer, information that is reasonably necessary for
Retailer or Retailer’s designee to value the Portfolio. Such information shall
include, at a minimum, customary Account level and portfolio-level profitability
and segmentation information as set forth on Schedule 15.4.1 (“Program Data”),
to be updated on a quarterly basis at Retailer’s request. Bank shall be
obligated to provide Program Data within thirty (30) days of Retailer’s request
during the twelve (12) month period prior to the end of the Initial Term, at any
time thereafter, or at any time should a right to terminate the Agreement arise
for either Party.

15.4.2 Option to Purchase. Upon the delivery of any notice of termination by
either Party, Retailer shall have the option to purchase, or designate a third
party to purchase, the Portfolio. The terms and conditions of such purchase are
set forth on Schedule 15.4.2.

15.5 Treatment of Portfolio Assets if Retailer Does Not Exercise Purchase
Option. In the event Retailer does not exercise its Purchase Option or Retailer
fails to close a Portfolio sale:

15.5.1 Bank shall have the option to:

(a) Liquidate the Accounts;

(b) Rebrand the Accounts and associated Accounts Receivables, provided, however,
that Bank shall not rebrand the Accounts for the benefit of a restricted card
program as set forth in Schedule 15.5.1(b) (“Restricted Card Program”) nor shall
any such Accounts be rebranded in a confusingly similar manner to the Credit
Cards;

(c) Sell the Accounts and associated Accounts Receivables provided that they are
not sold to or for the benefit of a Restricted Card Program; or

(d) Any combination of Sections 15.5.1(a), (b) and (c).

15.5.2 Bank shall be required to destroy Retailer Customer information,
including Customer Lists provided by or on behalf of Retailer or compiled by
Bank throughout the Term, and shall not use Retailer’s Confidential Information
for any purposes except as required by Applicable Law.

15.5.3 Subject to Applicable Law, Retailer shall be required to destroy Bank’s
Confidential Information and shall not use Bank’s Confidential Information for
any purpose.

15.6 Use of Retailer Marks. Following the Termination Date or the Repurchase
Closing Date, as applicable, Bank shall cease to use the Retailer Marks and
shall substitute or cancel the Credit Cards, and shall not claim any right,
title, or interest in or to the Retailer Marks granted pursuant to this
Agreement; provided, however, Bank shall be permitted to use the Retailer Marks,
subject to the following proviso, for a period of ninety (90) days following the
Termination Date or the Repurchase Closing Date, as applicable; provided,
further, that Bank may use the Retailer name solely as necessary to administer
and collect the balances due on such Accounts for so long as such balances
remain outstanding.

 

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15.6.1 No Program Marketing. After the Termination Date, Bank shall not market
the Program; provided, however, that Bank shall conclude any solicitation that
is required by Applicable Law.

15.6.2 Retailer Rights. After the Termination Date, Retailer shall be free to
issue, by itself or through third parties, credit cards, including credit cards
bearing Retailer Marks.

SECTION 16. MISCELLANEOUS

16.1 Entire Agreement. This Agreement constitutes the entire Agreement and
supersedes all prior agreements and understandings, whether oral or written,
among the parties hereto with respect to the subject matter hereof and merges
all prior discussions between them.

16.2 Amendment. Except as otherwise provided for in this Agreement, the
provisions herein may be modified only upon the mutual agreement of the parties,
however, no such modification shall be effective until reduced to writing and
executed by both parties.

16.3 Successors and Assigns. This Agreement and all obligations and rights
arising hereunder shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors, transferees and assigns. Either Party
may assign its rights and obligations under this Agreement. In the event that
Retailer sells, transfers or otherwise disposes to an unaffiliated third party
all or substantially all the assets of The Bon-Ton Stores, Inc., The Bon-Ton
Department Stores, Inc., Bon-Ton Distribution, Inc., The Bon-Ton Stores of
Lancaster, Inc., The Elder-Beerman Stores Corp., CarsonPirie Scott II Inc., and
McRIL, LLC, the purchaser in such transaction is a successor, transferee and/or
assignee of Retailer (the defined party to this Agreement), and the terms of
this Agreement shall be binding upon such purchaser (regardless of whether or
not such Person is a parent, Affiliate, or party with some other relationship of
the kind with Retailer, and regardless of under what name the business is
conducted).

16.4 Waiver. No waiver of the provisions hereof shall be effective unless in
writing and signed by the party to be charged with such waiver. No waiver shall
be deemed to be a continuing waiver in respect of any subsequent breach or
default either of similar or different nature unless expressly so stated in
writing. No failure or delay on the part of either party in exercising any power
or right under this Agreement shall be deemed to be a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right.

16.5 Severability. If any of the provisions or parts of the Agreement are
determined to be illegal, invalid or unenforceable in any respect under any
applicable statute or rule of law, such provisions or parts shall be deemed
omitted without affecting any other provisions or parts of the Agreement which
shall remain in full force and effect, unless, when viewed by an objective
commercially reasonable person familiar with the consumer credit card industry,
the declaration of the illegality, invalidity or unenforceability of such
provision or provisions substantially frustrates the continued performance by,
or entitlement to benefits of, either party, in which case this Agreement may be
terminated by the affected party, without penalty.

 

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16.6 Notices. All communications and notices pursuant hereto to either party
shall be in writing, including a writing by email, and addressed or delivered to
it at its address shown below, or at such other address as may be designated by
it by notice to the other party, and shall be deemed given when delivered by
hand, or two (2) Business Days after being mailed (with postage prepaid) or when
received by receipted courier service:

 

If to Bank:

   If to Retailer:

One Righter Parkway, Suite 100

   The Bon-Ton Stores, Inc.

Wilmington, DE 19803

Attn: President

  

2801 East Market Street

York, Pennsylvania 17402

Attn: Senior Vice President and Treasurer

With a Copy to:

   With a Copy to:

ADS Alliance Data Systems, Inc.

   The Bon-Ton Stores, Inc.

3100 Easton Square Place

Columbus, OH 43219

  

2801 East Market Street

York, Pennsylvania 17402

Attn: Vice President and General Counsel

Attn.: Law Department

  

16.7 Captions and Cross-References. The table of contents and various captions
in this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to any Section are to such Section of this Agreement.

16.8 GOVERNING LAW / WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF
DELAWARE, REGARDLESS OF THE DICTATES OF THE CONFLICTS OF LAW PROVISIONS OF
DELAWARE OR ANY OTHER JURISDICTION, AND THE PARTIES HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION AND VENUE IN THE UNITED STATES FEDERAL DISTRICT COURT OF
DELAWARE OR DELAWARE STATE COURT HAVING JURISDICTION OVER THE CLAIM. EACH PARTY
HEREBY WAIVES ITS RIGHT TO A JURY TRIAL.

16.9 Counterparts. This Agreement may be signed in one or more counterparts, all
of which shall be taken together as one agreement.

16.10 Force Majeure.

16.10.1 If the performance by a Party of its respective non-monetary obligations
under this Agreement is delayed or prevented (in whole or in part) by acts of
God, fire, floods, storms, explosions, accidents, epidemics, war, civil
disorder, strikes, terrorism, nuclear or biological disaster, riot or any other
similar event or cause not reasonably within such Party’s control,

 

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whether or not specifically mentioned herein (any such event, a “Force Majeure
Event”), such Party shall be excused, discharged and released of performance to
the extent such performance or obligation is so delayed or prevented by the
Force Majeure Event without liability of any kind; provided, however, that:

(a) The occurrence of a Force Majeure Event shall not excuse a Party from
following the procedures set forth in its disaster recovery plan; and

(b) The Parties shall have the termination rights set forth in Section 14.4.

16.10.2 The Party subject to a delay or prevention as contemplated herein shall,
within three (3) days following the occurrence of a Force Majeure Event, notify
the other Party of such Force Majeure Event, which notice shall set forth:
(a) the nature of the Force Majeure Event; (b) its expected effect(s) and
duration; (c) any expected development which may further affect performance
hereunder; and (d) the efforts undertaken or to be undertaken to cure such Force
Majeure Event or provide substitute performance.

16.11 Relationship of Parties. This Agreement does not constitute the parties as
partners or joint venturers and neither party shall so represent itself.

16.12 Survival. No termination of this Agreement shall in any way affect or
impair the powers, obligations, duties, rights, indemnities, liabilities,
covenants or warranties and/or representations of the parties with respect to
times and/or events occurring prior to such termination. No powers, obligations,
duties, rights, indemnities, liabilities, covenants or warranties and/or
representations of the parties with respect to times and/or events occurring
after termination shall survive termination except for the following Sections
and their corresponding Schedules: 1.1; 1.2; 2.2.2; 3.6.6; 3.7.1; 4.7.1; 4.7.2;
4.7.3; 4.7.4; 4.7.6; 4.8.2; 5.1.4; 5.2.4; the first two sentences of 5.3; the
first two sentences of 5.4; 5.5.2; 5.5.3; 6.4; 6.5; 6.7.1; 6.7.2; 6.7.3; 6.7.4;
6.8; 7.1; 7.2.1(a); 7.2.4; 7.3; 9.8, but only to the extent that any such
Affiliate remains obligated under a Section or Schedule that survives pursuant
to this Section 16.12; 12.1, but only to the extent there is a Dispute between
the Parties as to monies owed hereunder by either Party to the other or in the
event of a security breach; 12.2; 13; 15.1.1; 15.2; 15.5; 16; and subsection
(2)(b) of Schedule 15.4.2.

16.13 Mutual Drafting. This Agreement is the joint product of Retailer and Bank
and each provision hereof has been subject to mutual consultation, negotiation
and agreement of Retailer and Bank; therefore to the extent any language in this
Agreement is determined to be ambiguous, it shall not be construed for or
against any party based on the fact that either party controlled the drafting of
the document.

16.14 Independent Contractor. The parties hereby declare and agree that Bank is
engaged in an independent business, and shall perform its obligations under this
Agreement as an independent contractor; that any of Bank’s personnel performing
the services hereunder are agents, employees, Affiliates, or subcontractors of
Bank and are not agents, employees, Affiliates, or subcontractors of Retailer;
that Bank has and hereby retains the right to exercise full control of and
supervision over the performance of Bank’s obligations hereunder and full
control over the employment, direction, compensation and discharge of any and
all of the Bank’s agents, employees, Affiliates, or subcontractors, including
compliance with workers’

 

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compensation, unemployment, disability insurance, social security, withholding
and all other federal, state and local laws, rules and regulations governing
such matters; that Bank shall be responsible for Bank’s own acts and those of
Bank’s agents, employees, Affiliates, and subcontractors; and that except as
expressly set forth in this Agreement, Bank does not undertake by this Agreement
or otherwise to perform any obligation of Retailer, whether regulatory or
contractual, or to assume any responsibility for Retailer’s business or
operations.

16.15 No Third Party Beneficiaries. The provisions of this Agreement are for the
benefit of the parties hereto and not for any other person or entity, including
the current owner of the Retailer Program Accounts.

16.16 Taxes. Retailer shall be responsible for, and agrees to pay, all sales,
use, excise, and value-added taxes, or taxes of a similar nature (excluding
personal property taxes and taxes based on Bank’s income which shall be borne by
Bank), imposed by the United States, any state or local government, or other
taxing authority, on all services provided by Bank under this Agreement.
Provided, however, that if/when Bank seeks payment from Retailer with respect to
any such taxes, Bank shall deliver a written invoice (or other comparable form
of written documentation requesting payment and basis therefor) to Retailer in a
timely manner relative to when (i) Bank received an invoice or other statement
for payment from the subject taxing authority, or (ii) Bank determined (or
should have determined, based on Bank’s normal accounting reviews and
preparation of tax documents of which such matter should have been a part) that
Retailer should pay such amount. The parties agree to cooperate with each other
to minimize any applicable sales, use, or similar tax and, in connection
therewith, the parties shall provide each other with any relevant tax
information as reasonably requested (including, without limitation, resale or
exemption certificates, multi-state exemption certificates, information
concerning the use of assets, materials and notices of assessments). All amounts
set forth in this Agreement are expressed and shall be paid in U.S. dollars.

[Signature block on following page.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in manner
and form sufficient to bind them as of the date first above written.

 

 

THE BON-TON STORES, INC.     WORLD FINANCIAL NETWORK BANK

By: s/s H. Todd Dissinger

    By: /s/ John J. Coane

H. Todd Dissinger

    John J. Coane

Printed Name

    Printed Name

Senior Vice President – Treasurer and Credit

    Vice President & CFO        

Title

    Title

 

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Schedule 2.1.1

Transition Plan Parameters

Bank shall develop a transition plan to specify the tasks, timelines,
responsibilities, dependencies, major milestones and deliverables to perform the
functions and services necessary for the transition of the ownership, management
and servicing of the Accounts from the Current Provider to Bank including the
formation of a transition team, the assignment of project management resources,
the development of a contingency planning process, the development of a customer
communication plan and the identification of a prioritized set of product
enhancements for the Program post transition. Bank, with the assistance and
input of Retailer, will develop a mutually agreeable Transition Plan within
forty-five (45) days, but in no event later than sixty (60) days after the
Effective Date. Bank and Retailer acknowledge that the Parties will continue to
adjust the Transition Plan as necessary by mutual agreement during the
transition. No later than forty-five (45) days after the Effective Date, Bank
will begin reporting the status of the transition to Bank’s and Retailer’s
respective Program Managers.

In all cases, Bank and Retailer shall use commercially reasonable efforts to
meet the key milestones developed as part of the Transition Plan by the dates
specified below. Bank shall report to the Bank Program Manager and Retailer
Program Manager on the progress of the Transition Plan and on the progress
towards meeting the Systems Transition Date and Servicing Transition Date at
least weekly. In the event that either Bank or Retailer reasonably believes that
the Systems Transition Date or Servicing Transition Date may not be met within
the specified timeframe, Bank and Retailer shall jointly develop a contingency
plan taking into consideration Retailer capacity and resource constraints
associated with not meeting the Systems Transition Date or Servicing Transition
Date, Retailer planned new store openings, and the upcoming Holiday season.
Furthermore, Bank shall, with Retailer’s cooperation and support, use its best
efforts to reasonably provide assistance to Retailer in order to meet the
Systems Transition Date and Servicing Transition Date and to address Retailer’s
capacity requirements should the Systems Transition Date or Servicing Transition
Date not be met. Such assistance may include re-sequencing or accelerating the
transition of critical servicing functions from the Current Provider to Bank.

Key Milestones:

 

  •  

Retailer has reviewed and agreed to comply with the Operating Procedures as of
the Effective Date.

 

  •  

Systems Transition Date by June 21, 2012.

 

  •  

Servicing Transition Date by June 21, 2012.

 

  •  

Issuance of new plastic cards as agreed to in accordance with the Transition
Plan.

 

  •  

New Account Terms and conditions mailed to Cardholders as agreed to in
accordance with the Transition Plan.

 

  •  

Credit Slips and Charge Slips as agreed to in accordance with the Transition
Plan.

 

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The Transition Plan will take into consideration all necessary components,
including the following components listed below.

 

Component

    

Description

Transition Team & Responsibilities

    

¡     Designation of managers responsible for developing and executing the
Transition Plan (along with interview process as necessary)

 

¡     Establish project management protocol (e.g., meetings, progress reports,
etc.)

Milestones/Priorities

    

¡     Identification of the major milestones and priorities that constitute the
Transition Plan including integration or transfer of management
responsibilities, establishment of data sharing protocols, the development of a
systems conversion plan, etc.

Timing

    

¡     Denotation of key dates for each major milestone of the Transition Plan
considering the Joint Marketing Plan, seasonality of Retailer’s business,
systems freeze periods, etc.

Human Resources

    

¡     If applicable, impact on and communication plan associated with any human
resources aspects of the Transition Plan

Transition Risk Mitigation

    

¡     Identification of and mitigation plan for major risks associated with the
Transition Plan (systems, data feeds, training, testing periods, etc.)

Customer Impact Analysis and Communication Plan

    

¡     Identification of all major implications for Retailer’s Customers and
Cardholders and a review of how the Transition Plan will mitigate risk to the
Cardholder (quality monitoring, testing plans, etc.)

 

¡     Develop a comprehensive Cardholder communication plan (notifications,
documentation, etc.)

Store Impact Analysis and Communication Plan

    

¡     Identification of all major implications for Retailer’s stores and how the
Transition Plan will mitigate risk to the stores (e.g., any POS impact, etc.)

 

¡     Develop a comprehensive communication plan for the stores (documentation,
training, etc.)

Data Feeds

    

¡     Identification and replication (or other delivery of the same
functionality) of all data feeds currently received by Retailer from its credit
systems

 

¡     Identification of credit bureau transition requirements

Features and Functionality

    

¡     Identification and replication (or other delivery of the same
functionality) on Bank’s systems of the features and functionality existing on
the Current Provider’s credit systems as of the Effective Date

 

¡     Development of plan to implement real time open to buy functionality for
returns and Cardholder payments

 

2

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Component

    

Description

Documentation Services

    

¡     Identification and replication (or other delivery of the same
functionality, such as imaging) of all custodial, document management, and
document retention services with respect to the Credit and Charge Slips.

 

¡     Physical transportation of relevant Credit and Charge Slips

Cultural Assimilation

    

¡     Identification of Retailer’s employee training requirements

 

¡     Creation of Retailer’s employee training program

 

¡     Cooperation to communicate the unique aspects of Retailer’s strategy,
competitive positioning, and Customer philosophies to Bank’s employees to ensure
a seamless transition from the Current Provider to Bank

 

3

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THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 2.1.3

Transition Costs

[***] fund a Program Re-launch Fund in the amount of [***], of which [***] shall
be jointly allocated by Retailer and Bank, and shall be used to support the
launch of the Program and is intended, but not limited, to pay for the
following:

[***]

Such funds shall not be directed toward developing new Forms.

The remaining [***] will be utilized to fund the following.

Up to [***] is intended to pay for:

[***]

The following shall be funded by Bank as part of its on-going support for the
Program:

[***]

In addition to the amounts above, [***] the sum of [***].

The Parties agree to plan for and account for all transition costs. All expenses
charged to the Program Re-launch Fund shall be at direct cost and not include
any internal allocations for overhead, staffing costs, travel costs, or other
indirect costs. If any of the re-launch expenditures exceed the funds allocated
as set forth above, the Parties shall mutually agree to re-allocate the fund.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 2.3

Operating Procedures

Retailer has reviewed and agreed to comply with the Operating Procedures as of
the Effective Date. The Bank shall have the right to determine those portions of
the Operating Procedures and other Program procedures that are necessary to
comply with Applicable Law. The Operating Procedures may be amended or modified
by [***] from time to time in accordance with this Agreement.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

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Schedule 2.3.2

Quick Credit and Instant Credit

“Quick Credit” is an in-store application procedure designed to open Accounts as
expeditiously as possible at the Point of Sale, whereby an application for an
Account might be processed without a paper application being completed by an
Applicant. An Applicant’s credit card (Visa, MasterCard, American Express,
Discover or other Bank approved private label card) or other Bank approved
identification (such as a Driver’s License) is electronically read by a terminal
to identify certain information to facilitate a credit analysis. Other data
shall be entered into that same terminal by the Retailer’s associate as
specified in the Operating Procedures.

“Instant Credit” is an application procedure designed to open Accounts at POS in
stores, via a VRU, or through Retailer-designated websites. An Applicant’s
application information, as specified in the Operating Procedures, as well as an
email address and approval or disapproval of a debt cancellation product, is
manually entered into the POS, signature capture device, telephone or web
application and is systemically communicated to Bank for disposition. For the
avoidance of doubt, Retailer, in its sole discretion, may require a valid
“Reference Credit Card,” as specified in Section 5.2 of the Operating
Procedures.

 

1

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THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 3.6.1

Marketing Fund

The Joint Marketing Plan shall be funded by Bank, or as otherwise may be set
forth in the applicable Joint Marketing Plan, or as determined by the Management
Committee. With respect to Bank’s contribution, beginning with the first
anniversary of the Program Commencement Date, Bank shall allocate to the
Marketing Fund annually an amount equal to [***] of the total amount of Net
Credit Sales over the twelve (12) Retailer Fiscal Months immediately prior to
such anniversary date, to be used in any month. All unused funds in the
Marketing Fund [***]. Bank’s contribution to the Marketing Fund shall be
utilized solely to promote Next Generation Marketing within the Program,
including, but not limited to the following services, to be performed by
Retailer or Bank, as appropriate.

[***]

Notwithstanding anything to the contrary herein, on the date that is thirty-six
(36) months from the Program Commencement Date, [***] of the total number of
Cardholders as of such date, then use of the Marketing Fund shall not be limited
to Next Generation Marketing and may be used, at Retailer’s discretion, for any
type of prospecting for additional Cardholders.

Consistent with current practices, Retailer shall continue to fund and perform
the following:

[***]

The Marketing Fund shall not be used towards the following items, [***]:

 

  •  

Expenditures related to the Transition Plan as identified in Schedule 2.1.1

 

  •  

Plastic Credit Cards or documentation for Credit Cards

 

  •  

New Account terms and conditions documentation, envelopes, and mailing

 

  •  

Collateral materials for the Program such as take-one applications

 

  •  

Marketing of approved ancillary products and services

 

  •  

Billing Statements

 

  •  

Compensation of Bank staff

 

  •  

Bank overhead

 

  •  

Operations of the Program such as customer service, data processing, and other
services

New Account discounts and rewards liabilities, including rewards bonus points,
shall be funded by Retailer.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.1.3

Management Committee

1. Management Committee Generally.

(a) Functions. The Management Committee shall perform the functions with respect
to the Program as set forth herein and any other actions that, pursuant to any
express provision of this Agreement, requires the Management Committee’s action
or as may be otherwise approved by the Management Committee.

(b) Composition of the Management Committee. The Management Committee shall
consist of at least six (6) members, and in any case must be comprised of an
equal number of members appointed by each Party, each with comparable seniority.
Such members shall be referred to herein, respectively, as the “Retailer
Designees” and the “Bank Designees.” The titles of the initial Retailer
Designees and Bank Designees shall be as set forth below:

 

Titles of Retailer Designees

  

Titles of Bank Designees

[***]

   [***]

[***]

   [***]

[***]

   [***]

The Program Managers shall serve as one of the designees for each respective
Party. Bank and Retailer may each remove or replace its designees to the
Management Committee from time to time so long as all designees continue to
satisfy the requirements of this Paragraph (b); provided, however, that each
Party shall provide the other Party with as much prior notice of any such
removal or replacement as is reasonably practicable under the circumstances.

(c) Management Committee Action. Subject to Section 4.1.1(d)(ii) and as
otherwise expressly set forth elsewhere in this Agreement, the Management
Committee shall have authority to take action in the following areas (the
“Management Committee Matters”):

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

(i) Subject to Section 3.1.1, design and content of [***] and other Cardholder
communications and materials (excluding such communications and materials
required by Applicable Law and Bank’s standard Account servicing communications
with Cardholders);

(ii) Material changes to program [***] for the Program

(iii) Program marketing budget and Program marketing plans;

(iv) [***];

(v) Ancillary products and services, [***] for such products and services;

(vi) Program value proposition;

(vii) Program competitiveness, in accordance with Section 4.4.2; and

(viii) Such other tasks as are assigned to it by the Agreement or as mutually
agreed by the Parties.

2. Proceedings of the Management Committee.

(a) Meetings. The Management Committee shall meet (telephonically unless all
Management Committee members agree to meet in person) not less frequently than
quarterly and not less than one meeting per twelve (12) months shall be in
person. Such meetings shall alternate between each Party’s chosen corporate
offices. In addition, any member of the Management Committee may call a special
meeting by delivery of at least five (5) Business Days’ prior notice to all of
the other members of the Management Committee, which notice shall specify the
purpose for such meeting. If fewer than all committee members are present in
person, by telephone or by proxy, the business transacted at such special
meeting shall be limited to that stated in the notice. Except to the extent
expressly provided otherwise in this Agreement, the Management Committee (and
any subcommittee formed by it) shall determine the frequency, place (in the case
of meetings in person) and agenda for its meetings, the manner in which meetings
shall be called and all procedural matters relating to the conduct of meetings
and the approval of matters thereafter. A meeting of at least two (2) of each
Party’s designees shall constitute a quorum sufficient to take actions in the
name of the Management Committee. If one Party has more members present than the
other Party, such “extra” members may participate in the meeting.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

2

--------------------------------------------------------------------------------

(b) Actions. Each Party shall be entitled to one (1) vote on each matter brought
before the Management Committee. All decisions of the Management Committee must
be unanimous decisions. The Management Committee may take any action authorized
under this Agreement either at a meeting or by the written consent of the number
of each Party’s designees as is required to constitute a quorum as set forth in
Paragraph 2(a) of this Schedule 4.1.3.

(c) Management Committee Matters. Subject to Paragraph 2(b) of this Schedule
4.1.3, Management Committee approval shall be required for all Management
Committee Matters, subject to the escalation procedures provided in Paragraph 3
of this Schedule 4.1.3.

3. Disputes. To the extent the Management Committee fails to agree on any matter
of material significance to the Program within thirty (30) days after the
relevant initial vote, such unapproved matter shall be resolved in accordance
with the following:

(a) Informal Dispute Resolution. Any dispute, controversy or claim between the
Parties arising out of or relating to this Agreement or any breach thereof
(“Dispute”) shall be resolved as follows:

(b) Executive Review. Upon written request of either Retailer or Bank, one
designated executive for each party (each an “Escalation Executive”) shall meet
for the purpose of attempting to resolve such Dispute in accordance with this
Paragraph (b). Such meeting shall be in person or by telephone. Should the
Escalation Executives be unable to resolve the Dispute within the designated
time period below, the Dispute shall be resolved as follows:

(c) Retailer Matters. Subject to Applicable Law, [***] (“Retailer Matters”):

(i) Subject to Bank systems specifications and capabilities and Section 3.1.1,
the design and other marketing aspects of [***];

(ii) Program marketing plans (channels, promotions, etc.) and use of the
Marketing Fund;

(iii) Retailer capital expenditures;

(iv) [***];

(v) New credit card products and/or marketing channels proposed by Bank,
provided that the economic terms and compensation arrangements related to such
products and/or channels are acceptable to both Parties;

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

3

--------------------------------------------------------------------------------

(vi) Changes to the Program value proposition;

(vii) [***];

(viii) Subject to Applicable Law, communications with Cardholders (excluding
Bank’s standard Account servicing communications with Cardholders);

(ix) [***];

(d) Bank Matters. Subject to Applicable Law, [***] (“Bank Matters”):

(i) Subject to Section 4.3, changes to the Program [***];

(ii) Changes to [***] subject to Section 4.4.1 and 4.4.2;

(iii) Subject to Section 7.2.1(b) and (d), changes to the Program [***];

(iv) Bank capital expenditures (systems, tools, etc.);

(v) Compliance of the Operating Procedures with Applicable Law, [***]; and

(vi) Compliance of the Billing Statements, account documentation and marketing
materials with Applicable Law, [***].

(e) Unresolved Disputes. [***] for other unresolved Disputes.

(f) Time Period. A Party’s obligations under this Paragraph 3 shall be deemed
satisfied upon the expiration of the fifteen (15) day period immediately
following the Escalation Executive meeting to negotiate the Dispute pursuant to
this Paragraph 3.

4. Formal Proceedings Prior to Dispute Resolution Procedures. Notwithstanding
Paragraph 3, a Party may institute formal proceedings without undertaking the
Dispute resolution procedures to avoid the expiration of any applicable
limitations period, to preserve a superior position with respect to other
creditors and to seek temporary or preliminary injunctive relief to protect its
intellectual property or its Confidential Information. The commencement of a
proceeding pursuant to this provision does not relieve a Party from the
Escalation Executive requirement contained in Paragraph 3.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

4

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.3.1

Approval Rates and Credit Limits

1. Approval Rates [***]. Subject to Section 3 below, [***], Bank shall [***]
for: (i) [***]; and (ii) [***]. Subject to Section 4 below, the [***] Approval
Rate means, [***]

2. Average Credit Limit [***] for New Accounts. Subject to Section 3 below,
[***], Bank shall [***].

3. Exclusions. The following Credit Card Applications shall be excluded from the
computation of [***] approval rates and [***] average credit limits: (i) [***];
(ii) [***]; and (iii) [***].

[***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

4. Bank shall use the following [***] for Retailer Locations as indicated by
month for purposes of Sections 1 and 2 above:

 

Month

  

[***]

  

[***]

  

Credit Limit

* [***]

5. Credit Reporting. Bank shall provide Retailer with a [***] report outlining
its approval rates and credit limits [***]

 

[***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

2

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.3.5

Promotional Programs

At the discretion of Retailer, Bank shall provide the Promotional Programs below
in order to stimulate Net Credit Sales. The usage and levels of Promotional
Programs shall be determined [***]. As used below, “Promotional Financing Cap”
means, for any Program Year, with respect to the dollar amount of the Net
Promotional Program Credit Sales as a percentage of the [***].

Approved Promotional Programs

Approved Promotional Programs shall include the following:

 

September 30, September 30, September 30, September 30, September 30, September
30,

Promotional

Program Name

    

Plan Term

     Plan
APR  

Retroactive
Finance
Charges
Assessed

    

Effect of Account

Holder Delinquency

on Plan

     Payments
Under Plan      Discount Rate

12 month zip

     12 months      0%   No      Reverts to reg plan      Equal      [***]

24 month zip

     24 months      0%   No      Reverts to reg plan      Equal      [***]

Holiday Bonus

     6 months      0%   Yes      Revert to reg plan      Min pay      [***]

The “Minimum Purchase Amount Requirements” for the Approved Promotional Programs
are [***].

The Discount Rates are listed in the above table for each Approved Promotional
Program. The Discount Rate shall be adjusted on the last Business Day of each
Program Quarter following the Program Commencement Date by [***] to the Discount
Rates in the above table.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

From time to time, Retailer may propose additional programs to be added to the
list of Approved Promotional Programs. To the extent that such additional plans
proposed by Retailer are [***], such additional programs proposed by Retailer
shall be added to the list of Approved Promotional Programs.

The Net Promotional Program Credit Sales exceeding the Promotional Financing Cap
(reflected as a dollar amount and calculated as [***]) during the prior twelve
(12) month period, will be subject to a Discount Rate. Retailer payments to Bank
each Program Year, if applicable, would be determined on an annual basis as
follows: Net Promotional Program Credit Sales (reflected as a dollar amount)
minus the product of [***] equals the Net Promotional Program Credit Sales in
excess of the Promotional Financing Cap. If the resulting number is positive,
multiply the excess amount by the Applicable Discount Rate. The Applicable
Discount Rate shall mean [***] based on Net Promotional Program Credit Sales by
program. [***].

Within ten (10) days following the end of the month during which the above
calculation occurred, Bank shall provide to Retailer the above calculation,
along with management reports and supporting data necessary for Retailer to
audit the calculations in a timely manner: If the Promotional Financing Cap is
exceeded, there shall be included on the year end settlement sheet for such
Program Year (and Retailer shall pay to Bank within one month subsequent to such
Program Year) an amount equal to the product of the dollar amount by which Net
Promotional Program Credit Sales for such Program Year exceeded the Promotional
Financing Cap multiplied by the Applicable Discount Rate.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

2

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.3.6

Specialty Credit Programs

 

[***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

Schedule 4.4.1-A

Account Terms

The Bank Private Label Credit Card shall include the following customer terms
and conditions:

 

Term/Condition

    

Store Accounts

Standard APR

     Risk based pricing ranging of Prime + 21.74% (currently 24.99% )

Penalty/Default APR

     Prime + 26.74% (currently 29.99%)

Penalty/Default APR Assessment

     Not before 2 cycles past due

Penalty/Default APR Cure

     6 consecutive on-time payments

Compounding

     Assess finance charges on previously billed finance charges and fees

Annual/Application/Membership Fee

     $0

Late Fees

     $25.00 for first occurrence and $35 for each incremental within 6 billing
cycles

Late Fee Assessment Date

     No less than 23 days after the close of each billing cycle

Minimum Payment

     Minimum payments will comply with Applicable Law and will not be less than
$25 or the balance, if the balance is less than $25

Balance Computation

     1 Cycle Average Daily Balance; Balance Includes New Purchases, Finance
Charges, and Fees

Minimum Finance Charge

     $2.00

Grace Period

     No less than 23 days

Overlimit Fee

     $0

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.4.1-B

Changes to Rates and Fees

Changes to Rates and Fees. With respect to any changes in terms affecting the
Cardholder rates and fees set forth in Schedule 4.4.1-A, [***].

New Fees. Except as otherwise required by Applicable Law, Bank may charge a new
fee (i.e., not charged as of the Program Commencement Date) to Cardholders or
Applicants for Credit Cards [***]

Specified Limits. [***].

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.4.1-C

Special Fee Policies

 

[***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.4.2

Competitor Card Programs

If any retailer listed below ceases to exist for any reason, including as a
result of a merger, combination or closing, or ceases to offer a private label
credit card program, Retailer may replace such retailer with another retailer in
the same Peer Group category. Any other changes to the Peer Groups shall be
agreed upon in the Management Committee and the Management Committee shall
discuss the composition of the Peer Groups at least once per Program Year;
provided, however, that changes resulting from a shift of a retailer from one
(1) Peer Group to the other shall be a Retailer Matter. In no event, however,
shall the number of retailers in the Bank Managed Peer Group be greater than
three (3) and in no event shall the number of retailers in the Third Party
Managed Peer Group be greater than seven (7).

Bank Managed Peer Group

[***]

Third Party Managed Peer Group

Boscov’s

Dillard’s

JC Penney

Target

Kohl’s

Sears

Macy’s

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.6.15

Internet Applications

Bank shall provide, at a minimum, the following internet services for the
Program. The cost of such services shall be [***], and such services shall be
integrated with the Retailer Websites and be transparent to Cardholders.

 

  •  

Real-time authorization and re-authorization for Retailer

 

  •  

Internet customer service site, including the following functionality:

 

  •  

Summary account information

 

  •  

Online bill pay

 

  •  

Access to on-line statements

 

  •  

Transaction-level detail

 

  •  

Payment history

 

  •  

Customer service e-mail

 

  •  

Account maintenance self-service including address and phone number change,
replacement card request, and credit line increase request

 

  •  

To the extent available, notice of acceptance of payments via portals such as
CheckFree and Spectrum

 

  •  

Where applicable, links back to Retailer Websites

Online statements will be formatted and presented to customers [***].

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.6.16

Bank Program Team Specifications

Bank shall provide the following Program human resources to the Program at no
cost to Retailer:

 

September 30, September 30,

Position

     Number
of Staff   Experience & Specifications

[***]

     [***]   [***]

Bank will also provide a cross-functional team to support the Program Managers
and partnership managers with industry-leading expertise to assist with specific
program needs. Specific areas of support include:

 

  •  

Customer Service

 

  •  

IT

 

  •  

Finance

 

  •  

Risk

 

  •  

Operations

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.9.3

Service Level Standards

 

1. Each Service Level Standard, as identified in the chart below, is [***] .

 

2. A “Service Failure” shall be deemed to have occurred if [***].

 

3. [***]

 

4. [***]

Assumptions:

[***]

 

#

    

Service Level Standard

    

Critical SLA

[***]

     [***]      [***]

 

#

    

Service Level Standard

    

Non-Critical SLA

[***]

     [***]      [***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

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Schedule 4.9.8

Authorized Service Providers

None.

 

1

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THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.10

Cross-Marketing of Ancillary Products and Services

1. Protection Programs. Bank or an Affiliate may solicit Cardholders for and
offer to Cardholders (or arrange for a third party to solicit or provide)
protection programs with Retailer’s prior written approval with respect to the
content and marketing of such protection program. Preapproved Protection
Programs include those set forth below and may be implemented as follows:

 

Account Assure

   CPP Identity Protector

With respect to [***] derived from a protection program, each Program month
through the Termination Date (and on a pro rata basis for any non-full Program
month period), [***] of the protection program [***] derived from any protection
program. No later than fifteen (15) days following the end of each Program
month, [***]

2. Enhancement Marketing Services. Bank or an Affiliate may solicit or provide
Enhancement Marketing Services with the prior written approval of Retailer with
respect to the specific service being offered and the content and marketing of
such Enhancement Marketing Service.

Enhancement Marketing Services include those set forth below:

 

MyCard Extras

   MyCard Extras Plus

Lifestyle Perks

   Style Matches

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

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With respect to [***] derived from an Enhancement Marketing Service, each
Program month through the Termination Date (and on a pro rata basis for any
non-full Program month period), [***] from the Enhancement Marketing Services.
No later than fifteen (15) days following the end of each Program month, [***].
Bank shall not offer any other enhancement programs to Cardholders without the
prior written consent from Retailer, and Retailer may approve or disapprove such
enhancement programs at its sole discretion.

3. Fees. The fees and charges for protection programs and Enhancement Marketing
Services shall be billed to the applicable Cardholder’s Account when
appropriate.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

2

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 4.13.5

Management Committee Program Projections

The Bank shall prepare and deliver to the Management Committee annual written
Program Projections containing the following elements:

 

  [***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

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Schedule 5.1.1

Retailer Marks

 

September 30, September 30, September 30,

BERGNER’S & Design

     Illinois 095012      10/17/2005   
Retail department store services in Class 35

BERGNER’S

     Illinois 095011      10/17/2005   
Retail department store services in Class 35

BOSTON STORE

     Wisconsin 6,482      08/03/1988    Sale of clothing in Class 42

CARSON PIRIE SCOTT

     1,143,734      12/16/1980    Retail department store services in Class 42

CARSONS

     1,395,289      05/27/1986    Department store services in Class 42

ELDER-BEERMAN (STYLIZED)

     1,332,638      04/23/1985    Retail department store services in Class 42

HERBERGER’S

     2,278,878      09/21/1999    Retail department store services in Class 35

HERBERGER’S

     2,278,879      09/21/1999    Credit card services in Class 36

THE BON-TON (design)

     1,661,242      10/15/1991    Retail department store services in Class 42

THE BON-TON

     1,680,687      03/24/1992    Retail department store services in Class 42

YOUNKERS (Stylized)

     1,795,407      09/28/1993    Retail department store services in Class 42

 

1

--------------------------------------------------------------------------------

Schedule 5.2.1

Bank Marks

World Financial Network Bank

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 6.6.6

Payments by Bank

Bank shall make the following payments to Retailer:

 

  1. Each Business Day, Bank shall wire Retailer an amount equal to [***].

 

  2. On the Closing Date, Bank shall pay to Retailer a signing bonus (“Signing
Bonus”) in the amount of fifty million dollars ($50,000,000). In the event of
any termination of this Agreement pursuant to Section 14.2.2 Retailer shall
reimburse Bank for [***].

 

  3. By the fifteenth (15th) day of each month, Bank shall post into settlement
an amount equal to [***].

 

  4. On or before fifteenth (15th) day following the end of each Program Year,
Bank shall wire to Retailer an amount equal to [***]

[***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

Schedule 6.8.1

Chargebacks and Retailer Presentment Warranties

A. Chargebacks.

Bank can Chargeback a transaction to Retailer and Retailer will assume liability
for said transaction if:

(a) for brick and mortar Retailer Locations, a Cardholder disputes the purchase
of Goods and/or Services and Retailer failed to obtain a signature on a Credit
Slip or an electronic signature;

(b) a Cardholder disputes the delivery of Goods and/or Services and Retailer has
not provided Bank with the documentation satisfactory for Bank to substantiate
delivery;

(c) any presentment warranties set forth in this Schedule 6.8.1 and made by
Retailer prove to be false or inaccurate in any respect, and as a result
thereof, the amount of such charge is otherwise unbillable or uncollectible;

(d) the Cardholder asserts any claim or defense against Bank as a result of any
act or omission of Retailer allegedly in violation of any Applicable Law
provided any such claim or defense constitutes a bona fide claim or defense
presented by the Cardholder in good faith;

(e) the amount by which any charge for the purchase of Goods and/or Services is
reduced by Retailer as an accommodation to a Consumer alleging dissatisfaction
with such Goods and/or Services; or

 

(f) as otherwise provided in the Operating Procedures

B. Retailer Presentment Warranties

(a) The Credit Slip represents a bona fide sale by Retailer of Goods and/or
Services described in such Credit Slip, the Credit Slip has not been included in
any Transaction Record previously transmitted to Bank, and Retailer has
delivered or shipped or performed, as applicable, all of the Goods and/or
Services listed on such Credit Slip (except to the extent that any of following
will be subsequently delivered or performed, including (i) Goods and/or Services
purchased by telephone or Internet, and (ii) Merchandise retained by Retailer
for repair or warranty services).

(b) Except for Credit Slips with respect to Customer deposits for in-store
orders for home delivery and similar delayed delivery programs in the ordinary
course of business, Retailer has shipped all the Merchandise listed on such
Credit Slip, which were not received by the Cardholder at time of purchase.

(c) The Credit Slip is signed or similarly authenticated.

 

1

--------------------------------------------------------------------------------

(d) The Credit Slip is not illegible, inaccurate or incomplete and has not been
materially altered after being signed by the Cardholder.

(e) The transaction did not involve a cash advance or Goods and/or Services not
listed on the Credit Slip and only Goods and/or Services sold by Retailer are
the subject of the transaction.

 

(f) The Account number of the Cardholder has been accurately printed or
electronically captured on the Credit Slip.

(g) Retailer has not nor will it directly or indirectly, take or grant or
purport to take or grant any right or security interest in such Credit Slip or
any related Credit Slip to or from any third party (other than to Bank).

(h) The transactions giving rise to the Charge Transaction Data were conducted
by Retailer in the ordinary course of business and in accordance with all
applicable law that pertains to the sale of the Goods and/or Services.

(i) To the knowledge of Retailer, there is no fact, nor any claim or defense of
a Cardholder, that would impair the validity, enforceability, or collectability
of the obligation of the Cardholder evidenced by the Credit Slip.

(j) The Goods and/or Services were sold by Retailer in the ordinary course of
business to Cardholders.

 

2

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 6.9.2

Additional Non-Competition Terms

 

1. Subject to Section 6.14, [***]

(a) In the event that [***].

(b) Subject to [***].

(c) If [***].

 

2. Subject to Paragraph 1 of this Schedule 6.9.2 above, [***].

(a) In the event that [***].

(b) Subject to [***].

(c) If [***].

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 6.11.1

Reports

The Parties will work together to develop the appropriate reporting for Retailer
as soon as possible following the Effective Date; it is intended that Retailer
will require the following types of reports as listed in this Schedule, subject
to reasonable revision by Retailer.

Frequency of Reports

 

September 30, September 30,

Report

     Frequency Provided to Retailer   Report Type

Settlement

     [***]   [***]

Credit Sales

     [***]   [***]

Promotional Financing

     [***]   [***]

Credit Card Applications, New Accounts [***]

     [***]   [***]

[***]

     [***]   [***]

Service Level Standards

     [***]   [***]

[***]

     [***]   [***]

Cardholder Loyalty Program

     [***]   [***]

Bank shall provide the following reports to Retailer [***]. Such reports shall
contain the relevant data for the day immediately preceding the report.

 

  1. Settlement

 

  •  

Settlement [***]

 

  2. Credit sales

 

  •  

Report on credit sales [***]

 

  3. Credit Card Applications

 

  •  

Report of all Credit Card Applications [***].

 

  4. Promotional Financing

 

  •  

[***]

 

  5. New Accounts

 

  •  

Report of all [***].

 

  6. [***]

 

  •  

Report of [***].

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

Bank shall provide the following non-financial reports to Retailer [***]:

 

  1. [***]

Report of all [***]

 

  2. Promotional Financing

[***]

 

  3. [***]

 

  4. [***]

 

  5. Promotional Financing Reports

[***]

 

  6. Portfolio Marketing Reports

Number of [***]

Itemized detail of [***]

 

  7. Service Level Standard Reports

Reports detailing [***]

 

  8. [***]

 

  9. [***]

 

  10. [***]

 

  11. [***]

 

  12. [***]

 

  13. Cardholder Loyalty Program

[***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

2

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Schedule 7.2.1(b)

Privacy Policy

 

FACTS

     WHAT DOES COMENITY DO WITH YOUR PERSONAL INFORMATION?

Why?

     Financial companies choose how they share your personal information.
Federal law gives consumers the right to limit some but not all sharing. Federal
law also requires us to tell you how we collect, share, and protect your
personal information. Please read this notice carefully to understand what we
do.

What?

    

The types of personal information we collect and share depend on the product or
service you have with us. This information can include:

 

•        Social Security number and income

 

•        Account balances and payment history

 

•        Credit history and credit scores

How?

     All financial companies need to share customers’ personal information to
run their everyday business. In the section below, we list the reasons financial
companies can share their customers’ personal information; the reasons Comenity
chooses to share; and whether you can limit this sharing.

 

September 30, September 30, September 30,

Reasons we can share your personal information

    

Does Comenity
share?

    

Can you limit
this sharing?

For our everyday business purposes—such as to process your transactions,
maintain your account(s), respond to court orders and legal investigations, or
report to credit bureaus

     Yes      No

For our marketing purposes—to offer our products and services to you

     Yes      No

For joint marketing with other financial companies

     Yes      No

For our affiliates’ everyday business purposes—information about your
transactions and experiences

     Yes      Yes

For our affiliates’ everyday business purposes—information about your
creditworthiness

     Yes      Yes

For our affiliates to market to you

     Yes      Yes

For nonaffiliates to market to you

     Yes      Yes

 

September 30, September 30, September 30,

To limit our sharing

    

•      World Financial Network Bank customers: Call 1-800-220-1181 (TDD/TTY:
1-800-695-1788) – our menu will prompt you through your choices.

 

•      World Financial Capital Bank customers: Call 1-877-287-5012 (TDD/TTY:
1-888-819-1918) – our menu will prompt you through your choices.

 

Please note:

 

If you are a new customer, we can begin sharing your information 30 days from
the date we sent this notice. When you are no longer our customer, we continue
to share your information as described in this notice.

 

However, you can contact us at any time to limit our sharing.

Questions?

     Go to comenity.net/privacy or call 1-866-423-1097

<FORM ID#>

 

1

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Who we are

    

Who is providing this notice?

     This privacy notice is provided by the Comenity family of companies,
including World Financial Network Bank and World Financial Capital Bank.

 

What we do

     How does Comenity protect my personal information?      To protect your
personal information from unauthorized access and use, we use security measures
that comply with federal law. These measures include computer safeguards and
secured files and buildings. How does Comenity collect my personal information?
    

We collect your personal information, for example, when you

 

•    open an account or provide account information

 

•    give us your income information

 

•    use your credit or show your driver’s license

 

We also collect your personal information from others, such as credit bureaus,
affiliates, or other companies.

Why can’t I limit all sharing?     

Federal law gives you the right to limit only

 

•    sharing for affiliates’ everyday business purposes—information about your
creditworthiness

 

•    affiliates from using your information to market to you

 

•    sharing for nonaffiliates to market to you

 

State laws and individual companies may give you additional rights to limit
sharing. See below for more on your rights under state law.

What happens when I limit sharing for an account I hold jointly with someone
else?      Your choices will apply to everyone on your account.

 

Definitions

    

Affiliates

    

Companies related by common ownership or control. They can be financial and
nonfinancial companies.

 

•    Our affiliates include companies with a Comenity name; financial companies
such as World Financial Capital Bank and World Financial Network Bank, other
World Financial entities; nonfinancial companies such as Epsilon, Alliance Data,
and LoyaltyOne.

Nonaffiliates

    

Companies not related by common ownership or control. They can be financial and
nonfinancial companies.

 

•    Nonaffiliates we share with can include financial service providers,
retailers, direct marketers, publishers and nonprofit organizations.

Joint marketing

    

A formal agreement between nonaffiliated financial companies that together
market financial products or services to you.

 

•    Our joint marketing partners include lenders and insurance companies.

Other important information

We also will comply with more restrictive state laws to the extent that they
apply. For example, if your billing address is in Vermont or California, we will
automatically opt you out of sharing your information with nonaffiliates for
marketing purposes.

 

2

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 7.2.3

Notification Procedures

Notification to Retailer. Immediately, but in no event [***], after becoming
aware of an actual or believed Breach, Bank agrees to notify Retailer’s Program
Manager.

Notification to Bank. Immediately, but in no event [***], after becoming aware
of an actual or believed Breach, Retailer agrees to notify Bank’s Program
Manager.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

Schedule 14.1

Term

This Agreement shall become effective as of the Effective Date and shall
continue in effect until the seventh anniversary of the Program Commencement
Date (the “Initial Term”), plus successive two (2) year terms thereafter (each a
“Renewal Term”), unless (a) the Agreement is otherwise terminated by a Party
pursuant to the provisions of Section 14, or (b) a Party provides the other
Party with a notice of termination at least one hundred eighty days (180) prior
to the end of the Initial Term or the then current Renewal Term.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 14.2.3

Additional Bank Termination Events

1. [***]. Bank shall have the right to terminate the Agreement if [***]:
(i) [***]; (ii) [***]; or (iii) [***] .

[***]

2. [***]. Bank may terminate this Agreement [***].

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 14.3.7

Additional Retailer Termination Events

 

1. [***] Retailer shall have the right to terminate this Agreement if [***].

 

2. [***]. Retailer shall have the right to terminate this Agreement if [***].

 

  (a) (i) [***](ii) [***]; or (iii)[***]

 

  (b) [***].

 

  (c) [***].

For purposes of this Schedule 14.3.7:

 

  (x) [***]; and

 

  (y) [***] .

 

3. [***]. Retailer may terminate this Agreement [***].

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

1

--------------------------------------------------------------------------------

THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 15.4.1

Program Data

 

A. Program Data Logistics

 

  •  

Bank will provide Program Data including [***]), except for confidential
Cardholder identifying information, [***].

 

  •  

Bank will provide the Program Data in a customary format [***].

 

  •  

Bank will provide documentation in a reasonable and customary manner, including
a data dictionary in advance, to allow recipients to load and use the data files
in an efficient manner and understand each field name on the data files and the
accompanying data.

 

B. General Data

 

  •  

At a minimum, Bank shall provide the following categories of data. [***]

 

C. [***]:

 

D. [***]:

 

E. [***]:

 

F. [***]

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

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THIS SCHEDULE HAS BEEN REDACTED AND IS THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST PURSUANT TO RULE 24b-2.

REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION.

Schedule 15.4.2

Portfolio Purchase Option

1. Option to Purchase. Upon the delivery of any notice of termination by either
Party, Retailer shall have the option to purchase, or designate a third party to
purchase, the Portfolio at a purchase price equal to [***] (the “Purchase
Option”). Within one hundred eighty (180) days after delivery by Bank of any
information requested by Retailer pursuant to this Paragraph 1, Retailer shall
notify Bank of whether it shall exercise its Purchase Option. If Retailer fails
to timely deliver notice of exercise of the Purchase Option to Bank, Retailer
shall be deemed to have elected not to exercise the Purchase Option. If,
however, Retailer exercises the Purchase Option, Retailer shall use commercially
reasonable efforts to close the purchase sale within one hundred and eighty
(180) days of the date on which Retailer exercised the Purchase Option.

2. Bank Cooperation. Bank shall cooperate in the transfer of accounts to
Retailer or to its designated third-party purchaser, including by:

(a) Subject to Section 11.7.2, timely removing the Portfolio assets from any
securitization;

(b) At Retailer’s request, in order to facilitate a smooth transition process,
(i) engaging in Conversion planning and execution prior to, and as necessary
after, the termination of this Agreement and (ii) [***]. For avoidance of doubt,
after the Repurchase Closing Date: (A) Bank shall have no [***] (B) Bank shall
have no [***] and (C) in no instance shall Bank [***]; and

(c) Using good faith efforts to enter into a purchase and sale agreement
pursuant to which Retailer or its designated third-party purchaser would
purchase the Portfolio. Such agreement shall, at a minimum, include customary,
commercially reasonable representations and warranties by Bank regarding the
Portfolio assets.

3. [***]. If Retailer arranges for the purchase of the Portfolio and the
Repurchase Closing Date is to occur after the Termination Date of this Agreement
as a result of any action taken by a Governmental Authority, [***] without the
mutual written agreement of the Parties.

4. Purchase of Portfolio. Upon purchase of the Portfolio by Retailer, Bank shall
assign to Retailer or its designee, without recourse, all of its right, title
and interest in and to the Accounts and Receivables related thereto being
transferred.

 

[***] REPRESENTS CONFIDENTIAL MATERIAL WHICH HAS BEEN REDACTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

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Schedule 15.5.1(b)

Restricted Card Programs

Belk

Boscov’s

Dillard’s

JC Penney

Target

Kohl’s

Sears

Macy’s

Stage Stores

The Management Committee shall discuss the Restricted Card Programs regularly
and agree upon any changes to this list.

 

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