Exhibit 10.1
FIRST AMENDMENT
TO THE
MERCHANT SERVICES AGREEMENT
The First Amendment to the Merchant Services Agreement ("First
Amendment") is dated as of October , 1997, by and between XXXXXX STATE BANK
("Bank") and THE CHILDREN'S PLACE RETAIL STORES, INC. ("Company").
WHEREAS, Bank and Company have entered into the Merchant Services
Agreement dated as of December 12, 1994, as amended and supplemented ("Merchant
Services Agreement"); and
WHEREAS, Bank and Company desire to amend certain provisions of the
Merchant Services Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
mutual covenants hereinafter set forth, Bank and Company agree as follows:
1. The Merchant Fee as set forth in paragraph 3.1 (a) of the
Merchant Services Agreement is changed from 3.41% to 3.91%. The Merchant Fee of
3.91% will remain in effect until August 1, 1998. Thereafter the Merchant Fee
will be subject to change.
2. In addition to the other fees provided for in Article III of the
Merchant Services Agreement, Bank will charge and Company agrees to pay an Open
Active Account Fee and a Never Active Account Fee.
(a) Open Active Account Fee. Company shall pay an Open Active
Account Fee for each calendar month. Subject to the cap set
forth in the following sentence, the amount of the Open Active
Account Fee for each calendar month will be the product of (i)
the number of Accounts that have a debit or credit balance at
any time during the month ("Open Active Accounts") and (ii)
the applicable per Account fee, which will be determined
according to the following schedule and will be based on the
calendar year-to-date average active Account balance, as
calculated by Bank.
Year-To-Date Average
Active Account Balance Per Account Fee
---------------------- ---------------
$151.00 or more $ 0
$141.00 - $150.99 $ .08
$131.00 - $140.99 $ .16
$121.00 - $130.99 $ .39
$111.00 - $120.99 $ .65
$101.00 - $110.99 $ .97
$ 91.00 - $100.99 $1.36
The Open Active Account Fee payable by Company for each
calendar month will be no more than an amount equal to the
greater of (i) 2.22% of the net amount of Card Sales made by
Company during such calendar month ("Current Net Sales"), or
(ii) 2.22% of the net amount of Card Sales made by Company
during the same calendar month of the prior year, as set forth
in Exhibit A attached hereto and incorporated herein ("Prior
Year Net Sales"). Bank will calculate the amount of the Open
Active Account Fee on or about the last day of each calendar
month and will collect the Open Active Account Fee each month
in accordance with paragraph 3.1 (d) of the Merchant Services
Agreement. Until August 1, 1998, the sum of the Merchant Fee
and Open Active Account Fee payable by Company for each
calendar month will be no more than 6.13% of the net amount of
Current Net Sales or Prior Year Net Sales, as applicable
(determined in accordance with this paragraph). The amount of
the Open Active Account Fee will be subject to change on or
after August 1, 1998.
(b) Never Active Account Fee. On August 31, 1997 and on September
30, 1997, Bank will determine the number of Accounts which are
180 days and older and which have never been active (that is,
had a debit or credit balance at any time) ("Never Active
Account"). Company shall pay a Never Active Account Fee in the
amount of $.43 per Account for each Never Active Account
identified on August 31, 1997 and an additional Never Active
Account Fee for each Never Active Account identified on
September 30, 1997. Bank will collect the Never Active Account
Fee in accordance with paragraph 3.1(d) of the Merchant
Services Agreement.
3. Company has requested that Bank provide to Company each month
until August 1, 1998, a tape file of the names and addresses of Cardholders
whose Accounts have been open at least 90 days and have never been active, to
enable Company to direct market to such Cardholders to activate their Accounts.
Bank will provide the requested file to Company, provided Company shall use such
names and addresses for the sole purpose of marketing to Cardholders to activate
their Accounts. Notwithstanding Company's direct marketing programs to such
Cardholders, Bank shall have the right, among other rights provided under the
Xxxxxx State Bank Credit Card Agreement and Merchant Services Agreement, to
terminate Accounts which are 180 days and older and which have never been
active.
4. This First Amendment will be effective as of August 1, 1997.
5. Any capitalized terms used herein and not otherwise defined will
have the meanings given to them in the Merchant Services Agreement. Except as
provided in this First Amendment, or as necessary and appropriate to give
meaning to the terms and conditions of this First Amendment, the terms and
conditions of the Merchant Services Agreement will remain in full force and
effect. In the event of any conflict between the terms of the Merchant Services
Agreement and this First Amendment, this First Amendment will govern.
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment.
THE CHILDREN'S PLACE RETAIL STORES, INC. XXXXXX STATE BANK
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------- --------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: President Title: Senior Vice President
Date: 10/27/97 Date: 11/3/97
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EXHIBIT A
The Children's Place
Prior Year
Net Sales
------------
Aug-96
------------
$2,645,182
------------
------------
Sep-96
------------
$2,922,475
------------
------------
Oct-96
------------
$2,140,691
------------
------------
Nov-96
------------
$2,228,979
------------
------------
Dec-96
------------
$2,771,653
------------
------------
Jan-97
------------
$1,030,300
------------
------------
Feb-97
------------
$1,277,198
------------
------------
Mar-97
------------
$1,866,892
------------
------------
Apr-97
------------
$1,443,810
------------
------------
May-97
------------
$1,378,114
------------
------------
Jun-97
------------
$1,369,468
------------
------------
Jul-97
------------
$1,314,753
------------
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