exv10w17we






Exhibit 10.17(e)




Pages where confidential treatment has been requested are stamped:

“Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.”

All redacted material has been marked by the symbol: [***].




Exhibit 10.17(e)

Exhibits and Schedules to the Credit Card Program Agreement between The Bon-Ton

Stores, Inc. and HSBC Bank Nevada, N.A.



 









 





Schedule 2.1(b)




Competing Retail Programs




Sears




Federated




Kohl’s




Saks




Dillard’s




JC Penney




Gottschalk’s




Boscov’s




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Schedule 2.1(b)(i)



[***]




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Schedule 2.2(a)




Operating Committee Members





	1.	 	Bon-Ton Members
	 
	2.	 	Bank Members




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Schedule 2.3



Launch Activities and Program Launch Payment



Launch Activities





	 	A 	 	Bon-Ton agrees to perform as follows:
	 
	 	 	 	While it is the Bank’s intent to link up with Bon-Ton’s existing systems, to the
extent reasonably necessary, Bon-Ton will develop software products for Bon-Ton’s
authorization system and application system. For the purpose of clarity, Bank
acknowledges that the software products of Bon-Ton and all Bon-Ton Confidential
Information, as well as all related trade secrets, copyrights, patents, or other
proprietary rights, are and shall remain the exclusive property of Bon-Ton and its
Affiliates. Bank shall not acquire any right, title or interest in or to the
software products of Bon-Ton.
	 
	 	B 	 	 Circuits. Bank and Bon-Ton agree to arrange for the installation of
certain direct electronic data links (leased lines which are owned and maintained by
Bank and/or its authorized agent’s system) and all communication’s equipment (which are
owned and maintained by Bank and/or its authorized agent’s system) between Bank and
Bon-Ton to provide the service described herein. Bon-Ton is responsible for making
Bon-Ton’s system ready and available for the installation and use of the direct
electronic data links. Bank is responsible for making Bank’s system ready and
available for the installation and use of the direct electronic data links. The
parties shall complete the installation of the direct electronic data link(s) on a
mutually agreed upon schedule. Bank or its designated agent shall perform all services
required to maintain the direct electronic data links. Bank shall provide diversified
circuits for redundancy with two different companies. Bon-Ton shall provide access to
and cooperate with Bank or its agent to permit the installation of direct electronic
data links for the transmission and receipt of authorization requests and authorization
responses for transactions.
	 
	 	C 	 	 Program Launch Payment. The Program Launch Payment means a one-time
payment from Bank to Bon-Ton of [***]Dollars ($[***]).




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Schedule 2.4



Revenue Participation Payment


Bank shall pay to Bon-Ton, as of the Commencement Date, a Revenue Participation Payment in the
amount of [***]% of [***] as an ongoing payment. Such Revenue Participation Payment shall be made
on each Business Day during the Term no later than 5:00 p.m., New York City time, with regard to
all credit sales volume data that is received by Bank by 7:00 a.m. New York City time, that day.











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Schedule 2.5



Prepaid Program Payment


The Prepaid Program Payment means a one-time payment to Bon-Ton from Bank of [***] percent ([***]%)
multiplied by the Total Receivables Purchased (“Total Receivables Purchased” is defined in the
Purchase and Sale Agreement dated June 20, 2005 by and between Bank and Bon-Ton (the “Purchase
Agreement”). Not later than three (3) Business Days after the Final Settlement Date, as defined in
the Purchase Agreement, (i) if the Total Receivables Purchased as reflected on the Final Closing
Statement (as defined in the Purchase Agreement) exceeds the estimated Total Receivable Purchased
as reflected on the Preliminary Closing Statement (as defined in the Purchase Agreement), Bank
shall pay to Bon-Ton an amount equal to [***] percent of such excess and (ii) if the Total
Receivables Purchased as reflected on the Preliminary Closing Statement exceeds the Total
Receivables Purchased as reflected on the Final Closing Statement, then Bon-Ton will pay to Bank an
amount equal to [***] percent of such excess.











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Schedule 2.6



Incentive Participation Payment


Bank shall pay to Bon-Ton an Incentive Participation Payment in the amount of [***]% of [***], to
support Program initiatives. Such Incentive Participation Payment shall be made each Month, for
the immediately preceding Month, no later than the fifth Business Day of the Month. As of the
Effective Date, the Incentive Participation Payment is intended to assist Bon-Ton in defraying the
cost of the employee “approved application incentive” and rewards related to the Program. Unless
otherwise modified by the Operating Committee, Bon-Ton agrees to maintain and keep in place during
the Term of this Agreement, its Store management account solicitation goals and objectives in
effect prior to the Effective Date, which both awards Bon-Ton employees with compensation for
generating an approved Cardholder application and sets application goals per employee based on
number of hours worked.










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Schedule 2.7(a)



Marketing Fund Contribution


Marketing Fund Contribution: The Marketing Fund Contribution will be [***] Dollars
($[***]), payable on the Commencement Date and on every yearly anniversary of the Commencement
Date.







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Schedule 2.7(d)



Program Re-Launch Economic Support


The Bank will provide [***] Dollars ($[***]) to support the re-launching of the Program.











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Schedule 2.7(f)



Other Marketing Support


Bank will, in addition to the materials provided pursuant to Section 2.7, provide [***] Dollars
($[***]) per year towards additional marketing campaigns and programs as directed by the Operating
Committee.











10









 








Schedule 2.7(g)




Periodic Program Reporting



The parties will develop a standard set of management reports as soon as practicable after the
Effective Date using the existing Bon Ton reports as a starting point. The list provided below is
a general representation of reports that will be provided to Bon Ton as part of this Agreement.




	 	 	 	 	 
	Report Type	 	Description	 	Frequency
	Settlement
	 	•   Detailed accounting of daily settlement
amounts providing a reconciliation of gross
credit sales to net credit sales

	 	Daily
	 
	Program Accounting
	 	•   Report of status of Promotional Credit
Plans to monitor High and Low Collar thresholds

	 	Monthly
	 
	 	 	•   Report of all amounts due to/from
Bon-Ton
	 	 
	 
	Performance Database
	 	•   Reports monitoring relevant Program
trends including new and existing account
performance, credit sales penetration,
store/region performance, vintage performance,
etc.

	 	Monthly
	 
	Applications and New
Account Reports
	 	•   Application volume and approval rate
trends including distributions by FICO score
and “No Hit” populations

	 	Weekly
	 
	 	 	•   Campaign-level reporting as required
	 	 
	 
	 	 	•   New Account data (for Bon-Ton marketing)
	 	 
	 
	Marketing
Effectiveness

Reports
	 	•   Metrics monitoring the productivity of
marketing investments including the use of
Promotional Credit Plans, account acquisition
incentives (initial purchase discounts, SPIFs),
and the rewards program

	 	Monthly
	 
	Service Level Reports
	 	•   Reporting on service levels provided in
Schedule 5.14 and others as agreed upon
including time series measurements

	 	Monthly
	 
	Chargeback Reports
	 	•   Report monitoring chargeback trends and
the chargeback queue depicting unresolved
chargebacks by age and dollar amount

	 	Weekly
	 
	Cardholder Data and
Analytical
Information
	 	•   Data attributes (e.g., new movers,
change of address information, demographic
data) from Bank’s internal databases that could
enhance Bon-Ton’s marketing efforts

	 	Quarterly
	 
	Market Basket Reports
	 	•   Cardholder transaction data including
product code, SKU number, and sales amount

	 	Monthly






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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.8



Program Services Compensation


Bank will pay to Bon-Ton, by the 15th day of each Month, as compensation for services
rendered with respect to the Program, an amount equal to [***] ($[***]) times the number of
in-store payments on Accounts received by Bon-Ton and either forwarded to Bank or netted in daily
settlements during the preceding Month.







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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.11



Sales, Gross Receipts, and Privilege Tax Refunds, Deductions, and Credits



[***]



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Schedule 2.12




Debt Cancellation





	I.	 	Offering of Debt Cancellation. Bank shall offer a debt cancellation product (“Debt
Cancellation”) to Cardholders, which may be made available through the paper Card applications
available at Bon-Ton’s point of sale (“POS”) and through other channels in the states agreed
upon by the parties in accordance with the following terms.






	II.	 	Rights and Obligations of Bon-Ton.






	 	(a)	 	Enrollment. For POS applications, Bon-Ton shall obtain the signature or
initials of Cardholders on Debt Cancellation enrollment forms for those Cardholders who
wish to enroll and transmit such Debt Cancellation enrollments to Bank for processing.
	 
	 	(b)	 	Cardholder Inquiries. Bon-Ton shall refer all inquiries concerning Debt
Cancellation to Bank on a timely basis.
	 
	 	(c)	 	Cancellations and Claims. If any Cardholders direct cancellation or
claim-related requests or inquiries to Bon-Ton, Bon-Ton shall forward any such requests
or inquiries to Bank on a timely basis.






	III.	 	Rights and Obligations of Bank.






	 	(a)	 	Debt Cancellation Forms. Bank shall develop and print all required Debt
Cancellation forms, including the contractual terms and conditions (“Debt Cancellation
Terms and Conditions”). Bank may, from time to time at its discretion, revise these
forms or the information provided to Bon-Ton, and may require Bon-Ton to destroy and
replace existing forms, including existing Card application forms if the enrollment
forms are attached to or referenced in those forms.
	 
	 	(b)	 	Fees. Bank shall establish the applicable fees for all Debt Cancellation.
	 
	 	(c)	 	Claims. Bank shall process all claims submitted for Debt Cancellation
(“Claims”), and shall maintain the following records of such Claims:




	 
	 	(i)	 	Notification of Claim
	 
	 	(ii)	 	Proof of loss
	 
	 	(iii)	 	Correspondence.


	 
	 	 	 	Bank shall be responsible for the administration, investigation, and verification of
Claims in accordance with the Debt Cancellation Terms and Conditions.
	 
	 	(d)	 	Servicing. Bank may enter into a servicing arrangement with any of its
affiliates, whereby such affiliates, on Bank’s behalf, will perform the duties and
obligations of Bank hereunder.




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	IV.	 	Administrative Expense Allowance.






	 	(a)	 	POS. Within fifteen (15) days after the end of each Month, Bank shall pay to
Bon-Ton an administrative expense allowance of [***]% of the amount of Debt
Cancellation fees billed during that period less any refunds of Debt Cancellation fees
credited to Cardholder’s Accounts during that period (“Net Written Fees”) generated
from POS business during that Month.
	 
	 	(b)	 	Telesales. Within fifteen (15) days after the end of each Month, Bank shall
pay to Bon-Ton an administrative expense allowance of [***]% of Net Written Fees
generated during that Month from telesales.
	 
	 	(c)	 	Other Marketing Channels. Within fifteen (15) days after the end of each
Month, Bank shall pay to Bon-Ton an administrative expense allowance of [***]% of Net
Written Fees generated during that Month from all marketing channels other than POS and
telesales, including but not limited to, billing statement inserts, card carriers and
bangtails.






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Schedule 4.1




Cardholder Agreement Terms and Conditions



(a) Annual Percentage Rate. The APR to be charged on purchases with the Card shall be
variable based on the Prime Rate plus 16.2% for the Standard APR, or on the Prime Rate plus 20.2%
for the Default APR. The Standard APR shall not exceed the maximum interest rate allowable by
Applicable Law, and shall be subject to change from time to time by Bank upon notice to Bon-Ton.
The Standard APR shall not be lower than 21.9%.



(b) Cardholders or applicants will not be charged any application fees, annual membership or other
periodic fees for the Card, or any other activity or inactivity fees.



(c) Cardholders will be charged fees for late or missed payments according to the following Table
4.1(c):




Table 4.1(c)




	 	 	 	 	 
	Account Balance	 	Late fee assessed	 
	$99.99 or less
	 	$	15.00	 
	$100.00 to $1,000.00
	 	$	29.00	 
	$1,000.01 or greater
	 	$	35.00	 





(d) Grace Period. Cardholders will have a grace period of 23 days before interest is
charged or billed to an Account in accordance with this Agreement and in accordance with the
Cardholder Agreement.



(e) Late Fee Assessment Date. Cardholders will be assessed a late fee if the payment is
not received by the payment due date.



(f) Minimum Payment. According to Applicable Law, the Cardholder’s minimum monthly payment
will be the amount of finance charges, fees, and the greater of $10 or 1% of the balance.



(g) Other Fees. Cardholders will not be charged an overlimit fee but will be charged
$29.00 for every returned check.



(h) Minimum Finance Charge. The Cardholder’s minimum finance charge will be $1.00.



(i) Late Fee Waiver Policy. Bank agrees to implement a Late Fee Waiver Policy as set forth
in Schedule 4.1(h).



Both parties desire to maintain Cardholder terms and conditions that are within market ranges of
other similar retail private label credit card programs. Any changes to the Cardholder Terms and
Conditions established in this Schedule 4.1 shall be approved by the Operating Committee per
Section 2.2 unless the specific change is required by Applicable Law, in which case such change
shall be within the sole discretion of Bank. The parties agree to implement the initial Cardholder






16









 







Agreement Terms and Conditions pursuant to Schedule 4.1 by September 1, 2005 or by the earliest
date thereafter subject to Applicable Law.






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Schedule 4.1(h)



Late Fee Waiver Policy


(a) For the first [***] days following the effective date of the change in the late fee grace
period from five (5) days to zero (0) days, as included in the Initial Cardholder Terms and
Conditions (“the Late Fee Grace Period Change”), Bank, or Bon-Ton as interim servicer shall employ
a modified Late Fee Waiver Policy with respect to Cardholders who request a reversal of a late fee
billed to an Account. During this [***] day waiver period, Bank agrees to waive, for each
Cardholder, a maximum of [***] consecutive late fees if requested by the Cardholder. Bank and
Bon-Ton will mutually agree on the scripting Bon-Ton would like Bank to utilize during this
[***]-day transition period. To the extent a Cardholder did not request a late fee waiver during
the initial [***]-day transition period following the effective date of the Late Fee Grace Period
Change, Bank agrees to waive during the following [***] day period for each [***] (“[***]”) a
maximum of [***] late fees if requested by the Cardholder, and for each other [***], [***] late fee
if requested by the Cardholder.



In addition, Bank shall waive, or allow Bon-Ton as interim servicer to waive, for the first [***]
(“the Late Fee Waiver Period”) following the effective date of the Late Fee Grace Period Change,
the [***] late fee assessed to [***] where a minimum payment was received from such [***] during
the Late Fee Grace Period Change but where such waiver was not requested from the Cardholder, and
for all such Cardholders Bank, or Bon-Ton as interim servicer, will include a statement message
relating thereto, on the billing statement that would reflect such late fee and the waiver thereof
(“[***]”).



(b) Following the end of the Late Fee Waiver Period and during each subsequent twelve (12) month
period, Bank, or Bon-Ton as interim servicer, shall waive: (i) for each [***], [***] late fees if
requested by such Cardholder; and, (ii) for any other [***], [***] late fee if requested by such
Cardholder.



(c) Following the end of the Late Fee Waiver Period, Bank, or Bon-Ton as interim servicer, agrees
to continue Bon-Ton’s historical late fee waiver run rate [***] with due consideration to effects
of changes in the Cardholder terms and conditions.







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Confidential treatment has been requested.

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Schedule 5.14




Service Level Standards




[***]



The above Service Level Standards will be tracked for timeliness and accuracy within Bank’s
existing and generally accepted Six Sigma framework.



(a) With at least 30 days notice, HSBC will offer extended hours of operations to support Bon-Ton’s
special promotional events and seasonality requirements such as early store openings and late store
closures during holiday seasons.






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Confidential treatment has been requested.

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Schedule 5.14



Service Level Standards (cont)



[***]


(b) Mail Rate means the calendar day that the envelope has been stuffed and is ready for
mailing with the United States Postal Service (“USPS”). In the event that the USPS is closed on
that calendar day, envelopes will be dropped off for mailing on the next calendar day the USPS is
open for business.



(c) If Bank fails to meet any Service Level Standards in any one Month, promptly (but no later than
thirty days after the end of that Month) Bank shall send Bon-Ton a report detailing the reason(s)
for such failure and a corrective action plan with respect to the failure. Bank shall send Bon-Ton
a second report, no later than 60 days following the date on which the corrective action plan was
implemented with the results of said plan. Should Bank fail again on any of the same Service Level
Standards within 180 days after the report detailing the corrective action plan was sent to
Bon-Ton, Bank shall pay to Bon-Ton a penalty in the amount of $[***] for each Service Level
Standard that was failed. Bank’s liability and obligations under this section shall only apply to
failed Service Level Standards that are caused solely by Bank.







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Exhibits and Schedules to First Amendment to the Credit Card Program

Agreement between The Bon-Ton Stores, Inc. and HSBC Bank Nevada, N.A. dated

March 5, 2006




Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.



Schedule 2.1 (b)(i)



[***]




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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.4



Revenue Participation Payment


Bank shall pay to Bon-Ton, as of the Commencement Date, a Revenue Participation Payment in the
amount of [***]% of [***] with respect to all Accounts other than NDSG Accounts as an ongoing
payment. Such Revenue Participation Payment shall be made on each Business Day during the Term no
later than 5:00 p.m., Eastern Standard Time, with regard to all credit sales volume data that are
received by Bank by 7:00 a.m., Eastern Standard Time, that day.



Bank shall pay to Bon-Ton, as of the Amendment Effective Time, an NDSG Revenue Participation
Payment in the amount of [***]% of NDSG [***] as an ongoing payment. Such NDSG Revenue
Participation Payment shall be made on each Business Day during the Term no later than 5:00 p.m.,
Eastern Standard Time, with regard to all credit sales volume data that are received by Bank by
7:00 a.m., Eastern Standard Time, that day.



If the NDSG Portfolio is not transitioned (and such changes have not taken effect) by August 1,
2006 from the Current NDSG T&Cs to the Substantive Aspects of the Modified T&Cs outlined in
Schedule 4.2 (“Substantive Modified Transition Failure”) and the reason for the Substantive
Modified Transition Failure is not caused by Bank, Bank shall be entitled to reduce the NDSG
Revenue Participation Payment from [***]% to [***]% as of August 1, 2006 until such time as the
NDSG Portfolio is transitioned to the Substantive Aspects of the Modified T&Cs; provided, however,
that in any circumstance, Bank shall resume the full [***]% Revenue Participation Payment by
November 1, 2006. For purposes of this Agreement, the phrase “Substantive Aspects” means changes
to the annual percentage rates, fees, late fee tiers, grace periods, late fee grace periods, and
minimum finance charges.



[***]



Beginning with the first Business Day following the date on which the NDSG Portfolio cardholder
terms and conditions are further modified, and have taken effect, to match the Bon-Ton Elder
Beerman terms and conditions, as referenced on Schedule 4.2, the NDSG Revenue Participation Payment
shall be [***]% of NDSG [***] as an ongoing payment. Such NDSG Revenue Participation Payment shall
be made on each Business Day during the Term no later than 5:00 p.m., Eastern Standard Time, with
regard to all NDSG-related credit sales volume data that are received by Bank by 7:00 a.m., Eastern
Standard Time, that day.







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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.5.1


The NDSG-related Prepaid Program Fee is $[***]







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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.6



Incentive Participation Payment


Bank shall pay to Bon-Ton an Incentive Participation Payment in the amount of [***]% of [***]
(including, without limitation, NDSG [***]), to support Program initiatives. Such Incentive
Participation Payment shall be made each Month, for the immediately preceding Month, no later than
the fifth Business Day of the Month. As of the Effective Date, the Incentive Participation Payment
is intended to assist Bon-Ton in defraying the cost of the employee “approved application
incentive” and rewards related to the Program. Unless otherwise modified by the Operating
Committee, Bon-Ton agrees to maintain and keep in place during the Term of this Agreement, its
Store management account solicitation goals and objectives in effect prior to the Effective Date,
which both awards Bon-Ton employees with compensation for generating an approved Cardholder
application and sets application goals per employee based on number of hours worked.







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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.7(a)



Marketing Fund Contribution


Marketing Fund Contribution: The Marketing Fund Contribution for the first Program Year
was [***] Dollars ($[***]), paid to Bon-Ton on the Commencement Date. The Marketing Fund
Contribution for the second Program Year and for every Program Year thereafter, payable on the
first and every yearly anniversary of the Commencement Date will be [***] Dollars ($[***]).







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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.7(f)



Other Marketing Support


Bank will, in addition to the materials provided pursuant to Section 2.7, provide [***] Dollars
($[***]) per year towards additional marketing campaigns and programs as directed by the Operating
Committee; provided, that subsequent to the Amendment Effective Time, such additional marketing
support contribution shall be increased to $[***].







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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.8



Program Services Compensation


Bank will pay to Bon-Ton, by the 15th day of each Month, as compensation for services
rendered with respect to the Program, an amount equal to [***] ($[***]) times the number of
in-store payments on Accounts (including, without limitation, NDSG Accounts) received by Bon-Ton
and its Affiliates (including, without limitation, NDSG) and either forwarded to Bank or netted in
daily settlements during the preceding Month.







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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 4.2



NDSG Cardholder Agreement Terms and Conditions



     The NDSG Portfolio will be transitioned from the Current NDSG cardholder terms and conditions
(“Current NDSG T&Cs”) to the Modified T&Cs outlined in the following table. The Substantive
Aspects of the Modified T&Cs will be effective no later than the date that the NDSG Portfolio is
converted to the HSBC systems from Saks’ systems:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Bon-Ton/
	Term/Condition	 	Current NDSG T&Cs	 	Modified T&Cs	 	ElderBeerman T&Cs
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Standard APR

	 	21.6% Fixed
	 	Variable: Prime plus 16.2%,
minimum 21.9%
	 	Variable: Prime plus 16.2%,
minimum 21.9%

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Annual/Application/Membership
Fee

	 	$ 0	 	$ 0	 	$ 0
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Late Fees

	 	$5.00 if balance < 49.99

$19.00 if balance $50.00 -
$149.99

$24.00 if balance
$150.00-$299.99

$29.00 if balance > $300.00
	 	$15.00 if balance <$100

$29.00 if balance is
$100-$1,000

$35.00 if balance > $1,000
	 	$15.00 if balance <$100

$29.00 if balance is
$100-$1,000

$35.00 if balance >$1,000

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Late Fee Assessment 

Date

	 	11 days (10 disclosed plus one)
	 	5 days (from the due date)
	 	No grace days past payment due
date

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Minimum Payment

	 	OCC min payment
	 	OCC min payment
	 	OCC min payment

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Minimum Finance Charge

	 	$ 0.50	 	$ 1.00	 	$ 1.00
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Grace Period

	 	30/31 days depending on the
month
	 	25 days
	 	23 days

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Return Check Fee

	 	$ 25	 	$ 29	 	$ 29
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Late Fee Waiver Policy

	 	None
	 	As set forth below
	 	To be determined by the parties







     Bon-Ton shall have the right, but not the obligation, to require that HSBC change the
NDSG Portfolio Cardholder terms and conditions to the Bon-Ton/Elder-Beerman terms and conditions
set forth in the table above and, if Bon-Ton exercises such right to do so, the NDSG Revenue
Participation Payment shall be as set forth on Schedule 2.4, as amended herein.



     The costs of notice to Cardholders for the Modified T&Cs shall be borne by Bank. The costs of
notice to Cardholders for the Bon-Ton/Elder-Beerman T&Cs shall be mutually agreed on by the
parties.



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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.



NDSG Portfolio Late Fee Waiver Policy




     For the first [***] days following the effective date of the change in the late fee grace
period from eleven (11) days to five (5) days, as included in the Modified T&Cs (the “NDSG Late Fee
Grace Period Change”), Bank shall employ a modified NDSG Late
Fee Waiver Policy with respect to NDSG Cardholders who request a reversal of a late fee billed to
an Account. During this [***]-day waiver period, Bank agrees to waive, for each NDSG Cardholder, a
maximum of [***] consecutive late fees if requested by the NDSG Cardholder. Bank and Bon-Ton will
mutually agree on the scripting Bon-Ton would like Bank to utilize during this [***]-day transition
period. To the extent an NDSG Cardholder did not request a late fee waiver during the initial
[***]-day transition period following the effective date of the NDSG Late Fee Grace Period Change,
Bank agrees to waive during the following [***]-day period for each NDSG Cardholder, one late fee
if requested by the NDSG Cardholder.




     Following the end of the NDSG Late Fee Waiver Period, Bank agrees to continue Bon-Ton’s
historical late fee waiver run rate ([***]) with due consideration to effects of changes in the
Cardholder terms and conditions.



29









 





Exhibits and Schedules to Second Amendment to the Credit Card Program

Agreement between The Bon-Ton Stores, Inc. and HSBC Bank Nevada, N.A. dated

December 15, 2006




Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.



Schedule 3




     1. The parties agree that during the period of time beginning with the Amendment Effective
Date and ending at 11 :59 p.m. on February 28, 2007, the Revenue Participation Payment associated
with the Parisian Accounts will be [***]% of [***] associated with the Parisian
Accounts.



     2. The parties agree that beginning on March 1, 2007, the Revenue Participation Payment
associated with the Parisian Accounts will be [***]% of [***] associated with the
Parisian Accounts.



     3. Immediately following the execution of this Second Amendment, Bon-Ton shall transmit to
HSBC, via the wire instructions below, a one-time payment of $[***].



[***]









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Exhibits and Schedules to Third Amendment to the Credit Card Program

Agreement between The Bon-Ton Stores, Inc. and HSBC Bank Nevada, N.A. dated

August 4, 2009




Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.4




Revenue Participation Payment


Beginning on the Third Amendment Effective Date, Bank shall pay to Bon-Ton as an ongoing payment a
Revenue Participation Payment in the amount of [***] of [***] not related to Promotional Credit
Plans (which includes Promotional Credit Plan Card Sales that are related to mail, telephone and
Internet orders) with respect to all Accounts other than NDSG Accounts and Parisian Accounts, and
[***] of both NDSG [***] and Parisian [***] not related to Promotional Credit Plans (which includes
Promotional Credit Plan Card Sales that are related to mail, telephone and Internet orders). Such
Revenue Participation Payment shall be made on each Business Day during the Term no later than 5:00
p.m., New York City time, with regard to all credit sales volume data that are received by Bank by
7:00 a.m., New York City time, that day.



[***]











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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.7(a)



Marketing Fund Contribution



Marketing Fund Contribution:





	 	•	 	For each Program Year that begins after the Third Amendment Effective Date, Bank shall
make a total Marketing Fund Contribution of $[***].
	 
	 	•	 	In the event that the entire amount of the Marketing Fund Contribution is not spent
within a Program Year and Bon-Ton made proposals for Program related marketing to the
Operating Committee that would have spent the entire amount of the unused portion of the
Marketing Fund Contribution, then Bank will pay Bon-Ton that difference within 14 days of
the end of the Program Year.






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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.17


(a) Bon-Ton agrees to share certain losses associated with the Program in
accordance with the provisions of this Schedule 2.17.



(b) For purposes of this Schedule 2.17, the following definitions apply:





	 	•	 	“Gross Charge-Off” means, for any period, the
aggregate amounts charged off during such period, including fees and
finance charges, in accordance with Bank’s guidelines in effect
throughout 2008, copies of which have been delivered to Bon-Ton, such
guidelines to be applied in a manner consistent with their application
for the year ending December 31, 2008, or Applicable Law (but only to the
extent that changes to the guidelines are required by Applicable Law).
	 
	 	•	 	“Net Charge-Off” means, for any period, Gross
Charge-Off less Recoveries.
	 
	 	•	 	“Recoveries” mean, for previously charged off
Accounts, all monies collected either through sale or through further
payment by customer, net of fees paid to collection agencies or attorneys
to collect these funds, as well as sales tax recoveries, net of
consultant or attorney fees supporting the collection of these
recoveries, in accordance with Bank’s guidelines in 2008, copies of which
have been delivered to Bon-Ton, such guidelines to be applied in a manner
consistent with their application in 2008, or Applicable Law (but only to
the extent that changes to the guidelines are required by Applicable
Law), or consistent with changes made to the guidelines for Bon-Ton and
a majority of active, non-secured private label credit card portfolios
(as of the execution of this Third Amendment, Bank owns approximately
[***] of such portfolios) in an effort to reduce the total amount of Net
Charge-Off.
	 
	 	•	 	“Net Charge-Off Percentage” means, for any calendar
year, Net Charge-Off divided by the twelve (12) month daily average
Cardholder Indebtedness.




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	 	•	 	“Annual Net Charge-Off” means, for any year, the
total Net Charge-Off for any particular calendar year.




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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.





	 	•	 	“Annual Baseline Net Charge-Off” means, for any
year, the product of Net Charge-Off Percentage for calendar year 2008
multiplied by the twelve (12) month daily average Cardholder Indebtedness
for that calendar year.
	 
	 	•	 	“Loss Cap” means, for any full calendar year,
$[***], and for any partial calendar year, $[***] multiplied by the
quotient of the number of completed months during such partial year that
this Third Amendment was effective divided by 12.
	 
	 	•	 	“First Quarter Baseline Net Charge-Off” means the
total amount of Net Charge-Offs from January 1, 2008 through March 31,
2008.
	 
	 	•	 	“Annual First Quarter Net Charge-Off” means, for any
calendar year, the total amount of Net Charge-Offs from January 1 through
March 31 of that year.
	 
	 	•	 	“Second Quarter Baseline Net Charge-Off” means the
total amount of Net Charge-Offs from January 1, 2008 through June 30,
2008.
	 
	 	•	 	“Annual Second Quarter Net-Charge-Off” means, for
any calendar year, the total amount of Net Charge-Offs from January 1
through June 30 of that year.
	 
	 	•	 	“Third Quarter Baseline Net Charge-Off” means the
total amount of Net Charge-Offs from January 1, 2008 through September
30, 2008.
	 
	 	•	 	“Annual Third Quarter Net Charge-Off” means, for any
calendar year, the total amount of Net Charge-Offs from January 1 through
September 30 of that year.
	 
	 	•	 	“Payment Notice” means the notice delivered from
Bank to Bon-Ton that calculates any amounts due and owing from either
Bank or Bon-Ton under this Schedule 2.17. An executive officer of Bank
must certify that the Payment Notice (i) has been prepared based upon the
books and records of Bank in accordance with the terms of this Schedule
2.17, including use of Bank’s guidelines for categorizing Gross
Charge-Off in effect throughout 2008, except as modified by Applicable
Law, and Bank’s guidelines for Recoveries in effect in 2008, unless
modified by Applicable Law, or by changes made to the guidelines for
Bon-Ton and a majority of active, non-secured private label credit card
portfolios (as of the




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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.





	 	 	 	execution of the Third Amendment, Bank owns approximately [***] of such
portfolios) in an effort to reduce Net Charge-Off, and (ii) accurately
reflects the Net Charge-Off for the period stated.
	 
	 	•	 	“Active, Existing Cardholders” means named
Cardholders on Accounts that have had statement activity within the prior
[***] months.
	 
	 	•	 	“Segment” means any of the [***] point segments of
Active, Existing Cardholders with FICO scores between [***] as set forth
below in the definition of “Trigger”, and Active, Existing Cardholders
with FICO scores of [***] or above, with the FICO score based on the
score at the beginning of the observation period.
	 
	 	•	 	“Observation Period” means any 12 month observation
period.
	 
	 	•	 	“Segment Delinquent Indebtedness” means the 12 month
average of the amount of Cardholder Indebtedness for a Segment during an
Observation Period for those customers that are at least 30 days past
due, excluding charge-offs.
	 
	 	•	 	“Segment Indebtedness” means the 12 month average of
the total amount of Cardholder Indebtedness for a Segment during an
Observation Period.
	 
	 	•	 	“[***] Delinquent Indebtedness” means the 12 month
average of the amount of Cardholder Indebtedness for the entire
population of Active, Existing Cardholders with FICO scores of [***] or
greater during an Observation Period for those customers that are at
least 30 days past due, excluding charge-offs.
	 
	 	•	 	“[***] Indebtedness” means the 12 month average of
the total amount of Cardholder Indebtedness for the entire population of
Active, Existing Cardholders with FICO scores of [***] or greater during
an Observation Period.
	 
	 	•	 	“Population Delinquent Indebtedness” means, for any
Segment, the 12 month average of the amount of Cardholder Indebtedness
with respect to that Segment identified by a Rule during an Observation
Period for those customers that are at least 30 days past due, excluding
charge-offs.




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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.





	 	•	 	“Population Indebtedness” means, for any Segment,
the 12 month average of the total amount of Cardholder Indebtedness with
respect to that Segment identified by a Rule during an Observation Period.
	 
	 	•	 	“Rule” means any rule that is statistically
correlated to delinquency and/or charge off performance in at least three
other retail portfolios and for which Bank is currently using or will use
within three months of the date of implementation of any such rule. For
example, debt-to-income ratio greater than [***]% could constitute a Rule
even if the degree of correlation is different between Bon-Ton and the
other retail portfolios. Prior to the implementation of a rule, Bank
shall have one of its senior Risk officers certify that the rule being
proposed for Bon-Ton and the other retail portfolios is statistically
correlated to delinquency and/or charge off performance and Bank shall
provide Bon-Ton with detail as to such statistical correlation for
Bon-Ton.
	 
	 	•	 	“Trigger” means the following for each Segment:





	 	 	 
	FICO Score Range	 	Trigger
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]





(c) Beginning on the Third Amendment Effective Date, in any calendar year during
the term of the Agreement that the Annual Net Charge-Off exceeds the Annual
Baseline Net Charge-Off, Bon-Ton agrees to pay to Bank, in the manner contemplated
by paragraphs (e)-(i) of this Schedule 2.17, an amount equal to [***]% of such
excess amount; provided, however, that in no event shall Bon-Ton’s payment
obligations pursuant to this Schedule 2.17 with respect to any calendar year
exceed the Loss Cap.



(d) Bon-Ton may exercise its rights under Section 13.10 of the Agreement to
examine Bank’s calculation of any amount due under this Schedule 2.17. Each of
Bon-Ton and Bank shall pay the other party any undisputed amounts owed in
connection with the applicable Payment






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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.



Notice within 14 Business Days of receipt of a Payment Notice prepared and
delivered in accordance with the provisions of this Schedule 2.17. If
there is a dispute as to any amount due, the matter shall be resolved as provided
in paragraph (j) of this Schedule 2.17; provided, however, that Bon-Ton shall pay
all undisputed amounts within the 14 Business Day period set forth above. Failure
to pay any undisputed amounts within the specified time period shall be deemed a
material breach of Bon-Ton’s obligations under the Agreement.



(e) Bank will have its internal auditor certify that the Net Charge-Off Percentage
for calendar year 2008, the First Quarter Baseline Net Charge-Off, the Second
Quarter Baseline Net Charge-Off and the Third Quarter Baseline Net Charge-Off are
accurate and were prepared based upon the books and records of Bank in accordance
with the terms of this Schedule 2.17, including use of those of Bank’s guidelines
in effect throughout 2008 which guidelines did not change during 2008.



(f) After the first quarter of every calendar year from and after the Third
Amendment Effective Date, Bank shall calculate the Annual First Quarter Net
Charge-Off. If the Annual First Quarter Net Charge-Off exceeds the First Quarter
Baseline Net Charge-Off, Bon-Ton shall pay Bank [***]% of that excess, not to
exceed the Loss Cap. For instance, if the Annual First Quarter Net Charge-Off was
$[***] and the First Quarter Baseline Net Charge-Off was $[***], then Bon-Ton
shall pay Bank $[***] (($[***]) x ([***]) = $[***]).



(g) After the second quarter of every calendar year, Bank shall calculate the
Annual Second Quarter Net Charge-Off. Bank shall then subtract the Second Quarter
Baseline Net Charge-Off from the Annual Second Quarter Charge-Off.





	 	•	 	If that number is [***], Bank shall refund to Bon-Ton all
monies, if any, pursuant to subsection (f) above for that calendar year.
For instance, if in a given year (i) Bon-Ton paid Bank $[***] pursuant to
subsection (f) above; (ii) the Second Quarter Baseline Net Charge-Off was
$[***]; and (iii) the Annual Second Quarter Net Charge Off was less than
or equal to $[***], under this subsection (g) Bank would refund to
Bon-Ton the $ [***] Bon-Ton had paid under subsection (f).
	 
	 	•	 	If, however, the subtraction described above results in
[***], Bank will subtract the amount paid by Bon-Ton under subsection (f)
from [***]% of the difference calculated as described above. If the
number is [***], Bon-Ton shall pay that amount to Bank, up to the Loss
Cap. If the amount is [***], Bank shall refund that




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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.





	 	 	 	amount to Bon-Ton. For instance, if in a given year (i) Bon-Ton paid Bank $ [***]
pursuant to subsection (f) above; (ii) the Second Quarter Baseline Net Charge-Off was $[***]; and (iii) the Annual Second
Quarter Net Charge Off was $[***], under this subsection (g) Bon-Ton would
owe Bank $[***] (($[***]) x [***] — $[***] = $[***]). Similarly, if in
the foregoing example the Second Quarter Net Charge-Off was $[***], Bank
shall pay Bon-Ton $[***] (($[***]) x [***] — $[***] = -$[***]).




(h) After the third quarter of every calendar year, Bank shall calculate the
Annual Third Quarter Net Charge-Off. Bank shall then subtract the Third Quarter
Baseline Net Charge-Off from the Third Quarter Charge-Off.





	 	•	 	If that number is [***], Bank shall refund to Bon-Ton the
net amount, if any, of monies paid by Bon-Ton under subsections (f) and
(g) less any monies refunded by Bank under subsection (g) above for that
calendar year. For instance, if in a given year (i) Bon-Ton paid Bank
$[***] pursuant to subsection (f) above; (ii) Bank refunded $[***] to
Bon-Ton under subsection (g) above; (ii) the Third Quarter Baseline Net
Charge-Off was $[***]; and (iii) the Annual Third Quarter Net Charge Off
was less than or equal to $[***], under this subsection (h) Bank shall
pay to Bon-Ton $[***].
	 
	 	•	 	If, however, the subtraction described above results in
[***], Bank will subtract the amount paid by Bon-Ton under subsection (f)
and (g) from [***]% of the difference calculated as described above. If
the number is [***], Bon-Ton shall pay that amount to Bank, up to the
Loss Cap. If the amount is [***], Bank shall refund that amount to
Bon-Ton. For instance, if in a given year (i) Bon-Ton paid a net of
$[***] to Bank pursuant to subsections (f) and (g) above; (ii) the Third
Quarter Baseline Net Charge-Off was $[***]; and (iii) the Annual Third
Quarter Net Charge Off was $[***], under this subsection (h) Bon-Ton
would owe Bank $[***] (($[***]) x [***] — $[***] = $[***]). Similarly,
if in the foregoing example the Third Quarter Net Charge-Off was $[***],
Bank would refund to Bon-Ton $[***] (($[***]) x [***] — $[***] =
-$[***]).




(i) For any calendar year in which the Annual Net Charge-Off exceeds the Annual
Baseline Net Charge-Off, Bon-Ton shall pay to Bank [***]% of such excess, less the
net payments applicable to such calendar year theretofore paid by Bon-Ton pursuant
to paragraph (d) above; provided, however, that in no event shall the payments by
Bon-Ton




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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.



pursuant to this Schedule 2.17 exceed the Loss Cap for any calendar year. For any calendar year in
which the amount paid by Bon-Ton to Bank pursuant to this Schedule 2.17 for all
calendar quarters in the calendar year (less the net payments applicable to such
calendar year paid by Bank to Bon-Ton pursuant to this Schedule 2.17) exceeds
[***]% of the amount, if any, by which the Annual Net Charge-Off exceeds the Annual Baseline Net Charge-Off, Bank
shall refund to Bon-Ton such excess. Bank shall have its internal auditor certify
that the calculation of Annual Net Charge-Off under this paragraph (i) is accurate
and was prepared based upon the books and records of the Bank in accordance with
the terms of this Schedule 2.17



(j) In the event of a dispute relating to any Payment Notice, such dispute shall
be presented to the Operating Committee. If the Operating Committee fails to
agree on a resolution to the disputed matter within 10 Business Days, then
executive officers of Bon-Ton and Bank with decision making authority, who are not
members of the Operating Committee, shall in good faith attempt to resolve the
dispute or difference. If after 10 Business Days such dispute or difference
remains unresolved, either Bon-Ton or Bank shall have the right to declare a
deadlock. A deadlock with respect to any Payment Notice shall be deemed not to be
a matter addressed by either Section 2.2(g) or Section 2.2(h) and therefore shall
not be within the ultimate decision-making authority of either Bank or Bon-Ton.



(k) New proposals for credit line decreases, closures and changes in authorization
criteria for Active, Existing Cardholders with FICO scores of below [***] or an
invalid FICO score shall be decided in accordance with Section 2.2 of the
Agreement. Subject to the exceptions provided for in subsections (m) and (n)
below, new proposals for credit line decreases, closures and changes in
authorization criteria for Active, Existing Cardholders with FICO scores of [***]
or above must be approved by both Bon-Ton and Bank at the Operating Committee. A
deadlock with respect to any such credit line decrease for Active, Existing
Cardholders with FICO scores of [***] or above shall be deemed not to be a matter
addressed by either Section 2.2(g) or Section 2.2(h) and therefore shall not be
within the ultimate decision-making authority of either Bank or Bon-Ton. For
purposes of subsections (k), (m) and (n), “new” means any policy or criteria not
approved and/or currently in effect as of the execution of this Third Amendment.



(l) At each quarterly Operating Committee meeting, and within 45 days of any
change in projection of more than [***]%, Bank shall provide to Bon-Ton on a
rolling basis a projection of Net Charge-Offs for the next four calendar quarters
by type (delinquency/aging, bankruptcy, legal, deceased, etc.).



(m) Notwithstanding anything contained in subsection (k) above, new proposals for
credit line decreases, closures and changes in authorization





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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.



criteria shall be decided in accordance with Section 2.2 of the Agreement if (i)
for any Segment during any Observation Period the Segment Delinquent Indebtedness divided by Segment Indebtedness meets or exceeds the
respective Trigger, and (ii) the [***]+ Delinquent Indebtedness divided by the
[redacted]+ Indebtedness meets or exceeds [***]%. In conjunction with any
proposal to the Operating Committee under this subsection (m), Bank shall propose
an option for additional [***] loss sharing to Bon-Ton based on projections for
incremental losses for the remainder of the Initial Term, subject to the condition
that the failure by Bon-Ton to pay undisputed amounts under this option within 14
business day shall constitute a material breach of the Agreement.



(n) Notwithstanding anything contained in subsections (k) and (m) above and only
if this Third Amendment is not terminated in accordance with Section 20 hereof,
new proposals for credit line decreases, closures and/or changes in authorization
criteria shall be decided in accordance with Section 2.2 of the Agreement for a
Segment if, with respect to any portion of a Segment identified by a Rule in any
Observation Period, the Population Delinquent Indebtedness divided by Population
Indebtedness meets or exceeds the Trigger for that Segment.





	 	•	 	With respect to actions taken on populations under this subsection
(n), Bank agrees that Accounts subject to a credit line decrease, closure
and/or change in authorization criteria as set forth in this subsection
(n): (i) will not be eligible for another change for at least [***] and
(ii) will be excluded from the calculation of Population Delinquent
Indebtedness and Population Indebtedness for at least 6 months.
	 
	 	•	 	In the event that Bank institutes credit line decreases under this
subsection (n), Bank shall not reduce credit lines to less than $[***].
	 
	 	•	 	For purposes of this subsection (n), the above calculations shall take
place no more frequently than on a monthly basis.
	 
	 	•	 	Bank agrees that with respect to any credit line decreases, closures
or changes in authorization criteria instituted under this subsection (n)
that, as of the date any such action is taken, it will not have
implemented credit line decreases, closures or changes in authorization,
on a cumulative basis, on more than the [***]% of the then current number
of Accounts in the Segment.




(o) [***]






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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 2.18


Beginning with the Third Amendment Effective Date, Bank assumes that at least
[***]% of [***] in any calendar year will relate to Promotional Credit Plans. If
during any calendar year, beginning with 2009, less than [***]% of [***] for that
calendar year relate to Promotional Credit Plans, Bon-Ton shall pay Bank within 14
Business Days of receiving an invoice therefor an amount equal to the product of
the amount of the percentage shortfall multiplied by [***]% multiplied by the
[***] for that year. For instance, if [***].











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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 3


Paragraph 2 of Schedule 3 to the Agreement is amended to read in its entirety as
follows: The parties agree that beginning on March 1, 2007 until the Third
Amendment Effective Date, the Revenue Participation Payment associated with the
Parisian Accounts will be [***]% of [***] associated with the Parisian Accounts.









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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 3-20


As a condition to the effectiveness of the Opt Out Right set forth in Section 20 of the Third
Amendment, the party giving the Opt Out Notice must make a one-time payment of $[***] (the “Opt Out
Payment”) to the other party within one business day of providing the Opt Out Notice. Failure to
make the Opt Out Payment shall render the Opt Out Notice void, and the Opt Out Right may only be
exercised upon delivery of a new Opt Out Notice. In the event a party exercises its Opt Out Right,
(i) Bank shall not be required to return to Bon-Ton any monies received from Bon-Ton under the
Third Amendment, and (ii) Bon-Ton shall not be required to return to Bank any monies received from
Bank under the Third Amendment. In addition, exercise of the Opt Out Right shall not affect any
rights which accrued prior to the Opt Out Effective Date. For example, if the Opt Out Effective
Date is July 1, 2010, then (1) Net Credit Sales on Promotional Credit Plans will be excluded from
calculation of the Revenue Participation Payment through June 30, 2010, and (2) the parties shall
be required to calculate and pay, to Bank or Bon-Ton as appropriate, the amount required by
Schedule 2.17 for the Second Quarter of 2010, even if the calculation of the amount owed thereunder
takes place after July 1, 2010. With respect to Sections 2.7(a) and 2.7(f) of the Agreement and
Schedules 2.1(b)(1), 2.7(a) and 2.7(f) of the Agreement, the parties agree that (i) such provisions
will revert to the provisions that existed prior to the execution of the Third Amendment at the
commencement of the next full Program Year, and (ii) the Marketing Fund Contribution shall be
increased by $[***] for each month remaining in the then current Program Year.



The parties agree to pro-rate any amounts due under Schedule 2.17 as follows: (a) if the Opt Out
Effective Date is prior to the 16th day of any month the Opt Out Effective Date shall be deemed to
have been the first day of such month, and if the Opt Out Effective Date is on or after the 16th
day of any month, the Opt Out Effective Date shall be deemed to have been the first day of the
following month; (b) if necessary, Bank shall calculate a revised Baseline Net Charge-Off in
accordance with the principles set forth in Schedule 2.17 of the Agreement for the period in 2008
from January 1 to the deemed Opt Out Effective Date established in accordance with clause (a)
above; and (c) the parties shall calculate amounts due under Schedule 2.17 by determining the
Annual Net Charge-Off for such period and comparing it to the Baseline Net Charge-Off for such
period resulting from clause (b) above. For example:





	 	•	 	If the Opt Out Effective Date is July 15, 2010, then any amounts due under
Schedule 2.17 would be calculated using only the Second Quarter information, and neither
Bank nor Bon-Ton would owe the other any payment as a result of any calculation with
respect to the Third Quarter.
	 
	 	•	 	If the Opt Out Effective Date is June 15, 2010, then (i) Bank shall calculate
a revised Baseline Net Charge-Off for the Second Quarter based solely upon information from
January 1 through May 31, 2008, and (ii) the parties shall determine any amount due
under Schedule 2.17 based on the actual Annual Net Charge-Off from January 1 through May 31,
2010 and the revised Baseline Net Charge-Off calculated by Bank.




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	 	•	 	If the Opt Out Effective Date is July 16, 2010, then (i) Bank shall calculate
a revised Baseline Net Charge Off for the Third Quarter based solely upon information from
January 1 through July 31, 2008, and (ii) the parties shall determine any amount due under
Schedule 2.17 based on the actual Annual Net Charge-Off from January 1 through July 31,
2010 and the revised Baseline Net Charge-Off calculated by Bank.




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Confidential treatment has been requested.

Redacted material has been separately filed with the Commission.




Schedule 4.1(h)



Late Fee Waiver Policy


Beginning with the Third Amendment Effective Date, Bank shall waive for any Cardholder [***] late
fee during a rolling twelve (12) month period if requested by the Cardholder. For example, if a
Cardholder receives a late fee waiver [***], Bank will not be required to grant a late fee waiver
request from that Cardholder [***]. Bank shall provide data to Bon-Ton with respect to late fee
complaints, late fee waiver requests and late fee waivers as Bon-Ton may reasonably request from
time to time.





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