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Exhibit 10.12
AMENDMENT TO AMERICAN EXPRESS(R) CARD
SERVICE AGREEMENT FOR RETAIL ESTABLISHMENTS
This amendment ("Amendment"), effective as of the 1st day of January, 1993
(the "Effective Date"), hereby amends the Card Service Agreement(s) currently in
effect between, and relating only to, the entities listed on the signature page
hereof ("you", "your"), on the one hand, and American Express Travel Related
Services Company, Inc. and its subsidiaries, affiliates and licensees that issue
Cards or Card services ("we", "our" or "American Express") on the other hand,
governing Card acceptance by all of your establishments in the United States,
Canada, the U.S. Virgin Islands and Puerto Rico ("Establishments"). Except as
specifically described below, the terms of our Card Service Agreement and any
amendments, addenda or supplements thereto (the "Card Service Agreement") remain
in full force and effect.
1. DISCOUNT RATE. Your discount rate is the percentage rate which is to be
applied to calculate the deduction from the amount of each Charge we accept from
you and determines the price at which we accept Charges from you. Your discount
rate shall be determined according to the schedule appearing below based on your
"Net Annual Charge Volume". Your Net Annual Charge Volume is the aggregate of
Charges we accepted from all of your Establishments located in the United
States, Puerto Rico, the U.S. Virgin Islands and Canada during the preceding
calendar year, less Credits, adjustments and amounts charged back by us pursuant
to our rights of Full Recourse.
You may qualify for a new discount rate based on your Net Annual
Charge Volume for the previous full calendar year. If so, we will adjust your
discount rate on April 1st following that calendar year, and the new discount
rate will be as indicated in the schedule below.
Net Annual Charge Volume Discount Rate
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$20,000,000-$199,999,999 2.60%
$200,000,000 and over 2.50%
2. STRATEGIC INVESTMENT FUND. Each year that all of your Establishments
comply with all of the provisions of the Card Service Agreement and this
Amendment, we shall establish a Strategic Investment Fund in an amount based on
your level of Net Annual Charge Volume for the previous calendar year as
indicated below.
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Net Annual Charge Volume Strategic Investment Fund
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$30,000,000-$49,999,999 .10%
$50,000,000-$399,999,999 .15%
$400,000,000-$699,999,999 .20%
$700,000,000-$999,999,999 .40%
$1,000,000,000-$1,299,999,999 .50%
The Strategic Investment Fund shall be used during the calendar year
for which it is established to promote Card acceptance at your Establishments,
including but not limited to marketing, operational/technology enhancements,
database modeling/list access and other mutually-agreed upon and beneficial
business initiatives. Any monies in the Strategic Investment Fund that remain
unused at the end of such calendar year shall revert to us at that time and you
shall have no claim or right to such monies.
As an alternative to the Strategic Investment Fund, you may elect to
receive one half of the Strategic Investment Fund amount shown above in the form
of a reduction to your discount rate set forth in paragraph 1 above. If you wish
to elect this alternative, you must notify us in writing on or before November 1
of the year before you wish the election to take effect. You may change your
election for any year by notifying us in writing on or before November 1 of the
prior calendar year.
3. EQUAL ACCEPTANCE OF THE CARD. You agree that you will accept the Card
at each and every one of your Establishments. When a Cardmember asks to use or
presents the Card, you shall honor the Card and shall not attempt to persuade
the Cardmember to use any other payment method or payment instrument. You shall
not otherwise discourage the Cardmember from using the Card or disparage the
Card Service in any way. Except as provided in the section below entitled
"Proprietary Cards", you shall not state or publish a preference for any charge,
credit or debit card or service over the Card.
4. CARD ACCEPTANCE AWARENESS. You agree to display indicia of Card
acceptance at least as prominently in all your Establishments and advertising as
you display indicia of your acceptance of any other payment method, including
your Proprietary Card. These indicia of Card acceptance include, without
limitation, the display of Take-One applications, in-store signs and decals on
Establishment entrances, as well as reference to Card acceptance in all of your
print advertising and circulars and on all of your catalog order forms.
You agree not to promote the use of other charge, debit or credit cards or
services to your customers more actively than you
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promote the use of the Card, except as provided in the section entitled
"Proprietary Cards". You agree not to state or publish a preference for any
other charge, debit or credit card or service over the Card.
5. PROPRIETARY CARDS. If you issue your own proprietary card which is used
only in your Establishments ("Proprietary Card"), this Amendment does not limit
your ability to promote the use of that Proprietary Card more actively than you
promote the use of the Card; provided, however, that once a Cardmember presents
or asks to use the Card at the point of sale, you will not discourage the use of
the Card directly or indirectly and you will not verbally solicit the Cardmember
for your Proprietary Card until after the transaction is complete.
6. OPTIMA DIVIDEND DELETED. Upon the Effective Date of this Amendment, all
provisions regarding the Optima Dividend in your Card Service Agreement,
amendments and addenda thereto are deleted in their entirety and no Optima
Dividend shall be paid for Optima Card Charges made at your Establishments
thereafter.
7. WAIVER OF EXISTING MARKETING/ADVERTISING SUPPORT AND FEE-FREE
CARDMEMBER LISTS. In order to receive the benefits set forth in this Amendment,
you agree to waive any and all claim or right to receive any and all marketing
and/or advertising support and fee-free Cardmember Lists from which you may be
entitled to benefit during 1993 and thereafter pursuant to any agreement
currently in effect between you and us and between any of your divisions and
subsidiaries and us. Cardmember Lists, database reports/analyses and custom
models may be purchased at our standard rates.
8. WARRANTY. You represent and warrant that all indebtedness arising from
all Charges is genuine, free of any liens, claims or encumbrances, and results
from a Bona Fide sale of goods or services at your Establishment to a Cardmember
and that the amount of each Charge you submit represents the full and true value
of goods and services sold by you to such Cardmember. You further warrant that
all Authorizations you obtain and Charges you submit to us are only for the
purpose of making Bona Fide sales of goods and services at your Establishment.
You further warrant that you will not use or permit any third party (other than
leased departments within your Establishments that appear to the public to be
part of your Establishments and for which you are liable to us under your Card
Service Agreement) to benefit from your ability to accept the Card hereunder nor
will you use or permit any third party to use Card transaction information,
including but not limited to Card account numbers, for any purpose other than as
specified in the Card Service Agreement.
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9. INABILITY TO PERFORM. If you cease or adversely alter your operations,
or if you sell your assets or stock, or if you become insolvent, or if we
receive a disproportionate number of Cardmember inquiries or complaints relating
to Charges at your Establishments or if we have reasonable cause to believe that
you will not be able to perform your obligations under the Card Service
Agreement, we may, at our discretion, immediately terminate the Card Service
Agreement. If bankruptcy proceedings or similar state court proceedings are
filed with respect to your business, the Card Service Agreement and this
Amendment and all financial accommodations contained therein are automatically
terminated. You agree to notify us immediately if any of the above events occur.
You further agree that should any of the above events occur, or if the Card
Service Agreement is terminated for any reason, we may take other reasonable
actions, including but not limited to maintaining a reserve from payments
otherwise payable to you to protect our rights under the Card Service Agreement
or any other agreement between you and us.
10. AUTHORITY TO SIGN. You represent that the party who signs this
Amendment has authority to bind all of the entities listed below.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
Effective Date.
220-57-0156-8 AMERICAN EXPRESS TRAVEL RELATED
-------------------------- SERVICES COMPANY, INC.
[MAP or CAP Entity]
By: Filene's Basement Inc. By: /s/ Xxxxxxx X. Xxxxxxxx
Name: /s/ Xxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx
Title: V.P. & Controller President
Date: 2/16/93 Consumer Card and Financial
Services Group USA
COVERED ENTITIES:
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CHECK ONE: Strategic Investment Fund YES X NO
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