PRIVATE LABEL CREDIT CARD PLAN AGREEMENT

BETWEEN

WORLD FINANCIAL NETWORK BANK

AND

PIER 1 IMPORTS (U.S.), INC.

DATED AS OF OCTOBER 5, 2011

 

 

 

 

TABLE OF CONTENTS

 

SECTION 10.  MISCELLANEOUS
10.1	Entire Agreement
10.2	Coordination of Public Statements
10.3	Amendment
10.4	Successors and Assigns
10.5	Waiver
10.6	Severability
10.7	Notices
10.8	Captions and Cross-References
10.9	GOVERNING LAW / WAIVER OF JURY TRIAL
10.10	Counterparts
10.11	Force Majeure
10.12	Relationship of Parties
10.13	Survival
10.14	Mutual Drafting
10.15	Independent Contractor
10.16	No Third Party Beneficiaries
10.17	Confidentiality and Security Control
10.18	Taxes

 

 

 

 

 

 

SECTION 6.  REPRESENTATIONS AND WARRANTIES OF BANK

 

Bank hereby represents and warrants to Pier 1 as follows:

6.1            Organization, Power and Qualification .

(a)           Bank is duly organized and validly existing Delaware state bank and has the full power and authority to enter into this Agreement and to carry out the provisions of this Agreement, including making revolving credit card loans to consumers.

(b)           As of the Effective Date, Bank is an insured depository institution under the provisions of the Federal Deposit Insurance Act, 12 U.S.C. 1811-1831aa.

(c)           Bank is duly qualified and in good standing to do business in all jurisdictions where such qualification is necessary for Bank to conduct its business as it presently is being conducted and to carry out its obligations under this Agreement.

6.2            Authorization, Validity and Non-Contravention .

(a)           This Agreement has been duly authorized by all necessary corporate (or analogous governing) proceedings, has been duly executed and delivered by Bank and is a valid and legally binding agreement of Bank and duly enforceable in accordance with its terms (except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and by general equity principles).

(b)           No consent, approval, authorization, order, registration or qualification of or with any court or regulatory authority or other governmental body having jurisdiction over Bank is required for (nor would the absence of such materially adversely affect) the legal and valid execution and delivery of this Agreement, and the performance of the transactions contemplated by this Agreement.

(c)           The execution and delivery of this Agreement by Bank hereunder and the compliance by Bank with all provisions of this Agreement: (i) will not, to the best knowledge of the  Bank officer executing this Agreement on Bank 1’s behalf (and anyone advising him or her on such execution), conflict with or violate any Applicable Law, (ii) will not conflict with or result in a breach or default under any of  the terms or provisions of any indenture, loan agreement or other contract or agreement to which Bank is a party (including but not limited to any under which Bank is an obligor or by which Bank’s property is bound) where such conflict, violation, breach or default would have a material adverse effect on Bank or the Plan, and (iii) will not violate or result in the violation of the Charter or By-Laws of Bank.

 

 

6.3            Accuracy of Information .  All factual information furnished by Bank to Pier 1 in writing at any time pursuant to any requirement of, or furnished in response to any written request of Pier 1 under this Agreement or any transaction contemplated hereby has been, and all such factual information hereafter furnished by Bank to Pier 1 will be, to the best knowledge of Bank’s officer executing this Agreement (as well as anyone responsible for such transmission of information to Pier 1) true and accurate in every respect material to the transactions contemplated hereby on the date as of which such information has or will be stated or certified.  Provided, however, that individual breaches (as opposed to the development of a pattern of occurrences) of this Section 6.3 shall not be grounds for a Pier 1 Termination Event under Section 9.3 unless such breach has a materially adverse effect on Pier 1, Bank, this Agreement, or the Plan.

6.4            Compliance with Law .  Any action or inaction taken by Bank (where Bank has a duty to act) in connection with the Plan shall be in compliance with all Applicable Law, except where the failure to so comply does not or will not have an adverse effect on the Bank, Pier 1 or the Plan.

6.5            Intellectual Property Rights .  In the event Bank provides any software or hardware to Pier 1, Bank has the legal right to such software or hardware and the right to permit Pier 1 to use such software or hardware, and such use shall not violate any intellectual property rights of any third party.  [ See also Section 8.1 (b)] Any software or other technology developed by Bank or its Affiliates or developed for Bank or its Affiliates at Bank’s expense, to facilitate the Plan, including but not limited to, software and software modifications developed in response to Pier 1’s request or to accommodate Pier 1’s special requirements and all derivative works, regardless of the developer thereof, will remain the exclusive property of Bank and/or its Affiliates.  Nothing in this Agreement shall be deemed to convey a proprietary interest to Pier 1 or any third party in any of the software, hardware, technology or any of the derivative works thereof which are owned or licensed by Bank and/or its Affiliates, and Pier 1 shall return to Bank all materials containing such intellectual property upon termination of this Agreement.

Note : The following provision shall apply with regard to representations and warranties containing the qualifier “to the best knowledge of the Bank officer executing this Agreement . . . ..” (a) If that qualifier is the only thing that prevents Bank from having committed a breach hereunder, such absolution of breach does not constitute or equate to an absolution of any liability (including but not limited to Losses as defined in Section 8) that would apply  if the underlying event would otherwise have constituted a breach. (b) No individual referenced in such qualifier shall be held personally liable for their actions.

 

 

SECTION 7.  COVENANTS OF BANK

Bank hereby covenants and agrees as follows:

7.1            Notices of Changes .  Bank will as soon as reasonably possible notify Pier 1 of any:  (a) change in the name or form of business organization of Bank, change in the location of its chief executive office or the location of the office where its records concerning the Plan are kept; (b) merger or consolidation of Bank, or the sale of a significant portion of its stock (or other form of ownership), or the sale of a substantial amount of its assets not in the ordinary course of business, or any change in the control of Bank; (c) material adverse change in its financial condition or operations; (d) adverse opinion by its auditors or accountants as to its viability as a going concern; or (e) occurrence that would constitute a Pier 1 Termination Event under Section 9.3. and Section 9.3.1.  Bank will furnish such additional information with respect to any of the foregoing as Pier 1 may request for the purpose of evaluating the effect of such change on the financial condition and operations of Bank and on the Plan.

7.2            Financial Statements .  Bank shall furnish to Pier 1 upon request by Pier 1, and as soon as available, the following information pertaining to Bank: (a) a statement of financial condition; (b) a statement of income; (c) a statement of changes in shareholder’s equity; (d) a statement of cash flow; and (e) a copy of the opinion submitted by Bank’s independent certified public accountants in connection with such of the financial statements as have been audited.

7.3            Access Rights .

(a)           Subject to (b) below, Bank will permit, once per Plan Year unless Pier 1 has reasonable cause to do so more than once, authorized representatives designated by Pier 1, at Pier 1’s expense, to visit its facilities and inspect, to the extent permitted by Applicable Law, any of Bank’s books and records pertaining to Purchases and any category of payments owed by one party to the other, and to make copies and take extracts there from, and to discuss the same with its officers and independent public accountants, all at reasonable times during normal business hours.  Bank shall permit Pier 1, once per Plan Year, during normal business hours and upon reasonable notice, and in a manner which does not disrupt the operations, to visit the offices at which services relating to the Plan are provided, to review the activities of Bank and its subcontractors.

(b)           Bank’s obligations under (a) shall not be required to the extent that (i) such access is prohibited by Applicable Law, (ii) such records are legally privileged, (iii) such records are Bank planning documents or those of any of its Affiliates, operating budgets, management reviews or employee records, or (iv) such records relate to other clients of, or credit programs operated by, Bank.

7.4            Bank’s Business .  Bank shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and to comply with all Applicable Laws in connection with its business and the issuance of credit by Bank.

 

 

7.5            Insurance .  See Schedule 7.5.

7.6            Business Continuation/Disaster Recovery Plan .  Bank shall maintain a commercially reasonable plan designed to identify and lessen the impact resulting from Force Majeure or other causes that would threaten operation of Bank’s business, as well as a loss or exposure of information requiring protection as described in Sections 2.8 and 10.17.

7.7    SSAE 16.   Bank shall comply with SSAE 16 or a comparable standard system recognized as appropriate for entities similarly situated to Bank*. Bank shall provide Pier 1 with then current, unqualified Type 2 Statements on SSAE 16 or comparable reports recognized as appropriate for entities similarly situated to Bank. Any such report shall be dated as of the most recent date generated, but not more than twelve (12) months prior to the date of production to Pier 1.  Provided, however, that if the protocols/criteria related to them do not require annual reporting, Bank shall provide such reports or ones comparable thereto no less than every eighteen (18) months. Bank shall also (upon reasonable prior written request from Pier 1) provide to Pier 1 any reports related thereto generated by or for Bank. Furthermore, Bank shall at all times make itself available to reasonable requests (and upon reasonable notice) by Pier 1 to discuss the status of matters related to this Section 7.7.

The obligations of Bank under this Section 7.7 apply regardless of whether Bank utilizes a third-party data host provider.

 

 *For instance, as of the Effective Date, SAS 70, from which Bank intends to transition to SSAE 16 by end of calendar year 2012.

 

SECTION 8.  INDEMNIFICATION

8.1            Indemnification Obligations .

(a)           Pier 1 shall be liable to and shall defend, indemnify and hold harmless Bank and its Affiliates and their respective officers, directors, employees, agents, contractors, subcontractors and their successors and assigns   (collectively “Bank Indemnified Parties”) from any and all Losses (as hereinafter defined) incurred by them by reason of:  (i) Pier 1’s breach of any representation, warranty or covenant hereunder; (ii) Pier 1’s failure to perform its obligations hereunder; (iii) any damage caused by or related to Goods or Services charged to an Account; (iv) any action or failure to act (where there was a duty to act) by Pier 1 related to the Plan and/or as otherwise provided for in this Agreement; (v) Pier 1 having caused Losses to third parties, where such third parties have sought recovery from Bank Indemnified Parties (including, by way of example and not limitation, claims related to infringement of third-party intellectual property rights); and (vi) Bank’s defending against claims described in (v).

Provided, however , as follows. First, in any case, Pier 1’s liability does not extend to Losses proximately arising from (x) an act (or failure to act when there was a duty to do so) by Bank that constitutes a breach by it under the terms of this Agreement, (y) the negligence of any Bank Indemnified Party, and/or (z) an intentional tort by any Bank Indemnified Party.

 

 

Second, with respect to (i) and (ii) above, if Pier 1 cures the underlying breach and/or failure to perform within the thirty (30) day time period provided in Section 9.2 (c) for Pier 1 to avoid generating a Bank Termination Event, then Pier 1 shall not have to pay the first $25,000 of Losses related thereto.

(b)           Bank shall be liable to and shall defend, indemnify and hold harmless Pier 1 and its Affiliates and their respective officers, directors, employees, agents, contractors, sub-contractors and their successors and assigns (collectively, “Pier 1 Indemnified Parties”) from any and all Losses incurred by them by reason of:  (i) Bank’s breach of any representation, warranty or covenant hereunder; (ii) Bank’s failure to perform its obligations hereunder; and (iii) any action or failure to act (where there was a duty to act) by Bank and its officers, directors, and employees relating to the Plan and/or as otherwise provided for in this Agreement; (iv) Bank having caused Losses to third parties, where such third parties have sought recovery from Pier 1 Indemnified Parties (including, by way of example and not limitation, claims related to infringement of third party intellectual property rights); and (v) Pier 1’s defending against claims described in (iv).

Provided, however, as follows. First, in any case, Bank’s liability does not extend to Losses proximately arising from   (x) an act (or failure to act when there was a duty to do so) by Pier 1 that constitutes a breach by it under the terms of this Agreement, (y) the negligence of any Pier 1 Indemnified Party, and/or (z) an intentional tort by any Pier 1 Indemnified Party.

Second, with respect to (i) and (ii) above, if Bank cures the underlying breach and/or failure to perform within the thirty (30) day time period provided in Section 9.3 (c) and or Section 9.3 (e) for Bank to avoid generating a Pier 1 Termination Event, then Bank shall not have to pay the first $25,000 of Losses related thereto.

(c)           For purposes of this Section 8.1 the term “Losses” shall mean any liability, damage, costs, fees, losses, judgments, penalties, fines, and expenses, including without limitation, any reasonable attorneys’ fees, disbursements, settlements (which require the other party’s consent which shall not be unreasonably withheld), and court costs, reasonably incurred by Bank, Pier 1, or a third-party, as the case may be, without regard to whether or not such Losses would be deemed material under this Agreement; provided however, that Losses shall not include any overhead costs that either party would normally incur in conducting its everyday business.

8.2            LIMITATION ON LIABILITY .

(a)            IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES THE OTHER PARTY INCURS OR CLAIMS TO HAVE INCURRED ARISING OUT OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO A PARTY’S INTENTIONAL BREACH OF THIS AGREEMENT.

 

 

(b)           EACH PARTY’S TOTAL LIABILITY TO THE OTHER FOR ALL DAMAGES FOR ANY CAUSE WHATSOEVER SHALL BE, AS OF THE EFFECTIVE DATE,  FIFTEEN MILLION DOLLARS ($15,000,000.00), AND SHALL INCREASE BY FIVE MILLION DOLLARS ($5,000,000.00) AT THE BEGINNING OF EACH OF PLAN YEARS TWO THROUGH FOUR, AND THEN INCREASE BY TEN MILLION ($10,000,000.00) AT THE BEGINNING OF EACH OF PLAN YEARS FIVE THROUGH SEVEN, SUCH THAT BY THE BEGINNING OF PLAN YEAR SEVEN THE “CAP” SHALL BE SIXTY  MILLION DOLLARS ($60,000,000.00).

  PROVIDED, HOWEVER , THAT SUCH LIMITATIONS DO NOT APPLY:

(i)

WITH REGARD TO THE PARTIES’ RESPECTIVE LIABILITIES REFERENCED IN SECTION 8.1(a) (v) and 8.1 (b) (iv), ABOVE, RESPECTIVELY.  IN SUCH CASES, THE AMOUNT OWED BY THE INDEMNIFYING PARTY WOULD NOT BE LIMITED BY THE “CAP” AMOUNTS SET FORTH ABOVE IN THIS SUBSECTION (b).  INSTEAD, THE INDEMNIFYING PARTY SHALL PAY THE FULL AMOUNT OF LOSSES OWED TO THE THIRD PARTIES, REGARDLESS OF WHETHER THAT INVOLVES PAYING THE THIRD PARTIES DIRECTLY OR REIMBURSING THE INDEMNIFIED PARTY TO THE EXTENT OF ITS PAYMENTS TO THE THIRD PARTIES (OR SOME COMBINATION OF BOTH MEANS, AS APPLICABLE);

(ii)

WITH REGARD TO AMOUNTS OWED BY ONE PARTY TO THE OTHER UNDER THE TERMS OF THIS AGREEMENT, NONE OF THE FOLLOWING WOULD COUNT TOWARD ANY OTHERWISE APPLICABLE ”CAP”: (X) BANK’S REQUIRED PAYMENTS TO PIER 1 UNDER SECTION 3.6 (a), SECTION 3.6 (e), SCHEDULE 1.1 (OTHER THAN SUBSECTION “B”), AND ALL OF SCHEDULES 2.5 (b) THROUGH 2.5 (d); AND (Y) PIER 1’S REQUIRED PAYMENTS TO BANK UNDER SECTION 3.9, SCHEDULE 1.1 (B), AND SCHEDULE 2.7.

(iii)

WITH REGARD TO THE INDEMNIFYING PARTY’S INTENTIONAL BREACH OF THIS AGREEM ENT.

8.3            NO WARRANTIES .  EXCEPT AS PROVIDED HEREIN, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RESPECTING THE SERVICES AND/OR OTHER PRODUCTS SOLD OR PROVIDED BY BANK PURSUANT TO THIS AGREEMENT.

8.4            Notification of Indemnification; Conduct of Defense .

(a)           In no case shall the indemnifying party be liable under Section 8.1 of this Agreement with respect to any claim or claims made against the indemnified party or any other person so indemnified unless the indemnifying party shall be notified in writing by the indemnified party of the nature of the claim within a reasonable time after the assertion of the claim. However, failure by the indemnified party to so notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have under other provisions of this Agreement, except to the extent that the indemnifying party’s right to defend the matter is materially and irrevocably prejudiced by such failure of the indemnified party to give prompt notice to the indemnifying party.

(b)           The indemnifying party shall be entitled to participate, at its own expense, in the defense of any suit brought against the indemnified party which gives rise to a claim under this Section 8 of a claim by the indemnified party against the indemnifying party.  Alternatively, the indemnified party may elect to assume defense of such claim against it for which it seeks indemnification, but the indemnified party must do so within a reasonable time after receiving notice of the claim against it.  However, if the indemnified  party so elects to assume the defense, such defense shall be conducted by counsel chosen by the indemnifying party and approved by the indemnified party (or the person or persons so indemnified who are the defendant or defendants in any suit so brought), which approval shall not be unreasonably withheld.  Once the indemnifying party has retained counsel approved by the indemnified party, the indemnified party (or the person or persons so indemnified who are the defendant or defendants in the suit) shall bear the fees and expenses of any additional counsel it chooses to retain.

SECTION 9.  TERM, EXPIRATION AND TERMINATION

9.1            Term and Expiration .  Upon execution by authorized representatives of both parties, and unless terminated as provided herein, this Agreement shall become effective as of the Effective Date and remain in effect until (i) the end of either Plan Year Seven, or (ii) the end of Plan Year Ten per Schedule 1.1 (F), but in either case such period shall be referred to as the “Initial Term”.  This Agreement shall automatically renew for successive two (2)-year terms (each a “Renewal Term”) thereafter, unless either party provides the other with at least twelve (12) months’ written notice of its intention not to renew this Agreement beyond the expiration of the Initial or then current Renewal Term.

Note: The termination provisions set forth in Section 9.2 and Section 9.3 are in addition to those set forth in Schedule 2.1 (a), Section 10.6, and Section 10.11.

9.2            Termination with Cause by Bank; Bank Termination Events .  Any of the following conditions or events shall constitute a “Bank Termination Event” hereunder, and unlike the prerequisites for termination for a Special Circumstances Bank Termination Event under Section 9.2.1, Bank may terminate this Agreement immediately without further action for the following:

 

 

(a)           If Pier 1 shall:  (i) generally not pay its debts as they become due; (ii) file, or consent by answer or otherwise to the filing against it, of a petition for relief, reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction; (iii) make an assignment for the benefit of its creditors; (iv) consent to the appointment of a custodian, receiver, trustee or other officer with similar powers of itself or of any substantial part of its property; (v) be adjudicated insolvent or be involuntarily liquidated; (vi) take corporate action for the purpose of any of the foregoing and any such event shall materially adversely affect the ability of Pier 1 to perform under this Agreement or the Plan; (vii) have a materially adverse change in its financial condition which could materially adversely affect the ability of Pier 1 to perform under this Agreement or the Plan; or

(b)           If a court or government authority of competent jurisdiction shall enter an order appointing, without consent by Pier 1, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or if an order for relief shall be entered in any case or proceeding for liquidation or reorganization or otherwise to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding up or liquidation of Pier 1, or if any petition for any such relief shall be filed against Pier 1 and such order or petition shall not be dismissed, or appealed, as the case may be, within sixty (60) days; or

(c)           If Pier 1 shall default in the performance of or compliance with any term or violates any of the covenants, representations, warranties or agreements contained in this Agreement and Pier 1 shall not have remedied such default or violation within thirty (30) days after written notice thereof shall have been received by Pier 1 from Bank; or

(d)           If at any time after the Plan Commencement Date, Pier 1 no longer markets itself as a specialty home goods retailer of the kind it is recognized to be as of the Effective Date, and as a result thereof there is a material decrease in (i) the price point associated with the Goods and/or Services, (ii) the average “ticket” on individual transactions under the Plan, and (iii) the blend in the creditworthiness of Applicants. By way of clarification, unless all three (3) of items (i) through (iii) occur, this subsection will never apply, and even then their occurrence must be caused by Pier 1’s change to its business model as above described. Further, this subsection does not apply to consequences arising from the general state of the economy, changes in consumer behavior and preferences, and/or increases in competition within Pier 1’s “space” in the retail community.

9.2.1            Special Circumstances Bank Termination Event .  The following event shall constitute a “Special Circumstances Bank Termination Event” hereunder, and before Bank can terminate this Agreement for same, it must follow the process described below:

(a)	Event or Condition .  Within any rolling six (6) month period, there is a net reduction of 25% or more of Pier 1 stores (and/or the announcement or notification to Bank of same).

 

(b)    Process. The parties’ intent with respect to this Section 9.2.1 is to avoid termination if doing so is reasonable given Bank’s concerns as to the viability of the Plan and the Bank’s related financial interests. With such intent in mind, the parties hereby agree that, promptly after such occurrence, Pier 1 shall provide to Bank a written report that identifies the reasons for Pier 1’s belief that the event does not create an actionable concern on Bank’s part as to the viability of the Plan and Bank’s related financial interests.  The parties will work in good faith to reach an agreement (within a reasonable period of time) as to how to proceed. Such agreement might involve taking no action at all, establishing certain new metrics and related triggers related to termination by Bank, or some other resolution agreed to by the parties in writing.

However, Bank may terminate this Agreement, upon as much prior written notice to Pier 1 as is reasonable under the circumstances if, as applicable, Pier 1 does not fulfill its obligations under the agreed resolution reached by the parties and/or there occurs a triggering event that is part of such agreed resolution between the parties.

9.3            Termination with Cause by Pier 1; Pier 1 Termination Events .  Any of the following conditions or events shall constitute a “Pier 1 Termination Event” hereunder, and unlike the prerequisites for termination for a Special Circumstances Pier 1 Termination Event under Section 9.3.1, Pier 1 may terminate this Agreement immediately without further action for the following:

(a)           If Bank shall:  (i) generally not be paying its debts as they become due; (ii) file or consent by answer or otherwise to the filing against it, of a petition for relief, reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction; (iii) make an assignment for the benefit of its creditors; (iv) consent to the appointment of a custodian, receiver, trustee or other officer with similar powers for itself or of any substantial part of its property; (v) be adjudicated insolvent or be liquidated; or (vi) take corporate action for the purpose of any of the foregoing and any such event shall materially adversely affect the ability of Bank to perform under this Agreement or the operation of the Plan and such event shall materially adversely affect the ability of Bank to perform under this Agreement or the Plan; or (vii) have a materially adverse change in its financial condition, including, but not limited to being downgraded by a rating agency to a rating below an investment grade rating; or (viii) breach or fail to perform or observe any covenant or other term contained in any creditor loan agreement, debt instrument or any other material agreement to which it is bound, which breach or failure, if left uncured could result in a default of such agreement; or (ix) or be the subject of some form of action by a governmental authority having  jurisdiction over Bank (such as but not limited to Bank having its charter (or equivalent right to operate) revoked) such that it cannot materially perform its obligations under this Agreement; or

(b)           If a court or government authority of competent jurisdiction shall enter an order appointing, without consent by Bank, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or if an order for relief shall be entered in any case or proceeding for liquidation or reorganization or otherwise to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding up or liquidation of Bank, or if any petition for any such relief shall be filed against Bank and such petition shall not be dismissed within sixty (60) days; or

 

 

(c)           Except with respect to the Service Standards or Bank’s obligations to pay Pier 1 per Section 3.6 (a), if Bank shall default in the performance of or compliance with any term or violates any of the covenants, representations, warranties or agreements contained in this Agreement and Bank shall not have remedied such default within thirty (30) days after receipt of written notice of the default from Pier 1; or

(d)           Bank (i) shall fail to pay Pier 1 per Section 3.6 (a), and (ii) Bank shall not have remedied such default within three (3) Business Days after written notice of the default thereof shall have been received by Bank from Pier 1. Provided, however, that upon the  fourth (4 th ) occurrence of (i) within any one Plan Year, the provisions of (ii) shall become irrelevant and the matter shall be governed by Section 9.3.1; or

(e)           With respect to the Service Standards, if Bank fails for three (3) consecutive months to perform any one of the same Service Standards in a Service Factor Category, and such failure is not the result of an act of Pier 1, or as a result of a Force Majeure event specified in Section 10.11, and Bank fails to remedy such failure within thirty (30) days after receipt of written notice of the default from Pier 1.

9.3.1 Special Circumstances Pier 1 Termination Event .  The following event shall constitute a “Special Circumstances Pier 1 Termination Event” hereunder, and before Pier 1 can terminate this Agreement for same, it must follow the process described below.

(a)   Event or Condition . Bank defaults paying Pier 1 as provided in Section 3.6 (a) for a fourth (4 th ) time in the same Plan Year.  If Bank cures the failure within three (3) Business Days after receipt of notice of the default from Pier 1, the provisions of (b) below shall apply. However, if Bank fails to cure such failure within three (3) Business Days after receipt of written notice of the default from Pier 1, the matter shall become a Pier 1 Termination Event under Section 9.3 and Pier 1 may terminate this Agreement immediately without further action.

(b)   Process (when applicable) . The parties intent with respect to this Section 9.3.1 is to avoid termination and reach a resolution that is commercially reasonable and sufficient to prevent repeated Bank failures. With such intent in mind, the parties hereby agree that, promptly after such fourth (4 th ) failure, Bank shall provide to Pier 1 a written report that identifies the cause(s) of all four (4) failures, what steps Bank has previously taken, is taking, and/or plans to take (as applicable) to remedy such cause(s), and the date by which Bank expects such cause(s) to be remedied.

(ii) The parties will work in good faith to reach an agreement (within a reasonable period of time) as to how any such future Bank failures under Section 3.6 (a) can be averted. However, Pier 1 may terminate this Agreement, upon as much prior written notice to Bank as is reasonable under the circumstances if Bank does not fulfill its obligations under (i) and/or (ii) above, and/or if Bank fails to comply with Section 3.6 (a) either (x) one more time in the same subject Plan Year, or (y) per the agreement reached under (ii) within the same subject Plan Year.

 

 

9.4            Intentionally Left Blank .

9.5            Purchase of Accounts .  See Schedule 9.5.

SECTION 10.  MISCELLANEOUS

10.1            Entire Agreement .  This Agreement constitutes the entire Agreement and supersedes all prior agreements and understandings, whether oral or written, among the parties hereto with respect to the subject matter hereof and merges all prior discussions between them.

10.2            Coordination of Public Statements .  (a) Except as required by Applicable Law and/or as set forth in this Section 10.2, neither party will make any public announcement of the Plan or provide any information concerning the Plan to any representative of any news, trade or other media without the prior approval of the other party, which approval will not be unreasonably withheld.  See also “ Note ” below.  Once the execution of this Agreement becomes public knowledge, and thereafter during the Term, neither party will require the consent of the other for the limited purpose of recognizing (orally, or in any form of writing) the fact that the parties are parties to this Agreement and the nature of the relationship created hereunder.   

(b) With regard to (i) responding to any inquiry from any public or governmental authority, (ii) making any public filing under Applicable Law, or (iii) adhering to any requirements of any listing agency (such as but not limited to the New York Stock Exchange), the responding/filing party shall cooperate and coordinate with the non-filing/non-reporting party in a manner consistent with Section 10.17.   See also “Note” below.

(c) Upon Bank’s reasonable request from time to time, Pier 1 shall in good faith consider providing references or participate in marketing campaigns or testimonial initiatives for Bank (and/or its Affiliate Plan servicer) regarding Bank’s administration of the Plan and/or the performance of its Affiliate Plan servicer .

(d)   Once   the execution of this Agreement becomes public knowledge, and thereafter during the Term, neither party will require the consent of the other for the limited purpose of recognizing (orally, or in any form of writing) the fact that the parties are parties to this Agreement and the nature of the relationship created hereunder.   

Note:   The parties recognize (and agree to the appropriateness of) the fact that such disclosures will in many instances be made by an Affiliate of disclosing party.

10.3            Amendment .  Except as otherwise provided for in this Agreement, the provisions herein may be modified only upon the mutual agreement of the parties, however, no such modification shall be effective until reduced to writing and executed by both parties.

10.4            Successors and Assigns .  See Schedule 10.4.

10.5            Waiver .  No waiver of the provisions hereof shall be effective unless in writing and signed by the party to be charged with such waiver.  No waiver shall be deemed to be a continuing waiver in respect of any subsequent breach or default either of similar or different nature unless expressly so stated in writing.  No failure or delay on the part of either party in exercising any power or right under this Agreement shall be deemed to be a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right.

10.6            Severability .  If any of the provisions or parts of the Agreement are determined to be illegal, invalid or unenforceable in any respect under any applicable statute or rule of law, such provisions or parts shall be deemed omitted without affecting any other provisions or parts of the Agreement which shall remain in full force and effect, unless, when viewed by an objective commercially reasonable person familiar with the consumer credit card industry, the declaration of the illegality, invalidity or unenforceability of such provision or provisions substantially frustrates the continued performance by, or entitlement to benefits of, either party, in which case this Agreement may be terminated by the affected party, without penalty.

10.7            Notices .  All communications and notices pursuant hereto to either party shall be in writing and addressed or delivered to it at its address shown below, or at such other address as may be designated by it by notice to the other party, and shall be deemed given when delivered by hand, or two (2) Business Days after being mailed (with postage prepaid) or when received by receipted courier service:

10.8            Captions and Cross-References .  The table of contents and various captions in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  References in this Agreement to any Section are to such Section of this Agreement.

10.9            GOVERNING LAW / WAIVER OF JURY TRIAL .  THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE DICTATES OF THE CONFLICTS OF LAW PROVISIONS OF DELAWARE OR ANY OTHER JURISDICTION, AND THE PARTIES HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION AND VENUE IN THE UNITED STATES FEDERAL DISTRICT COURT OF DELAWARE OR DELAWARE STATE COURT HAVING JURISDICTION OVER THE CLAIM. EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL.

 

 

10.10            Counterparts .  This Agreement may be signed in one or more counterparts, all of which shall be taken together as one agreement.

10.11            Force Majeure .  Neither party will be responsible for any failure or delay in performance of its obligations under this Agreement because of circumstances beyond its reasonable control, and not due to the fault or negligence of such party, including, but not limited to, acts of God, flood, criminal acts, fire, riot, computer viruses or hackers where such party has utilized commercially reasonable means to prevent the same, accident, strikes or work stoppage, embargo, sabotage, terrorism, inability to obtain material, equipment or phone lines, government action (including any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Agreement), and other causes whether or not of the same class or kind as specifically named above (a “Force Majeure” event).  In the event a party is unable to perform substantially for any of the reasons described in this Section, it will notify the other party promptly of its inability so to perform, and if the inability continues for at least ninety (90) consecutive days (thirty (30) days in the cases of credit authorizations and processing of new Accounts), the party so notified may then terminate this Agreement forthwith.  This provision shall not, however, release the party unable to perform from using its best efforts to avoid or remove such circumstance and such party unable to perform shall continue performance hereunder with the utmost dispatch whenever such causes are removed.

10.12            Relationship of Parties .  This Agreement does not constitute the parties as partners or joint venturers and neither party will so represent itself.

10.13            Survival .  No termination of this Agreement shall in any way affect or impair the powers, obligations, duties, rights, indemnities, liabilities, covenants or warranties and/or representations of the parties with respect to times and/or events occurring prior to such termination.  No powers, obligations, duties, rights, indemnities, liabilities, covenants or warranties and/or representations of the parties with respect to times and/or events occurring after termination shall survive termination except for the following Sections and their corresponding Schedules: Section 2.10, Section 3.3, Section 3.5, Section 3.6, Section 3.8, Section 3.9, Section 3.10, Section 8, Section 9.5, Section 10.7, Section 10.9, Section 10.11, Section 10.17 and Section 10.18.    Furthermore, in the event a closing under Schedule 9.5 takes place after the termination of this Agreement, then those provisions related to utility of Accounts (pre-existing, as no new Accounts will be opened), the settlement process (including chargebacks, etc.), and Bank’s administration of the Plan and credit related decision making shall also survive until the closing, subject to the limitations set forth in Schedule 9.5 (b).

 

10.14            Mutual Drafting .  This Agreement is the joint product of Pier 1 and Bank and each provision hereof has been subject to mutual consultation, negotiation and agreement of Pier 1 and Bank; therefore to the extent any language in this Agreement is determined to be ambiguous, it shall not be construed for or against any party based on the fact that either party controlled the drafting of the document.

 

 

10.15            Independent Contractor .  The parties hereby declare and agree that Bank is engaged in an independent business, and shall perform its obligations under this Agreement as an independent contractor; that any of Bank’s personnel performing the services hereunder are agents, employees, Affiliates, or subcontractors of Bank and are not agents, employees, Affiliates, or subcontractors of Pier 1; that Bank has and hereby retains the right to exercise full control of and supervision over the performance of Bank’s obligations hereunder and full control over the employment, direction, compensation and discharge of any and all of the Bank’s agents, employees, Affiliates, or subcontractors, including compliance with workers’ compensation, unemployment, disability insurance, social security, withholding and all other federal, state and local laws, rules and regulations governing such matters; that Bank shall be responsible for Bank’s own acts and those of Bank’s agents, employees, Affiliates, and subcontractors; and that except as expressly set forth in this Agreement, Bank does not undertake by this Agreement or otherwise to perform any obligation of Pier 1, whether regulatory or contractual, or to assume any responsibility for Pier 1’s business or operations.

10.16            No Third Party Beneficiaries .  The provisions of this Agreement are for the benefit of the parties hereto and not for any other person or entity, including the current owner of the Pier 1 Program Accounts.

 

10.17            Confidentiality and Security Control .

(a)            Confidential Information .  Except as specifically provided in this Section 10.17, neither party shall disclose any Confidential Information (defined below) which it learns as a result of negotiating or implementing this Agreement.  “Confidential Information” shall mean information not of a public nature concerning the business or properties of the other party including, without limitation: the terms and conditions of this Agreement (as well as proposed terms and conditions of any amendments, renewals, or extensions of this Agreement), any proposed and/or agreed upon terms and conditions of any other credit card program agreement between the parties and/or their Affiliates, sales volumes, test results, and results of marketing programs, Plan reports and files generated by Bank (in the case of Bank), trade secrets, business and financial information, source codes, business methods, procedures, know-how and other information, including but not limited to intellectual property, of every kind that relates to the business of either party.

However, the definition of “Confidential Information” specifically excludes information which:

(i)

is publicly known prior to the time that the non-owner of such information reveals such information to any third party; or

(ii)

is obtained by a party hereto from a source other than the other party hereto and the obtaining of such information was without breach of  this Agreement or, any other obligation of confidentiality or secrecy owed to the other party hereto and without breach of any obligation of confidentiality or secrecy owed to any other person or organization not a party hereto (including but not limited to the source); or

 

(iii)

is independently known, conceived or developed by the disclosing party without violation of this Agreement or duty of confidentiality by the disclosing party or any other person or organization which has entered into a confidential arrangement with the non-disclosing party.

(b)            Other Protected Information .  The use and/or disclosure of any Consumer Personal Information, Pier 1 Customer Information, and/or Bank Cardholder Information shall be subject to Applicable Law, Section 2.8, and this Section 10.17.

(c)            Permitted Uses and Disclosures .  Nothing in this Section 10.17 shall be interpreted to mean that a party is restricted with respect to the use or disclosure of Confidential Information which it owns.  The parties may also disclose any Consumer Personal Information or Confidential Information under the following circumstances.  First, to the extent disclosure is required by Applicable Law.  Second, to the extent disclosure is both permitted by Applicable Law and either necessary for the performance of the disclosing party’s obligation under this Agreement and/or agreed to in writing by the other party, provided that:  (i) prior to disclosing any such information to any third party, the party making the disclosure (to the third party) shall give notice to the other party of the nature of such disclosure and of the fact that such disclosure will be made; and (ii) prior to filing a copy of this Agreement (whole or partial) with any governmental authority or agency, the filing party will consult with the other party with respect to such filing and shall redact such portions of this Agreement which the other party requests be redacted, unless, in the filing party’s reasonable judgment based on the advice of its counsel (which advice shall have been discussed with counsel to the other party), the filing party concludes that such request is inconsistent with the filing party’s obligations under Applicable Law. In any event, the responding/filing party will work in good faith to accommodate the non-responding/non-filing party’s concerns regarding the amount of disclosure, including the number and application of redactions. The preceding sentences regarding “second” apply to (but not exclusively to) the filings described in Section 10.2

(d)            Protecting Disclosed Information .  When, pursuant to subsection (c) above, one party discloses the other party’s Confidential Information or Consumer Personal Information to the disclosing party’s Affiliate or a third-party, the disclosing party shall be responsible for ensuring that such disclosure complies with Applicable Law.  Furthermore, the disclosing party shall ensure that the Affiliate or third-party executes a confidentiality agreement provided by or approved in writing by the non-disclosing party. Provided, however, that each party hereby acknowledges such obligation to be satisfied with regard to the other’s parent (or ultimate parent), any Affiliate required to make filings described in Section 10.2, and, in the case of Bank, its Plan servicer. Each party covenants that at all times it shall have in place procedures designed to assure that each of its employees who is given access to the other party’s Consumer Personal Information or Confidential Information shall protect the privacy of such information.  Each party acknowledges that any breach of the confidentiality provisions of this Agreement by it will result in irreparable damage to the other party and therefore in addition to any other remedy that may be afforded by law any breach or threatened breach of the confidentiality provisions of this Agreement may be prohibited by restraining order, injunction or other equitable remedies of any court.  The provisions of this Section 10.17 will survive termination or expiration of this Agreement.

 

 

(e)            Protecting Stored Information .  Each party shall establish commercially reasonable controls to ensure the confidentiality of any Consumer Personal Information and the other party’s Confidential Information.  Each party shall also ensure that such information is not disclosed contrary to the provisions of this Agreement, or any applicable privacy, security or other laws, rules, and regulations.  Without limiting the foregoing, each party shall implement commercially reasonable physical and other security measures as are necessary to (i) ensure the security and confidentiality of any Consumer Personal Information and the other’s Confidential Information, (ii) protect against any threats or hazards to the security and integrity of such information, (iii) protect against any unauthorized access to or use of such information, and (iv) properly dispose of any Consumer Personal Information as required under Applicable Law.  Each party shall promptly notify the other in the event it believes, or has reason to believe, that confidentiality or security breach, or any other unauthorized intrusion, has occurred with respect to the other party’s Confidential Information or Consumer Personal Information.  The reporting party shall estimate the intrusion’s effect on the owner of the information and shall specify the corrective action taken and to be taken by the party that suffered the breach.

(f)           If, upon expiration or termination of this Agreement, Pier 1 or its designee does purchase the Accounts from Bank pursuant to Section 9.5 and Schedule 9.5, Bank shall take appropriate measures to destroy or remove from its systems Pier 1’s  Customer Information, Confidential Information, and Consumer Personal Information.  This includes but is not limited to any and all records regarding Cardholders (except as required by Applicable Law and/or recognized good practices within the consumer credit card industry), whether in paper, electronic, or other form, that is maintained or otherwise possessed by or on behalf of Bank, including a compilation of such records.

If, upon expiration or termination of this Agreement, Pier 1 or its designee does not purchase the Accounts from Bank pursuant to Section 9.5 and Schedule 9.5, Pier 1 shall take appropriate measures to destroy or remove from its systems Bank’s Cardholder Information, Confidential Information, and Consumer Personal Information.  This includes but is not limited to any and all records regarding Cardholders, whether in paper, electronic, or other form, that is maintained or otherwise possessed by or on behalf of Pier 1, including a compilation of such records.

If Pier 1 or its designee does purchase the Accounts at such time, Pier 1’s obligation to remove or destroy information shall apply only to any Bank Confidential Information that is not comprised of Bank Cardholder Information or Consumer Personal Information.

 

 

10.18            Taxes .  Pier 1 will be responsible for, and agrees to pay, all sales, use, excise, and value-added taxes, or taxes of a similar nature (excluding personal property taxes and taxes based on Bank’s income which shall be borne by Bank), imposed by the United States, any state or local government, or other taxing authority, on all services provided by Bank under this Agreement. Provided, however, that  if/when Bank seeks payment from Pier 1, Bank shall deliver a written invoice (or other comparable form of written documentation requesting payment and basis therefor) to Pier 1 in a timely manner relative to when (i) Bank received an invoice or other statement for payment from the subject taxing authority, or (ii) Bank determined (or should have determined, based on Bank’s normal accounting reviews and preparation of tax documents of which such matter should have been a part) that Pier 1 should pay such amount. The parties agree to cooperate with each other to minimize any applicable sales, use, or similar tax and, in connection therewith, the parties shall provide each other with any relevant tax information as reasonably requested (including without limitation, resale or exemption certificates, multi-state exemption certificates, information concerning the use of assets, materials and notices of assessments).  All amounts set forth in this Agreement are expressed and shall be paid in U.S. dollars.

[Signature block on following page.]

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in manner and form sufficient to bind them as of the date first above written.

 

 

 

 

Execution Page

Schedule 1.1

Other Definitions and Payments Between the Parties

(****)

 

 

 

 

 

 

 

 

Schedule 2.1 (a)

Plan Commencement Date

(****)

 

 

 

 

 

 

Schedule 2.1 (b)

Service Standards

(****)

 

 

 

 

 

 

Schedule 2.1.1

Portfolio Purchase and Sale Agreement

(****)

 

 

 

 

 

 

Schedule 2.2 (b)

Quick Credit

(****)

 

 

 

 

 

 

 

(****)

 

 

 

 

 

 

Schedule 2.5 (a)

Marketing Promotions

(****)

 

 

 

 

 

 

Schedule 2.5 (b)

Marketing Funds

(****)

 

 

 

 

 

 

(****)

 

 

 

 

 

(****)

 

 

 

 

 

 

 

 

(****)

 

 

 

 

 

 

Schedule 2.8

Monthly Master File Information

(****)

 

 

 

 

 

 

 

Schedule 2.9 (b)

Enhancement Marketing Services

(****)

 

 

 

 

 

 

Schedule 3.6 (d)

Summary of Rates and Fees

(all subject to Applicable Law)

(****)

 

 

 

 

 

 

Schedule 3.13

Bank Reports

(****)

 

 

 

 

 

 

 

Schedule 5.5

Pier 1 Insurance

(****)

 

 

 

 

 

 

Schedule 7.5

Bank Insurance

(****)

 

 

 

 

 

 

 

Schedule 9.5

Purchase of Accounts

(****)

 

 

 

 

 

 

Schedule 10.4

Successors and Assigns

(a)

This Agreement and all obligations and rights arising hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective successors, transferees and assigns as permitted under this Schedule 10.4.  Either party may assign its rights and obligations under this Agreement as set forth in this Schedule 10.4.

(b)	(i) Bank need not obtain Pier 1’s prior written consent to sell, transfer, or otherwise assign this Agreement as part of a sale of substantially all its assets.

(ii)  Bank need not obtain Pier 1’s prior written consent to sell, transfer, or otherwise assign this Agreement to an Affiliate of Bank as part of a sale of not substantially all of Bank’s assets, provided that (upon completion of such sale, transfer, or other assignment) consumer credit account programs are a material component of such Affiliate’s core business.

(iii) Bank’s sale, transfer, or other assignment under any circumstances other than those described in this (b) (i) or (ii) above shall require Pier 1’s prior written consent, which consent shall not be unreasonably denied or delayed.   It shall not be reasonable for Pier 1 to withhold consent under this (b) (iii) if, after the assignment, the servicer is the same one as before the assignment and/or an Affiliate of Bank.

(c)

For so long as Bank or a Bank Affiliate is party to this Agreement, the primary service provider for the Plan shall be a Bank Affiliate, unless (x) a change is necessitated by Applicable Law, including a change thereto, (y) a change is necessitated for reasons associated with the securitization of the portfolio of Accounts, or (iii) consented to by Pier 1, which consent shall not be unreasonably denied or delayed. It shall not be reasonable for Pier 1 to withhold consent under this (c) if the proposed non-Affiliate servicer has experience in the retail credit card industry servicing programs equal to or greater than the size of the Plan at such time (in terms of the then current sales and accounts receivables).  By way of further clarification, the parties recognize that any primary service provider uses subcontractors for certain functions.

 
 

(d)

In the event that Pier 1 sells, transfers or otherwise disposes of all or substantially all of the assets that comprise the line-of-business currently operating under the name “Pier 1 Imports” and/or “Pier 1”, then the purchaser in such transaction shall constitute  a successor, transferee and/or assignee of Pier 1 (the defined party to this Agreement), and the terms of this Agreement shall be binding upon such party (regardless of whether or not such entity is a parent, Affiliate, or party with some other relationship of like kind with Pier 1, and regardless of under what name the business is conducted).

 

 

Schedule 11

The parties do hereby establish a “Plan Committee” which shall be comprised and operated as set forth in this Schedule 11.

A.             Overview .   The purpose of the Plan Committee shall be to fulfill those responsibilities assigned to it per this Schedule 11, as well as any other responsibilities agreed upon in writing by the parties after the Effective Date.

The parties’ intent is that the Plan Committee serve as a forum through which the parties can work in cooperative collaboration (emphasizing communication and good faith efforts) to maximize the value of the Plan for their mutual benefit, without modifying or compromising those rights provided to them, respectively, elsewhere in this Agreement.  Stated another way, the provisions of this Schedule 11 do not supersede either party’s rights and obligations as set forth elsewhere in this Agreement.

Rather, the provisions of this Schedule 11 describe the manner of cooperation and communication that shall accompany each party’s exercise of its rights and fulfillment of its obligations, such that Bank shall still have ultimate discretion with respect to Bank Matters and Pier 1 shall have ultimate discretion as to Pier 1 Matters, subject only to any conditions set forth elsewhere in this Agreement. For instance, while Operating Procedures and Credit Card Agreement terms and provisions are Bank Matters, each of Section 2.3 and Section 3.6 (d) sets forth certain conditions with regard to Bank’s exercise of its rights with regard to such Bank Matter.

For  purposes of this Schedule 11, “Bank Matters” are those related to subsections (D) (4) and (D) (8) below, as well as any component of the other subsections within (D) below for which Bank’s rights are set forth elsewhere in this Agreement.

For  purposes of this Schedule 11, “Pier 1  Matters” are those related to subsections (D) (5) and (D) (7) below, as well as any component of the other subsections within (D) below for which Pier 1’s  rights are set forth elsewhere in this Agreement.

B.             Composition of the Plan Committee . The Plan Committee shall consist of six (6) designees with equal voting rights, and half of whom shall be designated by Pier 1 (the “Pier 1 Designees”), and half shall be designated by Bank (the “Bank Designees”). Each of Pier 1 and Bank shall at all times have as one of its designees the person within its respective organization with overall responsibility for the performance of the Plan. Each of Pier 1 and Bank may from time to time substitute its designees, so long as their designees continue to satisfy the above requirements, and provided that each of Pier 1 and Bank shall provide the other with as much prior notice of any such substitution as is reasonably practicable under the circumstances. By way of clarification, each party’s designees must (collectively) have authority to make those decisions and take those actions necessary to effectuate the provisions of this Schedule 11.

 

 

 

C.            Proceedings of the Plan Committee .

1.           The Plan Committee shall meet no less than quarterly, including (i) in person at least twice per Plan Year, alternating between the parties’ offices, and (ii) the other times telephonically, unless all Plan Committee Designees agree to meet in person or otherwise. The Plan Committee (and any subcommittee formed by it) shall determine the frequency, place (in the case of meetings in person) and agenda for its meetings, the manner in which meetings shall be called and all procedural matters relating to the conduct of meetings and the approval of matters thereafter not already specifically provided for herein.

 

2           (a)        A valid meeting shall consist of an equal number of Pier 1 Designees and Bank Designees. By way of clarification, this provision does not affect/address the issue of how many non-designees attend a meeting and participate therein (which issue shall be decided by  the Plan Committee in its discretion).

 (b)       A valid vote (and any course of action based thereon) shall consist of votes cast by an equal number of Pier 1 Designees and Bank Designees.

 (c)         A majority vote of all designees participating in a valid vote shall suffice for a matter to be considered approved or otherwise decided.

D.             Functions of the Plan Committee .   The functions of the Plan Committees shall be as follows: 

(a)       With regard to Section 2.5 (b) and Schedule 2.5 (b), agree upon and approve all expenditures of Marketing Funds.

(b)       With regard to Schedule 2.5 (c), discuss and monitor use of New Account Prospect Funds, including but not limited to conducting analysis of the results of such expenditures.

(c)      With regard to Schedule 2.5 (d), discuss and monitor use of Launch Incentive Funds, including but not limited to conducting analysis of the results of such expenditures.

(d)       Approve a quarterly marketing plan, including: setting marketing related Plan goals and strategy.

2.            General Plan Performance

(a)        Review and discuss status, major trends, projections, and possible strategies related to new Accounts (volumes, approval rates, activation rates, and penetration rate).  Set related goals and time frames for evaluating and meeting same.

 

 

 

3.            General Portfolio Performance

Review, discuss and address (in general terms) any particular concerns that Bank has with regard to the general performance of the overall portfolio, in terms such as average spend, revolve rates, write-offs, collection related matters, and/or anticipated or actual change in Applicable Law. Review and discuss any steps Bank feels are necessary to address such concerns. By way of clarification, Bank shall not take any material action tied to such matters that Bank believes will materially affect the financial components of the Plan (including effects on Cardholders and Applicants), without providing Pier 1 as much prior written notice as is reasonable under the circumstances and the opportunity for discussion and inquiry by Pier 1.

4.            Bank Performance

Review, discuss and address (in general terms, unless material specific concerns must be addressed) Bank’s performance (including Pier 1 concerns regarding same) with regard to (i) meeting Service Standard level commitments, (ii) Customer service; (iii) communications and cooperation with Pier 1 in Bank’s  day-to-day administration of the Plan; and (iv) performance of Bank’s Plan servicer, vendors, contractors, and subcontractors.

 

 

5.            Pier 1 Performance

Review, discuss and address (in general terms unless material specific concerns must be addressed) Pier 1’s performance (including Bank’s concerns regarding same) with regard to Pier 1’s (i) meeting compliance (in terms of Applicable Law) obligations; (ii) associate management (in terms of training and general support of the Plan); (iii) communications and cooperation with Bank in the Bank’s day-to-day administration of the Plan; and (iv)  performance of Pier 1’s vendors, contractors, and subcontractors.

6.            Industry Monitoring

(a)           Monitor competitive credit card programs to derive learnings that might benefit the Plan, and discuss relevant information in terms of (i) expansion or contraction; (ii) reward programs/value propositions; (iii) application methods; and (iv) novel ideas and/or innovations; and/or (v) other components comparable to the Plan;

(b)           Monitor, review, discuss and consider changes to the Plan based on current trends in the consumer credit card industry in general.

7.            Pier 1’s General  Business

Review, discuss and address any general Pier 1 business matters that might affect the Plan:

(i)

overall Pier 1 sales volumes, including sales by tender type;

(ii)

Sales Channel status and future expectations: expansion, contraction, etc.

(iii)

any associate and/or Customer feedback with regard to the Plan; and

(iv)

prospective non-specific Plan marketing campaigns.

Note : With regard to matters to be discussed under this subsection (D) (7) of Schedule 11, Pier 1 has the right, in its discretion, not to share information regarding its possible future material actions and/or certain highly sensitive issues if/when it believes in good faith that doing so would be detrimental to its business interests.

8.            Status of and Possible Changes to Bank’s Administration of the Plan

Review, discuss and address any matters (including possible changes) which Bank believes to be material with respect to its administration of the Plan, including but not limited to: (i) Operating Procedures; (ii) collection efforts and practices; (iii) credit decisions, and/or (iv) Credit Card Agreement terms and provisions (Rates and Fees as well as non-Rates and Fees). By way of clarification, Bank shall not take any material action tied to such matters that Bank believes will materially affect the financial components of the Plan (including impact on Cardholders and Applicants), without providing Pier 1 as much prior written notice as is reasonable under the circumstances and the opportunity for discussion and inquiry by Pier 1.

 

 

9.            Plan Documents

Review, discuss and address any matters either party believes is relevant to the development and use of Plan Documents as part of each party’s rights and obligations under Section 2.4.

10.            Systems

Review, discuss and address any matters either party believes is relevant with respect to its systems (including changes thereto) and performance of the respective parties under this Agreement. This includes but is not limited to the parties’ respective rights and obligations under Section 3.6 (e).