Credit Agreement - MBNA America Bank NA and Coldwater Creek Inc.
AGREEMENT
This agreement is entered into as of this 3rd day of June, 1997 (the
"Effective Date") by and between MBNA AMERICA BANK, N.A., a national banking
association having its principal place of business in Wilmington, Delaware
(hereinafter referred to as "MBNA America"), and COLDWATER CREEK INC., a
Delaware corporation having its principal place of business at One Coldwater
Creek Drive, Sandpoint, Idaho (hereinafter referred to as ("COLDWATER CREEK")
for themselves, and their respective successors and assigns.
1. DEFINITIONS
When used in the Agreement,
(a) "Agreement" means this agreement and Schedules A, B, C and D.
(b) "Credit Card Account" means a credit card Account opened by a Member in
response to marketing efforts made pursuant to the Program.
(c) "Customer" means any Member who is a participant in the Program.
(d) "Financial Service Products" means credit card programs, charge card
programs, debit card programs, installment loan programs, revolving loan
programs, deposit services and travel and entertainment charge card
programs.
(e) "GIP Account" means a Credit Card Account opened by a Member pursuant to a
GIP in which COLDWATER CREEK complies with the GIP provisions of this
Agreement.
(f) "Group Incentive Program" or "GIP" means any marketing or other program
whereby COLDWATER CREEK conducts solicitation efforts for the Program, and
the parties mutually agree that such marketing or other program shall
constitute a GIP.
(g) "Mailing Lists" means updated and current lists and/or magnetic tapes (in a
format designated by MBNA America) containing names, postal addresses and,
when available, telephone numbers of Members segmented by zip codes or
reasonably selected membership characteristics.
(h) "Member" means a client, customer or subscriber of COLDWATER CREEK and /or
other potential participants mutually agreed to by COLDWATER CREEK AND MBNA
America.
(i) "Program" means those programs and services of the Financial Service
Products MBNA America agrees to offer pursuant to this Agreement to the
Members from time to time.
(j) "Royalties" means the compensation set forth in Schedule B.
(k) "Trademarks" means any design, image, visual representation, logo service
mark, trade dress, trade name, or trademark used or acquired by COLDWATER
CREEK during the term of this Agreement.
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2. RIGHTS AND RESPONSIBILITIES OF COLDWATER CREEK
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(a) COLDWATER CREEK agrees that during the term of this Agreement: ( i ) it
will endorse the Program exclusively and will not sponsor, advertise, aid,
develop or solicit any Financial Service Products of any organization other
than MBNA America; ( ii ) it will not license or allow others to license
the Trademarks in relation to or for promoting any Financial Service
Products of any entity other than MBNA America; and it will not sell, rent
or otherwise make available or allow others to sell, rent or otherwise make
available any of its mailing lists or information about any current or
potential Members in relation to or for promoting any Financial Service
Products of any entity other than MBNA America. However, COLDWATER CREEK
may accept advertising from any other organization offering or promoting
bank credit card programs and services or travel and entertainment charge
card programs and services provided that such advertisements are not
accompanied by any Trademark or any printed statement from COLDWATER CREEK,
expressly stating or implying an endorsement by COLDWATER CREEK of such
other organization's Financial Service Products.
(b) COLDWATER CREEK agrees to utilize best efforts to provide MBNA America
with-such information and assistance as may be reasonably requested by MBNA
America in connection with the Program.
(c) COLDWATER CREEK authorizes MBNA America to solicit any Member (with Member
being defined in Paragraph 1 (h) above), by mail, direct promotion,
advertisements and/or telephone for participation in the Program.
(d) COLDWATER CREEK shall have the right of prior written approval of all
Program advertising and solicitation materials to be used by MBNA America,
which contain COLDWATER CREEK's Trademark, such approval shall not be
unreasonably withheld or delayed.
(e) Upon the request of MBNA America, COLDWATER CREEK shall provide MBNA
America with Mailing Lists free of any charge for the solicitation of the
Program. The initial Mailing List shall contain at least one hundred
thousand (100,000) names with corresponding postal addresses and, when
available, telephone numbers.
(f) COLDWATER CREEK shall only provide information to or otherwise communicate
with Members or potential Members about the Program with MBNA America's
prior written approval, except for current advertising and solicitation
materials provided by MBNA America to COLDWATER CREEK. Notwithstanding the
above, COLDWATER CREEK may respond to individual inquires about the Program
from its Members on an individual basis, provided that said responses are
accurate and consistent with the then current materials provided by MBNA
America to COLDWATER CREEK. Any correspondence received by COLDWATER CREEK
that is intended for MBNA America (e.g. applications, payments, billing
inquires, etc.) shall be forwarded to the MBNA America Account executive
via overnight courier within forty-eight (48) business hours of receipt.
All charges incurred for this service will be paid by MBNA America.
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(g) COLDWATER CREEK hereby grants MBNA America and its affiliates a limited,
exclusive license to use the Trademarks solely in conjunction with the
Program, including the promotion thereof. This license shall be transferred
upon assignment of this Agreement. This license shall remain in effect for
the duration of this Agreement and shall apply to the Trademarks,
notwithstanding the transfer of such Trademarks by operation of law or
otherwise to any permitted successor, corporation, organization or
individual. Nothing stated in this Agreement prohibits COLDWATER CREEK from
granting to other persons a license to use the Trademarks in conjunction
with the providing of any other service or product, except for any
Financial Service Products.
(h) During the term of this Agreement (and for a six (6) month period after the
termination of this Agreement), COLDWATER CREEK, at its sole cost and
expense, shall provide the Customers with the benefits and services set
forth on Schedule D in accordance with the terms and provisions contained
therein.
3. RIGHTS AND RESPONSIBILITIES OF MBNA AMERICA
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(a) MBNA America shall design, develop and administer the Program for the
Members
(b) Subject to Section 2(d), MBNA America shall design all advertising,
solicitation and promotional materials with regard to the Program. MBNA
America reserves the right of prior written approval of all advertising and
solicitation materials concerning or related to the Program, which may be
developed by or on behalf of COLDWATER CREEK.
(c) MBNA America shall bear all costs of producing and mailing materials for
the Program.
(d) MBNA America shall make all credit decisions and shall bear all credit
risks with respect to each Customer's Account(s) independently of COLDWATER
CREEK.
(e) MBNA America shall use the Mailing Lists provided pursuant to this
Agreement consistent with this Agreement and shall not permit those
entities handling these Mailing Lists to use them for any other purpose.
Nor shall MBNA America reproduce, rent or sell the Mailing List for any
reason other than the purpose of fulfilling their obligations under this
Agreement. MBNA America shall have the sole right to designate Members on
these Mailing Lists to whom promotional material will not be sent. These
Mailing Lists are and shall remain the sole property of COLDWATER CREEK.
However, MBNA America may maintain separately all information which it
obtains as a result of an account relationship or an application for an
account relationship. This information becomes a part of MBNA America's own
files and shall not be subject to this Agreement; provided however that
MBNA America will not use this separate information in a manner that would
imply an endorsement by COLDWATER CREEK.
(f) All Mailing Lists are (i) confidential and proprietary and (ii) shall
remain the sole property of COLDWATER CREEK. MBNA America expressly
acknowledges and
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agrees that MBNA America has no property right or interest whatsoever in
any Mailing List. MBNA America shall hold all Mailing Lists in strict and
absolute confidence and shall not provide, trade, give away, barter, lend,
send, sell or otherwise disclose (collectively "transfer") any Mailing List
and shall not make any copies of a Mailing List of any type whatsoever
except as necessary to fulfill its obligations hereunder or as approved in
a separate writing by COLDWATER CREEK. However, MBNA America may maintain
separately all information it obtains as a result of an Account
relationship or an application for an account relationship. This
information becomes a part of MBNA America's own files and shall not be
subject to this Agreement; provided however that MBNA America will not use
this separate information in a manner that would imply an endorsement of
COLDWATER CREEK.
(g) Except as otherwise provided herein, MBNA America shall have authority to
use the Mailing List only for purposes consistent with this Agreement or as
expressly permitted by COLDWATER CREEK in a separate writing. MBNA America
shall comply with any reasonable request of COLDWATER CREEK with respect to
security precautions to maintain the security of the Mailing List. MBNA
America agrees to secure and safeguard the Mailing List in strict
accordance with the requirements of this Section D and COLDWATER CREEK's
instructions, as communicated to COLDWATER CREEK to MBNA America from time
to time. MBNA America shall only permit access to the Mailing List to those
employees, volunteers, agents and/or representatives of MBNA America who
need such access to perform their duties for MBNA America. In view of the
confidential nature of the Mailing List, MNBA America warrants that MNBA
America and all its employees, volunteers, agents and/or representatives
who work with any Mailing List shall be made aware of the obligations
contained in this Section and shall be under obligation not to copy any
Mailing List, transfer any Mailing List or make any other use of any
Mailing List other than as specifically approved by this Agreement.
(h) In the event MBNA America receives a request to disclose a Mailing List
pursuant to a subpoena, order of court of competent jurisdiction or by
judicial or administrative agency or legislative body or committee, MBNA
America agrees to: (i) immediate notify COLDWATER CREEK of the existence,
terms and circumstances surrounding such request; (ii) consult with
COLDWATER CREEK on the advisability of taking legally availability steps to
resist or narrow such request; and (iii) if disclosure of such Mailing List
is required or deemed advisable, exercise its best efforts to obtain an
order or other reliable assurance that confidential treatment will be
accorded to such portion of the Mailing List to be disclosed which
COLDWATER CREEK designates.
4. REPRESENTATION AND WARRANTIES
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(a) COLDWATER CREEK and MBNA America each represents and warrants to the other
that as of the Effective Date and throughout the term of this Agreement:
i. It is duly organized, validly existing and in good standing.
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ii. It has all necessary power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement
iii. This Agreement constitutes a legal, valid and binding obligation of
such party, enforceable against such party in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, receivership, reorganization or other similar laws
affecting the enforcement of creditors' rights to generally and by
general principles of equity.
iv. No consent, approval or authorization from any third party is required
in connection with the execution, delivery and performance of this
Agreement, except such as have been obtained and are in full force and
effect.
v. The execution, delivery and performance of this Agreement, by such
party will not constitute a violation of any law, rule regulation,
court order or ruling applicable to such party.
(b) COLDWATER CREEK represents and warrants to MBNA America as of the date
hereof and throughout the term of this Agreement that ii has the right and
power to license the Trademarks to MBNA America for use as contemplated by
this Agreement.
5. CROSS INDEMNIFICATION
--------------------------
(a) COLDWATER CREEK and MBNA America each will indemnify and hold harmless the
other party, its directors, officers, agents, employees, affiliates,
successors and assigns (the "Indemnitees") from and against any and all
liability, causes of action, claims, and the reasonable and actual costs
incurred in connection therewith ("Losses"), resulting from the material
breach of this Agreement by COLDWATER CREEK or MBNA America, respectively
as the case may be, or its directors, officers or employees. COLDWATER
CREEK will indemnify and hold harmless MBNA America and its Indemnitees
from and against any and all Losses arising from the Trademark license
granted herein or from MBNA America's use of the Trademarks in reliance
thereon. Each party shall promptly notify the other party in the manner
provided herein upon learning of any claims or complaints that may
reasonably result in the indemnification by the other party.
(b) MBNA America will indemnify and hold harmless COLDWATER CREEK, its
directors, officers, agents, employees, parents, subsidiaries, affiliates,
successor and assigns, from and against any causes of action, and the
reasonable and actual costs incurred in connection therewith, which arises
out of a violation of applicable Delaware for federal law by MBNA America,
its employees, agents or contractors, in which COLDWATER CREEK is included
as a defendant (referred to as a "Claim"). COLDWATER CREEK shall, within
ten (10) business days of receiving notice of the Claim, notify MBNA
America in writing (in the manner provided for in this Agreement) of the
Claim. COLDWATER CREEK agrees (i) not to take any action which may
prejudice MBNA America's defense or increase its liability ("Action") with
respect to a Claim without MBNA America's prior written approval
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and (ii) that MBNA America may respond to a Claim as it determines in its
sole discretion. If COLDWATER CREEK takes any Action with respect to a
Claim without MBNA America's written approval or COLDWATER CREEK fails to
notify MBNA America of a Claim within fifteen (15) business days of
receiving the Claim, unless MBNA America is also a defendant in the Claim,
MBNA America shall be released and discharged from any obligation under
this Section 5 to indemnify and hold COLDWATER CREEK harmless with respect
to that Claim.
6. ROYALTIES
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(a) During the term of this Agreement, MBNA America shall pay Royalties to
COLDWATER CREEK. Royalties will not be paid without a completed Schedule C.
Except as other wise provided in Schedule B, payment of Royalties then due
shall be made approximately forty-five (45) days after the end of each
calendar quarter.
(b) If during the term of this Agreement and for a six (6) month period after
termination of the Agreement COLDWATER CREEK is unable or fails to fulfill
its obligation under Schedule D of this Agreement, MBNA America may, in
addition to any other right or remedy it has under this Agreement, cease
making Royalty payments otherwise accrued by and payable to COLDWATER CREEK
during the term of the Agreement pursuant to Section 6(a) hereof, and
utilize any such obligation as set forth in Schedule D, as appropriate, or
to provide the Customers with a benefit similar in quality and value to the
benefits set forth on Schedule D.
(c) On or before the forty-fifth (45/th/) day after the end of each calendar
quarter during the term of this Agreement, MBNA America will provide
COLDWATER CREEK with a statement showing the number of Credit Card Accounts
opened, the number of Credit Card Accounts renewed and the retail purchase
dollar volume (excluding those transactions that relate to refunds, returns
and unauthorized transactions), made during the preceding calendar period.
7. PROGRAM ADJUSTMENTS
-----------------------
A summary of the current features of the Program are set forth in Schedule A.
MBNA America reserves the right to make periodic adjustments to the Program and
its terms and features. MBNA America shall inform COLDWATER CREEK prior to such
an adjustment. Delaware and applicable federal law currently require each open-
end credit account Customer be given the opportunity to reject a proposed change
and pay the existing balance under the prior terms if the proposed adjustment
increases the fees or finance charges on such account.
8. CONFIDENTIALITY OF AGREEMENT
--------------------------------
The terms of this Agreement, any proposal, financial information and proprietary
information provided by or on behalf of one party to the other party prior to,
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contemporaneously with ,or subsequent to, the execution of this Agreement
("Information") are confidential as of the date of disclosure. Such Information
will not be disclosed by such other party to any other person or entity, except
as permitted under this Agreement or as mutually agreed in writing. MBNA America
and COLDWATER CREEK shall be permitted to disclose such Information (i) to their
accountants, legal, financial and marketing advisors, and employees as necessary
for the performance of their respective duties, provided that said persons agree
to treat the Information as confidential in the above described manner and (ii)
as required by law or by any governmental regulatory authority.
9. TERM OF AGREEMENT
---------------------
The initial term of this Agreement will begin on the Effective Date and end on
May 31, 2002. This Agreement shall extend at the end of the initial term or any
renewal term for successive two-year periods, but only upon the affirmative,
written notice of MBNA America and COLDWATER CREEK of each party's intent to
renew the Agreement at least ninety (90) days prior to the last date of such
term or renewal term, as applicable.
10. STATE LAW GOVERNING AGREEMENT
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This Agreement shall be governed by and subject to the laws of the State of
Delaware (without regard to its conflict of laws principles) and shall be deemed
for all purposes to be made and fully performed in Delaware.
11. TERMINATION
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(a) In the event of any material breach of this Agreement by MBNA America or
COLDWATER, the other party may terminate this Agreement by giving notice,
as provided herein, to the breaching party. This notice shall (i) describe
the material breach; and (ii) state the party's intention to terminate this
Agreement. If the breaching party does not cure or substantially cure such
breach within sixty (60) days after receipt of notice, as provided herein
(the "Cure Period"), then this Agreement shall terminate sixty (60) days
after the Cure Period.
(b) If either MBNA America or COLDWATER CREEK becomes insolvent in that its
liabilities exceed its assets, or is adjudicated insolvent, or takes
advantage of or is subject to any insolvency proceeding, or makes an
assignment for the benefit of creditors or is subject to receivership,
conservatorship or liquidation then the other party may immediately
terminate this Agreement.
(c) Upon termination of this Agreement, MBNA America shall, in a manner
consistent with Section 11(d) of this Agreement, cease to use the
Trademarks. MBNA America agrees that upon such termination it will not
claim any right, title, or interest in or to the Trademarks or to the
Mailing Lists provided pursuant to this Agreement. However, MBNA America
may conclude all solicitation that is required by law.
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(d) MBNA America and COLDWATER CREEK shall have the mutual right to prior
review and approval of any notice in connection with, relating or referring
to the termination of this Agreement to be communicated by MBNA America
and/or COLDWATER CREEK to the Members. Such notice shall be factually
accurate and the approval of either party shall be limited to the
Agreement. Such approval shall not be unreasonable withheld. Upon
termination of this Agreement, COLDWATER CREEK shall not attempt to cause
the removal of COLDWATER CREEK's identification or Trademarks from any
person's credit devices, checks or records of any Customer existing as of
the effective date of termination of this Agreement.
12. MISCELLANEOUS
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(a) This Agreement cannot be amended except by written agreement signed by the
authorized agent of both parties hereto.
(b) The obligations in Sections 5, 8, 11(c), 11(d), 14(b), 14(c), 14(d), 14(e),
14(f) and 14(g) shall survive any termination of this Agreement.
(c) The failure of any party to exercise any rights under this Agreement shall
not be deemed a waiver of such right or any other rights.
(d) The section captions are inserted only for convenience and are in no way to
be construed as part of this Agreement.
(e) If any part of this Agreement shall for any reason be found or held invalid
or unenforceable by any court or governmental agency of competent
jurisdiction, such invalidity or unenforceability shall not affect the
remainder of this Agreement which shall survive and be construed as if such
invalid or unenforceable part had not been contained herein.
(f) All notices relating to this Agreement shall be in writing and shall be
deemed given (i) upon receipt by hand delivery, facsimile or overnight
courier, or (ii) three (3) business days after mailing be registered or
certified mail, postage prepaid, return receipt requested. All notices
shall be addressed as follows:
(1) If to COLDWATER CREEK:
COLDWATER CREEK INC.
One Coldwater Creek Drive
Sandpoint, Idaho 83864
ATTENTION: Mr. Don Robson, Chief Financial Officer
Fax #: 208-265-3162
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(2) If to MBNA America:
MBNA AMERICA BANK, N.A.
Wilmington, Delaware 19884
ATTENTION: Mr. William H. Daiger, Jr., Group President
Fax #: 302-457-1195
Any party may change the address to which communications are to be sent by
giving notice, as provided herein, of such change of address.
(g) This Agreement contains the entire agreement of the parties with respect to
the matters covered herein and supersedes all prior promises and
agreements, written or oral, with respect to the matters covered herein.
MBNA America may utilize the services of any third party in fulfilling its
obligations under this Agreement.
(h) MNBA America may not assign or transfer its rights and/or obligations under
this Agreement without the written consent of COLDWATER CREEK; provided,
however, that MBNA America may assign or transfer, without written consent,
its rights and/or obligations under this Agreement:
i. to any individual, corporation or other entity [other than a
subsidiary or entity controlling, controlled by, or under common
control with MBNA America (an "MBNA Affiliate")] pursuant to a
sale [other than a sale as described in subsection (ii) below] as
long as such prospective buyer has substantially similar customer
satisfaction standards as MNBA America; or
ii. to any individual, corporation or other entity (other than an
MBNA Affiliate) pursuant to a merger, consolidation, or a sale of
all or substantially all the assets of MBNA America; or
iii. to any MBNA Affiliate.
MBNA America shall notify COLDWATER CREEK of the assignment of any rights or
obligations under this Agreement.
(i) MBNA America and COLDWATER CREEK are not agents, representatives or
employees of each other and neither party shall have the power to obligate
or bind the other in any manner except as otherwise expressly provided by
this Agreement.
(j) Nothing expressed or implied in this Agreement is intended or shall be
construed to confer upon or give any person other than COLDWATER CREEK and
MBNA America, their successors and assigns, any rights or remedies under or
by reason of this Agreement.
(k) Neither party shall be in breach hereunder by reason of its delay in the
performance of or failure to perform any of its obligations herein if such
delay or failure is caused by strikes, acts of God or the public enemy,
riots, incendiaries, interference by civil or
<PAGE>
military authorities, compliance with governmental laws, rules,
regulations, delays in transit or delivery, or any event beyond its
reasonable control or without its fault or negligence.
(l) This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
13. GROUP INCENTIVE PROGRAM
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(a) MBNA America shall design all advertising, solicitation and promotional
material with regard to the Program, except with respect to those materials
designed by COLDWATER CREEK pursuant to any GIP. In that regard, COLDWATER
CREEK shall give MBNA America thirty (30) days prior notice of its desire
to engage in marketing efforts regarding the Program itself, specifying
that accounts generated from such efforts will entitle COLDWATER CREEK to
the Royalty specified in Schedule B, subject to the other terms and
conditions of this Agreement.
(b) All marketing materials generated as a result of such GIP programs shall be
coded by COLDWATER CREEK for tracking purposes. Marketing materials or
telemarketing inquiries from Members which, in either case, do not contain
or reference such coding shall not be considered eligible for any of the
GIP Royalty as set forth in Schedule B.
(c) In addition to all other rights it may have under this Agreement, MBNA
America shall have the right of prior approval of all advertising and
solicitation materials distributed by COLDWATER CREEK pursuant to any GIP.
Further, MNBA America shall have final approval of the scope, timing and
content of any GIP.
(d) All costs approved by COLDWATER CREEK that are incurred by MBNA America in
producing and mailing materials created pursuant to any GIP or of
supporting the marketing efforts of COLDWATER CREEK pursuant to any GIP
shall be deducted from any or all Royalty payments due COLDWATER CREEK
under this Agreement.
(e) COLDWATER CREEK shall comply with MBNA America's instructions and all
applicable laws, including, without limitation, the Truth in Lending Act
and the Equal Credit Opportunity Act, with regard to any GIP.
14. CUSTOMER LIST
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(a) So long as COLDWATER CREEK continues to provide the Customers with
enhancements that require COLDWATER CREEK to receive a Customer List, as
defined below, each quarter MBNA America shall provide COLDWATER CREEK with
a list of information (e.g., names and addresses) about Customers as may be
mutually agreed upon by the parties (hereinafter the "Customer List").
When used in this Agreement, the term "Customer List" includes any whole or
partial copies or compilations of a Customer List in any form or any
medium, any information derived solely from a Customer List, and all
Customer Information, as hereinafter defined.
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(b) COLDWATER CREEK shall return to MBNA America each Customer List, in the
same form as received by COLDWATER CREEK within thirty (30) days of receipt
of such Customer List. COLDWATER CREEK agrees that as soon as COLDWATER
CREEK is no longer providing the Customers with the enhancements that
requires COLDWATER CREEK to receive the Customer List or providing such
enhancements as required by the Agreement, COLDWATER CREEK shall: (i)
immediately destroy and purge from all its systems all information within
each Customer List to the extent that such information in any way relates
to MBNA America, the Program or Credit Card Accounts ("Customer
Information"); and (ii) return or destroy within thirty (30) days all
Customer Information that is in tangible form, including any and all full
or partial copies, or reproductions thereof in any medium whatsoever. All
destruction of Customer Lists shall be done in strict accordance with MBNA
America's then current destruction policy.
(c) Any Customer List provided to COLDWATER CREEK may contain "dummy"
information (e.g., names, account information, addresses, etc.) so that
unauthorized use of a Customer List may be determined. This information
will be unknown to COLDWATER CREEK. A violation of this Section is
conclusively proven and the damages named hereinafter shall be deemed owed
when MBNA America establishes the following:
(i) that MBNA America placed "dummy" information on the list (e.g.,
name(s), account information, address(es), etc.);
(ii) that the "dummy" information received any mailings which were
sent or generated outside the scope of the permitted use of the
Customer List; and
(iii) that the identical "dummy" information was not provided by MBNA
America or its affiliate to any third party.
(d) All Customer Lists are (i) confidential and proprietary and (ii) shall
remain the sole property of MBNA America. COLDWATER CREEK expressly
acknowledges and agrees that COLDWATER CREEK has no property right or
interest whatsoever in any Customer List. COLDWATER CREEK shall hold all
Customer Lists in strict and absolute confidence and shall not provide,
trade, give away, barter, lend, send, sell or otherwise disclose
(collectively "transfer") any Customer List and shall not make any copies
of a Customer List of any type whatsoever except as expressly approved in a
separate writing by MBNA America. At all times COLDWATER CRREK shall keep
in confidence and trust all Customer Lists. COLDWATER CREEK further agrees
that it shall not transfer any Customer List to any other organization or
individual under any circumstances, and COLDWATER CREEK specifically but
not by way of limitation agrees that no subcontractors and/or affiliates
shall be transferred any Customer List unless agreed to in writing by MBNA
America prior to any such transfer.
(e) COLDWATER CREEK shall have no authority to use the Customer List for any
purpose not (i) directly necessary for the provision of the enhancements
required by this Agreement (as determined by MBNA America and COLDWATER
CREEK); or (ii) expressly permitted by MBNA America in a separate writing.
COLDWATER CREEK shall comply with any reasonable request of MBNA America
with respect to security precautions to maintain the security of the
Customer List. COLDWATER
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CREEK agrees to secure and safeguard the Customer List in strict accordance
with the requirements of this Section and MBNA America's instructions, as
communicated by MBNA America to COLDWATER CREEK from time to time.
COLDWATER CREEK shall only permit access to the Customer List to those
employees, volunteers, agents and/or representatives of COLDWATER CREEK who
need such access to perform their duties for COLDWATER CREEK. In view of
the confidential nature of the Customer List, COLDWATER CREEK warrants that
COLDWATER CREEK and all its employees, volunteers, agents and/or
representatives who work with any Customer List shall be made aware of the
obligations contained in this Section and shall be under strict legal
obligation not to copy any Customer List, transfer any Customer List or
make any other use of any Customer List other than as specifically approved
by this Section
(f) Because the nature of the Customer List makes an evaluation of damages
after a violation of this Section impossible, then in the event that nay
Customer List is handled or used in a fashion that violates this Section by
COLDWATER CREEK or its employees, volunteers, agents, and/or
representatives, MBNA America will be entitled to damages of twenty dollars
($20.00) for each use of each category of information (e.g., names
addresses, etc.) used in violation of this Section, with the amount of
damages not to exceed one hundred fifty thousand dollars ($150,000.00) per
breach. In addition, COLDWATER CREEK agrees that MBNA America shall be
entitled to injunctive relief to prevent violation or further violation by
COLDWATER CREEK and/or its employees, volunteers, agents or representatives
of this Section, and consents to submit to jurisdiction of the courts of
the State of Delaware and of the United States of America located in the
State of Delaware for nay actions, suits or proceedings arising out of or
related to this Section or the Agreement. Nothing herein shall be construed
a prohibiting MBNA America from pursuing any other remedy on account of
such breach or threatened breach.
(g) In the event COLDWATER CREEK receives a request to disclose a Customer List
pursuant to a subpoena, order of court of competent jurisdiction or by
judicial or administrative agency or legislative body or committee,
COLDWATER CREEK agrees to: (i) immediately notify MBNA America of the
existence, terms and circumstances surrounding such request; (ii) consult
with MBNA America on the advisability of taking legally available steps to
resist or narrow such request; and (iii) if disclosure of such Customer
List is required or deemed advisable, exercise its best efforts to obtain
an order or other reliable assurance that confidential treatment will be
accorded to such portion of the Customer List to be disclosed which MBNA
America designates.
15. CUSTOMER SERVICE STANDARDS
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(a) During the term of this Agreement, MBNA America agrees to apply, and to
meet or exceed then-current applicable regulatory requirements and MBNA
America customer satisfaction standards that MBNA America utilizes on a
portfolio-wide basis with respect to its other customers holding equivalent
types of accounts (e.g. Preferred, Gold., Platinum, as applicable, or Gold
Reserve, Gold Option or CD
<PAGE>
Deposits or MMDA Deposits). In the event that a recurrent issue concerning
Customer Service matters comes to the attention of COLDWATER CREEK, then
COLDWATER CREEK shall notify the then-current MBNA Account Executive
assigned to COLDWATER CREEK of the issue(s), and such Account Executive
will investigate the matter and report to COLDWATER CREEK regarding his/her
findings, along with planned steps to remediate any issues which are found
to exist within thirty (30) days. Further, upon the request of either
party, the parties agree to meet within five (5) days of such notice by
either party, to discuss the Customer Service Standards of MBNA America and
any material issues relating thereto, with the goal of addressing/resolving
such issues.
IN WITNESS WHEROF, each of the parties, by its representative, has executed this
Agreement as of the Effective Date.
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SCHEDULE A
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TERMS AND FEATURES
------------------
Subject to (i) MBNA America's right to vary the Program and its terms and
features, and (ii) the applicable agreement entered into between MBNA America
and each Customer:
A. CREDIT CARD ACCOUNTS
-----------------------
. There is NO annual fee
. The current annual percentage rate will be a variable rate of prime
plus 9.9%. For variable rate accounts, there may be an additional
margin applied on account of the Customer's delinquency.
. Customer may be offered opportunities to select credit insurance as a
benefit under the Program.
B. GOLD RESERVE ACCOUNTS
--------------------------
"Gold Reserve Account" means a Gold Reserve (R) (as such service mark may be
changed by MBNA America, in its sole discretion, from time to time) revolving
loan account opened by a Member in response to marketing efforts made pursuant
to the Program.
. There is NO annual fee for the first six (6) months
. The annual fee for the second six (6) months, when applies, is $10.00
. Thereafter the annual fee, when applied, is $20.00
. The current annual percentage rate is 18.90%
C. GOLD OPTION ACCOUNTS
-------------------------
"Gold Option Account" means a Gold Option (sm) (as such service mark may be
changed by MBNA America, in its sole discretion, from time to time) revolving
loan account opened by a Member in response to marketing efforts made pursuant
to the Program.
. The is NO annual fee.
. The current annual percentage rate is 14.99%.
<PAGE>
SCHEDULE B
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ROYALTY ARRANGEMENT
-------------------
During the term of this Agreement, MBNA America will pay COLDWATER CREEK INC. a
Royalty calculated as follows, for those accounts with active charging
privileges. All Royalty payments due hereunder are subject to adjustment by MBNA
America for any prior overpayment of Royalties by MBNA America:
A. CREDIT CARD ACCOUNTS
-------------------------
1. $1.00 (one dollar) for each new Credit Card Account opened, which
remains open for at least ninety (90) consecutive days and which is
utilized by the Customer for at least one purchase or cash advance
which is not subsequently rescinded, the subject of a charge back
request, or otherwise disputed
2. $1.00 (one dollar) for each Credit Card Account for which the annual
fee is paid by the Customer. If no annual fee is assessed by MBNA
America (other than as a result of a courtesy waiver by MBNA America),
then such Royalty will be paid for each Credit Card Account which: 1)
has a balance greater than zero as of the last business day of every
twelfth month after the opening of that Credit Card Account; and 2)
has had active charging privileges for each of the preceding twelve
months.
3. 0.50% (one half of one percent) of all retail purchase transaction
dollar volume generated by Customers using a Credit Card Account
(excluding those transactions that (1) relate to refunds, returns
and/or unauthorized transactions, and/or (2) are cash equivalent
transactions (e.g. the purchase of wire transfers, money orders, bets,
lottery tickets, or casino gaming chip)).
4. 1% (one percent) of the finance charges assessed within a calendar
quarter by the application of the relevant periodic rate(s) to the
respective average daily balance(s) of certain Credit Card Accounts
(the "Finance Charges"). This payment shall be calculated as of the
end of each calendar quarter. The Finance Charges are assessed based
upon the application of the relevant periodic rate(s) to the average
daily balances measured as of the end of each of the preceding three
months. The sum of the Finance Charges assessed during each of the
three months within the calendar quarter times the above percentage
rate is the quarterly payment due under this section. Each monthly
measurement shall include only finance Charges assessed during such
month, and shall exclude Finance Charges assessed on Credit Card
Accounts which, as of the day of measurement, are thirty-five (35) or
more days delinquent or are 10% or more over the assigned credit line
for such Credit Card Account.
B. GOLD RESERVE REVOLVING LOAN ACCOUNTS
-----------------------------------------
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1. $0.50 (fifty cents) for each Gold Reserve Account opened, which
remains open for at least ninety (90) consecutive days.
2. 0.25% (twenty-five one-hundredths of one percent) of the average of
all month-end outstanding balances (excluding transactions that relate
to credits and unauthorized transactions) in the calendar year for
each Gold Reserve Account. This Royalty will be paid within sixty (60)
days of the calendar year end.
3. $2.00 (two dollars) for each applicable twelve (12) month period that
a Customer pays the annual fee on a Gold Reserve Account.
C. GOLD OPTION REVOLVING LOAN ACCOUNTS
----------------------------------------
1. $0.50 (fifty cents) for each Gold Option Account opened, which remains
open for at least ninety (90) consecutive days.
2. 0.25% (twenty-five one-hundredths of one percent) of the average of
all month-end outstanding balances (excluding transactions that relate
to credits and unauthorized transactions) in the calendar year for
each Gold Option Account. This Royalty will be paid within sixty (60)
days of the calendar year end.
3. $2.00 (two dollars) for each applicable twelve (12) month period that
each Gold Option Account remains open.
D. DEPOSIT ACCOUNTS
---------------------
"CD Deposits" means those deposits in the certificate of deposit Accounts opened
by Members in response to marketing efforts made pursuant to the Program.
"MMDA Deposits" means those deposits in the money market deposit Accounts opened
by members in response to marketing efforts made pursuant to the Program.
1. 0.10% (ten one-hundredths of one percent) on an annualized basis,
computed monthly (periodic rate of 0.0083330%) of the average MMDA
Deposits.
2. 0.05% (five one-hundredths of one percent) on an annualized basis,
computed monthly (periodic rate of 0.004167%) of the average CD
Deposits.
E. GIP ACCOUNT
----------------
1. $35.00 (thirty-five dollars) for each GIP Account opened, which
remains open for at least ninety (90) consecutive days, and which is
utilized by the Customer for at least one purchase or cash advance
which is not subsequently rescinded, the subject of a charge back
request, or otherwise disputed. Such GIP Accounts will not qualify for
any other opening-of-an-Account Royalty.
F. ROYALTY ADVANCE
--------------------
<PAGE>
Upon execution of the Agreement by COLDWATER CREEK, MBNA America shall pay to
COLDWATER CREEK the sum of two hundred thousand dollars ($200,000.00) (the
"Advance"), as an advance against future Royalties, subject to the provisions
set forth below. All Royalties accrued shall, in lieu of direct payment to
COLDWATER CREEK, be applied against the Advance until such time as the Advance
is fully recouped. Any Royalties accrued thereafter shall be paid to COLDWATER
CREEK as set forth in this Agreement. Notwithstanding the foregoing, COLDWATER
CREEK hereby promises to pay MBNA America upon demand an amount equal to the
difference between the amount of the Advance and the total amount of accrued
Royalties credited by MBNA America against the Advance as of the date of such
demand, in the event any of the conditions set forth in Clauses (i) through (iv)
below should occur:
(i) the Agreement terminates and the amount of the Advance has not been
fully recouped by MBNA America;
(ii) COLDWATER CREEK breaches any of its obligations under this Agreement;
(iii) MBNA America is prohibited or otherwise prevented from conducting at
least two (2) direct mail campaigns to the full updated Mailing List
during each consecutive twelve month period during the term of the
Agreement; and
(iv) MNBA America is prohibited or otherwise prevented from conducting at
leach one (1) telemarketing campaign to the full updated Mailing List
during each consecutive twelve month period during the term of the
Agreement.
<PAGE>
SCHEDULE D
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ENHANCEMENTS
------------
A. Customers will have the opportunity to participate in the enhancement
program established by COLDWATER CREEK (the "Enhancement Program") which
will enable such Customers to earn one (1) twenty dollar ($20.00)
certificate (each, a "Certificate") from COLDWATER CREEK for each two
thousand ($2,000.00) dollars worth of Adjusted Purchases (as described
below) on the Credit Card Account, that can be applied toward the purchase
of merchandise at COLDWATER CREEK retail establishments or from COLDWATER
CREEK catalogs. For the purpose of calculating Adjusted Purchases dollar
volume, (i) Adjusted Purchases do not include fees, finance charges,
credits, returns, refunds, unauthorized transactions and cash advances;
(ii) each dollar of eligible purchases made from merchants other than
COLDWATER CREEK shall equal one dollar ($1.00) in Adjusted Purchases, and
each dollar of eligible purchases made from COLDWATER CREEK catalogs or
COLDWATER CREEK retail establishments, shall equal five dollars ($5.00) of
Adjusted Purchases. Certificates may not be combined with any other
discounts or coupons (other than other Certificates), and can be applied to
the price of sale merchandise, but shall have no independent cash value.
Such Certificates may be designated as "COLDWATER CREEK Certificates" or
such other name as COLDWATER CREEK may designate with the approval of MBNA
America, which approval shall not be unreasonably withheld or delayed, in
promotional materials. Certificates are redeemable within one hundred
eighty (180) days from the date of issue. If the Agreement expires or for
any reason terminated, COLDWATER CREEK agrees to honor all Certificates
that were issued as of the date of such termination or expiration through
each said Certificate's expiration date.
B. At no cost to COLDWATER CREEK, MBNA America will perform certain agreed
upon administrative and operational services for COLDWATER CREEK with
respect to the Enhancement Program. MBNA America will track the
accumulation of Adjusted Purchases of each Customer and will arrange for
Customers to receive their Certificates within a reasonable time after such
Customer has accumulated two thousand ($2,000.00) dollars worth of Adjusted
Purchases, subject to availability for Certificates.
C. COLDWATER CREEK shall ensure that its retail and catalog operations honor
Certificates at the full value stated thereon and shall provide operational
training materials to COLDWATER CREEK employees so that they understand the
Enhancement Program. For catalog purchases that use a Certificate,
COLDWATER CREEK acknowledges that it should risk develop an internal
process that eliminates or substantially reduces the risk that a
Certificate used for a catalog purchase has not been used before.
D. Any tax or similar reporting or remittance obligations imposed by any
authority upon the awarding or use of Certificates, or documentation
thereof, shall be solely and exclusively the responsibility of COLDWATER
CREEK.
<PAGE>
E. As between COLDWATER CREEK and MBNA America, the parties agree that
COLDWATER CREEK is solely exclusively responsible and liable for all suits,
causes of action, express or implied warranties, damages, and claims or
negligence or product liability arising from any and all items sold or to
be sold by COLDWATER CREEK.
F. COLDWATER CREEK and MBNA America will review the Enhancement Program
eighteen (18) months from the execution of this Agreement and at least once
a year thereafter to insure that it remains economically viable for both
parties. In the event that the Enhancement Program is not economically
viable for COLDWATER CREEK the parties will meet to discuss ways in which
to adjust the Enhancement Program. After said discussion, COLDWATER CREEK
may adjust the Enhancement Program upon ninety (90) days prior notice to
MBNA America and forty-five (45) days notice to the Customers.
Notwithstanding any adjustment to the Enhancement Program, COLDWATER CREEK
will honor the terms of any Certificate issued prior to the effective date
of such an adjustment.
During the term of this Agreement, COLDWATER CREEK and MBNA America on an
ongoing basis, will further develop the Enhancement Program.