Document:

Class C(2009-1) Terms Document

 Exhibit 4.2 
 EXECUTION VERSION 
  
  
 DISCOVER CARD EXECUTION NOTE TRUST 
 Issuer

 and 
 U.S. BANK NATIONAL
ASSOCIATION 
 Indenture Trustee 
 CLASS C(2009-1) TERMS DOCUMENT 
 Dated as of September 1, 2009 
 to 
 INDENTURE SUPPLEMENT 
 Dated as of July 26, 2007 
 for the DiscoverSeries Notes 
 to 
 INDENTURE 
 Dated as of July 26, 2007 
  
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
		
	ARTICLE I	  	1
	Definitions and Other Provisions of General Application	  	1
	Section 1.01.	  	Definitions	  	1
	Section 1.02.	  	Representations and Warranties of Issuer	  	9
	Section 1.03.	  	Representations and Warranties of Indenture Trustee	  	10
	Section 1.04.	  	Limitations on Liability	  	10
	Section 1.05.	  	Governing Law	  	10
	Section 1.06.	  	Counterparts	  	11
	Section 1.07.	  	Ratification of Indenture and Indenture Supplement	  	11
	ARTICLE II	  	11
	The Class C(2009-1) Notes	  	11
	Section 2.01.	  	Creation and Designation	  	11
	Section 2.02.	  	Adjustments to Required Subordinated Percentage and Amount	  	11
	Section 2.03.	  	Interest Payment	  	11
	Section 2.04.	  	Notification of LIBOR	  	12
	Section 2.05.	  	Payments of Interest and Principal	  	12
	Section 2.06.	  	Form of Delivery of Class C(2009-1) Notes; Denominations	  	12
	Section 2.07.	  	Delivery and Payment for the Class C(2009-1) Notes	  	13
	Section 2.08.	  	Targeted Deposits to the Accumulation Reserve Account	  	13
	Section 2.09.	  	Additional Issuances of Notes	  	13
	Section 2.10.	  	Designation of Additional Amounts to be included in the Excess Spread Amount for the DiscoverSeries Notes	  	14
	Section 2.11.	  	No Payments from Interest Funding Subaccount for accretion of principal of the Class C(2009-1) Notes	  	14
	Section 2.12.	  	Calculation of Class C(2009-1) Accreted Discount	  	14

  

									
		 		 		 	Exhibit	 	
					
		 		 	Exhibit A	 	Form of Class C Note	 	

 THIS CLASS C(2009-1) TERMS DOCUMENT (this “Terms Document”), by and between DISCOVER
CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United
States of America, as Indenture Trustee (the “Indenture Trustee”), is made and entered into as of September 1, 2009. 
 Pursuant to this Terms Document, the Issuer shall create a new Tranche of Class C Notes of the DiscoverSeries and shall specify the principal terms thereof. 
 ARTICLE I 
 Definitions and Other Provisions of General Application 
 Section 1.01. Definitions. For all purposes of this Terms Document, except as otherwise expressly provided or unless the context otherwise
requires: 
 (1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the
singular; 
 (2) all other terms used herein which are defined in the Indenture Supplement or the Indenture, either directly or by reference
therein, have the meanings assigned to them therein; 
 (3) all accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder means
such accounting principles as are generally accepted in the United States of America at the date of such computation; 
 (4) all references
in this Terms Document to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Terms Document; The words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Terms Document as a whole and not to any particular Article, Section or other subdivision; 
 (5) in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture Supplement or the Indenture, the terms and provisions of this
Terms Document shall be controlling, but solely with respect to the Class C(2009-1) Notes; 
 (6) each capitalized term defined herein shall
relate only to the Class C(2009-1) Notes and no other Tranche of Notes issued by the Issuer; 
 (7) “including” and words of
similar import will be deemed to be followed by “without limitation”; and 
 (8) for purposes of determining any amount or making
any calculation hereunder, such amount or calculation, (x) if specified to be as of the first day of any Due Period, shall (a)

 
include any Notes issued during such Due Period as if such Notes had been outstanding on the first day of such Due Period and (b) give effect to any
payments, deposits or other allocations made on the Distribution Date related to the prior Due Period, and (y) if specified to be as of the close of business on the last day of any Due Period shall give effect to any payments, deposits or other
allocations made on the related Distribution Date. 
 “Accumulation Amount” means $16,666,666.67; provided,
however, if the commencement of the Accumulation Period is delayed in accordance with Section 4.02 of the Indenture Supplement, the Accumulation Amount shall be determined in accordance with the definition of “Accumulation
Amount” in the Indenture Supplement. 
 “Accumulation Commencement Date” means August 1, 2010, or such later date
as the Calculation Agent on behalf of the Issuer determines in accordance with Section 4.02 of the Indenture Supplement. 
 “Accumulation Period” has the meaning set forth in the Indenture Supplement. 
 “Accumulation Period
Length” means 12 months; provided, however, if the commencement of the Accumulation Period is delayed in accordance with Section 4.02 of the Indenture Supplement, the Accumulation Period Length shall be determined in
accordance with the definition of “Accumulation Period Length” in the Indenture Supplement. 
 “Accumulation Reserve
Funding Period” shall not apply if the Calculation Agent on behalf of the Issuer notifies the Indenture Trustee that it expects the Accumulation Period Length to be adjusted to one (1) month, and otherwise shall mean a period
commencing on the first Distribution Date on which a condition in the right column of the following table was in effect on the immediately preceding Distribution Date, if the Distribution Date is a Distribution Date described in the corresponding
left column of the following table, and ending on the Distribution Date immediately preceding the earlier to occur of: 
 (x) the Expected
Maturity Date for the Class C(2009-1) Notes and 
 (y) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the
Class C(2009-1) Notes is paid in full. 
  

			
	 Distribution Date:
	 	 Condition:

	(a) The Distribution Date occurring three (3) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 4.02 of
the Indenture Supplement) and any following Distribution Date	 	No condition.
		
	(b) The Distribution Date occurring four (4) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 4.02 of
the Indenture Supplement) and any following Distribution Date	 	The three-month rolling average Excess Spread Percentage is less than 4%.

  

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	(c) The Distribution Date occurring six (6) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 4.02 of the
Indenture Supplement) and any following Distribution Date	 	The three-month rolling average Excess Spread Percentage is less than 3%.
		
	(D) The Distribution Date occurring twelve (12) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance with Section 4.02
of the Indenture Supplement) and any following Distribution Date	 	The three-month rolling average Excess Spread Percentage is less than 2%.

 “Class C(2009-1) Accreted Discount” means, for any Distribution Date, the amount
of principal accreted on the Class C(2009-1) Notes in accordance with Section 2.12 hereof through the Monthly Principal Accretion Period ending on such Distribution Date. 
 “Class C(2009-1) Adverse Event” means the occurrence of any of the following: (a) an Early Redemption Event with respect to the
Class C(2009-1) Notes or (b) an Event of Default and acceleration of the Class C(2009-1) Notes; provided, however, that if the only such event to have occurred is an Excess Spread Early Redemption Event for which an Excess Spread
Early Redemption Cure has occurred, a Class C(2009-1) Adverse Event shall not be treated as continuing from and after the date of such cure. 
 “Class C(2009-1) Note” means any Note, in the form set forth in Exhibit A hereto, designated therein as a Class C(2009-1) Note and duly executed and authenticated in accordance with the Indenture. 
 “Class C(2009-1) Noteholder” means a Person in whose name a Class C(2009-1) Note is registered in the Note Register. 
 “Class C(2009-1) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which the Outstanding Dollar
Principal Amount of the Class C(2009-1) Notes is paid in full, (b) the Legal Maturity Date and (c) the date on which the Indenture is discharged and satisfied pursuant to Article VI thereof. 
 “Class C Tranche Interest Allocation” notwithstanding anything to the contrary in the Indenture Supplement, for the Class C (2009-1)
Notes shall be zero; provided that, if the Outstanding Dollar Principal Amount is not paid in full on or prior to the Expected Maturity Date, for any Distribution Date after the Expected Maturity Date, the Class C Tranche Interest Allocation shall
be the Class C Interest for the Class C(2009-1) Notes plus any Interest Allocation Shortfall from the prior Distribution Date. Following a Receivables Sale for the Class C (2009-1) Notes, the Class C Tranche Interest Allocation shall be zero.

  

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 “Class C Reserve Account Percentage” means, for any Distribution Date on which a
condition in the left column of the following table was in effect on the immediately preceding Distribution Date, the percentage in the corresponding right column of the following table (or if more than one conditions were in effect on the
immediately preceding Distribution Date, the largest percentage). 
  

			
	 Condition:
  
 The three-month rolling average Excess Spread Percentage is:
	  	Class C Reserve Account Percentage:
		
	(a) 4.50% or greater	  	0%
		
	(b) 4.00% to 4.49%	  	1.25%
		
	(c) 3.50% to 3.99%	  	2.00%
		
	(d) 3.00% to 3.49%	  	2.75%
		
	(e) 2.50% to 2.99%	  	3.50%
		
	(f) 2.00% to 2.49%	  	4.50%
		
	 (g) less than 2.00%, or
  
 an Early Redemption Event or Event of Default for the Class C(2009-1) Notes has occurred and is continuing.
	  	6.00%

 “Discount Amount” means initially $36,362,600; provided that following any
issuance of additional Class C(2009-1) Notes in accordance with Section 2.09, the Discount Amount shall mean the amount specified in the Notice of Additional Issuance. 
 “Encumbered Amount” means, for the Class C(2009-1) Notes, an amount equal to 
 (a) the Nominal Liquidation Amount of the Class C(2009-1) Notes, divided by 
 (b) the Nominal Liquidation Amount of all Tranches of Class C Notes in the DiscoverSeries, multiplied by 
 (c) the sum of (i) the aggregate Required Subordinated Amount of Class C Notes for all Tranches of Class A Notes in the DiscoverSeries with a
Required Subordinated Amount of Class B Notes equal to zero and a Required Subordinated Amount of Class C Notes greater than 

  

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zero and (ii) the aggregate Required Subordinated Amount of Class C Notes for all Tranches of Class B Notes in the DiscoverSeries with a Required
Subordinated Amount of Class C Notes greater than zero. 
 “Encumbered Required Subordinated Amount of Class D Notes” means,
for the Class C(2009-1) Notes, the product of 
 (a) the sum of (1) the aggregate Required Subordinated Amount of Class D Notes for all
Tranches of Class A Notes in the DiscoverSeries with a Required Subordinated Amount of Class D Notes greater than zero, plus (2) the aggregate Unencumbered Required Subordinated Amount of Class D Notes for all Tranches of Class B
Notes in the DiscoverSeries with an Unencumbered Required Subordinated Amount of Class D Notes greater than zero, multiplied by 
 (b)
a percentage equivalent to a fraction, the numerator of which is the Nominal Liquidation Amount of the Class C(2009-1) Notes, and the denominator of which is the Nominal Liquidation Amount of all Tranches of Class C Notes in the DiscoverSeries.

 “Excess Spread Percentage” for any Distribution Date means a fraction, the numerator of which is the Excess Spread Amount
for such Distribution Date multiplied by 12 and the denominator of which is the sum of the Nominal Liquidation Amounts of all Tranches of DiscoverSeries Notes as of the first day of the related Due Period. 
 “Expected Maturity Date” means August 15, 2011. 
 “Indenture” means the Indenture dated as of July 26, 2007 between the Issuer and Indenture Trustee, as the same may be amended, supplemented, restated, amended and restated, replaced or otherwise
modified from time to time. 
 “Indenture Supplement” means the Indenture Supplement dated as of July 26, 2007, as
amended by the Omnibus Amendment dated as of July 2, 2009, for the DiscoverSeries Notes, by and between the Issuer and the Indenture Trustee, as the same may be amended, supplemented, restated, amended and restated, replaced or otherwise
modified from time to time. 
 “Initial Dollar Principal Amount” means $163,637,400, or such higher amount as is specified
in any Notice of Additional Issuance under Section 2.09. 
 “Interest Accrual Period” means, with respect to any
Interest Payment Date, the period from and including the previous Interest Payment Date to but excluding such Interest Payment Date (or, in the case of the first Interest Payment Date occurring after the Expected Maturity Date, from and including
the Expected Maturity Date to but excluding such Interest Payment Date). 
 “Interest Payment Date” means, if the
Outstanding Dollar Principal Amount is not paid in full on or prior to the Expected Maturity Date, the fifteenth day of each month commencing in September 2011, or if such fifteenth day is not a Business Day, the next succeeding Business Day.

  

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 “Issuance Date” means September 1, 2009 with respect to all Class C(2009-1) Notes
issued on the date hereof and, with respect to any additional Class C(2009-1) Notes issued pursuant to Section 2.09, any Issuance Date specified in the Notice of Additional Issuance delivered thereunder. 
 “Legal Maturity Date” means February 18, 2014. 
 “LIBOR” means, with respect to any LIBOR Determination Date, the rate for deposits in United States dollars with a duration comparable to the relevant Interest Accrual Period which appears on Reuters
Screen LIBOR01 as of 11:00 a.m., London time, on such day. If such rate does not appear on Reuters Screen LIBOR01, the rate will be determined by the Indenture Trustee on the basis of the rates at which deposits in United States dollars are offered
by major banks in the London interbank market, selected by the Indenture Trustee, at approximately 11:00 a.m., London time, on such day to prime banks in the London interbank market with a duration comparable to the relevant Interest Accrual Period
commencing on that day. The Indenture Trustee will request the principal London office of at least four banks to provide a quotation of its rate. If at least two such quotations are provided, the rate will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by four major banks in New York City, selected by the Trustee, at approximately 11:00 a.m., New York City time, on that day
for loans in United States dollars to leading European banks with a duration comparable to the relevant Interest Accrual Period commencing on that day. If LIBOR with respect to a LIBOR Determination Date is not determined pursuant to the foregoing,
LIBOR with respect to such LIBOR Determination Date will be LIBOR with respect to the immediately prior LIBOR Determination Date. 
 “LIBOR Determination Date” means the second LIBOR Business Day immediately preceding the commencement of an Interest Accrual Period. 
 “LIBOR Business Day,” if applicable, shall mean a day other than a Saturday or a Sunday on which banking institutions in both the City of London, England and in New York, New York are not required or
authorized by law to be closed. 
 “Nominal Liquidation Amount” means, notwithstanding anything to the contrary in the
Indenture Supplement, with respect to the Class C(2009-1) Notes: 
 (a) on the Issuance Date thereof, $200,000,000; 
 (b) on any Distribution Date thereafter such amount as increased or decreased pursuant to Section 3.01 of the Indenture Supplement and
Section 2.09 hereof; 
 (c) on any date, other than a Distribution Date, on which Prefunding Excess Amount are withdrawn from the
applicable Principal Funding Subaccount pursuant to Section 4.04 of the Indenture Supplement, the Nominal Liquidation Amount as of the beginning of such date plus the Prefunding Excess Amount so withdrawn; and 
 (d) on and after the date of a Receivables Sale for the Class C(2009-1) Notes, zero. 
  

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 “Note Interest Rate” means zero; provided that if the Outstanding Dollar Principal
Amount is not paid in full on or prior to the Expected Maturity Date, the Note Interest Rate shall be LIBOR + 2.50% per annum, calculated on the basis of the actual number of days elapsed and a 360-day year. 
 “Notice of Additional Issuance” has the meaning set forth in Section 2.09. 
 “Outstanding Dollar Principal Amount” means, for the Class C(2009-1) Notes, notwithstanding anything to the contrary in the Indenture
Supplement, (a) prior to an issuance of additional Class C(2009-1) Notes, the sum of (i) the Initial Dollar Principal Amount of such Notes and (ii) the Class C(2009-1) Accreted Discount as determined in accordance with
Section 2.12 hereof, minus (i) the aggregate amount of principal paid with respect to the Class C(2009-1) Notes as of the relevant date of determination and (ii) any net losses of principal of funds on deposit in respect of principal
in the Principal Funding Account or the related Principal Funding Subaccount, as applicable, for the Class C(2009-1) Notes and (b) following the issuance of additional Class C(2009-1) Notes, the sum of (i) the Outstanding Dollar Principal
Amount of such Notes determined as of the date of such additional issuance and (ii) the Class C(2009-1) Accreted Discount accreted after the date of such additional issuance, as determined in accordance with Section 2.12 hereof, minus
(i) the aggregate amount, as of the relevant date of determination, of principal paid with respect to the Class C(2009-1) Notes after the date of such additional issuance and (ii) any net losses, as of the relevant date of determination,
of principal of funds on deposit in respect of principal in the Principal Funding Account or the related Principal Funding Subaccount, as applicable, for the Class C(2009-1) Notes after the date of such additional issuance. Notwithstanding the
foregoing, if a Receivables Sale has occurred with respect to the Class C(2009-1) Notes, the Outstanding Dollar Principal Amount shall be zero. 
 “Required Daily Deposit Target Finance Charge Amount” means, for any day in a Due Period, an amount equal to the Class C Tranche Interest Allocation for the related Distribution Date; provided, however,
that for purposes of determining the Required Daily Deposit Target Finance Charge Amount on any day on which the Class C Tranche Interest Allocation cannot be determined because the LIBOR Determination Date for the applicable Interest Accrual Period
has not yet occurred, the Required Daily Deposit Target Finance Charge Amount shall be the Class C Tranche Interest Allocation determined based on a pro forma calculation made on the assumption that LIBOR will be LIBOR for the applicable period
determined on the first day of such calendar month, multiplied by 1.25. 
 “Required Daily Deposit Target Principal
Amount” means, for any day in a Due Period, (i) if such Due Period is in the Accumulation Period for the Class C(2009-1) Notes, the Accumulation Amount, (ii) if such day is on or after the occurrence and during the
continuance of a Class C(2009-1) Adverse Event, the lesser of (x) the Outstanding Dollar Principal Amount of the Class C(2009-1) Notes and (y) the Nominal Liquidation Amount of the Class C(2009-1) Notes, and (iii) in all other
circumstances, zero. 
 “Required Subordinated Amount of Class D Notes” means, for the Class C(2009-1) Notes for any date of
determination, an amount equal to the sum of 
  

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 (a) the Unencumbered Required Subordinated Amount of Class D Notes for such Class C(2009-1) Notes and

 (b) the Encumbered Required Subordinated Amount of Class D Notes for such Class C(2009-1) Notes; 
 provided, however, that for any date of determination on or after the occurrence and during the continuation of a Class C(2009-1) Adverse Event, the Required
Subordinated Amount of Class D Notes for the Class C(2009-1) Notes will be the greater of 
 (x) the amount determined above for such date of
determination and 
 (y) the amount determined above for the date immediately prior to the date on which such Class C(2009-1) Adverse Event
shall have occurred. 
 “Required Subordinated Percentage of Class D Notes (Unencumbered)” means, for the Class C(2009-1)
Notes, 6.951872%, subject to adjustment in accordance with Section 2.02. 
 “Reuters Screen LIBOR01” means the display
page currently so designated on the Reuters Screen (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). 
 “Specified Rating” means, for the Class C(2009-1) Notes, Baa2 with respect to Moody’s and BBB with respect to Fitch. 
 “Stated Principal Amount” means $200,000,000 or such higher amount as is specified in any Notice of Additional Issuance under Section 2.09. 
 “Targeted Accumulation Reserve Subaccount Deposit” means, with respect to any Distribution Date during the Accumulation Reserve Funding
Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the Class C(2009-1) Notes as of the close of business on the last day of the related Due Period or (ii) any other amount designated by the Calculation Agent
on behalf of the Issuer; provided, however, that if such designation is of a lesser amount, the applicable Note Rating Agencies shall have provided prior written confirmation that a Ratings Effect will not occur with respect to such
change. 
 “Targeted Principal Deposit” means, for the Class C(2009-1) Notes, notwithstanding anything to the contrary in
the Indenture Supplement, 
 (a) During the Accumulation Period, beginning with the Accumulation Commencement Date for the Class C(2009-1)
Notes, (x) (i) the Accumulation Amount for the Class C(2009-1) Notes, plus (ii) any Accumulation Amount that was scheduled to be deposited on any previous Distribution Date in the Accumulation Period that was not so deposited, minus
(y) the amount on deposit in the Principal Funding Subaccount for the Class C(2009-1) Notes that was applied to the amount in clause (x) in accordance with Section 4.04(a), 
 (b) If the Class C(2009-1) Notes have been accelerated after the occurrence of an Event of Default, or if an Early Redemption Event with respect to the
Class C(2009-1) Notes 

  

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has occurred (other than an Excess Spread Early Redemption Event for which an Excess Spread Early Redemption Cure has occurred), with respect to each
Distribution Date following the Due Period in which such Event of Default or Early Redemption Event has occurred, the lesser of (x) the Outstanding Dollar Principal Amount of such Tranche and (y) the Nominal Liquidation Amount of such
Tranche, in each case as of the last day of the preceding Due Period, and 
 (c) If a Receivables Sale has occurred for the Class C(2009-1)
Notes, zero. 
 “Unencumbered Amount” means, for the Class C(2009-1) Notes, an amount equal to the Nominal Liquidation
Amount of the Class C(2009-1) Notes minus the Encumbered Amount for the Class C(2009-1) Notes. 
 “Unencumbered Required
Subordinated Amount of Class D Notes” means, for the Class C(2009-1) Notes, an amount equal to the product of 
 (a) the
Unencumbered Amount for the Class C(2009-1) Notes and 
 (c) the Required Subordinated Percentage of Class D Notes (Unencumbered) for the
Class C(2009-1) Notes. 
 Section 1.02. Representations and Warranties of Issuer. The Issuer represents and warrants that:

 (a) the Issuer has been duly formed and is validly existing as a statutory trust in good standing under the laws of the State of Delaware,
and has full power and authority to execute and deliver this Terms Document and to perform the terms and provisions hereof; 
 (b) the
execution, delivery and performance of this Terms Document by the Issuer have been duly authorized by all necessary corporate and statutory trust proceedings of any Beneficiary and the Owner Trustee, do not require any approval or consent of any
governmental agency or authority, and do not and will not conflict with any material provision of the Certificate of Trust or the Trust Agreement of the Issuer; 
 (c) this Terms Document is the valid, binding and enforceable obligations of the Issuer, except as the same may be limited by receivership, insolvency, reorganization, moratorium or other laws relating to the
enforcement of creditors’ rights generally or by general equity principles; 
 (d) to the best of the Issuer’s knowledge, this
Terms Document will not conflict with any law or governmental regulation or court decree applicable to it; 
 (e) the Issuer is not required
to be registered under the Investment Company Act; 
 (f) all information heretofore furnished by the Issuer in writing to the Indenture
Trustee for purposes of or in connection with this Terms Document or any transaction contemplated hereby is, and all such information hereafter furnished by the Issuer in writing to the Indenture Trustee will be, true and accurate in every material
respect or based on reasonable estimates on the date as of which such information is stated or certified; and 
  

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 (g) to the best knowledge of the Issuer, there are no proceedings or investigations pending against the
Issuer before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality having jurisdiction over the Issuer (A) asserting the invalidity of this Terms Document, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Terms Document or (C) seeking any determination or ruling which in the Issuer’s judgment would materially and adversely affect the performance by the Issuer of its obligations
under this Terms Document or the validity or enforceability of this Terms Document. 
 Section 1.03. Representations and Warranties
of Indenture Trustee. The Indenture Trustee represents and warrants and any successor trustee shall represent and warrant that: 
 (a)
The Indenture Trustee is organized, existing and in good standing under the laws of the United States of America; 
 (b) The Indenture
Trustee has full power, authority and right to execute, deliver and perform this Indenture, and has taken all necessary action to authorize the execution, delivery and performance by it of this Terms Document; and 
 (c) This Terms Document has been duly executed and delivered by the Indenture Trustee. 
 Section 1.04. Limitations on Liability. 
 (a) It is expressly understood and agreed by the parties hereto that (i) this Terms Document is executed and delivered by the Owner Trustee not individually or personally but solely as Owner Trustee under the Trust Agreement, in the
exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking or agreement
by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein contained will be construed as creating any liability on the Owner Trustee individually or personally, to perform any covenant of the
Issuer either expressed or implied herein, all such liability, if any, being expressly waived by the parties to this Terms Document and by any Person claiming by, through or under them and (iv) under no circumstances will the Owner Trustee be
personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Terms Document or any related
documents. 
 (b) None of the Indenture Trustee, the Owner Trustee, the Calculation Agent, any Beneficiary, the Depositor, any Master
Servicer or any Servicer or any of their respective officers, directors, employees, incorporators or agents will have any liability with respect to this Terms Document, and recourse may be had solely to the Collateral pledged to secure these Class
C(2009-1) Notes under the Indenture, the Indenture Supplement and this Terms Document. 
 Section 1.05. Governing Law. THIS TERMS
DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, 

  

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WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 
 Section 1.06. Counterparts. This Terms Document may be executed in any number of counterparts, each of which when so executed will be deemed
to be an original, but all such counterparts will together constitute but one and the same instrument. 
 Section 1.07. Ratification
of Indenture and Indenture Supplement. As supplemented by this Terms Document, each of the Indenture and the Indenture Supplement is in all respects ratified and confirmed and the Indenture as supplemented by the Indenture Supplement and this
Terms Document shall be read, taken and construed as one and the same instrument. 
 ARTICLE II 
 The Class C(2009-1) Notes 
 Section 2.01. Creation and Designation. There is hereby created a Tranche of Class C Notes to be issued pursuant to the Indenture and the Indenture Supplement to be known as the “DiscoverSeries Class C(2009-1) Notes.”

 Section 2.02. Adjustments to Required Subordinated Percentage and Amount. 
 (a) On any date, the Issuer may, at the direction of the Beneficiary, change the Required Subordinated Percentage of Class D Notes (Unencumbered) for the
Class C(2009-1) Notes, without the consent of any Noteholders; provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change in such percentage will not result in a Ratings Effect for any
Tranche of Outstanding DiscoverSeries Notes. 
 (b) On any date, the Issuer may, at the direction of the Beneficiary, replace all or a
portion of the Required Subordinated Amount of Class D Notes for the Class C(2009-1) Notes with a different form of credit enhancement (including, without limitation, a cash collateral account, a letter of credit, a reserve account, a surety bond,
an insurance policy or a collateral interest, or any combination thereof) and may add such definitions and other terms and make such additional amendments to this Terms Document as shall be necessary for such replacement without the consent of any
Noteholders, provided that the Issuer has received written confirmation from each applicable Note Rating Agency that such replacement and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries
Notes. 
 Section 2.03. Interest Payment. For each Interest Payment Date, the amount of interest due with respect to the Class
C(2009-1) Notes shall be an amount equal to 
  

	 	(i)	(A) a fraction, the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360, times

 (B) the Note Interest Rate in effect with respect to such related Interest Accrual Period, times 
  

 11 

	 	(ii)	the Outstanding Dollar Principal Amount of the Class C(2009-1) Notes determined as of the first date of such related Interest Accrual Period, plus 

any Class C Tranche Interest Allocation Shortfall for such Class C(2009-1) Notes for the immediately preceding Distribution Date, together with interest thereon at
the Note Interest Rate in effect with respect to such related Interest Accrual Period, calculated on the basis of the actual number of days in the related Interest Accrual Period and a 360-day year. 
 Section 2.04. Notification of LIBOR. On each LIBOR Determination Date, the Indenture Trustee shall send to the Issuer, the Beneficiary, each
applicable Master Servicer and any stock exchange on which the Class C(2009-1) Notes are then listed (if the rules of such exchange so require), by facsimile transmission or electronic transmission, notification of LIBOR for the following Interest
Accrual Period. 
 Section 2.05. Payments of Interest and Principal. 
 (a) The Issuer will cause interest to be paid on each Interest Payment Date and principal to be paid on the Expected Maturity Date; provided,
however, that it shall not be an Event of Default if principal is not paid in full on such Expected Maturity Date unless funds for such payment have been allocated in accordance with Section 3.01 of the Indenture Supplement; and
provided, further, that if a Class C(2009-1) Adverse Event has occurred and is continuing, principal will instead be payable in monthly installments on each Principal Payment Date for the Class C(2009-1) Notes in accordance with
Sections 3.01 and 3.05 of the Indenture Supplement. All payments of interest and principal on the Class C(2009-1) Notes shall be made as set forth in Section 1101 of the Indenture. 
 (b) The right of the Class C(2009-1) Noteholders to receive payments from the Issuer will terminate on the Class C(2009-1) Termination Date. 

(c) All payments of principal, interest or other amounts to the Class C(2009-1) Noteholders will be made pro rata based on the Stated Principal Amount
of their Class C(2009-1) Notes. 
 Section 2.06. Form of Delivery of Class C(2009-1) Notes; Denominations. 
 (a) The Class C(2009-1) Notes shall be delivered in the form of a definitive Registered Note as provided in Section 201 of the Indenture. The form of
the Class C(2009-1) Notes is attached hereto as Exhibit A. 
 (b) The Class C(2009-1) Notes shall, until such time as the laws of any
jurisdiction in which they are offered or sold no longer restrict the transfer or sale thereof, bear a legend in substantially the following form: 
 THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE

  

 12 

 
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS
NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF DISCOVER CARD EXECUTION NOTE TRUST AND DISCOVER BANK THAT (A) THIS NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT OR, IN THE CASE OF THE INITIAL HOLDER HEREOF ONLY, ANOTHER APPLICABLE EXEMPTION UNDER THE SECURITIES ACT, (2) TO DISCOVER CARD EXECUTION NOTE TRUST, DISCOVER BANK OR THEIR AFFILIATES OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, IF APPLICABLE, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
SUBSEQUENT PURCHASER FROM IT OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. 
 No Class C(2009-1) Notes shall be transferred except in accordance
with the transfer restrictions described in the legend set forth above. 
 (c) The Class C(2009-1) Notes will be issued in minimum
denominations of $100,000 and integral multiples of $1,000 in excess of that amount. 
 Section 2.07. Delivery and Payment for the
Class C(2009-1) Notes. The Issuer shall execute and deliver the Class C(2009-1) Notes to the Indenture Trustee for authentication, and the Indenture Trustee shall deliver the Class C(2009-1) Notes when authenticated, each in accordance with
Sections 203 and 303 of the Indenture. 
 Section 2.08. Targeted Deposits to the Accumulation Reserve Account. The deposit targeted to
be made to the Accumulation Reserve Subaccount for the Class C(2009-1) Notes for any Due Period during the Accumulation Reserve Funding Period will be an amount equal to the Targeted Accumulation Reserve Subaccount Deposit minus any amount on
deposit in the Accumulation Reserve Subaccount for the Class C(2009-1) Notes. 
 Section 2.09. Additional Issuances of Notes.
Subject to clauses (ii), (iii), (iv) and (v) of Sections 2.02 and Section 2.03 of the Indenture Supplement, the Issuer may issue additional Class C(2009-1) Notes, so long as the following conditions precedent are satisfied:

 (a) the Issuer shall have given the Indenture Trustee written notice of such issuance of additional Class C(2009-1) Notes (the
“Notice of Additional Issuance”) at least one (1) Business Day in advance of the Issuance Date thereof, which notice shall include: 
  

 13 

	 	(i)	the Issuance Date of such additional Class C(2009-1) Notes; 

  

	 	(ii)	the amount of such additional Class C(2009-1) Notes being offered, the purchase price for such additional Class C(2009-1) Notes and the resulting Initial Dollar Principal Amount,
Stated Principal Amount and Nominal Liquidation Amount of Class C(2009-1) Notes; 

  

	 	(iii)	the Outstanding Dollar Principal Amount of the Class C(2009-1) Notes after giving effect to the issuance of the additional Class C(2009-1) Notes and all prior accretions of
principal as determined in accordance with Section 2.12; 

  

	 	(iv)	the Discount Amount after giving effect to such additional Class C(2009-1) Notes; and 

  

	 	(v)	any other terms that the Issuer set forth in such notice of issuance of additional Class C(2009-1) Notes to clarify the rights of Holders of such additional Class C(2009-1) Notes or
the effect of such issuance of additional Class C(2009-1) Notes on any calculations to be made with respect to the Class C(2009-1) Notes, Class C, or the Issuer. 

 All such terms shall be incorporated into and form a part of this Terms Document on and after the effective date of such Class C(2009-1) Notes; and 
 (b) no Class C(2009-1) Adverse Event has occurred and is continuing. 
 The Issuer shall not have to satisfy the conditions set forth in Section 310 of the Indenture in connection with an issuance of additional Class C(2009-1) Notes so long as such conditions were satisfied or waived
in connection with the initial issuance of Class C(2009-1) Notes. 
 Section 2.10. Designation of Additional Amounts to be included
in the Excess Spread Amount for the DiscoverSeries Notes. At any time that any outstanding Series of certificates issued by the Master Trust provides that the Series Principal Collections allocated to such Series will be deposited into the Group
Finance Charge Collections Reallocation Account for the Master Trust to the extent necessary for application to cover shortfalls for other Series issued by the Master Trust, an amount equal to (x) all Series Principal Collections allocated to
such Series, multiplied by (y) a fraction, the numerator of which is the sum of the Nominal Liquidation Amounts for each outstanding Tranche of the DiscoverSeries Notes (including the Class C(2009-1) Notes and the denominator of which the
Aggregate Investor Interest for the Master Trust, is hereby designated to be included in the Excess Spread Amount and shall be treated as Series Finance Charge Amounts for the DiscoverSeries. 
 Section 2.11. No Payments from Interest Funding Subaccount for accretion of principal of the Class C(2009-1) Notes. Section 3.04(4) of
the Indenture Supplement shall not apply to the Class C(2009-1) Notes. 
 Section 2.12. Calculation of Class C(2009-1) Accreted
Discount. The amount of Class C(2009-1) Accreted Discount as of the end of any Due Period shall be determined on a straight-line basis and shall be equal to the product of (x) a fraction the numerator of which shall be the 

  

 14 

 
number of Due Periods elapsed since the Note Issuance Date (or if additional Class C(2009-1) Notes have been issued under Section 2.09, since the
Issuance Date of such additional Notes) and the denominator of which shall be the number of Due Periods from the Note Issuance Date (or the Issuance Date of such additional Notes) to and including the Due Period related to the Expected Maturity Date
and (y) the Discount Amount. 
 [Remainder of page intentionally blank; signature page follows] 
  

 15 

 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all as of the day and year
first above written. 
  

			
	DISCOVER CARD EXECUTION NOTE TRUST,
	as Issuer
		
	By:	 	Wilmington Trust Company,
		 	not in its individual capacity but solely as Owner Trustee
		
	By:	 	 /s/ Jennifer A. Luce

		 	Name: Jennifer A. Luce
		 	Title: Assistant Vice President
	
	 U.S. BANK NATIONAL ASSOCIATION,
 as Indenture
Trustee

		
	By:	 	 /s/ Patricia M. Child

		 	Name: Patricia M. Child
		 	Title: Vice President

  
  
  
 [Signature Page to Class C(2009-1) Terms Document] 

 Exhibit A 
 Form of Class C Note 
 See attached.Separation Agreement

 Exhibit 10.1 
 SEPARATION AGREEMENT AND RELEASE 
 This Separation Agreement and Release (“Agreement”) is
made by and between Rayford K. Whitley (“Employee”) and Cost Plus, Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”). 
 RECITALS 
 WHEREAS, Employee was
employed by the Company; 
 WHEREAS, the Company and Employee entered into a Third Amended and Restated Employment Severance Agreement, dated
as of April 1, 2009 (the “Employment Severance Agreement”) which is superceded by this Agreement; 
 WHEREAS, the Company has
granted the Employee options to purchase shares of the Company’s common stock subject to the terms and conditions of the applicable Company Stock Option Plan and the Stock Option Agreement (collectively the “Stock Agreements”), and
the options that remain outstanding are set forth in Exhibit A; 
 WHEREAS, Employee separated from employment with the Company
effective May 8, 2009 (the “Separation Date”); and 
 WHEREAS, the Parties wish to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions, and demands that the Employee may have against the Company and any of the Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to
Employee’s employment with or separation from the Company; 
 NOW, THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee hereby agree as follows: 
 COVENANTS 
 1. Consideration. 
 a. Consulting
Agreement. The Company shall provide Employee with a consulting arrangement as set forth in Exhibit B attached hereto (the “Consulting Agreement”). The Parties agree to execute Exhibit B concurrently with this Agreement,
and Employee agrees to perform services on the terms and conditions set forth therein, as consideration for the benefits contained in this Agreement and the Consulting Agreement. 
 b. COBRA. The Company shall reimburse Employee for the payments Employee makes for COBRA coverage for a period of twelve (12) months, or
until Employee has secured other employment, whichever occurs first, provided Employee timely elects and pays for 

 
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period
prescribed pursuant to COBRA. COBRA reimbursements shall be made by the Company to Employee consistent with the Company’s normal expense reimbursement policy, provided that Employee submits documentation to the Company substantiating his
payments for COBRA coverage. 
 2. Stock. Employee agrees that for purposes of determining the number of shares of the Company’s
common stock that Employee is entitled to purchase from the Company, pursuant to the exercise of outstanding options, Employee will be considered to have vested only up to the Separation Date. Employee acknowledges that as of the Separation Date,
Employee will have vested in the number of options set forth in Exhibit A of this Agreement and no more. By his signature below, Employee further agrees that all unvested shares subject to his outstanding stock options will terminate as of
the Separation Date. He further agrees that Exhibit A contains a complete listing of all outstanding stock options held by him. The exercise of Employee’s vested options and shares shall continue to be governed by the terms and
conditions of the Company’s Stock Agreements. 
 3. Benefits. Employee’s health insurance benefits shall cease on the last
day of May 2009, subject to Employee’s right to continue his health insurance under COBRA, and the Company’s obligation to reimburse for such costs as set out in Paragraph 1(b). Employee’s participation in all benefits and incidents
of employment, including, but not limited to, vesting in stock options, and the accrual of bonuses, vacation, and paid time off, ceased as of the Separation Date. 
 4. Payment of Salary and Receipt of All Benefits. Employee acknowledges and represents that, other than the consideration set forth in this Agreement, the Company has paid or provided all salary, wages,
bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and
compensation due to Employee. 
 5. Release of Claims. Employee agrees that the foregoing consideration represents settlement in full
of all outstanding obligations owed to Employee by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees,
divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”). Employee, on his own behalf and on behalf of his respective heirs, family members, executors, agents, and assigns, hereby
and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement,
including, without limitation: 
 a. any and all claims relating to or arising from Employee’s employment relationship with the Company
and the termination of that relationship; 
  

 -2- 

 b. any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase
of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

 c. any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment;
conversion; and disability benefits; 
 d. any and all claims for violation of any federal, state, or municipal statute, including, but not
limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act;
the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the
Sarbanes-Oxley Act of 2002; the California Family Rights Act; the California Labor Code; the California Workers’ Compensation Act; and the California Fair Employment and Housing Act; 
 e. any and all claims for violation of the federal or any state constitution; 
 f. any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; 
 g. any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of any of the proceeds
received by Employee as a result of this Agreement; and 
 h. any and all claims for attorneys’ fees and costs. 
 Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This
release does not extend to any obligations incurred under this Agreement. This release does not release claims that cannot be released as a matter of law, including, but not limited to, Employee’s right to file a charge with or participate in a
charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding
that any such filing or participation does not give Employee the right to recover any monetary damages against the Company; Employee’s release of claims herein bars Employee from recovering such monetary relief from the Company). 
  

 -3- 

 6. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is waiving and
releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that this waiver and release does not apply to any rights or
claims that may arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled. Employee
further acknowledges that he has been advised by this writing that: (a) he should consult with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within which to consider this Agreement; (c) he
has seven (7) days following his execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes
Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the
event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this
Agreement. 
 7. California Civil Code Section 1542. Employee acknowledges that he has been advised to consult with legal counsel
and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows: 
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. 
 Employee, being aware of said code
section, agrees to expressly waive any rights he may have thereunder, as well as under any other statute or common law principles of similar effect. 
 8. No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the other
Releasees. Employee also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any of the other Releasees. 
 9. Confidentiality. Employee agrees to maintain in complete confidence the contents and terms of this Agreement and the consideration for this
Agreement (hereinafter collectively referred to as “Separation Information”). Except as required by law, Employee may disclose Separation Information only to his immediate family members, the Court in any proceedings to enforce the terms
of this Agreement, Employee’s attorney(s), and Employee’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns,
and must prevent disclosure of any Separation Information to all other third parties. Employee agrees that he will not publicize, directly or indirectly, any Separation Information. 
  

 -4- 

 Employee acknowledges and agrees that the confidentiality of the Separation Information is of the
essence. The Parties agree that if the Company proves that Employee breached this Confidentiality provision, the Company shall be entitled to an award of its costs spent enforcing this provision, including all reasonable attorneys’ fees
associated with the enforcement action, without regard to whether the Company can establish actual damages from Employee’s breach, except to the extent that such breach constitutes a legal action by Employee that directly pertains to the ADEA.
Any such individual breach or disclosure shall not excuse Employee from his obligations hereunder, nor permit him to make additional disclosures. Employee warrants that he has not disclosed, orally or in writing, directly or indirectly, any of the
Separation Information to any unauthorized party. 
 10. Trade Secrets and Confidential Information/Company Property. Employee agrees
that he will not disclose the Company’s trade secrets and confidential and proprietary information. Employee agrees to promptly return all documents and other items provided to Employee by the Company, developed or obtained by Employee in
connection with his employment with the Company, or otherwise belonging to the Company, except as required to perform the services set forth in the Consulting Agreement. 
 11. No Cooperation. Employee agrees that he will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims,
charges, or complaints by any third party against any of the Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Employee agrees both to immediately notify the Company upon
receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of
any disputes, differences, grievances, claims, charges, or complaints against any of the Releasees, Employee shall state no more than that he cannot provide counsel or assistance. 
 12. Nondisparagement. Employee agrees to refrain from any disparagement, defamation, libel, or slander of any of the Releasees, and agrees to
refrain from any tortious interference with the contracts and relationships of any of the Releasees. Employee shall direct any inquiries by potential future employers to the Company’s (i) human resources department, which shall use its
best efforts to provide only the Employee’s last position and dates of employment, or (ii) Chief Executive Officer. 
 13.
Breach. In addition to the rights provided in the “Attorneys’ Fees” section below, Employee acknowledges and agrees that any material breach of this Agreement, unless such breach constitutes a legal action by Employee
challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, or of any provision of the Confidentiality Agreement shall entitle the Company immediately to recover and/or cease providing the consideration
provided to Employee under this Agreement and to obtain damages, except as provided by law. 
  

 -5- 

 14. No Admission of Liability. Employee understands and acknowledges that this Agreement
constitutes a compromise and settlement of any and all actual or potential disputed claims by Employee. No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an
admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Employee or to any third party. 
 15. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this
Agreement. 
 16. ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, INCLUDING
DISPUTES ARISING OUT OF THE CONSULTING AGREEMENT ATTACHED HERETO AS EXHIBIT B, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION IN ALAMEDA COUNTY, BEFORE JUDICIAL ARBITRATION & MEDIATION SERVICES
(“JAMS”), PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN
ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY
JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE
PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH
ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY
AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY)
FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS PARAGRAPH
CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN. 
  

 -6- 

 17. Tax Consequences. The Company makes no representations or warranties with respect to the tax
consequences of the payments and any other consideration provided to Employee or made on his behalf under the terms of this Agreement. Employee agrees and understands that he is responsible for payment, if any, of local, state, and/or federal taxes
on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon. Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, interest,
assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of (a) Employee’s failure to pay or delayed payment of federal or state taxes, or (b) damages
sustained by the Company by reason of any such claims, including attorneys’ fees and costs. 
 18. Authority. The Company
represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or
equity or otherwise of or against any of the claims or causes of action released herein. 
 19. No Representations. Employee
represents that he has had an opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Employee has not relied upon any representations or statements made by the
Company that are not specifically set forth in this Agreement. 
 20. Severability. In the event that any provision or any portion of
any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said
provision or portion of provision. 
 21. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs and
expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action. 
 22. Entire Agreement. This Agreement represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee’s employment with and
separation from the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Employee’s relationship with
the Company, with the exception of the Stock Agreements. 
 23. No Oral Modification. This Agreement may only be amended in a writing
signed by Employee and the Company’s Chief Executive Officer. 
  

 -7- 

 24. Governing Law. This Agreement shall be governed by the laws of the State of California,
without regard for choice-of-law provisions. Employee consents to personal and exclusive jurisdiction and venue in the State of California. 
 25. Effective Date. Each Party has seven (7) days after that Party signs this Agreement to revoke it. This Agreement will become effective on the eighth (8th) day after Employee signed this Agreement, so long as it has been
signed by the Parties and has not been revoked by either Party before that date (the “Effective Date”). 
 26. Counterparts.
This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

 27. Voluntary Execution of Agreement. Employee understands and agrees that he executed this Agreement voluntarily, without any
duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of his claims against the Company and any of the other Releasees. Employee acknowledges that: 
  

	 	(a)	he has read this Agreement; 

  

	 	(b)	he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his own choice or has elected not to retain legal counsel;

  

	 	(c)	he understands the terms and consequences of this Agreement and of the releases it contains; and 

  

	 	(d)	he is fully aware of the legal and binding effect of this Agreement. 

  

 -8- 

 IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below. 
  

							
	 	 	 	 	Rayford K. Whitley, an individual
			
	Dated: May 29, 2009	 		 	 /s/    Rayford K. Whitley

		 		 	Rayford K. Whitley
			
		 		 	COST PLUS, INC.
				
	Dated: May 29, 2009	 		 	By	 	 /s/    Barry J. Feld

		 		 		 	Barry J. Feld
		 		 		 	Chief Executive Officer, President

  

 -9- 

 EXHIBIT A 
 (Insert Stock information, if applicable) 
  

 -10- 

 EXHIBIT B 
 COST PLUS, INC. CONSULTING AGREEMENT 
 This Consulting Agreement (“Consulting
Agreement”) is entered into by and between Cost Plus, Inc. (“Cost Plus” or the “Company”) and Rayford K. Whitley (“Consultant”) (each herein referred to individually as a
“Party” or collectively as the “Parties”) as of the first day following the Effective Date of the Severance Agreement and Release to which this document is attached. 
 The Company desires to retain Consultant as an independent contractor to perform consulting services for the Company, and Consultant is willing to
perform such services, on the terms described below. In consideration of the mutual promises contained herein, the parties agree as follows: 
 1. Services and Compensation. Consultant agrees to perform for the Company the services described in Exhibit 1 (the “Services”), and the Company agrees to pay Consultant the compensation described in
Exhibit 1 for Consultant’s performance of the Services. The Parties agree that Consultant will not be the primary decisionmaker for decisions typically reserved for the directors and/or officers of the Company. 
 2. Confidentiality. 
 A.
Definition. “Confidential Information” means any non-public information that relates to the actual business or research and development of the Company, technical data, trade secrets or know-how, including, but not limited to,
research, product plans or other information regarding Company’s products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on whom Consultant called or with whom Consultant
became acquainted during the term of this Consulting Agreement), software, developments, inventions, processes, formulas, technology, designs, drawing, engineering, hardware configuration information, marketing, finances or other business
information disclosed by the Company either directly or indirectly in writing, orally or by drawings or inspection of premises, parts, equipment, or other Company property. Confidential Information does not include information that (i) is known
to Consultant without conflicting obligations, at the time of disclosure to Consultant by the Company as evidenced by written records of Consultant, (ii) has become publicly known and made generally available through no wrongful act of
Consultant or (iii) has been rightfully received by Consultant without conflicting obligations, from a third party who is authorized to make such disclosure. 
 B. Nonuse and Nondisclosure. During and after the term of this Consulting Agreement, Consultant will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or
disclosure of Confidential Information, and consultant will not, (i) use the Confidential Information for any purpose whatsoever other than the performance of the Services on behalf of the Company or (ii) disclose the Confidential
Information to any third party without the prior written consent of an authorized representative of the Company. Consultant may disclose Confidential Information to the extent compelled by applicable law, provided however, prior to such
disclosure, Consultant shall provide prior written notice to Company to allow the Company an opportunity to seek a 

  

 -11- 

 
protective order or such similar confidential protection as may be available under applicable law. Consultant agrees that no ownership of Confidential
Information is conveyed to the Consultant. Without limiting the foregoing, Consultant shall not use or disclose any Company property, intellectual property rights, trade secrets or other proprietary know-how of the company to invent, author, make,
develop, design, or otherwise enable others to invent, author, make, develop, or design identical or substantially similar designs as those developed under this Consulting Agreement for any third party. Consultant agrees that Consultant’s
obligations under this Section 2.B shall continue after the termination of this Consulting Agreement. 
 C. Other Client and
Confidential Information. Consultant agrees that Consultant will not improperly use or disclose any proprietary information or trade secrets of any former or current employer of Consultant or other person or entity with which Consultant has an
obligation to keep in confidence. Consultant also agrees that Consultant will not bring onto the Company’s premises or transfer onto the Company’s technology systems any unpublished document, proprietary information, or trade secrets
belonging to any third party unless disclosure to, and use by the Company has been consented to in writing by such third party. 
 D.
Third Party Confidential Information. Consultant recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain
the confidentiality of such information and to use it only for certain limited purposes. Consultant agrees that, during the term of this Consulting Agreement and thereafter, Consultant owes the Company and such third parties a duty to hold all such
confidential or proprietary information in the strictest confidence and not to use it or disclose it to any person, firm, corporation, or other third party except as necessary in carrying out the Services for the Company consistent with the
Company’s agreement with such third party. 
 3. Ownership. 
 A. Assignment. Consultant agrees that all right, title, and interest in and to any copyrightable material, notes, records, drawings, designs,
inventions, improvements, developments, discoveries and trade secrets conceived, discovered, authored, invented, developed or reduced to practice by Consultant, solely or in collaboration with others, during the term of this Consulting Agreement
arising out of or in connection with performing the Services under this Consulting Agreement and any copyrights, patents, trade secrets, mask work rights or other intellectual property rights relating to the foregoing (collectively,
“Inventions”), are the sole property of the Company. Consultant also agrees to promptly make full written disclosure to the Company of any Inventions and to deliver and assign (or cause to be assigned) and hereby irrevocably assigns
fully to the Company all right, title and interest in and to the Inventions. 
 B. Further Assurances. Consultant agrees to assist
Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating to all Inventions in any and
all countries, including the disclosure to the Company of all pertinent information and data with respect to all Inventions, the execution of all applications, specifications, oaths, assignments and all other instruments that the Company may deem
necessary in order to apply for and obtain such rights and 

  

 -12- 

 
in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive right, title and interest in and to all Inventions,
and any copyrights, patents, mask work rights or other intellectual property rights relating to all Inventions, and testifying in a suit or other proceeding relating to such Inventions and any rights relating thereto. Consultant also agrees that
Consultant’s obligations under this Section 3.B shall continue after the termination of this Consulting Agreement. 
 C.
Pre-Existing Materials. Subject to Section 3.A, Consultant agrees that if, in the course of performing the Services, Consultant incorporates into any Invention or utilizes in the performance of the Services any pre-existing
invention, improvement, development, concept, discovery or other proprietary information owned by Consultant or in which Consultant has an interest (“Prior Inventions”), (i) Consultant will inform Company, in writing before
incorporating such Prior Inventions into any Invention, and (ii) the Company is hereby granted a nonexclusive, royalty-free, perpetual, irrevocable, transferable worldwide license with the right to grant and authorize sublicenses, to make, have
made, modify, use, import, offer for sale, sell, reproduce, distribute, modify, adapt, prepare derivative works of, display, perform, and otherwise exploit such Prior Inventions, without restriction, including, without limitation, as part of or in
connection with such Invention, and to practice any method related thereto. Consultant will not incorporate any invention, improvement, development, concept, discovery or other proprietary information owned by any third party into any Invention
without Company’s prior written permission. 
 D. Attorney-in-Fact. Consultant agrees that, if the Company is unable because of
Consultant’s unavailability, dissolution, mental or physical incapacity, or for any other reason, to secure Consultant’s signature with respect to any Inventions, including, without limitation, for the purpose of applying for or pursuing
any application for any United States or foreign patents or mask work or copyright registrations covering the Inventions assigned to the Company in Section 3.A, then Consultant hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents as Consultant’s agent and attorney-in-fact, to act for and on Consultant’s behalf to execute and file any such applications and oaths and to do all other lawfully permitted acts with respect to such
Inventions to further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Consultant. It is understood that the appointment of Company as the attorney-in-fact of the
Consultant for the purposes set forth above, is irrevocable as aforesaid, and is coupled with an interest. 
 E. Moral Rights. Any
assignment to the Company of Inventions includes all rights of attribution, paternity, integrity, modification, disclosure and withdrawal, and any other rights throughout the world that may be known as or referred to as “moral rights,”
“artist’s rights,” “droit moral,” or the like (collectively, “Moral Rights”). To the extent that Moral Rights cannot be assigned under applicable law, Consultant agrees to waive and agree not to enforce any
and all Moral Rights, including, without limitation, any right to identification of authorship or limitation on subsequent modification that Consultant may have in the assigned Inventions. 
 F. Maintenance of Records. Consultant agrees to keep and maintain adequate, current, accurate and authentic written records of all Inventions made
by Consultant (solely or jointly with others) during the term of this Consulting Agreement and retrain such records for a period of three (3) years thereafter. The records will be in the form of notes, sketches, drawings, electronic files,
reports, or 

  

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any other format that is customary in the industry and/or otherwise specified by the company. Such records are and remain the sole property of the Company at
all times and upon Company’s request, Consultant shall deliver (or cause to be delivered) the same. 
 4. Conflicting
Obligations. 
 A. Conflicts. Consultant certifies that Consultant has no outstanding agreement or obligation to any other person
or entity that is in conflict with any of the provisions of this Consulting Agreement, Consultant’s obligations to the Company under this Consulting Agreement, and/or Consultant’s ability to perform the Services. Consultant will not enter
into any such conflicting agreement during the term of this Consulting Agreement. Consultant expressly acknowledges and agrees that during the period in which he provides services to the Company under this Consulting Agreement he will not be
employed by, provide services to, or do any work for Pier 1 Imports, Inc., its successors, subsidiaries or assigns “Pier 1”), or Target, Inc., its successors subsidiaries or assigns (“Target”), because of the inherent conflict of
interest that would arise due to the nature of the services provided by Consultant to the Company. Full-time employment with a company other than Pier 1 or Target shall not constitute a breach of this Consulting Agreement. 
 B. Consultant shall have no right to subcontract the performance of any Services without the prior written permission of the Company. In the event the
Company authorizes Consultant to subcontract the performance of any Services, Consultant shall require all Consultant’s employee, contractors, or other third parties performing Services under this Consulting Agreement to execute a Confidential
Information and Assignment Consulting Agreement in a form satisfactory to the Company, and promptly provide a copy of each such executed agreement to the Company. Consultant’s violation of this Section 4.B will be considered a
material breach under Section 7.B. 
 5. Return of Materials. Upon the termination of this Consulting Agreement, or upon
Company’s earlier request, Consultant will deliver to the Company, and will not keep in Consultant’s possession, recreate, or deliver to anyone else, all of the Company’s property, including but not limited to all electronically
stored information and passwords to access such property, tangible embodiments of the Inventions, all devised and equipment belonging to the Company, any and all Confidential Information, those records maintained pursuant to Section 3.F and any
reproductions of any of the foregoing items that Consultant may have in Consultant’s possession or control. 
 6. Reports.
Consultant agrees that Consultant will, from time to time during the term of this Consulting Agreement, keep the Company advised as to Consultant’s progress in performing the Services under this Consulting Agreement. Consultant further agrees
that Consultant will, as requested by the Company, prepare written reports with respect to such progress. The Company and Consultant agree that the time required to prepare such written reports will be considered time devoted to the performance of
the Services. 
 7. Term and Termination. 
 A. Term. The term of this Consulting Agreement will begin on the Effective Date of this Consulting Agreement and will continue until the earlier of (i) twelve (12) months, or (ii) termination as
provided in Section 7.B. 
  

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 B. Termination. The Company may terminate this Consulting Agreement upon giving Consultant 14
days’ prior written notice of such termination pursuant to Section 12.E of this Consulting Agreement. However, except as set forth below in this Section 7.B, the Company will still be required to pay Consultant the
compensation described in Exhibit 1 to this Consulting Agreement for a period of twelve (12) months from the Effective Date of the Severance Agreement and Release to which this Consulting Agreement is attached. The Company may terminate
this Consulting Agreement immediately and without prior notice if Consultant refuses to or is unable to perform the Services or is in breach of any material provision of this Consulting Agreement, including but not limited to
Section 4.A. In the event the Company terminates this Consulting Agreement because Consultant refuses to or is unable to perform the Services or is in breach of any material provision of this Consulting Agreement, including but not
limited to Section 4.A, the Company shall not be obligated to continue to provide Consultant the compensation described in Exhibit 1 to this Consulting Agreement. 
 C. Survival. Upon any termination, all rights and duties of the Company and Consultant toward each other shall cease except: 
 (1) The Company will pay, within 30 days after the effective date of termination, all amounts owing to Consultant for Services completed and accepted by
the Company prior to the termination date and related reimbursable expenses, if any, submitted in accordance with the Company’s policies and in accordance with the provisions of Section 1 of this Consulting Agreement; and

 (2) Section 2 (Confidentiality), Section 3 (Ownership), Section 4 (Conflicting Obligations),
Section 7 (Term and Termination), Section 8 (Independent Contractor; Benefits), Section 9 (Indemnification), Section 10 (Nonsolicitation), Section 11 (Limitation of Liability),
Section 12 (Arbitration and Equitable Relief), and Section 13 (Miscellaneous) will survive termination of this Consulting Agreement. 
 8. Independent Contractor; Benefits. 
 A. Independent Contractor. It is the express intention
of the Company and Consultant that Consultant perform the Services as an independent contractor to the Company. Nothing in this Consulting Agreement shall in any way be construed to constitute Consultant as an agent, employee or representative of
the Company. Without limiting the generality of the foregoing, Consultant is not authorized to bind the Company to any liability or obligation or to represent that Consultant has any such authority. Consultant agrees to furnish (or reimburse the
Company for) all tools and materials necessary to accomplish this Consulting Agreement and shall incur all expenses associated with performance, except as expressly provided in Exhibit 1. Consultant acknowledges and agrees that
Consultant is obligated to report as income all compensation received by Consultant pursuant to this Consulting Agreement. Consultant agrees to and acknowledges the obligation to pay all self-employment and other taxes on such income. 
 B. Benefits. The Company and Consultant agree that Consultant will receive no Company-sponsored benefits from the Company where benefits include,
but are not limited to, paid vacation, sick leave, medical insurance and 401k participation. If Consultant is reclassified by a state or federal agency or court as Company’s employee, Consultant will become a reclassified employee and will
receive no 

  

 -15- 

 
benefits from the Company, except those mandated by state or federal law, even if by the terms of the Company’s benefit plans or programs of the Company
in effect at the time of such reclassification, Consultant would otherwise be eligible for such benefits. 
 9. Indemnification.
Consultant agrees to indemnify and hold harmless the Company and its affiliates and their directors, officers and employees from and against all taxes, losses, damages, liabilities, costs and expenses, including attorneys’ fees and other legal
expenses (collectively, “Losses”), arising directly or indirectly from or in connection with (i) any grossly negligent, reckless or intentionally wrongful act of Consultant or Consultant’s assistants, employees, contractors or
agents, (ii) a determination by a court or agency that the Consultant is not an independent contractor, (iii) any material breach by the Consultant or Consultant’s assistants, employees contractors or agents of any of the covenants
contained in this Consulting Agreement, (iv) any failure of Consultant to perform the Services in accordance with all applicable laws, rules and regulations directly related to the performance of the Services, or (v) any violation of a
third party’s rights resulting primarily from the Company’s use of the work product of Consultant under this Consulting Agreement. 
 10. Nonsolicitation. From the date of this Consulting Agreement until 12 months after the termination of this Consulting Agreement (the “Restricted Period”), Consultant will not, without the Company’s prior
written consent, directly or indirectly, solicit or encourage any employee or contractor of the Company or its affiliates to terminate employment with, or cease providing services to, the Company or its affiliates. During the Restricted Period,
Consultant will not, whether for Consultant’s own account or for the account of any other person, firm, corporation or other business organization, intentionally interfere with any person who is or during the period of Consultant’s
engagement by the Company was a partner, supplier, customer or client of the Company or its affiliates. Consultant agrees that nothing in this Section 10 shall affect Consultant’s continuing obligations under Section 7.C(2)
this Consulting Agreement during and after this twelve (12) month period. 
 11. Limitation of Liability. IN NO EVENT SHALL
COMPANY BE LIABLE TO CONSULTANT OR TO ANY OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOST PROFITS OR LOSS OF BUSINESS, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, WHETHER BASED IN CONTRACT, TORT
OR OTHER THEORY OF LIABILITY, REGARDLESS OF WHETHER COMPANY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. IN NO EVENT SHALL COMPANY’S LIABILITY ARISING OUT OF OR IN
CONNECTION WITH THIS CONSULTING AGREEMENT EXCEED THE AMOUNTS PAID BY COMPANY TO CONSULTANT UNDER THIS CONSULTING AGREEMENT FOR THE SERVICES, DELIVERABLES OR WORK PRODUCT GIVING RISE TO SUCH LIABILITY. 
 12. Miscellaneous. 
 A. Governing
Law; Consent to Personal Jurisdiction. This Consulting Agreement shall be governed by the laws of California without regard to California’s conflicts of law rules. To the extent that any lawsuit is permitted under this Consulting Agreement,
the parties hereby expressly consent to the personal and exclusive jurisdiction and venue of the state and federal courts located in California. 
  

 -16- 

 B. Assignability. This Consulting Agreement will be binding upon Consultant’s heirs,
executors, assigns, administrators, and other legal representatives, and will be for the benefit of the Company, its successors, and its assigns. There are no intended third-party beneficiaries to this Consulting Agreement, except as expressly
stated. Except as otherwise provided in this Consulting Agreement, Consultant may not sell, assign or delegate any rights or obligations under this Consulting Agreement. Notwithstanding anything to the contrary herein, Company may assign this
Consulting Agreement and its rights and obligations under this Consulting Agreement to any successor to all or substantially all of Company’s relevant assets, whether by merger, consolidation, sale of assets or stock, or otherwise. 

C. Entire Consulting Agreement. This Consulting Agreement, together with the Severance Agreement and Release to which it is attached,
constitutes the entire agreement between the parties with respect to the subject matter of this Consulting Agreement and supersedes all prior written and oral agreements between the parties regarding the subject matter of this Consulting Agreement.
To the extent any terms set forth in any exhibit or schedule conflict with the terms set forth in this Consulting Agreement, the terms of this Consulting Agreement shall control unless otherwise expressly agreed by the Parties in such exhibit or
schedule. Consultant represents and warrants that he/she is not relying on any statement or representation not contained in this Consulting Agreement. 
 D. Headings. Headings are used in this Consulting Agreement for reference only and shall not be considered when interpreting this Consulting Agreement. 
 E. Notices. Any notice or other communication required or permitted by this Consulting Agreement to be given to a party shall be in writing and
shall be deemed given (i) if delivered personally or by commercial messenger or courier service, (ii) when sent by confirmed facsimile; or (iii) mailed by U.S. registered or certified mail (return receipt requested), to the party at
the party’s address written below or at such other address as the party may have previously specified by like notice. If by mail, delivery shall be deemed effective three business days after mailing in accordance with this
Section 12.E. 
 (1) If to the Company, to: 
 200 Fourth Street, Oakland CA 94607 
 Attention: Joan Fujii 
 (2) If to Consultant, to the address for notice on the signature page to this Consulting Agreement or, if no such address is provided, to the last
address of Consultant provided by Consultant to the Company. 
 F. Attorneys’ Fees. In any court action at law or equity that is
brought by one of the parties to this Consulting Agreement to enforce or interpret the provisions of this Consulting Agreement, the prevailing party will be entitled to reasonable attorneys’ fees, in addition to any other relief to which that
party may be entitled. 
  

 -17- 

 G. Severability. If any provision of this Consulting Agreement is found to be illegal or
unenforceable, the other provisions shall remain effective and enforceable to the greatest extent permitted by law. 
 H. Modification,
Waiver. No modification of or amendment to this Consulting Agreement, nor any waiver of any rights under this Consulting Agreement, will be effective unless in a writing signed by both Parties. Waiver by the Company of a breach of any provision
of this Consulting Agreement will not operate as a waiver of any subsequent breach. 
 I. Signatures. This Consulting Agreement may be
signed in two counterparts, each of which shall be deemed an original, with the same force and effectiveness as though executed in a single document. 
 IN WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement as of the date first written above. 
  

									
	CONSULTANT	 		 	COST PLUS, INC.
					
	By:	 	 /s/    Rayford K. Whitley
	 		 	By:	 	 /s/    Barry J. Feld

	Name:	 	 Rayford K. Whitley
	 		 	Name:	 	 Barry J. Feld

	Title:	 	  
	 		 	Title:	 	 Chief Executive Officer, President

  

 -18- 

 EXHIBIT 1 
 Services and Compensation 
 1. Contact. Consultant’s principal Company contact:

 Name: Joan Fujii 
 Title:
EVP Human Resources 
 Email: joan.fujii@cpwm.com 
 Phone: (510) 808-9053 
 2. Services. The Services Consultant will provide to the Company will be
provided upon request by the Company, for a maximum of one (1) full business day of Consultant’s time per month, performing the following: 
 (a) Developing logistical and labor efficiencies in the supply chain; 
 (b) Such other business and
professional services as shall reasonably be requested of Consultant by the Company’s CEO. 
 3. Compensation. The Company will
pay Consultant $25,000 per month for each full month he performs services under this Consulting Agreement. Every month, Consultant shall submit to the Company a written invoice for Services rendered (“Invoice”). The Company shall pay
Consultant with fifteen (15) days of receipt of the Invoice. 
 This Exhibit 1 is accepted and agreed as of the date Consultant’s signature
appears below. 
  

									
	CONSULTANT	 		 	COST PLUS, INC.
					
	By:	 	 /s/    Rayford K. Whitley
	 		 	By:	 	 /s/    Barry J. Feld

	Name:	 	 Rayford K. Whitley
	 		 	Name:	 	 Barry J. Feld

	Title:	 	  
	 		 	Title:	 	 Chief Executive Officer, President

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