<SUBMISSION>
<ACCESSION-NUMBER>0000950152-05-003605
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20050427
<ITEMS>1.01
<ITEMS>2.05
<ITEMS>9.01
<FILING-DATE>20050427
<DATE-OF-FILING-DATE-CHANGE>20050427
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BLAIR CORP
<CIK>0000071525
<ASSIGNED-SIC>5961
<IRS-NUMBER>250691670
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
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<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-00878
<FILM-NUMBER>05776915
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>220 HICKORY ST
<CITY>WARREN
<STATE>PA
<ZIP>16366
<PHONE>8147233600
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>220 HICKORY STREET
<CITY>WARREN
<STATE>PA
<ZIP>16366
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>NEW PROCESS CO
<DATE-CHANGED>19890507
</FORMER-COMPANY>
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<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>j1363201e8vk.txt
<DESCRIPTION>BLAIR CORPORATION    8-K
<TEXT>
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                       PURSUANT TO SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

        DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 27, 2005

                                BLAIR CORPORATION

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                   ----------

<TABLE>
<S>                               <C>                     <C>
            DELAWARE                    001-00878              25-0691670
(STATE OR OTHER JURISDICTION OF   (COMMISSION FILE NO.)     (I.R.S. EMPLOYER
         INCORPORATION)                                   IDENTIFICATION NO.)
</TABLE>

<TABLE>
<S>                                                            <C>
        220 HICKORY STREET, WARREN, PENNSYLVANIA               16366-0001
        (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)
</TABLE>

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (814) 723-3600

                                 NOT APPLICABLE
          (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

                                   ----------

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))

<PAGE>

ITEM 1.01 EXECUTION OF MATERIAL DEFINITIVE AGREEMENT.

     On April 26, 2005, Blair Corporation ("Blair"), Blair Factoring Company,
Blair Credit Services Corporation, and JLB Service Bank, each a wholly-owned
subsidiary of Blair, entered into a Purchase, Sale and Servicing Transfer
Agreement (the "Purchase Agreement") with World Financial Capital Bank ("Bank"),
a wholly-owned subsidiary of Alliance Data Systems Corporation ("Alliance").
Pursuant to the Purchase Agreement, Blair's credit portfolio will be sold to
Bank at par plus a premium. Additionally, on April 26, 2005, Blair and Bank
entered into an agreement to form a long-term marketing and servicing alliance
under a Private Label Credit Program Agreement (the "Program Agreement") having
an initial term of ten (10) years. The transaction has been approved by both
companies and is expected to close by the end of the fourth quarter of fiscal
2005, subject to regulatory review and approval and customary closing
conditions. A copy of the Blair press release announcing the execution of the
Purchase Agreement and Program Agreement is filed with this report as Exhibit
99.1 and is incorporated herein by reference. The schedules and annexes to each
of the Purchase Agreement and the Program Agreement have been omitted from
Exhibits 10.1 and 10.2 hereto, respectively. Blair hereby agrees to furnish
supplementally a copy of any omitted schedule or annex to the Purchase Agreement
or the Program Agreement to the Securities and Exchange Commission upon its
request.

ITEM 2.05. COST ASSOCIATED WITH EXIT OF DISPOSAL ACTIVITIES.

     On April 26, 2005, Blair committed to the disposition of its credit
portfolio. As is described in more detail above under Item 1.01, upon the sale
of the credit portfolio to the Bank pursuant to the Purchase Agreement, the Bank
and Blair will embark on a long-term marketing and servicing alliance and the
Bank will manage the credit portfolio in accordance with the terms and
conditions set forth in the Program Agreement. It is expected that the
transaction will close by the end of the fourth quarter of fiscal year 2005. In
connection with the disposition of the credit portfolio, Blair estimates that it
will incur costs of $500,000 in severance benefits, $1 million in connection
with the integration of Blair's and the Bank's information technology systems,
and $3 million in other associated costs. In total, Blair estimates it will
incur $4.5 million of costs in connection with the disposition of the credit
portfolio. At this time, Blair is unable to make a determination of the
estimated amount or range of amounts of the costs that may result in future cash
expenditures. Blair will file an amended report within four business days of
making a determination of such an estimate, if any.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

     (a)  Financial statements of businesses acquired.

          Not applicable.

     (b)  Pro forma financial information.

          Not applicable.

     (c)  Exhibits

          Exhibit 10.1 Purchase, Sale and Servicing Transfer Agreement, dated as
               of April 26, 2005, among Blair Corporation, Blair Factoring
               Company, Blair Credit Services Corporation, JLB Service Bank, and
               World Financial Capital Bank.

<PAGE>

          Exhibit 10.2 Private Label Credit Program Agreement, dated as of April
               26, 2005, by and between Blair Corporation and World Financial
               Capital Bank.

          Exhibit 99.1. Press Release dated April 26, 2005.

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date: April 26, 2005                   Blair Corporation


                                       By: /s/ JOHN E. ZAWACKI
                                           ------------------------------------
                                           John E. Zawacki
                                           President and Chief Executive Officer


                                       By: /s/ BRYAN J. FLANAGAN
                                           ------------------------------------
                                           Bryan J. Flanagan
                                           Senior Vice President and Chief
                                           Financial Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>j1363201exv10w1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.1

                 PURCHASE, SALE AND SERVICING TRANSFER AGREEMENT

                                      AMONG

                          WORLD FINANCIAL CAPITAL BANK,

                BLAIR CORPORATION, JLB SERVICE BANK OF DELAWARE,

                        BLAIR CREDIT SERVICES CORPORATION

                                       AND

                             BLAIR FACTORING COMPANY

                           DATED AS OF APRIL 26, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                <C>                                                      <C>
ARTICLE I DEFINITIONS....................................................     2

   SECTION 1.1     Definitions of Certain Terms..........................     2
   SECTION 1.2     Interpretation........................................     7

ARTICLE II PURCHASE, SALE AND ASSUMPTION.................................     8

   SECTION 2.1     Purchase and Sale of Assets...........................     8
   SECTION 2.2     Assumption of Liabilities.............................     8
   SECTION 2.3     Purchase Price; Purchase Price Adjustment.............     8
   SECTION 2.4     Intentionally Omitted.................................     9
   SECTION 2.5     Intentionally Omitted.................................     9
   SECTION 2.6     Reimbursement For Non-Eligible Accounts...............     9
   SECTION 2.7     Post-Closing Deliveries...............................     9

ARTICLE III CLOSING; ASSIGNMENT..........................................    10

   SECTION 3.1     The Closing...........................................    10

ARTICLE IV REPRESENTATIONS OF THE PARTIES................................    11

   SECTION 4.1     Representations of the Sellers........................    11
   SECTION 4.2     Representations of the Purchaser......................    14
   SECTION 4.3     No Other Representations or Warranties................    16

ARTICLE V COVENANTS......................................................    16

   SECTION 5.1     Conduct of Business...................................    16
   SECTION 5.2     Certain Changes.......................................    17
   SECTION 5.3     Access and Confidentiality............................    18
   SECTION 5.4     Reasonable Efforts; Other Filings.....................    18
   SECTION 5.5     Additional Instruments................................    20
   SECTION 5.6     Marks; Branding.......................................    20
   SECTION 5.7     Notice to Customers...................................    20
   SECTION 5.8     Intentionally Omitted.................................    20
   SECTION 5.9     Post-Closing Access...................................    20
   SECTION 5.10    Cooperation in Litigation.............................    21
   SECTION 5.11    Bulk Sales Law........................................    21
   SECTION 5.12    Sellers other than the Parent.........................    21
   SECTION 5.13    Other Negotiations....................................    21
   SECTION 5.14    No Waiver.............................................    21
</TABLE>


                                        i

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                <C>                                                      <C>
ARTICLE VI TAXES.........................................................    22

ARTICLE VII CONDITIONS...................................................    23

   SECTION 7.1     Conditions to Each Party's Obligations to
                      Effect the Purchase and Assumption.................    23
   SECTION 7.2     Conditions to Obligations of the Purchaser............    24
   SECTION 7.3     Conditions to Obligations of the Sellers..............    24

ARTICLE VIII TERMINATION.................................................    25

   SECTION 8.1     Termination...........................................    25
   SECTION 8.2     Effect of Termination.................................    26

ARTICLE IX SURVIVAL; INDEMNIFICATION.....................................    26

   SECTION 9.1     Survival..............................................    26
   SECTION 9.2     Indemnification by the Sellers........................    26
   SECTION 9.3     Indemnification by the Purchaser .....................    27
   SECTION 9.4     Notice, Settlements and Other Matters.................    28

ARTICLE X MISCELLANEOUS..................................................    30

   SECTION 10.1    Notices...............................................    30
   SECTION 10.2    Expenses..............................................    31
   SECTION 10.3    Successors and Assigns................................    31
   SECTION 10.4    Entire Agreement; Amendment; Waiver...................    32
   SECTION 10.5    Counterparts..........................................    32
   SECTION 10.6    Governing Law.........................................    32
   SECTION 10.7    Waiver of Jury Trial..................................    32
   SECTION 10.8    Severability .........................................    32
   SECTION 10.9    Public Announcement...................................    32
   SECTION 10.10   Third-Party Beneficiaries.............................    32
   SECTION 10.11   Further Assurances....................................    32

SCHEDULES AND ANNEXES

Schedule A   Closing Statement
Schedule B   Write-Off Policy
Schedule C   Certain Defined Terms
Annex A      Form of Program Agreement
Annex B      Form of Assignment and Assumption Agreement
</TABLE>


                                       ii

<PAGE>

     PURCHASE, SALE AND SERVICING TRANSFER AGREEMENT, dated as of April 26, 2005
(this "Agreement"), among Blair Corporation, a Delaware corporation (the
"Parent"), JLB Service Bank of Delaware, a bank organized under the laws of the
state of Delaware ("JLB"), Blair Credit Services Corporation, a Delaware
corporation ("BCSC"), Blair Factoring Company, a Delaware corporation ("BF"),
and World Financial Capital Bank, an industrial loan bank with its principal
offices located in Utah (the "Purchaser").

                                    RECITALS

     WHEREAS, the Parent is, among other things, (i) engaged in the business of
selling merchandise through catalogs, retail stores and by other means and (ii)
directly and indirectly through certain of its Subsidiaries, including JLB, BCSC
and BF, engaged in the Business (as defined herein);

     WHEREAS, pursuant to this Agreement, the Parent and its Subsidiaries JLB,
BCSC and BF desire to sell to the Purchaser, and the Purchaser desires to
purchase from the Sellers (as defined below), the Acquired Assets (as defined
below) used in the Business pursuant to the terms contained and in the manner
described herein;

     WHEREAS, the Parent entered into that certain Receivables Purchase
Agreement, dated as of December 20, 2001, as amended and/or supplemented through
the Closing Date (the "Pooling Agreement"), by and among, BF, as seller, BCSC as
servicer, and PNC Bank, National Association and the conduit purchaser party
thereto (collectively, the "Pooling Agreement");

     WHEREAS, on the date hereof, the Parent and the Purchaser are entering into
a Program Agreement (the "Program Agreement") in the form attached hereto as
Annex A, to become effective as of the Closing under this Agreement, that
provides for, among other things, the issuance of Parent proprietary cards, the
issuance of existing and new credit related products to be developed with the
Purchaser, the processing and servicing of the related accounts, and the conduct
of related marketing activities; and

     WHEREAS, simultaneously with the Closing under this Agreement, the Sellers,
the Purchaser and certain of their respective Affiliates desire to enter into
other agreements in connection with the transactions contemplated hereby.

     NOW, THEREFORE, in consideration of these premises, and of the mutual
representations and agreements contained in this Agreement, the parties agree as
follows:


                                       1

<PAGE>

                                    ARTICLE I
                                   DEFINITIONS

     SECTION 1.1 Definitions of Certain Terms.

     (a) In this Agreement, the following terms are used with the meanings
assigned below:

     "Account Agreement" means an agreement (including related disclosure)
between Sellers or their Affiliates and a Person or Persons under which accounts
are established and pursuant to which credit is made available to or on behalf
of such Person or Persons, as such agreement may be amended, modified or
otherwise changed from time to time (including pursuant to change of terms
notices).

     "Accrued Interest" means the aggregate amount of all finance charges that
were accrued and earned, but not posted to the Eligible Accounts as of the
Cut-Off Time.

     "Acquired Assets" means all right, title and interest of the Sellers, free
of any Liens, in and to the following assets and properties:

          (1)  the Eligible Accounts and the Gross Receivables accrued as of the
               Cut-Off Time related to the Eligible Accounts;

          (2)  the applications for Eligible Accounts pending and solicitations
               for Eligible Accounts outstanding;

          (3)  the Account Agreements and the Master File;

          (4)  the Bad Debt Inventory;

          (5)  the Books and Records;

          (6)  rights, claims, credits, causes of action and rights of set-off
               against third parties relating principally to the Business or any
               Acquired Assets; and

          (7)  the Scoring Models.

     "Action" means any claim, action, complaint, investigation, subpoena,
petition, suit or other proceeding, whether civil, criminal or administrative,
in law or in equity, or before any arbitrator or Governmental Authority.

     "Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person.

     "Applicable Order" means, with respect to any Person, a judgment,
injunction, writ, decree or order of any Governmental Authority, in each case
legally binding on that Person or on any of its property.


                                       2

<PAGE>

     "Assumed Liabilities" mean the following Liabilities of the Sellers:

          (1)  all obligations to Customers from and after the Closing Date in
               respect of Eligible Accounts to perform under Account Agreements,
               including payment of credit balances as of the Cut-Off Time;

          (2)  all fees, normal operating assessments and other charges relating
               to the Eligible Accounts that are incurred or accrue on or after
               the Closing Date;

          (3)  all Liabilities for Taxes relating to the Business or the
               Acquired Assets to the extent set forth in Article VI; and

          (4)  all obligations relating to Bad Debt Inventory after the Closing
               Date.

     "Bad Debt Inventory" shall mean all accounts charged off by Blair for any
reason (but excluding commissions of collection agencies), except those accounts
twenty-four (24) months or greater past due that Blair is in the process of
selling in the ordinary course of business at the date of this Agreement.

     "Books and Records" means books, records, original documents, files and
papers maintained by or for the Sellers, whether in hard copy or electronic
format, in each case to the extent within any Seller's control and/or possession
and principally used in the Business, other than Tax returns or Tax workpapers.

     "Business" means the business relating to the Eligible Accounts, including
the extension of credit to Customers, the servicing and management of the
Eligible Accounts, billings, collections, processing of Eligible Account
transactions and the administration of the Eligible Accounts and Gross
Receivables, and any actions taken with respect to the Bad Debt Inventory.

     "Business Day" means any day other than a Saturday, a Sunday or a day on
which banks located in New York or Pennsylvania generally are required or
authorized by law or executive order to close.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Constituent Documents" means the articles of association, articles of
incorporation, certificate of incorporation, by-laws and/or other organizational
documents, as appropriate, of any Person.

     "Contract" means, with respect to any Person, any agreement, undertaking,
contract, indenture, deed of trust or other instrument, document or agreement by
which that Person, or any amount of its properties, is bound and/or subject.

     "Conversion Date" has the meaning assigned to such term in the Program
Agreement.


                                       3

<PAGE>

     "Customer" means a Person or Persons at no time employed by Parent or any
of its Affiliates in whose name(s) a credit account has been established
pursuant to an Account Agreement.

     "Cut-Off Time" means 11:59 PM Eastern time on the date immediately
preceding the Closing Date.

     "Eligible Account" means, as of the Cut-Off Time, any account that is
current through 179 days past due, identified by name and account number under
which a purchase or credit transaction may be or has been made by a Customer,
which has not been nor should have been written-off as part of the Sellers'
normal policies and procedures, and for which an Account Agreement is in effect
as of the Closing Date; provided that "Eligible Account" shall not include any
account where the accountholder is deceased or has been declared incompetent or
is subject to any petition under federal bankruptcy law, which account has been
found to be fraudulent, as to which the accountholder is under 18 years of age
or is not an individual or which account is maintained in a corporate or
business name, as to which account there is no valid Account Agreement, which
account is subject to a claim or litigation, or a final Office of Foreign Assets
Control check, or which account is more than 180 days past due.

     "Eligible Receivables" means all Gross Receivables.

     "Estimated Closing Statement" means a statement prepared by the Sellers,
substantially in the form of Schedule A, showing in reasonable detail the
Sellers' calculation of the Estimated Purchase Price.

     "Estimated Purchase Price" means the calculation of the Purchase Price
based on data available as of the close of business on the fifth Business Day
preceding the Closing Date, in accordance with the Estimated Closing Statement.

     "Federal Funds Rate" means the offered rate as reported in The Wall Street
Journal in the "Money Rates" section for reserves traded among commercial banks
for overnight use in amounts of one million dollars or more or, if no such rate
is published for a day, the rate published for the preceding Business Day.

     "Final Closing Statement" means a statement prepared by the Purchaser,
substantially in the form of Schedule A, showing in reasonable detail the
Purchaser's calculation of the Purchase Price, based on the Eligible Accounts
and the Acquired Assets as of the Cut-Off Time.

     "GAAP" means generally accepted accounting principles in the United States.

     "Governmental Authority" means any domestic or foreign governmental,
regulatory or self-regulatory authority, agency, court, tribunal, commission or
other governmental, regulatory or self-regulatory entity exercising legislative,
judicial, regulatory or administrative functions.


                                       4

<PAGE>

     "Gross Receivables" means all amounts owing (after deduction of credit
balances scheduled as of the Cut-Off Time and unapplied cash) to the Sellers
from Customers with respect to Eligible Accounts (including outstanding loans,
cash advances and other extensions of credit; billed or posted but unbilled
finance charges and late charges; Accrued Interest; and any other fees, charges
and interest assessed on the Eligible Accounts) as of the Cut-Off Time (or,
solely with respect to the Estimated Closing Statement, as of the close of
business on the fifth Business Day preceding the Closing Date).

     "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

     "Indemnity Cap Amount" has the meaning set forth on Schedule C.

     "Indemnity Deductible" has the meaning set forth on Schedule C.

     "Intellectual Property Right" means any intellectual property right,
including any trademark, service mark or other source indicator, invention,
patent, copyright, trade secret, know-how, and any registration or application
for registration of any of the foregoing.

     "Knowledge" means the actual knowledge of the executive officers of the
respective parties who have managerial responsibility for the relevant area of
the party's business or operations.

     "Liability" means any debt, liability, commitment or obligation, of any
kind whatsoever, whether due or to become due, known or unknown, accrued or
fixed, absolute or contingent, or otherwise.

     "Lien" means, with respect to any property, any lien, security interest,
mortgage, pledge, charge or encumbrance relating to that property, including the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such property, or tax
related lien.

     "Master File" means the master file maintained by the Sellers with respect
to the Eligible Accounts, including identification and other Customer data and
Eligible Account information, the names and addresses of Customers with respect
to the Eligible Accounts and any and all Eligible Account adjustments made by or
on behalf of the Sellers in the form commonly maintained by Sellers or an
Affiliate of Sellers.

     "Material Adverse Effect" means:

          (a)  With respect to the Business, a material adverse change in, or a
               material adverse effect upon, the results of operations or
               financial condition of the Business, taken as a whole, excluding
               any effect or change attributable to or resulting from (1)
               events, conditions or occurrences in economic, business or
               financial conditions generally affecting the consumer credit
               business or banking industry, (2) financial market conditions,
               including interest rates or changes therein, (3)


                                       5

<PAGE>

               changes in laws, GAAP or regulatory accounting principles, (4)
               any action, omission, change, effect, circumstance or condition
               contemplated by this Agreement, or attributable to the signing
               and announcement of this Agreement or the transactions
               contemplated by this Agreement or (5) any actions or omissions
               required by the terms of this Agreement; and

          (b)  With respect to the Sellers or the Purchaser, impairment of the
               ability of the relevant Person or Persons to perform its or their
               obligations under this Agreement.

     "Permissible Liens" means Liens for taxes, assessments and other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action.

     "Person" means any individual, corporation, business trust, partnership,
association, limited liability company or similar organization, or any
Governmental Authority.

     "Previously Disclosed" means, with respect to the Seller or the Purchaser,
information previously given in writing by one party to the other party, whether
in response to an express informational requirement or as an exception to one or
more representations or covenants.

     "Purchase Price" means the purchase price as defined in Schedule A, payable
in accordance with the Final Closing Statement, as finally determined in
accordance with Section 2.3.

     "Requirement of Law" means, with respect to any Person, any law, ordinance,
statute, treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding on that Person or
any material amount of its property.

     "Requisite Regulatory Approvals" means the consents, registrations,
approvals, permits or authorizations referred to in clause (i) of Section
7.1(a).

     "Scoring Models" means the Customer risk scorecard and the Customer
behavioral risk scorecard developed on behalf of the Sellers relating to the
Eligible Accounts and maintained by Sellers or an Affiliate of Sellers.

     "Sellers" means the Parent, JLB, BCSC and BF.

     "Subsidiary" means, with respect to any Person, any other Person a majority
of the outstanding voting securities of which are owned directly or indirectly
by such Person.

     "Tax Return" means any return, declaration, report or similar statement
required to be filed with respect to any Taxes (including any attached
schedules) including any information return, claim for refund, amended return
and declaration of estimated Tax.

     "Taxes" means (A) any income, alternative or add-on minimum tax, gross
receipts, sales, use, transfer, gains, ad valorem, franchise, profits, license,
withholding, payroll, employment,


                                       6

<PAGE>

excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other like
assessment or charge, together with any interest or any penalty, addition to tax
or additional amount imposed by any Governmental Authority responsible for the
imposition of any such tax (domestic or foreign), and (B) any Liability of the
Sellers for the payment of any amounts of the type described in clause (A) above
as a result of being a member of an affiliated, consolidated, combined or
unitary group for any period.

     (b) Each of the following terms is defined in the section of this Agreement
set forth opposite such term:

<TABLE>
<S>                            <C>
Agreement...................   Preamble
Allocation Statement........   2.4(a)
BF (and JLB and BCSC).......   Preamble
Closing.....................   3.1(a)
Closing Date................   3.1(a)
Confidentiality Agreement...   5.3(c)
Indemnified Party...........   9.4(a)
Indemnifying Party..........   9.4(a)
Losses......................   9.2
Parent......................   Preamble
Pooling Agreement...........   Recitals
Program Agreement...........   Recitals
Purchase and Assumption.....   3.1(a)
Purchaser...................   Preamble
</TABLE>

     SECTION 1.2 Interpretation.

     (a) In this Agreement, unless the context otherwise requires, references
to:

          (i) the Preamble or the Recitals, Sections, Annexes or Schedules refer
to the Preamble or a Recital or Section of, or Annex or Schedule to, this
Agreement;

          (ii) any statute or regulation refer to the statute or regulation as
amended, modified, supplemented or replaced from time to time (and, in the case
of statutes, include any rules and regulations promulgated under the statute)
and to any section of any statute or regulation include any successor to the
section;

          (iii) any Governmental Authority include any successor to the
Governmental Authority; and

          (iv) this Agreement are to this Agreement, the Schedules, and to the
Annexes hereto.

     (b) The table of contents and headings contained in this Agreement are for
reference purposes only and do not limit or otherwise affect any of the
provisions of this Agreement.


                                       7

<PAGE>

     (c) Whenever the word "include," "includes" or "including" is used in this
Agreement, it will be deemed to be followed by the words "without limitation."

     (d) Unless the context otherwise requires, the word "or" when used in this
Agreement will be deemed to have the inclusive meaning represented by the phrase
"and/or."

     (e) This Agreement is the product of negotiation by the parties having the
assistance of counsel and other advisers. It is the intention of the parties
that this Agreement not be construed more strictly with regard to one party than
with regard to the other.

                                   ARTICLE II
                          PURCHASE, SALE AND ASSUMPTION

     SECTION 2.1 Purchase and Sale of Assets. On the terms and subject to the
conditions of this Agreement at the time of the Closing, and effective from and
after the Closing Date, the Sellers shall sell, convey and assign to the
Purchaser, free and clear of all Liens, except Permissible Liens, the Acquired
Assets, and the Purchaser agrees to purchase all such Acquired Assets.

     SECTION 2.2 Assumption of Liabilities. On the terms and subject to the
conditions of this Agreement from and after the Closing Date, the Purchaser
agrees to assume, pay, defend, discharge and perform as and when due the Assumed
Liabilities.

     SECTION 2.3 Purchase Price; Purchase Price Adjustment.

     (a) On the second Business Day before the Closing, the Parent, on behalf of
the Sellers, will deliver to the Purchaser the Estimated Closing Statement
reflecting the Sellers' calculation of the Estimated Purchase Price to be paid
by the Purchaser at the Closing.

     (b) Within sixty (60) Business Days after the Closing, Purchaser will
deliver to Parent the Final Closing Statement prepared based on the information
in the Master File and the other Acquired Assets as of the Cut-Off Time and
copies of the Master File as of the Cut-Off Time and all material working papers
relating to the Final Closing Statement.

     (c) The Parent shall, within fifteen (15) days after receipt of the Final
Closing Statement, advise the Purchaser in writing and in reasonable detail of
any inaccuracies it believes were reflected in the Final Closing Statement. In
the event no such objection is delivered to the Purchaser within such time
period, the Final Closing Statement, as delivered to the Parent, shall be final
and binding upon the parties. In the event the Parent delivers such an
objection, the Sellers and the Purchaser shall attempt in good faith to resolve
their differences. In the event all differences are not resolved within thirty
(30) days following receipt of the Final Closing Statement by the Parent, then
the issues remaining unresolved shall be determined by an independent public
accountant mutually acceptable to the Parent and the Purchaser (the
"Accountant"). The Accountant shall resolve all disputed items in accordance
with the provisions of this Agreement. In making its determination, the
Accountant may only consider


                                       8

<PAGE>

those items and amounts as to which the Purchaser and the Sellers have disagreed
within the time periods and the permitted grounds specified. The Accountant's
determination will be conclusive and binding on the Purchaser and the Sellers
absent manifest error. The fees of the Accountant will be shared by the
Purchaser and the Sellers in proportion to the relative differences between
their respective calculations of the Purchase Price and the amount determined by
the Accountant.

     (d) If the Estimated Purchase Price exceeds the Purchase Price, then the
Parent, on behalf of the Sellers, shall, within five (5) Business Days after the
Purchase Price has been finally determined pursuant to Section 2.3(c), pay such
excess to the Purchaser, together with interest on such excess for the period
from and including the Closing Date to but excluding the date of such payment at
a rate per annum equal to the Federal Funds Rate. If the Estimated Purchase
Price is less than the Purchase Price, then the Purchaser shall, within five (5)
Business Days after the Purchase Price has been finally determined pursuant to
Section 2.3(c), pay such deficiency to the Parent on behalf of the Sellers,
together with interest on such deficiency for the period from and including the
Closing Date to but excluding the date of such payment at a rate per annum equal
to the Federal Funds Rate. Each party to this Agreement will make available to
the other parties, and to the Accountant, its and its accountants' work papers,
schedules and other supporting data as may be reasonably requested by such party
to enable it to verify the amounts set forth in the Final Closing Statement.

     SECTION 2.4 Intentionally Omitted.

     SECTION 2.5 Intentionally Omitted.

     SECTION 2.6 Reimbursement For Non-Eligible Accounts. If Sellers transfer
any non-Eligible Accounts and related Gross Receivables to the Purchaser, then
during the one hundred eighty (180) day period following the Closing Date, the
Sellers shall promptly, following written notice to the Sellers by the
Purchaser, repurchase all such non-Eligible Accounts and related Gross
Receivables. The Sellers shall pay to the Purchaser, for any such repurchases,
an amount equal to the Purchase Price of the Eligible Accounts and/or Gross
Receivables together with interest at the Federal Funds Rate on such Purchase
Price from the Closing Date to the date of payment, and the Purchaser will
reassign such non-Eligible Accounts and/or Gross Receivables to the Sellers and
the Purchaser will promptly credit against the Seller's payment all Customers'
payments received for such non-Eligible Accounts. The Sellers will assume any
obligations of the Purchaser to refund such Customer payments. This provision
applies only to accounts that were not charged off by Blair prior to Closing.

     SECTION 2.7 Post-Closing Deliveries.

     (a) The Sellers shall be entitled to retain all payments from Customers on
Eligible Accounts posted by the Sellers prior to the cut-Off Time.

     (b) All payments posted to the Eligible Accounts by the Sellers after the
Cut-Off Time shall be deposited by the Sellers in their own account and
thereafter settled with the Purchaser in accordance with the provisions of this
Section 2.7. The Purchaser hereby authorizes and empowers the Sellers to sign
and endorse (without recourse by the Purchaser against the Sellers


                                       9

<PAGE>

with respect to such endorsement) the Purchaser's name as the Purchaser's
attorney-in-fact on all checks, drafts, money orders or other forms of payment
relating to such Eligible Account so received by the Sellers but payable to the
order of the Purchaser. Within 24 hours after the end of each Business Day, the
Sellers will provide the Purchaser with a computer tape listing all said
payments containing the amount and Eligible Account number for each payment so
received by the Sellers. The Sellers will transfer via wire transmission or
automated clearinghouse said funds to the Purchaser, without cost to the
Purchaser, for the first thirty (30) days after the Closing Date, on each Friday
following the Closing and monthly thereafter. If the Purchaser receives any
checks, drafts, money orders or other forms of payment relating to the Eligible
Accounts subsequent to the Cut-Off Time, which instruments are payable to the
order of the Sellers, the Sellers hereby authorize and empower the Purchaser to
sign and endorse (without recourse by the Sellers against the Purchasers with
respect to such endorsement) the Seller's name as the Sellers' attorney-in-fact
on such Eligible Accounts to facilitate the deposit thereof. If any such payment
is sent to the Purchaser later than specified above, such payment shall be
accompanied by interest on such amount calculated on the basis of an interest
rate equal to the Federal Funds Rate for each day during the period between the
date of receipt of such payment by the Sellers and the date the Sellers pay the
Purchaser.

                                   ARTICLE III
                               CLOSING; ASSIGNMENT

     SECTION 3.1 The Closing.

     (a) The closing (the "Closing") of the purchase and sale of the Acquired
Assets and assumption of the Assumed Liabilities hereunder (collectively, the
"Purchase and Assumption") will take place through the wire transfer of the
Estimated Purchase Price and facsimile exchange, together with subsequent
overnight courier exchange, of the required closing documents, on the Business
Day after the last of the conditions set forth in Sections 7.1, 7.2 and 7.3
(other than conditions relating solely to the delivery of documents to be dated
the Closing Date) has been satisfied or waived in accordance with the terms of
this Agreement or at such other date as the parties hereto jointly designate in
writing (the "Closing Date").

     (b) At the Closing, the Purchaser will, and the Sellers will, deliver or
cause to be delivered to each other an agreement of sale, assignment, transfer
and conveyance of the Acquired Assets and assumption of the Assumed Liabilities,
respectively, in substantially the forms set forth in Annex B and such other
instruments as are necessary or appropriate to reflect any alternative
arrangements described in Section 2.5, appropriately executed by the Sellers and
the Purchaser.

     (c) At the Closing, the Purchaser will pay the Estimated Purchase Price by
initiating a wire transfer of immediately available funds (in U.S. dollars) on
the Closing Date to an account or accounts specified by the Parent at least one
Business Day prior to the Closing Date.

     (d) If a credit is posted to an Eligible Account after the Cut-Off Time
with respect to a Gross Receivable arising prior to the Cut-Off Time, the
Purchaser shall notify the Sellers and the Sellers shall send to the Purchaser
the amount of such credit. Such payments shall be transmitted


                                       10

<PAGE>

to the Purchaser on each Friday following the Closing Date. If any such payment
is sent to the Purchaser later than specified above, such payment shall be
accompanied by interest on such amount calculated on the basis of an interest
rate equal to the Federal Funds Rate for each day during the period between the
date of such credit and the date the Sellers pay the Purchaser.

                                   ARTICLE IV
                         REPRESENTATIONS OF THE PARTIES

     SECTION 4.1 Representations of the Sellers. The Sellers represent to the
Purchaser as follows, Purchaser acknowledging that as of the date of this
Agreement the Pooling Agreement and related agreements are in full force and
effect and the following representations are subject to the termination thereof
in accordance with Section 7.1 and 7.2(a) thereof:

     (a) Existence and Authority. Each Seller is duly organized and validly
existing under its jurisdiction of organization. Each Seller has the requisite
power and authority to own the Acquired Assets owned by it and to carry on the
Business as currently conducted by it, and is duly qualified to do business in
each jurisdiction where its the ownership or operation of the Acquired Assets or
its conduct of the Business requires such qualification, except for any failure
to have such authority or be so qualified that would not reasonably be expected
to have a Material Adverse Effect on the Business or the Sellers.

     (b) Authorization and Validity. Each Seller has the requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly authorized by each Seller party thereto.
This Agreement has been duly executed and delivered by each Seller. Subject to
required regulatory filings with and approvals by the Federal Deposit Insurance
Corporation and the [Delaware Banking Department], and assuming that this
Agreement has been duly authorized, executed and delivered by the Purchaser,
this Agreement is the legal, valid and binding obligation of the Sellers,
enforceable against Sellers in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization, fraudulent transfer and
other laws affecting creditors' rights generally and to general equitable
principles.

     (c) Governmental and Third-Party Consents. Except for any notification that
may be required under the HSR Act, the Bank Merger Act and Delaware banking law,
no notices, reports or other filings are required to be made by the Sellers
with, nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Sellers from, any Governmental Authority or any
other third party in connection with the execution, delivery or performance of
this Agreement by the Sellers or the consummation by them of the transactions
contemplated by this Agreement, except for such notices, reports, filings,
consents, registrations, approvals, permits or authorizations which have been
given or made or those the failure to obtain which would not have a Material
Adverse Effect on the Business or the Sellers.

     (d) No Conflicts. The execution, delivery and performance by the Sellers of
this Agreement does not, and (subject to obtaining the Previously Disclosed
governmental and third-party consents referred to in Section 4.1(c)) the
consummation of the transactions contemplated by this Agreement will not:


                                       11

<PAGE>

          (i) Breach or violate the Constituent Documents of the Sellers;

          (ii) Breach or violate any Requirement of Law or Applicable Order
applicable to the Sellers;

          (iii) Breach, violate or result in a default under the terms,
conditions or provisions of any Contract of any Seller, or give any third party
the right to terminate or cancel any right of any Seller under any Contract of
such Seller, or accelerate the performance of its obligations thereunder, in
each case where such Contract relates to the Business or is binding upon the
Acquired Assets; or

          (iv) Result in the creation of any Lien (other than Permissible Liens)
on any Acquired Asset other than a Permissible Lien (with or without the giving
of notice or the lapse of time, or both);

except in each case described in clause (ii), (iii) or (iv), for any breach,
violation, default, termination, cancellation, acceleration or Lien that would
not reasonably be expected to have a Material Adverse Effect on the Sellers or
on the Business prior to the Closing Date.

     (e) Absence of Certain Changes.

          (i) Since January 1, 2005, the Business has been conducted in the
ordinary course and there has not been any change in the financial condition or
results of operations of the Business that has had or would reasonably be
expected to have a Material Adverse Effect on the Business prior to the Closing
Date or the Sellers.

          (ii) Set forth on Schedule B hereto is a true and complete copy of the
write-off policy of each of the Sellers as in effect on January 1, 2005. Since
January 1, 2005 (A) the Eligible Accounts and Gross Receivables have been
underwritten, established, administered, serviced, collected, terminated and
charged-off in the ordinary course consistent with Sellers' past practice, and
(B) Sellers have not materially amended, modified or supplemented or otherwise
made any material changes to the policies and procedures as in effect on such
date.

     (f) Title to Properties; Encumbrances. Each Seller has good title to or a
valid leasehold interest in, or is licensed or otherwise entitled to use, all of
the Acquired Assets owned or used by it (other than the Eligible Accounts, to
which Section 4.1(k) is applicable), free and clear of all Liens other than
Permissible Liens.

     (g) Litigation. There are no Actions pending, in arbitration or before any
Governmental Authority against any Seller in connection with the Business or any
Acquired Asset, or to the Sellers' Knowledge, threatened against any of the
Sellers with respect to the Business or Acquired Assets, in each case that would
reasonably be expected to have a Material Adverse Effect on the Business or
Acquired Assets prior to the Closing Date.


                                       12

<PAGE>

     (h) Books and Records. All Books and Records of the Sellers relating to the
Business have been maintained accurately and in accordance with GAAP (where
applicable) and with all Requirements of Law applicable to the Sellers and the
Business, except for any instances of inaccuracy or noncompliance that would not
reasonably be expected to have a Material Adverse Effect on the Business or the
Sellers.

     (i) Compliance with Laws. Except to the extent that the following would not
reasonably be expected to have a Material Adverse Effect on the Business or the
Sellers prior to the Closing Date:

          (i) the Sellers are in compliance with all Requirements of Law
relating to the Business and the Acquired Assets; and

          (ii) the Sellers are not subject to any capital plan or supervisory
agreement, order or memorandum between any of them and any Governmental
Authority.

     (j) Account Agreements; Eligible Accounts and Gross Receivables. Except to
the extent that any of the following would not have a Material Adverse Effect on
the Business prior to the Closing Date or the Sellers:

          (i) Each Seller is the sole owner of and has good title to its
Eligible Accounts and Gross Receivables and the Bad Debt Inventory. This
Agreement shall, following the Closing Date, and subject to the filing of
appropriate financing statements and all required continuations, amendments and
replacements thereof, vest in the Purchaser all right, title and interest of the
Sellers in and to the Eligible Accounts, the Gross Receivables, free and clear
of all Liens.

          (ii) Each Account Agreement is a valid and legally binding obligation
of each obligor thereunder, including any cosigner, guarantor or surety, in the
full amount thereof set forth in the Books and Records of the Business, and is
enforceable against such obligors in accordance with its terms, subject to (A)
claims and defenses on disputed transactions asserted by a Customer as indicated
on the Master File or the Books and Records, (B) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other laws
relating to or affecting creditors' rights generally and the effect of general
equitable principles, and (C) the Soldiers' and Sailors' Civil Relief Act of
1940, as amended. The form of Account Agreement has been previously provided by
Sellers to Purchaser, and that form contains all material terms of the Account
Agreement as in effect as of the date of this Agreement for each of the Eligible
Accounts and the Bad Debt Inventory; provided that no representation or warranty
is hereby given as to the capacity, authority or any other factor relating to
the identity or status of the obligor which may effect the enforceability of the
Account Agreement to which it is party.

          (iii) Each Gross Receivable is not subject to offset, refund,
recoupment, reversal, adjustment or any claim or defense by any Person (other
than claims or defenses on disputed transactions and refunds of credit balances,
as indicated on the Master File). No Gross Receivable and none of the Eligible
Accounts related thereto have been reaffirmed by the


                                       13

<PAGE>

applicable obligor in connection with or following any bankruptcy, insolvency or
similar Action involving such obligor.

          (iv) Each account comprised in the Acquired Assets complies with the
applicable Account Agreement.

          (v) All Eligible Account and the Bad Debt Inventory applications have
been taken and evaluated and applicants notified in a manner that complied with
all applicable Requirements of Law.

          (vi) All Eligible Accounts and the Bad Debt Inventory have been
originated, maintained and serviced in all material respects in compliance with
all applicable Requirements of Law.

          (vii) All disclosures made in connection with the Eligible Accounts
and the Bad Debt Inventory complied in all material respects with all applicable
Requirements of Law.

     (k) No Brokers or Finders. The Assumed Liabilities do not include, and the
Sellers are solely responsible for and shall pay, any Liability incurred by any
of them or any of their Affiliates for any financial advisory fees, brokerage
fees, commissions or finder's fees directly or indirectly in connection with
this Agreement or the transactions contemplated hereby.

     (l) Accuracy of Information. The information contained in the Master File
and the Books and Records delivered to Purchaser prior to the date hereof was,
and the information contained in the Master File and the Books and Records
delivered to Purchaser on the Closing Date will be, complete and accurate in all
material respects as of the date of delivery and the Cut-Off Time, respectively.

     SECTION 4.2 Representations of the Purchaser. The Purchaser represents to
the Sellers as follows, that upon approval from the Federal Deposit Insurance
Corporation and the Utah Department of Financial Institutions with respect to
the transactions contemplated by this Agreement:

     (a) Existence and Authority. The Purchaser is an industrial bank, validly
existing and in good standing under the laws of Utah and has the requisite power
and authority to carry on its business as now conducted and to acquire the
Acquired Assets.

     (b) Authorization and Validity. The Purchaser has the requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly authorized by the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser. Subject to the
required filings with and approvals by the Federal Deposit Insurance Corporation
and the Utah Department of Financial Institutions, assuming that this Agreement
has been, duly authorized, executed and delivered by the Sellers, this Agreement
is, the legal, valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium,


                                       14

<PAGE>

reorganization, fraudulent transfer and other laws affecting creditors' rights
generally and to general equitable principles.

     (c) Governmental and Third-Party Consents. Except for any notification that
may be required under the HSR Act, the Bank Merger Act and Utah banking law, no
notices, reports or other filings are required to be made by the Purchaser with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by it from, any Governmental Authority or any other
third party in connection with the execution, delivery and performance of this
Agreement by the Purchaser or the consummation by the Purchaser of the
transactions contemplated by this Agreement, except for such notices, reports,
filings, consents, registrations, approvals, permits or authorizations which
have been give or made or those the failure to obtain which would not have a
Material Adverse Effect on the Purchaser or on the Business following the
Closing Date.

     (d) No Conflicts. The execution, delivery and performance by the Purchaser
of this Agreement does not, and (subject to obtaining the Previously Disclosed
governmental and third-party consents referred to in Section 4.2(c)) the
consummation of the transactions contemplated by this Agreement will not:

          (i) Breach or violate the Purchaser's Constituent Documents;

          (ii) Breach or violate any Requirement of Law or Applicable Order
applicable to the Purchaser;

          (iii) Breach, violate or result in a default under the terms,
conditions or provisions of any Contract of the Purchaser, or give any third
party the right to terminate or cancel any right of the Purchaser under any such
Contract, or accelerate the performance of its obligation thereunder; or

          (iv) Result in the creation of any Lien (other than a Permissible
Lien) on the properties or assets of the Purchaser;

except in each case described in clause (ii), (iii) or (iv), for any breach,
violation, default, termination, cancellation, acceleration or Lien that would
not reasonably be expected to have a Material Adverse Effect with respect to the
Purchaser following the Closing Date.

     (e) Absence of Certain Changes. Since January 1, 2005, there has not been
any change in the financial condition or results of operations of the Purchaser
that has had or would reasonably be expected to have a Material Adverse Effect
with respect to the Purchaser or the Acquired Assets following the Closing Date.

     (f) Compliance with Laws. Except to the extent that the following would not
reasonably be expected to have a Material Adverse Effect with respect to the
Purchaser or the Business after the Closing Date:


                                       15

<PAGE>

          (i) the Purchaser is, or on the Closing Date will be, in compliance
with all Requirements of Law relating to its credit card business; and

          (ii) the Purchaser is not, and on the Closing Date will not be,
subject to any capital plan or supervisory agreement, order or memorandum
between it and any Governmental Authority.

     (g) Servicing Qualifications. The Purchaser or any entity to which it has
subcontracted its servicing obligations is, or as of the Closing Date will be,
licensed and qualified in all jurisdictions necessary to service the Eligible
Accounts in accordance with all applicable Requirements of Law, except where the
failure to be so qualified would not have a Material Adverse Effect on the
Purchaser or the Business.

     (h) Financing. The Purchaser has sufficient cash, available lines of credit
or other sources of immediately available funds to enable it to pay the
Estimated Purchase Price as required by Section 3.1(c) and to timely pay any and
all other amounts to be paid by it under this Agreement and all other agreements
entered into in connection herewith or related hereto.

     (i) Litigation. There are no Actions pending, in arbitration or before any
Governmental Authority, or to the Purchaser's Knowledge, against the Purchaser
or any of its assets that would be reasonably expected to prohibit the
transactions contemplated hereby.

     (j) No Brokers or Finders. Any Liability incurred by the Purchaser or its
Affiliates for any financial advisory fees, brokerage fees, commissions or
finder's fees directly or indirectly in connection with this Agreement or the
transactions contemplated hereby will be borne by the Purchaser.

     SECTION 4.3 No Other Representations or Warranties. Except as expressly set
forth in this Article IV and Article VI, neither the Sellers nor the Purchaser
have made or make any other express or implied representations, or any express
or implied warranty, either written or oral, with respect to the Acquired
Assets, the Assumed Liabilities or the Sellers, the Business or the Purchaser,
respectively.

                                    ARTICLE V
                                    COVENANTS

     SECTION 5.1 Conduct of Business.

     (a) Except as otherwise contemplated hereby or Previously Disclosed to the
Purchasers, and except for transactions in the ordinary course of business,
until the Closing Date, the Parent will, and will cause the other Sellers to,
use their respective commercially reasonable efforts to preserve intact the
business organizations and relationships with third parties relating to the
Business, to keep available the services of required employees of the Business
and to preserve beneficial relationships with Customers, following substantially
the same material practices and standards, including collection practices and
accounting practices for charge-offs and reserves, as in effect on January 1,
2005.


                                       16

<PAGE>

     (b) Except as otherwise contemplated hereby, and except for transactions in
the ordinary course of business, until the Closing Date, the Purchaser will use
its respective commercially reasonable efforts to preserve intact the business
organizations and relationships with third parties relating to its credit
business, to keep available the services of required employees of its credit
business and to preserve beneficial relationships with customers in connection
with its credit business, following substantially the same material practices
and standards, including collection practices and accounting practices for
charge-offs and reserves, as in effect on the date hereof.

     SECTION 5.2 Certain Changes. Without limiting Section 5.1, and except as
otherwise contemplated hereby or required by applicable Requirements of Law,
from the date hereof until the Closing Date, without the prior written consent
of the Purchaser (which consent will not be unreasonably withheld or delayed),
the Sellers will not:

     (a) Enter into or amend any Contract relating to the Business (except for
the termination of certain collection and reporting Contracts in accordance with
their terms) except in the ordinary course of the Business consistent with past
practice and only to the extent such entry or amendment would not have a
Material Adverse Effect;

     (b) Acquire, except in the course of collection, a material amount of
assets from any other Person or all or substantially all of the business or
assets of any Person if such business or assets would constitute Acquired
Assets;

     (c) Change in any material respect its credit and underwriting, posting,
collection, charge-off or operating policies and procedures (or the manner of
application thereof) with respect to the Business as in effect on January 1,
2005;

     (d) Sell, lease or otherwise dispose of any of the Acquired Assets except
(1) in the ordinary course of business consistent with past practice and in
transactions that individually or in the aggregate with all such other
dispositions would not have a Material Adverse Effect on the Sellers or the
Business, (2) in connection with securitizations of receivables arising under
the Eligible Accounts (provided that the benefits thereof are transferable to
the Purchaser at the Closing), (3) pursuant to the terms of commitments existing
as of the date hereof or (4) as Previously Disclosed;

     (e) Change any of the Account Agreements, except in accordance with its
terms;

     (f) Agree with any Person or otherwise commit themselves to do any of the
foregoing.

If Sellers contemplate taking any of the permitted actions set forth in clauses
(a) through (d) above, they shall provide prior notice of such action to
Purchaser.


                                       17

<PAGE>

     SECTION 5.3 Access and Confidentiality.

     (a) Until the Closing Date, upon reasonable prior notice and subject to
applicable Requirements of Law relating to the exchange of information, the
Parent will, and will cause the other Sellers to, permit the Purchaser and its
authorized representatives to have reasonable access, during regular business
hours for purposes consistent with this Agreement (including reasonable access
to the servicing reports, systems and procedures of the other Sellers), to the
personnel, properties and financial Books and Records relating to the Business,
to the extent that such access does not interfere with the business of the
Sellers; provided, that the Purchaser and such representatives comply with the
confidentiality obligations contained herein and in the Confidentiality
Agreement (as defined below); and provided, further that the foregoing shall not
(1) require the Sellers to permit any inspection, or to disclose any
information, that in their reasonable judgment would result in the disclosure of
any trade secrets of third parties or trade secrets of the Sellers or their
Affiliates unrelated to the Business or violate any obligations of the Sellers
to any third party with respect to confidentiality if the Sellers shall have
used commercially reasonable efforts to obtain the consent of such third party
to such inspection or disclosure or (2) require any disclosure by the Sellers
that could, as a result of such disclosure, have the effect of causing the
waiver of any attorney-client privilege.

     (b) If this Agreement is terminated, the Purchaser, at its own expense,
will promptly deliver (without retaining any copies) to the applicable Seller,
or (at the Sellers' option) confirm in writing to the Sellers that it has
completely destroyed, all information furnished to the Purchaser or its
representatives by the Sellers or any of their agents, employees or
representatives in connection with this Agreement, whether so obtained before or
after the execution hereof, and all analyses, compilations, forecasts, studies
or other documents prepared by the Purchaser or its representatives that contain
or reflect any such information. The Purchaser will cause any information so
obtained to be kept confidential and will not use, or permit the use of, such
information in its business or in any other manner or for any other purpose
except as contemplated by this Agreement.

     (c) In addition to the confidentiality arrangements contained herein, all
information provided or obtained in connection with the transactions
contemplated by this Agreement (including pursuant to clause (a) above) will be
held by the Purchaser in accordance with the Confidentiality Agreement between
the Purchaser and the Parent dated September 3, 2004 (the "Confidentiality
Agreement"). In the event of a conflict or inconsistency between the terms of
this Agreement and the Confidentiality Agreement, the terms of this Agreement
will govern.

     (d) The Sellers and their Affiliates shall be entitled to specific
performance of the foregoing provisions of this Section 5.3 and the provisions
of the Confidentiality Agreement, in addition to any other remedies that they
may have at law or in equity.

     SECTION 5.4 Reasonable Efforts; Other Filings.

     (a) Subject to the terms and conditions of this Agreement, the Purchaser
will, and the Parent will and cause the other Sellers to, use commercially
reasonable efforts to take, or cause to be taken, all actions and will do, or
cause to be done, all things necessary, proper or advisable


                                       18

<PAGE>

under applicable Requirements of Law, so as to permit consummation of the
Purchase of assets and Assumption as promptly as reasonably practicable and
otherwise to enable consummation of the transactions contemplated by this
Agreement and will cooperate fully to that end.

     (b) Without limiting Section 5.4(a), the Parent will and will cause the
other Sellers to, and the Purchaser will, use reasonable best efforts to prepare
all documentation, to effect all filings and to obtain all permits, consents,
approvals and authorizations of all Governmental Authorities necessary to
consummate the transactions contemplated by this Agreement, including taking any
action necessary to defend vigorously, lift, mitigate or rescind the effect of
any litigation or administrative proceeding involving any Governmental Authority
adversely affecting the transactions contemplated by this Agreement or this
Agreement, including promptly appealing any adverse court or administrative
decision. Each of the Sellers, on the one hand, and the Purchaser, on the other
hand, shall consult with the other with respect to the obtaining of such
permits, consents, approvals and authorizations and to keep the other apprised
of the status thereof. Subject to appropriate confidentiality protections, the
Sellers and the Purchaser shall each furnish to the others such necessary
information and reasonable assistance as any of the other parties may request in
connection with the foregoing and shall each provide counsel for the other
parties with copies of all filings made by such party, and all correspondence
between such party (and its advisors) with any Governmental Authority and any
other information supplied by such party and such party's Affiliates to a
Governmental Authority in connection with this Agreement and the transactions
contemplated hereby. Each party shall, subject to applicable Requirements of
Law, permit counsel for the other party to review in advance any such proposed
written communication to any Governmental Authority.

     (c) Without limiting the foregoing, the Parent will, and will cause the
other Sellers to, and the Purchaser will, use reasonable best efforts to obtain
the Requisite Regulatory Approvals in time to permit the Closing Date to occur
on or before October 31, 2005 or, if the Closing Date has not occurred, as
promptly after October 31, 2005 as reasonably practicable. The Parent, on the
one hand, and the Purchaser, on the other hand further agrees, without any
request or demand by the other, to complete all necessary filings related to the
Requisite Regulatory Approvals no later than ten (10) Business Days from the
execution and delivery of this Agreement and to prosecute actively all such
filings and pursue the receipt of each Requisite Regulatory Approval.

     (d) The Purchaser will promptly notify the Sellers in writing, and the
Parent will and will cause the other Sellers to promptly notify the Purchaser in
writing, upon (i) becoming aware of any order or decree or any complaint praying
for an order or decree restraining or enjoining the execution of this Agreement
or the consummation of the transactions contemplated hereunder, or (ii)
receiving any notice from any Governmental Authority of its intention to (A)
institute an Action to restrain or enjoin the execution of this Agreement or the
consummation of the transactions contemplated hereunder or (B) nullify or render
ineffective this Agreement if such transactions are consummated.

     (e) The filing fees under the HSR Act or any other antitrust or other laws
shall be borne by the Purchaser.


                                       19

<PAGE>

     SECTION 5.5 Additional Instruments. At the reasonable request of the
Parent, on the one hand, or the Purchaser, on the other hand, at or after the
Closing, the Person receiving such request will promptly execute and deliver, or
cause to be executed and delivered, to the requesting party such assignments,
bills of sale, assumption agreements, consents and other similar instruments in
addition to those required by this Agreement, in form and substance satisfactory
to the requesting party, as may be reasonably necessary to carry out or
implement any provision of this Agreement.

     SECTION 5.6 Marks; Branding. It is expressly agreed that, except for the
limited license granted in the Program Agreement and as is otherwise provided in
this Section 5.6, the Purchaser is not purchasing or acquiring any right, title
or interest in the name "Blair" or any variation thereof or any trademarks,
trade names or service marks or other intellectual property of the Sellers or
their Affiliates as the Sellers or their Affiliates have used prior to the date
of this Agreement (or will or may use or own thereafter) in connection with the
Eligible Accounts or the Business (collectively, the "Marks"). The Purchaser
acknowledges that the Sellers or their Affiliates own the Marks and goodwill
related thereto and symbolized thereby, and the Purchaser covenants not to
contest the Sellers' or their affiliates' title in and to the Marks. However,
the Sellers hereby grant the Purchaser a royalty-free license to use, after the
Closing, the name "Blair" and such other marks of the Sellers as have been used
in connection with the Eligible Accounts and the Gross Receivables for
identification purposes, to the extent permitted by Law, in any collection
efforts or other Customer communications and for the purpose of otherwise
enforcing all of the Purchaser's rights in the Acquired Assets. The Purchaser
shall cease all use of the Marks under this exception when the Purchaser no
longer owns any Eligible Accounts.

     SECTION 5.7 Notice to Customers.

     (a) On or within seven (7) Business Days following the Closing Date, the
Purchaser will, after conferring with the Sellers, prepare a form or forms of
notice to each Customer with an Eligible Account to the effect that such
Customer's Eligible Account has been acquired by the Purchaser. Such notice
shall be in the form that will comply with all applicable Requirements of Law.
The costs of preparation and mailing of such notices shall be borne by the
Purchaser. The mailing shall be made in such manner and at such time as the
Purchaser decides, after conferring with the Sellers.

     (b) From and after the date of this Agreement and until the Closing, the
Purchaser and its Affiliates shall not communicate with the Customers (whether
by mail, by telephone or otherwise) without the prior written consent of the
Sellers.

     SECTION 5.8 Intentionally Omitted.

     SECTION 5.9 Post-Closing Access. On and after the Closing Date, the
Purchaser and the Seller will upon reasonable notice afford to the other party,
their Affiliates and their representatives reasonable access (including the
right to copy to the extent permitted by Requirements of Law), without charge,
during normal business hours, to the Acquired Assets, the Books and Records
relating thereto and any third party who maintains or controls any of the
foregoing, all as may be reasonably required in order to enable the requesting
party to (i) perform


                                       20

<PAGE>

any covenants required to be performed under this Agreement after the Closing
Date by them; (ii) permit the preparation of any Tax Return or other document
required to be filed with any Governmental Authority; (iii) respond to any
Action by any Governmental Authority or any other Person, including any
Customer; and (iv) permit the processing of or response to any claim made under
this Agreement and the other party shall reasonably cooperate with the
requesting party, if requested, in connection with the foregoing. The party
requesting such access shall comply with the other party's security policies and
procedures.

     SECTION 5.10 Cooperation in Litigation. The Sellers shall keep all Accounts
in Actions and copies of all litigation filings, correspondence, Books and
Records and other documentation of any kind that the Sellers reasonably
determine are necessary or desirable in connection with its handling and
disposition of Actions, and the parties shall comply with each other's
reasonable requests for access concerning any Actions or materials relating
thereto.

     SECTION 5.11 Bulk Sales Law. The Purchaser and the Sellers hereby
acknowledges that they do not intend to comply, in connection with the
transactions contemplated hereby, with the provisions of any applicable bulk
sale or similar Requirement of Law (including the Uniform Commercial Code Bulk
Transfer provisions).

     SECTION 5.12 Sellers other than the Parent. The Parent shall take all
lawful actions to cause the other Sellers to comply with all agreements and
covenants applicable to them.

     SECTION 5.13 Other Negotiations. During the period from the date of this
Agreement to the Closing Date, except as otherwise required based upon the
fiduciary duties applicable to the Board of Directors of each Seller under
Delaware law, the Sellers shall not, directly or indirectly, (i) initiate,
solicit or encourage discussions with; (ii) provide (or permit access to)
information to, or (iii) approve or enter into a transaction with, any Person or
group of Persons concerning any proposed or possible transfer of any of the
Acquired Assets.

     SECTION 5.14 No Waiver. The Sellers and the Purchaser are sophisticated
parties and have negotiated the terms of this Agreement with the specific
purpose of, among other things, allocating the Sellers' and the Purchaser's
respective risks and obligations hereunder.

     (a) The Sellers expressly acknowledge and agree that the Purchaser's actual
or constructive knowledge, whether on, prior to or following the date of this
Agreement of (i) any breach of any representation or warranty of the Sellers in
Section 4.1 hereof or (ii) the occurrence or failure to occur, or the impending
or threatened occurrence or failure to occur, of any event which occurrence or
failure to occur would cause or be reasonably likely to cause the failure of any
of the conditions set forth in Section 7.2(a) or 7.2(b), shall not (x) limit,
constitute a waiver of or otherwise affect any rights of or remedies available
to the Purchaser under this Agreement, including, without limitation, the
Purchaser's termination rights under Article VIII and rights to indemnification
under Section 9.2 or (y) qualify, excuse any inaccuracies in or otherwise alter
or affect the Sellers' representations and warranties or obligations under this
Agreement.


                                       21

<PAGE>

     (b) The Purchaser expressly acknowledges and agrees that the Sellers'
actual or constructive knowledge, whether on, prior to or following the date of
this Agreement of (i) any breach of any representation or warranty of the
Purchaser in Section 4.2 hereof or (ii) the occurrence or failure to occur, or
the impending or threatened occurrence or failure to occur, of any event which
occurrence or failure to occur would cause or be reasonably likely to cause the
failure of any of the conditions set forth in Section 7.3(a) or 7.3(b), shall
not (x) limit, constitute a waiver of or otherwise affect any rights of or
remedies available to the Sellers under this Agreement, including, without
limitation, the Sellers' termination rights under Article VIII and rights to
indemnification under Section 9.3 or (y) qualify, excuse any inaccuracies in or
otherwise alter or affect the Sellers' representations and warranties or
obligations under this Agreement.

                                   ARTICLE VI
                                      TAXES

     (a) The Parent hereby represents and warrants to the Purchaser that the
Sellers have timely filed all Tax Returns relating to the Business, the Acquired
Assets that they were required to file on or before the date hereof (taking into
account all applicable extensions), and have timely paid all Taxes shown thereon
as due and owing. There are no Liens with respect to Taxes upon any of the
Acquired Assets other than with respect to Taxes not yet due and payable or
which are being contested in good faith by appropriate action.

     (b) At the requesting party's expense, the parties hereto shall furnish or
cause to be furnished to each other, promptly upon reasonable request, any
information and assistance relating to the Acquired Assets and the Business as
the requesting party deems reasonably necessary in connection with the filing of
any Tax Returns, the preparation for any audit by any Taxing authority, the
response to any inquiry by a Taxing authority, the mailing or filing of any
notice and the prosecution or defense of any claim, suit or proceeding relating
to any Tax Returns or any other filing required to be made with any Taxing
authority or any other matter related to Taxes. The Purchaser will, and the
Parent will and will cause the other Sellers to, cooperate with each other in
the conduct of any audit or other proceeding related to Taxes involving the
Business prior to the Closing Date. However, notwithstanding any other provision
in this Section 6, and except as specifically required elsewhere in this
Agreement or the Program Agreement, the Purchaser shall not be obligated to
disclose to Sellers or their agents information regarding the Eligible Accounts
that arises after the Closing Date.

     (c) Notwithstanding anything in this Agreement to the contrary, all Tax
Returns filed by the Sellers for periods ending on or before the Closing Date
shall remain the property of the Sellers.

     (d) Notwithstanding anything in this Agreement to the contrary, all excise,
sales, use, transfer, documentary, stamp or similar Taxes (excluding Taxes on
income) that are payable or that arise as a result of the consummation of the
transactions contemplated by this Agreement and any recording or filing fees
with respect thereto will be borne by the Purchaser.


                                       22

<PAGE>

     (e) The Purchaser shall, if the Sellers so request and at the Sellers'
expense (for reasonable costs and expenses), cooperate with the Sellers to file
for and obtain any Tax refund that relates to any period prior to the Closing
Date.

                                   ARTICLE VII
                                   CONDITIONS

     SECTION 7.1 Conditions to Each Party's Obligations to Effect the Purchase
and Assumption. The respective obligations of the Parent, the other Sellers and
the Purchaser to effect the Purchase and Assumption are subject to the
fulfillment or written waiver, at or prior to the Closing Date, of the following
conditions:

     (a) Governmental and Regulatory Approvals. (i) The HSR waiting period shall
have expired or have been earlier terminated, applicable bank regulatory
approvals shall have been obtained, Bank shall have obtained approval from the
Federal Deposit Insurance Corporation and the Utah Department of Financial
Institutions with respect to the transactions contemplated by this Agreement,
Sellers shall have obtained approval from the Federal Deposit Insurance
Corporation and the Delaware State Banking Commission with respect to the
transactions contemplated by this Agreement, all applicable approval under the
Bank Merger Act shall have been obtained and (ii) all other authorizations of,
filings and registrations with, and notifications to, all Governmental
Authorities required to effect the transactions contemplated by this Agreement
(other than the Requisite Regulatory Approvals) shall have been obtained or made
and shall be in full force and effect and all waiting periods required by
applicable Requirements of Law in connection therewith shall have expired or
been terminated except to the extent that the failure to obtain any such other
approvals or authorizations would not be reasonably expected to have a Material
Adverse Effect on the Business, the Purchaser or the Sellers.

     (b) Third Party Consents. All necessary consents and approvals of third
Persons shall be in full force and effect, including Lien releases.

     (c) No Injunction or Prohibition. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, by-law, judgment, decree, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and prohibits or
makes illegal consummation of the transactions contemplated by this Agreement.

     (d) Program Agreement. The Program Agreement shall have been duly executed
and delivered by the other party thereto.

     (e) Financing Statements. The Sellers shall have executed and delivered
UCC-1 financing statements to be filed in the Offices of the Secretaries of
State of the states of Delaware and Pennsylvania and any other state necessary
to perfect the sale of receivables purchased pursuant to the terms and
conditions hereof.

     (f) Conversion and Operation. In connection with and in preparation for the
conversion, prior to the Conversion Date all relevant information and data shall
have been


                                       23

<PAGE>

exchanged between Sellers and Purchaser, such data shall have been tested and
reports of such testing shall have been exchanged and shall be mutually
acceptable to Sellers and Purchaser, and Sellers and Purchaser shall have agreed
that the credit program to be operated pursuant to the Program Agreement is
operational.

     SECTION 7.2 Conditions to Obligations of the Purchaser. The obligations of
the Purchaser to effect the Purchase and Assumption are subject to the
fulfillment or written waiver, at or prior to the Closing Date, of the following
additional conditions:

     (a) Performance of Obligations. The Sellers shall have performed in all
material respects all their covenants and agreements set forth in this
Agreement, to the extent required at or prior to the Closing Date. The Pooling
Agreement and all related agreements entered into in connection therewith shall
have been terminated, and Sellers shall have all right, title and interest in
and to the Acquired Assets.

     (b) Representations. The representations of the Sellers set forth in this
Agreement shall be true and correct as of (1) the date of this Agreement subject
to the introductory sentence of Section 4.1 and the satisfaction of the second
sentence of Section 7.2(a) above, and (2) the Closing Date, except that
representations that by their terms speak as of some other date shall be true
and correct only as of such date (in each case, without giving any effect to any
qualifications or limitations as to materiality or Material Adverse Effect
contained therein), except to the extent that any failure to be so true and
correct has not had, or is not reasonably likely to have, a Material Adverse
Effect on the Parent, BF or the Business.

     (c) Certificate. The Purchaser shall have received a certificate signed on
the Sellers' behalf by an executive officer of the Parent, dated the Closing
Date, to the effect that the conditions set forth in Sections 7.2(a) and 7.2(b)
have been satisfied.

     (d) Affidavit. Each Seller shall have delivered to the Purchaser a
non-foreign affidavit dated as of the Closing Date, sworn under penalties of
perjury and in form and substance required under Treasury regulations issued
pursuant to Section 1445 of the Code stating that such Seller is not a foreign
person as defined in Section 1445 of the Code.

     SECTION 7.3 Conditions to Obligations of the Sellers. The obligations of
the Sellers to effect the Purchase and Assumption are subject to the fulfillment
or waiver in writing, at or prior to the Closing Date, of the following
additional conditions:

     (a) Performance. The Purchaser shall have performed in all material
respects all its covenants and agreements set forth in this Agreement to the
extent required at or prior to the Closing Date.

     (b) Representations. The representations of the Purchaser set forth in this
Agreement shall be true and correct as of (1) the date of this Agreement, and
(2) the Closing Date, except that any representations that by their terms speak
as of the date of this Agreement or some other date shall be true and correct
only as of such date (in each case, without giving any effect to any
qualifications or limitations as to materiality or Material Adverse Effect
contained therein),


                                       24

<PAGE>

except to the extent that any failure to be so true and correct has not had, or
is not reasonably likely to have, a Material Adverse Effect on the Purchaser and
would not reasonably be expected to have a Material Adverse Effect on the
Business following the Closing Date.

     (c) Certificate. The Sellers shall have received a certificate signed on
the Purchaser's behalf by an executive officer of the Purchaser, dated the
Closing Date, to the effect that the conditions set forth in Sections 7.3(a) and
7.3(b) have been satisfied.

                                  ARTICLE VIII
                                   TERMINATION

     SECTION 8.1 Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any time before
the Closing Date only:

     (a) By the written consent of the parties hereto;

     (b) By the Purchaser or the Parent, if (i) any approval of a Governmental
Authority, the lack of which would result in the failure to satisfy the
condition set forth in Section 7.1(a), has been denied by the Governmental
Authority, and (ii) in each case such party has no opportunity to cure the fault
giving rise to such denial, including through reapplication or appeal;

     (c) By the Purchaser or the Parent, if (i) any permanent injunction or
Action by any Governmental Authority of competent jurisdiction prohibiting
consummation of the transactions contemplated by this Agreement becomes final
and nonappealable; (ii) any law or regulation makes consummation of the
transactions contemplated by this Agreement illegal or otherwise prohibited,
including any law imposing fiduciary duties referenced in Section 5.13; or (iii)
consummation of the transactions contemplated by this Agreement would violate
any nonappealable final order, decree or judgment of any Governmental Authority
having competent jurisdiction;

     (d) By the Purchaser or the Parent, if the transactions contemplated by
this Agreement are not consummated by October 31, 2005; provided, however, that
neither Purchaser, on the one hand, nor the Parent, on the other hand, may
terminate this Agreement pursuant to this Section 8.1(d) if its (or one of its
Affiliate's) breach of any representation, warranty or covenant contained herein
has been the cause of or resulted in the failure to consummate such transactions
by such date; or

     (e) By either the Purchaser, on the one hand, or the Parent, on the other
hand, in the event of a breach or default in the performance by the other party
(other than any of its Affiliates) of any representation, warranty, covenant or
agreement hereunder, which breach or default (i) would, individually or in the
aggregate with all other uncured breaches and defaults of such other party,
constitute grounds for the conditions set forth in Section 7.2(a) or (b) or
Section 7.3(a) or (b), as the case may be, not to be satisfied at the Closing
Date and (ii) has not been, or cannot be, cured within thirty (30) days after
written notice, describing such breach or default in reasonable detail, is given
by the terminating party to the breaching or defaulting party.


                                       25

<PAGE>

     SECTION 8.2 Effect of Termination. If this Agreement is terminated, no
party hereto (or any of its Affiliates, directors, officers, representatives or
agents) will have any Liability or further obligation to any other party to this
Agreement, except for (1) obligations which survive termination as expressly
provided for in Section 9.1 and (2) liabilities or obligations arising out of or
related to any knowing, willful or intentional breach of this Agreement prior to
such termination.

                                   ARTICLE IX
                            SURVIVAL; INDEMNIFICATION

     SECTION 9.1 Survival.

     (a) The representations or warranties of the parties in this Agreement will
survive the Closing until two (2) years after the Closing Date; provided that
(i) the representations and warranties of Sellers set forth in Section 4.1(g)
and the representations and warranties of Parent set forth in Article VI shall
survive for the applicable statutory period, and (ii) the representations and
warranties of Sellers set forth in Section 4.1(a), 4.1(b), 4.1(f), 4.1(i),
4.1(j) and 4.1(k) shall survive indefinitely.

     (b) No agreement or covenant in this Agreement will survive the Closing
Date, other than (i) the covenants in Section 5.1 (Conduct of Business) and 5.2
(Certain Changes) which shall survive until one year after the Closing Date and
(ii) the covenants set forth in Sections 2.3 (Purchase Price; Purchase Price
Adjustment), 2.4 (Allocation of Purchase Price), 5.5 Additional Instruments),
5.6 (Marks; Branding), Article VI (Taxes), Section 8.2 (Effect of Termination),
this Article IX (Survival; Indemnification) and Sections 10.6 (Governing Law)
and 10.7 (Waiver of Jury Trial).

     (c) No claim for indemnification pursuant to this Article IX for breach of
any representation, warranty or covenant may be brought after the date on which
such representation, warranty or covenant no longer survives; provided, that if
any reasonably specific indemnification claim is validly made prior to the
termination of the applicable survival period, the indemnifying party's
obligation hereunder with respect to such indemnification claim shall survive
until such claim has been finally resolved.

     SECTION 9.2 Indemnification by Sellers. Each Seller agrees, jointly and
severally, to indemnify the Purchaser, and each of its officers, directors,
employees, equity holders, attorneys, agents and Affiliates against and agrees
to hold each of them harmless from, any and all damage, loss, Liability,
expense, judgment, settlement, claim, cost or penalty (including reasonable
expenses of investigation and reasonable attorneys' fees and expenses)
(collectively, "Losses") incurred or suffered by the Purchaser or any of their
respective officers, directors, employees, equity holders, attorneys, agents or
Affiliates, whether or not resulting from a third party claim, arising out of or
relating to or resulting from, without duplication, (1) any breach of a
representation or warranty of any Seller contained in this Agreement or in any
certificate delivered by any Seller pursuant to this Agreement, (2) any breach
of an agreement or covenant made by any Seller in this Agreement, (3) any
inaccuracy in any certificate or instrument delivered by any Seller to the
Purchaser pursuant to this Agreement, (4) any Seller's use or


                                       26

<PAGE>

operation of any Acquired Assets prior to the Closing, including any act or
omission of any Seller, any of their respective officers, directors, employees,
attorneys, agents or Affiliates relating thereto, (5) any failure of any Seller,
or any of their respective Affiliates to comply with any applicable "bulk sales"
or similar Requirement of Law in connection with the consummation of the
transactions contemplated by this Agreement, or (6) Sellers' actions or
omissions relating to any accounts and/or receivables which are not Eligible
Accounts or Eligible Receivables. Notwithstanding the foregoing, the Purchaser
and its Affiliates will not be entitled to indemnity pursuant to this Section
9.2 (i) in respect of any individual Action or individual claim, fact or
occurrence or any series of related Actions, claims, facts or occurrences
(including any class action), until Losses in respect of such individual or
related Actions, claims, facts or occurrences are greater on a cumulative basis
than the Indemnity Deductible or (ii) for any Losses, until the aggregate amount
of such Losses incurred or suffered by the Purchaser or any of its Affiliates
exceeds on a cumulative basis the Indemnity Deductible, in which case the
Purchaser and its Affiliates shall be entitled to indemnification for the full
amount of such Losses in excess of such Indemnity Deductible; provided that in
no event will Purchaser and its Affiliates be entitled to indemnity for Losses
pursuant to this Section 9.2 to the extent that the amount of Losses, in the
aggregate, incurred or suffered by the Purchaser or any of its Affiliates
exceeds the Indemnity Cap.

     SECTION 9.3 Indemnification by the Purchaser. The Purchaser agrees to
indemnify each Seller, and each of their respective officers, directors,
employees, equity holders, attorneys, agents and Affiliates against, and agrees
to hold each of them harmless from, any and all Losses incurred or suffered by a
Seller or any Seller's officers, directors, employees, equity holders,
attorneys, agents or Affiliates, whether or not resulting from a third party
claim, arising out of, relating to or resulting from, without duplication, (1)
any breach of a representation or warranty of the Purchaser contained in this
Agreement or in any certificate delivered by the Purchaser pursuant to this
Agreement, (2) any breach of an agreement or covenant made by the Purchaser in
this Agreement, (3) any inaccuracy in any certificate or instrument delivered by
the Purchaser to any Seller pursuant to this Agreement, (4) any Assumed
Liability or any Liability or obligation of Purchaser to any third party arising
or to be paid, performed or discharged after the Closing Date, (5) Purchaser's
use and operation of the Acquired Assets from and after the Closing Date,
including any act or omission of Purchaser or any of Purchaser's officers,
directors, employees, agents, or Affiliates relating thereto, (6) any failure of
Purchaser or any of its Affiliates to comply with any applicable "bulk sales" or
similar Requirement of Law in connection with the consummation of the
transactions contemplated by this Agreement, (7) the Purchaser's actions or
omissions relating to any Acquired Assets which are accounts and/or receivables
which are not Eligible Accounts, or (8) any violation or alleged violation of
any federal, state, local or municipal law or regulation with respect to the
Acquired Assets or the Assumed Liabilities. Notwithstanding the foregoing, the
Sellers and their respective Affiliates will not be entitled to indemnity
pursuant to this Section 9.3 (i) in respect of any individual Action or
individual claim, fact or occurrence or any series of related Actions, claims,
facts or occurrences (including any class action), until Losses in respect of
such individual or related Actions, claims, facts or occurrences are greater on
a cumulative basis than the Indemnity Deductible or (ii) for any Losses, until
the aggregate amount of such Losses incurred or suffered by any Seller(s) or any
of their respective Affiliates exceeds on a cumulative basis the Indemnity
Deductible, in which case the Sellers and their respective Affiliates shall be
entitled to


                                       27

<PAGE>

indemnification for the full amount of such Losses in excess of such Indemnity
Deductible; provided that in no event will Sellers and their respective
Affiliates be entitled to indemnity for Losses pursuant to this Section 9.3 to
the extent that the amount of Losses, in the aggregate, incurred or suffered by
the Sellers or any of their respective Affiliates exceeds the Indemnity Cap.

     SECTION 9.4 Notice, Settlements and Other Matters.

     (a) A party seeking indemnification pursuant to Section 9.2 or 9.3 (an
"Indemnified Party") must give prompt written notice to the party from whom such
indemnification is sought (the "Indemnifying Party") of the assertion of a claim
for indemnification or the assertion or commencement of any Action, in respect
of which indemnity may be sought hereunder specifying in reasonable detail the
individual items of such Losses including the amount, the date each such item
was paid, or properly accrued or arose, and the specific details of the breach
of representation, warranty or covenant or other claim or matter to which such
item is related. Notwithstanding the foregoing, the failure of the Indemnified
Party to furnish the written notice referred to in the preceding sentence in a
prompt manner shall not affect its right to indemnification and will not relieve
the Indemnifying Party of any Liability it may have to the Indemnified Party,
except to the extent that the Indemnifying Party's right to defend the matter is
materially and irrevocably prejudiced by such failure to give prompt notice. In
the event that any third party claim is made against the Indemnified Party and
the Indemnified Party notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party may, subject to Section 9.4(b), elect at any
time to negotiate a settlement or a compromise of such Action or to defend such
Action, in each case at its sole cost and expense and with its own counsel
reasonably acceptable to the Indemnified Party, provided, however that any such
settlement or compromise may only be for the payment of money damages, unless
with the prior written consent of the Indemnified Party. If, within thirty (30)
days of receipt from an Indemnified Party of the notice referred to above the
Indemnifying Party (i) advises the Indemnified Party in writing that it will not
elect to defend, settle or otherwise compromise or pay such Action or (ii) fails
to make such an election in writing, the Indemnified Party may (subject to the
Indemnifying Party's continuing right of election in the preceding sentence), at
its option, defend, settle, compromise or pay such Action; provided that any
such settlement or compromise shall be permitted hereunder only with the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld. Unless and until the Indemnifying Party makes an election in
accordance with this Section to defend, settle, compromise or pay such Action or
claim, all of the Indemnified Party's reasonable costs arising out of the
defense, settlement, compromise or payment thereof will be Losses subject to
indemnification by the Indemnifying Party. Each Indemnified Party shall make
available to the Indemnifying Party all information reasonably available to such
Indemnified Party relating to such Action, provided the Indemnifying Party has
elected to defend, settle or otherwise compromise or pay such Action. If the
Indemnifying Party elects to defend any such Action, the Indemnified Party may
participate in such defense with counsel of its choice at the Indemnified
Party's sole cost and expense, unless (i) the employment of such counsel has
been authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party has not employed counsel to take charge of the defense within twenty (20)
days after delivery of the applicable notice, or having elected to assume such
defense, thereafter ceases to diligently pursue its defense of such Action, or
(iii) the Indemnified Party has reasonably concluded that there may be


                                       28

<PAGE>

defenses available to it, that are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not have the right to direct the defense of such Action on behalf of the
Indemnified Party), in any of which event attorney's fees and expenses shall be
borne by the Indemnifying Party.

     (b) The Indemnified Party will have the right to reject any settlement
approved by the Indemnifying Party if the Indemnified Party is not fully and
unconditionally released from any Liability resulting from that claim or is
required to pay any costs, expenses or damages to any Person as a result of the
Action that are not covered by and paid or payable pursuant to the indemnity
provided herein. The Indemnified Party will not have the right to settle any
third party Action without the written consent of the Indemnifying Party if the
Indemnifying Party is actively contesting such Action in good faith and has
assumed the defense of such Action from the Indemnified Party or if the period
for determining whether or not to assume the defense of such Action from the
Indemnified Party has not expired.

     (c) In calculating the amount of any Losses of an Indemnified Party under
this Article IX, there will be subtracted the amount of any (1) insurance
proceeds (net of Taxes actually incurred, and other than proceeds received
through self-insurance or insurance provided by Affiliates of such Indemnified
Party) actually received by the Indemnified Party with respect to such Losses
and (2) third-party payments actually received by the Indemnified Party with
respect to such Losses. In the event that the Indemnifying Party reimburses the
Indemnified Party for any Losses prior to the occurrence of any events
contemplated by clauses (1) or (2) above, the Indemnified Party will remit to
the Indemnifying Party any such amounts that the Indemnified Party subsequently
receives or realizes with respect to such Losses. Upon the payment in full of
any claim hereunder, the Indemnifying Party will be subrogated to the rights of
the Indemnified Party against any Person with respect to the subject matter of
such claim.

     (d) Without limitation of their respective rights and obligations as set
forth elsewhere in this Article IX, and subject to the procedures for
indemnification claims set forth in this Article IX, the Indemnified Party will
act in good faith, will use commercially reasonable efforts to mitigate any
Losses, will use similar discretion in the use of personnel and the incurring of
expenses as the Indemnified Party would use if the Indemnified Party was engaged
and acting entirely at its own cost and for its own account, and will consult
regularly with the Indemnifying Party regarding the conduct of any Actions or
the taking of any action for which indemnification may be sought.

     (e) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE
INDEMNIFICATION PROVIDED FOR HEREIN SHALL NOT COVER, AND IN NO EVENT SHALL ANY
PARTY HERETO BE LIABLE FOR, ANY INDIRECT DAMAGES, INCLUDING CONSEQUENTIAL,
INCIDENTAL, EXEMPLARY OR SPECIAL DAMAGES, OR PUNITIVE DAMAGES OR IN THE CASE OF
ANY "PUTATIVE DAMAGES," OR FOR ANY INDEMNIFIED PARTY'S NEGLIGENCE OR WILLFUL
MISCONDUCT.

     (f) BANK'S TOTAL CUMULATIVE LIABILITY TO BLAIR FOR ALL DAMAGES FOR ANY
CAUSE WHATSOEVER, SHALL NOT EXCEED THE INDEMNITY CAP


                                       29

<PAGE>

PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO BANK'S
INTENTIONAL BREACH OF THIS AGREEMENT.

     (g) BLAIR'S TOTAL CUMULATIVE LIABILITY TO BANK FOR ALL DAMAGES FOR ANY
CAUSE WHATSOEVER, SHALL NOT EXCEED THE INDEMNITY CAP PROVIDED, HOWEVER, THAT
THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO BLAIR'S INTENTIONAL BREACH OF
THIS AGREEMENT

     (h) After the Closing Date, other than as provided in Section 2.3 and
except with respect to claims based on fraud and/or claims seeking equitable
remedies, this Article IX will constitute the Sellers' and the Purchaser's
exclusive remedy for any of the matters addressed herein or other claim arising
out of or relating to this Agreement.

                                    ARTICLE X
                                  MISCELLANEOUS

     SECTION 10.1 Notices. All notices and other communications by the Purchaser
or the Sellers hereunder will be in writing to the other party and will be
deemed to have been duly given when delivered in person, when received via
facsimile or overnight courier, or when posted by United States registered or
certified mail, with postage prepaid, addressed as follows:

          if to the Purchaser to:

               World Financial Capital Bank
               2855 East Cottonwood Pkwy
               Salt Lake City, UT 84121
               Attn: Marvin Corne,
                     President
               Facsimile: (801) 527-2283

          with a copy to:

               ADS Alliance Data Systems, Inc.
               800 Tech Center Drive
               Gahanna, OH 43230
               Attention: Karen A. Morauski,
                          Vice President and Counsel
               Facsimile: (614) 944-5801


                                       30

<PAGE>

          if to the Sellers, to:

               c/o Blair Corporation
               220 Hickory Street
               Warren, PA 16366
               Attention: Bryan Flanagan,
                          Chief Financial Officer
               Facsimile: (814) 726-6123

          with a copy to:

               Patton Boggs LLP
               2550 M Street, N.W.
               Washington, DC 20037
               Attention: John H. Vogel, Esq.
                          Philip G. Feigen, Esq.
               Facsimile: (212) 457-6315

Notices and other communications may also be sent to such other address or
addresses as the Purchaser or the Sellers may from time to time designate by
notice as provided herein, except that notices of change of address will be
effective only upon receipt.

     SECTION 10.2 Expenses.

     (a) Except as otherwise provided herein, all legal and any other
third-party costs and expenses incurred in connection herewith and the
transactions contemplated by this Agreement will be paid by the party incurring
such expenses, except that all fees or other amounts payable to any Governmental
Authority in connection with any Requisite Regulatory Approval shall be paid by
the Purchaser.

     (b) Collection efforts and related expenses on all Eligible Accounts made
or incurred by the Sellers prior to the Closing Date will be the responsibility
of the Sellers, and all monies collected thereon prior to the Closing Date shall
be retained by the Sellers.

     (c) The Purchaser shall be responsible for all fees of the rating agencies
in connection with confirming ratings and providing approvals for the
contemplated assumptions by the Purchaser.

     SECTION 10.3 Successors and Assigns. This Agreement will be binding upon
and will inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement and the rights and obligations hereunder may
not be assigned by any party to any Person without the prior written consent of
the other party hereto, and any purported assignment without such consent shall
be void; provided, however, that the Purchaser may assign its rights to purchase
all or any portion of the Acquired Assets hereunder to one or more of its
Affiliates.


                                       31

<PAGE>

     SECTION 10.4 Entire Agreement; Amendment; Waiver. This Agreement, including
the Annexes and Schedules hereto and thereto, embody the entire agreement of the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements with respect thereto, other than the Confidentiality Agreement. No
representation, warranty, inducement, promise, understanding or condition not
set forth in this Agreement (or the other documents referred to in the preceding
sentence) has been made or relied on by any party in entering into this
Agreement. This Agreement may be amended, and any provision hereof waived, but
only in writing signed by the party against whom such amendment or waiver is
sought to be enforced.

     SECTION 10.5 Counterparts. This Agreement may be executed in two or more
counterparts any of which may be delivered by facsimile transmission and all of
which will together constitute one and the same instrument.

     SECTION 10.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE
TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     SECTION 10.7 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

     SECTION 10.8 Severability. In case any one or more of the provisions
contained herein will be invalid, illegal or unenforceable in any respect under
any law, the validity, legality and enforceability of the remaining provisions
contained herein will not in any way be affected or impaired thereby.

     SECTION 10.9 Public Announcement. Except for any notice which is required
by law or regulation, each of the Purchaser, on the one hand, and each Seller,
on the other hand, agrees that it will not issue a press release, make any other
public statement or make any statement to the employees with respect to the
transactions contemplated by this Agreement without the prior written consent of
the other, which consent will not be unreasonably withheld or delayed. Each of
the Purchaser, on the one hand, and each Seller, on the other hand, agrees, if
possible, to notify and consult with the other at least one Business Day in
advance of filing any notice required by law or regulation.

     SECTION 10.10 Third-Party Beneficiaries. Nothing in this Agreement,
expressed or implied, will confer on any Person, other than the parties hereto
or their respective successors, any rights, remedies, obligations or
liabilities; provided that the provisions of Article IX will inure to the
benefit of the Indemnified Parties.

     SECTION 10.11 Further Assurances. Each of the parties hereto shall,
whenever and as often as reasonably requested to do so by another party hereto,
execute, acknowledge and deliver


                                       32

<PAGE>

any and all such other and further acts, assignments, endorsements, transfers
and any instruments of further assurance, approvals and consents as are
necessary or proper in order to complete, ensure and perfect (i) the Purchase
and Assumption as contemplated hereby, and (ii) the consummation of the other
transactions contemplated hereby.

                         (Signature block on next page.)


                                       33

<PAGE>

     IN WITNESS WHEREOF, this Agreement has been executed on behalf of each of
the parties hereto as of the day and year first above written.

PURCHASER:

WORLD FINANCIAL CAPITAL BANK


By: /s/ MARVIN H. CORNE
    ---------------------------------
Name: Marvin H. Corne
      -------------------------------
Title: President
       ------------------------------


SELLERS

BLAIR CORPORATION


By: /s/ BRYAN J. FLANAGAN
    ---------------------------------
Name: Bryan J. Flanagan
      -------------------------------
Title: Senior Vice President and
       Chief Financial Officer
       ------------------------------


JLB SERVICE BANK


By: /s/ STEPHEN P. WIEDMAIER
    ---------------------------------
Name: Stephen P. Wiedmaier
      -------------------------------
Title: President and Chief
       Executive Officer
       ------------------------------


BLAIR CREDIT SERVICES CORPORATION


By: /s/ STEPHEN P. WIEDMAIER
    ---------------------------------
Name: Stephen P. Wiedmaier
      -------------------------------
Title: President
       ------------------------------


BLAIR FACTORING COMPANY


By: /s/ RANDALL W. WEIDERT
    ---------------------------------
Name: Randall W. Weidert
      -------------------------------
Title: President


                                       34
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>j1363201exv10w2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.2

                     PRIVATE LABEL CREDIT PROGRAM AGREEMENT

     This Private Label Credit Program Agreement is made as of the 26th day of
April, 2005, by and between BLAIR CORPORATION, a Delaware corporation with its
principal offices at 220 Hickory Street, Warren, PA 16366 ("Blair") and World
Financial Capital Bank, a Utah industrial bank with its principal offices at
2855 East Cottonwood Parkway, Salt Lake City, UT 84121 ("Bank").

                                   WITNESSETH:

     WHEREAS, Bank has established programs to extend private label credit to
qualified customers for the purchase of goods;

     WHEREAS, Blair is engaged, among other activities, in selling merchandise
through catalog, retail stores, the internet and other direct marketing means;

     WHEREAS, concurrently with the execution of this Agreement, Bank and Blair
are entering into a Purchase, Sale and Servicing Transfer Agreement (the
"Purchase Agreement") pursuant to which Bank shall purchase Blair's Customer
Credit Business (as hereinafter defined), including certain accounts and
associated receivables ("Purchased Accounts"); and

     WHEREAS, it is a condition precedent to the obligations of Blair under the
Purchase Agreement that Blair and Bank enter into this Agreement;

     NOW, THEREFORE, in consideration of the terms, conditions and mutual
covenants contained herein, and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Blair and Bank agree as
follows:

                                    ARTICLE 1
                                   DEFINITIONS

     1.1 Generally. The following terms shall have the following meanings when
used in this Agreement:

     - "Account" means a private label credit open end credit account
     established in favor of an Accountholder, pursuant to which such
     Accountholder may finance the purchase of Goods from Blair Channels and
     Enhancement Products, all subject to the terms of an Account Agreement. The
     term Account includes Purchased Accounts.

     - "Account Agreement" means the account agreement between Bank and an
     Accountholder governing the use of an Account, together with any
     amendments, modifications or supplements which now or hereafter may be made
     to such Account Agreement (and any replacement of such agreement).

<PAGE>

     - "Account Application" means the private label credit application which
     must be completed and submitted by individuals who wish to become
     Accountholders.

     - "Account Documentation" means, with respect to Accounts, all Account
     Applications, Credit Cards, and Billing Statements relating to such
     Accounts.

     - "Account List" means any list in electronic form that identifies or
     provides a means of differentiating Accountholders, including any such
     electronic listing that includes the names, addresses, email addresses (as
     available), and telephone numbers of Accountholders.

     - "Accountants" has the meaning set forth in Section 10.2 hereof.

     - "Accountholder" means any Person who has been issued an Account by Bank
     and includes any authorized user(s).

     - "Accountholder Data" means all personally identifiable information about
     an Accountholder received by Bank in connection with the Accountholder's
     application for or use of a Private Label Credit Card or Account, but does
     not include any information collected independently by Blair through or in
     the course of its business.

     - "Accountholder Indebtedness" means all amounts charged and owing to Bank
     by Accountholders with respect to Accounts (including finance charges, NSF
     fees, late charges, pay-by-phone fees and any other fees and charges),
     whether or not billed, less the amount of any credit balances owing by Bank
     to Accountholders, including any credits associated with returns of Goods
     and similar credits and adjustments, whether or not billed.

     - "Affiliate" means, with respect to any Person, each Person that controls,
     is controlled by, or is under common control with, such Person.

     - "Agreement" means this Program Agreement, together with all of its
     schedules and exhibits, and, if modified, altered, supplemented, amended
     and/or restated, as the same may be so modified, altered, supplemented,
     amended and/or restated from time to time.

     - "Applicable Law" means all federal, state and local laws, statutes,
     regulations, written regulatory guidance, orders or directives, as may be
     amended and in effect from time to time during the Term of this Agreement,
     including, but not limited to: (i) the Truth in Lending Act and Regulation
     Z; (ii) the Equal Credit Opportunity Act and Regulation B; (iii) the Fair
     Credit Reporting Act; (iv) the Gramm-Leach-Bliley Act and its implementing
     regulations ("GLBA"); and (vi) the PATRIOT Act and its implementing
     regulations.

     - "Approval Rate Threshold" means the approval rates set forth in Schedule
     3.4.


                                       2

<PAGE>

     - "Automated Telephone Application" shall mean an application procedure
     designed to open Accounts at the point of sale or order entry, in which an
     application for credit is processed without a paper application being
     completed by an Applicant, but instead, the Applicant's information is
     keyed into the telephone.

     - "Bank" has the meaning set forth on page 1.

     - "Bank Event of Default" means the occurrence of any one of the events
     listed in Section 12.2 hereof or an Event of Default of Bank.

     - "Bank Licensed Marks" means the trademarks, trade names, service marks,
     logos and other proprietary designations of Bank listed on Schedule B and
     licensed to Blair under Section 8.2 hereof.

     - "Bankruptcy Code" means Title 11 of the United States Code, as amended,
     or any other applicable state or federal bankruptcy, insolvency, moratorium
     or other similar law and all laws relating thereto.

     - "Bank's Parent" means Alliance Data Systems Corporation.

     - "Bank's Privacy Policy" shall mean the privacy policy to be provided by
     Bank to Accountholders in connection with the Program, in the form
     consistent with the terms of this Agreement and Applicable Law.

     - "Batch Prescreen Application" shall mean a process where Bank's offer of
     credit is made to certain customers prequalified by Bank, in a batch mode
     within a catalog environment. This process will be used in conjunction with
     the mailing of catalogues to qualified prospective Accountholders and will
     be integrated with the phone order processing system which will contain an
     indicator identifying qualified prospects.

     - "Billing Cycle" means the interval of time between regular periodic
     Billing Dates for an Account.

     - "Billing Date" means, for any Account, the last day of a Billing Cycle as
     of when the Account is billed.

     - "Billing Statement" means a summary of Account credit and debit
     transactions for a Billing Cycle including a descriptive statement (as
     provided by Blair to Bank) covering purchases of Goods and a statement with
     only past-due account information.

     - "Blair Channels" means all retail establishments owned or operated by
     Blair in the United States and all mail order, catalog (including Inserts),
     electronic mail outlets (including websites operated by Blair) and other
     direct access media (not used for initiating Accounts or submitting Account
     transactions to the Bank)within the United States that are owned or
     operated by Blair.


                                       3

<PAGE>

     - "Blair Event of Default" means the occurrence of any one of the events
     listed in Section 12.3 hereof or an Event of Default of Blair.

     - "Blair Licensed Marks" means the trademarks, trade names, service marks,
     logos and other proprietary designations of Blair listed on Schedule A and
     licensed to Bank by Blair under Section 8.1 hereof.

     - "Business Day" means any day, other than a Saturday, Sunday or legal or
     banking holiday, on which Blair and Bank both are open for business.

     - "Change in Control" means any acquisition of Control of Blair by an
     entity other than an Affiliate of Blair, or acquisition of Control of Bank
     by an entity other than an Affiliate of Bank, as the case may be.

     - "Charge Transaction Data" means the transaction information with regard
     to each purchase of Goods by an Accountholder on credit and each return of
     Goods for credit in the form of electronic information as more particularly
     set forth in the Operating Procedures.

     - "Co-Branded Credit Card" means a credit card that bears a Blair Licensed
     Mark and the trademarks, tradenames, service marks, logos and other
     proprietary designations of VISA U.S.A., Inc., MasterCard International
     Inc., American Express, Discover or any other payment system that is
     generally accepted by sellers in the general purpose department store
     business.

     - "Competing Program" has the meaning set forth in Section 2.5(a) hereof.

     - "Confidential Information" has the meaning set forth in Section 11.1
     hereof.

     - "Continuity Products" means goods that are offered by or through Blair
     Channels to Qualified Blair Customers in a series.

     - "Control" of a Person means the possession, directly or indirectly, of
     the power to direct or cause the direction of its management or policies,
     whether through the ownership of voting securities, by contract or
     otherwise.

     - "Customer Credit Business" means the Business, as that term is defined in
     the Purchase Agreement.

     - "Disclosing Party" has the meaning set forth in Section 11.1 hereof.

     - "Enhancement Products" means the Account enhancement products listed in
     Schedule 4.7, or such other products as shall be approved by the Operating
     Committee from time to time.


                                       4

<PAGE>

     - "Event of Default" means the occurrence of any one of the events listed
     in Section 12.1 hereof.

     - "Fair Market Value" has the meaning set forth in Section 14.3 hereof.

     - "Federal Funds Rate" means the offered rate as reported in The Wall
     Street Journal in the "Money Rates" section for reserves traded among
     commercial banks for overnight use in amounts of one million dollars or
     more, as published in the most recent Friday edition prior to any required
     payment or settlement date in which such offered rate is reported, and if
     such rate is not so reported in any Friday edition of The Wall Street
     Journal during the thirty day period preceding such required payment or
     settlement date, such offered rate as reported in another publication
     reasonably acceptable to the parties.

     - "Forms" has the meaning set forth in Section 3.3(c) hereof.

     - "GAAP" means generally accepted accounting principles, consistently
     applied.

     - "Goods" means the products sold by or through Blair Channels, primarily
     for personal, family, or household purposes.

     - "Governmental Authority" means any federal, state or local domestic,
     foreign or supranational governmental, regulatory or self-regulatory
     authority, agency, court, tribunal, commission or other governmental,
     regulatory or self-regulatory entity.

     - "Indemnified Party" has the meaning set forth in Section 15.3 hereof.

     - "Indemnifying Party" has the meaning set forth in Section 15.3 hereof.

     - "Indemnity Cap" has the meaning set forth on Schedule 15.

     - "Indemnity Deductible" has the meaning set forth on Schedule 15.

     - "Initial Term" has the meaning set forth in Section 13.1 hereof.

     - "Inserts" has the meaning set forth in Section 4.8 hereof.

     - "Instant Credit Application" shall mean an in store or catalog
     application procedure designed to open Accounts at point of sale or order
     entry whereby an application for credit is communicated to Bank either
     verbally at point of sale or systemically during the catalog order entry
     process according to Bank's Operating Procedures.

     - "Intellectual Property" means, on a worldwide basis, other than with
     respect to Blair Licensed Marks or Bank Licensed Marks, any and all: (i)
     rights associated with works of authorship, including copyrights, moral
     rights and mask-works; (ii) trade names, trade marks and service marks and
     the goodwill associated therewith; (iii) trade secret rights; (iv) patents,
     inventions, designs, processes, procedures, codes algorithms, methods and


                                       5

<PAGE>

     other industrial property rights; (v) other intellectual and industrial
     property rights of every kind and nature, however designated, whether
     arising by operation of law, contract, license or otherwise; and (vi)
     applications, registrations, renewals, extensions, continuations, divisions
     or reissues thereof now or hereafter in force (including any rights in any
     of the foregoing).

     - "Internet Instant Credit" shall mean an Internet application procedure
     designed to open Accounts during an Internet transaction whereby an Account
     Application is completed on the Program Website according to the Operating
     Procedures. The Account Application is then screened against the Bank's
     established credit criteria. The Bank's credit disposition response is then
     returned to the Internet session.

     - "Internet Online Prescreen" shall mean a process where a prescreened
     offer for an Account is made to customers meeting the Bank's credit
     criteria in a real-time preapproved process according to the Operating
     Procedures. The process utilizes the customer's shipping information or
     Blair's internal customer records. The customer records are pre-screened by
     a credit bureau using the Bank's established criteria to determine if an
     offer is appropriate. Customer records passing the bank's pre-screening
     criteria are returned to the Internet session where a pre-approved offer to
     open an Account is made.

     - "Internet Services" has the meaning set forth in Section 3.8(a).

     - "Knowledge" means the actual knowledge of the executive officers of the
     organization who have managerial responsibility for the Program.

     - "Loyalty Program" means any program developed by Blair to build
     incremental customer purchases by offering rewards for future purchases of
     Goods.

     - "Marketing Commitment" shall have the meaning set forth in Schedule
     4.1(a).

     - "Marketing Funds" shall have the meaning set forth in Schedule 4.1(a).

     - "Marketing Plan" means the document that outlines the objectives,
     strategies and tactics of new account solicitation, usage and awareness
     programs for the applicable planning period.

     - "Material Change" shall have the meaning set forth in Section 3.4(b).

     - "Monthly Settlement Sheet" has the meaning set forth in Section 7.2
     hereof.

     - "Net Credit Sales" means, for any Program Year, an amount calculated by
     Bank as follows: an amount equal to (a) gross credit sales (except gross
     credit sales related to special credit programs such as deferred credit
     programs) on Accounts during each Program Year including taxes and
     shipping, minus (b) the sum of credits paid by Blair to Bank for returned
     Goods and other credits related to the price of Goods (such as


                                       6

<PAGE>

     concessions, discounts and adjustments) with respect to such Accounts
     during such Program Year.

     - "Net Proceeds" has the meaning set forth in Section 6.4(b).

     - "New Mark" has the meaning set forth in Sections 8.1(b) and 8.2(b)
     hereof.

     - "Nominated Purchaser" has the meaning set forth in Section 14.2(a).

     - "On-Line Prescreen Application" or "On-Line Prescreen" shall mean a
     process where a pre-screened offer of credit is made to customers meeting
     Bank's credit criteria in a real-time pre-approved process according to the
     Operating Procedures. The process utilizes traditional order entry data
     elements to build customer records. The customer records are pre-screened
     by a credit bureau using Bank's established criteria to determine if an
     offer of credit is appropriate. Customer records passing the Bank's
     pre-screening credit criteria are returned to the point of order entry
     where the pre-approved offer to open an Account is made. Records not
     passing the credit criteria are not returned and no offer is made.

     - "Operating Committee" shall mean the committee established pursuant to
     Section 4.2 hereof.

     - "Operating Procedures" shall mean Bank's instructions and procedures as
     written by Bank and provided to Blair to be followed by Blair in connection
     with the Program, as set forth on Schedule 3.1(a), as amended from time to
     time in accordance with Section 16.5 hereof.

     - "Person" means and includes any individual, partnership, joint venture,
     corporation, company, bank, trust, unincorporated organization, government
     or any department, agency or instrumentality thereof.

     - "POS" means point of sale.

     - "Prime Rate" shall mean a "Prime Rate" of interest as published in the
     "Money Rates" section of The Wall Street Journal.

     - "Private Label Credit Card" or "Credit Card" means a credit card which
     may be issued by Bank in its discretion to an Accountholder in connection
     with the Program, in each case which bears a Blair Licensed Mark.

     - "Program" means the private label credit program established by Bank and
     made available to Accountholders for the purchase of Goods through Blair
     Channels, including, without limitation, the extension of credit, billings,
     collections, customer service,


                                       7

<PAGE>

     accounting between the parties and all other aspects of the customized
     credit plan specified in this Agreement and the Schedules hereto and in
     Account Agreements.

     - "Program Assets" means the Accounts, Purchase Documentation,
     Accountholder List, and Accountholder Indebtedness.

     - "Program Commencement Date" shall mean the date on which Bank commences
     operation of the Program. Bank shall be deemed to have commenced operation
     of the Program on the earlier of the date on which Bank begins to issue new
     Accounts, the date on which Bank notifies Blair in writing that Bank has
     commenced operation of the Program, or the date on which Bank purchases the
     Purchased Accounts.

     - "Program Purchase Date" has the meaning set forth in Section 14.2(c).

     - "Program Website" has the meaning set forth in Section 3.8(a).

     - "Program Year" shall mean each full twelve calendar month period
     following the Program Commencement Date, except that, if the Program
     Commencement Date falls on a date other than the first day of a calendar
     month, the first Program Year will include the days of such calendar month
     after the Program Commencement Date and the next full twelve calendar
     months.

     - "Purchase Agreement" has the meaning set forth on page 1 hereof.

     - "Purchase Documentation" means, with respect to Accounts to be purchased
     by Blair pursuant to Section 14.2, the form of all current Account
     Documentation, the current Account balance information, the current Account
     repayment terms, and the current Account status information.

     - "Purchased Accounts" has the meaning set forth on page 1 hereof.

     - "Qualified Blair Customer" shall mean current, potential or future
     customers of Blair that may be available for Accounts under the Program.

     - "Qualified Blair Customer List" means the list of Qualified Blair
     Customers provided from time to time by Blair to Bank for purposes of
     soliciting such Persons for the Program in accordance with a Marketing
     Plan.

     - "Receiving Party" has the meaning set forth in Section 11.1 hereof.

     - "Renewal Term" has the meaning set forth in Section 13.1 hereof.

     - "Risk Management Policies" has the meaning set forth in Section 3.4(a)
     hereof.

     - "SLS" means each individual performance service level standard set forth
     at Schedule 5.2.


                                       8

<PAGE>

     - "Solicitation Materials" means catalogues and other documentation,
     materials, artwork, copy, trademarks (excluding Blair Licensed Marks and
     Bank Licensed Marks), copyrights and any protectible items, in any format
     or media (including television and radio), used to promote or identify the
     Program to Accountholders and potential Accountholders, including, without
     limitation, direct mail solicitation materials, Internet and coupons.

     - "Supported Accounts" has the meaning set forth in Section 3.5 hereof.

     - "Term" means the Initial Term and each Renewal Term.

     - "Termination Period" means the period beginning with the date of any
     notice of termination pursuant to Article 13 and ending on the Program
     Purchase Date, if Blair or its designee purchases the Program Assets or
     upon notice that Blair will not purchase the Program Assets if it
     determines not to do so.

     - "Trademark Style Guide" means any rules governing the manner of usage of
     trademarks, tradenames, service marks, logos and other proprietary
     designations.

     - "Transaction" means any purchase of Goods through a Blair Channel using
     an Account.

     - "Value Proposition" means promotional card event discounts, and any other
     card-related features or benefits as may be approved by the Operating
     Committee from time to time, which may be funded using Marketing Funds
     and/or by Blair.

     1.2 Miscellaneous. As used herein,

          (a) all references to the plural number shall include the singular
number (and vice versa),

          (b) all references to "herein," "hereunder," "hereinabove" or like
words shall refer to this Agreement as a whole and not to any particular
section, subsection or clause contained in this Agreement, and

          (c) all references to "include," "includes" or "including" shall be
deemed to be followed by the words "without limitation."

                                    ARTICLE 2
                          ESTABLISHMENT OF THE PROGRAM

     2.1 Generally. Pursuant to the terms and conditions of this Agreement,
Blair and Bank shall establish and participate in the Program commencing on the
Program Commencement Date.


                                       9

<PAGE>

     2.2 Credit Program.

          (a) Beginning as of the Program Commencement Date, Bank shall offer
Accounts to Qualified Blair Customers in accordance with this Agreement and the
Account Agreement.

          (b) Qualified applicants desiring to use the Program shall be granted
an Account by Bank with a credit line in an amount to be determined by Bank in
its discretion for each individual applicant. Subject to Section 3.6 and
Applicable Law, Bank shall determine the terms and conditions of the Account to
be contained in an Account Agreement.

          (c) Applicants who wish to apply for an Account under the Program must
submit a completed application on a form or in an electronic format approved by
Bank, and Bank shall grant or deny the request for credit based solely upon
Bank's credit criteria. With respect to applicants who wish to apply for an
Account in a Blair retail establishment, Blair shall provide a copy of the
Account Agreement to the applicant to be retained for the applicant's records.
The application shall be submitted to Bank by the applicant or submitted by
Blair on behalf of the applicant, as required in the Operating Procedures. If
Bank grants the request for an Account, Bank will establish an credit limit for
such Account in an amount determined by Bank. Blair reserves the right to
continue to develop and market its programs for Continuity Products.

          (d) Bank shall make available to Blair and Blair shall utilize Batch
Prescreen Application, Instant Credit Application, Automated Telephone
Application, On-Line Prescreen Application and mail-in application procedures.

          (e) Blair agrees that it will protect and keep confidential the
information on such applications and shall not disclose the information to
anyone other than authorized representatives of Bank or Blair, or the applicant.

     2.3 Value Proposition. Bank shall offer to Accountholders any Value
Proposition.

     2.4 Conversion of Purchased Accounts. On the Program Commencement Date,
Bank will commence, subject to the requirements of Applicable Law, to convert
the Purchased Accounts to the terms and conditions specified in Schedule 2.4
hereto. After the Program Commencement Date, Bank shall prepare and send a
change in terms notice as required by Applicable Law with respect to Purchased
Accounts.

     2.5 Exclusivity.

          (a) General. Except as otherwise provided in this Section 2.5, during
the Term of this Agreement (excluding the Termination Period), Blair, on behalf
of itself and its Affiliates, agrees not to enter into or be a party to an
agreement or arrangement, or act as a partner of a bank or credit card issuer,
relating to a program for private label credit or co-brand credit bearing a
Blair Licensed Mark or other mark using the Blair name in the United States or
any other credit programs similar in purpose to the Program (such a program, a
"Competing Program"). In addition, Blair, on behalf of itself and its
Affiliates, shall not itself or themselves operate or


                                       10

<PAGE>

participate in a Competing Program. Bank shall have exclusive rights with
respect to the Program.

          (b) Second-Look Credit Card Program. Notwithstanding Section 2.5(a),
Blair shall have the right at any time during the Term of this Agreement, itself
or through a third party, to establish an unadvertised program for issuing
credit cards, including private label credit cards using Blair Licensed Marks,
to customers whose applications have been declined by Bank, provided that Blair
shall ensure that if Blair Licensed Marks are used in connection with such
program, they are used in a manner which clearly differentiates them from the
use of Blair Licensed Marks in the Program. Blair shall have the right to
include references to such credit cards in any materials listing approved forms
of payment, and to provide applications and brochures for such program to
customers whose Account applications have been declined by Bank, provided,
however, that if any of such materials contain a reference to the Program, Blair
shall first seek the approval of Bank, which approval shall not unreasonably be
withheld, conditioned or delayed.

          (c) Retail Portfolio Acquisition. Notwithstanding Section 2.5(a),
Bank's sole rights with respect to credit card portfolios acquired by Blair or
its Affiliates are set forth in Section 2.6 below.

          (d) Private Label Marketing Launch Funds. Bank will provide the amount
set forth in Schedule 4.1(a) in connection with the marketing launch of the
Purchased Accounts thereof.

          (e) Other Products. For clarity, other than the products set forth in
Section 2.5(a), this Agreement does not restrict in any way Blair rights with
respect to other payment products, including debit cards, gift cards or stored
value cards which do not compete with the Program.

     2.6 Retail Portfolio Acquisition.

          (a) In the event that Blair purchases another retailer, or any stores
or other channels thereof, that directly or through a third party has a
proprietary or co-branded credit card portfolio, Bank agrees to participate in
the evaluation of a potential purchase of some or all of the credit card
business of such retailer in the following manner.

               (i) Retailer that Operates a Credit Card Business. In connection
with Blair's purchase of any portion of the retail operations of a retailer that
directly or through an Affiliate provides a proprietary or co-branded credit
card, Bank agrees to review with Blair and evaluate the due diligence materials
to consider a potential joint bid with Blair to acquire the related credit card
business offered for sale by such retailer in connection with Blair's
acquisition of the retailer, or any of its stores or other channels on terms
mutually satisfactory to both Bank and Blair. If Bank determines not to acquire
such credit card portfolio, or terms mutually satisfactory to Blair and Bank are
not reached, Blair shall have the right to purchase and operate such retailer's
credit card business itself or to engage a third party to do so, provided,
however, that Blair shall differentiate such business from the Program and Blair
Channels shall not accept


                                       11

<PAGE>

such credit card business. If Blair, directly or with a third party, acquires
the credit card business of another retailer pursuant to this provision and this
Agreement otherwise continues in effect, the provisions of Section 2.5 shall not
apply to such acquired credit card business or to the associated acquired retail
operations, including any growth thereof.

               (ii) Retailer that has a Credit Card with another Issuer. In
connection with Blair's purchase of any portion of the retail operations of a
retailer that has a proprietary or co-branded credit card through a third-party
issuer, Bank agrees that it shall review with Blair and evaluate the due
diligence materials to consider a potential purchase of the retailer's credit
card portfolio from such third party issuer associated with the retail assets
being acquired. In the event that Bank does not bid or is unsuccessful in its
bid for the credit card portfolio, Blair may offer the credit card program of
such third party issuer until the expiration or other termination of the
agreement governing such program, and Bank may then at its option negotiate in
good faith for the purchase of the credit card portfolio at that time. In the
event that Bank does not acquire the credit card portfolio associated with the
retail assets acquired by Blair, Blair shall have the right to purchase and
operate such retailer's credit card business itself or to engage a third party
to do so, provided, however, that Blair shall differentiate such business from
the Program and Blair Channels shall not accept such credit card business. If
Blair, directly or with a third party, acquires the credit card business of
another retailer pursuant to this provision, Section 2.5 shall not apply to such
acquired credit card business or to the associated acquired retail operations,
including any growth thereof.

               (iii) Retailer that has a Proprietary or Co-Branded Credit Card
with Bank. In connection with Blair's purchase of a retailer that has a
proprietary or co-branded credit card portfolio operated by Bank, Bank agrees to
discuss integrating such credit card portfolio with the Program.

          (b) Conversion of Purchased Accounts. If Bank acquires any credit card
portfolio pursuant to Section 2.6(a)(i) or (ii), or operates a credit card
portfolio as set forth in Section 2.6(a)(iii), Bank shall integrate such credit
card portfolio with the Program, provided the integration is on terms mutually
acceptable to Bank and Blair.

                                    ARTICLE 3
                          ADMINISTRATION OF THE PROGRAM

     3.1 Operation of the Program.

          (a) Except as modified by agreement of the parties or the Operating
Committee from time to time, the Operating Procedures for the Program shall be
as set forth on Schedule 3.1. The parties shall cooperate to review and revise
the Operating Procedures as appropriate prior to and following the Program
Commencement Date. Notwithstanding the foregoing, Bank may amend the Operating
Procedures as necessary to comply with Applicable Law and may make such other
amendments consistent with amendments made to all operating procedures for all
private label credit programs operated by the Bank and all other like-kind
programs operated or controlled by Bank Parent ("Technical Amendments"). Blair
shall observe and comply with the Operating Procedures and such other reasonable
procedures. Blair shall use its best efforts to


                                       12

<PAGE>

ensure that Blair's employees are trained regarding the Operating Procedures and
shall use its best efforts to ensure their compliance with them. If amendments
are made to comply with Applicable Law, a copy of all such amendments shall be
provided to Blair as soon as practicable. For Technical Amendments, a copy of
the amendment shall be provided to Blair at least thirty (30) days prior to its
effective date.

          (b) Bank shall provide, either directly or indirectly, the services,
materials and personnel necessary to operate the Program in accordance herewith
and in accordance with the Operating Procedures and any Marketing Plan agreed to
by the parties from time to time.

          (c) Blair shall participate in the Program in accordance herewith and
in accordance with the Operating Procedures and any Marketing Plan agreed to by
the parties from time to time. Blair shall prominently advertise and actively
promote the Program wherever customers can purchase Goods.

          (d) In the event of any conflict between the Operating Procedures and
this Agreement, the Agreement shall control.

     3.2 Ownership of Accounts.

          (a) Except to the extent of Blair's and its Affiliates' interest in
Blair Licensed Marks and Blair's option to purchase the Program Assets under
Section 14.2, and except as otherwise set forth in this Agreement, from and
after the Program Commencement Date Bank shall be the sole and exclusive owner
of all Accounts and Program Assets and shall have all rights, powers, and
privileges with respect thereto as such owner, including, without limitation,
the right, power and privilege to review periodically the creditworthiness of
Accountholders to determine the credit limits or finance charge rates to be made
available to individual Accountholders and whether to suspend or terminate the
credit privileges of any Accountholder. All purchases of Goods in connection
with the Accounts and the Accountholder Indebtedness shall create the
relationship of debtor and creditor between the Accountholder and Bank,
respectively. Blair acknowledges and agrees that (i) it has no right, title or
interest (except for its interest in Blair Licensed Marks and its option to
purchase the Program Assets under Section 14.2) in or to, any of the Accounts or
Program Assets or any proceeds of the foregoing, and (ii) Bank extends credit
directly to Accountholders.

          (b) Except as expressly provided herein, Bank shall be entitled to (i)
receive all payments made by Accountholders on Accounts, (ii) retain for its
account all Accountholder Indebtedness and such other fees and income authorized
by the Account Agreements and collected by Bank with respect to the Accounts and
Accountholder Indebtedness, and (iii) retain for its account Bank's share of
income from selling credit card Enhancement Products in accordance with Schedule
4.11.

          (c) Bank shall fund all Accountholder Indebtedness on the Accounts.

          (d) Bank shall have the exclusive right to effect collection of
Accountholder Indebtedness, except with respect to Accountholder Indebtedness
charged back to Blair as


                                       13

<PAGE>

provided in Section 6.5, and shall notify Accountholders to make payment
directly to it in accordance with its instructions; provided, however, that Bank
at its option may make all collections for its account using a Program name
which includes the name of Blair and, if Bank so elects, the name of Bank, and
may direct all checks to be made payable to "Blair" or, with Blair's prior
approval, another name combined with the name Blair. Blair grants to Bank a
limited power of attorney (coupled with an interest) to sign and endorse Blair's
name upon any form of payment that may have been issued in Blair name in respect
of any Account.

     3.3 Branding of Accounts/Credit Cards/Account Documentation/Solicitation
Collateral Materials.

          (a) Subject to finalization of any Marketing Plan and the review by
the Operating Committee, Bank shall be responsible for, and bear the cost of,
design (provided it meets Bank's established standard specifications),
development and delivery (other than the development and delivery at Blair
Channels for which Blair shall bear the cost) of Account Documentation.

          (b) Blair Licensed Marks shall appear prominently on the face of any
Private Label Credit Cards. The Private Label Credit Cards shall not bear Bank
Licensed Marks; provided, however, Bank's name will appear on the back of the
Card in order to identify Bank as the credit provider under the Program,
together with any other disclosures required by Applicable Law or deemed
necessary by Bank.

          (c) Bank shall design, with Blair's review, the Account Agreement,
Account application, Credit Card, card mailer and Billing Statement to be used
under the Program, subject to and in compliance with the requirements of
Applicable Law. The degree to which Blair's tradenames, trademarks, servicemarks
or logos appear on Account applications, card mailers, Credit Cards, Billing
Statements, letters, and other documents and forms (collectively, "Forms") is a
matter to be determined by Bank after consultation and coordination with Blair
(as provided in Schedule 4.2), and in accordance with Applicable Law. Only one
design shall be used for each Form. If Blair requests any changes to Forms which
result in any Form being obsolete, Blair shall reimburse Bank for the cost of
any unused obsolete Forms.

     3.4 Risk Management/Credit Standards.

          (a) Bank shall be solely responsible for developing and implementing
risk management policies, procedures and practices for the Program in accordance
with this Agreement, including policies, procedures and practices for credit and
Account openings, transaction authorization, collections, credit line
management, over-limit decisions, Account closures, payment crediting and
charge-offs (collectively, "Risk Management Policies").

          (b) The decision to extend credit to any applicant under the Program
shall be Bank's decision. Bank will work in good faith with Blair to develop
business strategies with respect to the issuance of Accounts which are intended
to maximize the potential of the Program, and which are mutually beneficial to
Blair and Bank in accordance with Schedule 4.2. Based on Bank's discussions with
Blair and due diligence regarding the Purchased Accounts, Bank confirms that it
is Bank's intent to generate approval rates similar to those experienced by
Blair


                                       14

<PAGE>

in its operation of its private label credit program (assuming a similar credit
risk distribution of applications as was experienced in the Purchased Accounts
population during the six months prior to the Program Commencement Date) during
the first eighteen (18) months of the Term. With respect to the Purchased
Accounts, Bank shall transfer at the Program Commencement Date the then existing
credit lines for such Purchased Accounts, and thereafter Bank shall use its
proprietary Account management system to make periodic adjustments to credit
lines of Accounts consistent with Bank's established credit line management
procedures. Any change to underwriting criteria which Bank reasonably believes
will constitute a Material Change (as defined below) with respect to Accounts
and credit line assignments shall be discussed in the Operating Committee before
implementation. However, Bank shall determine all credit underwriting policies
and procedures, as subject to Applicable Law and safety and soundness
considerations, subject to written notice at least 30 days prior to the
effective date of the change to the extent reasonably practicable. In the event
of a Material Change, Blair shall have the right to terminate the Agreement in
accordance with 13.2(e). For purposes of this Agreement, "Material Change" shall
mean (i) with respect to new Accounts, after three months following a change in
underwriting or credit criteria there occurs a decrease of the approval rates of
new Accounts by more than ten percent (10.00%), assuming a consistent risk
distribution as that experienced for the three months prior to the change, and
(ii) with respect to credit line assignments, after three months following such
a change there occurs a decrease equal to or greater than (a) twenty percent
(20%) of the existing average credit line assignment for credit lines of less
than one thousand dollars and (b) ten percent (10%) of the existing average
credit line assignment for credit lines of one thousand dollars or more. Blair
may from time to time request Bank to consider offering certain types of special
credit programs. Bank shall reasonably consider Blair's requests and negotiate
with Blair in good faith. However, Bank shall, in its sole discretion, subject
to Applicable Law and safety and soundness considerations, determine whether or
not to offer any of such programs. In the event Bank agrees to any special
credit program, Blair and Bank shall mutually agree upon any special terms and
fees associated with the program.

          (c) Bank and Blair shall perform all necessary security functions to
minimize fraud in the Program due to lost, stolen or counterfeit cards and
fraudulent applications. Blair agrees and acknowledges that it shall cooperate
with Bank in such functions. All fraud losses other than fraud of Blair,
employees or agents, shall be at Bank's expense.

     3.5 Intentionally Omitted.

     3.6 Changes to Rates and Fees of Accounts. Subject to Applicable Law and
the terms and conditions set forth in the Account Agreement, Bank shall
initially charge each Accountholder the rates and fees set forth in Schedule
2.2. Bank may make any changes in the terms and fees of the Account Agreement at
any time as required by Applicable Law or on an individual Account by Account
basis in connection with its servicing of the Accounts. With respect to any
other changes in terms affecting the rates and/or fees charged by Bank as set
forth in Schedule 2.2 Bank will, prior to making any changes, review and discuss
such changes with Blair in order to maximize the potential of the Program and
mutually benefit Blair and the Bank.


                                       15

<PAGE>

     3.7 Loyalty Program. At Blair's request, Bank will provide Blair with
system functionality tied to the Accounts to support the Loyalty Program at no
additional charge, to the extent the Loyalty Program is consistent with Bank's
existing or future functionality offered to other Bank clients and is
facilitated using monthly billing statements to active Accounts and does not
include stand-alone mailings. Provided, however, that Bank will support
stand-alone Accountholder mailings and zero-balance statements in conjunction
with the Loyalty Program at Blair's expense or as part of the Marketing Funds.
Bank will, at Blair's request, upon the terms, conditions and fees mutually
agreed upon in writing by the parties, provide back office servicing and
administration support for any Loyalty Program. A Loyalty Program will provide
for loyalty point accumulation, tracking, lookup/reporting, and redemption where
coupon is part of the Billing Statement, at no additional charge to Blair,
consistent with Bank's existing or future functionality offered to other Bank
clients. Blair is the owner of each and every Loyalty Program and will be
responsible for determining and funding the reward related to such Loyalty
Program and for ensuring that such Loyalty Program complies with all Applicable
Law.

     3.8 Internet Services.

          (a) Accountholder Website. Subject to Blair's prior written approval
of the Program Website and any changes thereto, Bank shall develop and maintain
at Bank's cost a Blair-branded website for Accountholders and potential
Accountholders, with the look and feel consistent with the Blair website
("Program Website"). The Program Website shall contain or otherwise be
associated with only such material and links as shall be agreed by the Operating
Committee from time to time. Blair will provide such links on (i) its home page,
(ii) its check-out pages, and (iii) such other pages as the Operating Committee
shall determine from time to time. The Program Website shall also include links
back to the Blair website, on the Program Website home page and such other pages
as the Operating Committee shall determine from time to time. The Program
Website shall include the following functions, and such other functions as may
be approved by the Operating Committee from time to time (the Program Website
and such functionality, collectively, the "Internet Services"):

               (i) Applications. The Program Website shall permit potential
Accountholders to access an Account Application, and to complete and submit the
Account Application online;

               (ii) Accountholder Customer Service. The Program Website shall
permit Accountholders to (A) view the Accountholder's Account information and
Billing Statements; and (B) make payments on the Accountholder's Account via
automated clearing house transfer or other payment mechanism approved by the
Operating Committee.

               (iii) Preapproved Account Acceptance. The Program Website shall
allow Qualified Blair Customers to access an Account acceptance screen process,
provide the needed information, access the appropriate disclosures, and accept
an outstanding prescreen Account offer from Bank.

               (iv) Internet Online Prescreen. Bank shall make available
Internet Online Prescreen services, subject to the following:


                                       16

<PAGE>

          Concerning Internet On-Line Prescreen, Bank will bear 100% of the
Internet On-Line Prescreen credit bureau expense during the first Program Year
and thereafter Bank shall bear such expense provided that Blair's Internet
business' annual aggregate acceptance rate is at least equal to the "Target
Acceptance Rate." The Target Acceptance Rate shall be 12% for Program Year 2;
17% for Program Year 3 and 22% for Program Year 4; and 25% for Program Year 5
and thereafter. If the aggregate acceptance rate of Blair's Internet business is
less than the Target Acceptance Rate for any given Program year, Blair will
compensate Bank for the shortfall in performance according to this formula:

Target Acceptance Rate - Actual Acceptance Rate   $0.25 x the actual number of
----------------------------------------------- X     credit bureau reports
             Target Acceptance Rate                     obtained by Bank
                                                      (to be adjusted on a
                                                    percentage basis tied to
                                                  percentage changes in actual
                                                   total bureau costs to Bank)

     This formula applies regardless of the approval rate. Bank may offset such
amount against the Net Proceeds owed to Blair.

          Notwithstanding the foregoing, if in any Program Year the Target
Acceptance Rate for that period is not achieved, but in the subsequent Program
Year the Target Acceptance Rate applicable to such period is exceeded, Bank
promptly will reimburse Blair in an amount equal to such performance overage up
to but not in excess of the amount paid by Blair to Bank by reason of Blair's
failure to achieve the Target Acceptance Rate in the prior Program Year.

     If the aggregate acceptance rate of Blair's Internet business is less than
10% at the end of Program Year 2, then Bank shall have the right to terminate
Internet On-Line Prescreen.

          (b) Performance Standards. Bank represents and warrants that, to
integrate and maintain the webpage and to ensure access to the Program Website
and reduce technical errors, its software providing the link will function, and
continue to function, in a sound technical manner. Blair branding style
(including color, font and type size), marketing content and marketing design
format of the Program Website shall be subject to approval by the Operating
Committee; provided, however, (a) Bank shall not need the Operating Committee's
approval for changes to any of its trademarks or service marks, or with respect
to any requirement of Applicable Law; and (b) if at any time Bank, exercising
its reasonable business judgment, believes any change to the marketing content
or marketing design format is necessary, Bank may make such change upon receipt
of approval from the Operating Committee, which approval shall not be
unreasonably withheld. Bank shall appropriately monitor the Program Website to
ensure it is functioning properly. Blair represents and warrants that, to
integrate and maintain the link, and to ensure access to the Program Website and
reduce technical errors, it will use its best efforts to ensure that its
software providing the link will function, and continue to function, in a sound
technical manner. Blair shall appropriately monitor the link to ensure it is
functioning properly. In the event Bank changes or otherwise modifies the
website address for the Program


                                       17

<PAGE>

Website, Blair will either update or modify the link as reasonably requested by
Bank. In providing the link, Blair shall make it clear and conspicuous that the
customer is leaving Blair's website and is being directed to the Program Website
for the exclusive purpose of accessing the Program Website. Blair agrees that,
in connection with the link, it will only use Bank's name, or any logo,
statements, or any other information that is related to Bank, only in accordance
with this Agreement, or as approved in advance and in writing by Bank.

          (c) Customer Privacy. Bank shall ensure that the Bank's Privacy Policy
is clearly and prominently posted on the pages of the Program Website.

          (d) Internet Services Representations and Warranties. Each party
represents and warrants to the other with respect to its Internet site used to
support the Program as of the Program Commencement Date and during the Term of
this Agreement that:

               (i) Such party has the license, right or privilege to use the
hardware, software and content acquired from third parties for use in its
respective Internet website, and that it is the owner (or licensee) of all
hardware, software and content used in its respective Internet website and that
neither the website as a whole, nor any part thereof, infringes upon or violates
any patent, copyright, trade secret, trademark, invention, proprietary
information, nondisclosure or other rights of any third party.

     3.9 Sales Taxes. Blair will pay when due any sales taxes relating to the
sale of Goods. Bank shall notify Blair of any amounts written-off on Accounts by
Bank, identified by Account, and shall provide reasonable aggregate report
information and such other reasonable assistance as may be requested by Blair
(provided Blair reimburses Bank for any additional expenses) in order to enable
Blair to recover any sales tax charged to any Account that has been written-off
by Bank.

     3.10 Catalog On-Line Prescreen. Concerning catalog On-Line Prescreen, Bank
will bear 100% of the On-Line Prescreen credit bureau expense during the first
Program Year and thereafter Bank shall bear such expense provided that Blair's
catalog business' annual aggregate telephone acceptance rate is at least equal
to the "Target Acceptance Rate." The Target Acceptance Rate shall be 12% for
Program Year 2; 17% for Program Year 3 and 22% for Program Year 4; and 25% for
Program Year 5 and thereafter. If the aggregate acceptance rate of Blair's
catalog business is less than the Target Acceptance Rate for any given Program
year, Blair will compensate Bank for the shortfall in performance according to
this formula:

Target Acceptance Rate - Actual Acceptance Rate   $0.25 x the actual number of
----------------------------------------------- X     credit bureau reports
             Target Acceptance Rate                     obtained by Bank
                                                      (to be adjusted on a
                                                    percentage basis tied to
                                                  percentage changes in actual
                                                   total bureau costs to Bank)


                                       18

<PAGE>

This formula applies regardless of the approval rate. Bank may offset such
amount against the Net Proceeds owed to Blair.

     Notwithstanding the foregoing, if in any Program Year the Target Acceptance
Rate for that period is not achieved, but in the subsequent Program Year the
Target Acceptance Rate applicable to such period is exceeded, Bank promptly will
reimburse Blair in an amount equal to such performance overage up to but not in
excess of the amount paid by Blair to Bank by reason of Blair's failure to
achieve the Target Acceptance Rate in the prior Program Year.

     If the aggregate acceptance rate of Blair's catalog business is less than
10% at the end of Program Year 2, then (1) Blair may, at its sole option, using
the above formula, reimburse Bank in an amount equal to the shortfall or (2) if
Blair elects not to make such reimbursement payment to Bank, Bank shall have the
right to terminate catalog On-Line Prescreen.

                                    ARTICLE 4
                            MARKETING OF THE PROGRAM

     4.1 Marketing Commitment.

          (a) On the Program Commencement Date, Bank hereby agrees to contribute
Marketing Funds equal to the Marketing Commitment set forth in Schedule 4.1(a),
for purposes of funding marketing activities for the Program, as further
provided herein and therein.

          (b) The Marketing Commitment shall cover (all or a portion of) Blair's
costs related to marketing the Program through such promotions and initiatives
as may be established by the Operating Committee from time to time, including
the items specified in Schedule 4.1(a). With the understanding that the purpose
of the Marketing Fund is to develop, test and implement programs and initiatives
with the ability to enhance and grow the Program, Bank agrees not to
unreasonably withhold its approval for funding programs and initiatives which
are aligned with this objective.

          (c) If the Marketing Funds are not used in the Program Year they will
roll over to the first six months of the next Program Year, but shall not have
any cash value. Blair shall pay all marketing and promotion expenses directly as
they are incurred, and shall send Bank an invoice for the aggregate amount of
the expenditures agreed upon by the Operating Committee together with copies of
paid invoices or other supporting documentation reasonably satisfactory to Bank
for such expenses and Bank shall reimburse Blair until Bank's maximum
contribution amount for the applicable Program Year has been met. If Bank is
notified of the termination of this Agreement by Blair pursuant to Section 13.2,
then Bank shall have the right to cease the availability of the Marketing Funds
contributed by Bank for any future marketing or promotions; provided, however,
if the Term is renewed by Blair prior to the end of the Term, then Bank shall
continue to contribute any unused Marketing Funds for such Program Year on a
retroactive basis.

     4.2 Establishment of an Operating Committee. Blair and Bank shall establish
the Operating Committee as set forth in Schedule 4.2, consisting of six (6)
members, three (3) to be


                                       19

<PAGE>

appointed by Blair and three to be appointed by Bank. Each party may substitute
committee members upon three (3) Business Days' notice to the other party.

     4.3 Marketing Plans.

          (a) Within 30 days after the Program Commencement Date, the Operating
Committee shall approve a Marketing Plan for the balance of calendar year 2005
and for calendar year 2006. On or before sixty (60) days prior to the end of
calendar year 2006, the Operating Committee shall approve a Marketing Plan for
the next calendar year.

          (b) At least once per calendar year, the Operating Committee shall
consider features and other aspects of other private label credit card programs
in order to identify marketplace developments for possible inclusion in the
Program to ensure that the Program remains competitive with other private label
credit card programs. The Operating Committee shall determine the appropriate
persons and means to develop any plan with respect to the implementation of such
change and shall decide whether to approve such plan and whether to test or
launch any such Program changes for Accountholders or potential Accountholders.

          (c) Each Marketing Plan shall outline all programs, to the extent
established and mutually agreed upon by Blair and Bank, and shall include to the
extent feasible at least the following information for each program:

               (i) description of offer(s);

               (ii) description of target audience;

               (iii) planned budget, specifying Bank's share and Blair's share,
if any; and

               (iv) target implementation dates (e.g., mailing dates and
delivery dates).

          (d) Each Marketing Plan shall address development of Solicitation
Materials and Account Documentation; new account acquisition strategies,
including direct mailing and "take-one" acquisitions; activation, retention and
usage; statement design and messaging; advertising of the Program; and such
other marketing matters as the parties shall agree to.

          (e) Each Marketing Plan shall specify which party is responsible for
each Marketing Plan item and shall contain a budget specifying the parties'
respective financial responsibilities.

          (f) Any Marketing Plan may be modified or supplemented by the parties
from time to time upon mutual agreement, provided such modifications or
supplements, as the case may be, are approved by the Operating Committee. Blair
shall retain the right to market Continuity Programs to Accountholders and Bank
agrees to accept payments for Continuity Products from Accountholders, which
will be submitted as Charge Transaction Data by Blair subject to the terms of
this Agreement.


                                       20

<PAGE>

          (g) All marketing initiatives developed under this Agreement shall
contain unique marketing source codes to facilitate post-marketing research and
analysis.

     4.4 Communications with Accountholders.

          (a) Blair Inserts. Blair shall have the exclusive right to communicate
with Accountholders for marketing purposes, except for Enhancement Products, any
message required by Bank or other communications approved by the Operating
Committee, through use of inserts, fillers and bangtails (collectively,
"Inserts"), including Inserts selectively targeted for particular classes of
Accountholders, in any and all Billing Statements, subject to such production
requirements as contained in the Operating Procedures and Applicable Law. Blair
shall be responsible for the content of, and the cost of preparing and printing,
any Inserts not required by Applicable Law or approved by the Operating
Committee. Any Blair inserts that reference Bank or the Program must be approved
by Bank as to content, in Bank's reasonable discretion. All Inserts shall
conform to Bank's customary production standards and requirements, including
size and weight requirements as set forth in the Operating Procedures. If the
insertion of Inserts in particular Billing Statements would increase the postage
costs for such Billing Statement, Blair agrees to either pay for the incremental
postage cost or prioritize the use of Inserts to avoid postage cost over-runs.
Notwithstanding the foregoing, (i) any message required by Bank, or (ii)
collection messages for Accountholders, or (iii) approved Enhancement Products'
inserts shall take precedence over any Blair Inserts.

          (b) Billing Statement Messages. Blair shall have the exclusive right
to use Billing Statement messages in each Billing Cycle to communicate with
Accountholders, except for Enhancement Products, any message required by Bank or
communications approved by the Operating Committee, subject to such production
requirements as contained in the Operating Procedures and Applicable Law. Any
Blair messages that reference Bank or the Program must be approved by Bank as to
content, in Bank's reasonable discretion. Blair shall be responsible for the
content of any such messages not required by Applicable Law or approved by the
Operating Committee. Notwithstanding the foregoing, (i) any message required by
Bank, or (ii) collection and/or customer service messages, or (iii) approved
Enhancement Products shall take precedence over any Blair messages.

     4.5 Customer Information.

          (a) All sharing, use and disclosure of information regarding
Accountholders and Qualified Blair Customers shall be subject to the provisions
of Sections 4.9, 4.10, and 4.11. The parties acknowledge that each party may
independently from the other obtain and use the same or similar information as
may be contained in Accountholder Data and the Qualified Blair Customer List and
that each such separate data residing with a party will therefore be considered
separate information owned by such party subject to the specific provisions
applicable to that data hereunder.

          (b) Blair and Bank will each establish and maintain appropriate
administrative, technical and physical safeguards to protect the security,
confidentiality and integrity of the Accountholder Data and the Qualified Blair
Customer List. These safeguards will be designed to


                                       21

<PAGE>

protect the security, confidentiality and integrity of the Accountholder Data
and the Qualified Blair Customer List, ensure against any anticipated threats or
hazards to its security and integrity, and protect against unauthorized access
to or use of such information or associated records which could result in
substantial harm or inconvenience to any Accountholder or applicant. Blair and
Bank will each ensure that any third party to whom it transfers or discloses
Accountholder Data or the Qualified Blair Customer List signs a written contract
with the transferor in which such third party agrees to substantively the same
privacy and security provisions as those in this Agreement. Information
transferred by one party on behalf or at the direction of the other will be
considered information transferred by the party requesting or directing the
transfer. Each party shall use the same degree of care in protecting
Accountholder Data and the Qualified Blair Customer List against unauthorized
disclosure as it accords to its own confidential customer information, but in no
event less than a reasonable standard of care. Blair shall promptly notify Bank
in the event it believes or has reason to believe that a security breach or
unauthorized intrusion has occurred with respect to Accountholder Data.

     4.6 Qualified Blair Customer List.

          (a) Subject to compliance with Applicable Law, Blair's privacy policy,
the Marketing Plan and such criteria (including format) as may be mutually
agreed from time to time, Blair shall make available to Bank, free of any
charge, the Qualified Blair Customer List in electronic form. As between Blair
and Bank, the Qualified Blair Customer List will be owned exclusively by Blair.
Bank acknowledges and agrees that it has no proprietary interest in the
Qualified Blair Customer List.

          (b) Bank shall not use, or permit to be used, directly or indirectly,
the Qualified Blair Customer List, except as provided in this Section 4.6. Bank
may use the Qualified Blair Customer List in compliance with Applicable Law
solely for purposes of soliciting customers listed in the Qualified Blair
Customer List for Private Label Credit Cards, as required by Applicable Law or
as otherwise agreed by the Operating Committee in advance in writing.

          (c) Bank shall not disclose, or permit to be disclosed, the Qualified
Blair Customer List, except as provided in this Section 4.6. Bank may disclose
the Qualified Blair Customer List in compliance with Applicable Law solely:

               (i) to its subcontractors in connection with a permitted use of
such Qualified Blair Customer List under this Section 4.6, provided that each
such subcontractor agrees to be bound by this Section 4.6, or a comparable
contractual commitment with the same effect;

               (ii) to its Affiliates and its Affiliates' employees, agents,
attorneys and accountants with a need to know such Qualified Blair Customer List
in connection with a permitted use of such Qualified Blair Customer List under
this Section 4.6; provided that (A) any such Person is bound by terms
substantially similar to this Section as a condition of employment, of access to
Qualified Blair Customer List or by professional obligations imposing comparable
terms; and (B) Bank shall be responsible for the compliance of each such Person
with the terms of this Section; or


                                       22

<PAGE>

               (iii) to any Governmental Authority with authority over Bank (A)
in connection with an examination of Bank; or (B) pursuant to a specific
requirement to provide such Qualified Blair Customer List by such Governmental
Authority or pursuant to compulsory legal process; provided that Bank seeks the
full protection of confidential treatment for any disclosed Qualified Blair
Customer List to the extent available under Applicable Law governing such
disclosure, and with respect to clause (B), to the extent permitted by
Applicable Law, Bank (1) provides at least ten (10) Business Days' prior notice
of such proposed disclosure to Blair if reasonably possible under the
circumstances, and (2) seeks to redact Qualified Blair Customer List to the
fullest extent possible under Applicable Law governing such disclosure.

          (d) Upon the termination of this Agreement, Bank's rights to use and
disclose the Qualified Blair Customer List shall terminate. Promptly following
such termination, Bank shall return or destroy all Qualified Blair Customer
Lists and shall certify such return or destruction to Blair upon request.

     4.7 Accountholder Data.

          (a) As between Bank and Blair, Accountholder Data shall be the
property of and exclusively owned by Bank. Blair acknowledges and agrees that it
has no proprietary interest in the Accountholder Data.

          (b) Bank's privacy policy applicable to the Accountholder Data is the
Bank's Privacy Policy.

          (c) Bank shall not be entitled to sell, rent or otherwise disclose any
information relating to the Accountholders to any third party to be used for the
purpose of marketing of products or services to such Accountholders other than
to market Enhancement Products as permitted by this Agreement. Bank shall have
the right to market the Enhancement Products in accordance with the provisions
of Schedule 4.7.

          (d) Blair shall not use, or permit to be used, Accountholder Data,
except as provided in this Section 4.7. Blair may use the Accountholder Data in
compliance with Applicable Law and the Bank's Privacy Policy solely (i) for
purposes of promoting the Program or promoting products and services available
for purchase on an Account at or through any Blair Channel, (ii) as otherwise
necessary to carry out its obligations under this Agreement, and (iii) as
required by Applicable Law.

          (e) Bank shall provide to Blair free of charge on a monthly basis
master file reports initially containing the information set forth on Schedule
4.7(e) for Blair to the extent such information is available to Bank, and any
other information agreed to by Bank and Blair (collectively, the "Master File
Information"), to the extent permitted by Applicable Law, which Blair may use
solely in connection with maintaining and servicing the Accounts and for the
purpose of marketing Goods to the Accountholders, as permitted by Applicable
Law; provided, however, that Blair may disclose such information to Blair's
third party service provider in connection with Blair's permitted use of such
information under this Agreement, so long as (i)


                                       23

<PAGE>

such third party service provider is prohibited from using such information for
any purpose other than providing the services to Blair, (ii) such third party
provider enters into a written agreement with the Blair regarding the security
and confidentiality of Accountholder information, and (iii) the terms and
conditions of such agreement that address security and confidentiality of
Accountholder information are reasonably acceptable to Bank.

          (f) Blair shall not disclose, or permit to be disclosed, the
Accountholder Data, except as provided in this Section 4.7. Blair may only use
the Accountholder Data in compliance with Applicable Law and the Bank's Privacy
Policy solely:

               (i) to its subcontractors in connection with a permitted use of
such Accountholder Data under this Section 4.7, provided that each such
subcontractor agrees to be bound by this Section 4.7, or a comparable
contractual commitment with the same effect;

               (ii) to its Affiliates and its Affiliates' employees, agents,
attorneys and accountants with a need to know such Accountholder Data in
connection with a permitted use of such Accountholder Data under this Section;
provided that (A) any such Person is bound by terms substantially similar to
this Section as a condition of employment or of access to Accountholder Data or
by professional obligations imposing comparable terms; and (B) Blair shall be
responsible for the compliance of each such Person with the terms of this
Section; or

               (iii) to any Governmental Authority with authority over Blair (A)
in connection with an examination of Blair; or (B) pursuant to a specific
requirement to provide for such Accountholder Data by such Governmental
Authority or pursuant to compulsory legal process; provided that Blair seeks the
full protection of confidential treatment for any disclosed Accountholder Data
to the extent available under Applicable Law governing such disclosure, and with
respect to clause (B), to the extent permitted by Applicable Law, Blair (1)
provides at least 10 Business Days' prior notice of such proposed disclosure to
Bank if reasonably possible under the circumstances and (2) seeks to redact
Accountholder Data to the fullest extent possible under Applicable Law governing
such disclosure.

          (g) With respect to use and disclosure of Accountholder Data following
the termination of this Agreement:

               (i) The rights and obligations of Blair under this Section 4.7
shall continue through any Termination Period.

               (ii) If Blair exercises its rights under Section 14.2, Bank shall
transfer its right, title and interest in the purchased Accountholder Data to
Blair or its Nominated Purchaser as part of such transaction, and Bank's right
to use and disclose the purchased Accountholder Data shall terminate upon the
termination of the Termination Period.

               (iii) If Blair provides notice that it will not exercise its
rights under Section 14.2, upon termination of the Termination Period, Blair's
right to use and disclose the Accountholder Data shall terminate upon the
termination of the Termination Period.


                                       24

<PAGE>

     4.8 Liability for Materials Developed and Used in Connection with the
Program. Bank shall be responsible for ensuring that all Account Documentation,
Account Agreements, and Credit Card designs comply with Applicable Law and the
Operating Procedures, provided that Bank has produced or approved such
materials, documents or designs. Notwithstanding the foregoing, each party shall
be solely responsible for ensuring that its respective solicitation materials,
Inserts and statement messages comply with Applicable Law.

                                    ARTICLE 5
                               OPERATING STANDARDS

     5.1 Reports. Bank shall provide to the Operating Committee and to Blair the
reports specified in Schedule 5.1 and such other reports as are mutually agreed
to by the parties from time to time in accordance with the requirements and time
frames set forth in Schedule 5.1.

     5.2 Servicing. Bank shall service all Accounts under the Program in
accordance with the terms and conditions of this Agreement, including the
service level standards set forth in Schedule 5.2, as they may be amended from
time to time by the Operating Committee. Without limiting the generality of the
foregoing, Bank shall be solely responsible for Account Application processing,
customer service, statementing, payment processing, transaction authorization
and processing, Loyalty Program servicing, collections and risk management.

     5.3 Customer Service.

          (a) Bank shall be solely responsible for customer service for the
Program in accordance with this Agreement, including the service level standards
set forth in Schedule 5.2 as attached hereto, including, but not limited to,
with respect to processing Accountholder telephone and mail inquiries and
disputes related to the Account.

          (b) As of the Program Commencement Date, Bank shall establish and
maintain a separate toll-free customer service telephone number for the Program,
which toll-free number and all related charges shall be at Bank's sole expense.

          (c) Customer service shall be provided by a dedicated group with
overflow calls going to Bank's servicer's regular customer service unit. If the
overflow calls for any two (2) consecutive months exceed ten percent (10%) of
total calls for the month, Bank shall increase the number of the dedicated
group. The foregoing notwithstanding, to the extent such group is not fully
utilized for activities related to the Program, Bank's servicer may utilize the
dedicated group in connection with other activities for its other customers.
There shall be no offshore call center established or utilized by Bank, pursuant
to this Agreement, without Blair's prior approval.

          (d) Commencing within fourteen (14) days following the Program
Commencement Date, Bank shall provide IVR customer service, in English and
Spanish, 365 days per year, 24 hours per day, except for downtime due to
scheduled maintenance and updates.


                                       25

<PAGE>

          (e) Customer service shall be Blair branded to the extent legally
permissible. Notwithstanding the foregoing, Bank shall have the right in its
sole discretion to take whatever steps and make such disclosures it believes are
necessary to ensure that at all times Bank is considered the creditor on the
Accounts.

          (f) If Bank receives an Accountholder complaint regarding the quality
or delivery of Goods, Bank shall refer such complaint to Blair in accordance
with the Operating Procedures.

     5.4 Customer Service Standards.

          (a) Subject to the following sentence, Blair and Bank will jointly
observe inbound/outbound telephone customer service contacts that Bank has with
Accountholders. A Bank representative will accompany the Blair representative
during the observations.

          (b) Customer service observations may be conducted by Blair monthly
during each Program Year, with reasonable prior notice to Bank on any day and at
any time during the servicer's Business Day, provided that such observations
shall not unreasonably interfere with Bank's normal business operations and that
Blair complies with Bank's and its servicer's security policies and procedures.

     5.5 Non-Performance of Service Level Standards.

          (a) Bank shall report to Blair monthly, by the fourteenth (14th) day
of the following month, in a mutually agreed format, Bank's performance under
and as to whether or to what extent Bank is in compliance with each of the SLSs
set forth at Schedule 5.2. If Bank fails to meet any SLS, Bank shall (i) report
to Blair, together with such monthly reports, the reasons for the SLS
failure(s); and (ii) promptly take any action necessary to correct and prevent
recurrence of such failure(s).

          (b) The provisions of this Section 5.5 shall apply beginning ninety
(90) days after the Program Commencement Date with respect to operations assumed
by Bank as of the Program Commencement Date, and ninety (90) days after the
effective date of other operations implemented by Bank thereafter with respect
to any such other operations.

     5.6 Access. Blair authorizes Bank to monitor the administration and
promotion of the Program through mystery shopping and by other reasonable means
and the results of such monitoring shall be reviewed with the Operating
Committee.

     5.7 Disaster Recovery. Bank will maintain in effect during the Term a
disaster recovery and business continuity plan that complies with Applicable
Law. Bank will provide Blair access to review such plan or a summary thereof
upon request. Bank will test such plan annually and will promptly implement such
plan upon the occurrence of a disaster or business interruption.


                                       26

<PAGE>

                                    ARTICLE 6
                                MERCHANT SERVICES

     6.1 Transmittal and Authorization of Charge Transaction Data.

          (a) Blair will honor the Accounts for Transactions. Blair will
transmit Charge Transaction Data for authorization of Transactions to Bank as
provided in the Operating Procedures.

          (b) Bank shall authorize or decline Transactions in batch or on a real
time basis as mutually agreed by the parties.

     6.2 POS Terminals. Blair shall maintain POS terminals capable of processing
(a) bankcard transactions and (b) Account transactions and applications as
handled as of the Program Commencement Date.

     6.3 Settlement Procedures.

          (a) Blair shall electronically transmit all Charge Transaction Data
from Blair to Bank in a format acceptable to Bank. Upon receipt, Bank shall use
commercially reasonable efforts to promptly verify and process such Charge
Transaction Data, and in the time frames specified herein, Bank will remit to
Blair an amount equal to the Net Proceeds indicated by such Charge Transaction
Data for the credit sales day(s) for which such remittance is made. In the event
Bank discovers any discrepancies in the amount of Charge Transaction Data
submitted by Blair or paid by Bank to Blair, Bank shall notify Blair in detail
of the discrepancy, and credit Blair, or offset against amounts owed to Blair,
as the case may be, in a subsequent daily settlement. Bank will transfer funds
via Automated Clearing House ("ACH") to an account designated in writing by
Blair to Bank (the "Blair Deposit Account"). If Charge Transaction Data is
received by Bank's processing center before 12 noon Eastern time on a Business
Day, Bank will initiate such ACH transfer by 12 noon Eastern time on the next
Business Day thereafter. In the event that the Charge Transaction Data is
received after 12 noon Eastern time on a Business Day, then Bank will initiate
such transfer no later than 12 noon Eastern time on the second Business Day
thereafter. Bank shall remit funds to one (1) Blair designated account. The term
"initiate" shall mean that Bank shall transmit an ACH file to Bank's financial
institution for settlement on the next Business Day. All Charge Transaction Data
is subject to review and acceptance by Bank. In the event of a computational or
similar error of an accounting or record keeping nature with respect to such
Charge Transaction Data, Bank may credit to the Blair Deposit Account or offset
against the Net Proceeds (as the case may be) the proper amount as corrected. If
the Net Proceeds are insufficient, Blair shall remit the proper amount to Bank
immediately upon written demand. Upon any such correction Bank shall give prompt
notice thereof to Blair.

          (b) "Net Proceeds" shall be an amount equal to: the sum of the total
of charges identified in such Charge Transaction Data, in each case adjusted for
the reconciliation of recent Charge Transaction Data, less the sum of (i) the
total amount of any charges or credits included in such Charge Transaction Data,
and (ii) any amounts charged back to Blair pursuant to Section


                                       27

<PAGE>

6.5, and Blair shall be responsible for allocating such remittances among all
Blair Channels as appropriate and Bank shall have no responsibility or liability
in connection therewith (it being agreed that Bank has no obligation to accept
Charge Transaction Data directly from, or make remittances to, any person other
than Blair).

          (c) Bank shall pay and reimburse Blair in the amounts and in the
manner for the compensation and fees set forth in Schedule 7.3 the amount of any
fees, or other amounts owed by Blair to Bank under this Agreement, including
without limitation amounts due to Bank for supported Accounts or for any other
special credit plans or promotional plan programs approved by Bank.

     6.4 Bank Right to Chargeback. Bank shall have the right to charge back to
Blair pursuant to Schedule 6.5 (a) the amount of any Accountholder Indebtedness,
including any amounts incurred prior to the Program Commencement Date with
respect to Purchased Accounts and (b) amounts paid by Bank to Blair under
paragraph 1 of Schedule 7.3.

     6.5 Exercise of Chargeback. If Bank exercises its right of chargeback
pursuant to Schedule 6.5, Bank may set off all amounts charged back against any
sums due Blair under this Agreement, or Bank may demand payment from Blair for
the full amount of such chargeback. In the event of a chargeback pursuant to
this Article 6 and Schedule 6.5, upon payment in full of the related amount by
Blair, Bank shall immediately assign to Blair, without any representation,
warranty or recourse, (i) all right to payments of amounts charged back in
connection with such Accountholder charge, and (ii) any security interest
granted by Blair under Section 16.1. Bank shall fully cooperate in any effort by
Blair to collect the chargeback amount, including by executing and delivering
any document necessary as evidence of assignment of such rights.

     6.6 Covenants of Blair. Blair makes the following covenants to Bank, each
and all of which shall survive the execution and delivery of this Agreement:

          (a) Forms and Materials. Blair shall use only forms, scripts and
materials, including in electronic format, provided or approved by Bank in a
timely manner (including through the Operating Committee) when taking any action
with regard to the Program.

          (b) Special Agreements or Conditions. Blair will not charge any credit
card surcharge, application, processing or other Program related fee to
Accountholders.

                                    ARTICLE 7
                               COSTS AND EXPENSES

     7.1 Bank Responsibility for Program Operation. Except as otherwise
specified in any Marketing Plan or any other provision of this Agreement, Bank
shall be responsible for the costs of operating the Program.

     7.2 Resolution. Any disputes regarding the amounts owed under this
Agreement shall be resolved in accordance with Section 10.2.


                                       28

<PAGE>

     7.3 Fees. Bank shall pay and reimburse Blair in the amounts and in the
manner set forth in Schedule 7.3.

     7.4 Postage. Any increase(s) in the cost of mailing Billing Statements,
form letters or new Credit Cards due to an increase in the first class pre-sort
cost of postage from the United States Postal Service which increase occurs on
or after the Program Commencement Date shall be borne one-half by Bank and
one-half by Blair. Adjustments will be made for any subsequent decreases in the
cost of postage. Bank will use commercially reasonable efforts to obtain the
best available bulk rate discount based on Bank's volume.

                                    ARTICLE 8
                 LICENSING OF TRADEMARKS; INTELLECTUAL PROPERTY

     8.1 Blair Licensed Marks.

          (a) Grant of License to Use Blair Licensed Marks. Blair hereby grants
to Bank a non-exclusive, royalty-free, non-transferable revocable right and
license to use Blair Licensed Marks in the United States in connection with the
creation, establishment, marketing and administration of, and the provision of
services related to, the Program, all pursuant to, and in accordance with, this
Agreement and any applicable Trademark Style Guide. Those services shall
include, without limitation, the solicitation of Accountholders and potential
Accountholders, acceptance of Account Applications, the issuance and reissuance
of Credit Cards, the provision of accounting services to Accountholders, the
provision of Billing Statements and other correspondence relating to Accounts to
Accountholders, the extension of credit to Accountholders, and the advertisement
or promotion of the Program. Blair grants this license to allow Bank to perform
its obligations under this Agreement. Except in connection with the sale or
servicing of the Accounts, Bank may not sublicense Blair Licensed Marks for any
other reason without Blair's prior written approval. Bank shall ensure that any
subcontractor or third party that Bank uses to reproduce Blair Licensed Marks
shall agree to comply with all of the standards specified herein and the
limitations on the use of Blair Licensed Marks contained in this Section.

          (b) New Marks. If Blair adopts a trademark, trade name, service mark,
logo or other proprietary mark which Blair uses in connection with the Program
(a "New Mark"), Blair may, in its discretion, add such New Mark to Blair
Licensed Marks and license its use hereunder.

          (c) Termination of License. After termination of this Agreement, the
license granted in this section shall terminate thirty (30) days after the Bank
no longer owns any Accounts or Accountholder Indebtedness. Upon termination of
this Agreement, all rights to use Blair Licensed Marks shall, with no further
action required by any party, immediately terminate and Bank shall: (i)
discontinue immediately all use of Blair Licensed Marks, and any colorable
imitation thereof; and (ii) at Bank's option, with written notice to Blair,
delete Blair Licensed Marks from or destroy all unused Credit Cards, Account
Applications, Purchase Documentation, periodic statements, materials, displays,
advertising and sales literature and any other items bearing any of Blair
Licensed Marks.


                                       29

<PAGE>

          (d) Ownership of Blair Licensed Marks. Bank acknowledges that (i)
Blair Licensed Marks, all rights therein, and the goodwill associated therewith,
are, and shall remain at all times, the exclusive property of Blair Holdings,
Inc. ("Blair Holdings") and are licensed by Blair Holdings to Blair, (ii) Bank
shall take no action which will adversely affect Blair's interests in or Blair
Holding's title in and to Blair Licensed Marks, or the goodwill associated with
Blair Licensed Marks (it being understood that the collection of Accounts,
adverse action letters, and changes in terms of Accounts do not adversely affect
goodwill, if done in accordance with prudent and reasonable commercial practices
and the terms of this Agreement), and (iii) any and all goodwill arising from
Bank's use of Blair Licensed Marks shall inure to the benefit of Blair and Blair
Holdings. Nothing herein shall give Bank any proprietary or other interest in or
to Blair Licensed Marks, except the limited right to use Blair Licensed Marks in
accordance with this Agreement, and Bank shall not contest Blair's interest or
Blair Holding's title in and to Blair Licensed Marks.

          (e) Infringement by Third Parties. Bank shall notify Blair, in
writing, in the event that it has Knowledge of any infringing use of any of
Blair Licensed Marks by any third party. If any of Blair Licensed Marks is
infringed, Blair and Blair Holdings only have the right, in their sole
discretion, to take whatever action they deem necessary to prevent such
infringing use; provided, however, that if Blair and Blair Holdings fail to take
reasonable steps to prevent infringement of Blair Licensed Marks and such
infringement has an adverse effect upon the Program or the rights of Bank
hereunder, Bank may request that Blair take action necessary to alleviate such
adverse impact. Bank shall reasonably cooperate with and assist Blair, at
Blair's expense, in the prosecution of those actions that Blair determines, in
its sole discretion, are necessary or desirable to prevent the infringing use of
any of Blair Licensed Marks.

     8.2 Bank Licensed Marks.

          (a) Grant of License to Use Bank Licensed Marks. Bank hereby grants to
Blair a non-exclusive, royalty-free, non-transferable revocable right and
license to use Bank Licensed Marks in the United States in connection with the
creation, establishment, marketing and administration of, and the provision of
services related to, the Program, all pursuant to, and in accordance with, this
Agreement and any applicable Trademark Style Guide. Those services shall
include, without limitation, the solicitation of Accountholders and the
advertisement or promotion of the Program. Bank grants this license to allow
Blair to perform its obligations under this Agreement. Blair may not sublicense
Bank Licensed Marks without Bank's prior written approval Blair shall ensure
that any subcontractor or third party that Blair uses to reproduce Bank Licensed
Marks shall agree to comply with all of the standards specified herein and the
limitations on the use of Bank Licensed Marks contained in this Section.

          (b) New Marks. If Bank adopts a New Mark, Bank may, in its discretion,
add such New Mark to Bank Licensed Marks and license its use hereunder. The
foregoing notwithstanding, it is understood and agreed that Bank shall not be
required to add a New Mark to Bank Licensed Marks if such New Mark was developed
by Bank primarily for another charge, credit or debit program.


                                       30

<PAGE>

          (c) Termination of License. The license granted in this Section shall
terminate after the Program Purchase Date or thirty (30) days after termination
after this Agreement under Section 14.4, as applicable. Upon such termination of
this license, all rights to use Bank Licensed Marks shall, with no further
action required by any party, immediately terminate and Blair shall: (i)
discontinue immediately all use of Bank Licensed Marks and any colorable
imitation thereof; and (ii) at Blair's option, delete Bank Licensed Marks from
or destroy all unused Account Applications, Purchase Documentation, periodic
statements, materials, displays, advertising and sales literature and any other
items bearing any of Bank Licensed Marks.

          (d) Ownership of Bank Licensed Marks. Blair acknowledges that (i) Bank
Licensed Marks, all rights therein, and the goodwill associated therewith, are,
and shall remain at all times, the exclusive property of Bank, (ii) it shall
take no action which will adversely affect Bank's exclusive ownership of Bank
Licensed Marks or the goodwill associated with Bank Licensed Marks, and (iii)
any and all goodwill arising from use of Bank Licensed Marks by Blair shall
inure to the benefit of Bank. Nothing herein shall give Blair any proprietary or
other interest in or to Bank Licensed Marks, except the limited right to use
Bank Licensed Marks in accordance with this Agreement, and Blair shall not
contest Bank's title in and to Bank Licensed Marks.

          (e) Infringement by Third Parties. Blair shall use reasonable efforts
to notify Bank, in writing, in the event that it has Knowledge of any infringing
use of any of Bank Licensed Marks by any third party. If any of Bank Licensed
Marks is infringed, Bank alone has the right, in its sole discretion, to take
whatever action it deems necessary to prevent such infringing use; provided,
however, that if Bank fails to take reasonable steps to prevent infringement of
Bank Licensed Marks and such infringement has an adverse effect upon the Program
or the rights of Blair hereunder, Blair may request that Bank take action
necessary to alleviate such adverse impact. Blair shall reasonably cooperate
with and assist Bank, at Bank's expense, in the prosecution of those actions
that Bank determines, in its sole discretion, are necessary or desirable to
prevent the infringing use of any of Bank Licensed Marks.

     8.3 Ownership of Intellectual Property.

          (a) Ownership of Intellectual Property. Each Intellectual Property
already developed and brought to the Program by one party ("Contributing Party")
shall remain the property of the Contributing Party. Each party also shall own
all right, title and interest in the Intellectual Property it develops
independently of the other party during the Term.

          (b) Joint Intellectual Property. Except as provided below, any
Intellectual Property developed, conceived or first reduced to practice in the
course of joint development activities during the Term ("Joint Intellectual
Property") shall be owned jointly by the parties during and after the Term.
Unless otherwise provided in writing by both parties, each party hereby grants
to the other party a non-exclusive, perpetual, royalty-free, non-transferable
license, subject to all confidentiality obligations between the parties, to use
any Joint Intellectual Property during or after the Term for any reasons.
Patents and inventions shall be deemed to be Joint Intellectual Property only if
employees or contractors of each party who have assigned all such patent rights
to such party are deemed co-inventors under the patent law. Software and


                                       31

<PAGE>

other works of authorship and associated copyrights shall be deemed to be Joint
Intellectual Property only if the parties are deemed co-authors of such software
or other work of authorship under the copyright law or otherwise deemed
co-owners of such copyright. Otherwise, all patents, patentable inventions,
software, other works of authorship and related copyrights shall be deemed to be
developed solely by one party. Thus, to the extent that a work created by one
party is based on or incorporates Intellectual Property of the other party but
the parties are not joint inventors or joint authors under the patent or
copyright law, respectively, then one party shall be the sole owner of the
Intellectual Property in the underlying work and the other party shall be the
sole owner of the Intellectual Property in the new work.

                                    ARTICLE 9
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     9.1 General Representations and Warranties of Blair. To induce Bank to
establish and administer the Program, Blair makes the following representations
and warranties to Bank, each and all of which shall survive the execution and
delivery of this Agreement, and each and all of which shall be deemed to be
restated and remade with the same force and effect on each day of the Term. Bank
acknowledges that as of the date of this Agreement there is in effect a
securitization with Blair and certain Affiliates identified in the Purchase
Agreement, and that the following representations are subject to the
termination thereof on or before the Program Commencement Date in accordance
with the terms of the Purchase Agreement.

          (a) Corporate Existence. Blair (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(ii) is duly licensed or qualified to do business as a corporation and is in
good standing as a foreign corporation in all jurisdictions in which the nature
of the activities conducted or proposed to be conducted by it or the character
of the assets owned or leased by it makes such licensing or qualification
necessary to perform its obligations required hereunder except to the extent
that its non-compliance would not have a material and adverse effect on Blair's
ability to perform its obligations hereunder, and all necessary licenses,
permits, consents or approvals from or by, and has made all necessary notices
to, all governmental authorities having jurisdiction, to the extent required for
Blair's current ownership, lease or conduct and operation, except to the extent
that the failure to obtain such licenses, permits, consents or approvals or to
provide such notices would not have a material and adverse effect on Blair's
ability to perform its obligations required hereunder.

          (b) Capacity; Authorization; Validity. Blair has all necessary
corporate power and authority to execute and enter into this Agreement, and
perform the obligations required of Blair hereunder and the other documents,
instruments and agreements relating to the Program and this Agreement executed
by Blair pursuant hereto. The execution and delivery by Blair of this Agreement
and all documents, instruments and agreements executed and delivered by Blair
pursuant hereto, and the consummation by Blair of the transactions specified
herein have been duly and validly authorized and approved by all necessary
corporate action of Blair. This Agreement (i) has been duly executed and
delivered by Blair, (ii) constitutes the valid and legally binding obligation of
Blair, and (iii) is enforceable in accordance with its terms (subject to
applicable bankruptcy, insolvency, reorganization, receivership or other laws
affecting the rights


                                       32

<PAGE>

of creditors generally and by general equity principles including, without
limitation, those respecting the availability of specific performance).

          (c) Conflicts; Defaults; Etc. The execution, delivery and performance
of this Agreement by Blair, its compliance with the terms hereof, and its
consummation of the transactions specified herein will not (i) conflict with,
violate, result in the breach of, constitute an event which would, or with the
lapse of time or action by a third party or both would, result in a default
under, or accelerate the performance required by, the terms of any material
contract, instrument or agreement to which Blair is a party or by which it is
bound, or by which Blair's assets are bound, except for conflicts, breaches and
defaults which would not have a material and adverse effect upon Blair's ability
to perform its obligations under this Agreement; (ii) conflict with or violate
the certificate of incorporation or by-laws of Blair; (iii) violate any
Applicable Law or conflict with, or require any consent or approval under any
judgment, order, writ, decree, permit or license to which Blair is a party or by
which it is bound or affected, except to the extent that such violation or the
failure to obtain such consent or approval would not have a material and adverse
effect upon Blair's ability to perform its obligations under this Agreement;
(iv) require the consent or approval of any other party to any contract,
instrument or commitment to which Blair is a party or by which it is bound; or
(v) require any filing with, notice to, consent or approval of, or any other
action to be taken with respect to, any regulatory authority with respect to the
transactions contemplated by this Agreement.

          (d) Solvency. Blair is solvent.

          (e) No Default. Blair is not in default with respect to any contract,
agreement, lease, or other instrument to which it is a party or by which it is
bound, except for defaults which would not have a material and adverse effect
upon Blair's ability to perform its obligations under this Agreement, nor has
Blair received any notice of default under any contract, agreement, lease or
other instrument which default or notice of default would materially and
adversely affect the performance by Blair of its obligations under this
Agreement.

          (f) Books and Records. All of Blair's records, files and books of
account relating to the Program, including but not limited to, records provided
to Bank regarding Blair's Account activities, are in all material respects
complete and correct and are maintained in accordance with Applicable Law.

          (g) Blair Licensed Marks. Blair Holdings has licensed Blair Licensed
Marks to Blair and granted Blair written approval to license to Bank the use of
Blair Licensed Marks in connection with the Program.

     9.2 General Representations and Warranties of Bank. To induce Blair to
enter into this Agreement and participate in the Program, Bank makes the
following representations and warranties to Blair, each and all of which shall
survive the execution and delivery of this Agreement, and each and all of which
shall be deemed to be restated and remade with the same force and effect on each
day of the Term.


                                       33

<PAGE>

          (a) Corporate Existence. Bank (i) is an industrial bank duly
organized, validly existing, and in good standing under the laws of Utah with
its home office as indicated in the first paragraph of this Agreement; (ii) is
duly licensed or qualified to do business as an industrial bank and is in good
standing as a foreign corporation in all jurisdictions in which the nature of
the activities conducted or proposed to be conducted by it or the character of
the assets owned or leased by it makes such licensing or qualification necessary
to perform its obligations hereunder except to the extent that its
non-compliance would not have a material and adverse effect on Bank or Bank's
ability to perform its obligations hereunder, and upon approval from the Federal
Deposit Insurance Corporation and the Utah Department of Financial Institutions
with respect to the transactions contemplated by this Agreement will have all
necessary licenses, permits, consents, or approvals from or by and has made all
necessary notices to, all governmental authorities having jurisdiction, to the
extent required for Bank's current ownership, lease or conduct and operation,
except to the extent that the failure to obtain such licenses, permits,
consents, approvals or to provide such notices would not have a material and
adverse effect on Bank or Bank's ability to perform its obligations under this
Agreement.

          (b) Capacity; Authorization; Validity. Bank has all necessary power
and authority to (i) execute and enter into this Agreement, and (ii) upon
approval from the Federal Deposit Insurance Corporation and the Utah Department
of Financial Institutions with respect to the transactions contemplated by this
Agreement will have all necessary power and authority to perform all of the
obligations required of Bank hereunder and the other documents, instruments and
agreements relating to the Program and this Agreement executed by Bank pursuant
hereto. The execution and delivery by Bank of this Agreement and all documents,
instruments and agreements executed and delivered by Bank pursuant hereto, and
the consummation by Bank of the transactions specified herein, have been duly
and validly authorized and approved by all necessary corporate action of Bank.
This Agreement (i) has been duly executed and delivered by Bank, (ii)
constitutes the valid and legally binding obligations of Bank, and (iii) is
enforceable in accordance with its respective terms (subject to applicable
bankruptcy, insolvency, reorganization, receivership or other laws affecting the
rights of creditors generally and financial institutions in particular and by
general equity principles including, without limitation, those respecting the
availability of specific performance).

          (c) Conflicts; Defaults; Etc. The execution, delivery and performance
of this Agreement by Bank, its compliance with the terms hereof, and the
consummation of the transactions specified herein will not (i) conflict with,
violate, result in the breach of, constitute an event which would, or with the
lapse of time or action by a third party or both would, result in a default
under, or accelerate the performance required by, the terms of any material
contract, instrument or agreement to which Bank is a party or by which it is
bound, except for conflicts, breaches and defaults which would not have a
material and adverse effect upon Bank or Bank's ability to perform its
obligations under this Agreement; (ii) conflict with or violate the articles of
incorporation or by-laws, or any other equivalent organizational document(s) of
Bank; (iii) violate any Applicable Law or conflict with, or require any consent
or approval under any judgment, order, writ, decree, permit or license, to which
Bank is a party or by which it is bound or affected, except to the extent that
such violation or the failure to obtain such consent or approval would not have
a material and adverse effect upon Bank or Bank's ability to perform its
obligations under this Agreement; (iv) require the consent or approval of any
other party to any


                                       34

<PAGE>

contract, instrument or commitment to which Bank is a party or by which it is
bound; or (v) require any filing with, notice to, consent or approval of, or any
other action to be taken with respect to, any regulatory authority other than
the approval from the Federal Deposit Insurance Corporation and the Utah
Department of Financial Institutions with respect to the transactions
contemplated by this Agreement:

          (d) Solvency. Bank is solvent.

          (e) No Default. Bank is not in default with respect to any contract,
agreement, lease, or other instrument to which it is a party or by which it is
bound, except for defaults which would not have a material and adverse effect
upon Bank or Bank's ability to perform its obligations under this Agreement, nor
has Bank received any notice of default under any such contract, agreement,
lease or other instrument which default or notice of default would materially
and adversely affect the performance by Bank of its obligations under this
Agreement.

          (f) Books and Records. All of Bank's and, to the best of its
Knowledge, its records, files and books of account relating to the Program are
in all material respects complete and correct and are maintained in accordance
with Applicable Law.

          (g) Bank Licensed Marks. Bank is the owner of Bank Licensed Marks and
has the right, power and authority to license to Blair the use of Bank Licensed
Marks in connection with the Program.

     9.3 General Covenants of Blair. Blair makes the following covenants to
Bank, each and all of which shall survive the execution and delivery of this
Agreement:

          (a) Maintenance of Existence and Conduct of Business. Blair shall
preserve and keep in full force and effect its corporate existence and remain
primarily in the same line of (retail) business in which it was engaged on the
Program Commencement Date, other than in the event of a Change in Control,
merger or consolidation in which Blair is not the surviving entity.

          (b) Litigation. Blair promptly shall notify Bank in writing if it
receives written notice of any litigation involving Blair and the Program or any
of the Accounts.

          (c) Applicable Law/Operating Procedures. Blair shall at all times
during the Term of this Agreement comply in all material respects with
Applicable Law in connection with Blair's business, the Value Proposition, the
Continuity Products and Blair's obligations under this Agreement and the
Operating Procedures.

          (d) Disputes with Accountholders. Blair shall cooperate with Bank in a
timely manner (but in no event less promptly than required by Applicable Law) to
resolve all disputes with Accountholders.

          (e) Insurance. Blair shall maintain insurance policies with insurers
and in such amounts and against such types of loss and damage as are customarily
maintained by other companies within Blair's industry engaged in similar
businesses as Blair.


                                       35

<PAGE>

     9.4 General Covenants of Bank. Bank makes the following covenants to Blair,
each and all of which shall survive the execution and delivery of this
Agreement:

          (a) Maintenance of Existence and Conduct of Business. Bank shall
preserve and keep in full force and effect its corporate existence and remain
primarily in substantially the same line(s) of business (i.e., banking) in which
it was engaged on the Program Commencement Date, other than in the event of a
Change in Control, merger or consolidation in which Bank is not the surviving
entity.

          (b) Litigation. Bank promptly shall notify Blair in writing if it
receives written notice of any litigation involving Bank, Blair and the Program.

          (c) Applicable Law/Operating Procedures. Bank shall at all times
during the Term comply in all material respects with Applicable Law in
connection with Bank's business, and Bank's obligations under this Agreement and
the Operating Procedures.

     9.5 Financial Statements.

          (a) Bank shall provide to Blair the "call reports" of Bank on a
regular basis promptly after such reports are filed by Bank. Bank shall promptly
notify Blair in writing of any event that is reasonably likely to prevent Bank
from being able to issue and transact business in private label credit programs
for Blair.

          (b) If at any time during the term of this Agreement Blair or Bank's
Parent is not required to file periodic reports on a timely basis with the
Securities and Exchange Commission ("SEC"):

               (i) Blair or Bank's Parent (as appropriate based on the party not
filing) will provide to the other (i) its audited annual financial statements
within 90 days of the end of the fiscal year, and (ii) its unaudited quarterly
financial statements within 60 days of the end of the fiscal quarter. Such
statements shall include the consolidated balance sheet, income statement and
statement of cash flows and financial position, accompanied by the certification
on behalf of such entity by its chief financial officer that such financial
statements were prepared in accordance with GAAP applied on a consistent basis
(except for normal year end adjustments and the absence of footnotes on the
quarterly statements) and present fairly the consolidated financial position of
such entity as of the end of such calendar period and the results of its
operations.

               (ii) Blair or Bank's Parent (as appropriate based on the party
not filing) shall make its chief financial officer, or a knowledgeable designee,
available to discuss such party's financial results with a representative of the
other party. Such party shall provide the other party copies of all compliance
certificates delivered to its lenders under its credit facilities, if any.


                                       36

<PAGE>

                                   ARTICLE 10
                                  AUDIT/ACCESS

     10.1 Audit/Access Rights. Once per Program Year or at any time that a party
disputes the amount of any monies owed by either party to the other hereunder,
such party, at its sole cost and expense and upon three (3) Business Days' prior
notice to the other party, may conduct an audit of those of the other party's
financial and operational records that are under the control and/or direction of
the other party and relate to the Program or can be reasonably segregated. Such
audit shall be conducted during normal business hours in accordance with
generally accepted auditing standards and the auditing party shall employ such
reasonable procedures and methods as necessary and appropriate in the
circumstances, minimizing interference with the audited party's normal business
operations. The audited party shall use reasonable commercial efforts to
facilitate the auditing party's review, including making reasonably available
such personnel of the audited party to assist the auditing party as reasonably
requested. The audited party shall deliver any document or instrument necessary
for the auditing party to obtain such records from any Person maintaining
records for the audited party and shall maintain records pursuant to its regular
record retention policies. For purposes of this provision, the audited party
also shall be required to provide records relating to the Program held by
Persons performing services in connection with the Program at the auditing
party's request. Notwithstanding the generality of the foregoing, however, a
party shall not be required to provide access to records to the extent that (a)
such access is prohibited by Applicable Law, (b) such records are legally
privileged, (c) such records are confidential or proprietary internal records,
such as company planning documents of such party or any of its Affiliates,
operating budgets, management reviews or employee records, or (d) such records
relate to other customers or operations of such party other than the Program or
to personnel records not normally disclosed in connection with audits.

     10.2 Dispute Resolution. The parties agree to attempt in good faith to
resolve any disputes arising in connection with the payments made or demanded by
the parties under this Agreement excluding Article 14 hereof. In the event the
parties are unable to resolve any such dispute, either party may request a
nationally recognized firm of independent accountants mutually agreeable to the
parties (the "Accountants") to reconcile any amounts in dispute. Any such
request shall be in writing and shall specify with particularity the disputed
amounts being submitted for determination. Each party agrees to promptly and in
good faith take all necessary action to designate the Accountants no later than
ten (10) Business Days after a request that such a designation be made. The
parties shall cooperate fully in assisting the Accountants in their review,
including, without limitation, by providing the Accountants full access to all
files, books and records relevant thereto and providing such other information
as the Accountants may reasonably request in connection with any such review. In
the event the determination made by the Accountants requires either party to
make payment to the other of any additional amount, such party shall (i) make
such payment no later than five (5) Business Days following receipt from the
Accountants of written notice to both parties of such determination plus
interest at the Federal Funds Rate on any amount due computed from and including
the date such amount should have been paid through and excluding the date of
payment; and (ii) shall pay (A) the fees and disbursements of such Accountants
arising out of such reviews, and (B) the prevailing


                                       37

<PAGE>

party's audit expenses, if any. The determination of the Accountants shall be
final and binding on the parties subject to the correction of obvious errors.

                                   ARTICLE 11
                                CONFIDENTIALITY

     11.1 General Confidentiality.

          (a) For purposes of this Agreement, "Confidential Information" means
any and all of the following: (i) information that is provided by or on behalf
of either Blair or Bank to the other party or its agents in connection with the
Program; (ii) information about Blair or Bank or their respective Affiliates, or
their respective businesses or employees, that is otherwise obtained by the
other party in connection with the Program, in each case including, without
limitation: (A) information concerning marketing plans, objectives and financial
results; (B) information regarding business systems, methods, processes,
financing data, programs and products; (C) information unrelated to the Program
obtained by Blair or Bank in connection with this Agreement, including, without
limitation, by accessing or being present at the business location of the other
party; and (D) proprietary technical information, including source codes; (iii)
the terms and conditions of this Agreement; or (iv) the Marketing Plan. For
purposes of this Agreement, Confidential Information shall not include
Accountholder Data or the Qualified Blair's Customer List.

          (b) The restrictions on disclosure of Confidential Information under
this Article 11 shall not apply to, with respect to Blair or Bank, information
that: (i) is already rightfully known to such party at the time it obtains
Confidential Information from the other party; (ii) is or becomes generally
available to the public other than as a result of disclosure in breach of this
Agreement or any other confidentiality obligations; (iii) is lawfully received
on a non-confidential basis from a third party authorized to disclose such
information without restriction and without breach of this Agreement or any
other agreement or understanding; (iv) is contained in, or is lawfully capable
of being discovered through examination of publicly available records or
products; or (v) is required to be disclosed by Applicable Law (provided that
the party subject to such Applicable Law shall notify the other party of any
such use or requirement prior to disclosure of any Confidential Information
obtained from the other party in order to afford such other party an opportunity
to seek a protective order to prevent or limit disclosure of the Confidential
Information to third parties and shall disclose Confidential Information of the
other party only to the extent required by such Applicable Law). Nothing herein
shall be construed to permit the Receiving Party (as defined below) to disclose
to any third party any Confidential Information that the Receiving Party is
required to keep confidential under Applicable Law.

          (c) The terms and conditions of this Agreement shall be the
Confidential Information of both Blair and Bank. The Marketing Plan shall be the
Confidential Information of both Blair and Bank.

          (d) If Blair or Bank receives Confidential Information of the other
Party ("Receiving Party"), the Receiving Party shall do the following with
respect to the Confidential Information of the other party ("Disclosing Party"):
(i) keep the Confidential Information of the


                                       38

<PAGE>

Disclosing Party secure and confidential; (ii) treat all Confidential
Information of the Disclosing Party with the same degree of care as it accords
its own Confidential Information, but in no event less than a reasonable degree
of care; and (iii) implement and maintain commercially reasonable physical,
electronic, administrative and procedural security measures, including
commercially reasonable authentication, access controls, virus protection and
intrusion detection practices and procedures. For purposes of this subsection,
both parties shall be considered the Receiving Party of Confidential Information
comprised of the terms and/or conditions of this Agreement and the Marketing
Plan.

     11.2 Use and Disclosure of Confidential Information.

          (a) Each Receiving Party shall use and disclose the Confidential
Information of the Disclosing Party only for the purpose of performing its
obligations or enforcing its rights with respect to the Program or as otherwise
expressly permitted by this Agreement, and shall not accumulate in any way or
make use of such Confidential Information for any other purpose.

          (b) Each Receiving Party shall: (i) limit access to the Disclosing
Party's Confidential Information to those employees, authorized agents, vendors,
consultants, service providers and subcontractors who have a reasonable need to
access such Confidential Information in connection with the Program; and (ii)
ensure that any Person with access to the Disclosing Party's Confidential
Information agrees to be bound by the provisions of this Article 11 and
maintains the existence of this Agreement and the nature of their obligations
hereunder strictly confidential.

     11.3 Unauthorized Use or Disclosure of Confidential Information. Each
Receiving Party agrees that any unauthorized use or disclosure of Confidential
Information of the Disclosing Party might cause immediate and irreparable harm
to the Disclosing Party for which money damages might not constitute an adequate
remedy. In that event, the Receiving Party agrees that injunctive relief may be
warranted in addition to any other remedies the Disclosing Party may have. In
addition, the Receiving Party agrees promptly to advise the Disclosing Party by
telephone and in writing via facsimile of any security breach that may have
compromised any Confidential Information or Accountholder Data, or of any
unauthorized misappropriation, disclosure or use by any person of the
Confidential Information or Accountholder Data of the Disclosing Party which may
come to its attention and to take all steps at its own expense reasonably
requested by the Disclosing Party to limit, stop or otherwise remedy such
misappropriation, disclosure or use.

     11.4 Return or Destruction of Confidential Information. Upon the
termination or expiration of this Agreement, the Receiving Party shall comply
with the Disclosing Party's reasonable instructions regarding the disposition of
the Disclosing Party's Confidential Information or Accountholder Data, which may
include return of any and all of the Disclosing Party's Confidential Information
or Accountholder Data (including any electronic or paper copies, reproductions,
extracts or summaries thereof); provided, however: the Receiving Party in
possession of tangible property containing the Disclosing Party's Confidential
Information or Accountholder Data may retain one archived copy of such material,
subject to the terms of this Agreement, which may be used solely for regulatory
purposes and may not be used for any other


                                       39

<PAGE>

purpose. Such compliance shall be certified in writing, including a statement
that no copies of Confidential Information or Accountholder Data have been kept,
except as necessary for regulatory purposes.

                                   ARTICLE 12
                     EVENTS OF DEFAULT; RIGHTS AND REMEDIES

     12.1 Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an Event of Default
hereunder:

          (a) A party shall fail to make a payment of any material amount due
and payable pursuant to this Agreement and such failure shall remain unremedied
for a period of five (5) Business Days after the non-defaulting party shall have
given written notice thereof, unless such failure to pay is the subject of a
dispute resolution under Section 10.2, in which case, the five (5) Business Day
period shall commence upon receipt of the written notice from the Accountants.

          (b) A party shall fail to perform, satisfy or comply with any
obligation, condition, covenant or other provision contained in this Agreement
(other than failure to comply with any service level standard set forth in
Schedule 5.2), and (i) such failure shall remain unremedied for a period of
thirty (30) days after the other party shall have given written notice thereof
or, if the same cannot be cured in a commercially reasonable manner within such
time, the same shall not constitute an Event of Default if the party shall have
initiated and diligently pursued a cure within such time and such cure is
completed within ninety (90) days from the date of written notice regarding such
failure.

          (c) Any representation or warranty contained in this Agreement shall
not be true and correct in any respect as of the date when made or reaffirmed,
and (i) the party making such representation or warranty shall fail to cure the
event giving rise to such breach within thirty (30) days after the other party
shall have given written notice thereof or, if the same cannot be cured in a
commercially reasonable manner within such time, the same shall not constitute
an Event of Default if the party shall have initiated a cure within such time
and such cure shall be completed within ninety (90) days from the date of
written notice regarding such breach, and (ii) such failure shall either have a
material and adverse effect on the Program or materially diminish the economic
value of the Program to the other party.

     12.2 Defaults by Bank. The occurrence of any one or more of the following
events (regardless of the reason therefore) shall constitute an event of default
by Bank hereunder:

          (a) Bank fails to settle Charge Transaction Data in full when due and
the failure continues for five (5) Business Days after receipt of written notice
by Bank from Blair (which notice may be by fax with a confirmation call) that
such settlement payment was not received.

          (b) Bank shall no longer be solvent or shall fail generally to pay its
debts as they become due or there shall be a substantial cessation of Bank's
regular course of business.


                                       40

<PAGE>

          (c) The FDIC or any other federal or state regulatory authority having
jurisdiction over Bank shall order the appointment of a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) of Bank or
of any substantial part of its properties, or order the winding-up,
reorganization, or liquidation of the affairs of Bank, and such order shall not
be vacated, discharged, stayed or bonded within sixty (60) days from the date of
entry thereof.

          (d) Bank shall (i) consent to the institution of proceedings specified
in paragraph (c) above or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of Bank of any substantial part of its properties, or (ii) take
corporate action in furtherance of any such action.

     12.3 Defaults by Blair. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an event of default
by Blair hereunder:

          (a) Blair shall no longer be solvent or shall fail generally to pay
its debts as such debts become due or there shall be a substantial cessation of
Blair's regular course of business.

          (b) A petition under the U.S. Bankruptcy Code or similar law shall be
filed against Blair and not be dismissed within sixty (60) days.

          (c) A decree or order by a court having jurisdiction (i) for relief in
respect of Blair pursuant to the Bankruptcy Code or any other applicable
bankruptcy or other similar law, (ii) for appointment of a custodian, receiver,
liquidator, assignee, trustee, or sequestrator (or similar official) of Blair or
of any substantial part of its properties, or (iii) ordering the winding-up or
liquidation of the affairs of Blair shall be entered, and shall not be vacated,
discharged, stayed or bonded within sixty (60) days from the date of entry
thereof.

          (d) Blair shall (i) file a petition seeking relief pursuant to the
Bankruptcy Code or any other applicable bankruptcy or other similar law, (ii)
consent to the institution of proceedings pursuant thereto or to the filing of
any such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
Blair or any substantial part of its properties, or (iii) take corporate action
in furtherance of any such action.

     12.4 Remedies for Events of Default. In addition to any other rights or
remedies available to the parties at law or in equity, the following remedies
shall be available:

          (a) Upon the occurrence of an Event of Default pursuant to Section
12.1, the non-defaulting party shall be entitled, in addition to its remedies
under Sections 12.4(b) and (c) (as appropriate), to collect any amount
indisputably in default plus interest based on the Federal Funds Rate and
calculated on a three hundred and sixty (360) day year basis.

          (b) Within one hundred and eighty (180) days after the occurrence of
an Event of Default where Bank is a defaulting party or a Bank Event of Default,
Blair may terminate this Agreement upon written notice.


                                       41

<PAGE>

          (c) (i) After the occurrence of a Blair Event of Default or violation
of Applicable Law, (ii) within thirty (30) days after a violation of the
Operating Procedures by Blair following notice from Bank and an opportunity for
Blair to cure within thirty (30) days of notice, or (iii) within one hundred and
eighty (180) days after the occurrence of an Event of Default where Blair is a
defaulting party, Bank may, at Bank's option, terminate this Agreement upon
written notice to Blair.

                                   ARTICLE 13
                                   TERMINATION

     13.1 Term. This Agreement shall continue in full force and effect for ten
(10) years from the Program Commencement Date plus the extra period equal to the
extra days in the first Program Year, if any, (the "Initial Term"). The
Agreement shall renew automatically without further action of the parties for
successive three (3) year terms (each a "Renewal Term") unless either party
provides written notice of termination for any reason or without cause at least
nine (9) months prior to the expiration of the Initial Term or current Renewal
Term, as the case may be.

     13.2 Termination by Blair Prior to the End of the Initial Term or a Renewal
Term. Blair may terminate this Agreement:

          (a) within one hundred eighty (180) days after the occurrence of a
Bank Event of Default or any other Event of Default where Bank is the defaulting
party.

          (b) upon one hundred eighty (180) days' prior written notice if there
is (i) a Change in Control of Bank, (ii) a merger or consolidation of Bank, and
Bank or an Affiliate of Bank is not the surviving entity, or (iii) a sale of all
or substantially all of the assets of Bank to any entity other than an Affiliate
of Bank, and if, within twelve (12) months after completion of any of such
events, the entity acquiring or obtaining control of Bank makes a material
change to any of the underwriting standards which adversely affects the number
of Accounts opened by Bank and credit lines established by Bank after
implementing such change.

          (c) upon thirty (30) days' written notice if Bank fails for three (3)
consecutive months to perform any one of the same Service Standards outlined in
Schedule 5.2 and such failure is not the result of an act by Blair or a result
of force majeure, and Bank fails to remedy such failure within thirty (30) days.

          (d) if the Closing (as defined in the Purchase Agreement) of the
purchase by Bank of the Purchased Accounts does not occur by October 31, 2005
and the Purchase Agreement is terminated in accordance with the provisions of
such Purchase Agreement.

          (e) upon thirty (30) days' written notice if there is a Material
Change and said Material Change continues to exist for thirty (30) days after
written notice is given by Blair to Bank.

          (f) following an assignment, in accordance with Schedule 16.3.


                                       42

<PAGE>

          (g) pursuant to a force majeure under Section 16.15 of this Agreement.

     13.3 Termination by Bank Prior to the End of the Initial Term or Renewal
Term. Bank may terminate this Agreement:

          (a) immediately after the occurrence of a Blair Event of Default or,
upon one hundred and eighty (180) days' notice after the occurrence of any other
Event of Default where Blair is the defaulting party.

          (b) if the Closing (as defined in the Purchase Agreement) of the
purchase by Bank of the Purchased Accounts does not occur by October 31, 2005
and the Purchase Agreement is terminated in accordance with the provisions of
such Purchase Agreement.

          (c) pursuant to a force majeure under Section 16.15 of this Agreement.

          (d) following an assignment pursuant to Schedule 16.3.

          (e) pursuant to a force majeure under Section 16.15 of this Agreement.

          (f) pursuant to Section 3.10.

     13.4 Termination of Particular State. In addition, Bank may terminate the
operation of the Program in a particular state or jurisdiction if the Applicable
Law of the state or jurisdiction is amended or interpreted in such a manner so
as to render all or any part of the Program illegal or unenforceable, and in
such event Bank will, if requested, assist Blair with finding a new credit
provider for such state or jurisdiction.

                                   ARTICLE 14
                             EFFECTS OF TERMINATION

     14.1 General Effects.

          (a) All solicitations, marketing and advertising of the Program, other
than acceptance of applications through Blair Channels in the ordinary course of
business consistent with past practice, shall cease upon notice of termination
of this Agreement by either party, except as the parties may mutually agree,
provided that the parties will continue to operate the Program and service the
Accounts in good faith and in the ordinary course of their respective
businesses, subject to the terms of this Agreement, until the provisions of
Sections 14.2, 14.3 and 14.4 are satisfied. The parties will cooperate to ensure
the orderly wind-down or transfer of the Program.

          (b) Upon any termination of this Agreement, the parties shall have any
rights or remedies available to such party under this Agreement or in law or at
equity. Upon the satisfaction of the provisions of Section 14.2, 14.3 and 14.4,
all obligations of the parties under this Agreement shall cease, except that the
provisions specified in Section 16.23 shall survive. In


                                       43

<PAGE>

the event that Blair terminates this Agreement pursuant to Section 13.1 of this
Agreement, Bank shall not be required to contribute to the Marketing Fund with
respect to the year of termination.

     14.2 Blair's Option to Purchase the Program Assets.

          (a) If this Agreement expires or is terminated by either party for
whatever reason, Blair has the option to purchase from, or arrange the purchase
by a third party nominated or selected by Blair (a "Nominated Purchaser") from,
Bank the Program Assets, except for any Accounts deemed ineligible by Bank, on
such terms and conditions mutually acceptable to Blair (or a Nominated
Purchaser) and Bank, including commercially reasonable representations and
warranties.

          (b) The purchase option given by Section 14.2(a) is exercisable by
Blair or the Nominated Purchaser serving notice on Bank within sixty (60) days
after receipt of the master file to be provided pursuant to Section 14.2(e).

          (c) If such purchase option is exercised, Blair or the Nominated
Purchaser must complete the purchase of the Program Assets within one hundred
eighty (180) days after the notice has been given pursuant to Section 14.2(b);
provided, however, that such times may be extended for required regulatory
approvals, rating agency consents, and to complete any interim servicing
obligation agreed to by Blair and Bank. The date of such completion shall be the
"Program Purchase Date."

          (d) The purchase price for the Program Assets shall be shall be equal
to 100% of the face value of the Accounts (excluding ineligible accounts) and
the receivables related thereto, including without limitation all accrued
finance charges and fees. In the event Blair elects to continue a private label
credit program with another provider on or within twenty-four (24) months after
termination of this Agreement, then Blair or the Nominated Purchaser shall be
obligated to purchase the Accounts and receivables related thereto at the
purchase price set forth above. If Blair or Blair's new private label credit
provider does not purchase the Accounts, Blair shall not solicit the
Accountholders for any replacement financial product that competes with the
liquidation of the Accounts by Bank. Bank will provide Blair written notice once
liquidation of the Accounts has been completed.

          (e) The Parties will use reasonable commercial efforts to minimize
transaction costs. Once a purchase agreement for purchase of Program Assets has
been executed, Bank will provide Blair or the Nominated Purchaser with access to
the Program Assets and such other information related thereto as agreed upon by
Bank and Blair or the Nominated Purchaser.

     14.3 If Purchase Option Is not Exercised.

          (a) If this Agreement is terminated and Blair does not give written
notice that it will exercise its option referred to in Section 14.2, Blair shall
have no further rights whatsoever in the Program Assets.


                                       44

<PAGE>

          (b) Bank may use Blair Licensed Marks to communicate with
Accountholders in connection with the billing and collection of Accounts and as
otherwise required by Applicable Law until the Account balances have been
collected in full or written-off and liquidated, notice of which should be
provided by Bank to Blair.

          (c) Blair and Bank shall reasonably agree upon a Program termination
letter to be sent to Accountholders if Blair shall not exercise its purchase
option.

                                   ARTICLE 15
                                 INDEMNIFICATION

     15.1 Blair's Indemnification of Bank. From and after the Program
Commencement Date, Blair shall indemnify and hold harmless Bank, its Affiliates,
their respective officers, directors, employees, equity holders, attorneys and
agents, whether or not resulting from a third party claim, against and agrees to
hold each of them harmless from any and all losses, liabilities, damages,
judgments, settlements, claims, penalties, costs and expenses of whatever
nature, including reasonable attorneys' fees and expenses of investigation
(collectively "Losses"), which are caused or incurred by or result from, arise
out of or relate to, without duplication:

          (a) Blair's gross negligence, recklessness or willful misconduct
(including acts and omissions of Blair) relating to the Program;

          (b) any breach by Blair or any of its employees or agents of any of
the terms, covenants, representations, warranties or other provisions contained
in this Agreement;

          (c) the failure of Blair to satisfy any of its obligations or
liabilities to third parties in connection with the Program, including its
obligations to Accountholders in respect of the purchase of Goods;

          (d) dishonest or fraudulent acts by Blair or its employees or agents
in connection with the Program; and

          (e) allegations by a third party that the use of Blair Licensed Marks
or any materials or documents provided by Blair in connection with the Program
constitutes: (i) libel, slander, and/or defamation; (ii) infringement of
intellectual property, including but not limited to trademark infringement or
dilution, or copyright infringement; (iii) unfair competition or
misappropriation of another's ideas or trade secret; (iv) invasion of rights of
privacy or rights of publicity; or (v) breach of contract or tortious
interference.

Notwithstanding the foregoing, Bank and its Affiliates will not be entitled to
indemnity pursuant to this Section 15.1 for any Losses, until the aggregate
amount of all such Losses incurred or suffered by Bank or any of its Affiliates
exceeds on a cumulative basis the Indemnity Deductible, in which case the Bank
and its Affiliates shall be entitled to indemnification for the full amount of
such Losses in excess of such Indemnity Deductible; provided that, in no event
will Bank and its Affiliates be entitled to indemnity of Losses pursuant to this
Section 15.1 to the extent that the


                                       45

<PAGE>

amount of Losses, in the aggregate, incurred or suffered by the Bank or any of
its Affiliates exceeds the Indemnity Cap.

     15.2 Bank's Indemnification of Blair. From and after the Program
Commencement Date, Bank shall indemnify and hold harmless Blair, its Affiliates,
their respective officers, directors, employees, equity holders, attorneys,
agents and representatives against and agrees to hold each of them harmless from
any and all Losses which are caused or incurred by or result from, arise out of
or relate to:

          (a) Bank's gross negligence, recklessness or willful misconduct
(including acts and omissions of Bank) relating to the Program;

          (b) any breach by Bank or any of its employees or agents of any of the
terms, covenants, representations, warranties or other provisions contained in
this Agreement;

          (c) Bank's failure to satisfy any of its obligations or liabilities to
third parties in connection with the Program, including its obligations to
Accountholders under the Program;

          (d) dishonest or fraudulent acts by Bank or its employees or agents in
connection with the Program; and

          (e) allegations by a third party that the use of Bank Licensed Marks
or any materials or documents provided by Bank in connection with the Program
constitutes: (i) libel, slander, and/or defamation; (ii) infringement of
intellectual property, including but not limited to trademark infringement or
dilution, or copyright infringement, (iii) unfair competition or
misappropriation of another's ideas or trade secret; (iv) invasion of rights of
privacy or rights of publicity; or (v) breach of contract or tortious
interference.

Notwithstanding the foregoing, Blair and its Affiliates will not be entitled to
indemnity pursuant to this Section 15.2 for any Losses, until the aggregate
amount of all such Losses incurred or suffered by Blair or any of its Affiliates
exceeds on a cumulative basis the Indemnity Deductible, in which case Blair and
its Affiliates shall be entitled to indemnification for the full amount of such
Losses in excess of such Indemnity Deductible; provided that, in no event will
Blair and its Affiliates be entitled to indemnity of Losses pursuant to this
Section 15.2 to the extent that the amount of Losses, in the aggregate, incurred
or suffered by the Blair or any of its Affiliates exceeds the Indemnity Cap.

     15.3 Notice, Settlements and Other Matters.

          (a) A party seeking indemnification pursuant to Section 15.1 or 15.2
(an "Indemnified Party") must give prompt written notice to the party from whom
such indemnification is sought (the "Indemnifying Party") of the assertion of a
claim for indemnification or the assertion or commencement of any Action, in
respect of which indemnity may be sought hereunder specifying in reasonable
detail the individual items of such Losses including the amount, the date each
such item was paid, or properly accrued or arose, and the specific details of
the breach of representation, warranty or covenant or other claim or matter to


                                       46

<PAGE>

which such item is related. Notwithstanding the foregoing, the failure of the
Indemnified Party to furnish the written notice referred to in the preceding
sentence in a prompt manner shall not affect its right to indemnification and
will not relieve the Indemnifying Party of any liability it may have to the
Indemnified Party, except to the extent that the Indemnifying Party's right to
defend the matter is materially and irrevocably prejudiced by such failure to
give prompt notice. In the event that any third party claim is made against the
Indemnified Party and the Indemnified Party notifies the Indemnifying Party of
the commencement thereof, the Indemnifying Party may, subject to Section
15.3(b), elect at any time to negotiate a settlement or a compromise of such
Action or to defend such Action, in each case at its sole cost and expense and
with its own counsel reasonably acceptable to the Indemnified Party; provided
however, that any such settlement or compromise may only be for the payment of
money damages, unless with the prior written consent of the Indemnifying Party.
If, within thirty (30) days of receipt from an Indemnified Party of the notice
referred to above the Indemnifying Party (i) advises the Indemnified Party in
writing that it will not elect to defend, settle or otherwise compromise or pay
such Action or (ii) fails to make such an election in writing, the Indemnified
Party may (subject to the Indemnifying Party's continuing right of election in
the preceding sentence), at its option, defend, settle, compromise or pay such
Action; provided that any such settlement or compromise shall be permitted
hereunder only with the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld. Unless and until the Indemnifying Party
makes an election in accordance with this Section to defend, settle, compromise
or pay such Action or claim, all of the Indemnified Party's reasonable costs
arising out of the defense, settlement, compromise or payment thereof will be
Losses subject to indemnification by the Indemnifying Party. Each Indemnified
Party shall make available to the Indemnifying Party all information reasonably
available to such Indemnified Party relating to such Action, provided the
Indemnifying Party has elected to defend, settle or otherwise compromise or pay
such Action. If the Indemnifying Party elects to defend any such Action, the
Indemnified Party may participate in such defense with counsel of its choice at
the Indemnified Party's sole cost and expense unless (i) the employment of such
counsel has been authorized in writing by the Indemnifying Party, (ii) the
Indemnifying Party has not employed counsel to take charge of the defense within
twenty (20) days after delivery of the applicable notice or, having elected to
assume such defense, thereafter ceases to diligently pursue its defense of such
Action, or (iii) the Indemnified Party has reasonably concluded that there may
be defenses available to it, that are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not have the right to direct the defense of such Action on behalf of the
Indemnified Party), in any of which events attorneys' fees and expenses shall be
borne by the Indemnifying Party.

          (b) The Indemnified Party will have the right to reject any settlement
approved by the Indemnifying Party if the Indemnified Party is not fully and
unconditionally released from any liability resulting from that claim or is
required to pay any costs, expenses or damages to any Person as a result of the
Action that are not covered by and paid or payable pursuant to the indemnity
provided herein. The Indemnified Party will not have the right to settle any
third party Action without the written consent of the Indemnifying Party if the
Indemnifying Party is actively contesting such Action in good faith and has
assumed the defense of such Action from the Indemnified Party or if the period
for determining whether or not to assume the defense of such Action from the
Indemnified Party has not expired.


                                       47

<PAGE>

          (c) In calculating the amount of any Losses of an Indemnified Party
under this Article 15, there will be subtracted the amount of any (1) insurance
proceeds (net of taxes actually incurred, and other than proceeds received
through self-insurance or insurance provided by Affiliates of such Indemnified
Party) actually received by the Indemnified Party with respect to such Losses
and (2) third-party payments actually received by the Indemnified Party with
respect to such Losses. In the event that the Indemnifying Party reimburses the
Indemnified Party for any Losses prior to the occurrence of any events
contemplated by clauses (1) or (2) above, the Indemnified Party will remit to
the Indemnifying Party any such amounts that the Indemnified Party subsequently
receives or realizes with respect to such Losses. Upon the payment in full of
any claim hereunder, the Indemnifying Party will be subrogated to the rights of
the Indemnified Party against any Person with respect to the subject matter of
such claim.

          (d) Without limitation of their respective rights and obligations as
set forth elsewhere in this Article 15, and subject to the procedures for
indemnification claims set forth in this Article 15, the Indemnified Party will
act in good faith, will use commercially reasonable efforts to mitigate any
Losses, will use similar discretion in the use of personnel and the incurring of
expenses as the Indemnified Party would use if the Indemnified Party was engaged
and acting entirely at its own cost and for its own account, and will consult
regularly with the Indemnifying Party regarding the conduct of any Actions or
the taking of any action for which indemnification may be sought.

          (e) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE
INDEMNIFICATION PROVIDED FOR HEREIN SHALL NOT COVER, AND IN NO EVENT SHALL ANY
PARTY HERETO BE LIABLE FOR, ANY INDIRECT DAMAGES, INCLUDING CONSEQUENTIAL,
INCIDENTAL, EXEMPLARY OR SPECIAL DAMAGES, OR PUNITIVE DAMAGES, OR IN THE CASE OF
ANY "PUTATIVE DAMAGES," OR FOR AN INDEMNIFIED PARTY'S NEGLIGENCE OR WILFUL
MISCONDUCT.

          (f) BANK'S TOTAL CUMULATIVE LIABILITY TO BLAIR FOR ALL DAMAGES FOR ANY
CAUSE WHATSOEVER, SHALL NOT EXCEED THE INDEMNITY CAP PROVIDED, HOWEVER, THAT
THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO BANK'S INTENTIONAL BREACH OF
THIS AGREEMENT.

          (g) BLAIR'S TOTAL CUMULATIVE LIABILITY TO BANK FOR ALL DAMAGES FOR ANY
CAUSE WHATSOEVER, SHALL NOT EXCEED THE INDEMNITY CAP PROVIDED, HOWEVER, THAT
THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO BLAIR'S INTENTIONAL BREACH OF
THIS AGREEMENT.

                                   ARTICLE 16
                                  MISCELLANEOUS

     16.1 Precautionary Security Interest. Blair and Bank agree that this
Agreement contemplates the extension of credit by Bank to Accountholders.
However, as a precaution in the unlikely event that any person asserts that
Article 9 of the UCC applies or may apply to the transactions contemplated
hereby, and to secure Blair's payment of and performance of all


                                       48

<PAGE>

obligations of Blair to Bank, Blair hereby grants to Bank a first priority
present and continuing security interest in and to the following, whether now
existing or hereafter created or acquired: (i) all Accounts, Accountholder
Indebtedness, Purchase Documentation and Charge Transaction Data, (ii) all
deposits, credit balances and reserves on Bank's books relating to the Program,
and (iii) all proceeds of the Accountholder Indebtedness. In addition, Blair
agrees to take any reasonable action requested by Bank, at Bank's expense, to
establish the first lien and perfected status of such security interest; and
appoints Bank as Blair's attorney-in-fact to take any such action on Blair's
behalf in connection therewith.

     16.2 Securitization. Bank shall have the right to securitize the
Accountholder Indebtedness or any part thereof by itself or as part of a larger
offering at any time. Such securitization shall not affect Blair's rights or
Bank's obligations hereunder, including with respect to customer service,
payment processing or collections. Bank shall not securitize the Accountholder
Indebtedness in any manner that may encumber or interfere with the right of
Blair, or its Nominated Purchaser, to purchase any of the Program Assets upon
termination of this Agreement. To the extent any of Blair's Licensed Marks are
used in any securitization documents, such marks will not be used in a way that
adversely affects Blair or Blair Licensed Marks.

     16.3 Assignment. Either party may assign this Agreement or any of its
rights hereunder without the prior written consent of the other party only as
provided on Schedule 16.3 hereto.

     16.4 Subcontracting. It is understood and agreed that, in fulfilling its
obligations under this Agreement, either party may utilize its Affiliates or
other Persons to perform functions. The party shall be responsible for functions
performed by such Affiliates or other Persons to the same extent the party would
be responsible if it performed such functions itself.

     16.5 Amendment. Except as provided herein, this Agreement and the Exhibits
and Schedules hereto may only be amended by a written instrument signed by Bank
and Blair.

     16.6 Non-Waiver. No delay by a party hereto in exercising any of its rights
hereunder, or partial or single exercise of such rights, shall operate as a
waiver of that or any other right. The exercise of one or more of a party's
rights hereunder shall not be a waiver of, or preclude the exercise of, any
rights or remedies available to such party under this Agreement or in law or at
equity.

     16.7 Severability. If any provision of this Agreement is held to be
invalid, void or unenforceable, all other provisions shall remain valid and be
enforced and construed as if such invalid provision were never a part of this
Agreement.

     16.8 Waiver of Jury Trial. The parties hereto waive all right to trial by
jury in any action or proceeding to enforce or defend any rights under this
Agreement.


                                       49

<PAGE>

     16.9 Governing Law; Compliance with Law.

          (a) This Agreement and all rights and obligations hereunder (other
than the Program itself, including without limitation all matters related to the
Accounts, the Account Agreement, the Forms and the Account Documentation to the
extent related to the relationship between the Accountholders and the Bank,
which shall be governed by Utah law), including, without limitation, matters of
construction, validity and performance, shall be governed by and construed in
accordance with the laws of the State of New York, without regard to internal
principles of conflict of laws, and applicable federal law.

          (b) Each party shall comply with Applicable Law in connection with its
activities and the performance of its rights and obligations hereunder.
Notwithstanding anything else contained in this Agreement, neither party shall
be obligated to take any action that such party believes in good faith would
violate, or is reasonably likely to cause either of them to violate, any
Applicable Law or that would cause such party to become a "consumer reporting
agency" for purposes of the federal Fair Credit Reporting Act.

     16.10 Captions. Captions of the articles and sections of this Agreement are
for convenient reference only and are not intended as a summary of such articles
or sections and do not affect, limit, modify or construe the contents thereof.

     16.11 Notices. Any notice, approval, acceptance or consent required or
permitted under this Agreement shall be in writing to the other party and shall
be deemed to have been duly given when delivered in person or, if sent by United
States registered or certified mail, with postage prepaid, or by a nationally
recognized overnight delivery service, when received, addressed as follows:

               If to Blair:

                    Blair Corporation.
                    220 Hickory Street
                    Warren, PA 16366
                    Attention: Bryan Flanagan,
                               Chief Financial Officer
                    Fax: (814) 726-6123

               With a copy to:

                    Patton Boggs LLP
                    2550 M Street, NW
                    Washington, D.C. 20037
                    Attention: John H. Vogel, Esq.
                               Philip G. Feigen, Esq.
                    Fax: (202) 457-6315


                                       50

<PAGE>

               If to Bank:

                    World Financial Capital Bank
                    2855 East Cottonwood Parkway
                    Salt Lake City, UT 84121
                    Attention: Marvin Corne,
                               President
                    Fax: (801) 527-2283

               With a copy to:

                    ADS Alliance Data Systems, Inc.
                    800 Tech Center Drive
                    Gahanna, OH 43230
                    Attention: Karen A. Morauski,
                               Vice President and Counsel
                    Fax: (614) 944-5801

     16.12 No Joint Venture. Nothing contained in this Agreement shall be deemed
or construed by the parties or any third party to create the relationship of
principal and agent, partnership, joint venture or of any association between
Blair and Bank, and no act of either party shall be deemed to create any such
relationship. Blair and Bank each agree to such further actions as the other may
request to evidence and affirm the non-existence of any such relationship.

     16.13 Press Releases. Blair and Bank each shall obtain the prior written
approval of the other party with regard to the substance and timing of any press
releases which announce the execution of this Agreement or the transactions
specified herein, which prior approval shall not unreasonably be withheld. At
all times thereafter, Blair and Bank, prior to issuing any press releases
concerning this Agreement or the transactions specified herein, shall consult
with each other concerning the proposed substance and timing of such releases
and give due consideration to the comments of the other party relating thereto.
The foregoing notwithstanding, it is understood that neither party shall be
required to consult with the other party with regard to (a) press releases and
other announcements as may be required by Applicable Law or the applicable rules
and regulations of any governmental agency or stock exchange and (b)
publications prepared solely by and for employees of Blair or Bank, or their
respective Affiliates, all of which may be issued without prior consultation
with, or the prior written consent of, the other party. Prior to filing a copy
of this Agreement with any governmental authority or agency, the filing party
will consult with the other party with respect to such filing and shall redact
such portions of this Agreement which the other party requests be redacted,
unless, in the filing party's reasonable judgment based on the advice of its
counsel (which advice shall have been discussed with counsel to the other
party), the filing party concludes that such request is inconsistent with the
filing party's obligations under Applicable Law.


                                       51

<PAGE>

     16.14 Third Parties. There are no third-party beneficiaries to this
Agreement. The parties do not intend: (i) the benefits of this Agreement to
inure to any third party; or (ii) any rights, claims or causes of action against
a party to be created in favor of any person or entity other than the other
party.

     16.15 Force Majeure. If performance of any service or obligation under this
Agreement, including the service level standards at Schedule 5.2, is prevented,
restricted, delayed or interfered with by reason of labor disputes, strikes,
acts of God, floods, lightning, severe weather, shortages of materials,
rationing, utility or communication failures, earthquakes, war, revolution,
civil commotion, acts of public enemies, blockade, embargo or any law, order,
proclamation, regulation, ordinance, demand or requirement having legal effect
of any government or any judicial authority or representative of any such
government, or any other act whatsoever, whether similar or dissimilar to those
referred to in this clause, which are beyond the reasonable control of a party
and could not have been prevented by reasonable precautions, then such party
shall be excused from such performance to the extent of and during the period of
such prevention, restriction, delay or interference. A party excused from
performance pursuant to this Section shall exercise all reasonable efforts to
continue to perform its obligations hereunder, including by implementing its
disaster recovery and business continuity plan as provided in Section 5.7, and
shall thereafter continue with reasonable due diligence and good faith to remedy
its inability to so perform except that nothing herein shall obligate either
party to settle a strike or other labor dispute when it does not wish to do so.
In the event a party is unable to perform substantially for any of the reasons
described in this Section, it will notify the other party promptly of its
inability so to perform, and if the inability continues for at least one-hundred
eighty (180) consecutive days (thirty (30) days in the cases of credit
authorizations and processing of new Accounts), the party so notified may then
terminate this Agreement forthwith.

     16.16 Entire Agreement. This Agreement, together with the Schedules and
Exhibits hereto which are expressly incorporated herein by reference, supersedes
any other agreement, whether written or oral, that may have been made or entered
into by Blair and Bank (or by any officer or employee of either of such parties)
relating to the matters specified herein, and constitutes the entire agreement
by the parties related to the matters specified herein or therein.

     16.17 Binding Effect; Effectiveness. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement is the product of negotiation
by the parties having the assistance of counsel and other advisers. It is the
intention of the parties that this Agreement not be construed more strictly with
regard to one party than with regard to the other.

     16.18 Counterparts/Facsimiles. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one and the same
instrument, but in making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart. Any telefacsimile of an
executed counterpart shall be deemed an original.

     16.19 Survival. Upon the termination of this Agreement, the parties shall
have the rights and remedies described herein. Upon such termination, all
obligations of the parties under this Agreement shall cease, except that the
obligations of the parties pursuant to Sections 6.4


                                       52

<PAGE>

(Bank Right of Chargeback), 6.5 (Exercise of Chargeback), 8.1 (Blair Licensed
Marks) which shall survive as provided in such Section, 8.2 (Bank Licensed
Marks) which shall survive as provided in such Section, Section 10.1 (Audit;
Access Rights) which shall survive for sixty (60) days beyond the termination
date, 10.2 (Dispute Resolution), Article 11 (General Confidentiality), Article
14 (Effects of Termination), Article 15 (Indemnification), and Sections 16.1
(Precautionary Security Interest), 16.8 (Waiver of Jury Trial), 16.9(a)
(Governing Law), and 16.20 (Taxes) shall survive the expiration or termination
of this Agreement.

     16.20 Taxes. Blair will be responsible for, and agrees to pay, all sales,
use, excise, and value-added taxes, or taxes of a similar nature (excluding
personal property taxes and taxes based on Bank's income which shall be borne by
Bank), imposed by the United States, any state or local government, or other
taxing authority, on all services provided by Bank under this Agreement. The
parties agree to cooperate with each other to minimize any applicable sales,
use, or similar tax and, in connection therewith, the parties shall provide each
other with any relevant tax information as reasonably requested (including
without limitation, resale or exemption certificates, multi-state exemption
certificates, information concerning the use of assets, materials and notices of
assessments). All amounts set forth in this Agreement are expressed and shall be
paid in lawful U.S. dollars.

     16.21 Cooperation. Blair and Bank agree to cooperate and to produce or
execute such other documents or agreements as such parties agree may be
necessary or desirable for the execution and implementation of this Agreement
and the consummation of the transactions specified herein or contemplated
hereby.


                                       53

<PAGE>

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed as of the date first above written.

BLAIR CORPORATION


By: /s/ BRYAN J. FLANAGAN
    ---------------------------------
Name: Bryan J. Flanagan
      -------------------------------
Title: Senior Vice President and
       Chief Financial Officer
       ------------------------------

WORLD FINANCIAL CAPITAL BANK


By: /s/ MARVIN H. CORNE
    ---------------------------------
Name: Marvin H. Corne
      -------------------------------
Title: President
       ------------------------------


                                       54

<PAGE>

                         SCHEDULES TO PROGRAM AGREEMENT

<TABLE>
<CAPTION>
SCHEDULE                      SUBJECT
--------                      -------
<S>                           <C>
   2.2.....................   Terms for Accounts
   3.1.....................   Operating Procedures
   4.1(a)..................   Marketing Commitment
   4.2.....................   Operating Committee
   4.7.....................   Enhancement Products
   4.7(e)..................   Monthly Master File Reports from Bank to Blair
   5.1.....................   Reports from Bank to Blair and Operating Committee
   5.2.....................   Service Level Standards
   6.5.....................   Permitted Chargebacks
   7.3.....................   Compensation and Fees
   15......................   Certain Definitions
   16.3....................   Assignment
</TABLE>

<TABLE>
<CAPTION>
EXHIBITS                      SUBJECT
--------                      -------
<S>                           <C>
   A.......................   Licensed Blair Marks
   B.......................   Licensed Bank Marks
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>j1363201exv99w1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<PAGE>
Blair-1


                                                                    Exhibit 99.1

FOR IMMEDIATE RELEASE:
CONTACTS:
Blair Corporation                                         Alliance Data Systems
Bryan Flanagan, SVP/Chief Financial Officer               Ed Heffernan, CFO
Thomas McKeever, SVP/Operations & Administration          972-348-5191
814-723-3600                                              Shelley Whiddon, Media
                                                          972-348-4310

                   BLAIR CORPORATION AND ALLIANCE DATA SYSTEMS
                  ANNOUNCE NEW PRIVATE LABEL CREDIT AGREEMENT

          PROGRAM TO HELP $500 MILLION CATALOG AND WEB RETAILER IMPROVE
                     INCREMENTAL SALES AND CUSTOMER LOYALTY

           AGREEMENT TO INCLUDE ACQUISITION OF BLAIR CREDIT PORTFOLIO

WARREN, Pa., and DALLAS (April 27, 2005) -- Blair Corporation (Amex: BL) and
Alliance Data Systems Corp. (NYSE: ADS) announced today that they have reached a
definitive purchase and sale agreement whereby Alliance's industrial bank
subsidiary will purchase Blair's private label credit portfolio and will, under
a 10-year agreement, provide a fully integrated private label credit program for
Blair's catalog and Web brands including Blair and Irvine Park.

With sales of approximately $500 million, Blair is ranked among the nation's top
10 apparel catalog retailers and has been in business nearly 100 years. Through
its Blair and Irvine Park brands, the multi-channel retailer sells quality men's
and women's business and casual fashion attire, and home accessories, while
focusing on delivering high value and superior customer service to its
customers.

Under terms of the purchase and sale agreement, Alliance's industrial bank
subsidiary will acquire Blair's private label credit portfolio, which currently
consists of over 800,000 statemented accounts each month and generates in excess
of $200 million in annual

<PAGE>

Blair-2


credit sales. Total consideration will be based upon a price equal to the
balance of the consumer credit portfolio plus a premium. As of March 31, 2005,
Blair's consumer receivables balance was $166.3 million. Total consideration
will be approximately $176.3 million. The transaction has been approved by both
companies and is expected to close during the fourth quarter of 2005, subject to
regulatory review and approval, and customary closing conditions.

Also under terms of the agreement, Alliance will provide services including
account acquisition and activation, receivables funding, account authorization,
statement generation, marketing services, remittance processing and customer
service functions.

"We are pleased to announce this agreement with Alliance Data Systems today,"
said John E. Zawacki, president and chief executive officer of Blair. "It will
provide Blair customers with expanded financing options supported by consistent,
customer-friendly account servicing. Our commitment to provide updated fashion
apparel and home furnishing choices at Blair, combined with excellence in
customer service, is further strengthened by this partnership. We are
particularly excited by Alliance's marketing expertise, which will further
enhance our ability to better serve our core customers. We are proud to be
associated with Alliance and look forward to many years of mutually beneficial
operations."

"We are very pleased that Blair selected Alliance to provide its private label
credit solution," said Ivan Szeftel, president, Retail Services, Alliance Data
Systems. "For nearly 100 years, Blair has stayed true to offering its customers
high-quality apparel and customer service. Our integrated credit and marketing
capabilities nicely complement Blair's commitment to its customers;
specifically, our unique customized communications and marketing tools will
recognize and reward customers for their purchases, thereby improving repeat
business and use of the private label program while strengthening Blair's
relationship with its customers. Through our private label

<PAGE>

Blair-3


credit services, we look forward to helping facilitate Blair's continued success
as it grows its catalog and Web business."

During the year ended December 31, 2004, Blair's credit portfolio generated
income before income taxes of approximately $5.6 million. After closing, Blair
anticipates that the annual impact of the transaction to its income before
income taxes will be a net reduction in pre-tax income of $2 to $4 million, as
financial benefits from the Alliance partnership will partially offset the
income generated from the divested credit portfolio.

Blair currently intends to distribute the net proceeds from the transaction
(after transaction costs and required debt repayment, including a reserve for
applicable taxes related to the gain on sale), anticipated to be approximately
80 percent of gross proceeds, to Blair's shareholders in the form of a stock
repurchase, dividend, or combination of both. The transaction will be accretive
to Blair's 2005 earnings per share.

Stephens Inc. served as financial advisor to Blair Corporation.

ABOUT BLAIR

Headquartered in Warren, Pennsylvania, Blair Corporation sells a broad range of
women's and men's apparel and home products through direct mail marketing and
its Web sites www.blair.com and www.irvinepark.com. Blair Corporation employs
over 2,000 associates (worldwide) and operates facilities and retail outlets in
Northwestern Pennsylvania as well as a catalog outlet in Wilmington, Delaware.
The company, which has annual sales of approximately $500 million, is publicly
traded on the American Stock Exchange (Amex:BL). For additional information,
please visit http://www.blair.com.

ABOUT ALLIANCE DATA SYSTEMS

Alliance Data Systems (NYSE: ADS) is a leading provider of transaction services,
credit services and marketing services, managing over 105 million consumer
relationships for some of North America's most recognizable companies. Alliance
creates and manages customized solutions that change consumer behavior and that
enable its clients to build stronger, mutually beneficial relationships with
their customers. Headquartered in Dallas, Alliance Data Systems employs
approximately 7,500 associates at 35 locations

<PAGE>

Blair-4


in the United States and Canada. For more information about the company, visit
its web site, WWW.ALLIANCEDATASYSTEMS.COM.

BLAIR FORWARD LOOKING INFORMATION

The foregoing contains certain "forward-looking statements" within the
definition of federal securities laws. Statements made in this release regarding
the company's definitive agreement and intention to sell substantially all of
its and its affiliates' credit portfolio, to enter into a long term marketing
and servicing alliance, expectations and intentions regarding use of such sale
proceeds, expectations regarding the accretive nature of the transaction and
subsequent resulting income generation are forward-looking statements. The
company cautions that forward-looking statements, as such term is defined in the
Private Securities Litigation Reform Act of 1995, contained in this report are
based on estimates, projections, beliefs and assumptions of management at the
time of such statements and are not guarantees of future performance. The
company disclaims any obligation to update or revise any forward-looking
statements based on the occurrence of future events, the receipt of new
information, or otherwise. Forward-looking statements of the company involve
risks and uncertainties and are subject to change based on various important
factors. Actual future performance, outcomes and results may differ materially
from those expressed in forward-looking statements made by the company and its
management as a result of a number of risks, uncertainties and assumptions.
Representative examples of those factors (without limitation) include the
company's success in gaining regulatory review and approval of the transaction;
general retail industry conditions and macro-economic conditions; economic and
weather conditions for regions in which the company's stores are located and the
effect of these factors on the buying patterns of the company's customers; the
impact of competitive pressures in the department store industry and other
retail channels including specialty, off-price, discount, internet, and
mail-order retailers; potential disruption from terrorist activity; world
conflict and the possible impact on consumer spending patterns and other
economic and demographic changes of similar or dissimilar nature.

ALLIANCE DATA SYSTEMS' SAFE HARBOR STATEMENT/FORWARD LOOKING STATEMENTS

This release may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements may use words such
as "anticipate," "believe," "estimate," "expect," "intend," "predict," "project"
and similar expressions as they relate to us or our management. When we make
forward-looking statements, we are basing them on our management's beliefs and
assumptions, using information currently available to us. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, these forward-looking statements are subject to risks, uncertainties
and assumptions, including those discussed in our filings with the Securities
and Exchange Commission.

If one or more of these or other risks or uncertainties materialize, or if our
underlying assumptions prove to be incorrect, actual results may vary materially
from what we projected. Any forward-looking statements contained in this news
release reflect our current views with respect to future events and are subject
to these and other risks, uncertainties and assumptions relating to our
operations, results of operations, growth strategy and liquidity. We have no
intention, and disclaim any obligation, to update or revise any forward-looking
statements, whether as a result of new information, future results or otherwise.
</TEXT>
</DOCUMENT>
</SUBMISSION>
