1
EXHIBIT 10.2
AMENDED AND RESTATED
PRIVATE LABEL REVOLVING CREDIT
PLAN AGREEMENT
BY AND BETWEEN
BANK ONE, NA
AND
▇▇▇▇▇▇▇, INC.
JUNE 17, 1998
Page 27
2
TABLE OF CONTENTS
Page
----
1. Definitions ............................................................1
2. Bank One Covenants......................................................3
3. ▇▇▇▇▇▇▇ Covenants.......................................................4
4. Plan Credit and Marketing Decisions, Terms and Conditions...............5
5. Plan Interest Proceeds..................................................8
6. Income..................................................................9
7. Value-Added Programs...................................................10
8. Reserve Accounts.......................................................10
9. Reports and Inspection; Annual Performance Analysis....................12
10. Processing Agreement; Remote Application Processing Agreement..........12
11. Warranties; Services...................................................13
12. Credit and Transaction Application Processing Hours....................13
13. Advertising............................................................14
14. Use of ▇▇▇▇▇▇▇' Trademarks and Trade Names.............................15
15. Artwork................................................................15
16. Telecommunication Requirements.........................................16
17. Plan Administrator.....................................................16
18. Term/Termination.......................................................16
19. Rights Upon Termination................................................17
20. Additional Termination Rights of Bank One..............................17
21. Default................................................................18
22. Charge Back and Set off................................................18
23. Indemnification........................................................19
24. Escrow Account.........................................................22
25. Exclusive Property.....................................................22
Page 28
3
26. Inspection Rights......................................................23
27. Waiver.................................................................23
28. Financial Statements...................................................23
29. Modification...........................................................23
30. Assignment; Securitization.............................................24
31. Delivery of Cardholder List; Option to Purchase Portfolio..............24
32. Confidentiality........................................................25
33. Severability...........................................................26
34. Notices................................................................26
35. Miscellaneous..........................................................26
ADDENDUM A AUTHORIZATION TO TRANSACT TELEPHONE OR
MAIL ORDERS....................................28
ADDENDUM B PRIVATE LABEL ADVERTISING REQUIREMENTS...............................29
ADDENDUM C PLAN CARD PROCESSING AGREEMENT.......................................31
ADDENDUM D REMOTE APPLICATION PROCESSING AGREEMENT..............................42
Page 29
4
BANK ONE, NA AND ▇▇▇▇▇▇▇, INC. AMENDED AND RESTATED
PRIVATE LABEL REVOLVING CREDIT PLAN AGREEMENT
This Agreement is made this 17th day of June, 1998, to be effective
June 17, 1998, by and between ▇▇▇▇▇▇▇, INC., an Ohio corporation ("▇▇▇▇▇▇▇(R)"),
and BANK ONE, NA, a national banking association ("Bank One") and amends and
replaces the existing contract between ▇▇▇▇▇▇▇ and Bank One dated March 16,
1993.
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇ and Bank One have had in effect a private label
revolving credit card plan since 1984;
WHEREAS, ▇▇▇▇▇▇▇ desires to have Bank One continue the private label
revolving credit card Plan (as hereinafter defined) to enable ▇▇▇▇▇▇▇' customers
purchasing merchandise or services from ▇▇▇▇▇▇▇ (collectively "Products") to
finance such Products under the Plan; and
WHEREAS, Bank One is willing to continue such a Plan for ▇▇▇▇▇▇▇
subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1 DEFINITIONS.
The following definitions shall apply to this Agreement:
"Account" shall mean a revolving line of credit established under the
Plan for a Cardholder, including, but not limited to, all documents
pertaining thereto, for the purpose of financing credit purchases of
Products purchased by a Cardholder from ▇▇▇▇▇▇▇.
"Addendum" shall mean documentation attached to this Agreement which
specifies certain particulars of this Agreement.
"Agreement" shall collectively mean this Revolving Credit Plan
Agreement and all Addenda hereto.
"Annualized Monthly Cardholder Loss Percentage" shall mean the ratio of
a) the product of the sum of the principal Plan Balances which Bank One
reasonably deems uncollectible for a given month, including bankruptcy,
death and insolvency, minus the recoveries times the number twelve
(12), to b) the aggregate outstanding Plan balance at the end of the
same month.
"Applicant" shall mean a ▇▇▇▇▇▇▇ customer who completes a Bank One
application for a Plan Account.
"Application" shall mean a Plan credit application completed by an
Applicant.
"Bank One Loan Loss Reserve" shall mean those accounts of Bank One to
which monies are reserved to absorb anticipated losses from loans and
other extensions of credit which accounts shall be funded in accordance
with federal regulations.
"Bankruptcy Code" shall mean any chapter of the Bankruptcy Reform Act
of 1978, as amended.
"Business Day" shall be defined as any day which the Federal Reserve
Bank of Cleveland, Ohio, is open for the transaction of general banking
business.
"Cardholder" shall mean an Applicant approved by Bank One and for whom
an Account is opened pursuant to the Plan.
Page 30
5
"Cardholder Agreement" shall mean the Revolving Credit Plan Agreement
between Bank One and a Cardholder and the Truth-In-Lending Disclosure
issued by Bank One to such Cardholder setting forth the terms and
conditions of its extension of open-end credit to such Cardholder.
"Cardholder List" shall mean the listing of names, addresses and
Account numbers of Cardholders.
"Charge Back" shall mean the reversal of a previously credited sales
Transaction, which involves the return of the sales Transaction from
Bank One to ▇▇▇▇▇▇▇ and a debit to ▇▇▇▇▇▇▇' Settlement Account, a
deduction by Bank One from any payment due ▇▇▇▇▇▇▇, or reimbursement to
Bank One by ▇▇▇▇▇▇▇ for violation of the terms and conditions set forth
herein.
"Charge" shall mean an Account charged off as a loss for, reasons
including but not limited to, bankruptcy, fraud, death of a Cardholder
and/or delinquency.
"Consumer Interest Rate" shall mean the annual percentage rate of
finance charge charged to Cardholders, calculated and disclosed
pursuant to the federal Truth-In-Lending Act and Regulation Z.
"Cost of Funds" shall mean the interest expense actually born or
incurred by Bank One in obtaining liabilities to fund or finance the
Plan.
"Loans" shall mean all credit extended to Cardholders under the Plan on
or after the date of this Agreement.
"Opening Date" shall mean the date on which the first Cardholder
Account is opened under the Plan.
"Plan" shall mean individually each private label credit card plan, and
collectively all private label credit card plans, established pursuant
to this Agreement, each of which makes Accounts available to qualified
customers of ▇▇▇▇▇▇▇ to permit them to finance credit purchases of
Products sold by ▇▇▇▇▇▇▇. The term "Plan" includes the extension of
credit to Cardholders, billing of Accounts, collection of Accounts,
customer services rendered to Cardholders, accounting between the
parties hereto, and all other aspects of the customized private label
revolving credit plan contemplated thereby.
"Plan Card" shall mean the plastic credit card issued to a Cardholder
and identified as the card used by the Cardholder to finance Products
purchased from ▇▇▇▇▇▇▇ pursuant to the Plan.
"Plan Interest Proceeds" shall mean finance charges billed by Bank One
to Cardholders plus the amount of posted interest credited to Accounts
from purchases made under either a ninety (90) day or a one hundred
twenty (120) day same as cash promotion and interest posted to said
Accounts in the first billing cycle following the expiration of any
said promotion.
"Requirements" shall mean the advertising guidelines set forth in
Section Thirteen (13) herein as defined and referred to in Section Four
E (4E).
"Sales Agreement" shall mean receipt(s), sales slip(s) and/or other
document(s) evidencing the purchase, return or exchange of Products by
a Cardholder from ▇▇▇▇▇▇▇ at the time of the Transaction.
"Transaction" shall mean those mutual acts and exchanges between the
Cardholder and ▇▇▇▇▇▇▇ occurring at the time of a purchase, return or
exchange of Products.
"Transaction Draft" shall mean the document(s) required by Bank One
which ▇▇▇▇▇▇▇ is to complete to evidence a purchase, return or exchange
at the time of a Transaction.
"Verbiage" shall have the meaning as set forth in Section Thirteen
(13).
Page 31
6
2. BANK ONE COVENANTS.
Bank One agrees:
A. To comply with all applicable consumer credit and other laws and
regulations in connection with its administration and operation of
the Plan including, but not limited to, Applicant credit evaluation,
credit approval and denial procedures and all forms and documents
related to the Plan, including, but not limited to, Applications,
Cardholder Agreements, and Transaction Drafts. Examples of these laws
and regulations include Regulation B, Regulation Z, applicable federal
and state interest rate and fee limitation statutes and collection
practice laws.
B. To perform all functions necessary and appropriate to continue,
operate, administer and service the Plan, including, but not limited
to, all Applicant credit investigations, credit decisions and
notifications of approval or adverse action relating to an Application
or an Account.
C. To design, supply and mail (where appropriate) all Plan forms and
documents including the Application, the Plan Card(s), Cardholder
Agreements, any separate Plan Card carrier(s), and the periodic billing
statement(s) used in connection with the Plan.
D. To perform all Plan administrative duties and Cardholder services,
including, but not limited to, billing, collecting balances, processing
payments and/or adjustments and handling inquiries.
E. To allow ▇▇▇▇▇▇▇, if an Application is not approved by Bank One or
its secondary source of financing, to provide that said Application to
another creditor for the purpose of securing credit, in compliance with
all applicable laws.
3. ▇▇▇▇▇▇▇ COVENANTS.
▇▇▇▇▇▇▇ agrees:
A. To own and perfect all legal rights to any trade name(s), logos or
service marks it selects to use in connection with the Plan or the Plan
Card.
B. From time to time assist customers who wish to apply for an Account
in completing the Application. ▇▇▇▇▇▇▇ shall not be the agent of Bank
One for purposes of taking the Application and shall not hold itself
out as an agent of Bank One for such. In connection with the
Application by a customer for an Account, ▇▇▇▇▇▇▇ pledges its best
efforts to ensure that the information communicated to Bank One shall
be as true and as complete as ▇▇▇▇▇▇▇ may know. ▇▇▇▇▇▇▇ also pledges
its best effort to ensure that the Application shall not contain any
information which, in ▇▇▇▇▇▇▇' knowledge, or in the knowledge of its
employees, or agents, is false or constitutes a misrepresentation of
facts.
C. Except as otherwise provided in this Agreement, ▇▇▇▇▇▇▇ will use its
best efforts to ensure that at all ▇▇▇▇▇▇▇ stores, Bank One is offered
the first option on substantially all potential consumer financing,
meaning that on any Transaction in which the customer seeks or desires
financing (except for Visa/MasterCard, Discover, Diners Club or other
similar national card branded programs which ▇▇▇▇▇▇▇ accepts), ▇▇▇▇▇▇▇
shall encourage the use of or opening of an Account; however, ▇▇▇▇▇▇▇
shall not coerce customers or pursue any deceptive practices in
soliciting Accounts.
D. If an in-store Application is being made, to provide each Applicant
with the first copy of the Cardholder Agreement at, or before, the time
the Application is completed.
E. To retain original Applications in trust for Bank One for a minimum
of twenty-five (25) months and to deliver any Application to Bank One
within five (5) Business Days upon request of Bank One unless said
Application has been previously forwarded.
F. To process in a timely manner Transaction Drafts for Cardholders.
Page 32
7
G. To cooperate with Bank One at any time in providing to Bank One
information in ▇▇▇▇▇▇▇' possession regarding a particular Transaction,
including providing to Bank One a written statement of circumstances
involving said Transaction.
H. To act promptly and reasonably to resolve disputes with Cardholders
regarding Products.
I. To offer no deviation to Cardholders from the Cardholder Agreement
without the prior written approval of Bank One. For example, oral
misrepresentations to customers relative to special terms, interest
rates, payment schedules or payment due dates shall be prohibited.
4. PLAN CREDIT AND MARKETING DECISIONS, TERMS AND CONDITIONS.
A. Bank One has the absolute and unilateral right to determine the
credit worthiness of Applicants and the terms and conditions of
Cardholder Agreements. Bank One makes no representation either
expressed or implied as to Applicant approval rate. Credit criteria and
standards to be applied to Applicants will be at Bank One's sole
discretion and uniformly applied. Bank One may change its credit
criteria and standards or the Cardholder Agreement terms and conditions
at any time it deems appropriate, provided, however, that Bank One
shall provide reasonable notice to ▇▇▇▇▇▇▇ of material charges in its
credit criteria and standards. In consideration of this, Bank One
waives any and all claims against ▇▇▇▇▇▇▇ for credit or other losses
resulting from the Plan, except as elsewhere stipulated in this
Agreement.
B. Bank One shall determine and be responsible for the compliance of
the terms and conditions of the Plan and all documents required by it
to be used in connection with the Plan, with all applicable federal and
state laws and regulations, including, but not limited to, the
compliance and enforceability of the Cardholder Agreement, except that
the Consumer Interest Rate charged to Cardholders shall be mutually
agreed upon by Bank One and ▇▇▇▇▇▇▇, subject to applicable law.
However, if the parties cannot agree to a mutually acceptable Consumer
Interest Rate within thirty (30) days after notification by either
party to the other of a proposed change in the Consumer Interest Rate,
then either party may, within ten (10) days thereafter, terminate the
Plan upon One Hundred Eighty (180) days prior written notice to the
other party.
C. The Plan is currently offered to new Applicants as follows:
(i) Consumer Interest Rate shall be a variable rate equal
to 14.73% plus the "Prime Rate" as published in the "Money
Rates" section of The Wall Street Journal on the 15th day of
each calendar month or the next Business Day if the 15th day
falls on a weekend or holiday.
(ii) No annual membership fee;
(iii) Ninety (90) days same as cash on initial service or
purchase of Products made under the Plan. A minimum monthly
payment is required to be made with the balance to be paid in
full by the due date shown on Cardholder's third periodic
billing statement. If the Cardholder does not pay the full
balance, accrued interest from the date of the first periodic
billing statement after the Transaction will be added to
Cardholder's Account. Late payment fees will be charged to
Cardholders who ail to meet the minimum payment requirements
during the ninety (90) day period;
(iv) Ninety (90) days same as cash on subsequent services
or purchases or Products made under the Plan. A minimum
monthly payment is required to be made with the balance to be
paid in full by the due date shown on Cardholder's third
periodic billing statement. Interest is calculated on and
posted to the Account from the date the charge was incurred
until paid in full. However, if the subsequent service or
purchase principal amount is paid in full by the payment due
date set forth in the third monthly billing cycle from the
from the charge date (regardless if there is an existing
principal balance) then Bank One will credit
Page 33
8
existing principal balance), then Bank One will credit the
Account for the amount of the posted interest only on that
service or purchase. Late payment fees will be charged to
Cardholders who fail to meet the minimum payment requirements
during the ninety (90) day period;
(v) Late payment fee of Twenty Five Dollars and No
Cents ($25.00).
(vi) Return check fee of Twenty Five Dollars and No
Cents ($25.00).
(vii) A minimum monthly payment of three percent (3%) of
the unpaid balance or Ten and No/100 Dollars ($10.00),
whichever is greater, is required each month.
(viii) Overlimit Fee will be assessed at 30% over credit
limit and will be the amount of Twenty Two Dollars and No
Cents ($22.00).
▇▇▇▇▇▇▇ and Bank One may, by mutual agreement, develop other
special financing programs and by mutual agreement may change the fees
and charges set forth in Section 4C (v), (viii).
D. No minimum Transaction amount for purchases to be charged to an
Account will be required by either ▇▇▇▇▇▇▇ or Bank One. Transactions
may be for any amount up to the Cardholder's available credit limit.
All "add on" purchase Transactions up to the Cardholder's available
credit limit will be authorized and processed electronically using the
Bank One/▇▇▇▇▇▇▇ electronic interface as set forth herein.
E. Bank One has the right to approve or disapprove all aspects of the
Plan not specifically referred to in this Agreement including, but not
limited to, advertising and promotional material as same relates to the
Plan beyond the advertising requirements set forth in Section Thirteen
(13) herein and those guidelines provided to ▇▇▇▇▇▇▇ by Bank One, a
copy of which is attached hereto as Addendum "B". The purpose of said
approval is to allow Bank One to insure that advertising does not
jeopardize or impede Bank One's position that Bank One is the creditor
and owner of all Accounts, all of which are located in Dayton, Ohio,
and as such are subject only to State of Ohio laws and any Federal
statute applicable to national banks. Bank One must be contacted, for
written approval, at least thirty (30) days prior to (i) any change by
▇▇▇▇▇▇▇ in previously approved advertising related to the Plan and
constituting a variance from the existing Requirements or (ii) new
advertising or promotional material relating to the Plan being
implemented by ▇▇▇▇▇▇▇.
F. Bank One will provide to and/or develop programs for ▇▇▇▇▇▇▇ use for
Cardholder solicitation and existing but inactive Account activation.
Bank One will work closely with ▇▇▇▇▇▇▇ to develop a marketing plan to
be implemented at the beginning of each calendar year to promote and
enhance the Plan. The marketing plan will include direct mail programs,
holiday promotions and other mutually agreed upon promotional items to
support the growth of the Plan. Costs associated with list selection,
credit bureau scoring, printing, production and implementation would be
borne by ▇▇▇▇▇▇▇; however, any such expenses shall be mutually agreed
to by the parties prior to expenses being incurred, and can be shared,
as agreed.
G. Bank One will provide the ability to put promotional messages on
periodic statements and to include inserts for advertising or other
purposes in monthly periodic statements envelopes. Bank One's
responsibility shall be limited to providing format and structure for
such promotional messages, envelope space for such inserts and for the
mailing thereof. The insert(s) will be produced by ▇▇▇▇▇▇▇ at its
expense and in accordance with specifications as supplied by Bank One;
insertion will be done by Bank One at Bank One's expense. Bank One
shall pay the costs for all statement mailings including postage at
first class rates up to a weight of one (1) ounce per envelope, on
accounts with credit balances or balances greater than zero; provided,
however, Bank One will make mailings on Accounts with zero balances at
the request of ▇▇▇▇▇▇▇, in which case the cost of such mailing shall be
paid for by ▇▇▇▇▇▇▇, or shared as agreed.
H. Bank One shall have the right both before and after termination of
this Agreement to mail to the Cardholder base, materials for the
marketing of bank services or other products or services offered by or
though an Affiliate of BANC ONE CORPORATION ("Bank Services:), provided
that
Page 34
9
(i) Bank One informs ▇▇▇▇▇▇▇ of said mailings prior to
mailing;
(ii) No reference is made to ▇▇▇▇▇▇▇ in said mailings; and
(iii) Bank One provides ▇▇▇▇▇▇▇ a copy of said mailing.
I. Bank One may from time to time purchase customer lists from credit
bureaus or other sources for use by it or by other retailers in
promotional matters. ▇▇▇▇▇▇▇ recognizes that some Cardholder names may
appear on such independently obtained lists and agrees to the
appearance of such names, so long as Bank One does not specifically or
separately identify More Value TM Cardholders as such without the
express written consent of ▇▇▇▇▇▇▇.
5. PLAN INTEREST PROCEEDS.
Plan Interest Proceeds shall be distributed as follows:
A. Bank One will deduct from the Plan Interest Proceeds an amount
sufficient to cover Bank One's Cost of Funds, plus Bank One's operating
fee of seven percent (7.0%) per annum on the average outstanding Plan
portfolio balance, plus, to fund a loan loss reserve, an amount equal
to two percent (2.0%) per annum of the average outstanding Plan
portfolio balance. The average outstanding portfolio balance will
include balances arising from Transactions made under either 90 day
same-as-cash and 120 day same-as-cash promotions, but will exclude
balances arising from Transactions made under any other type of
promotional purchase program, until the promotional period for any
promotional purchase expires. Any balance outstanding from a
promotional purchase at the end of the promotional period will be added
to the regular revolving balance on the Account and included as part of
the average outstanding portfolio balance.
B. Annualized Cost of Funds shall be calculated monthly by a mutually
agreed upon methodology.
C. It is understood and agreed that the functional relationship between
the Consumer Interest Rate and the required return to Bank One may
result in a situation where the portion of the Plan Interest Proceeds
due ▇▇▇▇▇▇▇ could be negative, thereby causing ▇▇▇▇▇▇▇ to pay Bank One
for operation of the Plan.
D. Any income or expense calculation or computation referred to in this
Section Five (5) shall be determined as of the last Business Day of
each calendar month and payment in accordance with said calculation or
computation shall be made no later than the tenth (10th) Business Day
of the following month.
6. INCOME.
A. Any Plan income derived from late payment fees, returned check fees
and overlimit fees charged by and paid to Bank One will be retained by
Bank One. Income or commissions earned from third party products or
services, sometimes called value-added programs, sold to Cardholders
and received by Bank One will be shared equally, by the parties hereto,
less any administrative costs incurred. Net income derived from
collected insurance premiums offered at any time under the Plan will be
paid to ▇▇▇▇▇▇▇, after deducting any Cardholder refunds, and a Bank One
programming and administrative fee of five percent (5%).
B. Any expense(s) that may be incurred by Bank One under the Plan which
are caused by ▇▇▇▇▇▇▇, which may be billed to ▇▇▇▇▇▇▇, and which are
deemed by Bank One to be extraordinary in nature, shall be mutually
agreed upon by the parties prior to occurrence. Said agreed upon
expense(s) will be billed directly to ▇▇▇▇▇▇▇ if the reason for such
expense is to fulfill a request by ▇▇▇▇▇▇▇ or on ▇▇▇▇▇▇▇' behalf.
7. VALUE-ADDED PROGRAMS.
▇. ▇▇▇▇▇▇▇ agrees to provide the following services in connection with
any value-added programs provided, offered, or sold to Cardholders
from time to time in connection with the Plan;
Page 35
10
(i) To give Applicants and/or Cardholders materials and
documents provided to ▇▇▇▇▇▇▇ by Bank One or the third party
servicer of the value-added program which describes the
value-added program and/or contains the application or
authorization to be signed by the Applicant or Cardholder;
(ii) To assist the Applicant and/or Cardholder in
completing said application or authorization;
(iii) To respond to inquiries by an Applicant and/or
Cardholder relative to said value-added program;
(iv) To direct any Cardholder inquiring about the proper
manner in which to make a claim to contact either Bank One or
the third-party servicer, giving the name, address and phone
number of both; and
(v) To provide Bank One or the third-party servicer with
such assistance as may reasonably be requested by either.
B. For said value-added programs described above, Bank One shall
pay to ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ agrees to accept as payment in full for
services rendered by ▇▇▇▇▇▇▇, a predetermined level of compensation
based upon a predetermined schedule.
8. RESERVE ACCOUNTS.
Bank One shall establish from the Plan Interest Proceeds a special
reserve account (the "Reserve") described as follows:
A. At the end of each calendar month, ▇▇▇▇▇▇▇ will deposit with
Bank One 1/12 of two percent (2%) of the average outstanding balance
for that month to the Reserve. The Reserve shall be the exclusive
property of Bank One and funds from the Reserve shall be utilized to
offset Bank One's losses from the Plan at the sole and absolute
discretion of Bank One. ▇▇▇▇▇▇▇ retains the right to audit the funding
of the Reserve.
B. The Reserve shall be in the form of a Bank One Money Market
Account for business or shall be invested in any other manner as Bank
One and ▇▇▇▇▇▇▇ shall agree from time to time. The interest earned as a
result of such investments shall be credited to the Reserve. Bank One
shall not be liable to ▇▇▇▇▇▇▇ in respect to any loss or damage
sustained by ▇▇▇▇▇▇▇ as a result of any such investment.
C. If any Account shall become one hundred eighty (180) days past
due or, if for any other reason the Account is deemed uncollectible by
Bank One, in its sole discretion, (such Accounts collectively to be
known as "Chargeoffs"), the outstanding balance of any such Accounts,
together with any accrued and unpaid interest thereon, may be charged
off by Bank One against the Reserve as follows:
(i) At the end of each calendar month, the balance of all
Chargeoffs will be charged to the Reserve until the funds in
the Reserve have been reduced to Zero Dollars ($0.00);
(ii) Any Chargeoffs remaining unpaid after the application
of the Reserve pursuant to subsection (I) above will be
charged in their entirety to the Bank One Loan Loss Reserve;
(iii) Chargeoffs may not be carried forward or backward from
month to month.
D. Bank One may charge back directly to ▇▇▇▇▇▇▇ or against any
account of ▇▇▇▇▇▇▇ at Bank One, independently of the Reserve, that
amount of any Account that is not paid when due where the reason for
nonpayment is an alleged
Page 36
11
breach of warranty during the term of any warranty provided a
Cardholder by or through ▇▇▇▇▇▇▇ if such amount remains unpaid thirty
(30) days after Bank One gives ▇▇▇▇▇▇▇ notice of the amount in dispute
and a description of the alleged breach of warranty.
E. Notwithstanding any other provision in this Agreement, Bank
One and ▇▇▇▇▇▇▇ agree to review annually the amounts contributed by
▇▇▇▇▇▇▇ to the reserve account and the Chargeoffs charged to the
reserve account by Bank One. ▇▇▇▇▇▇▇ and Bank One agree that they will
share equally in the total Chargeoffs, up to a maximum Chargeoff rate
of four percent and based upon the average outstanding balance. To the
extent Chargeoffs exceed four percent, Bank One shall absorb the
excess, as set forth in C above. To the extent the Chargeoffs are less
than four percent, Bank One shall refund to ▇▇▇▇▇▇▇ one-half of the
difference between the actual Chargeoff rate and four percent.
▇▇▇▇▇▇▇ and Bank One agree to review the Chargeoff experience
at least annually and, if a payment is due to ▇▇▇▇▇▇▇ under the terms
of this section, Bank One agrees to make such payment promptly.
9. REPORTS AND INSPECTION; ANNUAL PERFORMANCE ANALYSIS.
A. Upon reasonable request of ▇▇▇▇▇▇▇, Bank One shall share with
▇▇▇▇▇▇▇ the following material specific to the Plan, all of which shall
remain confidential and shall not be divulged by ▇▇▇▇▇▇▇ to any third
party except as may be required by law or by order of a court of
competent jurisdiction (provided that ▇▇▇▇▇▇▇ shall notify Bank One of
any such action in which any such order is sought in sufficient time
for Bank One to intervene if it so desires);
(i) Operating procedures including, its general credit policy,
its general collection and chargeoff policies, and its overall
operating costs;
(ii) Aggregate Plan portfolio information including
application activity reports with acceptance rates and related
performance data, delinquency reports, and general demographic
data;
(iii) Applications, payment histories and other file data as
may be agreed upon from time to time; and
(iv) Other Plan portfolio statistics as may be agreed from
time to time. It is understood that because of applicable
state and federal laws, Bank One may be required to eliminate
names and other identifying information on Cardholder specific
items. From time to time other items of information may be
deemed necessary by ▇▇▇▇▇▇▇ and Bank One will not unreasonably
refuse such requests. Provided, however, that no report or
information shall be given to ▇▇▇▇▇▇▇ which would render Bank
One a credit reporting agency under the Fair Credit Reporting
Act or other applicable law.
B. No later than the end of February each year, Bank One and
▇▇▇▇▇▇▇ shall jointly conduct an annual performance analysis of the
Plan which shall include, but shall not be limited to, a review of the
program pricing relative to servicing costs, credit quality, and
Cardholder chargeoffs; and any other significant issues deemed
appropriate for review by either party hereto.
10. PROCESSING AGREEMENT: REMOTE APPLICATION PROCESSING AGREEMENT.
A. The Processing Agreement, which sets forth certain duties,
rights and obligations of each of the parties relative to the operation
of the services to be provided herein, is attached hereto as Addendum
"C". Each of ▇▇▇▇▇▇▇' store locations are obligated to fully comply
with Addendum "C".
B. The Remote Application Processing Agreement, which sets forth
certain duties, rights and obligations of each of the parties relative
to the operation of the services to be provided herein, is attached
hereto as Addendum "D". ▇▇▇▇▇▇▇ is obligated to fully comply with
Addendum "D".
Page 37
12
11. WARRANTIES; SERVICES.
A. If ▇▇▇▇▇▇▇ sells, arranges or gives away (with or without
cost) to any Cardholder, any warranty or servicing agreement or
contract including extended manufacturer's warranty, "free" check-ups,
free servicing, trade-in or credit for non-use of any warranty
(excepting manufacturer's warranty), then ▇▇▇▇▇▇▇ agrees to indemnify
Bank One for any loss relating to a Cardholder's claims for failure of
▇▇▇▇▇▇▇ or a third-party which ▇▇▇▇▇▇▇ has contracted with or through,
if any, to provide the warranty or service offered or sold by or
through ▇▇▇▇▇▇▇.
▇. ▇▇▇▇▇▇▇ grants to Bank One the right to audit and review all
terms and conditions of all said warranties or servicing agreements or
contracts (including copies of all applicable documents, internal
audits and reviews of warranty providers and/or insurance underwriters
of policies regarding said warranties, services or contracts) annually,
or more often as reasonably determined by Bank One. Bank One may
require ▇▇▇▇▇▇▇ to establish an escrow account as provided for herein
to insure coverage of said warranties, services or contracts whether or
not same is insured by a third party insurance carrier if Bank One
reasonably believes that ▇▇▇▇▇▇▇ or the insurance carrier does not have
sufficient financial capacity to honor the warranties, services or
contracts.
12. CREDIT AND TRANSACTION APPLICATION PROCESSING HOURS.
A. Bank One's credit application processing and credit approval
department's hours of operation are set forth below; however, same is
subject to the availability of information necessary to make credit
decision from the credit bureaus serving the market area(s) in which
Applicants resides. Such Bank One hours shall apply Three Hundred
Sixty-One (361) days (excluding New Year's Day, Easter Sunday,
Thanksgiving Day and Christmas Day) per year as follows:
Monday - Saturday 8 a.m. - 12:00 midnight
(Eastern Time)
Sunday 11:00 a.m. - 9:00 p.m.
(Eastern Time)
Bank One and ▇▇▇▇▇▇▇ may, however, establish additional credit
application processing hours as they shall mutually agree.
B. Transaction processing by Bank One will be offered twenty-four
(24) hours a day, Three Hundred Sixty-Five (365) days a year except
when a disaster beyond the reasonable control of Bank One occurs.
13. ADVERTISING.
▇. ▇▇▇▇▇▇▇ will:
(i) Display upon its premises in a manner approved by Bank
One, and agreed to by ▇▇▇▇▇▇▇, decals, signs or other
advertising materials supplied by Bank One which are intended
to notify the public that ▇▇▇▇▇▇▇ offers and accepts the Plan
Card;
(ii) Display the appropriate Bank One service marks, logo
types and Verbiage on all promotional materials and
advertising, including but not limited to forms of print
medium, in which the front of the Plan Card is depicted;
(iii) State on all advertising referencing the Plan that the
Plan is a "credit service of ▇▇▇▇ ▇▇▇, ▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
offered through ▇▇▇▇▇▇▇" (the "Verbiage");
Page 38
13
(iv) Not represent, either in writing at any time or orally
(as best as ▇▇▇▇▇▇▇ can control), that the Plan or the Plan
Card is owned or controlled by ▇▇▇▇▇▇▇ or refer to the Plan or
Plan Card as "Our Plan" or "Our Plan Card"; and,
(v) Follow any commercially reasonably advertising guidelines
relative to the Plan issued by Bank One from time to time.
B. Bank One and ▇▇▇▇▇▇▇ agree that the following guidelines shall
control use of the Plan name ▇▇▇▇ and logo and the Bank One ▇▇▇▇ and
logo:
(i) "More Value" shall be used as the name of the Plan;
(ii) Applications shall include the Plan ▇▇▇▇ and logo
and the Bank One name, logo and Verbiage;
(iii) Plan disclosures, Cardholder Agreements and the
Cardholder periodic billing statements will contain ▇▇▇▇▇▇▇'
name and logo, the Plan name and logo and the Bank One name,
logo and Verbiage; and
(iv) The letterhead for general correspondence to Cardholders
and others relating to the Plan shall include only the Bank
One name and logo. The correspondence shall reference that it
is concerning the Plan;
C. Bank One and ▇▇▇▇▇▇▇ agree to mutually cooperate in good faith
in determining the manner their respective names, logos and Verbiage
are used on documentation relating to the Plan. Mutual consent of the
parties shall be required for specific layouts for such documents.
14. USE OF ▇▇▇▇▇▇▇' TRADEMARKS AND TRADENAMES.
A. Bank One acknowledges that the term "▇▇▇▇▇▇▇" is a registered
trademark owned by ▇▇▇▇▇▇▇ and that during the term of this Agreement
and any renewal thereof, Bank One is hereby granted a limited,
nonexclusive license, to use depictions of the Plan Card, and Plan Name
or other names, trademarks, tradenames or service marks (collectively
the "Marks"), owned by ▇▇▇▇▇▇▇ in a fashion approved by ▇▇▇▇▇▇▇ in
writing from time to time, in its advertising, signs, brochures, forms
and the like, provided that Bank One uses such Marks only in a fashion
approved by ▇▇▇▇▇▇▇ and only in connection with the selling or
servicing of the Plan. Bank One recognizes that upon termination of
this Agreement by either party for any reason whatsoever, Bank One
shall immediately cease and discontinue to use any of ▇▇▇▇▇▇▇' Marks
and shall have no interest or right to use any ▇▇▇▇▇▇▇ ▇▇▇▇ for any
purpose thereafter except as to collection of Accounts existing at date
of termination.
▇. ▇▇▇▇▇▇▇ acknowledges that the term "Bank One" is a registered
trademark of Bank One and that during the term of this Agreement, and
any renewal thereof, ▇▇▇▇▇▇▇ is hereby granted a limited, nonexclusive
license to use depictions of the Plan Card, Plan Name and other Marks
owned by Bank One in a fashion approved by Bank One in writing, from
time to time, in its advertising, signs, brochures, forms and the like,
provided that ▇▇▇▇▇▇▇ uses such Marks only in a fashion approved by
Bank One and only in connection with the selling or servicing of the
Plan. ▇▇▇▇▇▇▇ recognizes that upon termination of this Agreement by
either party for any reason whatsoever, ▇▇▇▇▇▇▇ shall immediately cease
and discontinue to use any of the Bank One Marks and shall have no
interest or right to use any Bank One ▇▇▇▇ for any purpose thereafter
except as to collection of Accounts existing at the date of
termination.
15. ARTWORK.
▇▇▇▇▇▇▇ agrees to provide "camera ready" artwork for the design, but
not substantive content, of the Plan Card, periodic billing statements and
Applications, at ▇▇▇▇▇▇▇' expense. Said artwork will be in accordance with and
shall meet Bank One specifications.
Page 39
14
16. TELECOMMUNICATION REQUIREMENTS.
A. Facsimile machines of reasonable quality and quantity as
determined by Bank One and supporting telecommunication lines necessary
for the transmission of credit applications are required for each of
▇▇▇▇▇▇▇' store locations. Said facsimile machines and supporting
telecommunication lines shall be in accordance with Bank One
specifications. A Bank One Authorization/Data Capture Terminal is also
required for each store location; such Terminal shall be provided by
Bank One.
B. Transaction Drafts must be transmitted electronically through
the medium of the Bank One Authorization/Data Capture Terminal
utilizing the Bank One Data Capture Network.
C. All Transactions must be authorized and transmitted
electronically through the medium of the Bank One/▇▇▇▇▇▇▇ electronic
interface network.
17. PLAN ADMINISTRATOR.
Each party shall name a Plan administrator/manager as the key contact
for the other party for any and all questions, comments, problems or suggestions
concerning the Plan.
18. TERM/TERMINATION.
A. This Agreement shall have a term of five (5) years (the
"Initial Term") from the Effective Date and shall be automatically
renewed for successive five (5) year terms ("Renewal Terms")
thereafter, subject to the rights of termination stated herein.
B. Either Bank One or ▇▇▇▇▇▇▇ may give written notice to the
other party of its intent to terminate the Plan at least One Hundred
Eighty (180) days prior to the then scheduled termination date of the
Initial Term or any Renewal Term hereof, and the obligation of Bank One
to continue to extend credit to Cardholders hereunder shall terminate
on the scheduled termination date.
C. In the event of termination of the Plan, the Reserve Account
shall continue to be funded until all Accounts are paid in full or
charged off under the Plan, unless an alternative arrangement is agreed
upon by both parties in writing. In the event of termination of the
Plan, the provisions of this Section will continue in full force and
effect as to all Account outstanding balances on the date of such
termination until all such Accounts are paid in full or charged off.
D. During the period after notice of termination is given and
before the scheduled termination date, the parties shall cooperate to
provide for an orderly transition. Bank One shall maintain existing
application response times, credit policies, and Cardholder Agreement
terms and conditions, defined as those in effect prior to any proposed
change. ▇▇▇▇▇▇▇ shall continue to offer Plan financing and encourage
use of the Plan by Cardholders.
E. In the case of termination of the Plan, the provisions of this
Agreement will continue in full force and effect as to all Accounts
outstanding on the date of such termination until all such Accounts are
paid in full or charged off. Any balance in the Reserve then remaining
shall be refunded to ▇▇▇▇▇▇▇.
19. RIGHTS UPON TERMINATION.
Except as otherwise provided in this Agreement, and except in the case
of any willful default, neither ▇▇▇▇▇▇▇ nor Bank One shall have any obligations
to the other hereunder following termination nor, by reason of the termination
of this Agreement, be liable to the other for compensation, reimbursement or
damages, either on account of present or prospective profits, on sales or
anticipated sales, or on account of expected investments or commitments made in
connection therewith, or in connection with
Page 40
15
the establishment, development or maintenance of the public good will of ▇▇▇▇▇▇▇
or Bank One or on account of any condition or thing whatsoever.
20. ADDITIONAL TERMINATION RIGHTS OF BANK ONE.
Notwithstanding anything to the contrary herein, Bank One may terminate
this Agreement upon written notice to ▇▇▇▇▇▇▇ if Federal or State of Ohio
legislation is enacted which limits the interest rate, fees, or other charges
which national or State of Ohio banks may assess on credit cards to such an
extent that, in Bank One's sole and exclusive determination, its yield on the
Plan will be materially adversely impacted; or Bank One may terminate service in
a particular state if that state passes and enacts new legislation, or if claims
by a state governmental authority or law established by court decision indicates
that Bank One is subject to existing legislation, which adversely affects Bank
One's ability to do business in that state or makes it unfeasible, in Bank One's
sole determination, to continue to do business in that state at the interest
rate and/or fees normally charged by Bank One for credit extended under the
Plan, unless ▇▇▇▇▇▇▇ agrees, with the consent of Bank One, which such consent
shall not be unreasonably withheld, to pay a discount, impose additional charges
upon Cardholders or take such other action or combination of actions as are
necessary to correct the materially adverse impact to Bank One. Bank One's
notice of termination pursuant to this Section shall specify the effective date
of such termination which shall be not earlier than the effective date of any
new legislation or one hundred eighty (180) days, whichever is earlier, and
shall further specify the reasons for termination.
21. DEFAULT.
Either party shall have the right to terminate this Agreement in the
event of a default by the other party of the terms and conditions of the
Agreement which is not cured within thirty (30) days following receipt of
written notice of such default or specify to the other party the particular
manner and time frame for curing the default (if not curable with such 30 day
period). The party giving the notice of default may permit the allegedly
defaulting party to cure a default which cannot be cured within the 30 day
period without waiving its rights to terminate the Agreement based on the
alleged default or any other default under the Agreement. If at the end of such
30 day period (or other period agreed upon by the parties), the default has not
been cured, the party giving notice of default may give notice of termination.
Such notice shall be effective one hundred eighty (180) days from the date of
such notice. During the 180 day period, the parties shall continue to adhere to
their respective obligations under this Agreement. The right to terminate the
Agreement pursuant to this paragraph shall also be available to either party in
the event either party files a petition pursuant to any chapter of the
Bankruptcy Code or if a petition is filed against either party pursuant to any
chapter of the Bankruptcy Code and not dismissed within forty (40) days after
such filing, or if either party becomes insolvent, makes an assignment for the
benefit of its creditors, files a petition or otherwise seeks relief under or
pursuant to any other bankruptcy, insolvency or reorganization statute or
proceeding, or if either party dissolves, discontinues or substantially
discontinues its business, or if a conservator, receiver, trustee, or similar
officer is appointed for either party or for a substantial portion of either
party's business or assets, or if any judgment, writ of attachment, execution,
levy or similar process against either party is issued with respect to any
substantial part (valued at ten percent (10%) or more of the total tangible
assets) of the property of either party, the other party may, at its sole
election, terminate this Agreement by written notice to the other, which notice
is waived by and need not be given if the termination is due to the filing of a
petition pursuant to any chapter of the Bankruptcy Code, or in the event of
fraud or misrepresentation by the other party. Notwithstanding, any isolated
acts of fraud or misrepresentation by an employee of ▇▇▇▇▇▇▇, such shall not be
considered grounds for default provided ▇▇▇▇▇▇▇ reimburses Bank One for any
reasonable expenses incurred as a result of such acts.
22. CHARGE BACK AND SET OFF.
In order to assure, implement and maximize Bank One's rights of Charge
Back and Set off, and their availability to Bank One for any and all
indebtedness and obligations of ▇▇▇▇▇▇▇ to Bank One hereunder, whether now
existing and hereafter incurred:
▇. ▇▇▇▇▇▇▇ understands and recognizes that each Transaction
creates a contingent and unmatured claim for Charge Back in favor of
Bank One against ▇▇▇▇▇▇▇.
▇. ▇▇▇▇▇▇▇ irrevocably grants to Bank One a right of Set off in
and to any of ▇▇▇▇▇▇▇' funds, whether in an Escrow Account or not, now
or hereafter
Page 41
16
due or to become due to ▇▇▇▇▇▇▇ from Bank One, together with the
proceeds thereof. ▇▇▇▇▇▇▇ also irrevocably grants to Bank One a lien
and security interest solely in and to any of ▇▇▇▇▇▇▇' funds in
any said funds whether in an Escrow Account or not. Any such funds,
money or amounts may be commingled with other funds of Bank One and
need not be maintained in any separate account.
C. The right of ▇▇▇▇▇▇▇ to receive any amounts due or to become
due from Bank One is expressly subject and subordinate to the Charge
Back, Set off and lien rights of Bank One with respect to claims that
are liquidated, fixed or matured. No failure of Bank One to exercise
its rights of Charge Back, Set off or lien and no course of conduct by
Bank One in not exercising its rights of Charge Back, Set off or lien
shall in any respect constitute a waiver of or impair the rights and
remedies of Bank One to exercise at any subsequent time the rights of
Charge Back, Set off and lien provided for in this Agreement and under
applicable law.
▇. ▇▇▇▇▇▇▇ agrees to duly exercise and deliver to Bank One such
instruments and documents as Bank One may reasonably request to perfect
and confirm the lien, security interest, right of Set off and
subordination set forth in this Agreement.
E. In recognition that each Transaction creates a contingent and
unmatured claim for Charge Back in favor of Bank One against ▇▇▇▇▇▇▇
for the amount that Bank One is required, or has the right, to pay to
or repurchase with respect to any fee, discount, customer credit and
adjustment, charge, fine, assessment, penalty or other item which may
be charged back to ▇▇▇▇▇▇▇ by Bank One, ▇▇▇▇▇▇▇ and Bank One hereby
agree that this Agreement constitutes a contract to extend debt
financing or financial accommodations by Bank One to ▇▇▇▇▇▇▇.
23. INDEMNIFICATION.
▇. ▇▇▇▇▇▇▇ agrees to indemnify Bank One and to hold Bank One
harmless from and against any and all actions, lawsuits, complaints,
liabilities, losses, claims, damages and expenses (including, without
limitation, reasonable fees and disbursements of counsel) suffered,
sustained, incurred, paid or required to be paid by Bank One, whether
filed or claimed by consumers or instrumentalities of the Federal or
state governments:
(i) Arising out of or resulting from the breach,
incorrectness, or incompleteness of any representation,
warranty or covenant made by ▇▇▇▇▇▇▇ in this Agreement or in
any other instrument delivered pursuant hereto;
(ii) Its actions under the Plan and in conducting its
business;
(iii) Any failure on ▇▇▇▇▇▇▇' part to comply with any
local, state or federal statute, law or regulation with regard
to the validity and legality of ▇▇▇▇▇▇▇' business;
(iv) Any and all aspects of ▇▇▇▇▇▇▇' business including,
but not limited to the selection, use, and operation of sales
agreements used in conjunction with a Transaction with
Cardholders;
(v) Any and all local, state or federal filings,
reports, disclosures, taxes and the like required of ▇▇▇▇▇▇▇;
(vi) Any and all product liability claims or condition,
quality, or failure claims arising from or in anyway related
to Products including any warranty, service or contract as set
forth in Section Eleven (11) purchased from ▇▇▇▇▇▇▇ with a
Plan Card; or
(vii) Acts or omissions of Bank One performed in response
to requests or instructions given by ▇▇▇▇▇▇▇ to Bank One.
▇▇▇▇▇▇▇ hereby guarantees that Bank One shall suffer no loss
on a Cardholder Account as a result of a claim with respect to
which it is entitled to be
Page 42
17
indemnified. Provided, however, that nothing herein shall
operate to protect or indemnify Bank One from any claim or
action arising out of or based on a request or conduct of
Bank One, its agents or employees.
B. Bank One agrees to indemnify ▇▇▇▇▇▇▇ and to hold ▇▇▇▇▇▇▇
harmless from and against any and all actions, lawsuits, complaints,
liabilities, losses, claims, damages and expenses (including, without
limitation, reasonable fees and disbursements of counsel) suffered,
sustained, incurred, paid or required to be paid by ▇▇▇▇▇▇▇, whether
filed or claimed by consumers or instrumentalities of the Federal or
state governments:
(i) Arising out of or resulting from the breach,
incorrectness, or incompleteness of any representation,
warranty or covenant made by Bank One in this Agreement or in
any other instrument delivered pursuant hereto;
(ii) Its actions under the Plan and in conducting its
business;
(iii) Any failure on Bank One's part to comply with any
local, state or federal statute, law or regulation with regard
to the validity and legality of Bank One's business;
(iv) Any and all local, state or federal filings, reports,
disclosures, taxes and the like required of Bank One; or
(v) Acts or omissions of ▇▇▇▇▇▇▇ performed in response to
requests or instructions given by Bank One to ▇▇▇▇▇▇▇. Bank
One hereby guarantees that ▇▇▇▇▇▇▇ shall suffer no loss on a
Cardholder Account as a result of a claim with respect to
which it is entitled to be indemnified. Provided, however,
that nothing herein shall operate to protect or indemnify
▇▇▇▇▇▇▇ from any claim or action arising out of or based on a
request or conduct of ▇▇▇▇▇▇▇, its agents or employees.
C. Each party agrees to give prompt written notice to the
indemnifying party of any third-party claim, action or proceeding as to
which it may request indemnification hereunder. Each party will
cooperate with the other party in determining the validity of any such
third-party claim, action or proceeding. The indemnifying party
hereunder shall have the right to defend with counsel reasonably
satisfactory to the indemnified party any such third-party claim,
action or proceeding, subject to the right of the indemnified party, at
its own expense, to participate in the defense of the same. The
indemnified party shall have the right to be represented by counsel and
accountants, at its own expense, and shall be kept fully informed as to
such claim at all stages thereof whether or not it is represented by
its own counsel. Until the indemnifying party shall have so assumed the
defense of any such claim, or if the indemnified party shall have
reasonably concluded that there are likely to be defenses available to
the indemnified party that are different from or in addition to those
available to the indemnifying party (in which case the indemnifying
party shall not be entitled to assume the defense but shall have the
right to be represented by counsel and accountants, at its own expense,
and shall be kept fully informed as to such claim at all states thereof
whether or not represented by its own counsel), all legal or other
expense reasonably incurred by the indemnified party shall be borne by
the indemnifying party. The indemnifying party shall make available to
the indemnified party and its attorneys and accountants all books and
records or the indemnifying party relating to such action and the
parties hereto agree to render to each other such assistance as they
may reasonably require of each other in order to facilitate the proper
and adequate defense of any such action. Neither the indemnifying party
nor the indemnified party shall settle or compromise any such
third-party claim, action or proceeding without the prior written
consent of the other which consent shall not be unreasonably withheld.
Without limiting the generality of the foregoing, it shall not be
deemed unreasonable to withhold consent to a settlement involving
injunctive or other equitable relief against the indemnified party or
its assets, employees or business.
D. Each party shall indemnify the other on demand for said
damages, claims, etc., suffered by said party and such reimbursement
shall be secured by this Agreement.
E. Neither party shall be liable for any consequential damages
arising from the other's actions under this Agree-
Page 43
18
ment. Both parties waive any claim for punitive damages arising from
the other party's actions under this Agreement. Both parties also waive
their right to request a trial by jury in any litigation involving
▇▇▇▇▇▇▇ and Bank One.
24. ESCROW ACCOUNT.
Bank One, at the termination of this Agreement, or prior thereto if
deemed necessary by Bank One, in its sole and exclusive reasonable
determination, which determination shall be based upon:
(i) The material financial deterioration of ▇▇▇▇▇▇▇, as in
comparison to ▇▇▇▇▇▇▇' previous financial statements for the
last six (6) to twelve (12) month period;
(ii) A significant breach of this Agreement and/or of the
Operating Procedures by ▇▇▇▇▇▇▇ which creates a significant
financial risk to Bank One;
(iii) Excessive disputes or Charge Backs against ▇▇▇▇▇▇▇ by
Cardholders and or Bank One; and/or
(iv) Possible excessive warranty, services or contract
claims, may require ▇▇▇▇▇▇▇ to open and maintain with bank
One, a non-interest bearing Escrow Account in an amount equal
to one (1) months' Plan Card sales or projected Plan Card
sales. ▇▇▇▇▇▇▇ agrees to pay said sum to Bank One promptly on
demand by Bank One. If ▇▇▇▇▇▇▇ fails or refuses to pay said
sum as required, Bank One may debit ▇▇▇▇▇▇▇' checking account,
or withhold payment(s) owed to ▇▇▇▇▇▇▇. Bank One will not pay
▇▇▇▇▇▇▇ any interest on the funds in the Escrow Account. Bank
One will release the money held in the Escrow Account to
▇▇▇▇▇▇▇, if any remains, not later than one hundred eighty
(180) calendar days after the opening date of the Escrow
Account and ▇▇▇▇▇▇▇ will be provided with an accounting of any
money taken out of the Escrow Account.
25. EXCLUSIVE PROPERTY.
All Accounts, Applicant and Cardholder names and information, files,
specifications, data, programs, forms and procedures utilized or developed by
Bank One in connection with services under this Agreement shall be and will
remain the property of Bank One and may only be used by ▇▇▇▇▇▇▇ in accordance
with the terms of this Agreement.
26. INSPECTION RIGHTS.
Each party shall have the right, at reasonable times and at reasonable
intervals, at its own expense, to send a reasonable number of its employees,
consultants or agents to observe the operations of the other and shall cooperate
with the other in making arrangements for the same. Each party shall also have
the right to audit the financial records of the other relating to this
Agreement, either by its employees, consultants, agents or independent certified
public accountants, provided, that the party requesting same bears all costs and
expenses of the audit and provided that the audit is conducted with reasonable
prior notice and during normal business hours.
27. WAIVER.
No delay or failure of Bank One or ▇▇▇▇▇▇▇ to exercise any right, power
or privilege set forth in, or resulting from, this Agreement, shall affect such
right, power or privilege; nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power or
privilege affect such right. The rights and remedies of Bank One and ▇▇▇▇▇▇▇
hereunder are cumulative and not exclusive. Any waiver, permit, consent or
approval of any kind by Bank One or ▇▇▇▇▇▇▇ of any breach or default hereunder,
or any such waiver of any provision or conditions hereof, must be in writing and
shall be effective only to the extent set forth in such writing. No waiver shall
be deemed to be a continuing waiver in respect to any subsequent breach or
default either of similar or different nature unless expressly so stated in
writing.
Page 44
19
28. FINANCIAL STATEMENTS.
The financial statements and other information heretofore furnished by
▇▇▇▇▇▇▇ to Bank One fairly represents the financial condition of ▇▇▇▇▇▇▇ and,
since such time, there have been no material adverse change in the condition
(financial or otherwise) or operations of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ shall furnish to Bank
One annually, audited financial statements of ▇▇▇▇▇▇▇ prepared and certified by
certified public accountants, which will include a statement of income and
expense in the operation of ▇▇▇▇▇▇▇' business. In addition, ▇▇▇▇▇▇▇ agrees to
furnish to Bank One from time to time such other financial information as Bank
One may reasonably request. Bank One shall hold all such financial information
in strict confidence.
29. MODIFICATION.
This Agreement may be modified from time to time by mutual written
agreement signed by both parties, except for terms and/or conditions which Bank
One has unilateral control which Bank One may modify by sending written notice
of such modification, together with the effective date thereof, to ▇▇▇▇▇▇▇.
30. ASSIGNMENT; SECURITIZATION.
A. All terms and provisions of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
transferees, successors and assigns; provided, however, that this
Agreement and all rights, privileges, duties and obligations of the
parties hereto may not be assigned or delegated by either party without
the written consent of the other party. Notwithstanding the foregoing,
Bank One may without such consent assign any or all of its rights and
obligations hereunder to BANC ONE CORPORATION or to any subsidiary or
affiliate wholly owned (directly or indirectly) by BANC ONE
CORPORATION, but only if BANC ONE CORPORATION or such subsidiary or
affiliate, as the case may be, shall, prior to such assignment, have
obtained all necessary governmental or regulatory approvals and
authorizations and have obtained, filed and satisfied all other
consents, authorizations, notifications, requirements and conditions
necessary for it to receive such assignment and engage fully in the
activities contemplated by it without satisfying any further such
requirements whatsoever or (b) sell Plan Accounts as accounts
receivable for securitization; however, retaining servicing thereon.
BANC ONE CORPORATION or such subsidiary or affiliate, as the case may
be, shall thereafter be subject to, bound by and entitled to the
benefits of the provisions of this Agreement with the same effect as
though it were an original party hereto; provided, however, that no
such assignment shall relieve Bank One of any of its obligations or
liabilities hereunder which are not performed or discharged fully by
BANC ONE CORPORATION or such subsidiary or affiliate.
B. Additionally, no assignee for the benefit of creditors, successor in
interest, custodian, receiver, trustee in bankruptcy, debtor in
possession, sheriff or any other officer of a court, or other person
charged with taking custody of a party's assets or business, shall have
any right to continue or to assume or to assign this Agreement.
31. DELIVERY OF CARDHOLDER LIST; OPTION TO PURCHASE PORTFOLIO.
A. Upon receiving or giving notice of termination of this Agreement,
Bank One will provide ▇▇▇▇▇▇▇ the Cardholder List in a mutually
acceptable format, and such other pertinent information as can be
mutually and reasonably agreed upon, and both parties will use their
best efforts to ensure a smooth transition. Bank One will also update
this list, at reasonable intervals to be agreed upon by the parties
hereto, between notice and actual termination. At termination a final
list will be given.
B. In the event a notice of termination of this Agreement is given by
either party, ▇▇▇▇▇▇▇ shall have sixty (60) calendar days from the
notification date in which to advise Bank One that ▇▇▇▇▇▇▇ desires to
buy from Bank One all the Accounts not previously charged off. If
▇▇▇▇▇▇▇ elects to buy said Accounts, then the parties shall use their
best efforts and good faith efforts to negotiate and sign a purchase
agreement within sixty (60) days from receipt of the notice of
termination. If a purchase agreement is not signed between the parties
within said sixty (60) day period, then Bank One may at its option,
negotiate, and enter into, a purchase agreement with any other entity.
32. CONFIDENTIALITY.
Page 45
20
The terms of this Agreement are, and shall continue to be, confidential
and shall not be disclosed to any third parties without the prior written
authorization of the other party, except as otherwise provided herein or as
required by law. Each party will hold, and will cause its officers, directors,
employees, representatives, agents, consultants and advisors to hold, in strict
confidence, all documents and information obtained by them with respect to the
other party hereto in connection with the transactions contemplated by this
Agreement except to the extent that such information can be shown to have been
or to have become:
(i) Generally available to the public other than as a
result of a disclosure by the officers, directors, employees,
representatives, agents, consultants or advisors of such
party;
(ii) Made available on a non confidential basis from a
source other than the officers, directors, employees,
representatives, agents, consultants or advisors of such
party;
(iii) Known to such party prior to the date of disclosure
of such information by the other party, and will not release
or disclose such information to any other person, except their
auditors, attorneys, and other consultants in connection with
the transactions contemplated by this Agreement.
Notwithstanding, permission from the other party shall not be
necessary for disclosures pursuant to any federal, state or
local governmental body, laws or regulations, in which case
notice shall be promptly given to the other party. Prior
authorization shall be required for disclosure of information
to a potential successor to the other party or to a party
which may purchase the Cardholder Accounts. In either case,
the potential successor shall sign a written nondisclosure
agreement containing terms similar to those contained herein;
(iv) As a result of a final non-appealable order from a
court of competent jurisdiction.
33. SEVERABILITY.
If any of the provisions or parts of this Agreement are determined to
be illegal or invalid under any applicable statute or rule of law, such
provision(s) or part(s) shall be deemed omitted without affecting any other
provision(s) or part(s) of this Agreement, which shall remain in full force and
effect.
34. NOTICES.
All notices required under this Agreement shall be in writing and shall
be effective upon sending written notice of termination via certified or
registered mail, postage prepaid, return receipt requested, or by delivery to an
overnight mail service such as Western Union Mailgram or Federal Express. The
notice may be sent to the appropriate address listed below unless the sending
party has received written notice of a different address.
Bank One: Banc One Private Label Credit Services
Attn: President
Kettering Business Park
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
cc: Banc One Corporation
Attn: General Counsel
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇, Inc.
Page 46
21
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President
cc: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
35. MISCELLANEOUS.
A. Except to the extent superseded by Federal law applicable to
national banks, this Agreement shall be subject to and construed under
the laws of the State of Ohio.
B. This Agreement and the Addenda hereto contain the entire Agreement
between the parties regarding the subject matter hereof. All prior
agreements and letters, and any amendments or modifications thereto,
between Bank One and ▇▇▇▇▇▇▇ are terminated and merged into this
Agreement and are no longer in force or effect upon execution hereof by
Bank One and ▇▇▇▇▇▇▇. If there is any conflict or ambiguity between
terms of this Agreement and such prior terms, the terms of this
Agreement shall govern. All oral representatives are fully merged in
this Agreement.
C. With the exception of the "Definitions" listed in the preamble, the
provision headings contained in this Agreement are for convenience only
and shall at no time be deemed to define, describe, limit, or enlarge
the meaning, intent, or scope of any provision of this Agreement, or to
in any way affect the interpretation of this Agreement. All words used
herein shall be of such gender or number as the circumstances require.
D. All obligations incurred or existing under this Agreement as of the
date of termination or default, whether then known by either party to
exist, and whether specifically referred to elsewhere herein or not,
shall survive such termination or default.
E. Upon failure of ▇▇▇▇▇▇▇ to meet any of its obligations set forth in
this Agreement, Bank One has the right to collect any amount due, or
which may become due, to Bank One from any accounts belonging to
▇▇▇▇▇▇▇ held by Bank One or by any other financial institution with
contemporaneous notice to ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ gives Bank One a
security interest in all such accounts for that purpose.
▇. ▇▇▇▇▇▇▇ shall notify Bank One of any judgments, writs, warrants of
attachment, executions or levies against any substantial part of
▇▇▇▇▇▇▇' assets (valued at ten percent (10%) or more of ▇▇▇▇▇▇▇' total
assets) not later than thirty (30) days after ▇▇▇▇▇▇▇ obtains knowledge
of any such judgments, writs, warrants of attachment, executions or
levies.
G. In all cases under this Agreement wherein consent is required of one
or both of the parties, the decision by the parties shall be made in
good faith and not be unreasonably withheld. Furthermore, the parties
agree that each shall in good faith perform their obligations under
this Agreement.
H. This Agreement may be executed in any number of counterparts, all of
which together shall constitute one and the same instrument, but in
making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
I. The parties agree that the Plan Card Processing Agreement attached
hereto as Addendum "C" and any operating procedures, guidelines and/or
manuals developed by the parties regarding the administration of the
Plan will be, and hereby are, incorporated herein as part of this
Agreement.
Page 47
22
IN WITNESS WHEREOF, the parties hereto have set their hands upon the
day and year first above written
WITNESS: ▇▇▇▇▇▇▇, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Executive Vice President
BANK ONE, NA
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Senior Vice President
Page 48
23
ADDENDUM "A"
TO PLAN CARD PROCESSING AGREEMENT
AUTHORIZATION TO TRANSACT TELEPHONE OR MAIL ORDERS
A. Bank One specifically authorizes ▇▇▇▇▇▇▇ to sell its own Products,
services or warranties by telephone or mail order and to submit said Plan
Transactions to Bank One. When a Transaction is based on a telephone order or
mail order the Transaction Draft may be completed without a Cardholder signature
or a Plan Card imprint; however, ▇▇▇▇▇▇▇ shall type or print legibly on the
Transaction Draft the following information as it appears on the Plan Card: the
account number and the embossed name. ▇▇▇▇▇▇▇ shall also type or print legibly
"telephone order" or "mail order", as applicable, on the Cardholder signature
panel of the Transaction Draft.
▇. ▇▇▇▇▇▇▇ specifically agrees that a Transaction representing a sale
made by telephone or mail order may be charged back to ▇▇▇▇▇▇▇ in accordance
with the charge back provisions contained in the Agreement if at any time any
defense or problem is made or presented to Bank One or found by Bank One,
questioning the validity or authorization of the Transaction.
C. Any conflict between this Addendum and any other Agreement provision
will be controlled by this Addendum.
Page 49
24
ADDENDUM "B"
PRIVATE LABEL ADVERTISING REQUIREMENTS
Bank One encourages you to promote your "MORE VALUE" program. You can
do so by advertising in your local newspaper and directory service. You can also
develop your own advertising to suit your specific needs. Due to the complexity
of advertising credit programs, always have your legal counsel review such
advertising. Bank One reserves the right to approve or disapprove all aspects of
the advertising and promotional material, and credit features used in your
advertisements. To comply with Federal Regulations (Truth in Lending Regulation
A-Section 226.16) among others, use the following guidelines when developing
your own advertising:
1. The full name of the service can be any of these:
* "MORE VALUE"
* Bank One's "MORE VALUE" card or credit card
* "MORE VALUE", a credit service of Bank One, Dayton, NA offered
through ▇▇▇▇▇▇▇.
2. Do not insert your company name in front of the "MORE VALUE"
program name.
3. Do display on your premises all decals, signs, or other advertising
materials supplied by Bank One, which are intended to notify the public
that you offer and accept the "MORE VALUE" credit card.
4. Do not imply that you own or operate the "MORE VALUE" program.
Don't use terms such as "exclusive" and "only from".
5. You must display the Bank One logo on all advertising in which the
front of the "MORE VALUE" credit card is used.
6. Do not imply that "MORE VALUE" is extending credit. Use one of the
following disclaimers (in small print).
* "MORE VALUE" is a credit service of Bank One, NA, Dayton,
Ohio.
* "MORE VALUE" is a credit card program of Bank One, NA,
Dayton, Ohio offered through "▇▇▇▇▇▇▇".
7. You should use phrases such as:
* Low monthly payment
* No annual membership fee
8. Do not use terms such as "free" and "interest free".
9. Do not alter the "MORE VALUE" credit card or the Bank One logo.
10. Any Monthly payment quoted in your advertisement must specify the
program name to which the payment refers. If promoting a "MORE VALUE"
minimum payment, specify the program name, "MORE VALUE", in conjunction
with the minimum payment.
11. If featuring a minimum payment, use a disclaimer that includes all
of the following:
* Annual percentage rate
* Percent/minimum payment due each month
Page 50
25
Example:
The minimum monthly payment is 3% of the unpaid
balance, or $10.00, whichever is greater, and is
based on a variable ANNUAL PERCENTAGE RATE ("APR") of
14.73% plus the "Prime Rate" as published in the
"Money Rates" section of The Wall Street Journal on
the 15th calendar day of each month or the next
business day if the 15th day falls on a weekend or
holiday.
Page 51
26
ADDENDUM "C"
PLAN CARD PROCESSING AGREEMENT
This Agreement governs the mechanics of the Plan and the Plan Card in
connection with connection with ▇▇▇▇▇▇▇' sale of Products.
1. PROCEDURES.
The procedures set forth by Bank One in any Operations Guide, Credit
Card Sales Guide, Operating Procedure Manual or other guides/manuals supplied by
Bank One to ▇▇▇▇▇▇▇ at any time ("Procedures"), are hereby incorporated into and
made a part of this Agreement, and the rules and regulations issued by Visa and
MasterCard or any successor thereto, as amended from time to time, shall be
followed by ▇▇▇▇▇▇▇ and shall govern the processing of Transactions initiated
through the medium of the Plan Cards issued to Cardholders. If there exists a
conflict between the Procedures and the rules and regulations issued by Visa or
MasterCard, the Procedures shall control.
2. HONORING THE PLAN CARD.
▇▇▇▇▇▇▇ will honor all valid Plan Cards when properly presented as
payment from a Cardholder for a Transaction. ▇▇▇▇▇▇▇ will not refuse a sale
because it falls below a certain dollar amount. ▇▇▇▇▇▇▇ will have a zero floor
limit ("Floor Limit") for all Plan Card Transactions.
3. COMPLETION OF SALES TRANSACTION DRAFTS AND CREDIT VOUCHERS.
All Transaction Drafts will be on forms supplied or approved by Bank
One and each will be completed in conformity with all applicable laws and
regulations and the terms of this Agreement, and will include, among other
things, the name of the Cardholder, Cardholder's Plan Card number, the imprint
of the Plan Card if the electronic interface is not available, the signature of
the Cardholder, the Transaction date, referencing number (SKU) of the Products
sold that ▇▇▇▇▇▇▇ will be able to identify upon request by Bank One, the total
cash price of the sale, and the city and state wherein the Transaction occurred.
As authorized by separate Addendum "A" to this Agreement, ▇▇▇▇▇▇▇ does not need
to secure the Cardholder's signature or the Plan Card imprint for telephone or
mail order sales. ▇▇▇▇▇▇▇ will compare the signature on the Transaction Draft to
the signature on the Plan Card and if they appear to be different, will contact
Bank One's authorization facility. A copy of the Transaction Draft will be given
to the Cardholder, and one copy, or more, will be retained by ▇▇▇▇▇▇▇.
4. ▇▇▇▇▇▇▇' REPRESENTATIONS OF TRANSACTIONS TENDERED.
A. All Transaction Drafts tendered represent obligations originated
with a Cardholder as a result of a Transaction with ▇▇▇▇▇▇▇ in the
amount set forth on such Transaction Draft for ▇▇▇▇▇▇▇' Products only
and do not involve credit for any other purpose. ▇▇▇▇▇▇▇ will not
knowingly complete any Transaction Draft which is fraudulent, nor
present a Transaction Draft for processing, directly or indirectly,
which did not originate as a result of any act between the Cardholder
and ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ will not tender for acceptance by Bank One any
Transaction Draft as to which it has knowledge of any invalidity or
defense to the collectability of such Transaction Draft; will exercise
due care in filling out forms and processing its work; and will require
no special agreement, condition or security from a Cardholder in
connection with any Transaction Draft. If Bank One determines that
▇▇▇▇▇▇▇ has breached the foregoing provisions of this paragraph, Bank
One, in addition to any other rights it may have, may offset funds in
▇▇▇▇▇▇▇' account or any other account maintained by Bank One.
▇. ▇▇▇▇▇▇▇ additionally warrants and represents that no Transaction
Draft submitted by ▇▇▇▇▇▇▇ represents a sale by ▇▇▇▇▇▇▇ which was made
by telephone or mail order except as permitted in Addendum "A" hereto.
Bank One reserves the right to unilaterally withdraw said authorization
without notice to ▇▇▇▇▇▇▇.
Page 52
27
5. SETTLEMENT ACCOUNT.
A. Bank One will pay ▇▇▇▇▇▇▇ the total face amount of each Transaction
Draft accepted hereunder. ▇▇▇▇▇▇▇ must maintain a commercial checking
account with any Automated Clearing House (hereinafter "ACH") member
financial institution (which may include Bank One) and will authorize
"pre-notifications" through any authorized transfer system (such as the
Central Regional Automated Funds Transfer System, Inc.). ▇▇▇▇▇▇▇
authorizes ongoing credits and debits to such account pursuant to the
terms of this Agreement. Bank One will transfer funds to or from said
account for the purpose of settling Transaction Drafts, charging
applicable fees, providing refunds, debiting for charge backs, and any
other necessary transactions. ACH transfers will be credited within one
(1) Business Day; Bank One transfers will be credited within one (1)
Business Day.
B. In reference to the above-mentioned account(s), all figures are
subject to final auditing and checking by Bank One, and ▇▇▇▇▇▇▇ agrees
that Bank One may make any corrections necessary without prior notice
to ▇▇▇▇▇▇▇, or may elect to return Transaction Drafts for ▇▇▇▇▇▇▇'
correction.
6. IMPRINTERS AND FORMS.
A. Bank One will provide ▇▇▇▇▇▇▇ with an appropriate number of
Transaction Draft imprinters, which unless otherwise agreed, will
remain the exclusive property of Bank One. ▇▇▇▇▇▇▇ will use such
imprinters whenever possible and will return such imprinters, and any
validation plates, if the same are utilized, upon termination of this
Agreement.
B. Bank One will provide ▇▇▇▇▇▇▇ with an appropriate number of sales
drafts, credit vouchers, and deposit slips upon request from ▇▇▇▇▇▇▇
without charge.
C. Bank One and ▇▇▇▇▇▇▇ will develop mutually acceptable procedures for
the utilization of appropriate forms, imprinters, and other
requirements for processing Transaction Drafts.
7. AUTHORIZATIONS.
In the event of suspicious or unusual circumstances, ▇▇▇▇▇▇▇ will
request a "Code 10" authorization. With the exception of a "Code 10"
authorization, ▇▇▇▇▇▇▇ must advise Bank One of the specific reason(s)
authorization is requested. If authorization is given, ▇▇▇▇▇▇▇ will type or
print legibly on the Transaction Draft the authorization approval code received.
8. UNACCEPTABLE PLAN CARDS.
▇▇▇▇▇▇▇ will not, without authorization, complete a Transaction
involving use of a Plan Card if ▇▇▇▇▇▇▇' authorization request is rejected.
9. RETRIEVAL OF THE PLAN CARD.
If, in response to an authorization request, ▇▇▇▇▇▇▇ is advised to
obtain or hold onto a Plan Card, or if given other instructions, ▇▇▇▇▇▇▇ shall
use its best efforts, by reasonable and peaceful means, to comply with such
advice or such instructions.
10. CASH PAYMENT/DISCOUNTS/DEPOSITS.
▇▇▇▇▇▇▇ will not receive any payments from a Cardholder with respect to
charges for Products which are included on a Transaction Draft resulting from
the use of a Plan Card. ▇▇▇▇▇▇▇ will be entitled under the Fair Credit Billing
Act to grant, or offer to grant, discounts for use of cash to make a purchase.
▇▇▇▇▇▇▇ will not receive moneys from a Cardholder and subsequently prepare and
deposit a credit voucher for the purpose of effecting a deposit thereof to the
account of the Cardholder.
11. ADDITIONAL CHARGE TO CARDHOLDERS.
▇▇▇▇▇▇▇ will not require the Cardholder to pay any part of any fee or
charge assessed by Bank One to ▇▇▇▇▇▇▇, whether
Page 53
28
through any increase in price or otherwise, or to pay any contemporaneous
finance charge in connection with the Transaction in which a Plan Card is used.
12. DISCLOSURE AND STORAGE OF CARDHOLDER INFORMATION.
▇▇▇▇▇▇▇ will not, without the Cardholder's and Bank One's written
consent, sell, purchase, provide, or exchange Plan Card account number
information to any third party other than ▇▇▇▇▇▇▇' agents for the purpose of
assisting ▇▇▇▇▇▇▇ in its business, to Bank One or pursuant to any government
request. ▇▇▇▇▇▇▇ will store all Cardholder account number information in an area
limited to selected personnel and, prior to discarding, will destroy such
information in a manner rendering data unreadable.
13. MULTIPLE TRANSACTION SEGMENTS.
When a purchase is completed by ▇▇▇▇▇▇▇ and two or more Transaction
Drafts are prepared for the purpose of creating individual Cardholder receipts,
a separate authorization shall be obtained for the amount of each Transaction
Draft. For purchases involving multiple cards or other combination of payment
methods accepted for a purchase, each payment segment completed with a Plan Card
shall require authorization for such corresponding amount.
14. IMPRINTER REPAIR/REPLACEMENT/DAMAGE.
Bank One reserves the right to debit ▇▇▇▇▇▇▇' account on a
non-refundable basis, for repair, replacement, handling, shipping, out of pocket
costs and expenses for any imprinter owned by Bank One in the event of one of
the following: the imprinter is not returned to Bank One or its agent at any
time for repair or replacement within ten (10) calendar days when requested to
do so or the imprinter must be replaced as a result of loss, destruction, misuse
or abuse by the ▇▇▇▇▇▇▇. Replacement cost (if necessary) will be the cost of a
new imprinter. All repairs and replacement charges for any imprinter owned by
the ▇▇▇▇▇▇▇ will be borne by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ will be responsible for the loss
of any imprinter and for any damage resulting from improper handling or
operation once the imprinter has been delivered to the ▇▇▇▇▇▇▇.
15. IMPRINTER TAXES.
With respect to any imprinter, ▇▇▇▇▇▇▇ will pay when due: (a) all use,
excise, personal property, ad valorem or other taxes; (b) all assessments, fees
and charges payable with respect to the ownership, possession or rental of the
imprinter, and (c) all expenses resulting from registration, inspection or other
governmental requirements, now or hereafter existing, all of which are imposed
by governmental entities because of the location or use of any imprinter at
▇▇▇▇▇▇▇' place(s) of business.
16. RETURNED MERCHANDISE AND ADJUSTMENTS
▇▇▇▇▇▇▇ will establish a fair policy for the exchange and return of
Products and adjustment of contracts involving services. If ▇▇▇▇▇▇▇ limits
acceptance of returned Products, proper disclosure must be provided to
Cardholder and purchased goods or services must be delivered to the Cardholder
at the time the Transaction takes place. Proper disclosure shall be given if the
words "NO REFUND", "EXCHANGE ONLY" or "IN-STORE CREDIT ONLY" are legibly printed
on the Transaction Draft, receipt or invoice in letters approximately 1/4 inch
high and in close proximity to the space provided for the Cardholder's
signature. ▇▇▇▇▇▇▇ will issue credit vouchers for any reason for Products,
refund, adjustment or cancellation of a sale where the original sale involved a
Plan Card, and such credits must be to the same Account used in the original
sale. Credit vouchers may not exceed the original Transaction amount. ▇▇▇▇▇▇▇
will not make any cash refunds when the Transaction involved the use of a Plan
Card.
17. CHARGE BACKS.
A. Bank One may charge back to ▇▇▇▇▇▇▇ a Transaction when one of
the following occurs:
(i) Billing Error. Where a Cardholder asserts a "billing
error" as defined by Regulation
Page 54
29
Z (12 CFR Part 226), Section 226.13, in the manner and within
the time limits required by said Section, and after giving
▇▇▇▇▇▇▇ an opportunity to respond in accordance with the
Procedures, which shall include a time period of at least ten
(10) Business Days, Bank One determines that a billing error
has occurred;
(ii) Merchandise or Service Dispute. Where a Cardholder
refuses to pay based on an assertion of a dispute about the
quality of the merchandise or services purchased (which is not
a billing error under Regulation Z Section 226.13), including
any alleged breach of warranty provided Cardholder by or
through ▇▇▇▇▇▇▇, Bank One shall request from ▇▇▇▇▇▇▇ for a
written response. If ▇▇▇▇▇▇▇ provides a good faith response as
determined by Bank One which indicated that (a) it is
reasonably addressing the Cardholder's concern, (b) the
Cardholder has not made a good faith attempt to resolve the
dispute, or (c) ▇▇▇▇▇▇▇ is not responsible for the dispute, no
charge back will be made. If no written response is received
within twenty (20) calendar days from Bank One's request, then
a charge back for the amount of the Transaction will be made;
(iii) Operating Regulations Violation. The occurrence of
any one (1) or more of the charge back reasons set forth in
the Operating Regulations of VISA and/or MasterCard;
(iv) Agreement Violations. With respect to any individual
Transaction, failure to comply with authorization procedures,
Transaction production requirements, breach of any
representation or a breach of the processing requirements set
forth in this Agreement or the Procedures;
B. When a charge back may be made pursuant to this paragraph,
▇▇▇▇▇▇▇ agrees that it will reimburse Bank One and that without prior
notice Bank One may charge ▇▇▇▇▇▇▇' account for the full amount of the
Transaction. In the event of any such charge back, Bank One hereby
assigns to ▇▇▇▇▇▇▇ the charged back Transaction, along with all
appropriate documentation, and the right to collect the amount charged
back to ▇▇▇▇▇▇▇.
18. TRANSACTION DRAFT OR VOUCHER RETENTION.
One (1) copy or more of each Transaction Draft and accompanying invoice
or ▇▇▇▇ will be retained by ▇▇▇▇▇▇▇ (held in trust for Bank One) for a period of
seven (7) years from date of the Transaction, filed by date, and such copy shall
be provided to Bank One upon request within five (5) Business Days of such
request. Failure to provide requested Transaction Draft copies on a timely basis
may result in ▇▇▇▇▇▇▇' assumption of liability in settlement of Cardholder
disputes and Bank One shall have the right to charge back the full amount of the
Transaction in question to ▇▇▇▇▇▇▇' account. Upon termination or default of the
Plan, ▇▇▇▇▇▇▇ will secure and store all invoices and Transaction Drafts for Bank
One at ▇▇▇▇▇▇▇' expense or will assemble and send same to Bank One at ▇▇▇▇▇▇▇'
option but Bank One's cost.
19. TRANSACTION DRAFT VERIFICATION
At any reasonable time Bank One may examine and verify all records of
▇▇▇▇▇▇▇ pertaining to Transaction Drafts submitted hereunder. Bank One shall
have no liability or assume any cost with regard to such records other than
reasonable costs of reproducing such records from duplicates provided by
▇▇▇▇▇▇▇.
20. PAYMENT ON TRANSACTION DRAFTS.
Bank One will have the sole right to receive payment on Transaction
Drafts it purchases. ▇▇▇▇▇▇▇ agrees not to ▇▇▇ or to make any collections
thereon, except as it may be specifically authorized by Bank One or in the event
that the Transaction is charged back to ▇▇▇▇▇▇▇. If specifically authorized,
▇▇▇▇▇▇▇ will hold all collections, if any, in trust for Bank One and will
deliver same immediately to Bank One.
21. IMMEDIATE CREDIT FOR INITIAL PURCHASE.
Page 55
30
Bank One will permit ▇▇▇▇▇▇▇ to allow an approved Applicant, for the
initial purchase only, a Plan credit charge in an amount not to exceed the
credit limit established by Bank One ("Immediate Credit"), provided that the
following procedures are adhered to by ▇▇▇▇▇▇▇:
(i) Applicant completes and signs a credit application
applying for issuance of a Plan Card;
(ii) ▇▇▇▇▇▇▇ submits Applicant's completed credit application
to Bank One via a facsimile machine or remote computer
terminal on a timely basis, but in no event more than ten (10)
days from date of application; and
(iii) ▇▇▇▇▇▇▇ processes the initial purchase after obtaining
appropriate authorization from Bank One.
22. CREDIT APPLICATIONS.
▇. ▇▇▇▇▇▇▇ agrees to provide each Applicant at or before the time
that Applicant's credit application is made a copy of the Plan
Agreement.
B. Any credit application which is:
(i) Knowingly falsified by ▇▇▇▇▇▇▇;
(ii) Accepted by ▇▇▇▇▇▇▇ knowing that the application
contains false information; or
(iii) Accepted by ▇▇▇▇▇▇▇ knowing that the Applicant(s)
signature is missing, the date of application is missing, the
identification required to be verified by ▇▇▇▇▇▇▇ has not been
completed (two types of identification are required for all
Applicants, one of which must be a photo identification),
Applicant(s) social security number is missing, Applicant(s)
date of birth is missing, or Applicant(s) printed name is
missing or other requirements as set forth in the Procedures
has not been met, may not be honored, at the discretion of
Bank One, for the purpose of crediting settlement proceeds to
▇▇▇▇▇▇▇' account. If proceeds have been credited to ▇▇▇▇▇▇▇,
then Bank One may charge back to ▇▇▇▇▇▇▇' account said
Transaction (hereinafter a credit application meeting the
criteria of either (i), (ii) or (iii) above, will be known as
a "Problem Application").
C. Any subsequent charge(s) to an Account which was/were honored
by Bank One but later determined to be improper because the Account was
established with a Problem Application, may be charged back to ▇▇▇▇▇▇▇
within a reasonable time after such Problem Application is made aware
to and recognized by Bank One.
23. DATA CAPTURE PROCEDURES.
Bank One will supply ▇▇▇▇▇▇▇ with an approved electronic point of sale
terminal ("POS Terminal") to be used for the electronic authorization and
monetary settlement of Transactions. In accordance, the following is agreed to:
A. Installation
(i) ▇▇▇▇▇▇▇ will install a POS Terminal(s) interconnected to
the Bank One designated authorization system and ▇▇▇▇▇▇▇ will
use a Bank One Transaction Draft imprinter(s), including
validation plate(s) or an approval electronic printer(s). Such
equipment will remain the absolute property of Bank One,
unless otherwise agreed, and ▇▇▇▇▇▇▇ will surrender such
equipment at the request of Bank One.
Page 56
31
(ii) ▇▇▇▇▇▇▇ may have a direct outside business telephone line
for POS Terminal(s). If ▇▇▇▇▇▇▇ chooses to not install a
direct outside business telephone line, ▇▇▇▇▇▇▇ is responsible
for contacting its telephone company and ensuring
compatibility of the POS Terminal(s) with ▇▇▇▇▇▇▇' telephone
system before installation of the POS Terminal(s). Bank One
assumes no liability for damage to ▇▇▇▇▇▇▇' telephone system
resulting from the use of the POS Terminal(s).
B. Use of POS Terminal
(i) ▇▇▇▇▇▇▇ will receive and process all authorizations and
periodically balance all Transactions in accordance with the
terms of this Agreement and the Procedures.
(ii) ▇▇▇▇▇▇▇ in accepting the Plan Cards and using the POS
Terminal, will exercise due care in inputting and processing
▇▇▇▇▇▇▇' work. ▇▇▇▇▇▇▇ ensures the accuracy and adequacy of
information entered through the POS Terminal(s) as evidenced
by the system log maintained by Bank One, and will affect
corrections and adjustments in the manner prescribed in the
Procedures. Bank One is not responsible for ▇▇▇▇▇▇▇ omissions.
(iii) ▇▇▇▇▇▇▇ will record the Bank One provided authorization
number and sequence number on all Transaction Drafts. The
sequence number is to be recorded on all credit vouchers.
(iv) ▇▇▇▇▇▇▇ will obtain an authorization prior to completing
a Transaction and will process said authorization in
accordance with the Procedures. If no prior authorization is
received on a Transaction, these Transactions(s) become
▇▇▇▇▇▇▇' liability.
(v) ▇▇▇▇▇▇▇ will electronically deposit Transaction Drafts to
Bank One within one (1) Business Day from the date of
Transaction.
(vi) The electronic submission to Bank One of Transaction
Drafts shall constitute an endorsement to Bank One by ▇▇▇▇▇▇▇.
C. POS Terminal and/or Electronic Printer Repair and Replacement
In the event of a POS Terminal and/or electronic printer malfunction,
▇▇▇▇▇▇▇ is responsible for calling Bank One's Merchant Services
Department within one (1) Business Day. Bank One will arrange for the
repair or the replacement of any POS Terminal and/or electronic printer
which fails to function properly during the normal course of operation
due to a defect in materials or workmanship. ▇▇▇▇▇▇▇ will be
responsible for the loss of any POS Terminal and/or electronic printer
and for any damage resulting from improper handling operation. ▇▇▇▇▇▇▇
will also provide adequate insurance covering loss of, or damage, to
all POS Terminal(s) and/or electronic printers, with Bank One named as
loss payee.
D. Fees and Service Charges Bank One reserves the right to debit
▇▇▇▇▇▇▇' Account, on a non-refundable basis, for the replacement cost
of the POS Terminal and/or electronic printer, if:
(i) The POS Terminal and/or electronic printer is not
returned in time for repair or replacement; or
(ii) The POS Terminal and/or electronic printer is not
returned within ten (10) days of Bank One's written request;
or
(iii) The POS Terminal and/or electronic printer must be
replaced as a result of loss, destruction, misuse or abuse
by ▇▇▇▇▇▇▇.
Page 57
32
Bank One may, at its discretion, levy its standard service charges for
any additional assistance in Terminal operation and resolution of
problems which are not caused by POS Terminal(s) malfunction or system
malfunction, but are due to ▇▇▇▇▇▇▇' failure to adhere to the
Procedures.
E. Terminal Taxes As to any POS Terminal and/or electronic
printer, ▇▇▇▇▇▇▇ will pay when due:
(i) All use, excise, personal property, ad valorem or other
taxes;
(ii) All assessments, fees and charges payable with respect to
the ownership, possession or rental of the POS Terminal and/or
electronic printer; and
(iii) All expenses resulting from registration, inspection or
other governmental requirements, now or hereafter existing,
all of which are imposed by governmental entities because of
the location or use of any POS Terminal and/or electronic
printer at ▇▇▇▇▇▇▇' place(s) of business.
F. Conflict With Other Agreement Provisions. Any conflict
between this paragraph and any other Agreement provision will be
controlled by this paragraph.
36. MISCELLANEOUS.
A. This Agreement shall become effective when signed by both
parties and shall remain in full force and effect until termination or
default.
B. This Agreement shall be governed by the laws of the State of
Ohio and shall be binding upon the parties, their heirs, successors or
assigns.
C. This Agreement supersedes any prior Qualified Card Merchant
agreement between the parties and will govern all prior Qualified Card
Transactions previously submitted to Bank One, regardless of date of
submission.
D. All obligations of ▇▇▇▇▇▇▇ incurred or existing under this
Agreement existing as the date of termination or default, regardless
of whether then known by either party to exist, shall survive such
termination or default.
▇. ▇▇▇▇▇▇▇ agrees to provide Bank One sixty (60) calendar days
prior written notice of its intent to:
(i) Transfer or sell any substantial part (50% or more) of
its total stock or assets;
(ii) Liquidate, or change the basic nature of its business;
(iii) Change its name, address, phone number or other
pertinent information relating to its business; or
(iv) Make any changes to the Settlement Account set forth in
Section Five (5) herein. Bank One, within sixty (60) days
after receipt of the above notice, may terminate this
Agreement effective one hundred eighty (180) calendar days
after written notice of said termination is sent to ▇▇▇▇▇▇▇.
F. All specifications, data, programs, forms and procedures
utilized or developed by Bank One in connection with services under
this Agreement shall be and remain the property of Bank One and may
only be used by ▇▇▇▇▇▇▇ in accordance with the terms of this Agreement.
Page 58
33
G. This Agreement may be amended from time to time by mutual
consent. Bank One may also modify this Agreement by sending written
notice of any amendment or modification to ▇▇▇▇▇▇▇. Said modification
will be effective upon receipt by ▇▇▇▇▇▇▇.
H. If any of the provisions or parts of this Agreement are
determined to be illegal or invalid under any applicable statute or
rule of law, such provisions or parts shall be deemed omitted without
affecting any other provisions or parts of this Agreement, which shall
remain in full force and effect.
I. Upon failure by ▇▇▇▇▇▇▇ to meet any of its obligations under
this Agreement, Bank One has the right to collect any amount due, or
which may become due, to Bank One from any accounts belonging to
▇▇▇▇▇▇▇ held by Bank One or by any other financial institution without
notice to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ gives Bank One a security interest in all
such accounts for that purpose.
J. In all cases under the Agreement wherein consent is required of
one of the parties, the decision by the parties shall be made in good
faith and not be unreasonably withheld. Furthermore, the parties agree
that each shall in good faith perform-their obligations under this
Agreement.
IN WITNESS WHEREOF, the parties have hereto set their hands this 17th
day of June, 1998.
WITNESS: ▇▇▇▇▇▇▇, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Executive Vice President
BANK ONE, NA
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Senior Vice President
Page 59
34
ADDENDUM "D"
REMOTE APPLICATION PROCESSING AGREEMENT
WHEREAS, ▇▇▇▇▇▇▇ and Bank One have mutually determined that the
following additional terms and conditions are both necessary and desirable to
the ongoing relationship contemplated by the Revolving Credit Plan Agreement
entered into by the parties:
1. Computer links have been developed between ▇▇▇▇▇▇▇ and Bank One which
allow ▇▇▇▇▇▇▇ to:
A. Process Plan credit applications for new Plan applicants and
requests and/or applications for Plan credit line increases on existing
Plan accounts at a remote location and receive credit decisions by
directly accessing Bank One's application processing system
("Processing").
B. View Bank One's appropriate credit decision for submitted Plan
credit applications or increases for Plan credit lines.
C. Receive an approved Plan Applicant account number, authorization
number and other information as is mutually determined to be required
by ▇▇▇▇▇▇▇ and Bank One to complete the remote application transaction.
2. ▇▇▇▇▇▇▇ agrees to fully comply with Bank One's Remote Application
Processing Instructions for Input Operators ("Instruction") as amended from time
to time for Processing and to use reasonable care and to adhere to a high
standard of accuracy and truthfulness as established by Bank One from time to
time. ▇▇▇▇▇▇▇ also warrants and represents that the original completed Plan
credit application or credit increase being processed is in its possession, has
the Applicant's signature and required identification verification prior to
being inputted and that all other information inputted into the computer system
for a Plan credit application or credit line increase is in agreement with the
information on the application submitted by the Applicant.
3. Both parties agree to work in good faith to correct known problems
involving the remote processing of Plan credit applications or credit increases
as quickly as is reasonably possible.
4. New stores operated and/or opened by ▇▇▇▇▇▇▇ will be automatically
covered by the Agreement and this Addendum.
5. ▇▇▇▇▇▇▇ shall be solely responsible for: (a) maintaining, and
operating, at its expense, the equipment/software provided by Bank One which is
required to interface with Bank One's equipment, (b) the accuracy and integrity
of the data it transmits for processing or storage, (c) maintaining a procedure
external to the interface service for reconstruction of lost data and programs
to the extent Bank One deems necessary and for purposes of re-entry in the event
of system malfunction, and (d) establishing a procedure for Processing Plan
credit applications or credit increases which can be implemented should the
Processing system malfunction and not be available. Bank One reserves the right
to approve/reject ▇▇▇▇▇▇▇' standby procedure at Bank One's discretion and to
request that ▇▇▇▇▇▇▇ submit alternative procedures.
6. ▇▇▇▇▇▇▇ agrees to indemnify Bank One for any loss Bank One may suffer
as a result of fraud perpetuated by ▇▇▇▇▇▇▇' employees whether or not said
employee was acting in the scope of his/her employment in committing said fraud.
Such indemnification is not limited to actual damages, but includes
consequential, incidental or any other loss Bank One may suffer as a result of
such fraud.
7. Any conflict between this Addendum and any other Agreement provision
will be controlled by this Addendum.
8. That Bank One may, with or without prior notice to ▇▇▇▇▇▇▇, audit Plan
credit applications or credit increases at such of ▇▇▇▇▇▇▇' locations as Bank
One may deem. Said audit(s) will involve examining and verifying information
contained in Plan credit applications or credit increases to the information
input and processed by ▇▇▇▇▇▇▇.
9. ▇▇▇▇▇▇▇ will submit, as per the Agreement, selected Plan credit
applications or credit increases upon Bank One's request.
Page 60
35
10. That Plan credit applicants, whether approved or rejected for Plan
credit, may be contacted by Bank One to verify information and authenticity of
his/her Plan credit application.
IN WITNESS WHEREOF, the parties have hereto set their hands this 17th
day of June, 1998.
WITNESS: ▇▇▇▇▇▇▇, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Executive Vice President
BANK ONE, NA
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Senior Vice President
Page 61
