Document:

exv10w1

 

Exhibit 10.1

SETTLEMENT AGREEMENT

Dated April 2, 2008

by and between

MASTERCARD INTERNATIONAL INCORPORATED

and

THE TJX COMPANIES, INC.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	1.1. Definitions
	 	 	1	 
	 
	 	 	 	 
	1.2. Certain Rules of Construction
	 	 	5	 
	 
	 	 	 	 
	2. ACCOUNTING STATEMENT
	 	 	5	 
	 
	 	 	 	 
	3. ALTERNATIVE RECOVERY OFFER
	 	 	6	 
	 
	 	 	 	 
	3.1. Alternative Recovery Acceptance
	 	 	7	 
	 
	 	 	 	 
	3.2. Alternative Recovery Amount
	 	 	7	 
	 
	 	 	 	 
	3.3. Maximum Settlement Amount
	 	 	7	 
	 
	 	 	 	 
	3.4. Reduction for Non-Acceptances
	 	 	7	 
	 
	 	 	 	 
	4. UNSATISFIED THRESHOLD EVENT; ALTERNATIVE RECOVERY
ACCEPTANCE REPORT; MASTERCARD REPRESENTATIONS; DELIVERY OF ACCEPTANCES
	 	 	7	 
	 
	 	 	 	 
	4.1. Unsatisfied Threshold Event
	 	 	7	 
	 
	 	 	 	 
	4.2. Alternative Recovery Acceptance Report
	 	 	8	 
	 
	 	 	 	 
	4.3. MasterCard Representations
	 	 	8	 
	 
	 	 	 	 
	4.4. Delivery of Alternative Recovery Acceptances
	 	 	9	 
	 
	 	 	 	 
	5. PAYMENT AND POST-CONSUMMATION COVENANT BY TJX
	 	 	9	 
	 
	 	 	 	 
	6. FINE APPEALS/MASTERCARD RELEASE
	 	 	9	 
	 
	 	 	 	 
	7. RELEASE; CONSUMMATION DATE
	 	 	10	 
	 
	 	 	 	 
	7.1. Release
	 	 	10	 
	 
	 	 	 	 
	7.2. Conditions to Consummation; Consummation Date
	 	 	10	 
	 
	 	 	 	 
	8. OPT-IN THRESHOLD CONDITION; TERMINATION, ETC.
	 	 	11	 
	 
	 	 	 	 
	8.1. Opt-In Threshold Condition
	 	 	11	 
	 
	 	 	 	 
	8.2. Termination
	 	 	11	 
	 
	 	 	 	 
	8.3. Effect of Termination
	 	 	12	 
	 
	 	 	 	 
	9. REPRESENTATIONS AND WARRANTIES; MASTERCARD AND TJX INDEMNIFICATION
	 	 	12	 
	 
	 	 	 	 
	9.1. Representations and Warranties
	 	 	12	 
	 
	 	 	 	 
	9.2. MasterCard Indemnification
	 	 	13	 
	 
	 	 	 	 
	9.3. TJX Indemnification
	 	 	14	 
	 
	 	 	 	 

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	10. MISCELLANEOUS
	 	 	14	 
	 
	 	 	 	 
	10.1. Notices
	 	 	14	 
	 
	 	 	 	 
	10.2. Succession and Assignment; No Third-Party Beneficiary
	 	 	15	 
	 
	 	 	 	 
	10.3. Amendments and Waivers
	 	 	16	 
	 
	 	 	 	 
	10.4. Entire Agreement
	 	 	16	 
	 
	 	 	 	 
	10.5. Counterparts; Effectiveness
	 	 	16	 
	 
	 	 	 	 
	10.6. Non-Severability
	 	 	16	 
	 
	 	 	 	 
	10.7. Headings
	 	 	17	 
	 
	 	 	 	 
	10.8. Construction
	 	 	17	 
	 
	 	 	 	 
	10.9. Survival of Covenants, Reliance, etc
	 	 	17	 
	 
	 	 	 	 
	10.10. Governing Law
	 	 	17	 
	 
	 	 	 	 
	10.11. Jurisdiction; Venue and Limitation on Actions; Service of Process
	 	 	17	 
	 
	 	 	 	 
	10.12. Specific Performance
	 	 	18	 
	 
	 	 	 	 
	10.13. Waiver of Jury Trial
	 	 	18	 
	 
	 	 	 	 
	10.14. No Admission of Liability
	 	 	19	 
	 
	 	 	 	 
	10.15. SEC Filings; Public Announcements
	 	 	19	 

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EXHIBITS

	 	 	 
	Exhibit 1.1

	 	MasterCard Online Issuer Claim for Reimbursement Worksheet
	 
	 	 
	Exhibit 2

	 	Accounting Statement
	 
	 	 
	Exhibit 3.1

	 	Form of Alternative Recovery Acceptance
	 
	 	 
	Exhibit 7.1

	 	Form of TJX Release
	 
	 	 
	Exhibit 10.15A

	 	TJX Press Release
	 
	 	 
	Exhibit 10.15B

	 	MasterCard Press Release

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SETTLEMENT AGREEMENT

     SETTLEMENT AGREEMENT dated as of April 2, 2008 (together with the attached Exhibits called
this “Settlement Agreement”), by and between MASTERCARD INTERNATIONAL INCORPORATED, a
Delaware corporation (“MasterCard”), and THE TJX COMPANIES, INC., a Delaware corporation
(“TJX”).

     WHEREAS, on January 17, 2007, TJX publicly announced that prior to December 19, 2006, the
portion of TJX’s computer system that processes and stores information related to certain customer
transactions at certain TJX-operated stores was subjected to one or more unauthorized intrusions
(further defined collectively below as the TJX Intrusion), during which certain payment card
account data were stolen;

     WHEREAS, certain issuers of payment cards bearing the “MasterCard,” “MasterCard Electronic,”
“Maestro,” and/or “Cirrus” brand names may have certain rights under the MasterCard Operating
Regulations (as defined below) to recover certain amounts (which amounts may be indemnifiable by
TJX) by reason of losses and costs associated with the TJX Intrusion allegedly incurred by those
issuers; and

     WHEREAS, in order to settle claims and resolve other disputes among TJX and its acquiring
banks, on the one hand, and MasterCard and certain MasterCard issuers, on the other hand, with
respect to the possible rights of MasterCard issuers described above and actual and potential
associated claims by MasterCard and MasterCard issuers asserting such possible rights, TJX and
MasterCard have entered into this Settlement Agreement.

     NOW, THEREFORE, in consideration of the representations, warranties and covenants set forth in
this Settlement Agreement and subject to all the terms and conditions set forth in this Settlement
Agreement, MasterCard and TJX agree as follows:

     1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.

          1.1. Definitions. The following capitalized terms and non-capitalized words and
phrases have the meanings respectively assigned to them below, which meanings are applicable
equally to the singular and plural forms of the terms so defined:

     “Acceptance Deadline” has the meaning set forth in Section 8.1.

     “Acceptance Delivery Date” has the meaning set forth in Section 4.4.

     “Accepting Issuer” has the meaning set forth in Section 3.1.

     “Accounting Statement” means a written statement (i) which sets forth MasterCard’s
calculation of the aggregate numbers of the Eligible MasterCard Issuers’ Alerted-On Accounts and
Claimed-On Accounts (including MasterCard’s calculation of how many of the Eligible MasterCard
Issuers’ Claimed-On Accounts constitute Reissued Accounts and how many constitute Specially
Monitored Accounts), and which contains detail sufficient to confirm the accuracy of the MasterCard
representation and warranty contained in clauses (i), (ii) and (iii) of

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the second sentence of Section 2, and (ii) which includes an issuer-by-issuer breakdown
identifying each Eligible MasterCard Issuer by means of a numerical identifier, rather than by
name; setting forth, as to each Eligible MasterCard Issuer, its number of Alerted-On Accounts and
its number of Claimed-On Accounts; and setting forth, as to each Eligible MasterCard Issuer’s
Claimed-On Accounts, how many of the Claimed-On Accounts of each Eligible MasterCard Issuer are
Reissued Accounts and how many are Specially Monitored Accounts.

     “Adjusted Settlement Amount” has the meaning set forth in Section 3.4.

     “Adjusted Worksheet Account Total” means, as to any Issuer Claim, the number appearing
in Item 4.1 of the Worksheet for such Issuer Claim after eliminating any duplicate MasterCard
Accounts that were originally included in the number used by MasterCard to populate such Item 4.1.

     “Affiliated Issuer” means, with respect to any MasterCard Issuer, any other MasterCard
Issuer that controls, is controlled by, or is under common control with, such MasterCard Issuer.

     “Affiliated Person” means, as to any Person, the past, present, and future
representatives, attorneys, agents, accountants, assigns, insurers, administrators, officers,
directors, trustees, employees, retained contractors, parents, affiliates, subsidiaries,
predecessors, and successors of the Person, and any other Persons acting on behalf of the Person,
all in their capacities as such.

     “Aggregate Non-Accepted Offers Amount” has the meaning set forth in Section 3.4.

     “Alerted-On Account” means (i) in general, any MasterCard Account with respect to
which MasterCard issued an alert in connection with the TJX Intrusion, and (ii) with respect to any
MasterCard Issuer, any MasterCard Account issued by that particular MasterCard Issuer, or by a
Sponsored Issuer of that particular MasterCard Issuer, with respect to which MasterCard issued such
an alert.

     “Alleged Non-Compliance” has the meaning set forth in Section 6.

     “Alternative Recovery Acceptance” has the meaning set forth in Section 3.1.

     “Alternative Recovery Acceptance Report” has the meaning set forth in Section 4.2.

     “Alternative Recovery Amount” has the meaning set forth in Section 3.

     “Alternative Recovery Offer” has the meaning set forth in Section 3.

     “Business Day” means any day other than any Saturday, Sunday or other day on which
commercial banks are authorized or required to close in Boston or New York City.

     “Claimed-On Account” means (i) in general, any Alerted-On Account with respect to
which a MasterCard Issuer has made an Issuer Claim, and (ii) with respect to any particular
Eligible MasterCard Issuer, any Alerted-On Account issued by that particular Eligible

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MasterCard Issuer, or by a Sponsored Issuer of that particular Eligible MasterCard Issuer,
with respect to which that particular Eligible MasterCard Issuer or an Affiliated Issuer of that
particular Eligible MasterCard Issuer has made an Issuer Claim.

     “Claiming Sponsored Issuer” means, with respect to any Eligible MasterCard Issuer, a
Sponsored Issuer (a) that (i) issued one or more of such Eligible MasterCard Issuer’s Claimed-On
Accounts and (ii) is identified as one of such Eligible MasterCard Issuer’s Claiming Sponsored
Issuers in such Eligible MasterCard Issuer’s Alternative Recovery Acceptance, or (b) that is an
Affiliated Issuer of such Eligible MasterCard Issuer.

     “Consummation Date” has the meaning set forth in Section 7.2.

     “Eligible MasterCard Issuer” means a MasterCard Issuer that is listed by MasterCard in
the Accounting Statement as a MasterCard Issuer entitled to receive an Alternative Recovery Offer
under the terms of this Settlement Agreement; provided, however, that no MasterCard
Issuer shall be an Eligible MasterCard Issuer if such MasterCard Issuer is a Sponsored Issuer of an
Eligible MasterCard Issuer.

     “Extended Acceptance Deadline” has the meaning set forth in Section 8.1.

     “Issuer Claim” means a compliance claim and/or a timely operating expense
reimbursement claim made with MasterCard by a MasterCard Issuer under the MasterCard Operating
Regulations with respect to one or more of the Alerted-On Accounts that under the applicable
MasterCard Operating Regulations were eligible to be made the subject of such a claim, in each case
regardless of whether such claim has been waived by the MasterCard Issuer in question after such
claim was made with MasterCard, but otherwise giving effect to any amendment of such claim by such
MasterCard Issuer as of the date of the Settlement Agreement.

     “MasterCard Account” means a payment card account utilized by a payment card bearing
the MasterCard symbol or MasterCard brand mark, the MasterCard Electronic symbol or MasterCard
Electronic brand mark, the Maestro symbol or Maestro brand mark, and/or the Cirrus symbol or Cirrus
brand mark, and issued by or through a member of MasterCard (or by or through some other entity
sponsored directly or indirectly by an Affiliated Person of a member of MasterCard), that enables
the purchase of goods from a merchant.

     “MasterCard Issuer” means an issuer of a MasterCard Account.

     “MasterCard Operating Regulations” means the governing bylaws, rules and regulations,
published policies, and any other manuals of MasterCard prepared in connection with any program or
service or activity of MasterCard and published to the members of MasterCard from time to time, for
example, and not by way of limitation, the Bylaws and Rules manual, the Security Rules
and Procedures manual, the Chargeback Guide manual, the Operations Manual, and
the Authorization System Manual.

     “Maximum Settlement Amount” has the meaning set forth in Section 3.3.

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     “Mistaken Issuer Claim” means any Issuer Claim as to which the number of Claimed-On
Accounts exceeds the Adjusted Worksheet Account Total.

     “Non-Accepted Offer Amount” has the meaning set forth in Section 3.4.

     “Non-Accepting Issuers” has the meaning set forth in Section 3.4.

     “Opt-In Threshold Condition” has the meaning set forth in Section 8.1.

     “Person” means any individual or corporation, association, partnership, limited
liability company, joint venture, joint stock or other company, business trust, trust,
organization, governmental authority or other entity of any kind.

     “Reissued Account” means an Alerted-On Account with respect to which an Eligible
MasterCard Issuer (or an Affiliated Issuer of such Eligible MasterCard Issuer) has submitted an
Issuer Claim asserting that the MasterCard card of the accountholder of that particular Alerted-On
Account was reissued as a result of the TJX Intrusion.

     “Release” has the meaning set forth in Section 7.1.

     “Reports on Compliance” means the following four reports prepared for TJX in
conjunction with the annual assessment of TJX’s compliance with the Payment Card Industry Data
Security Standards and/or other then existing data security standards: the 2007 Level 1 — PCI Data
Security Standards Report on Compliance dated October 16, 2007 prepared for TJX by VeriSign Inc.;
the 2006 Report of Compliance (RoC) of TJX dated September 29, 2006 prepared for TJX by Cybertrust,
Inc.; the 2005 Report of Compliance (RoC) of TJX dated September 30, 2005 prepared for TJX by
Cybertrust, Inc.; and the 2004 Report of Compliance dated September 29, 2004 prepared for TJX by
VeriSign Inc.

     “Settlement Agreement” has the meaning set forth in the preamble hereto.

     “Specially Monitored Account” means an Alerted-On Account with respect to which an
Eligible MasterCard Issuer (or an Affiliated Issuer of such Eligible MasterCard Issuer) has
submitted an Issuer Claim asserting that special monitoring procedures were implemented with
respect to that particular Alerted-On Account as a result of the TJX Intrusion.

     “Sponsored Issuer” means (A) in general, any MasterCard Issuer (i) that is an
Affiliated Issuer of an Eligible MasterCard Issuer, or (ii) that is sponsored directly or
indirectly by an Eligible MasterCard Issuer or by an Affiliated Issuer of an Eligible MasterCard
Issuer, or (iii) on behalf of which an Eligible MasterCard Issuer or an Affiliated Issuer of an
Eligible MasterCard Issuer made an Issuer Claim, and (B) with respect to any Eligible MasterCard
Issuer, any MasterCard Issuer (i) that is an Affiliated Issuer of such Eligible MasterCard Issuer,
or (ii) that is sponsored directly or indirectly by such Eligible MasterCard Issuer or by an
Affiliated Issuer of such Eligible MasterCard Issuer, or (iii) on behalf of which such Eligible
MasterCard Issuer or an Affiliated Issuer of such Eligible MasterCard Issuer made an Issuer Claim.

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     “Termination Date” has the meaning set forth in Section 8.2.

     “TJX Acquirers” means, in their capacities as acquiring banks for TJX or an Affiliated
Person of TJX, Fifth Third Bank, Chase Paymentech Solutions LLC (formerly known as Chase Merchant
Services LLC), First Data Loan Company, Canada, National Westminster Bank plc and Banco Popular de
Puerto Rico.

     “TJX Intrusion” means TJX computer systems intrusion(s) referenced in the MasterCard
Alerts having main case numbers MCA024-US-07, MCA024-CAN-07, MCA024-LAC-07, and MCA106-EU-07,
including all of their subparts.

     “Unsatisfied Threshold Event” means that the Eligible MasterCard Issuers that validly
accept their Alternative Recovery Offers by the Acceptance Deadline, or, if applicable, by the
Extended Acceptance Deadline, did not issue (together with their Claiming Sponsored Issuers), in
the aggregate, at least 90% of the Claimed-On Accounts of all the Eligible MasterCard Issuers.

     “Worksheet” means, with respect to any Issuer Claim, the MasterCard Online Issuer
Claim for Reimbursement Worksheet for such Issuer Claim, the form of which is attached hereto as
Exhibit 1.1.

          1.2. Certain Rules of Construction. Except as otherwise explicitly specified to the
contrary, (a) references to a Section, Exhibit or Schedule means a Section of, or Schedule or
Exhibit to, this Settlement Agreement, unless another agreement or document is specified, (b) the
word “including” will be construed as “including without limitation,” (c) references to a
particular statute or regulation include all rules and regulations thereunder and any predecessor
or successor statute, rules or regulation, in each case as amended or otherwise modified from time
to time, (d) words in the singular or plural form include the plural and singular form,
respectively and (e) references to a particular Person include such Person’s successors and assigns
to the extent not expressly prohibited by this Settlement Agreement.

     2. ACCOUNTING STATEMENT. Prior to the execution and delivery of this Settlement
Agreement, MasterCard has delivered to TJX the Accounting Statement, a copy of which is attached as
Exhibit 2 to this Settlement Agreement. MasterCard hereby represents and warrants to TJX
that (i) the Alerted-On Accounts constitute not more than 26.1 million unique MasterCard Accounts;
(ii) the Eligible MasterCard Issuers’ Alerted-On Accounts constitute, in the aggregate, not less
than 86% of all MasterCard Issuers’ Alerted-On Accounts; (iii) the Claimed-On Accounts that are the
subject of the operating expense reimbursement Issuer Claims filed with MasterCard by Eligible
MasterCard Issuers and their Affiliated Issuers in connection with the TJX Intrusion constitute, in
the aggregate, 13,354,885 MasterCard Accounts and include, in the aggregate, 3,537,530 Reissued
Accounts and 9,817,355 Specially Monitored Accounts; (iv) except for the Mistaken Issuer Claims,
MasterCard has no reason to believe that any Eligible MasterCard Issuer or any Affiliated Issuer of
any Eligible MasterCard Issuer has failed to comply with the “one-claim-per-account” provisions of
Section 10.3.4 of the MasterCard Security Rules and Procedures manual in its operating
expense reimbursement Issuer Claim relative to its Claimed-On Accounts; and (v) each entity
identified in the Accounting Statement as an Eligible MasterCard Issuer is a MasterCard Issuer and
no

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MasterCard Issuer identified in the Accounting Statement as an Eligible MasterCard Issuer is a
Sponsored Issuer of any other MasterCard Issuer identified in the Accounting Statement as an
Eligible MasterCard Issuer. MasterCard hereby further represents and warrants to TJX that (i) the
Accounting Statement correctly sets forth the information required to be set forth therein by the
terms of the definition of the term “Accounting Statement”; (ii) except with respect to the
Mistaken Issuer Claims (as to which the number of Claimed-On Accounts evidenced by each Mistaken
Issuer Claim has been reduced by the number of such Accounts in excess of the Adjusted Worksheet
Account Total for such Claim), the calculations and the numbers set forth in the Accounting
Statement with respect to the Eligible MasterCard Issuers’ Claimed-On Accounts, Reissued Accounts,
and Specially Monitored Accounts accurately reflect the numerical information provided to
MasterCard by the Eligible MasterCard Issuers and their Affiliated Issuers in the Issuer Claims;
(iii) the numerical information included in any Issuer Claim was included by MasterCard once and
only once in the calculations and numbers set forth in the Accounting Statement; and (iv) the
Mistaken Issuer Claims were filed by the Eligible MasterCard Issuers (or by Affiliated Issuers of
the Eligible MasterCard Issuers) indicated by a check mark on the Accounting Statement, and the
aggregate number of Claimed-On Accounts evidenced by all Mistaken Issuer Claims is less than 70,000
and does not exceed the aggregate number of all Adjusted Worksheet Account Totals evidenced by all
Mistaken Issuer Claims by more than 1,000. MasterCard shall in no event be deemed to be in breach
of the representations and warranties contained in clause (iv) of the second sentence of this
Section 2 and clause (iii) of the first sentence of Section 4.3 merely because, in regard to the
Issuer Claim in question, MasterCard failed to notify the MasterCard Issuer that filed such Issuer
Claim that MasterCard populated Item 4.1 of the Worksheet for such Issuer Claim with a number of
MasterCard Accounts that was not fully deduplicated and/or failed to determine whether (i) the
number of Claimed-On Accounts in such Issuer Claim before deducting the number of MasterCard
Accounts, if any, appearing in Items 5.2-5.4 and 6.2-6.3 of the Worksheet for such Issuer Claim was
greater than (ii) the Adjusted Worksheet Account Total for such Issuer Claim minus the
number of MasterCard Accounts, if any, appearing in Items 4.2-4.5 of the Worksheet for such Issuer
Claim.

     3. ALTERNATIVE RECOVERY OFFER. MasterCard hereby agrees to send to each Eligible
MasterCard Issuer an offer of a certain specified dollar amount (which amount shall be determined
by MasterCard, as to each Eligible MasterCard Issuer, in its sole discretion) (the amount so
determined by MasterCard for each Eligible MasterCard Issuer is herein called the “Alternative
Recovery Amount”) as an alternative to any recovery in connection with such Eligible MasterCard
Issuer’s Claimed-On Accounts that such Eligible MasterCard Issuer and its Claiming Sponsored
Issuers might be entitled to under the MasterCard Operating Regulations by reason of losses or
costs allegedly incurred by such Eligible MasterCard Issuer and its Claiming Sponsored Issuers by
reason of the TJX Intrusion (each such offer to an Eligible MasterCard Issuer is called an
“Alternative Recovery Offer”), and MasterCard agrees to recommend acceptance by each
Eligible MasterCard Issuer of its Alternative Recovery Offer. In communicating the Alternative
Recovery Offers to Eligible MasterCard Issuers, MasterCard shall provide each Eligible MasterCard
Issuer with a copy of this Settlement Agreement (without Exhibit 2) and with full and fair
disclosure regarding the pros and cons of accepting its Alternative Recovery Offer.

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          3.1. Alternative Recovery Acceptance. Any Eligible MasterCard Issuer which desires to
accept its Alternative Recovery Offer must, on or before the Acceptance Deadline (or the Extended
Acceptance Deadline, if applicable) duly execute and deliver to MasterCard an “Alternative Recovery
Acceptance” of such Eligible MasterCard Issuer in the form attached as Exhibit 3.1 to this
Settlement Agreement or in such other form as may be approved in writing by TJX and MasterCard as
to such Eligible MasterCard Issuer (an Eligible MasterCard Issuer’s “Alternative Recovery
Acceptance”) (each such Eligible MasterCard Issuer is herein called an “Accepting
Issuer”). No Eligible MasterCard Issuer shall be deemed to have validly accepted its
Alternative Recovery Offer and thereby have become an Accepting Issuer unless such Eligible
MasterCard Issuer shall have duly executed and timely delivered to MasterCard its Alternative
Recovery Acceptance and such duly executed Alternative Recovery Acceptance shall have been timely
delivered to TJX by MasterCard.

          3.2. Alternative Recovery Amount. Effective on the Consummation Date, each Accepting
Issuer shall be entitled to receive from MasterCard the Alternative Recovery Amount as calculated
by MasterCard for such Accepting Issuer.

          3.3. Maximum Settlement Amount. The aggregate amount of TJX’s payment obligation
under this Settlement Agreement shall not in any event exceed $23,989,750 (the “Maximum
Settlement Amount”), which amount is subject to reduction as provided in Section 3.4 below.

          3.4. Reduction for Non-Acceptances. The Maximum Settlement Amount was agreed upon by
the parties based upon an assumed 100% acceptance of the Alternative Recovery Offers by all
Eligible MasterCard Issuers. Accordingly, in the event the Opt-In Threshold Condition shall have
been satisfied but one or more Eligible MasterCard Issuers shall not have validly accepted its or
their Alternative Recovery Offer(s) (the “Non-Accepting Issuers”), the Maximum Settlement
Amount shall be reduced by the “Aggregate Non-Accepted Offers Amount,” which shall be determined as
follows: for each Non-Accepting Issuer, that Non-Accepting Issuer’s “Non-Accepted Offer
Amount” shall be an amount equal to the sum of (x) the number of such Non-Accepting Issuer’s
Reissued Accounts as shown in the Accounting Statement multiplied by $0.50,
plus (y) the number of such Non-Accepting Issuer’s Specially Monitored Accounts as shown in
the Accounting Statement multiplied by $0.125; the “Aggregate Non-Accepted
Offers Amount” shall be the aggregate amount of the Non-Accepted Offer Amounts of all
Non-Accepting Issuers up to but not exceeding a maximum aggregate amount of $400,000 for all such
Non-Accepted Offer Amounts; and the “Adjusted Settlement Amount” shall be the amount
obtained by subtracting the Aggregate Non-Accepted Offers Amount from the Maximum Settlement
Amount.

     4. UNSATISFIED THRESHOLD EVENT; ALTERNATIVE RECOVERY ACCEPTANCE REPORT; MASTERCARD
REPRESENTATIONS; DELIVERY OF ACCEPTANCES.

          4.1. Unsatisfied Threshold Event. In the event that the Unsatisfied Threshold Event
shall occur, MasterCard shall deliver (as provided in clause (a), (b) or (d) of Section 10.1) to
TJX a written certification to that effect not later than 5:00 p.m., Eastern time, three (3)
Business Days following the Acceptance Deadline or, if applicable, the Extended Acceptance

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Deadline, and the delivery of such written certification shall constitute a representation and
warranty by MasterCard, and MasterCard shall be deemed to represent and warrant by such delivery,
that the information contained therein is true and correct.

          4.2. Alternative Recovery Acceptance Report. If the Unsatisfied Threshold Event shall
not have occurred, and, accordingly, the Opt-In Threshold Condition shall have been satisfied,
MasterCard shall deliver (as provided in clause (a), (b) or (d) of Section 10.1) to TJX not later
than 5:00 p.m., Eastern Time three (3) Business Days following the Acceptance Deadline or, if
applicable, the Extended Acceptance Deadline, a written report (the “Alternative Recovery
Acceptance Report”) identifying by name and MasterCard BID number (and by the numerical
identifier used for such Eligible MasterCard Issuer in the Accounting Statement) each Eligible
MasterCard Issuer that validly accepted its Alternative Recovery Offer and is thereby an Accepting
Issuer. The Alternative Recovery Acceptance Report shall set forth (i) MasterCard’s calculation of
the Accepting Issuers’ aggregate number of Alerted-On Accounts and Claimed-On Accounts, such
calculation to be broken down on an issuer-by-issuer basis that sets forth for each Accepting
Issuer (together with the name and MasterCard BID number of such Accepting Issuer and the numerical
identifier used for such Accepting Issuer in the Accounting Statement) the number of its Alerted-On
Accounts and Claimed-On Accounts, and how many of its Claimed-On Accounts constitute Reissued
Accounts and how many constitute Specially Monitored Accounts, (ii) MasterCard’s calculation
demonstrating that the Opt-In Threshold Condition has been satisfied as provided in Section 8.1,
and (iii) MasterCard’s calculation of the Adjusted Settlement Amount as provided in Section 3.4.

          4.3. MasterCard Representations. The delivery of the Alternative Recovery Acceptance
Report by MasterCard shall constitute a representation and warranty by MasterCard, and MasterCard
shall be deemed to represent and warrant by such delivery, that (i) except with respect to the
Mistaken Issuer Claims (as to which the number of Claimed-On Accounts evidenced by each Mistaken
Issuer Claim has been reduced by the number of such Accounts in excess of the Adjusted Worksheet
Account Total for such Claim), MasterCard has in the Alternative Recovery Acceptance Report
correctly set forth the names and MasterCard BID numbers of the Accepting Issuers and the number of
each Accepting Issuer’s Alerted-On Accounts and Claimed-On Accounts (including the number of each
Accepting Issuer’s Reissued Accounts and Specially Monitored Accounts), (ii) each Accepting Issuer
identified as such in the Alternative Recovery Acceptance Report has timely provided MasterCard
with a complete and duly executed Alternative Recovery Acceptance, (iii) except for the Mistaken
Issuer Claims, MasterCard has no reason to believe that any Accepting Issuer or any Affiliated
Issuer of any Accepting Issuer failed to comply with the “one-claim-per-account” provisions of
Section 10.3.4 of the MasterCard Security Rules and Procedures manual in its operating
expense reimbursement Issuer Claim relative to such Accepting Issuer’s Claimed-On Accounts, (iv)
MasterCard has in the Alternative Recovery Acceptance Report correctly calculated that the Opt-In
Threshold Condition has been satisfied as provided in Section 8.1 and has correctly calculated the
Adjusted Settlement Amount as provided in Section 3.4, and (v) the numerical information contained
in the Alternative Recovery Acceptance Report with respect to the Accepting Issuers’ Claimed-On
Accounts accurately reflects such numerical information as it was provided to MasterCard by the
Accepting Issuers in their Alternative Recovery Acceptances and matches such numerical information
as it was provided to MasterCard by the Accepting Issuers and their Affiliated Issuers in their
Issuer Claims and as it was set forth as to the Accepting Issuers in the Accounting

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Statement. MasterCard’s liability for breach of the representation and warranty contained in
clause (iii) of the preceding sentence shall be limited to the extent provided in the last sentence
of Section 2.

          4.4. Delivery of Alternative Recovery Acceptances. In the event that the Unsatisfied
Threshold Event shall not have occurred and, accordingly, the Opt-In Threshold Condition shall have
been satisfied, not later than five (5) Business Days after MasterCard has delivered the
Alternative Recovery Acceptance Report to TJX, MasterCard shall deliver to TJX a true and correct
copy of each of the Alternative Recovery Acceptances executed and delivered by each of the
Accepting Issuers that is identified as an Accepting Issuer in the Alternative Recovery Acceptance
Report. The delivery of the Alternative Recovery Acceptances by MasterCard shall constitute a
representation and warranty by MasterCard, and MasterCard shall be deemed to represent and warrant
by such delivery, that Schedule I of each Alternative Recovery Acceptance accurately sets forth, as
shown in MasterCard’s records at December 31, 2007, the Sponsored Issuer(s), including any
Affiliated Issuer(s), of the Accepting Issuer that executed such Alternative Recovery Acceptance.
The date on which MasterCard has delivered all of such Alternative Recovery Acceptances to TJX as
required by this Section 4.4 is defined herein as the “Acceptance Delivery Date.”

     5. PAYMENT AND POST-CONSUMMATION COVENANT BY TJX. In the event that the Unsatisfied
Threshold Event shall not have occurred and, accordingly, the Opt-In Threshold Condition shall have
been satisfied, TJX agrees to pay the Adjusted Settlement Amount to MasterCard in same day funds on
the Consummation Date (by federal wire transfer to a bank account specified by MasterCard on not
less than two (2) Business Days advance written notice), provided that (i) the Alternative
Recovery Acceptance Report shall have been delivered to TJX by MasterCard as provided in Section
4.2; (ii) copies of all of the Alternative Recovery Acceptances shall have been delivered to TJX by
MasterCard as provided in Section 4.4; and (iii) the other conditions to consummation of the
Settlement Agreement and to the occurrence of the Consummation Date set forth herein shall have
been satisfied. TJX agrees that, upon and subject to the Consummation Date having occurred, TJX
and the TJX Acquirers and its and their Affiliated Persons shall have no claim against any
Accepting Issuer based upon an alleged breach of the representation and warranty contained in
clause (iv) of the first sentence of the second paragraph of such Accepting Issuer’s Alternative
Recovery Acceptance to the extent, and only to the extent, that the misrepresentation in question
was made innocently and occurred as a result of MasterCard’s having populated Item 4.1 of the
Worksheet for such Issuer Claim with a number of MasterCard Accounts that was not fully
deduplicated; provided, however, that this sentence shall not prevent TJX or any of
the TJX Acquirers or any of its or their Affiliated Persons from raising any such misrepresentation
as a defense, offset, or counterclaim to any claim such Accepting Issuer may assert against any of
them.

     6. FINE APPEALS/MASTERCARD RELEASE. Upon and subject to the Consummation Date having
occurred, TJX shall cause the appropriate TJX Acquirers to withdraw with prejudice their pending
appeals of the non-compliance assessments previously imposed on and collected from the TJX
Acquirers in connection with the TJX Intrusion, which non-compliance assessments aggregate
$1,210,250 in amount. Subject to the Consummation Date occurring as provided herein, MasterCard
hereby agrees that no further non-compliance assessments will be imposed or collected and no
changes in interchange fee rates will be

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imposed by MasterCard in connection with the TJX Intrusion, and MasterCard hereby releases and
agrees not to assert any claim or assessment of any kind (including any claim or assessment seeking
to recover any amount that MasterCard may award or allow on, or otherwise asserting any rights or
obligations or demanding any payment in connection with or by reason of, any issuer compliance or
operating expense reimbursement claim asserted under the MasterCard Operating Regulations by or on
behalf of any MasterCard Issuer before or after the date of this Settlement Agreement) that
otherwise might be asserted by MasterCard against TJX or any of the TJX Acquirers or any of its or
their Affiliated Persons (a) with respect to the TJX Intrusion (whether or not such claim or
assessment or the facts, events, or occurrences giving rise thereto were known, suspected, or
anticipated by MasterCard as of the date of this Settlement Agreement and may have materially
affected MasterCard’s decision to agree to this Settlement Agreement if known) or (b) by reason of
any alleged non-compliance by TJX or the TJX Acquirers or any of its or their Affiliated Persons
with any of the data security requirements of the MasterCard Operating Regulations on or before the
date of this Settlement Agreement (an “Alleged Non-Compliance”) to the extent such Alleged
Non-Compliance relates to the TJX Intrusion (whether or not such Alleged Non-Compliance was known,
suspected or anticipated by MasterCard as of the date of this Settlement Agreement and may have
materially affected MasterCard’s decision to agree to this Settlement Agreement if known) or was
known to MasterCard as of the date of this Settlement Agreement, or had been disclosed in one of
the Reports on Compliance (whether or not such Alleged Non-Compliance relates to the TJX
Intrusion); provided, however, that the release and agreement not to assert certain
claims or assessments contained in clause (b) shall not be interpreted to extend to any claim or
assessment by MasterCard (i) where an Alleged Non-Compliance is alleged to have continued after the
date of this Settlement Agreement and such claim or assessment is asserted or imposed with respect
to that portion of the Alleged Non-Compliance that is alleged to have occurred or continued after
the date of this Settlement Agreement, (ii) where an Alleged Non-Compliance is alleged to have
resulted in an actual or possible account data compromise event and such alleged account data
compromise event was not known to MasterCard as of the date of this Settlement Agreement and such
claim or assessment is asserted or imposed with respect to such account data compromise event,
(iii) where such claim or assessment is the return of a transaction by a MasterCard Issuer to a TJX
Acquirer as a chargeback pursuant to Chapters 1 and 3 of the MasterCard Chargeback
Guide manual, or (iv) where such claim or assessment is based upon an Alleged
Non-Compliance by a TJX Acquirer that concerns a merchant other than TJX and its Affiliated
Persons.

     7. RELEASE; CONSUMMATION DATE.

          7.1. Release. On the Consummation Date, upon and subject to the satisfaction of all
of the other conditions set forth in Section 7.2 below, TJX hereby agrees that it shall deliver to
MasterCard a duly executed version of the form of release attached to this Settlement Agreement as
Exhibit 7.1 (the “Release”).

          7.2. Conditions to Consummation; Consummation Date. It is a condition to the
consummation of the settlement contemplated by this Settlement Agreement that the Opt-In Threshold
Condition shall have been satisfied and a termination notice pursuant to Section 8.2 shall not have
been given by TJX or MasterCard. In the event that the Opt-In Threshold Condition shall have been
satisfied and such a termination notice has not been given, this

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Settlement Agreement shall be consummated on the date that is five (5) Business Days after the
Acceptance Delivery Date (the “Consummation Date”) by TJX paying MasterCard the Adjusted
Settlement Amount as required by Section 5 and delivering the Release to MasterCard as required by
Section 7.1, provided that all of the following additional conditions to consummation of the
settlement contemplated by this Settlement Agreement shall have also been satisfied:

     (a) MasterCard shall have delivered to TJX (i) the Alternative Recovery
Acceptance Report as required by Section 4.2 and (ii) copies of the Alternative
Recovery Acceptances as required by Section 4.4; and

     (b) The representations and warranties of MasterCard shall be true and correct
in all material respects on the Consummation Date with the same force and effect as
if made as of the Consummation Date and MasterCard shall have performed and complied
with all agreements, obligations and covenants contained in this Settlement
Agreement that are required to be performed or complied with by it.

     8. OPT-IN THRESHOLD CONDITION; TERMINATION, ETC.

          8.1. Opt-In Threshold Condition. The obligations of TJX to pay MasterCard the
Adjusted Settlement Amount and to deliver the Release to MasterCard as set forth in Section 7 are
subject to the condition that at or before 5:00 p.m., Eastern time, on May 2, 2008 (the
“Acceptance Deadline”) the Alternative Recovery Offers shall have been validly accepted by
Eligible MasterCard Issuers that (together with their Claiming Sponsored Issuers) in the aggregate
issued not less than ninety percent (90%) of the Claimed-On Accounts of all the Eligible MasterCard
Issuers (such percentage acceptance by Eligible MasterCard Issuers is herein called the “Opt-In
Threshold Condition”); provided, however, that in the event that as of the
Acceptance Deadline Eligible MasterCard Issuers that (together with their Claiming Sponsored
Issuers) in the aggregate issued at least 80% (but less than 90%) of the Claimed-On Accounts of all
the Eligible MasterCard Issuers have validly accepted their Alternative Recovery Offers, MasterCard
may, by written notice to TJX delivered not later than 5:00 p.m., Eastern Time, on the day after
the Acceptance Deadline, extend the Acceptance Deadline by five (5) Business Days (as so extended,
the “Extended Acceptance Deadline”).

          8.2. Termination. This Agreement shall automatically terminate in the event that the
Opt-In Threshold Condition shall not have been satisfied, and this Agreement may also be terminated
(the date on which the Agreement is terminated, the “Termination Date”) at any time prior
to the Consummation Date

          8.2.1. by mutual written consent of TJX and MasterCard;

          8.2.2. by TJX, by written notice to MasterCard, if either (i) there has been or will be a
material breach of, or inaccuracy in, any representation or warranty of MasterCard contained in
this Settlement Agreement as of the date of this Settlement Agreement or as of any subsequent date
(other than representations or warranties that expressly speak only as of a specific date or time,
with respect to which TJX’s right to terminate will arise only in the event of a breach of, or
inaccuracy in, such representation or warranty as of such specified date

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or time), or (ii) MasterCard has breached or violated any of its covenants and agreements
contained in this Settlement Agreement; and

               8.2.3. by MasterCard, by written notice to TJX, if either (i) there has been or will be a
material breach of, or inaccuracy in, any representation or warranty of TJX contained in this
Settlement Agreement as of the date of this Settlement Agreement or as of any subsequent date
(other than representations or warranties that expressly speak only as of a specific date or time,
with respect to which MasterCard’s right to terminate will arise only in the event of a breach of,
or inaccuracy in, such representation or warranty as of such specified date or time), or (ii) TJX
has breached or violated any of its covenants and agreements contained in this Settlement
Agreement.

Effective upon the occurrence of the Unsatisfied Threshold Event and effective upon the giving of
any such notice (delivered as provided in Section 10.1), this Settlement Agreement shall terminate
and be void and shall be of no further force or effect, except as provided in Section 8.3.

          8.3. Effect of Termination. If this Settlement Agreement is terminated as provided by
or pursuant to the provisions of Section 8.2, such termination shall be effective as against both
parties to this Settlement Agreement and shall be without liability of either party to the other
party to this Settlement Agreement, except for liabilities arising in respect of breaches of
representations and warranties and covenants under this Agreement by either party on or prior to
the Termination Date. In the event of such termination it is agreed by the parties that, as
provided in Section 10.14, none of MasterCard’s agreement to present the Alternative Recovery
Offers to Eligible MasterCard Issuers, TJX’s agreement to pay the Adjusted Settlement Amount, or
any other provision of this Settlement Agreement shall be cited in any way by MasterCard or TJX, or
be deemed evidence of an admission on the part of either of the parties, in any subsequent dispute
regarding the propriety of the standard compliance or issuer reimbursement processes under the
MasterCard Operating Regulations or in any other subsequent dispute other than a dispute relative
to the enforcement of this Settlement Agreement. The provisions of this Section 8.3 and Section 10
shall survive any termination pursuant to Section 8.2.

     9. REPRESENTATIONS AND WARRANTIES; MASTERCARD AND TJX INDEMNIFICATION.

          9.1. Representations and Warranties. Each of the parties to this Settlement Agreement
hereby makes the following representations and warranties to the other party:

               9.1.1. Representations and Warranties of MasterCard. In addition to its
representations and warranties made (i) in Section 2, and (ii) in connection with either the
delivery of the certification regarding the Unsatisfied Threshold Event as provided in Section 4.1
or the delivery of the Alternative Recovery Acceptance Report and the Alternative Recovery
Acceptances as provided in Section 4.3 and Section 4.4, MasterCard hereby represents and warrants
that:

          (a) The execution, delivery and performance of this Settlement Agreement,
including the Exhibits to which MasterCard is a party, and the consummation by
MasterCard of the transactions contemplated hereby and

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thereby, are within its corporate powers and have been duly authorized by all
necessary corporate action. This Settlement Agreement constitutes, and each of the
Exhibits to which MasterCard is a party when executed and delivered by it will
constitute, a valid and binding agreement of MasterCard, enforceable against
MasterCard in accordance with its terms, except to the extent such enforceability
may be limited to bankruptcy, insolvency, moratorium or other similar laws affecting
or relating to creditors’ rights generally and general principles of equity.

               (b) The execution, delivery and performance by MasterCard of this Settlement
Agreement and the Exhibits to which MasterCard is a party (a) do not and will not
(i) violate the certificate of incorporation or by-laws of MasterCard, or (ii)
require any consent that has not been given or other action that has not been taken
by any Person under any instrument binding upon MasterCard, and (b) do not require
any action by or filing with any domestic or foreign, federal, state or local
governmental authority, department, court or agency.

               9.1.2. Representations and Warranties of TJX. TJX hereby represents and warrants
that:

               (a) The execution, delivery and performance of this Settlement Agreement,
including the Exhibits to which TJX is a party, and the consummation by TJX of the
transactions contemplated hereby and thereby, are within its corporate powers and
have been duly authorized by all necessary corporate action. This Settlement
Agreement constitutes, and each of the Exhibits to which TJX is a party when
executed and delivered by it will constitute, a valid and binding agreement of TJX,
enforceable against TJX in accordance with its terms, except to the extent such
enforceability may be limited to bankruptcy, insolvency, moratorium or other similar
laws affecting or relating to creditors’ rights generally and general principles of
equity.

               (b) The execution, delivery and performance by TJX of this Settlement Agreement
and the Exhibits to which TJX is a party (a) do not and will not (i) violate the
certificate of incorporation or by-laws of TJX, or (ii) require any consent that has
not been given or other action that has not been taken by any Person under any
instrument binding upon TJX, and (b) do not require any action by or filing with any
domestic or foreign, federal, state or local governmental authority, department,
court or agency.

               (c) The 2007 Level 1 — PCI Data Security Standards Report on Compliance dated
October 16, 2007 prepared for TJX by VeriSign Inc. found all applicable requirements
of the Payment Card Industry Data Security Standards to be “in place.”

          9.2. MasterCard Indemnification. MasterCard agrees to indemnify TJX and the TJX
Acquirers and its and their respective Affiliated Persons against and shall hold each of them
harmless from any and all damage, loss, liability, fines, penalties and expense (including
reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection

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with any action, suit or proceeding whether involving a third party claim or a claim solely
between the parties hereto) incurred or suffered by TJX or any of the TJX Acquirers or any of its
or their respective Affiliated Persons arising out of any misrepresentation or breach of warranty
or breach of covenant or agreement made or to be performed by MasterCard pursuant to this
Settlement Agreement.

          9.3. TJX Indemnification. TJX agrees to indemnify MasterCard and its Affiliated
Persons against and shall hold each of them harmless from any and all damage, loss, liability,
fines, penalties and expense (including reasonable expenses of investigation and reasonable
attorneys’ fees and expenses in connection with any action, suit or proceeding whether involving a
third party claim or a claim solely between the parties hereto) incurred or suffered by MasterCard
or any of its Affiliated Persons arising out of any misrepresentation or breach of warranty or
breach of covenant or agreement made or to be performed by TJX pursuant to this Settlement
Agreement.

     10. MISCELLANEOUS. 

          10.1. Notices. All notices, requests, demands, claims and other communications
required or permitted to be delivered, given or otherwise provided under this Settlement Agreement
must be in writing and must be delivered, given or otherwise provided:

     (a) by hand (in which case, it will be effective upon delivery);

     (b) by facsimile (in which case, it will be effective upon receipt of
confirmation of good transmission);

     (c) by overnight delivery by a nationally recognized courier service (in which
case, it will be effective on the Business Day after being deposited with such
courier service); or

     (d) by electronic mail (in which case it will be effective on transmission to
each representative of a party for whom an email address is listed below, unless the
party making delivery is notified that it was not received by such a representative
of the other party);

in each case, to the address (or facsimile number or e-mail address) listed below:

     If to MasterCard, to it at:

MasterCard International Incorporated

2000 Purchase Street

Purchase, NY 10577

Facsimile Number: (914) 249-3040

joshua_peirez@mastercard.com

Attention: Joshua Peirez

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     with a copy to:

Mastercard International Incorporated

2000 Purchase Street

Purchase, NY 10577

Facsimile Number: (914) 249-4262

Attention: Noah Hanft, Esq., General Counsel

Golenbock Eiseman Assor Bell & Peskoe LLP

437 Madison Avenue, 35th Floor

New York, NY 10022

Facsimile number: (212) 754-0777

mhyman@golenbock.com

Attention: Martin S. Hyman, Esq.

     If to TJX, to it at:

770 Cochituate Road

Framingham, Massachusetts 01701

Facsimile number: (508) 390-5022

Ann_McCauley@tjx.com

Attention: Ann McCauley, Esq., Senior Vice President and General Counsel

     with a copy to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Facsimile number: (617) 951-7050

Douglas.Meal@ropesgray.com

Attention: Douglas H. Meal, Esq.

Each of the parties to this Settlement Agreement may specify a different address or facsimile
number or email address by giving notice in accordance with this Section 10.1 to each of the other
parties. Any party delivering, giving, or otherwise providing any notice pursuant to clause (b) or
(d) above shall follow up such notice by delivering a hard copy of such notice to the other party
pursuant to clause (a) or (c) above; provided, however, that the failure of such
party to deliver such a follow-up hard copy to the other party shall not affect the effectiveness
of the notice in question.

          10.2. Succession and Assignment; No Third-Party Beneficiary. This Settlement
Agreement will be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, each of which such successors and permitted assigns will be
deemed to be a party for all purposes of this Settlement Agreement. No party may assign, delegate
or otherwise transfer either this Settlement Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other party. This Settlement

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Agreement is for the sole benefit of the parties and nothing in this Settlement Agreement
(whether expressed or implied) will give or be construed to give any Person (including without
limitation Eligible MasterCard Issuers), other than the parties, any legal or equitable rights in
connection with this Settlement Agreement except that (i) the TJX Acquirers and their Affiliated
Persons and the Affiliated Persons of TJX are intended beneficiaries of the provisions of Section 6
and Section 9.2 to the extent of enforcing the release and covenant provided to them in Section 6,
(ii) the TJX Acquirers and their Affiliated Persons and the Affiliated Persons of TJX are the
intended beneficiaries of the Alternative Recovery Acceptances to the extent of enforcing the
release and covenant not to sue and indemnity provided to them therein, (iii) the Affiliated
Persons of MasterCard are intended beneficiaries of the Alternative Recovery Acceptances to the
extent of enforcing the release and covenant not to sue and indemnity provided to them therein and
the provisions of Section 9.3 to the extent of enforcing the release provided to them in the
Release, and (iv) the Released Parties (as that term is defined in the Release) are intended
beneficiaries of the Release to the extent of enforcing the release provided to them therein.

          10.3. Amendments and Waivers. No amendment or waiver of any provision of this
Settlement Agreement will be valid and binding unless it is in writing and signed, in the case of
an amendment, by MasterCard and TJX, or in the case of a waiver, by the party against whom the
waiver is to be effective. No waiver by any party of any breach or violation of or, default under
or inaccuracy in any representation, warranty or covenant hereunder, whether intentional or not,
will extend to any prior or subsequent breach or violation of, default under, or inaccuracy in, any
such representation, warranty or covenant or affect in any way any rights arising by virtue of any
such prior or subsequent occurrence. No delay or omission on the part of any party in exercising
any right, power or remedy under this Settlement Agreement will operate as a waiver thereof.

          10.4. Entire Agreement. This Settlement Agreement, together with any documents,
instruments and certificates explicitly referred to herein, constitutes the entire agreement among
the parties with respect to the subject matter of this Settlement Agreement and supersedes any and
all prior discussions, negotiations, proposals, undertakings, understandings and agreements,
whether written or oral, with respect such subject matter (other than the parties’ existing
confidentiality obligations to one another with respect to such subject matter).

          10.5. Counterparts; Effectiveness. This Settlement Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of which together will
constitute but one and the same instrument. A facsimile signature shall be deemed an original for
purposes of this Settlement Agreement. This Settlement Agreement will become effective when duly
executed by each party hereto.

          10.6. Non-Severability. The parties to this Settlement Agreement have negotiated the
provisions of this Settlement Agreement as an integral whole and would not have entered into this
Settlement Agreement if the provisions hereof had not been written as they appear herein.
Accordingly, if at any time, whether before or after the Consummation Date, any term or provision
of this Settlement Agreement or any document delivered pursuant to this Settlement Agreement should
be held invalid or unenforceable by any court of competent jurisdiction, the parties intend that
this Settlement Agreement may be terminated by written notice to the other party referencing this
Section 10.6 and delivered in accordance with Section

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10.1, which notice shall have the same effect as if a termination notice pursuant to Section
8.2 had been delivered, as provided in Section 8.3, and that each party shall thereafter take such
action as may be necessary to restore the other party to its position immediately prior to its
execution of this Settlement Agreement.

          10.7. Headings. The headings contained in this Settlement Agreement are for
convenience purposes only and will not in any way affect the meaning or interpretation hereof.

          10.8. Construction. The parties have participated jointly in the negotiation and
drafting of this Settlement Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Settlement Agreement will be construed as if drafted jointly by the
parties and no presumption or burden of proof will arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Settlement Agreement. The parties intend
that each representation, warranty and covenant contained herein will have independent
significance. If any party has breached or violated, or if there is an inaccuracy in, any
representation, warranty or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the party has not breached or violated, or in respect of
which there is not an inaccuracy, will not detract from or mitigate the fact that the party has
breached or violated, or there is an inaccuracy in, the first representation, warranty or covenant.

          10.9. Survival of Covenants, Reliance, etc. All covenants, agreements,
representations and warranties made in this Settlement Agreement shall survive the execution and
delivery of this Agreement, the delivery of the other instruments referenced herein as Exhibits,
and if it should occur, the Consummation Date, provided that representations and warranties
shall not be required to be true and correct on and as of any date after the Consummation Date. No
investigation made by any party and no knowledge of any breach of the other party obtained by any
party or on its behalf shall impair the materiality or enforceability of any covenant, agreement,
representation or warranty contained in this Settlement Agreement or the right of such party to
rely upon each such covenant, agreement, representation and warranty notwithstanding such party’s
investigation or knowledge.

          10.10. Governing Law. This Settlement Agreement, and the rights of the parties and
all actions arising in whole or in part under it, will be governed by and construed in accordance
with the domestic substantive laws of the State of New York, without giving effect to any choice or
conflict of law provision or rule that would cause the application of the laws of any other
jurisdiction.

          10.11. Jurisdiction; Venue and Limitation on Actions; Service of
Process.

                    10.11.1. Jurisdiction. Each party to this Settlement Agreement, by its execution
hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts located in
the Borough of Manhattan of the State of New York and the United States District Court located in
the Southern District of New York for the purpose of any action between the parties arising in
whole or in part under or in connection with this Settlement Agreement, (b) hereby waives to the
extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense
or otherwise, in any such action, any claim that it is not subject personally

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to the jurisdiction of the above-named courts, that its property is exempt or immune from
attachment or execution, that any such action brought in one of the above-named courts should be
dismissed on grounds of forum non conveniens, should be transferred or removed to any court other
than one of the above-named courts, or should be stayed by reason of the pendency of some other
proceeding in any other court other than one of the above-named courts, or that this Settlement
Agreement or the subject matter hereof may not be enforced in or by such court and (c) hereby
agrees not to commence any such action other than before one of the above-named courts.
Notwithstanding the previous sentence a party may commence any action in a court other than the
above-named courts solely for the purpose of enforcing an order or judgment issued by one of the
above-named courts.

                    10.11.2. Venue and Limitation on Actions. Each party agrees that for any action
between the parties arising in whole or in part under or in connection with this Settlement
Agreement, such party may bring actions only in the state courts located in the Borough of
Manhattan or in the United States District Court for the Southern District of New York. Each party
further waives any claim and will not assert that venue should properly lie in any other location
within the selected jurisdiction. Notwithstanding anything to the contrary in any otherwise
applicable law or statute, no action arising in whole or in part under or in connection with this
Settlement Agreement may be brought unless such action is commenced within two years after the
accrual of the claim that is the basis for such action.

                    10.11.3. Service of Process. Each party hereby (a) consents to service of process in
any action between the parties arising in whole or in part under or in connection with this
Settlement Agreement in any manner permitted by New York law, (b) agrees that service of process
made in accordance with clause (a) or made by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 10.1, will constitute good and valid
service of process in any such action and (c) waives and agrees not to assert (by way of motion, as
a defense, or otherwise) in any such action any claim that service of process made in accordance
with clause (a) or (b) does not constitute good and valid service of process.

          10.12. Specific Performance. The parties will have such entitlement as may be
provided under applicable law to seek and obtain an injunction or injunctions to prevent breaches
or violations of the provisions of this Settlement Agreement and to enforce specifically this
Settlement Agreement and the terms and provisions hereof in any action instituted in accordance
with Section 10.11, in addition to any other remedy to which the parties may be entitled, at law or
in equity.

          10.13. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN
PART UNDER OR IN CONNECTION WITH THIS SETTLEMENT AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS,
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT

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AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER
BETWEEN THEM RELATING TO THIS SETTLEMENT AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL
INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

          10.14. No Admission of Liability. Neither this Settlement Agreement nor the
Alternative Recovery Offers, nor any act performed or document executed pursuant to or in
furtherance of this Settlement Agreement or the Alternative Recovery Offers: (a) is or may be
deemed to be or may be used as an admission of, or evidence of, the validity or lack thereof of any
claim or right of recovery or cause of action against or by, or of any wrongdoing or liability of
either of the parties to this Settlement Agreement, the TJX Acquirers or the Affiliated Persons of
each of them; or (b) is or may be deemed to be or may be used as an admission of, or evidence of,
any fault or omission of either of the parties to this Settlement Agreement, the TJX Acquirers or
the Affiliated Persons of each of them, in any civil, criminal, or administrative proceeding in any
court, administrative agency, or other tribunal. Either of the parties to this Settlement
Agreement may file this Settlement Agreement, the Release, and/or the Alternative Recovery
Acceptances in any action that may be brought against it in order to support a defense or
counterclaim based on principles of res judicata, collateral estoppel, release, good faith
settlement, judgment bar or reduction or any other theory of claim preclusion or issue preclusion
or similar defense or counterclaim.

          10.15. SEC Filings; Public Announcements. The parties agree that, in the event this
Settlement Agreement is filed by either of them with the Securities and Exchange Commission, such
filing will not include Exhibit 2. The parties further agree that their public announcement of
this Settlement Agreement will be made by means of a press release by TJX (in the form attached
hereto as Exhibit 10.15A), and by public disclosure by MasterCard (in the form attached
hereto as Exhibit 10.15B).

[Remainder of page intentionally left blank]

-19-

 

     IN WITNESS WHEREOF, each of the undersigned has executed this Settlement Agreement as an
agreement under seal as of the date first above written.

	 	 	 	 	 
	 	MASTERCARD INTERNATIONAL INCORPORATED

 	 
	 	By:  	/s/
Eileen S. Simon 	 
	 	 	Name:  	 Eileen S. Simon	 
	 	 	Title:  	 Group Executive, Associate General Counsel	 
	 
	 	THE TJX COMPANIES, INC.

 	 
	 	By:  	 /s/
Donald
G. Campbell	 
	 	 	Name:  	 Donald G. Campbell	 
	 	 	Title:  	 Vice Chairman	 

 

 

	 	 	 	 	 

Exhibit 3.1

Acceptance of Alternative Recovery Offer

     [Name of accepting MasterCard issuer] (the “Issuer”), on its own behalf and on behalf
of each of its Claiming Sponsored Issuers (as defined below), hereby accepts the Alternative
Recovery Offer contained in the communication from MasterCard International Incorporated
(“MasterCard”) dated [___], 2008, which communication in turn references the
Settlement Agreement dated April 2, 2008 (the “Settlement Agreement”) between MasterCard
and The TJX Companies, Inc. (“TJX”), a copy of which (other than Exhibit 2) was
previously provided to the Issuer by MasterCard. Capitalized terms not otherwise defined herein
shall have the same meanings as in the Settlement Agreement.

     The Issuer represents and warrants that (i) this acceptance has been duly authorized, executed
and delivered by the Issuer, (ii) Schedule I hereto contains a complete and accurate list
of the Issuer’s Sponsored Issuers and accurately identifies which of the Sponsored Issuers are
Affiliated Issuers, and the Issuer has accurately identified on Schedule I hereto any of
its Sponsored Issuers that is not one of the Issuer’s “Claiming Sponsored Issuers” (the
term Claiming Sponsored Issuers being defined herein as those of the Issuer’s Sponsored Issuers
that either issued one or more of the Issuer’s Claimed-On Accounts or are Affiliated Issuers of the
Issuer), (iii) the Issuer is authorized to execute and deliver this acceptance on behalf of its
Claiming Sponsored Issuers, (iv) the Issuer’s Claimed-On Accounts constitute [MasterCard to fill in
the number of Issuer’s Claimed-On Accounts as shown on the Accounting Statement] unique MasterCard
Accounts and include [MasterCard to fill in the number of Issuer’s Reissued Accounts as shown on
the Accounting Statement] unique MasterCard Accounts with respect to which the Issuer (or a
Claiming Sponsored Issuer) reissued the accountholder’s MasterCard card as a result of the TJX
Intrusion (the “Reissued Cards”) and [MasterCard to fill in the number of Issuer’s
Specially Monitored Accounts as shown on the Accounting Statement] unique MasterCard Accounts with
respect to which the Issuer (or a Claiming Sponsored Issuer) implemented special monitoring
procedures as a result of the TJX Intrusion (the “Monitored Accounts”); (v) each
operating expense reimbursement claim that the Issuer and its Affiliated Issuers made with
MasterCard with respect to the Issuer’s Claimed-On Accounts quantifies with reasonable accuracy the
incremental unit costs that the Issuer (or a Claiming Sponsored Issuer) incurred to reissue the
Reissued Cards and to monitor the Monitored Accounts; and (vi) none of the Issuer’s Claimed-On
Accounts was issued by any of the Issuer’s Sponsored Issuers that the Issuer identified on
Schedule I hereto as not being one of the Issuer’s Claiming Sponsored Issuers.

     This acceptance shall become effective when, and only if, the Consummation Date has occurred.
Subject to this acceptance having become effective, the Issuer, on its own behalf and on behalf of
each of its Claiming Sponsored Issuers and on behalf of its and their Affiliated Persons,
irrevocably waives any right to assert against MasterCard, TJX, the TJX Acquirers, and the
Affiliated Persons of each of them (collectively, the “Releasees”), and fully and finally
releases the Releasees from, the following (collectively, the “Released Issuer Claims”)
(whether or not any Released Issuer Claims, any injury or harm, including injury or harm that
arises or occurs after the date of this acceptance, and/or any facts, events, or occurrences giving
rise thereto are known, suspected, or anticipated as of the date of this acceptance, including
those which if known may have materially affected the Issuer’s decision to execute this
acceptance):

-1-

 

     (a) any claim or right of recovery the Issuer or any Claiming Sponsored Issuer or any of its
or their Affiliated Persons might otherwise have had in respect of any of its or their Alerted-On
Accounts under the MasterCard Operating Regulations (whether under the compliance rules contained
in said Regulations, the operating expense reimbursement rules contained in said Regulations, or
otherwise) by reason of any matter, occurrence, or event pertaining to the TJX Intrusion,

     (b) any dispute or objection the Issuer or any Claiming Sponsored Issuer or any of its or
their Affiliated Persons might otherwise be entitled to raise or make with respect to the amount or
the calculation of the amount by MasterCard of its Alternative Recovery Amount as shown in the
Alternative Recovery Offer, and

     (c) any claim or right the Issuer or any Claiming Sponsored Issuer or any of its or their
Affiliated Persons might be entitled to assert, and any monetary recovery or other relief that the
Issuer or any Claiming Sponsored Issuer or any of its or their Affiliated Persons might be entitled
to seek or receive in any litigation or other proceeding (including without limitation the pending
putative class action proceedings consolidated under the caption entitled In re TJX Companies
Retail Security Breach Litigation, No. 07-2828, currently pending before the United States
Court of Appeals for the First Circuit and the pending putative class action proceedings captioned
AmeriFirst Bank et al v. TJX Companies, Inc. et al, No. 08-0229, currently pending before
the Massachusetts Superior Court for Middlesex County), under any applicable laws, rules or
regulations, in connection with any injury or harm the Issuer or any Claiming Sponsored Issuer or
any of its or their Affiliated Persons may have incurred in its or their capacity as a MasterCard
Issuer by reason any of its or their Alerted-On Accounts, or by reason of any matter, occurrence,
or event pertaining to the TJX Intrusion.

     Subject to this acceptance having become effective, the Issuer covenants and agrees that
neither it nor any of its Claiming Sponsored Issuers nor any of its or their respective Affiliated
Persons will assert any of the Released Issuer Claims against, or otherwise seek to obtain any
monetary recovery or other relief by reason of any of the Released Issuer Claims from, MasterCard
or TJX or any of the TJX Acquirers or any of the Affiliated Persons of each of them.

     Subject to this acceptance having become effective, the Issuer agrees to indemnify MasterCard,
TJX, the TJX Acquirers, and each of their respective Affiliated Persons against and shall hold each
of them harmless from any and all damage, loss, liability, fines, penalties and expense (including
reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with
any action, suit or proceeding whether involving a third party claim or a claim solely between the
parties hereto), incurred or suffered by MasterCard, TJX, the TJX Acquirers, or any of each of
their respective Affiliated Persons arising out of any misrepresentation or breach of warranty made
by the Issuer in this acceptance or any breach of any covenant or agreement made or to be performed
by the Issuer or any of its Claiming Sponsored Issuers or any of its or their respective Affiliated
Persons pursuant to this acceptance.

     This acceptance, the rights of any person or entity hereunder, and any action arising
hereunder, will be governed by and construed in accordance with the substantive laws of the State
of New York, without giving effect to any choice or conflict of law provision that would cause the
application of the laws of any other jurisdiction.

Dated: [                    ], 2008

-2-

 

	 	 	 	 	 
	 	[Name of Accepting MasterCard Issuer]

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 

-3-

 

	 	 	 	 	 

EXHIBIT 7.1

TJX’s Release of MasterCard Relating to TJX Intrusion 

     The TJX Companies, Inc. (“TJX”) hereby grants the full, complete and final release,
discharge, and covenant not to sue set forth in detail below, on its own behalf and, to the extent
any of the following persons or entities purports to assert any Claim(s) (as defined below) of TJX,
on behalf of each of its past, present and future representatives, attorneys, associates, parents,
subsidiaries, affiliates, agents, assigns, insurers, administrators, trustees, officers, directors,
employees, retained contractors, predecessors, successors, and any other person or entity claiming
on behalf of either of them. Capitalized terms not otherwise defined herein have the meanings set
forth in the Settlement Agreement dated April 2, 2008 between TJX and MasterCard International
Incorporated (the “Settlement Agreement”).

     For purposes of this release, the “Released Parties” are MasterCard International
Incorporated (“MasterCard”), and (in their capacities as MasterCard Issuers) Eligible
MasterCard Issuers that validly accept their Alternative Recovery Offers and their Claiming
Sponsored Issuers (such Eligible MasterCard Issuers and their Claiming Sponsored Issuers,
collectively, in their capacities as MasterCard Issuers, the “Released MasterCard
Issuers”), and (in their capacities as such) MasterCard’s and any Released MasterCard Issuer’s
past, present, and future representatives, attorneys, agents, accountants, assigns, insurers,
administrators, officers, directors, trustees, employees, retained contractors, parents,
affiliates, subsidiaries, predecessors, successors, and any other person or entity acting on behalf
of any of them; provided, however, that the Released Parties do not include (i)
MasterCard Issuers that are not eligible to receive or that do not validly accept their Alternative
Recovery Offers, or (ii) any Sponsored Issuer that is not a Claiming Sponsored Issuer of an
Accepting Issuer.

     For purposes of this release, the term “Claims” shall mean any and all claims, causes
of action, suits at law or in equity, assertions of wrongdoing or fault, liabilities, awards,
judgments, demands, debts, defenses, losses and expenses, damages, obligations, attorney fees,
costs and/or sanctions, of whatever kind or nature, whether now known or unknown, suspected or
unsuspected, liquidated or unliquidated, matured or unmatured, including even those Claims that, if
known as of the date of this release, may have materially affected TJX’s decision to agree to the
Settlement Agreement.

     By this release, TJX releases the Released Parties from any and all Claims that TJX ever had,
now has, or may have in the future against MasterCard, or any of the other Released Parties in
their capacities as such, by reason of any act, omission or occurrence before the date of the
Settlement Agreement on the part of MasterCard or any Released MasterCard Issuer related to the TJX
Intrusion, whether those Claims are (a) affirmatively made against MasterCard or any Released
MasterCard Issuer, (b) made as a defense to any acts or omissions by MasterCard or any Released
MasterCard Issuer relating to the MasterCard Operating Regulations, or (c) assertions of
MasterCard’s or a Released MasterCard Issuer’s fault as a defense to allegations by a third party,
including but not limited to MasterCard Issuers that are not Released Parties (all the Claims
described in this sentence as having been released being defined herein as the “Released
Claims”).

 

 

     Notwithstanding anything to the contrary in the preceding paragraphs, the Released Claims do
not include (i) any objection, dispute, or Claim TJX might otherwise be entitled to assert with
respect to (A) any Claim with respect to the TJX Intrusion that may be submitted to MasterCard by a
MasterCard Issuer after the date of the Settlement Agreement under the MasterCard Operating
Regulations or (B) any ruling made by MasterCard with respect to any such Claim described in clause
(i)(A) of this sentence; (ii) any right TJX otherwise would have to assert or seek to establish, as
a defense to any Claim asserted against it by a MasterCard Issuer in litigation or otherwise, the
facts or results of any actions or inactions involving MasterCard or a Released MasterCard Issuer,
provided that TJX does not seek to establish that any such actions or inactions, or the results
thereof, constituted legal wrongdoing on MasterCard’s or a Released MasterCard Issuer’s part or
created legal liability on MasterCard’s or a Released MasterCard Issuer’s part; or (iii) any of the
rights and obligations created by or under the Settlement Agreement or any document delivered
pursuant thereto.

     This release, the rights of any person or entity hereunder, and any action arising hereunder,
will be governed by and construed in accordance with the substantive laws of the State of New York,
without giving effect to any choice or conflict of law provision that would cause the application
of the laws of any other jurisdiction.

Dated:
[                 ], 2008

	 	 	 	 	 
	 

	 	By:
	 	Officer’s Signature
	 

	 	 	 	 
	 

	 	 	 	Officer’s Name and Title
	 
	 	 	 	 
	 	 	On behalf of The TJX Companies, Inc.exv10w38w5w1

 

Exhibit 10.38.5.1

Execution Copy

TERMINATION

               This Termination (this “Termination”) of (I) the Master Repurchase Agreement, dated as
of June 22, 2006 (the “Master Repurchase Agreement”) by and among Autobahn Funding Company,
LLC, and Deutsche Zentral-Genossenschaftsbank Frankfurt AM Main — New York Branch (together, the
“Buyer”), and Hanover Capital Mortgage Holdings, Inc., HDMF-I LLC, HDMF-II LLC and HDMF
II Realty Corp., (individually and together, the “Seller”), and (II) the Custodial
Agreement, dated as of June 22, 2006 (the “Custodial Agreement”), by and among the Buyer,
the Seller and U.S. Bank National Association (the “Custodian”), is made and is effective
as of the 31st day of March 2008.

               For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and the mutual covenants herein contained, the parties hereto hereby agree as
follows:

     SECTION 1.      Defined Terms. Any capitalized terms used but not otherwise defined herein
shall have the respective meanings set forth in the Master Repurchase Agreement.

     SECTION 2.      Termination.

     (a)      Notwithstanding any provision to the contrary contained in the Master Repurchase
Agreement, the Master Repurchase Agreement and the Facility established thereunder, by voluntary
and mutual agreement of the parties hereto, shall terminate on March 31, 2008 with no further
force or effect; provided, that, in accordance with Section 20 of the Master Repurchase
Agreement, solely those obligations of the Seller pursuant to Section 14 of the Master Repurchase
Agreement shall survive the termination thereof, but Seller shall have no other obligations
pursuant to Section 20 including, but not limited to, any obligation to pay any Make- Whole Fee, or
other such fee.

     (b)      Notwithstanding any provision to the contrary contained in the Custodial Agreement, the
Custodial Agreement, by voluntary and mutual agreement of the parties hereto, shall terminate on
March 31, 2008 with no further force or effect.

     SECTION 3.      Fees and Expenses. The Seller covenants to pay as and when billed by the
Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the
transactions contemplated hereby and in the Master Repurchase Agreement including, without
limitation, (i) all reasonable fees, disbursements and expenses of counsel to the Buyer, including
but not limited to an amount equal to $83,333.33 representing the Non-Use Fee accrued through March
31, 2008 and an amount equal to $3,412.50, representing the legal fees of Dewey & LeBoeuf LLP, and
(ii) all reasonable fees and expenses of the Custodian and its counsel, including but not limited
to, the Custodian’s outstanding fees in the amount of $2,500, relating to the month of March 2008.

     SECTION 4.      Releases.

     (A)      The Buyer does hereby release to the Seller, without recourse, any and all right, title
and interest of the Buyer in and to the Purchased Items and the Purchased Assets. In addition, the
Buyer hereby authorizes the Seller to terminate any UCC Financing Statements filed with respect to
the Purchased Items and the Purchased Assets in accordance with the Master Repurchase Agreement.

     (B)      The Seller and its present and former officers, employees, directors, managers,
principals, affiliates and agents and their respective heirs, executors, successors and assigns
(collectively, the “Seller Parties”) do, for good and valuable consideration, hereby
release and forever waive and discharge the Buyer and each and all of the Buyer’s present and
former officers, employees, directors, managers, principals, affiliates and agents and their
respective heirs, executors, successors and assigns from any and all claims, demands, suits, causes
of action, liabilities, losses, damages, penalties, costs and expenses (including legal fees and
expenses of counsel) of whatever nature or sources, whether arising by statute, in law or in
equity, known or unknown, from the beginning of the world to the date hereof related in any way,
directly or indirectly, out of or in connection with the repurchase facility previously in place
and evidenced by the Master Repurchase Agreement.

     The parties intend that this Termination shall be effective as a full and final accord,
satisfaction and release of all of the Seller Parties’ claims being released by this Termination
(collectively, the “Claims”). Therefore, the release of the Claims shall extend to any and
all Claims, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, legal or
equitable, and each of the Seller Parties expressly waives and relinquishes any and all rights that
any of them may have under New York law.

 

 

     SECTION 5.      Successors and Assigns. This Termination is binding upon each undersigned
and its successors and assigns.

     SECTION 6.      GOVERNING LAW. THIS TERMINATION SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS DOCTRINE
APPLIED IN SUCH STATE.

     SECTION 7.      Counterparts. This Termination may be executed by each of the parties
hereto on any number of separate counterparts, each of which shall be an original and all of which
taken together shall constitute one and the same instrument.

[Signature Page Follows]

2

 

               IN WITNESS WHEREOF, the parties hereto have caused this Termination to be executed and
delivered by their duly authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	BUYER:

AUTOBAHN FUNDING COMPANY LLC

 	 
	 	By:  	DZ Bank AG Deutsche Zentral-Genossenschaftsbank, as its
 	 
	 	 	attorney-in-fact 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Sandeep Srinath	 
	 	 	Name:  	Sandeep Srinath	 
	 	 	Title:  	Vice President	 

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Patrick F. Preece	 
	 	 	Name:  	Patrick F. Preece	 
	 	 	Title:  	Senior Vice President	 
	 

	 	 	 	 	 
	 	BUYER:

DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK

 	 
	 	By:  	/s/ Sandeep Srinath	 
	 	 	Name:  	Sandeep Srinath	 
	 	 	Title:  	Vice President	 

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Patrick F. Preece	 
	 	 	Name:  	Patrick F. Preece	 
	 	 	Title:  	Senior Vice President	 
	 

 

	 	 	 	 	 
	 	SELLER:

HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

 	 
	 	By:  	/s/ John A. Burchett 	 
	 	 	Name:  	John A. Burchett 	 
	 	 	Title:  	Chief Executive Officer 	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Irma N. Tavares
 	 
	 	 	Name:  	Irma N. Tavares	 
	 	 	Title:  	Chief Operating Officer 	 
	 

	 	 	 	 	 
	 	SELLER: 

HDMF-I, LLC

 	 
	 	By:  	/s/ John A. Burchett 	 
			Name: 	John A. Burchett	
	 	 	Title:  	Chief Executive Officer of Managing Member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Irma N. Tavares	 
	 	 	Name:  	Irma N. Tavares	 
	 	 	Title:  	Chief Operating Officer of Managing Member	 
	 

	 	 	 	 	 
	 	SELLER: 

HDMF-II, LLC

 	 
	 	By:  	

/s/ John A. Burchett	 
	 	 	Name:  	John A. Burchett	 
	 	 	Title:  	Chief Executive Officer of Managing Member	 

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Irma N. Tavares	 
	 	 	Name:  	Irma N. Tavares	 
	 	 	Title:  	Chief Operating Officer of Managing Member	 
	 

	 	 	 	 	 
	 	SELLER: 

HDMF-II REALTY CORP.

 	 
	 	By:  	/s/ John A. Burchett 	 
	 	 	Name:  	John A. Burchett 	 
	 	 	Title:  	Chief Executive Officer	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Irma N. Tavares	 
	 	 	Name:  	Irma N. Tavares	 
	 	 	Title:  	Chief Operating Officer	 
	 

	 	 	 	 	 
	 	CUSTODIAN: 

U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/
Toby Robillard	 
	 	 	Name:  	Toby Robillard	 
	 	 	Title:  	Vice President

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