EXHIBIT NUMBER 10.42
AMENDMENT TO ACCOUNT PURCHASE
AND CREDIT CARD PROGRAM AGREEMENT
AMENDMENT, made and entered into as of July 8, 1997 by and among XXXXXX
FURNITURE CORPORATION, XXXXXX FURNITURE COMPANY OF THE MIDWEST, INC., XXXXXX
FURNITURE COMPANY OF THE PACIFIC, INC., XXXXXX FURNITURE COMPANY OF WASHINGTON,
INC., XXXXXX SHOPPING SERVICE, INC., XXXX X. XXXXX COMPANY (collectively,
"Xxxxxx") and GENERAL ELECTRIC CAPITAL CORPORATION ("GE Capital").
WITNESSETH:
WHEREAS, Xxxxxx and GE Capital are parties to an Account Purchase and
Credit Card Program Agreement dated as of May 2, 1994, said Agreement being an
amendment and restatement of the Account Purchase Agreement dated as of October
31, 1987 as amended and restated (the "Agreement"); and
WHEREAS, Xxxxxx has requested that GE Capital agree to certain
modifications to the Agreement for purposes of assisting Xxxxxx in satisfying
certain financial reporting requirements of Statement of Financial Accounting
Standards ("SFAS") No. 125 and SFAS No. 77.
NOW THEREFORE, in consideration of the mutual promises and subject to the
terms and conditions hereinafter set forth, the parties hereto hereby agree as
follows:
1. Capitalized terms used herein which are not otherwise defined shall
have the same meaning as in the Agreement.
2. The renegotiation period referred to in Section 12.1(b) of the
Agreement, shall be deemed to end on August 16, 1997.
3. The first sentence of Section 12.4 of the Agreement is hereby deleted
in its entirety and replaced with the following:
"Except as provided in the following sentence, upon any termination
hereof, Parent shall purchase all Accounts and Indebtedness owned by GE
Capital for an amount equal to the "Purchase Price" as defined below.
Notwithstanding the foregoing, upon any termination of this Agreement
under Section 12.1 hereof, Parent shall, if (and only if) requested in
writing by GE Capital, purchase all Accounts and Indebtedness owned by GE
Capital (other than Indebtedness incurred prior to January 1, 1997) for
an amount equal to the Purchase Price, provided that GE Capital may not
require Parent to consummate the purchase of such Accounts prior to the
last billing date in October 1999, and provided further that GE Capital
may not request Parent to purchase the Accounts and Indebtedness after
the last billing date in October 2000. In order to determine the amount
of Indedtedness incurred prior to January 1, 1997 (the "Prior
Indebtedness") that remains outstanding at any point in time for the
purposes of calculating the amount of Indebtedness that GE Capital does
not have the right to require Parent to purchase pursuant to the
preceding sentence (and for no other purpose): (a) the amount of the
Prior indebtedness as of December 31, 1996 was $750,991,264; (b) the
number of Accounts as of December 31, 1996 related to the Prior
Indebtedness was 631,917 (the "Applicable Accounts"); and (c) all
payments and write-offs with respect to the Applicable Accounts shall be
applied first to the Prior Indebtedness, notwithstanding that (x) the
Applicable Accounts may
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also have Indebtedness incurred on or after January 1, 1997 and (b) the
Account Debtor may have directed that payments be otherwise applied.
4. A new Section 12.6 shall be added to the Agreement as follows:
"Upon any termination of this Agreement, if Parent fails to purchase all
of the Accounts and Indebtedness from GE Capital under circumstances in
which Parent is obligated to purchase such Accounts and Indebtedness
pursuant to this Agreement, GE Capital shall have the right, in addition
to and retaining all other rights it may have under the terms of this
Agreement or applicable law, (i) to liquidate such Accounts and
Indebtedness in any such lawful manner which may be expeditious or
economically advantageous to GE Capital, (ii) to issue a replacement or
substitute credit card, or (iii) to sell such Accounts and Indebtedness
to any Person not a party to this Agreement. Parent and each Operating
Subsidiary expressly agrees to cooperate with GE Capital and take any
action reasonably necessary to effectuate any such liquidation or
replacement or substitute credit card issuance in an orderly manner,
including, without limitation, accepting any substitute credit cards
following the effective date of termination and/or taking any other
action as may reasonably require to encourage use of acceptance of such
replacement or substitute credit cards."
5. Except as specifically provided herein, the terms and conditions of
the Agreement shall continue in full force and effect and shall be fully binding
on the parties hereto. Without limiting the generality of the foregoing, the
provisions of this Amendment shall only relate to the rights of the parties
regarding purchase of the Accounts and Indebtedness after termination of the
Agreement and shall not alter, limit or restrict any of GE Capital's rights to
terminate the Agreement in accordance with its terms, including, without
limitation, pursuant to the provisions of Article XIII thereof. Upon the
execution of this Amendment, each reference in the Agreement to "this
Agreement," "hereunder," "hereof," or words of like import shall mean and be a
reference to the Agreement as amended hereby. In the event of any conflict
between the terms of the Agreement and the terms of this Amendment, the terms of
this Amendment shall prevail.
6. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one and the same amendatory instrument,
and any of the parties hereto may execute this Amendment by signing any such
counterpart.
IN WITNESS WHEREOF, Xxxxxx and GE Capital have executed this Agreement as
of the date first set forth above.
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GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ XXXXXX XXXXXX
------------------------------------
Title: Senior Vice President And
General Manager
XXXXXX FURNITURE CORPORATION
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Vice President
XXXXXX FURNITURE COMPANY OF THE
MIDWEST, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Vice President
XXXXXX FURNITURE COMPANY OF THE
PACIFIC, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Vice President
XXXXXX FURNITURE COMPANY OF
WASHINGTON, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Vice President
XXXXXX SHOPPING SERVICE, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Vice President
XXXX X. XXXXX COMPANY
By: /s/ XXXXXXX X. XXXXX
------------------------------------
Title: Vice President
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