EXHIBIT 10.31
 
FIRST AMENDMENT TO PRIVATE LABEL
CONSUMER CREDIT CARD PROGRAM AGREEMENT
 
This first Amendment to PRIVATE LABEL CONSUMER CREDIT Card Program Agreement
made as of November 6, 2010 (this “Amendment”) amends that certain Private Label
Consumer Credit Card Program Agreement, made as of June 15, 2010 (as amended,
modified and supplemented from time to time, the “Agreement”) by and between GE
Money Bank (“Bank”) and Nautilus, Inc. (“Retailer”). Capitalized terms used
herein and not otherwise defined have the meanings given them in the Agreement.
WHEREAS, prior to entering into the Agreement with Bank, Retailer was a party to
a private label credit card program agreement with a different issuer (the
“Prior Issuer”) under which Retailer hosted the private label credit card
application on the Retailer Website;
WHEREAS, Retailer desires to host an Internet Application on the Retailer
Website (the “Credit Application”) during the Term;
WHEREAS, Bank will allow Retailer to host the Credit Application during the Term
subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and subject to the terms
and conditions hereinafter set forth, the parties hereby agree as follows:
I.    
amendmentS to the agreement

1.1    Hosting of Credit Applications. Section H is hereby added to Appendix C
of the Agreement:
H.    Hosting of Credit Application. The parties agree that Retailer may host
the Credit Application on the Retailer Website during the Term; provided that:
 
(i)    Retailer may not make the Credit Application available to the public
until Bank approves, in writing, all aspects of the Credit Application,
including, without limitation, the online form visible to consumers, all
disclosures required by Bank (“Disclosures”), and all interfaces between the
Retailer Website and Bank's systems (or the systems of Bank's vendors). Retailer
will post any new Disclosures and update any Disclosures, including Bank's
privacy policy, within two weeks, or less if required otherwise by applicable
law, of a request from Bank. In the event that Retailer cannot make a requested
change to a Disclosure, or post a new Disclosure in a timely manner, Bank may
direct that Retailer cease hosting the Credit Application on the Retailer
Website, and the parties will work together to accelerate the transition to
Bank's hosting of an Internet Application on the Bank Webpage.
 
(ii)    Consistent with its obligations under Section 13.5(b), Retailer will
establish and maintain administrative, technical, and physical safeguards to
protect the security, confidentiality and integrity of all Cardholder
Information collected on the Credit Application. Retailer's data security
measures must be as strong, or stronger, than the measures implemented to
protect the security of Cardholder Information collected on credit applications
for the Prior Issuer.
 
(iii)    Consistent with its obligations under Section 13.5(c), Retailer will
ensure that any third party to whom it transfers or discloses Cardholder
Information in connection with its credit application hosting activities signs a
written agreement with Retailer in which such third party agrees to (a) restrict
its use of Cardholder Information to

 

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the authorized use specified in the written contract; (b) comply with all
applicable laws (including, without limitation, privacy and security laws and
the reuse and redisclosure provisions of the Gramm-Leach-Bliley Act) and the
Bank Privacy Disclosures; and (c) implement and maintain appropriate safeguards
as stated in Section 13.5(b).
 
(iv)    Retailer will use the Cardholder Information collected on the Credit
Application only as allowed by the Agreement, the Bank Privacy Disclosures, and
applicable law.
 
(v)    Consistent with its obligations under Section 13.5(d), Retailer
acknowledges that it is responsible for any breach of security of its systems
used to collect and maintain Cardholder Information.
 
(vii)    In addition to its rights under Section 7.1, Bank will have the right
to chargeback to Retailer any Indebtedness that is attributable to a credit
application that was submitted via a Retailer Website or Retailer's servers if
the Cardholder, or other relevant person, disputes one or more transactions, and
Bank reasonably determines that the submission of the credit application was
subject to any act of fraud.
 
(vii)    Retailer acknowledges that after the Term, Bank will share certain
contact information of Cardholders with Retailer, but that Bank will not share
sensitive Cardholder Information with Retailer, such as social security numbers
and birth dates of Cardholders.
 
ii. GENERAL
2.1    Authority for Amendment. Retailer represents and warrants to Bank that
the execution, delivery and performance of this Amendment has been duly
authorized by all requisite corporate action on the part of Retailer and upon
execution by all parties, will constitute a legal, binding obligation of
Retailer.
2.2    Effect of Amendment. Except as specifically amended hereby, the
Agreement, and all terms contained therein, remains in full force and effect.
The Agreement, as amended by this Amendment, constitutes the entire
understanding of the parties with respect to the subject matter hereof.
2.3    Binding Effect; Severability. Each reference herein to a party hereto
shall be deemed to include its successors and assigns, all of whom shall be
bound by this Amendment and in whose favor the provisions of this Amendment
shall inure. In case any one or more of the provisions contained in this
Amendment shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
2.4    Further Assurances. The parties hereto agree to execute such other
documents and instruments and to do such other and further things as may be
necessary or desirable for the execution and implementation of this Amendment
and the consummation of the transactions contemplated hereby and thereby.
2.5    Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Utah, without regard to principles of
conflicts of laws.
2.6    Counterparts. This Amendment may be executed in counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one agreement.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their duly authorized officers, all as of the day and year first above
written.
 
NAUTILUS, INC.
 
 
By: /s/ William McMahon
Its: SVP Consumer
GE MONEY BANK
 
 
By: /s/ Glenn Marino
Its: EVP