LAW OFFICES

MANATT, PHELPS & PHILLIPSA PANTNBIISHIP INCLUDING PMOFIMIONAI. COMPONATIONB

TELEPHONE (2O2) 463-43OO IZOO NEW HAMPSHIRE AVENUE N W LO» AHOE' •«

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WASHINGTON D C 2OO3B "" ANOEl£S CAUFORNIA

January 23, 1991 c_ -,>ac "-iro -r-CJ "*«•

Lawrence M. Noble, Esq. 7" ,_2a

General Counsel An D AQ«J_^J ,„ Federal Election Commission nUn J./7L Oj. 2 ''1999 E Street, N.W. -%Washington, D.C. 20463 ~

Re: Request for Advisory Opinion

Dear Mr. Noble:

On behalf of the Deloitte & Touche Federal Political ActionCommittee (the "PAC"), we are hereby requesting an advisory opinionfrom the Federal Election Commission. Specifically, as set forthbelow, the PAC requests an opinion from the Commission as to thepermissibility under the Federal Election Campaign Act of 1971,as amended (the "Act" or "FECA"), 2 U.S.C. S 431 et seq., of aproposal to solicit advance authorization of periodic credit cardcontributions to the PAC from employees of Deloitte & Touche.

Deloitte & Touche was formed in December 1989, upon themerger of the accounting firms of Deloitte, Has kins & Sells andTouche Ross. Deloitte & Touche is a general partnership providingcomprehensive accounting and auditing, tax, consulting, and otherprofessional services throughout the United States. Prior to themerger, the employees of each Firm had established Federalpolitical committees registered with the Federal ElectionCommission. These^committees were the Deloitte, Haskins & SellsGood Government PAC, and the Touche Ross Partners Political ActionCommittee. Because both Firms were partnerships, the committeeswere not separate segregated funds, but rather, were nonconnectedmulti-candidate committees. Since the date of the merger, the twocommittees were treated as affiliated within the meaning of11 C.F.R. S 100.5(g)(2). The name of the Touche Ross Partners'committee has been changed to the Deloitte & Touche FederalPolitical Action Committee, and the Deloitte, Haskins & Sellscommittee has been terminated.

Deloitte & Touche has approximately 150 offices in the UnitedStates with approximately 1,700 partners nationwide and 20,000employees. All costs incurred in connection with the

MANATT, PHELPS & PHILLIPS

Lawrence M. Noble, Esq.January 23, 1991Page 2

administration and solicitation of contributions to the PAC aredefrayed from the contributions received by the PAC.

Pursuant to FEC Advisory Opinion No. 1978-68, in which theCommission held that political committees may accept credit cardcontributions, the PAC has become an American Express "establish-ment" for the purposes of accepting credit card contributions.Under the American Express agreement, the PAC is an establishmentunder the American Express mail order system. The agreementbetween American Express and the PAC is identical to those betweenAmerican Express and other nonpolitical establishments, and thePAC is responsible for paying all service charges and otherapplicable fees. No charges, fees or other costs related to thesolicitation or agreement with American Express will be borne byDeloitte & Touche.

The PAC proposes to send an annual solicitation to allDeloitte & Touche partners requesting that they make a contributionto the PAC by charging it to their American Express card. Thesolicitation will suggest a guideline and will comply in allrespects with the Commission's regulations concerning guidelinesand notices for solicitations contained in 11 C.F.R. SS110.11 and114.5(a).£' The solicitation will include a return card which eachindividual will be asked to complete, sign and return authorizingan annual charge to his or her American Express card in Decemberof each year in a specific amount. The authorization will remaineffective until revoked in writing by the contributor. Theauthorization may be revoked by the contributor at any time. Anycontributor who wishes his or her contribution to be charged tohis or her account on a monthly, rather than annual basis, will bepermitted to so elect. The PAC will maintain all records requiredby the Commission's regulations and will comply with all applicablereporting and aggregation requirements for these credit cardcontributions.

Since the solicitation and authorization by the contributormay occur some time prior to the actual charge to the individual'sAmerican Express account in December of each year, the PAC iswilling to provide individuals with a written reminder of theamount of their contribution, prior to charging those contributionsto their accounts. Further, the PAC will refund to AmericanExpress (and thus to the individual contributor) any contributioncharged to an individual's account which the individual repudiatesor refuses to pay, even if a written authorization is still

I/ Since the PAC is not a separate segregated fund, it is notrequired to comply with the provisions of 11 C.F.R. S 114.5,but will do so nonetheless.

MAN ATT, PHELPS & PHILLIPS

Lawrence H. Noble, Esq.January 23, 1991Page 3

in effect. These measures will insure that contributors who havesigned authorizations will be fully aware of the charge of thecontribution to their account, and that no involuntary contributionwill be made inadvertently.

In addition, the PAC may notify Deloitte & Touche employeesbelow the partner level of the existence of the PAC and of theopportunity to contribute through use of the American Expresscard. This notification to non-partner employees would probablybe made in the Deloitte & Touche PAC newsletter, and not byspecific solicitation letter. As with the specific writtensolicitation to partners, the notice in the newsletter wouldcomply with the requirements of 11 C.F.R. $$110.11 and 114.5(a).

The PAC will accept contributions only from those employeeswho are United States citizens and will accept only individualcontributions from personal funds. _' Deloitte & Touche partnersare entitled to obtain an American Express card imprinted with thename Deloitte & Touche through a separate arrangement betweenDeloitte & Touche and American Express. These are individual andnot Firm accounts, although the cards are imprinted with both theindividual's name and that of the Firm (for identification purposesonly). Deloitte & Touche is not responsible in any way for billscharged to these accounts, and American Express has no recourseto Deloitte & Touche for any late or unpaid balances.f_'Individuals who choose to do so may utilize these American Expresscards to make their contributions to the PAC or may utilize anyother American Express account which they may maintain.

We believe that this plan to solicit credit card contributionscomplies in every respect with the guidance previously set forthby the Commission in this area. First, the Commission hasspecifically stated that the Act permits political committees toaccept contributions made by credit card. See AO 1978-68. As inthe situations addressed in this and subsequent advisory opinions,the agreement between the PAC and American Express will comply in

2/ Deloitte & Touche does not have any partners who areindividually incorporated.

3/ Individuals must use funds from their own personal accountsto pay these American Express bills. They may not pay thesebills by drawing on any partnership account or undistributedpartnership funds. Therefore, although Deloitte & Toucheitself is a government contractor, there is no way thatpartnership funds or funds commingled with partnership fundscan be used to make contributions to the Deloitte & TouchePAC by virtue of the use of these American Express cards.

MANATT, PHELPS & PHILLIPS

Lawrence M. Noble, Esq.January 23, 1991Page 4

all respects with the American Express usual and normal practiceand will not result in any prohibited corporate contribution tothe PAC.

Second, the Commission has, with respect to other similartypes of financial transactions, found that the prior authorizationof periodic contributions is permissible under the Act, and mayremain in effect until such authorization is revoked by thecontributor. Thus, the Commission has found contributions byautomatic withdrawal from bank accounts permissible (see AO 1989-26), and has specifically stated that the Act permits payrolldeductions, including payroll deductions for partnership contribu-tions, provided that the costs of the payroll deduction are notborne by the partnership. See AOs 1978-23 and 1982-63.

We believe that the proposal contained herein is a logicalextension of principles previously espoused by the Commissionrelating to credit card contributions (AO 1978-68) and contribu-tions by automatic withdrawal from bank accounts (AO 1989-26).Since the safeguards in this request, such as the ability of thecontributor to revoke the authorization at any time and theagreement to pay American Express at the usual and normal charge,are virtually identical to those set forth by the Commission inAO 1989-26, the proposed activity will comply in all respectswith the Act and regulations. Based on the foregoing analysis,we request that.the Commission issue an opinion that nothing inthe Act or regulations prohibits the PAC from accepting a writtenauthorization from a contributor to charge a PAC contribution tohis or her American Express account on a periodic basis, untilsuch time as the contributor withdraws that authorization.

For your information, we have enclosed a copy of theestablishment agreement between the Deloitte & Touche PAC andAmerican Express, and a copy of the agreement between CorporateCardmembers and American Express regarding corporate cards. Ifyou have any further questions concerning this request or if yourequire additional information, please contact me at 463-4300.

Sincerely,

Lyn UtrechtManatt, Phelps & Phillips

Attachments

RELATED Dtet MarkatlngSERVICES EftaWtstmtnt Agrwnwnt

Amercan Express Towerworld Financial CenterNew Work New Vork 1028S

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Account Number

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•awesNsVni and NunW. ITJAJ A^C Q rt i a. //» •

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This Agreement covers your parKtpation m me AmericanExpress • Card Service far a» your establishments m theUnited Slates me S Virgin islands Puerto Rico andCanaoa it •„ jpersedi* any previous agreement you havecovei-ng me Amencai Express Card Service (the CardService ) As you real this Agreement please note thewords you and your mean the estaoftsm vm mat signs-inis fjAgreement The words we our and us refer to AmericanExpress Travel Related Services Company inc and usaffiliates suosidianes aid licensees *r. en issue Cards orparticipate m me Card Sence For me purposes a jvsAgreement a charge or credit card issued by us bearmgthe name arxl KXJO of American Express is cawed me Cartfme person whose name is embossed on the lace of toeCard « me Cardmember and 01 amounts ol purchasesmade wuh me Card when amounts are payable byCardmembers to us are called Charges This Agreementcovers your participation m me Amencan Express CardService with respect to marf order and or telephone c-derCharges only in me event mat any ol your estaohshr emsservice'etaM walk-in customers you must enter into aseparau. addendum covermg such Charges

It an the provisions at this Agreement and an ol our proce-dures and rules are satisfied each une a Cardrnembermakes a purchase with me Card at any ot your establish-ments we win accept Cha'ges made at your estabhsn-ment(s) without FUH Recourse Fuff Recourse shall meanthat we are entitled to reimbursement tram you ol theamount ol ma Charge m question to the extent ol anypayment made by Ame» to you and we can onset suchamount by deducting it Irom amounts due to you lorCharges or we can bin you tor it We WIN have FullRecorjrse tor any Charges as to which you have notcomplied wnn an the rules procedures or conditionsstated « mis Agreement even rf we had nonce whenwe paid you that you did not teHow them We also w*have other rights to Fun Recourse as specified m mwAgreement Where we have me nghi to Fun Recoursewe may deiay asserting Bvs nght during any penod inwhen we or you are attempting to resolve a d«pute

B. CARD ACCEPTANCE PftOCOUftES

Mall Order ChargesYou agree to permi Cardmembers to purchase goodsand servces with me Card o/ mail order through yourestafc snmenti* inly rfa yo -aveoaaineoanore

£.« emoer*ine Cardmemoer)

b you nave obtained the expiration date ol the Card andme Cardmemoer s complete account number

c vouhave^eriiiedthatiner.'chaseisbsMgrnaoeonoralter me beg nmng date e» me Card and no later man meexpirawn oate ol me Card

d betore sending me order to the Cardrnember you navenot been notified through our CaneeBation BuHetm orotherwise *nat the Card has been cancelled

e you nave received an Overwnit Authorization approvalcoae number if necessary atthenmetheorderismadeand iftreorder ssemtwo(2)monthsormoretnereaHeraga n at me tirne me order is tent to ttȣatfaiBmber

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me Cardrnember s complete aceo gumber „b youruveveritiedthatnwpurcnaseifeiinginatMonor

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d you nave received an OverhnM Authorization approvalcode number f necessary aitnewtetheoroer ismaoeand itineoraenssemrwo(2)monthsormoreinereaiteragam at me time me order is sent out or detwered to meCarom* iber

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You agree to comply win sucn other reasonable operatinginstructions and procedures as *a may issue from time totuneYou agree to make every effort to avttd acceptance otfraudulent Cards and submsson 10 us ot unauinonzedCharges Should Charges made won fraudulent Cardsand. or unauthorized Charges exceed vuee tenb« U onepercent (30%) of your Card sales « any consecutive twelve(12) month period you agree to eucuie an addendum toV«s Agreement whereoy fraud training ol your personnel WRIIbe conducted and other arm fraud measures wui be

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d You agree to notify us promptly m me event you enwrinto bankruptcy or insolvency proceedings a* follows'oral or telephone notification to your local AmericanExpress Sales Representat 'eonorbetoremedaysuchproceedings ve tiled and written confirmation ther ofwrihmseven(7)davsthereattertoouraddresssho*'' mthehr page of m« Agreement and directed to meattention ol me Retail Vice President s oftce

XXQOVERMNOLAW

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XXI AUTHORITY TO WON

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AMERICAN EXPRESS

Edwin M Coop*"*ia«President

Group—USA

O Base Payment PlanO Economy Payment PlanJI extended Payment Plan

inia's

OCT 11 '90 15-40 H _ 3/E DISTRICT P. 2/7

TOWELRELATEDSERVICES

independent and ChainDirect MarketingEatabliahment Agreement

American ExpressTravel Related Sennets Company, IncAmerican Express TurnerWorld Financial CenterNew York. New York 10285

Chain AfflBanon Own Number

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L GENERAL DEFINITIONS

This Agreement covers your participation in the AmericanExpress* Card Service (or all your establishments in theUnited Slates, the U S Virgin Islands, Puerto Rico andCanada. It supersedes any pre lous agreement you havecoverino the American Express Card Service (the "CardService"), Ae you read this Agreement, please note thewords you and your mean the establishment that signs thisAgreement The words we, our and M refer to AmericanExpress Travel Related Services Company, Ino and Itsaffiliates, subsidiaries and licensees which Issue Garde orparfaopaie In the Card Service For me purposes of thisAgreement, a charge or credit card issued by us peeringthe name and logo of American Express la called the Card,the person whose name la embossed on the face of theCare .3 the Card/nemoer, and all amounts of purchasesmade with the Card, which amounts are payable byCardmemoer* to us. ant called Cftavgat TWa Agreementcovers your participation In the American Express CardService with respect to mall order and/or telephone orderCharges only In the event that any of your establishmentsservice retail, walk-in, customers, you must enter into aseparate addendum covering such Charges.

If all the provisions of this Agreement and aM of our piece-durea and rules are satisfied each time a Cardmembermakes a purchase with the Card at any of your establish-ments, we will accept Charges made at your establish-ment ) without Full Recourse, full ffecounje shall meanthat we are entitled to reimbursement from you of theamount of the Charge in question to the extent of anypayment made by Amex to you and we can offset suchamount by deducting it from amounts due to you forCharges or we can bill you for it We will have FullRecourse tor any Charges as to which you have notcomplied with all the rules, procedures, or conditionsstated In this Agreement, even if we had notice whenwe paid you that you did not follow them. We also willhave other nghts to Full Recourse ae specified in thisAgreement Where we have the right to Full Recourse,we may delay asserting this right during any period Inwhich we or you are attempting to resolve a dispute

II. CARD ACCEPTANCE PROCEDURES

You agree to permit Cardmembera to purchase goodsand services with the Card by mall order through yourestablishments) only Ifa youhaveobtalnedanorderformwiththesignatureofthe

Cardmember (the Card cannot be used by anyone butthe Cardmember);

b. you have obtained the expiration date of the Card, andthe Cardmamber's complete account number;

c you have verified that the purchase is being made on orafter the beginning date of the Card and no later then theexpiration date of the Card,

d before sending the order to the Cardmember, you havenot been notified, through our Cancellation Bulletin orotherwise, that the Card has been cancelled;

e you have received en Overtimtt Authorization approvalcodenumber.if necessary, at the time theorder is madeand, if the order is sent two (2) months or more thereafter,again at the time the order« sent to the Cardmember

f. all other relevant provisions in this Agreement are com-plied with

You agree to permit Cardmembers to purchase goods andservices with the Card by telephone order through yourestablishment ) only ifa you have obtained the exptraflon date of the Card, and

the Cardmember's complete account number;b you have venfled that the purchase is being made on or

after the beginning date of the Card and no later than theexpiration date of the Card,

c before sending the order to the Cardmember, you havenot been notified, through our Cancellation Bulletin orotherwise, (net the Card has been cancelled,

d you have received an CverbnUt Authorization approvalcode number, if necessary, at the tone the order Is madeand, if the order is sent two(2) months or more thereafter.again at the dme the order is sent out or delivered to theCardmember

OCT 11 '90 15:40 flrlEX S/E

e all other relevant provisions in this Agreement are com-plied with

You agree to comply with such other reasonable operatinginstructions and procedures as we may issue from time totime

You agree to make every effort to avoid acceptance offraudulent Cards and submission to us of unauthorizedCharges Should Charges made with fraudulent Cardsand/or unauthorized Charges exceed three tenths of onepercent(.30%) of your Card sales in any consecutive twelve(12) month penod. you agree to execute an addendum tothis Agreement whereby fraud training of your personnel willbe conducted and other anti-fraud measures will beinstituted

Whan a Cardmember makes or requests to make a pur-chase with the Card, you wiU not extend or offer to extendcredit or charge services to the Cardmember through yourown or any other credit, debit or charge card or service

You represent and warrant that you have performed or willperform all obligations connected with or arising from allCharges submitted to us. that all indebtedness arising tramCharges submitted tous isgenumeand resultsframabonetide sale of goods or services to a Cardmember (other thanyour offloes, employees or their family members), that theamount shown on each Charge Record Form represents thefull and true value of goods or services sold to suchCardmember

IIL OVBRUMT AUTHORIZATION

For the purposes of this Agreement, "Overhrmt Authoriza-tion" of a Charge means only that we have approved theamount of the Charge to a Cardmember's account Youmust stHI comply wiH all provisions of this Agreement, par-ticularly all those requirements in the preceding Sectionentitled "Card Acceptance Procedures" if you do not fullycomply, we have the right of Full Recourse for the Charges)Involved, even if you obtained Overllmlt Authorization orother authorization from us

Before you allow a Cardmember to makea Charge or seriesof Charges for more than seventy-five dollars ($75) In ordersIn one day fOvertimlt Charges"), or whatever •floor bmtt"we establish, and before sending the order to theCardmember. you must call us for en Overilmit Authoriza-tion Wehavethenghttochangeyourflooriimlt If we do, wewill notify you in writing of your new floor limit and the date ittakes effect IntheeventtheCardmember'sorderisnotsentto the Cardmember until two (2) months or more afteryour receipt of the order, you agree to obtain a secondOveriimit Authorization at the time the purchase is sent to theCardmember

You can call us toil free for Overiimit Authorization at thedesignated service center or centers We will make sure thatat least one authorization center in Continental NorthAmerica is open to receive your calls twenty-four (24) hoursa day, seven (7) days a week

We will have Full Recourse for any Overiimit Charge forwhich Overiimit Authorization « not properly requested orobtained, or for which Overkmrt Authonzati- n H requestedand refused or for which no Overiimit Authorization approvalcode is given

inthe event that you have an electronic point of sale authon-zation system which is acceptable to us, you may obtainOvertmit Authorization throughyour electronic pant-ot-salesystem m accordance with our specifications and instruc-tions pursuant to a separate written agreement with us Ifyou choose to utilize the services of a third party processorto obtain authorization electronically, such processor mustbe acceptable to us You agree to notify promptly yourAmerican Express Sales Representative in the event youobtameither an electronic pant of sale authonzaoon systemor the capability to receive authorizations electronically

IV. CHARGE RECORD FORMS

You agree to follow our standard operating procedures forcompleting our Charge Record Forms for eachCardmember purchase You further agree to send us com-pleted Charge Record Forms at or altar the time you sendout the goods or services purchased by a Cardmember tothe Cardmember. We wiN have Full Recourse for anyCharges for which you have sent ua the Charge RecordForms before you have sent to the Cardmember the goodsor services indicated on such Charge Record Forms If thegoods or services an sentouttorefree trial penod. you willeend'us the'ChargTReoord Forms only when the free ti alpenod ends. Each Charge Record Fonr must containa The Cardmember's name and account number, and the

expiration date of the Cardb The dated the Charge )c The Overtmlt Authorization approval codefa), If

necessaryd TheamountoftheCharge.lneiudingapplicabletaxes.if

anye Your establishment identification Thlsmustincludeyour

name, city, state and Amencan Express service estab-lishment number

f The words "Mall Order" or "Telephone Order," as ap-propriate. In the space for the Cardmembers signature

g All other Information that Is requested on the ChargeRecord Form or that may be requested from time to timeby us

All Information must be filled in legibly.

You must keep your mail order term with the Cardmember'ssignaturefor at least twenty-five (25) months afteryou fill theorder if we so request, you agree to send us a copy of theorder form within fifteen (16) days of our request If wedonotreceive a copy of the order within fifteen (15) days, we willhave Full Recourse for the amount of the Charge.

We shall assign to each of your establishments a uniqueservice establishment number. All Charges from each es-tablishment shall be submitted according to its establish-ment number.

In the event you wish to use any charge form other than ourCharge Record Form, you must obtain our prior writtenapproval

v. cREorraVbu may establish your own policy with respect to eredrtsf orreturned merchandise or eennbes, and you agree to notifyCardrnembera of your policy pnor to any Card purchase.You agree that you will maintain and enforce a policy forpurchases made with the Card that to at (east as

favorable as the policy for purchases nwdt with otherforms of payment, including cash, checks, or othercharge, credit or debit cards In the event you Issue anycredits to Cardmembera for services or relumedmerchandise which they purchased with the Card, youagree to record these credits on our Credit Recordforms You also agree to send these forms together witha Summary of Credit Record form to the office or officeswe designate within seven (7) days after you issue thecredit We will deduct the full amount of the credit, minusthe discount you paid us for the Charges bemg credited,from subsequent payments to you or bill you for It

You agree not to give cash refunds on Card Charges

VI. SUBMISSION OF CHARGES;OUR PAYMENTS TO YOU

You agree to send us Summary of Charge Record Forms foreach of your establishments at least once each week show-ing the total of all Charges for purchases sent toCardmembera that week, plus our copy of all Charge Re-cord Forms You agree not to include more than one hun-dred (100) Charge Record Forms in each Summary. If youdo not send us Charge Record Forms within ten (10) days,from the date the goods or services are sent to theCardmember or within ten (10) days after any free trialpenod ends, as applicable, we will not be obligated toaccept those Charges and we wiu have Full Recourse if wedo accept such Charges YOU agree to prepare the Sum-mary of Charge Record Form according to the instructionswe provide and to send it to the office we designate If youown or operate more than one establishment you mustsubmit Charges to us separated by establishment number

We shall accept Cardmembers' Charges from you ataprlceequal to the total face amount, less our discount asexplained below. You shall transfer all these Chargesdirectly to us, and shall not bin any Cardmember forpurchases made with the Card, if you do receive paymentfor any of ourCardmembers'Charges, you agree to endorseit over to us and mail it to us immediately

Vlk PAYMENT PLANS

You may choose the payment plan that suits your needsbeet—a Basic Payment Plan, an Economy Payment Plan,oranExtendedPaymentPlan Yourdlscountratedependsin part on the payment plan you choose, so be sure to readthese options carefully indicate your choice by checkingthe box on the signature page next to the plan you wantbefore signing this agreement.

Here is how the Plans work;BaetoPeyi 11 If we receive your Summary of

Charge Record Form before the close of any businessday, our payment to you for all Charges on the Summarysubmitted in accordance wtth this Agreement will bemailed withm three (3) business days after we receive itFor example, payments for Charges we receive before thedose of business on Monday will be mailed to you onThursday Payment for Charges we receive before theelose of business on Thursday will be mailed to you onTuesday.• Beonomy Payment Plan: We will mail payment to you forall Charges on your Summary of Charge Record Form

submitted in accordance with this Agreement on the firstbusiness day fifteen (15) calendar days after we receiveyour Summary• Extended Payment Plan: Wewill mail payment to you forall Charges on your Summary of Charge Record Formsubmitted in accordance with this Agreement on the firstbusiness day thirty (30) calendar days after we receiveyour Summary

VNI. DISCOUNT RATE

Your discount rate depends on two factors the paymentplan you select and the Net Annual Volume of Charges youhad during the previous calendar year This "Net AnnualVolume of Charges" means the total of all CardmemberCharges we accepted from you during the previouscalendar year, less any credits you issued or amounts forwhich we turned to you for payment For the purposes ofthis Agreement the dale we accept a Charge Is thebusiness day we receive it at the office we havedesignated for the receipt of Charges from youYou may qualify for a new discount rate based on the NetAnnual Volume of Charges we have received from youduring the previous calendar year If so. we will adjust yourdiscount rate onAprtjrtfollowing that calendar year, andthe new discount rate will be as indicated in the discountrate schedule below. The cslendar year runs from Januarythrough December, and you must be a participant in theCard Service for a full calendar year before we make anyadjustment To illustrate, if you start participating In theCard Service m July, it will be twenty-one (21) monthsbefore your discount rate could be adjusted.If you own and operate more than one establishment, yourdiscount rate will be based on the total Net Annual Volumeof Charges from all your establishments combined

Untd Apnl 1st following the full calendar year of your par-tlapation m the Card Service program, your discount ratewuibe-

--* under the Basic Payment Plan% under the Economy Payment Plan, or% under the Extended Payment Plan,

Here is the discount rate schedule showing how we com-pute your discount rate after me first full calendar year

N« AnnualVgmmt

80-890000IBaOOO-SlOOLOOOS100400>|

990MOQ-S7BOJOOS780MO-S1 ,000,000SI iOOO.OOO-S1 .600,000SI .Mfl.fJOQ-ft Mff.OQQ

SMOOMO-S4.aOO.000

480%440

430420410400390360370300380340328300

428%4184053S93883783883.39348339338318300278

400%3903403703403803403.30320310300290278280

OCT 11 '90 15'42 flMEX S/ DISTRICT P.5/7

IX. PAYMENT CURRENCY

We will make all payments to you in U S Dollars at theaddress you specify, except establishments located inCanada will be paid in Canadian dollars

Charges from any of your establishments located inCanada should be sent to us with a separate Summary ofCharge Record Form for Canadian dollars

X SUBMISSION AND/OR TRANSMISSIONOP CHARGE AND CREDIT DATAELECTRONICALLY OR ON MAGNETIC TAPES.

In the event that you wish to submit Charges and creditsto us electronically, or on magnetic tape, you will obtainour prior approval to submit in this manner and wiflcomply with our written standards, specifications andInstructions for all such submissions In order to makesuch submissions, you must execute a separateElectronic Submission and Transmission Addendum withus. 'You agree to notify promptly your American ExpressSales Representative In the event you wish to submitCharge and credit data to us electronically or onmagnetic tape

All such subnotion of Charge and credit data Is subject tothe provisions of Sections IV and VI hereof

XI. CARDMEMBER COMPLAINTSAND INQUIRIES

For purposes of this Agreement a claim or complaint meena• The Cardmemberhaa made an Inquiry orcomplalnttoyouabout a Charge and has made a good faith attempt toreceive reasonable satisfaction from you, or• The Cardmember has made an inquiry or complaint to usconcerning a Charge made at your establishment statingthe approximate date and amount of the Charge, Mentfying(he merchandise or service purchased, and explaining thenatureofthedlapute

You agree to deal directly with the Cardmember to resolveany claims or complaints about thequandty, nature or qual-ity of merchandise or servicee purchased with the Card atyour establishments). If any Cardmember refuses to makepayment in full to us because of a dalm or complaint, youagree to make a good faith effort to reeotve the complaintwithin twenty-five (25) days from the time you are notified ofsuch refusal.if you and (he Cardmember agree to settle for less than theMl amount of the original Charge, you will give us writtenverification of the Cardmember's agreement to anyadjustment within seven (7) days of making the adjustmentWe will have Full Recourse for the difference between theoriginal amount and the amount you and the Cardmemberhave agreed on, less any discount we collected.

If the complaint has not been fully resolved, or if requestedInformation has not been supplied, or if you have not ad-vised us of the resolution by the end of the twenty-five (28)day period, we will have Full Recourse for the full amount ofthe Charge In dispute

You also agree that you will answer all Inquiries from usabout claims or complaints made to us by Cardmemberswilhlntwenty-five(25)d8ysafteryoureceiveourlnqulry If aCardmember disputes delivery of goods or services pur-chased or the validity of a Charge, you agree » provide uswhh the mail order form signed by the Cardmember end/orsigned proof of delivery to the Cardmember's billingaddress We must receive your reply withm twenty-five (25)days from the date you receive our inquiry If you do notprovide us with such signed mail order form and/or proof ofdelivery within this twenty-five (25) day period, we will haveFull Recourse for the amount of the Charge involved Whilenot limiting our rights to Full Recourse hereunder, if youobtain the Cardmember's billing address at the time (heorder Is made, and verify the billing address from us at thetime the Charge is authorized, you may reduce your risk ofset-offs and deductions for Cardmember disputes and/orfraud in addition, to the extent that a Cardmember has anght under any state, federal, or local law, rule or regulationto assert against us any claim or defense which theCardmember has against you, we shall have Full Recoursewith respecttoanyChargeastowhichsuehaCardmemberwithholds payment from us or asserts such a claim or

You agree to" reimburse us'tor any Charge for which wehave Full Recourse or we may deduct true amount fromany future payments we make u you under thisAgreementIntheevemthat 1)wereceivewhatwereeaonablyconslderto be a disproportionate number of claims or complaintsbecause of your actions or omissions: or 2) you fall to re-spond promptly to inquiries from us on a repeated basis,ihen we will be deemed to have the nght to ImmediateRecourse with respect to all such disputed amounts irre-spective of any other time penods specified and to withholdand apply such sums as are reasonably necessary to pro-tact or satisfy our rights. We agree to notify you in writing ifwe assert the right of Immediate Recourse against you Forthe purpose of this Agreement, "disproportionate number ofInquiries" means a number and/or dollar amount of claimsor complaints as a percentage of your transactions orCharge Volume which • excessive based on our ex-perience with your parbcipatton In the Card Service or withother similar businesses.

"immediate Recourse" shall mean that we are entitled toImmediate reimbursement from you for disputed Charge(e)for which we paid you or for which payment is due you andthat we may offset such amount by deducting It fromamounts due to you, immediately, and without first makingan inquiry to you about such Charge(e)or we can bill you fortt. You wiN be notified of all Immediate Recourse set-offsand/or deductions. In the event you and the Cardmemberthereafter resolve such dlspute(s) whereby theCerdmember agrees to pay you by ehargng the amountn question to his/her Amencan Express Card eccount,you agree to submit a new Charge form, or tape (Ifapplicable) to ue for euch amount H the resolution ofthe dispute occurs after the expiration of eppltoable FairCredit Billing Act tame frames, however, you mustprovide us with the written consent of the Cardmember.

Ml. APPLYING CARDMBMBER PAYMENTS

AH payments we receive from a Cardmember for Chargesmade at your establishrnentfs) will first be used to satisfyany Charges we accepted from you for which we do nothave Full Recourse Payments will (hen be applied to anyCharges we accepted from you for which we have FullRecourse IftheCardmemberpaysusforChargesfdrwhichwe have already exercised our nght to Full Recourse, andthe Cardmember's payment is clearly identifiable as beingmade for such Charges, we will credit your account for thisamount

m. CHECK CASHING

We will not be responsible for cheeks you cash forCardmembera.

XIV. INDEMNIFICATION§Ybu agree that we wifl not be responsible toyou or to anyoneelse for any claims which arise out of your advertising or thesale, performance or use of the goods and services you sellYou agree to reimburse us for any expenses resulting fromthese claims This includes attorney's fees, court costs,settlements and judgments against us.

used arty in your esiabhshmenKs). to your customers moreactiveiyihanyoupromotetheuseoftneCard You agree notto solicit Cardmemben for your own charge, credit, or debitcard or service when they present or ask to use the Card

XVI. The Optima ** DividendWhen Cardmemben) choose to use the Optima Card inyour establishment you will be paid an Optima DividendProvided you agree to include the Card as a method ofpayment in all of your catalogues and order forms whereverany other method of payment is mentioned, you will be paidan Optima Dividend calculated as a percentage of the NetU.S. Optima Card Charge volume that you submit to us"Net U S Optima Card Charge volume" shall mean theaggregate of all Charges made by Cardmembers with theOptima Card at your establishments in the United States(the fifty (60) states and the Distnct of Columbia) andreceived by us during the month, less any credits youissued, adjustments, and amounts for which we turned toyou for payment. For the purposes of this section, theamount of your Opbma Dividend rate win be based on yourNet Annual Volume of Charges, as defined in Section VIII

Here is a schedule showing how we compute your OptimaDividend rate--

XV. CATALOGUES AND PROMOTIONALMATERIAL

You agree to include the Card aaamethod of payment In aHof your catalogues and order forms wherever any othermethod of payment is mentioned.You agree that all your advertising (Including but not limitedto catalogues and orderforms) in which you mention Ameri-can Express or the Card will meet the standards set by usYou agree not to use any mall order forms or cards whichwould reveal a Cardmember's American Express accountnumber to third parti* while In transit or in the mall.Where you mention the Card as a payment method, youmust use the American Express name and logo only as setforth in our pre-approved logo sheets which we shall pro-vide to you. No other use of our name, corporate identifica-tion symbol ortaglma is permitted without prior written con-sent In the event (hat you wish to menten AmericanExpress or the Card In any other promotional materials,(other than identification in catalogues or as a method ofpayment In an order form) you must obtain our prior writtenconsent In order to obtain such consent you must submitsuch materials to your Amencan Express Sales Representa-tive for prior written approval. We agree to use our bestefforts to review such material* promptly V* agree not tomention you In any of our advertising or promotional materialunless we obtain approval from you in the same mannerHowever, you agree to let us list the neme end address ofyour establishments) in our Card Directory, our Guides endother materials related to the Card Service.Msu agree not to promote the use of other charge, credit ordebit cards or services, except for your own card wrnch is

Net Annual Volume of ChargesFor All Amencan Express Optima DividendCard Charges Percentage RateSO-$009.999 1.00%$1.000.000 • $10,990.009 116%$20.000,000 and over 125%

XVII. ASSIGNMENT

You may not as«gn (transfer) this Agreement to anyone elsewithout written permission from us. We may assign thisAgreement to our parent or one of our subsidnnea or af-filiates without your permission But we cannot assign It toanyone else without your wntten permission

XVNL CHANGING THIS AGREEMENT

We have the nght to amend this Agreement at any tme. Wewill notify you in writing at least tan (10) days in advance ifthe changes are unacceptable to you, you may terminatethis Agreement as desenbed in the next Section

XOL TERMINATING THIS AGREEMENT

a This Agreement shell be effective as of the date wereceive and accept a copy executed by you, You canterminate this Agreement at any time by sending uswntten notice by certified mall to the address specifiedonthefront of this Agreement or to such other address aswe may apacrfy In writing to you. We can temMnate trueAgreement m the same manner The termination willbecome efleetrveihirty (30) daye after notice la received,

however, we may advise you of an earlier terminationdate

b. You agree to honor our Cards and to follow all the termsof this Agreement until the termination takes effect Theprovisions governing the processing of Charges willcontinue to apply if processing of Charges takes placeafter the termination becomes effective Our rights of FullRecourse will survive termination of this Agreement

c Anything to the contrary contained in this Agreementnotwithstanding, if (i) you enter bankruptcy or msoNvency proceedings voluntarily or involuntarily or make anassignment for the benefit of your creditors, or (u) there isaseJoof all or substantially all of your assets, or (m) youcease all or a substantial portion of your operations, or(w) there n a material adverse change in your financialcondition or operations affecting your participation In theCard Service; or (v) if we receive a disproportionateamount of claims or complaints, or M we, m the exerciseof our business judgment, reasonably deem you to beincapable of performing your obligation hereunder; thenIn any such event, we shall have the nght to Immediatelyterminate this Agreement and all financialaccommodations contained herein, and/or to take anyother action to which we believe we are entitled underthis Agreement or under applicable law or m equity,including, but not limited to maintaining a reserve frompayments due to you to protect our rights under thisAgreement Our rights under this section shall survivetermination of Ihia Agreement

d Yfau agree to notify us promptly, in the event you enterinto bankruptcy or Insolvency proceedings, as follows,oral or telephonic notification to your local AmericanExpress Sales Representative on or before theday suchproceedings are filed, and wntten confirmation thereofwithin seven (7) days thereafter to our address shownonthe first page of this Agreement and directed to theattention of the Retail Vice President's office.

XX. GOVERNING LAW

This Agreement shall be governed by and construed inaccordance with laws of the State of New York

XXI. AUTHORITY TO SIGN

You represent that the individual who signs this Agree-ment has authority to sign We represent that AmericanExpress Travel Related Services Company, Inc Is au-thorized to sign this Agreement on its own behalf and onbehalf of all its affiliates subsidianea and licensees thatissue Cards or participate in the Card Service

This Agreement will become effective when we receiveand accept your signed copy By signing this Agree-ment, you acknowledge that you have read it and kept acopy for your files

By-(Authorized agnsfcire)

Edwin M CoopermanPresidentConsumer Card Group—USA

it Pirn Elected:Initial*.

TOWELAgreement BetweenCorporate Cardmember andAmerican Express TravelRelated Services Company, Inc.

SERVICESAn Amencan Express company

Before youCard, read

or use the enclosed AmericanAgreement thoroughly, because

, using or accepting the Corporate Card, you wfl beExpress*by eitheragreeing with us to everything written here Your use of theCorporate Card wiP be governed by this Agreement

As you read the Agreement, remember that the words you your

Corporate Card The words, we, our and us rater to AmericanExpress Trawl Related Serwas Company, Inc The word Companymeans the firm in whose name the account is opened and whosename usually appears on the Corporate Card under your name Acard issued to a Corporate Cardmember is called a Corporate Card

The Corporate Card issued to you B for use in connection with abusinessaccountopenednmenameofthe Company Because youreceived the Corporate Card at the request of your Company, we cancancel the Card it the Company requests or if the Company B unableor unwilling to meet its obligations relating to it or to the accountThe Corporate Cardmember agrees to be bound individually by allthe terms of this Agreement

jf you agree to be bound Dy this Agreement you should sign theCorporate Card as soon as you receive it If you do not wish to bebound by this Agreement, cut the Corporate Card in half and returnthe pieces to us Unless you do so. we wril assume that you haveaccepted this Agreement If you do sign the Corporate Card youshould not use it before the valid date or after the expiration dateprinted on the face of the Corporate Card

All amounts charged to an account, including, without limrtaton,purchases, any annual Corporate Card fees delinquencyassessments, or other fees will be called Charges in this AgreementCharges also include any purchases in which you have evidenced anintent to incur a Charge regardless of whether you have signed aCharge form We will send monthly statements of charges to youAll Charges are due immediately upon your receipt of the monthlybilling statement

You, as the Corporate Cardmember are sote/K and personallyliable to us for all Charges made n connection with the CorporateCard issued to you we Company a not responsible to us forpayment of such Charges You should notify us immediately of anychange in your billing address Valid business expenses charged tothe Corporate Card will be reimbursable by the Company under theCompany's expense reimbursement procedures applicable to youThis Agreement has no effect on such procedures or your ngfit toreimbursement by the Company

When any Charges are first included within an unpaid "PreviousBalance* on any monthly statement they will be considereddelinquent Once they have Men included within an unpaid "PreviousBalance" for a second time, they will be considered seriouslydelinquent On each monthly statement a date will be shown whichwill be identified as the "Closing Date" If on the Closing Date forany monthly statement a delinquent amount previously billed ofmore than $50 remains unpaid, we wiH add to that statement adelinquency assessment of up to $15 or 2Vk% (14166% for PuertoRico accounts) of the seriously delinquent Charges appearing onthat statement, whichever is gmatei; except that no such assessment

will apply to Loiusana. Massachusetts. North Dakota. Texas orWisconsin accounts If on the Closing Date for any monthlystatement a senously delinquent amount previously billed remainsunpaid, we wiB add to that statement a delinquency assessmentof up to $12 or 21Mb (14166% tor Puerto Rico accounts) of thetotal of delinquent and senously delinquent Charges, whichever isgreater (except that Louisiana and Massachusetts accounts wiU beassessed only iVWband Wisconsin accounts only 1% of thesenousryd^wrt Charges) appealing on that statement For thepurpose of calculating deficiency assessments, we will disregardamounts owed for any annual Card account fees or amounts to berepaid to us for insurance premiums Delinquency assessmentswill not however, exceed the maximum allowed by law Court costsphis attorneys fees of up to 15% of the then unpaid balance maybe added to your account if we must refer it to an attorney torcollection You w* pay a smaller amount if the court considers asmaller amount appropriate or if applicable state law provides fora smaller amount

lfyoumairaChargemaforeigncurn}ncy,itvnllbe(»nvertediiU& Dollars The comersnxi rate used will be at least as favorableto you as an interbank rate, a tourist rate or, where required by lawan officd rate, which rate is n existence within twenty-tour howsof the tome that the Charge B processed by us or by our authorizedagents, plus 1% of the converted amount Amounts converted bycommon earners—such as avfenes—wril be oiled at rates theearners use

YOU must pay us either with United States currency, with a moneyolder payabletnUnitBd States Doltere or withadrattoracheckdrawfion a United States bank and parable in United States Dollars Ifwedeadetoacceptapaymentmadeinsomeothertorm your paymentwill not be credited to you until your payment is converted into oneof the forms just mentioned We can charge you any costs we incurin converting your paymentSI lfT»gultrP«yiiMiiU

We may accept late payments, partial payments, or any checks ormoney orders marked as bang payment in full or as bang asettlement of any dispute without tosmg any of our rights under BusAgreement or under the law Accepting such payments does notmean we agree to change this Agreement in any way

SI Ivw w* wv^wwow •••••

no other person is permitted to use this Corporate Card torCharges, for identification, or tar any other reason We will look toyou for payment of all Charges made with the Corporate Card issuedto you even if you have tot someone else use the Corporate Card orrelinquished physical possession of the Corporate Card to anyoneother than the Company or us If you voluntanly relinquish physicalpossession of the Cam* to some other person, you will be liable forall Charges incurred by that person to the extent allowed byapplicable law You agree that you will not resell or return for a cashrefund any goods tickets or services obtained with the CorporateCard Obviously, you may return an item or ticket to a Arm honoringthe Corporate Card for credit to your account, if that firm permitssuch returns

We reserve the right to deny authorization of any Charge

(See reverse side)

i have any questions, uroUwiui or deputes concerning theyw should contact usand wewdtaka ay

th0 HiftNiiubonyouunMSS fBQtaVBO DV

law, we are not resporabk for any problem you have with anygoods or services you charge on the Corporate Card. and. if you

andappropnak stops torowds therequest or to resolve your dispute

1« CtMMkM Thto ApraMiMfrtWe have DIB right to change thisApmement at any tune We

wrii notify you of any changes we consKtar that you have acceptedthe changes if you keep or use the Corporate Card after you receiveour notice

If you do notlaw,wB are notresponsnk for any probbmyou have with any If you do not Accept nie changes,you may ttgoods or services you charge on the CorporateCard, and, if you Agreement by cutnngthe Corporate Canf HI half andhave a depute with a firm honoring the Corporate Card, you must pans to us We wiH then refund a pro rate portion ipay us anyway and settle the depute directly with the win We Card fee You will stiM be responsible tor all Chargeswill not be responsdxe if any firm refuses to honor the Corporate you terminated the Agreementwill not be responsdxe if any firm refuses to honor the CorporateCard, or tor any other problems you may have with such firm

If you use the Card to buy insurance, you give us pennssnnto pay pmmunv tor you when due You agree tt repay us accordngtorn terms of ms Agreement YounwstteUiRinwnhngifyouin longer wish us to pay premwms for you If the Card Accountor your Card B canceled, we wiP stop paying premiums for you

You agree to notify us at once if the Corporate Card B tost orstolen or if you suspect it s bang used without your pennssnn13)

If you or your rto us any checks

_. i (Miisiiitb or causes to be transnittodi or drafts that are not honored to uwr fuP amount

for each check or draft we may charge the account up to $15 tocover coPecBon costs

juinaytaabtaj raitaCanJintcash, American Express* Travelers'

tjie changes, jfou may terminate this" " HI half and returning the

' ~of the annualmade before*•__ *----_,-•:,» ~me AyiueiiHiii

171 Tht» Cewri HMMbw Our PropertyTne Corporate Card remans our property and we can revoke your

nght to use it at any time We can do this with or without causeand without giving you notice If we revoke the Corporate Cardwithout cause, we writ refund a pro rate portion of any annual Cardfee We may list revoked Corporate Card account numbers in our•^—.— ——•|^4M>» Piillmhm • «k» ftimiMm^mm MBlW«^M ••••••« tumtwmmumtt* tk«uancBuauon buueun, w otnenmse nrorm nrms nononng tneCorporate Cardttiat me Corporate Card ssued to you has oeenrevoked or cancelled

If we revoke the Corporate Card or it expires, you must returnit to us upon our request. Abo, if the Company or a firm that acceptsthe Corporate Card asks you to surrender an expired or revokedCorporate Card, you must do so You may not use the CorporateCard after it has expired or after it has been revoked

imachnestoobton,.. _. i or other goods or

services Before you may use the Card in such machines, you wiPhave to enrol m our Express Cash Program We wd) have a specialagnynem wrth y^ concening use of me Card m connection withthe Express Cash Program Please refer to that agreement for therights and duties relating to the use of the Card n such machnes

Your Corporate Card «l_-.-_^ T-pmted on the face of the Corporate Card By accepting theof the Corporate Cant, you are requesting us to BSUB you ior replacement Corporate Card baton the current Corporatentmtmmm »*•— -—•» l g •MM^WOM! innm MMMM||U ••»- iul nn«timmexpires we WH on any renewal nes annuiuy we wui conunuBto BSUB renewal or replacement Corporate Cards unU you or theCompany Mis us to stop

i authorize us to make whatever credit inquiries we may'deemappropriate and to exchange any information we may receive inme course of such investigations We may ask credit reportingagenoes for consumer reppteofyourcredrtnstory Upon requestwe writ teP you whether a consumer report was requested and thename and address of the agency that furnshad it Your performanceunder tms Agreement may'be reported to credit reporting agencies1« Law That AppB«s

New York Law governs this AgreementAmerican Express Travel Related Services Company, Inc

i vabd through the expirabon date—* **—• •* •—jitfinidiiianiyi

'Sffl>l***-

Executive Vice PresrientTravel Management Services

GD-ZUMOHP (DCURw SM)MMnUSAaflB