CREDIT CARD PROGRAM
AGREEMENT
This Third Amendment to the Credit Card Program
Agreement (“Third Amendment”) is made and entered into
as of August 4, 2009 by and between HSBC Bank Nevada, National
Association (“HSBC” or “Bank”), and The
Bon-Ton Stores, Inc. (“Bon-Ton”) and amends that
certain Credit Card Program Agreement dated as of June 20,
2005, as previously amended (“Agreement”). This Third
Amendment is effective as of the 1 st day of January, 2009 (“Third Amendment
Effective Date”).
WHEREAS , the undersigned parties desire to amend the
Agreement.
NOW THEREFORE , in consideration of the mutual promises,
covenants and agreements set forth below and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, HSBC and Bon-Ton do hereby agree as
follows:
1. Definition (dd) of Article 1
of the Agreement is deleted and replaced in its entirety to read as
follows:
2. Article 1 of the Agreement is
amended by adding the following definitions to the end
thereof:
(ggg) “
Parisian ” means the following retail stores purchased
from Belk, Inc. on October 31, 2006:
Store #571
— Livonia, MI
Store #564 — Indianapolis, IN
Store #572 — Rochester Hills, MI
Store #573 — Partridge Creek, Clinton Township, MI
(hhh) “
Parisian Account ” means an Account arising from an
application accepted at a Parisian retail store.
(iii) “
Parisian Card Sale ” means any sale of Goods that
Bon-Ton or any of its Affiliates makes to a Cardholder pursuant to
this Agreement and the Cardholder Agreement that is charged to a
Parisian Account.
(jjj) “
Parisian Net Credit Sales ” means gross Parisian Card
Sales, minus Normal Business Returns and Chargebacks, during the
specified period of time that are attributable to Parisian
Accounts.
3. Section 2.1(b) of the Agreement is
deleted and replaced in its entirety to read as follows:
(b) Program Competitiveness, Goodwill, and
Cardholder Satisfaction . Bank will use all commercially
reasonable efforts to maintain a competitive private label credit
card program in terms of features and functionality based on a
comparison to Competing Retail Programs (to the extent the
information is publicly available or allowed by Bank’s
agreements with such other card programs).
Bank will use all commercially reasonable
efforts to manage the Program in a manner that will preserve and
enhance goodwill of the Cardholders.
Bank will use all commercially reasonable
efforts to monitor Cardholder satisfaction with the Program;
provided, however, that if the Operating Committee determines that
such efforts include a customer survey, the cost of the survey will
be taken from the Marketing Fund Contribution.
4. Schedule 2.1(b)(i) of the Agreement
is deleted in its entirety.
5. Schedule 2.4 of the Agreement is
amended to read in its entirety as set forth in Schedule 2.4
attached hereto.
6. Section 2.5 of the Agreement is
deleted and replaced in its entirety to read as follows:
On the Closing
Date, Bank shall pay Bon-Ton the Prepaid Program
Payment.
If on the first and any subsequent anniversary
of the Effective Date for the Initial Term, the sum of
(i) Bon-Ton’s net retail sales, excluding NDSG-related
net retail sales, for the immediately preceding twelve
(12) months, plus (ii) any Unused Credits, excluding NDSG
Unused Credits, plus (iii) for Program Years beginning after
the Third Amendment Effective Date, $15,000,000, is 80% or less
than Effective Date Sales, Bank shall be entitled to recover and
Bon-Ton agrees to pay Bank an amount equal to the product of
(i) 1/7 th of
the Prepaid Program Payment multiplied by (ii) the difference
of (A) 1 minus (B) the quotient of the sum of
Bon-Ton’s net retail sales for the immediately preceding
twelve (12) months plus Unused Credits, such sum divided by
the Effective Date Sales. The term “Effective Date
Sales” means Bon-Ton’s net retail sales for the twelve
(12) months preceding the Effective Date. The term
“Unused Credits” means the aggregate amount, if any,
that on the first and any subsequent anniversary of the Effective
Date for the Initial Term that Bon-Ton’s net retail sales for
the immediately preceding twelve (12) months
exceeds 110% of
the Effective Date Sales, less any amounts used pursuant to this
Section 2.5(ii).
If on the first
and any subsequent anniversary of the Amendment Effective Time
during the Initial Term, the sum of (i) NDSG-related net
retail sales for the immediately preceding twelve (12) months,
plus (ii) any NDSG Unused Credits, plus (iii) for Program
Years beginning after the Third Amendment Effective Date,
$25,000,000, is 80% or less than Amendment Effective Time Sales,
Bank shall be entitled to recover and Bon-Ton agrees to pay Bank an
amount equal to the product of (i) 1/6
th of the NDSG Prepaid Program Fee, as defined on
Schedule 2.5.1, multiplied by (ii) the difference of
(A) 1 minus (B) the quotient of the sum of (x)
NDSG-related net retail sales for the immediately preceding twelve
(12) months plus (y) NDSG Unused Credits, such result
divided by (z) the Amendment Effective Time Sales. The term
“Amendment Effective Time Sales” means NDSG-related net
retail sales for the twelve (12) months preceding the
Amendment Effective Time. The term “NDSG Unused
Credits” means the aggregate amount, if any, that on the
first and any subsequent anniversary of the Amendment Effective
Time during the Initial Term by which NDSG-related net retail sales
for the immediately preceding twelve (12) months exceeds 110%
of the Amendment Effective Time Sales, less any amounts used
pursuant to this Section 2.5.
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