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EXHIBIT 10.2

FORM OF EMPLOYMENT AGREEMENT

          AGREEMENT by and between CSX CORPORATION, a Virginia corporation (the “Company”), and
                                         (the “Executive”), dated as of the ___day of                     , 200_.

          The Board of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control and to encourage the Executive’s full attention and
dedication to the Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Certain Definitions.

     a. “Effective Date” means the first date during the Term (as defined in Section
l(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs, and (i) the
Executive’s employment with the Company is terminated by the Company without Cause or (ii)
the Executive ceases to be an officer of the Company in either case prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the Executive
that such termination of employment or cessation of status as an officer (i) was at the
request of a third party who has taken steps reasonably calculated to effect such Change of
Control or (ii) otherwise arose in connection with or anticipation of such Change of
Control, then, in each such case, for all purposes of this Agreement “Effective Date” shall
mean the date immediately prior to the date of such termination of employment or cessation
of status as an officer.

     b. The “Term” means the period commencing on the date hereof and ending on the
earlier to occur of (i) the third anniversary of such date or (ii) the first day of the
month next following the Employee’s normal retirement date (“Normal Retirement Date”) under
the principal pension plan in which the Executive participates (the “Pension Plan”);
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the
Term shall be automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice to the
Executive that the Term shall not be
so extended; and

 

 

provided, further, that the Term shall end on an earlier
date if the Company gives the Executive at least one year’s advance written notice thereof.

          2. Change of Control. For the purpose of this Agreement, a “Change of Control” shall
mean:

     a. Stock Acquisition. The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”)
or (ii) the combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or

     b. Board Composition. Individuals who, as of the date hereof, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent
to such date whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or

     c. Business Combination. Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the assets of the
Company or its principal subsidiary (a “Business Combination”) that is not subject, as a
matter of law or contract, to approval by the Surface Transportation Board or any successor
agency or regulatory body having jurisdiction over such transactions (the “Agency”), in each
case, unless, following such Business Combination:

     (i) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which

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as a
result of such transaction owns the Company or its principal subsidiary or all or
substantially all of the assets of the Company or its principal subsidiary either
directly or through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as the
case may be;

     (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination; and

     (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or

     d. Regulated Business Combination. Consummation of a Business Combination that
is subject, as a matter of law or contract, to approval by the Agency (a “Regulated Business
Combination”) unless such Business Combination complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2; or

     e. Liquidation or Dissolution. Consummation of a complete liquidation or
dissolution of the Company or its principal subsidiary approved by the Company’s
shareholders.

If any Change of Control is a Regulated Business Combination, but its implementation involves
another “Change of Control” that is not a Regulated Business Combination within the meaning of this
Section 2, then for all purposes of this Agreement, such Change of Control shall not be deemed to
be a Regulated Business Combination, the provisions governing a Regulated Business Combination
shall not apply, and the provisions governing such other Change in Control shall apply.

          3. Employment Period.

     a. Generally. Subject to Section 3(b), the Company hereby agrees to continue
the Executive in its employ, and the Executive hereby agrees to remain in
the employ of the Company subject to the terms and conditions of this Agreement, for
the period commencing on the Effective Date and ending on the third anniversary of such date
(the “Employment Period”).

     b. Regulated Business Combination. Notwithstanding the foregoing, in the case
of a Change of Control that is a Regulated Business Combination, then for all

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purposes of
this Agreement, the “Employment Period” shall mean the longer of (i) the period commencing
on the Effective Date and ending on the third anniversary of such date or (ii) the period
commencing on the Effective Date and ending twelve months from the effective date of a final
decision by the Agency on the proposed Regulated Business Combination (“Final Regulatory
Action”), provided, however, that (x) if the Final Regulatory Action is a
denial of the Regulated Business Combination then for all purposes of this Agreement the
“Employment Period” shall end upon the sixtieth (60th) day following such Final Regulatory
Action and (y) if the Final Regulatory Action is an approval of the Regulated Business
Combination, but the Regulated Business Combination is not consummated by the first
anniversary of the Final Regulatory Action, then for all purposes of this Agreement the
“Employment Period” shall end upon such first anniversary, of the Final Regulatory Action.

          4. Terms of Employment.

     a. Position and Duties. (i) During the Employment Period: (A) the Executive’s
position (including status, offices, titles and reporting requirements), authority, duties
and responsibilities shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the 120-day period
immediately preceding the Effective Date, and (B) the Executive’s services shall be
performed at the location where the Executive was employed immediately preceding the
Effective Date or any office or location less than 35 miles from such location.

     (ii) During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, Executive agrees during normal
business hours to diligently discharge the business and affairs of the Company and,
to the extent necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive’s reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking engagements
or teach at educational institutions and (C) manage personal investments, so long as
such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not thereafter be
deemed to interfere with the performance of the Executive’s responsibilities to the
Company.

     b. Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary (“Annual Base Salary”), which shall be paid at
a monthly rate, at least equal to twelve times the highest monthly base salary

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paid or
payable, including any base salary which has been earned but deferred, to the Executive by
the Company and its affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced after any such
increase, and the term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. Notwithstanding the preceding, an across-the-board
reduction in Annual Base Salary applicable to all similarly situated peer executives
implemented out of extreme business necessity and unrelated to a contemplated or anticipated
Change of Control shall not be a violation of this section. As used in this Agreement, the
term “affiliated companies” shall include any company controlled by, controlling or under
common control with the Company.

     (ii) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be eligible to earn, for each calendar year ending during the Employment
Period, an annual bonus (the “Annual Bonus”) in cash, at a minimum, target and
maximum level not less favorable (in terms both of dollar amounts and difficulty of
achievement) to the Executive than the Executive’s opportunity to earn such annual
cash bonuses under the Company’s annual incentive plans, or any comparable bonus
under any predecessor or successor plan, for the last three full calendar years
prior to the Effective Date (annualized in the event that the Executive was not
employed by the Company for the whole of such calendar year). Notwithstanding the
preceding, an across-the-board reduction of minimum, target and maximum Annual Bonus
opportunities applicable to all similarly situated peer executives implemented out
of extreme business necessity and unrelated to a contemplated or anticipated Change
of Control shall not be a violation of this section. (The highest of the actual
amounts of such bonuses, as so annualized, for each of such three full calendar
years is hereafter referred to as the “Recent Annual Bonus”.) Each such Annual
Bonus shall be paid no later than the end of the third month of the calendar year
next following the calendar year for which the Annual Bonus is awarded, unless
deferred pursuant to the terms of a deferred compensation plan maintained by the
Company.

     (iii) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most

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favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at any
time during the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated companies.

     (iv) Welfare Benefit Plans. During the Employment Period, the Executive
and/or the Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer executives of the Company
and its affiliated companies, but in no event shall such plans practices, policies
and programs provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices, policies and programs
its effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer executives of the
Company and its affiliated companies.

     (v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices and procedures
of the Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

     (vi) Fringe Benefits. During the Employment Period, the Executive shall
be entitled to fringe benefits, in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

     (vii) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with furnishings
and other appointments, and to exclusive personal secretarial and other assistance,
at least equal to the most favorable of the foregoing provided to the Executive by
the Company and its affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable

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to the Executive, as
provided generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

     (viii) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its affiliated companies as in effect for
the Executive at any time during the 120-day period immediately preceding the
Effective Date or, it more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies.

          Notwithstanding Sections 4.b.(iii)-(viii), benefits payable under a plan, practice, policy, or
program that has been amended to reduce benefits or terminated within the 120-day period
immediately preceding the Effective Date for reasons unrelated to affecting benefits due hereunder
shall not be taken into account under such provisions. In the case of a plan, practice, policy or
program amended to reduce benefits, only the higher pre-amendment benefit shall be disregarded.

          5. Termination of Employment.

     a. Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. If the Company
determines in good faith that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set forth below), it may give to
the Executive written notice in accordance with Section 13(b) of this Agreement of its
intention to terminate the Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the “Disability Effective Date”), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement, “Disability” shall mean the absence of
the Executive from the Executive’s duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive’s legal representative. Executive
agrees to cooperate with the Company and the selected physician so that such determination
can be made.

     b. Cause. The Company may terminate the Executive’s employment during the
Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:

     (i) the willful and continued failure of the Executive to perform substantially
the Executive’s duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the Executive by the
Board or the Chief Executive Officer of the Company which specifically identifies
the manner in which the Board or Chief Executive officer

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believes that the Executive
has not substantially performed the Executive’s duties, or

     (ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the Executive,
shall be considered “willful” unless it is done, or omitted to be done, by the Executive in
bad faith or without reasonable belief that the Executive’s action or omission was in the
best interests of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief
Executive Officer or a senior officer of the Company or based upon the advice of counsel for
the Company shall he conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until there shall
have been delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.

     c. Good Reason. The Executive’s employment may be terminated by the Executive
during the Employment Period for Good Reason. For purposes of this Section 5(c), any good
faith determination of “Good Reason” made by the Executive shall be conclusive. For
purposes of this Agreement, “Good Reason” shall mean:

     (i) the assignment to the Executive of any duties inconsistent in any respect
with the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section 4(a)
of this Agreement, or any other diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

     (ii) any failure by the Company to comply with any of the provisions of Section
4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;

     (iii) the Company’s requiring the Executive to be based at any office or
location other than as provided in Section 4(a)(i)(B) hereof or the Company’s
requiring the Executive to travel on Company business to a materially greater extent
than required immediately prior to the Effective Date, in either case without the
Executive’s prior consent.

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     (iv) any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; or

     (v) any failure by the Company to comply with and satisfy Section 12(c) of this
Agreement.

     d. Regulated Business Combination. Notwithstanding the foregoing, in the case
of a Change of Control that is a Regulated Business Combination, then for all purposes of
this Agreement, during that portion of the Employment Period prior to Final Regulatory
Action, the Executive may not exercise his rights to terminate his employment under this
Agreement for “Good Reason.” The Executive may only terminate his employment under this
Agreement if he is “Constructively Terminated” by the Company. Moreover, except to the
extent expressly set forth in the definition of “Constructive Termination,” the Executive
shall have no remedy for any breach by the Company of the provisions of Section 4;
provided, however, that any failure of the Company to comply in any material
respect with the provisions of Section 4 shall create a rebuttable presumption that a
Constructive Termination has occurred.

For purposes of this Agreement, a “Constructive Termination” shall mean:

     (i) substantial diminution of the Executive’s duties or responsibilities as
contemplated by Section 4(a) of this Agreement, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

     (ii) a reduction in the Executive’s Annual Base Salary;

     (iii) a failure by the Company to comply with Section 4(b)(ii) regarding the
Annual Bonus;

     (iv) a reduction in the Executive’s other incentive opportunities, benefits or
perquisites described in Section 4(b) unless the Executive’s peer executives suffer
a comparable reduction;

     (v) the Company’s requiring the Executive to be based at any office or location
other than as provided in Section 4(a)(i)(B) hereof or the Company’s
requiring the Executive to travel on Company business to a materially greater
extent than required immediately prior to the Effective Date, in either case without
the Executive’s prior consent.

     (vi) any purported termination by the Company of the Executive’s employment
otherwise than for Cause.

During that portion of the Employment Period after Final Regulatory Action, the Executive may
terminate his Employment under this Agreement for “Good Reason.”

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     e. Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason or Constructive Termination, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(b) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision
so indicated, and (iii) if the Date of Termination (as defined below) is other than the date
of receipt of such notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason, Cause or Constructive Termination shall not waive any right of the
Executive or the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.

     f. Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good Reason or
Constructive Termination, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive’s employment is terminated by
the Company other than for Cause or Disability, the Date of Termination shall be the date on
which the Company notifies the Executive of such termination and (iii) if the Executive’s
employment is terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case may be.

          6. Obligations of the Company upon Termination.

     a. Good Reason or Constructive Termination. If, during the Employment Period,
the Company shall terminate the Executive’s employment other than for Cause or Disability or
the Executive shall terminate employment for Good Reason or Constructive Termination, then
the Company shall provide the following payments and benefits:

     (i) The Company shall pay to the Executive in a lump sum in cash within 30 days
after the Date of Termination the aggregate of (A) plus (B), as follows:

     A. the sum of (1) the Executive’s Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product of (x)
the higher of (I) the Recent Annual Bonus and (II) the Executive’s most
recently established target Annual Bonus (annualized for any calendar year
consisting of less than twelve full months or during which the Executive was
employed for less than twelve full months) (such higher amount being
referred to as the “Highest Annual Bonus”) and (y) a fraction, the numerator
of which is the number of days in the

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current calendar year through the Date
of Termination, and the denominator of which is 365 and (3) any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the “Accrued Obligations”); and

     B. an amount equal to the product of (1) [two/three] and (2) the sum of
(x) the Executive’s Annual Base Salary in effect on the date of Executive’s
termination of employment (or, if greater, the Executive’s Annual Base
Salary in effect immediately before any salary reduction therein triggering
the event leading to Executive’s termination) and (y) the Highest Annual
Bonus.

     (ii) for [two/three] years after the Executive’s Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or the
Executive’s family at least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies described in Section
4(b)(iv) of this Agreement if the Executive’s employment had not been terminated or,
if more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated companies
and their families; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility; except as provided below, the period
during which the Executive and his family are eligible for health continuation
coverage under Section 4980B of the Code by reason of the Executive’s termination of
employment shall run from the end of such [two/three] year period. For purposes of
determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed until
[two/three] years after the Date of Termination
and to have retired on the last day of such period. With respect to any
self-insured medical benefits, the Company and Executive agree to use their
reasonable best efforts to replace such benefits with comparable fully insured
benefits, the cost of which shall be shared in the same manner as the self-insured
coverage. If the Company and Executive are unable to effect coverage acceptable to
Executive, coverage will be made available under the applicable self-insured plan
(but not through any plan or arrangement deemed to be a cafeteria plan under Section
125 of the Code) of the Company and Executive may elect to pay one hundred percent
of the cost of such coverage on an after-tax basis. In the event medical coverage
is provided under the existing plan, the initial eighteen months shall be deemed to
be COBRA coverage and the additional [two/three] years of coverage provided
thereafter.

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     (iii) The Company shall, at its sole expense as incurred, provide the Executive
with outplacement services the scope and provider of which shall be selected by the
Executive in his sole discretion, but at a cost not in excess of $20,000.

     (iv) To the extent not theretofore paid or provided, the Company shall timely
pay or provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies, including earned but unpaid stock and similar compensation (such other
amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

     b. Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate without
further obligations to the Executive’s legal representatives under this Agreement, other
than for payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect
to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(b)
shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be
entitled to receive, benefits at least equal to the most favorable benefits provided by the
Company and affiliated companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs, practices and policies
relating to death benefits, if any, as in effect with respect to other peer executives and
their beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s
beneficiaries, as in effect on the date of the Executive’s death with respect to other peer
executives of the Company and its affiliated companies and their beneficiaries.
Notwithstanding the preceding, benefits payable under a plan, practice, policy, or program
that has been amended to reduce benefits or terminated within the 120-day period immediately
preceding the Effective Date for reasons unrelated to affecting benefits due hereunder shall
not be taken into account. In
the case of a plan, practice, policy or program amended to reduce benefits, only the
higher pre-amendment benefit shall be disregarded.

     c. Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment Period, this Agreement shall terminate without
further obligations to the Executive, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability Effective Date to
receive, disability and other benefits at least equal to the most favorable of those
generally provided by the Company and its affiliated companies to disabled executives and/or
their families in accordance with such plans,

-12-

 

programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer executives and their
families at any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s family, as in effect at any time
thereafter generally with respect to other peer executives of the Company and its affiliated
companies and their families. Notwithstanding the preceding benefits payable under a plan,
practice, policy, or program that has been amended to reduce benefits or terminated within
the 120-day period immediately preceding the Effective Date for reasons unrelated to
affecting benefits due hereunder shall not be taken into account. In the case of a plan,
practice, policy or program amended to reduce benefits, only the higher pre-amendment
benefit shall be disregarded.

     d. Cause; Other than for Good Reason or Constructive Termination. If the
Executive’s employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason or Constructive Termination, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations and the
timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

          7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Company or any of its affiliated companies for which the Executive may qualify, nor, subject to
Section 13(f), shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.

          8. Full Settlement. The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the Company may have
against the Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and such amounts shall not be reduced whether or not
the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result
of any contest regardless of the outcome thereof by the Company, the Executive or others of the
validity or enforceability of, or liability under, any provision of this Agreement or any guarantee
of performance thereof

-13-

 

(including as a result of any contest by the Executive about the amount of
any payment pursuant to this Agreement), plus in each case interest on any delayed payment, at the
applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986,
as amended (the “Code”); provided, that the Executive shall repay to the Company all such amounts
paid by the Company, and shall not be entitled to any further payments hereunder, in connection
with a contest originated by the Executive if the trier of fact in such contest determines that the
Executive’s claim was not brought in good faith or was frivolous.

          9. Certain Additional Payments by the Company.

     a. Anything in this Agreement to the contrary notwithstanding and except as set forth
below, in the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 9) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section 9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Executive, after taking into account the
Payments and the Gross-Up Payment, would not receive a net after-tax benefit of at least
$50,000 (taking into account both income taxes and any Excise Tax) as compared to the net
after-tax proceeds to the Executive resulting from an elimination of the Gross-Up Payment
and a reduction of the Payments, in the aggregate, to an amount (the “Reduced Amount”) such
that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate, shall be
reduced to the Reduced Amount.

     b. Subject to the provisions of Section 9(c), all determinations required to be made
under this Section 9, including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm, law firm, or other
advisor as may be designated by the Company (the “Advisor”) which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Advisor is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control, the Company
shall appoint another recognized firm to make the determinations required hereunder (which
firm shall then be referred to as the Advisor).

-14-

 

All fees and expenses of the Advisor shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of the receipt of
the Advisor’s determination. Any determination by the Advisor shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Advisor hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company should have
been made (“Underpayment”), consistent with the calculations required to be made hereunder.
In the event that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the Advisor shall
determine the amount of the Underpayment that has occurred and any such Underpayment shall
be promptly paid by the Company to or for the benefit of the Executive.

     c. The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than
ten business days after the Executive is informed in writing of such claim and shall apprise
the Company of the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:

     (i) give the Company any information reasonably requested by the Company
relating to such claim,

     (ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,

     (iii) cooperate with the Company in good faith in order to effectively contest
such claim, and

     (iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue

-15-

 

or forgo any and
all administrative appeals, proceedings, hearings and conferences with the taxing authority
in respect of such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the amount of
such payment to the Executive, on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.

     d. If, after the receipt by the Executive of an amount advanced by the Company pursuant
to Section 9(c), the Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company’s complying with the requirements of
Section 9(c)) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.

          10. Confidential Information. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all confidential or proprietary information, knowledge or data
relating to the Company or any of its affiliated companies, and their respective businesses, which
shall have been obtained by the Executive during the Executive’s employment by the Company or any
of its affiliated companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this Agreement). After
termination of the Executive’s employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other than the Company and
those designated by it. In addition, to the extent that the Executive is a party to any other
agreement relating to confidential information, inventions or similar matters with the Company, the
Executive shall continue to comply with the provisions of such agreements. In no event shall an
asserted

-16-

 

violation of the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.

          11. Arbitration. The Company and the Executive agree that all disputes, controversies,
and claims arising between them concerning the subject matter of this Agreement, other than
Sections 9 and 10, shall be settled by arbitration in accordance with the rules and procedures of
the American Arbitration Association then in effect. The location of the arbitration will be
Richmond, Virginia or such other place as the parties may mutually agree. In rendering any award
or ruling, the arbitrator or arbitrators shall determine the rights and obligations of the parties
according to the substantive and procedural laws of the Commonwealth of Virginia. The parties to
any such dispute, controversy, or claim shall attempt to agree upon the selection of a single
arbitrator. If after a reasonable period of time the parties are unable to agree upon such a
single arbitrator, then three arbitrators will be appointed with each party selecting an arbitrator
from the American Arbitration Association’s available panel of arbitrators, and the parties
agreeing upon the selection of a third arbitrator. If the parties cannot agree upon the selection
of a third arbitrator, then the two arbitrators selected by the parties shall agree upon a third
arbitrator from the panel of American Arbitration Association arbitrators. If the two arbitrators
are unable to so agree on a third arbitrator, the third arbitrator shall be selected by the
American Arbitration Association. Any arbitration pursuant to this section shall be final and
binding on the parties, and judgment upon any award rendered in such arbitration may be entered in
any court, state or federal, having jurisdiction. All fees and expenses of the arbitration shall
be born in accordance with Section 8. The arbitrator or arbitrators shall have no authority to
award provisional relief, injunctive remedies, or punitive damages. The parties expressly
acknowledge that they are waiving their right to seek remedies in court, including without
limitations the right if any to a jury trial.

          12. Successors.

     a. This Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal representatives.

     b. This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

     c. The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

-17-

 

          13. Miscellaneous.

     a. This Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia, without reference to principles of conflict of laws. The captions
of this Agreement are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written agreement executed
by the parties hereto or their respective successors and legal representatives;
provided, that the Company may unilaterally amend Exhibit A hereto from time to time,
but only to the extent it determines, upon the advice of counsel, to be necessary to comply
with the legal requirements to obtain a valid release.

     b. All notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

     If to the Executive:

     If to the Company:

     CSX Corporation

     500 Water Street

     Jacksonville, FL 32202

     Attention: Senior Vice President, Human Resources and Labor Relations

or to such other address as either party shall have furnished to the other in writing in
accordance herewith. Notice and communications shall be effective when actually received by
the addressee.

     c. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.

     d. The Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant to any applicable
law or regulation.

     e. The Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the Executive to terminate
employment for Good Reason or Constructive Termination pursuant to Section 5 of this
Agreement, shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

-18-

 

     f. The Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company, the employment of
the Executive by the Company is “at will” and, subject to Section 1(a) hereof, prior to the
Effective Date, the Executive’s employment may be terminated by either the Executive or the
Company at any time prior to the Effective Date, in which case the Executive shall have no
further rights under this Agreement. From and after the Effective Date this Agreement shall
supersede any other agreement between the parties with respect to the subject matter hereof.

          14. Waiver and Release with Respect to Prior Agreement. In exchange for the
compensation and benefits promised herein, the Executive hereby waives and releases the Company and
its affiliates from any and all claims he ever had or may have arising from or in connection with
the Employment Agreement dated                     , between the Company and the Executive (the “Prior
Agreement”), and the Executive acknowledges that this Agreement supersedes and renders null and
void in all respects the Prior Agreement.

          15. Other Agreements Unaffected. Except for the Prior Agreement, or as otherwise
expressly provided herein, this Agreement shall have no effect on any other agreement between the
Executive and the Company or any of its affiliates, and any such agreement is ratified and
confirmed in all respects and shall remain in full force and effect in accordance with its terms.

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above written.

	 	 	 	 	 
	 	 	

	 
	 	 	 	 
	 	 	CSX CORPORATION
	 
	 	 	 	 
	

	 	By	 	 
	

	 	 	 	

-19-exv10w1

 

EXHIBIT 10.1

EXECUTION COPY

HOUSEHOLD RECEIVABLES ACQUISITION COMPANY

Seller,

HSBC PRIVATE LABEL ACQUISITION CORPORATION (USA)

Purchaser,

and

HSBC FINANCE CORPORATION

RECEIVABLES SALE AND PURCHASE,

ASSIGNMENT AND ASSUMPTION

AGREEMENT

Dated as of December 29, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page

	SECTION 1. DEFINITIONS
	 	 	1	 
	SECTION 2. SALE AND PURCHASE OF RECEIVABLES AND TRANSFER ASSETS
	 	 	3	 
	SECTION 3. PURCHASE PRICE
	 	 	4	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER
	 	 	4	 
	SECTION 5. INDEMNIFICATION BY SELLER AND HBFC
	 	 	6	 
	SECTION 6. COVENANT OF SELLER
	 	 	8	 
	SECTION 7. CONDITIONS OF SALE
	 	 	8	 
	SECTION 8. CLOSING
	 	 	8	 
	SECTION 9. TAXES.
	 	 	8	 
	SECTION 10. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
	 	 	9	 
	SECTION 11. INDEMNIFICATION BY PURCHASER
	 	 	9	 
	SECTION 12. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
	 	 	11	 
	SECTION 13. NOTICES
	 	 	11	 
	SECTION 14. SEVERABILITY
	 	 	11	 
	SECTION 15. AMENDMENTS
	 	 	11	 
	SECTION 16. COUNTERPARTS
	 	 	11	 
	SECTION 17. HEADINGS
	 	 	11	 
	SECTION 18. GOVERNING LAW
	 	 	11	 
	SECTION 19. INDEPENDENT CONTRACTOR
	 	 	11	 
	SECTION 20. NO JOINT VENTURE
	 	 	12	 
	SECTION 21. ENTIRE AGREEMENT
	 	 	12	 

i 

 

     RECEIVABLES SALE AND PURCHASE, ASSIGNMENT AND ASSUMPTION AGREEMENT (the
“Agreement”), dated as of December 29, 2004, by and among HOUSEHOLD RECEIVABLE
ACQUISITION COMPANY, a Delaware corporation (“HRAC” or the “Seller”), HSBC
PRIVATE LABEL ACQUISITION CORPORATION (USA), a Delaware corporation, (“HSBC
PLAC” or the “Purchaser”), and HSBC FINANCE CORPORATION (successor by merger to
Household Finance Corporation), a Delaware corporation (“HBFC”).

W I T N E S S E T H:

     WHEREAS, Seller is engaged, in part, in the business of entering into
securitizations relating to receivables of revolving credit accounts which
accounts were originated in the ordinary course of business of Household Bank
(SB), N.A. (the “Bank”), such receivables having been sold to Seller by the
Bank; and

     WHEREAS, Seller desires to sell to Purchaser existing receivables as
defined below related to certain private label merchant credit accounts, the
Transfer Assets (as defined below) and certain related liabilities, including,
but not limited to, Seller’s obligations under various securitizations; and

     WHEREAS, Purchaser desires to purchase such Receivables and Transfer
Assets and assume such Liabilities from Seller, as more particularly defined
herein on the terms and conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and conditions contained in this Agreement, and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, it is agreed as follows:

          SECTION 1. DEFINITIONS. All capitalized terms used herein or in any document,
made or delivered pursuant hereto, and not defined herein or therein, shall
have the meaning ascribed thereto in the Receivables Purchase Agreement, dated
as of June 12, 2001, between Household Receivables Acquisition Company and HRSI
Funding, Inc. II, and all amendments and supplements thereto; in addition, the
following words and phrases shall have the following meanings:

     “Account” shall mean each revolving credit account established by the Bank
under its private label credit card program, the Receivables of which are
subject to the Bank RPA.

     “Accrued Interest” shall mean the aggregate amount of all finance charges
that have accrued on the Accounts as of the Closing Date which has not been
posted to such Accounts, but will be posted to the Accounts in the billing
cycle immediately following the Closing Date.

     “Accrued Fee” shall mean the aggregate amount of all fees that have
accrued on the Accounts as of the Closing Date which has not been posted to
such Accounts, but will be posted to the Accounts in the billing cycle
immediately following the Closing Date.

 

 

     “Affiliate” shall mean, with respect to a particular person or entity, any
person or entity that directly or indirectly is in control of, is controlled
by, or is under common control with, such person or entity.

     “Bank” shall mean Household Bank (SB), N.A., and its successors and
assigns.

     “Bank RPA” shall mean the Amended and Restated Receivables Purchase
Agreement, dated as June 12, 2002, between Household Bank (SB), N.A. and
Household Receivables Acquisition Company, as amended.

     “Closing Date” shall mean the date of the closing of the sale and purchase
of the Receivables and Transfer Assets and assumption of the Liabilities
associated with the Accounts, as further defined in Section 8.

     “Cut-Off Time” shall mean 11:59 p.m. on the calendar day preceding the
Closing Date.

     “Liabilities” shall mean Seller’s interest in any outstanding credit
balances associated with all Accounts as of the Closing Date contained in
Section 2 of this Agreement and Seller’s obligations under each of the
Receivables Purchase Agreements.

     “Purchase Price” shall be the sum set forth on the bill of sale delivered
to the Purchaser by the Seller.

     “Receivables” shall mean all amounts shown on Seller’s records as amounts
due and payable as of the Closing Date on any Account issued by the Bank under
the programs listed on Schedule A to this Agreement, which were purchased by
Seller, pursuant to the Bank RPA, other than Securitized Receivables. The
Receivables shall include principal, finance charges all administrative and
transaction fees and insurance/debt cancellation proceeds. The Receivables
shall not include any Accrued Interest or Accrued Fees.

     “Receivables Purchase Agreements” shall mean the receivables purchase
agreements listed on Schedule A.

     “Securitized Receivables” shall mean (a) the Receivables, as such term is
defined pursuant to that certain Transfer and Servicing Agreement, dated as of
June 12, 2001, among HRSI Funding, Inc. II, Household Finance Corporation (as a
result of a merger, HSBC Finance Corporation is the successor thereto) and
Wilmington Trust Company, as owner trustee on behalf of the Household Private
Label Credit Card Master Note Trust I (“Trust I”), as amended, which are owned
by Trust I, and (b) the Receivables, as such term is defined pursuant to that
certain Transfer and Servicing Agreement, dated as of November 10, 2003, among
HRSI Funding, Inc. IV, Household Finance Corporation (as a result of a merger,
HSBC Finance Corporation is the successor thereto) and Wells Fargo Delaware
Trust Company, as owner trustee on behalf of the Household Private Label Credit
Card Master Note Trust II (“Trust II”), as amended, which are owned by Trust
II.

     “Transfer Assets” shall be as defined in Section 2(c) of this Agreement.

2

 

               SECTION 2. SALE AND PURCHASE OF RECEIVABLES AND TRANSFER ASSETS.

     (a) Subject to the terms of this Agreement and as described below,
on the Closing Date, Seller agrees to sell, convey, transfer and assign
to Purchaser and Purchaser agrees to purchase from Seller, for the
consideration herein provided, all right, title, interest and obligations
of Seller in and to any Receivables now existing in connection with the
Accounts offered by the Bank, if any (the “Sale”). All Receivables sold
to Purchaser under this Agreement are sold and transferred without
recourse as to their enforceability, collectibility or documentation. On
the Closing Date, Seller shall transfer to Purchaser all Receivables and
Liabilities existing on such date associated with the Accounts.

     (b) Subject to the terms of this Agreement, on the Closing Date,
Seller agrees to assign its rights under each of the Receivables Purchase
Agreements and to be released from its obligations under each of the
Receivables Purchase Agreements and Purchaser agrees to assume all of
Seller’s obligations under each of the Receivables Purchase Agreements.
On and after the Closing Date, Purchaser agrees that it will be bound by
the provisions set forth in each of the Receivables Purchase Agreements,
and hereby assumes and will perform in accordance with its terms all the
obligations which by the terms set forth in each of the Receivables
Purchase Agreements were required to be performed by Seller prior to this
Agreement and which Seller would be required to perform on or after this
Agreement had Seller not entered into this Agreement.

     (c) In consideration of the payment by Purchaser of the Purchase
Price, receipt of which is hereby acknowledged by Seller, and Purchaser’s
assumption of all of Seller’s obligations under the Receivables Purchase
Agreements, as of the Closing Date, Seller does hereby grant, bargain,
sell, convey, transfer and deliver unto Purchaser, its successors and
assigns, all of Seller’s right, title and interest in and to all assets,
accounts, investment property, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit,
goods, letters of credit, and advices of credit and all proceeds thereof
belonging to Seller, including all of Seller’s right, title and interest
in, to and under the Receivables Purchase Agreements (collectively all
such assets hereinafter referred to as the “Transfer Assets”).

     (d) In connection with the Sale, Seller agrees (i) to record and
file, at its own expense, any financing statements, or if a financing
statement relating to the Receivables and Transfer Assets is already on
record, an assignment of the financing statement (and continuation
statements with respect to such financing statements when applicable) or
a new financing statement with respect to the Receivables and Transfer
Assets which meets the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to
perfect and maintain perfection of the Sale of such Receivables and
Transfer Assets from Seller to Purchaser, (ii) that such financing
statements or assignments shall name Seller, as seller, and Purchaser, as
purchaser, of the Receivables and Transfer

3

 

Assets and (iii) to deliver a
file-stamped copy of such financing statements or assignments or other
evidence of such filings to Purchaser as soon as is practicable after
filing.

     (e) The parties hereto intend that the Sale of Seller’s right, title
and interest in and to the Receivables and Transfer Assets shall
constitute an absolute sale, conveying good title free and clear of any
liens, claims, encumbrances or rights of others from Seller to Purchaser
and that the Receivables and Transfer Assets shall not be part of
Seller’s estate in the event of the bankruptcy or insolvency of Seller or
a conservatorship, receivership or similar event with respect to Seller.
It is the intention of the parties hereto that the arrangements with
respect to the Receivables and Transfer Assets shall constitute a
purchase and sale of such Receivables and Transfer Assets and not a loan
or a borrowing secured by such Receivables and Transfer Assets. In the
event, however, that it were to be determined that the transactions
evidenced hereby constitute a loan and not a purchase and sale, it is the
intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that Seller shall be deemed
to have granted and does hereby grant to Purchaser a first priority
perfected security interest in all of Seller’s right, title and interest,
whether now owned or hereafter acquired, in, to and under the Receivables
and Transfer Assets to secure the obligations of seller hereunder.

               SECTION 3. PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, and in reliance upon the representations, warranties and covenants
of Seller made herein, Purchaser shall pay and deliver to Seller the Purchase
Price, for the Receivables and Transfer Assets purchased and the Liabilities
assumed under this Agreement which shall be fair market value consideration for
the assets purchased as described in the bill of sale or schedules or computer
files delivered therewith.

               SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Purchaser that as of the Closing Date (as defined in Section 8
below):

     (a) Seller is a corporation duly organized and validly existing
under the laws of its state of incorporation.

     (b) The execution, delivery and performance by Seller of this
Agreement has been duly authorized by all necessary corporate action on
the part of Seller. Seller has full power to consummate the transactions
contemplated hereby. Neither the execution and delivery by Seller of
this Agreement, the consummation by Seller of the transactions
contemplated hereby, nor compliance by Seller with the provisions hereof
will conflict with or result in a breach of, or constitute a default
under, any law or governmental regulation or any judgment or order
binding Seller or its properties or any agreement or instrument to which
Seller is a party or by which it is bound.

4

 

     (c) Seller will, on the Closing Date and immediately prior to such
date, be the owner of all right, title and interest in and to all of the
Receivables and Transfer Assets of such Seller to be sold pursuant to
this Agreement. Seller transfers the assets to be sold, free and clear
of all assignments, liens, charges, encumbrances and other security
interests.

     (d) This Agreement, and the consummation of the transactions
contemplated herein, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect, affecting the enforcement of creditor’s rights in general and as
such enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity).

     (e) Seller is the legal and beneficial owner of all right, title and
interest in and to the Receivables and Transfer Assets to be sold by
Seller.

     (f) The Receivables and Transfer Assets have been conveyed to
Purchaser in compliance, in all material respects, with all laws
applicable to Seller.

     (g) Seller has taken the necessary action to notify the Bank and its
respective employees, agents and representatives of the transfer of the
Receivables and Transfer Assets to Purchaser.

     (h) To Seller’s knowledge, it is not in material breach of the
Receivables Purchase Agreements or other agreement that affects the
transactions contemplated herein.

     (i) Each Receivable was created in compliance in all material
respects with all requirements of law and regulation applicable to the
Bank and pursuant to a credit card agreement which complies in all
material respects with all requirements of law applicable to the Bank.

     (j) As of the Closing Date, each Receivable is in compliance in all
material respects with the Federal Financial Institution Examination
Council guidelines.

     (k) With respect to each Receivable, all material consents,
licenses, approvals or authorizations of, or registrations or
declarations with, any governmental authority required to be obtained,
effected or given by the Bank in connection with the creation of such
Receivable or the execution, delivery and performance by the Bank of its
obligations under the credit card agreement pursuant to which such
Receivable was created, have been duly obtained, effected or given and
are in full force and effect.

5

 

     (l) At the time of the sale of each Receivable to Purchaser, Seller
has good and marketable title thereto, free and clear of all liens,
encumbrances, charges and security interests.

     (m) Each Receivable is the legal, valid and binding payment
obligation of the obligor thereof, enforceable against such obligor in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting the enforcement of
creditors’ rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or in equity).

     (n) No Receivable is, at the time of the sale of such Receivable to
Purchaser, subject to any right of rescission, setoff, counterclaim or
any other defense (including defenses arising out of violations of usury
laws) of the obligor thereunder, other than defenses arising out of
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting the enforcement of
creditors’ rights in general.

     (o) At the time of the sale of each Receivable to Purchaser, Seller
has satisfied all of its obligations, if any, required to be satisfied by
such time with respect to such Receivable.

     (p) At the time of the sale of each Receivable to Purchaser, Seller
has not taken any action which, or omitted to take any action the
omission of which, would impair at the time of such sale the rights of
Purchaser therein.

     (q) Seller confirms that all the representations and warranties of
Seller under each of the Receivables Purchase Agreements are true and
correct as to Seller.

               SECTION 5. INDEMNIFICATION BY SELLER AND HBFC.

     (a) Seller and HBFC agree to jointly defend, indemnify and hold
harmless Purchaser and its respective employees, agents and
representatives against any and all liabilities, judgments, damages,
claims, demands, costs, expenses or losses (including reasonable
attorney’s fees) (i) incurred by reason of any representation or warranty
made by Seller in connection with this Agreement having been untrue or
incorrect in any respect when made or deemed made, (ii) incurred by
reason of any breach by Seller of any covenant or agreement made herein,
or (iii) relating to Receivables prior to the Closing Date; provided that
in no event shall Seller or HBFC be obligated under this Section 5 to
indemnify Purchaser against (x) liability, loss, cost or expenses to the
extent that it results from Purchaser’s negligent or willful acts or
omissions or the negligent or willful acts or omissions of Purchaser’s
agents or assignees or (y) any credit loss suffered on any Receivable not
attributable to the actions of Seller or any merchant for whom the Bank
issues Accounts.

6

 

     (b) In the event any claim is made, or any suit or action is
commenced against Purchaser with respect to which indemnification may be
sought by it under this Section 5, Purchaser shall within ten (10) days
thereof give Seller and HBFC notice and Seller and HBFC shall be entitled
to conduct the defense thereof at Seller’s and HBFC’s expense; provided,
however, that Purchaser shall be entitled to participate in the defense
thereof at its own expense if such claim, suit or action relates to or
includes events after the Closing Date. Seller and HBFC may (but need
not) defend or participate in the defense of any such claim, suit or
action, but Seller and HBFC shall notify Purchaser within ten (10)
business days if Seller or HBFC shall not desire to defend or participate
in the defense of any such claim, suit or action, however, Seller and
HBFC shall continue to be liable to Purchaser in connection with the cost
of the defense of such claim, suit or action. Any such election to not
defend or participate shall have no effect upon Seller’s and HBFC’s
obligation to indemnify and hold harmless Purchaser pursuant to this
Section 5.

     (c) Purchaser may at any time notify Seller and HBFC of its
intentions to settle or compromise any claim, suit or action against
Purchaser which may be indemnifiable under this Section (and in the
defense of which Seller or HBFC has not previously elected to
participate), and Purchaser may settle or compromise any such claim, suit
or action unless Seller or HBFC notifies Purchaser in writing (within
thirty (30) days after Purchaser has given written notice of its
intention to settle or compromise) that Seller or HBFC intends to conduct
the defense of such claim, suit or action and that Seller and HBFC agrees
to further indemnify and hold Purchaser harmless from any liability,
loss, cost or expense to Purchaser in excess of that which Purchaser
would have incurred had the settlement or compromise been effected on the
terms proposed by Purchaser. Any such settlement or compromise of, or
any final judgment or decree entered on or in any claim, suit or action
which Purchaser has defended or participated in the defense
of in accordance herewith, shall be deemed to have been consented to
by, and shall be binding upon, Seller and HBFC as fully as if Seller and
HBFC had assumed the defense thereof and a final judgment or decree had
been entered in such suit or action, or with regard to such claim, by a
court of competent jurisdiction for the amount of such settlement,
compromise, judgment or decree, including without limitation court costs
and reasonable attorney’s fees.

     (d) Seller or HBFC shall obtain the prior written approval of
Purchaser before entering into any settlement of any claim, suit or
action, which it defends or ceases to defend, if pursuant to or as a
result of such settlement or cessation, any injunctive or other equitable
relief or admission of liability would be imposed against Purchaser.
Neither Seller nor HBFC shall consent to the entry of any judgment or
enter into any settlement that does not include, as an unconditional term
thereof, the giving by the claimant or plaintiff to Purchaser of a
release from all liability in respect to such claim.

7

 

               SECTION 6. COVENANT OF SELLER. After the Closing Date, Seller shall remit to
Purchaser all payments received with respect to the Receivables and Transfer
Assets as soon as practicable after the receipt thereof.

               SECTION 7. CONDITIONS OF SALE.

     (a) The obligations of Purchaser to perform hereunder and purchase
the Receivables and the Transfer Assets and assume the Liabilities on the
Closing Date shall be subject to the satisfaction on or before the
Closing Date of the following further conditions: (i) the representations
and warranties contained in Section 4 hereof shall be true and correct in
all respects on the Closing Date as if made on such date; and (ii) Seller
shall have performed and observed all covenants, agreements and
conditions hereof to be performed or observed by it on or before the
Closing Date.

     (b) The obligations of Seller to perform hereunder and sell the
Receivables and the Transfer Assets and transfer the Liabilities at
Closing shall be subject to the satisfaction, on or before the Closing
Date, of the further condition that Purchaser shall have delivered to
Seller the Purchase Price.

               SECTION 8. CLOSING. The closing of the sale and purchase of the Receivables
and the Transfer Assets and assumption of the Liabilities associated with the
Accounts and owned by Seller on December 29, 2004, as described in Section 2,
shall take place on December 29, 2004 (the “Closing Date”), at the location as
shall be mutually agreed upon by the parties hereto. The closing documents may
each be executed in two or more counterparts including telefax transmission
thereof (and by different parties on separate counterparts), each of which
shall
be an original, but all of which together shall constitute one and the same
instrument. On the Closing Date, the following actions shall be taken:

     (a) Seller shall deliver or cause to be delivered to Purchaser such
bills of sale, assignments, conveyances and other good and sufficient
instruments of transfer (all of which shall be consistent with the terms
set forth in this Agreement), which shall be effective to vest in
Purchaser good and valid title to the Receivables and the Transfer Assets
to be sold hereunder.

     (b) Purchaser shall pay to Seller the Purchase Price.

               SECTION 9. TAXES.

     (a) Each party shall promptly pay in full when due any tax or other
governmental charge or fee imposed upon it under applicable law on the
sale of the Receivables and Transfer Assets from Seller to Purchaser
pursuant to this Agreement.

     (b) Seller shall be liable for and pay any taxes related to the
Receivables and Transfer Assets that accrue or otherwise relate to any
taxable

8

 

year or period (or portion thereof) beginning or deemed to begin
after the Closing Date.

               SECTION 10. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Purchaser
represents and warrants to Seller that as of the date of this Agreement and on
the Closing Date (as defined in Section 8 above):

     (a) Purchaser is a corporation duly organized and validly existing
under the laws of its state of incorporation.

     (b) The execution, delivery and performance by Purchaser of this
Agreement has been duly authorized by all necessary corporate action on
the part of Purchaser. Purchaser has full power to consummate the
transactions contemplated hereby. Neither the execution and delivery by
Purchaser of this Agreement, the consummation by Purchaser of the
transactions contemplated hereby, nor compliance by Purchaser with the
provisions hereof will conflict with or result in a breach of, or
constitute a default under, any law or governmental regulation or any
judgment or order binding Purchaser or its properties or any agreement or
instrument to which Purchaser is a party or by which it is bound.

     (c) This Agreement, and the consummation of the transactions
contemplated herein, constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect, affecting the enforcement of creditor’s rights in
general and as such enforceability may be limited by general principles
of equity (whether considered in a proceeding at law or in equity).

     (d) Purchaser confirms that all representations and warranties of
Seller under each of the Receivables Purchase Agreements are true and
correct as to Purchaser.

               SECTION 11. INDEMNIFICATION BY PURCHASER.

     (a) Purchaser agrees to defend, indemnify, and hold harmless Seller
and its respective employees, agents, and representatives against any and
all liabilities, judgments, damages, claims, demands, costs, expenses or
losses (including reasonable attorney’s fees) arising after the Closing
Date and incurred by reason of any representation or warranty made by
Purchaser in connection with this Agreement, having been untrue or
incorrect in any respect when made or deemed made, or by reason of the
breach by Purchaser of any covenant or agreement made herein, or by
reason of any negligent or willful acts of Purchaser,

9

 

or by reason of any
action or proceeding being instituted by any person based upon an
allegation or assertion which, if true, would indicate the existence of
any of the foregoing circumstances.

     (b) In the event any claim is made, or any suit or action is
commenced against Seller in respect to which indemnification may be
sought by Seller under this Section 11, Seller shall promptly give
Purchaser notice thereof and Purchaser shall be entitled to conduct the
defense thereof at Purchaser’s expense; provided, however, that Seller
shall be entitled to participate in the defense thereof at its own
expense if such claim, suit or action relates to or includes events prior
to the Closing Date. Purchaser may (but need not) defend or participate
in the defense of any such claim, suit or action, but Purchaser shall
notify Seller within ten (10) business days if Purchaser shall not desire
to defend or participate in the defense of any such claim, suit or
action, however, Purchaser shall continue to be liable to Seller for the
cost of the defense of such claim, suit or action. Any such election to
not defend or participate in the defense shall have no effect upon
Purchaser’s obligation to indemnify and hold harmless Purchaser pursuant
to this Section 11.

     (c) Seller may at any time notify Purchaser of its intention to
settle or compromise any claim, suit or action against Seller which may
be indemnifiable under this Section (and in the defense of which
Purchaser has not previously elected to participate), and Seller may
settle or compromise any such claim, suit
or action unless Purchaser notifies Seller in writing (within thirty
(30) days after Seller has given Purchaser written notice of its
intention to settle or compromise) that Purchaser intends to conduct the
defense of such claim, suit or action and that Purchaser agrees to
further indemnify Seller and hold Seller harmless from any liability,
loss, cost or expense to Seller in excess of that which Seller would have
incurred had the settlement or compromise been effected on the terms
proposed by Seller. Any such settlement or compromise of, or any final
judgment or decree entered on or in, any claim, suit or action which
Seller has defended or participated in the defense of in accordance
herewith shall be deemed to have been consented to by, and shall be
binding upon, Purchaser as fully as if Purchaser had assumed the defense
thereof, and a final judgment or decree had been entered in such suit or
action, or with regard to such claim, by a court of competent
jurisdiction for the amount of such settlement, compromise, judgment or
decree, including without limitation court costs and reasonable
attorney’s fees.

     (d) Purchaser shall obtain the prior written approval of Seller
before entering into any settlement of any claim, suit or action which it
defends or ceases to defend, if pursuant to or as a result of such
settlement or cessation, any injunctive or other equitable relief or
admission of liability would be imposed against Seller. Purchaser shall
not consent to the entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to Seller of a release from all liability in
respect to such claim.

10

 

               SECTION 12. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
statements contained in this Agreement or in any Exhibit, Schedule or other
document delivered pursuant to this Agreement shall be deemed representations
and warranties hereunder to the party receiving delivery of same.

               SECTION 13. NOTICES. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be in writing and shall be delivered in
person to such party or mailed by first class registered or certified mail,
postage prepaid, addressed as follows:

	 	 	 	 	 
	

	 	If to Seller:
	 	Household Receivables Acquisition Company
	

	 	 	 	2700 Sanders Road
	

	 	 	 	Prospect Heights, IL 60077
	 
	 	 	 	 
	

	 	If to Purchaser:
	 	HSBC Private Label Acquisition Corporation (USA)
	

	 	 	 	2700 Sanders Road
	

	 	 	 	Prospect Heights, IL 60077

               SECTION 14. SEVERABILITY. If any provision, or application thereof, of this
Agreement is held unlawful or unenforceable in any respect, the parties hereto
agree that such illegality or unenforceability shall not affect other
provisions or applications thereof that can be given effect, and this Agreement
shall be construed as if the unlawful or unenforceable provisions are amended
so as to make it valid, reasonable and enforceable and agree to be bound by the
terms of such provision, as modified by the court.

               SECTION 15. AMENDMENTS. This Agreement may be amended or modified only by a
written instrument executed by all the parties hereto.

               SECTION 16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute but one instrument.

               SECTION 17. HEADINGS. The headings contained in this Agreement and in any
Exhibits appended hereto are for convenience only and shall not be deemed to
affect the interpretation of the provisions of this Agreement.

               SECTION 18. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

               SECTION 19. INDEPENDENT CONTRACTOR. In performing their responsibilities
pursuant to this Agreement, Seller shall not be deemed to be the agent of
Purchaser and Purchaser shall not be deemed to be the agent of Seller and each
party shall at all times take whatever measures as are necessary to ensure that
its status shall be that of an independent contractor and in no circumstances
shall either party be deemed to be the partner, agent or employee of the other.
This Agreement is not intended to create, nor does it create and shall not be
construed to create, a relationship of principal and agent, partner or joint
venturer or an association for profit between Purchaser and Seller. Any
amounts ever owing by Purchaser and Seller pursuant to this Agreement represent
contractual obligations only and are not a loan or debt.

11

 

               SECTION 20. NO JOINT VENTURE. Nothing in this Agreement shall be deemed to create a partnership or joint
venture between any of the parties. Except as expressly set forth herein, no
party shall have any authority to bind or commit the other parties.

               SECTION 21. ENTIRE AGREEMENT. This Agreement is intended to define the full
extent of the legally enforceable undertakings of the parties hereto, and no
related promise or representation, written or oral, which is not set forth
explicitly in this Agreement is intended by either party to be legally binding.
Both parties acknowledge that in deciding to enter into this transaction they
have relied on no representations, written or oral, other than those explicitly
set forth in this Agreement.

[Remainder of Page Intentionally Left Blank]

12

 

     IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first written above.

	 	 	 	 	 	 	 
	 	 	HOUSEHOLD RECEIVABLES ACQUISITION
	 	 	COMPANY, as Seller
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ S.H. Smith	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Name: S.H. Smith	 	 
	

	 	 	 	Title: Vice President & Assistant

Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	HSBC FINANCE CORPORATION (successor by
	 	 	merger to Household Finance
	 	 	Corporation) (with respect to Section 5 only)
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Edgar D. Ancona	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Name: Edgar D. Ancona	 	 
	

	 	 	 	Title: Senior Vice President — Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	HSBC PRIVATE LABEL ACQUISITION
	 	 	CORPORATION (USA), as Purchaser
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ J.W. Hoff	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Name: J.W. Hoff	 	 
	

	 	 	 	Title: Treasurer and Chief Financial	 	 
	

	 	 	 	Officer	 	 

[Signature Pages to BSA I (Page 1 of 2)]

 

 

ACKNOWLEDGMENT:

the signatories listed below hereby acknowledge the agreements, assignments and
assumptions set forth herein:

WILMINGTON TRUST COMPANY, not in its individual capacity but as Owner Trustee
on behalf of the Household Private Label Credit Card Master Note Trust I

	 	 	 	 	 
	By:

	 	          /s/ Rachel L. Simpson
	 	 
	

	 	
	 	 
	

	 	Name: Rachel Simpson	 	 
	

	 	Title: Financial Services Officer	 	 

WELLS FARGO DELAWARE TRUST COMPANY, not in its individual capacity but as owner
trustee of the Household Private Label Credit Card Master Note Trust II

	 	 	 	 	 
	By:

	 	          /s/ Jose I. Mercado
	 	 
	

	 	
	 	 
	

	 	Name: Jose I. Mercado	 	 
	

	 	Title: Trust Officer	 	 

U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee

	 	 	 	 	 
	By:

	 	          /s/ Patricia M. Child
	 	 
	

	 	
	 	 
	

	 	Name: Patricia M. Child	 	 
	

	 	Title: Vice President	 	 

[Signature Pages to BSA I (Page 2 of 2)]

 

 

Schedule A

	1.	 	ACCOUNT PROGRAMS

	A.	 	Multi-Merchant Private Label Credit Card Program.
	 
	B.	 	Best Buy Merchant Private Label Credit Card Program.

	2.	 	RECEIVABLES PURCHASE AGREEMENTS

	A.	 	Amended and Restated Receivables Purchase Agreement (as has
been or may be amended from time to time), dated as of June 12,
2002, between Household Bank (SB), N.A. and Household Receivables
Acquisition Company.
	 
	B.	 	Receivables Purchase Agreement (as has been or may be amended
from time to time), dated as of June 12, 2001, between Household
Receivables Acquisition Company and HRSI Funding, Inc. II.
	 
	C.	 	Receivables Purchase Agreement (as has been or may be amended
from time to time), dated as of November 10, 2003, between Household
Receivables Acquisition Company and HRSI Funding, Inc. IV.

A-1

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