EXHIBIT 10.12
WAREHOUSING SERVICE AGREEMENT
THIS WAREHOUSING SERVICE AGREEMENT made this 28th day of April, 2000 by
and between Xxxxx Shoe Company, Inc., a New York corporation with its principal
place of business at 0000 Xxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, ("Xxxxx
Shoe"), and Xxxxx & Xxxxxx Stores Company, a Missouri corporation with its
principal place of business at 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000
("Xxxxx & Xxxxxx").
WHEREAS, Xxxxx & Xxxxxx is engaged in the business of selling footwear
and accessories (and using supplies in its stores) (collectively, the
"Merchandise") to consumers through a chain of retail shoe stores; and
WHEREAS, as a part of this operation, Xxxxx & Xxxxxx requires the use
of a warehouse into which its Merchandise may be received from its
manufacturers, distributors and other locations or agents, in which its
Merchandise may be held in inventory and out of which its Merchandise may be
shipped by it to its various retail stores (the "Warehouse Services");
WHEREAS, Xxxxx & Xxxxxx desires to contract with Xxxxx Shoe for the
performance by Xxxxx shoe of the Warehouse Services; and
WHEREAS, Xxxxx Shoe desires to contract with Xxxxx & Xxxxxx for the
performance by it of the Warehouse Services.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
Section 1. Xxxxx Shoe shall provide to Xxxxx & Xxxxxx the Warehouse
Services upon the terms and conditions contained in this Agreement. The
Warehouse Services shall be made up of tasks and activities, whereby Xxxxx Shoe
on behalf of Xxxxx & Xxxxxx shall receive,
warehouse, pick, pack and give to carriers for shipment the Merchandise. Exhibit
A attached hereto entitled Performance Standards is hereby made a part of this
Agreement. The Warehouse Services shall be performed at Xxxxx Shoe's Sikeston,
Missouri warehouse (the "Warehouse"). A separate and discrete 57,887 square feet
of this Warehouse shall be made available for use in storing the Merchandise as
shown on Exhibit B attached hereto. In August, 2000 and February, 2001 and in
each August and February thereafter during the life of this Agreement, the
parties shall evaluate the need for additional or less space in order for Xxxxx
Shoe to adequately provide the Warehouse Services. At these times the parties
shall discuss the amount of additional or less space needed and the amount of
additional or less costs associated therewith. Beginning on September 1st and on
March 1st adjustments to the monthly amount of Fixed Costs to be paid to Xxxxx
Shoe shall be made if required and as agreed upon by the parties. Xxxxx Shoe
shall use its best efforts to accommodate Xxxxx & Xxxxxx in regard to additional
space if needed, subject to its own current and future needs.
Section 2. Xxxxx & Xxxxxx shall pay Xxxxx Shoe the following at the
times indicated for the Warehouse Services:
(a) Start-Up Costs: The parties estimate that Xxxxx Shoe's
costs and expenses will be approximately $85,000 in preparing to perform the
Warehouse Services. Xxxxx & Xxxxxx shall pay Xxxxx Shoe the total of these costs
and expenses which may be more or less than the estimated amount of $85,000.
Xxxxx Shoe shall first obtain the approval of Xxxxx & Xxxxxx if the total amount
is to be in excess of $85,000. These costs and expenses shall include, but are
not limited to, the procurement of various conveyor equipment and electrical
equipment, building preparation, two new dock doors, any and all direct costs
and expenses to Xxxxx Shoe for all third party services and materials, and Xxxxx
Shoe's internal labor and other costs. Xxxxx
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Shoe shall provide Xxxxx & Xxxxxx with copies of invoices and statements in
support of these Start-Up Costs. Payment of Start-Up Costs from time to time
shall be made by Xxxxx & Xxxxxx to Xxxxx Shoe within thirty (30) days after
receipt by Xxxxx & Xxxxxx of a Xxxxx Shoe invoice.
(b) Fixed Costs: $*** monthly to cover all of Xxxxx Shoe's
fixed costs in operating and maintaining the Warehouse and the equipment. These
costs include prorated building, building repairs and maintenance, building
insurance, taxes, telephone, utilities and housekeeping/spotter needed for
performance of the Warehouse Services. The Fixed Costs amount shall be adjusted
on May 1, 2001 and on each May 1st thereafter by increasing the then current
amount by *** percent (***%). A payment of Fixed Costs shall be made on May 1,
2000 and on the first day of each month thereafter during the Initial Term and
during a Renewal Term, if any, as hereinafter defined.
(c) Day-To-Day Handling Costs: These costs are payment for
Xxxxx Shoe's day-to-day handling of Merchandise from receipt at the Warehouse
dock through delivery to Xxxxx & Xxxxxx'x carrier at the Warehouse dock. These
costs are Xxxxx Shoe's direct hourly labor costs, including an hourly rate
determined for a non-hourly supervisor, plus ***% for fringe benefits, plus ***%
as profit. These costs will be invoiced by Xxxxx Shoe from time to time, but at
least monthly, to Xxxxx & Xxxxxx which shall make payment to Xxxxx Shoe within
thirty (30) days of the date of invoice.
(d) Direct Costs: These costs are reimbursement to Xxxxx Shoe
for the direct cost to it for shipping cartons, labels, supplies, replacement of
any property purchased by Xxxxx Shoe in preparation of start-up of Warehouse
Services because of loss, damage, destruction or wear and tear, and any other
similar direct costs reasonably incurred by Xxxxx Shoe in providing
[*** Indicates portions of this exhibit that have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.]
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the Warehouse Services. These costs shall be invoiced by Xxxxx Shoe from time to
time, and Xxxxx & Xxxxxx shall make payment to Xxxxx Shoe within thirty (30)
days of the date of invoice. Wherever practical, xxxxxxxx will be made directly
to Xxxxx & Xxxxxx by the supplier, and Xxxxx & Xxxxxx will be responsible for
payment to the supplier in accordance with the supplier's terms of payment.
(e) Special Tasks Costs: These costs are payment for Xxxxx
Shoe's performance of special tasks requested by Xxxxx & Xxxxxx, such as shoe
repair, price marking, taking physical inventory and any other special tasks
performed by Xxxxx Shoe at the request of Xxxxx & Xxxxxx. These costs shall be
based on Xxxxx Shoe's actual base labor rates (including overtime rates where
applicable), plus fringes, plus *** percent (***%) profit for time expended in
performance of special tasks. These costs shall be invoiced by Xxxxx Shoe from
time to time, and Xxxxx & Xxxxxx shall make payment to Xxxxx Shoe within thirty
(30) days of the date of invoice.
(f) Any monies owed to Xxxxx Shoe under this Agreement which
are delinquent in payment shall accrue interest from the date payment was due
until paid at the rate of ten percent (10%) per annum.
Section 3. This Agreement shall commence upon its execution by both
parties. Xxxxx Shoe shall acquire and install at the Warehouse the required
equipment and hardware and otherwise prepare for the start of performance of the
Warehouse Services. Warehouse Services shall commence on May 1, 2000. This
Agreement thereafter shall remain in effect through April 30, 2003 (the "Initial
Term"). Thereafter, this Agreement shall automatically renew for a continuous
series of one (1) year terms (each term a "Renewal Term") unless either party
shall give written notice to the other party no later than six (6) months prior
to the end of the Initial
[*** Indicates portions of this exhibit that have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.]
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Term or any Renewal Term of its wish for this Agreement to terminate at the end
of the Initial Term or any Renewal Term.
Section 4. Xxxxx & Xxxxxx, at its cost, may perform physical
inventories at the Warehouse. Xxxxx Shoe shall have no liability to Xxxxx &
Xxxxxx for shrinkage of Merchandise other than that proven to have been
misappropriated from inside the Warehouse by employees or agents employed by
Xxxxx Shoe or by other individuals outside of Xxxxx Shoe's organization due to a
lack of security on the part of Xxxxx Shoe to prevent misappropriation, but only
in cases where the security in place at the time of the misappropriation was
less than the usual level of security inside the Warehouse.
Section 5. Neither Xxxxx Shoe nor any of its directors, officers,
employees, servants, agents, successors or assigns (the "Xxxxx Shoe Aggregate")
shall have any liability, duty or obligation whatsoever or owe any defense,
indemnification, hold harmless or contribution whatsoever to Xxxxx & Xxxxxx or
to any other person or entity for or on account of any costs, expenses, losses,
claims, debts, obligations, demands, damages, liabilities, business
interruption, lost profits, or revenue, indirect, special, incidental or
consequential losses or damages, contingent liabilities, causes of action, suits
(including attorneys' fees and expenses) in connection with any accident,
illness, injury to or death of any person and/or damage to or loss or
destruction of any property, tangible or intangible, including the property of
Xxxxx & Xxxxxx or of any other party, arising directly or indirectly out of the
Warehouse Services or otherwise out of this Agreement and/or arising directly or
indirectly out of any act or omission of Xxxxx & Xxxxxx, Xxxxx Shoe or any third
party in connection with the Warehouse Services and/or this Agreement.
Section 6. Xxxxx & Xxxxxx does hereby agree to defend, indemnify and
hold harmless the Xxxxx Shoe Aggregate from and against any costs, expenses,
losses, claims, debts,
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obligations, demands, damages, liabilities, business interruption, lost profits
or revenue, indirect, special, incidental or consequential losses or damages,
contingent liabilities, causes of action, suits (including attorneys' fees and
expenses), for which they or any one of them may become liable or may incur or
be compelled to pay in connection with any accident, illness, injury to, or
death of any person and/or damage to or loss or destruction of any property,
tangible or intangible, including property of the Xxxxx Shoe Aggregate, of Xxxxx
& Xxxxxx and of any other party, arising directly or indirectly out of the
Warehouse Services or otherwise out of this Agreement, and/or arising directly
or indirectly out of any act or omission of Xxxxx & Xxxxxx, Xxxxx Shoe or any
third party in connection with the Warehouse Services and/or this Agreement.
Section 7. Xxxxx & Xxxxxx, at its cost, shall maintain in full force
and effect at all times while this Agreement is in effect all risk, personal
property insurance for its property, including the Merchandise, waiving
subrogation. The property insurance shall be for no less than the replacement
cost of Xxxxx & Xxxxxx'x personal property at the Warehouse, with deductibles in
amounts reasonably satisfactory to Xxxxx Shoe and naming as additional insureds
those indemnified in this Agreement. Xxxxx & Xxxxxx, at its cost, shall also
maintain in full force and effect at all times while this Agreement is in effect
commercial general liability insurance on a per occurrence form, including broad
form coverage for contractual liability, property damage, and personal injury
liability (including bodily injury and death), waiving subrogation, with minimum
limits of no less than one million dollars (US $1,000,000.00) per occurrence,
with deductibles in amounts reasonably satisfactory to Xxxxx Shoe, and naming as
additional insureds those indemnified in this Agreement. Xxxxx & Xxxxxx, at its
cost, shall also maintain in full force and effect at all times while this
Agreement is in effect workers' compensation coverage covering all of Xxxxx &
Xxxxxx employees who perform work or services under this Agreement, subject to
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statutory limits and employer's liability coverage with a minimum limit of
$500,000, waiving subrogation. All insurance shall be primary and not
contributory. Xxxxx & Xxxxxx shall deliver to Xxxxx Shoe certificates of
insurance evidencing satisfactory coverages and indicating that Xxxxx Shoe shall
receive thirty (30) days unrestricted prior written notice of cancellation,
non-renewal or of any material change in coverages. Xxxxx & Xxxxxx'x insurance
shall be carried by an insurer or insurers with a BEST Guide rating of B+ VII or
better. Compliance herewith in no way limits Xxxxx & Xxxxxx'x indemnity
obligations, except to the extent that Xxxxx & Xxxxxx'x insurance companies
actually pay amounts which Xxxxx & Xxxxxx would otherwise pay. Xxxxx & Xxxxxx'x
insurance policies may be subject to reasonable deductibles.
Section 8. No failure, omission, lack, delay, default or breach by the
Xxxxx Shoe Aggregate in the performance of any act, duty or obligation under
this Agreement ("Nonperformance") caused by or attributable to any action,
omission, reason, cause, event, circumstance, occurrence, contingency or force
majeure actually or practicably beyond its reasonable control or the reasonable
control of its vendors, suppliers or other third parties who are necessary to
performance under this Agreement, whether foreseeable or unforeseeable,
("Nonperformance Rationale") shall be deemed a default or a breach by the Xxxxx
Shoe Aggregate under this Agreement or shall act or be allowed to penalize or
make liable for damages the Xxxxx Shoe Aggregate or entitle Xxxxx & Xxxxxx to
any form of monetary relief in any manner under this Agreement, with the
exception of the payment to Xxxxx Shoe of Fixed Costs pursuant to Section 2(b)
above, the payment of which shall be suspended during the period of any
Nonperformance by Nonperformance Rationale. Nonperformance Rationale for
Nonperformance shall include, but shall not be limited to acts of God,
accidents, war, riot, insurrection, rebellion, sabotage, acts of the public
enemy, strikes, lockouts, labor disturbances, vandalism, fires,
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explosions, epidemics, quarantines, embargoes, quotas, boycotts, excessive
duties, unusual or excessive restraints affecting importing or exporting or
shipping or credit, nonarrival or delay of carriers, floods, storms,
earthquakes, natural disasters, short or reduced supply or excessive cost of
suitable raw materials, failure or interruption of transportation or power or
production facilities, assertion of infringement claims, any order or decree or
law or regulation or restriction of any court or government or governmental
agency or officer, or any other similar causes. In the case of Nonperformance by
Nonperformance Rationale, the time for performance under this Agreement shall be
suspended for a term equal to the duration of the Nonperformance Rationale.
Section 9. (a) Ownership of and title to the following items procured
by Xxxxx Shoe through the use of Start-Up Costs or through other Costs under
this Agreement shall reside in Xxxxx & Xxxxxx at all times. If no monies are
owing to Xxxxx Shoe under this Agreement, by giving written notice to Xxxxx Shoe
within thirty (30) days following the completion of the Term or any earlier
termination of this Agreement, Xxxxx & Xxxxxx shall have the right to obtain
possession of all or any of these items free and clear of any lien or security
interest of Xxxxx Shoe or any of Xxxxx Shoe's creditors. These items shall be
available to Xxxxx & Xxxxxx on an "as is, where is" basis with all faults,
defects, wear and tear and damage. Xxxxx & Xxxxxx shall be responsible for all
costs associated with the dismantling, crating, shipping and other items of
handling and shall pay Xxxxx Shoe for any such costs incurred or expended by
Xxxxx Shoe within thirty (30) days of the date of invoice. Any of these items
not so designated by Xxxxx & Xxxxxx for shipment to it according to the above
shall be deemed abandoned by it and ownership and title to such items shall then
reside in Xxxxx Shoe. These items consist of the following:
(i) One (1) Pushbutton
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(ii) Two (2) Color Printers for Pick Sheets
(iii) Twelve (12) 10' Sections of Powered Zero
Pressure
(iv) Three (3) 10' Sections of Elevated Powered
Belt
(v) Sixteen (16) 10' Sections of Gravity Conveyor
(vi) Ten (10) 10' Sections of Skatewheel Conveyor
(vii) Three (3) Unpowered 00 Xxx Xxxxx/Xxxx
(viii) Two (2) Case Counters - Inbnd/Outbnd
(b) Ownership of and title to the following items
procured by Xxxxx Shoe through the use of Start-Up Costs or other Costs under
this Agreement shall reside in Xxxxx Shoe at all times. Under no circumstances
or conditions shall Xxxxx & Xxxxxx be deemed to be the owner of, have title to
or have the right to possession of all or any of these items. These items
consist of the following:
(i) Six (6) Motor Starters, Fuses, etc.
(ii) Seven (7) Photo Eyes
(iii) Three (3) Electro-Mech Relays
(iv) Two (2) Dock Doors/Tracks
(v) Any items not specifically listed in this
Section 9
Section 10. (a) Xxxxx Shoe shall have the right to terminate this
Agreement and the rights of Xxxxx & Xxxxxx hereunder forthwith by notice in
writing to Xxxxx & Xxxxxx, in accordance with the provisions of Section 1l
below, if any payment hereunder is in arrears and Xxxxx & Xxxxxx fails to pay
the same within thirty (30) days after written notice from Xxxxx Shoe calling
upon Xxxxx & Xxxxxx to pay the same.
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(b) Xxxxx Shoe shall have the right to terminate this
Agreement and the rights of Xxxxx & Xxxxxx hereunder upon six (6) months written
notice to Xxxxx & Xxxxxx in any case where Xxxxx Shoe for any reason intends to
cease its operations in the Warehouse within ninety (90) days after the end of
the said six (6) month notice period.
(c) Xxxxx & Xxxxxx shall have the right to terminate this
Agreement at any time upon ninety (90) days' notice to Xxxxx Shoe if at any time
Xxxxx & Xxxxxx shall pay Day-To-Day Handling Costs for any calendar month which
in total are in excess of an average of $*** per unit of Merchandise for each
unit of Merchandise received by Xxxxx Shoe at its Warehouse dock through its
delivery to Xxxxx & Xxxxxx'x carrier at the Warehouse dock.
(d) Xxxxx & Xxxxxx or Xxxxx Shoe, as may be applicable,
shall have the right to terminate this Agreement if either party shall cause or
permit any material breach of this Agreement and such party shall fail to remedy
or cure such material breach within sixty (60) days after written notice from
the other party demanding remedy or cure of the same (such notice giving
adequate particulars of the alleged material breach and of the intention of such
party to terminate this Agreement under this subsection) unless such material
breach is cured or remedied in a manner reasonably required by such party within
such sixty (60) days, or if the material breach is one which requires more than
sixty (60) days to cure, the curing has commenced within such sixty (60) days
and thereafter is being diligently pursued.
(e) In the event of termination of this Agreement for any
reason or cause, Xxxxx & Xxxxxx shall pay Xxxxx Shoe on or prior to the date of
termination all amounts then invoiced by and owing to Xxxxx Shoe by Xxxxx &
Xxxxxx under this Agreement. Following termination of this Agreement for any
reason or cause, Xxxxx Shoe may submit invoices to Xxxxx & Xxxxxx from time to
time until all amounts owing to Xxxxx Shoe under this
[*** Indicates portions of this exhibit that have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.]
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Agreement shall have been invoiced and paid and as to such invoices Xxxxx &
Xxxxxx shall make payment to Xxxxx Shoe within thirty (30) days of the date of
invoice.
(f) Any termination of this Agreement shall be without
prejudice to the rights of either party against the other which may have accrued
under this Agreement.
Section 11. All notices, demands, consents, requests, instructions,
approvals and other communications required or permitted by this Agreement shall
be in writing and shall be given by personal delivery or by mailing the same,
certified mail, return receipt requested, postage prepaid, as designated below,
or a party may hereafter by notice given as herein provided designate a
different address to which written notice to that party may be given:
Xxxxx Shoe Company, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
ATTENTION: Xxxxxx X. Xxxxx
Vice President, Distribution
Xxxxx Shoe Company Division
Xxxxx & Xxxxxx Stores Company
0000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
ATTENTION: Xxxxxxx Xxxxx, Director of Logistics
and Transportation
Any notice personally delivered or mailed by one of the parties shall be deemed
given, and shall be effective for all purposes, upon personal delivery or two
days after deposit in the mail, if properly addressed and postage has been
prepaid.
Section 12. (a) This Agreement shall be executed in counterparts, and
each counterpart shall be deemed to be an original. This Agreement shall become
effective when
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counterparts have been executed by and delivered to the parties hereto.
(b) Neither party to this Agreement shall assign or
transfer this Agreement, its rights, claims, interests, or monies due or to
become due hereunder, without the prior written approval of the other party. No
assignment shall relieve the assignor of its duties and obligations under this
Agreement.
(c) This Agreement embodies all understanding between the
parties hereto with respect to the subject matter hereof. Any promises,
agreements, representations or obligations which may have been previously made
or undertaken by any of the parties and not set out herein are canceled and
shall be of no further force or effect, and this Agreement shall not be amended
or modified in any way, except by a written instrument executed by the parties
hereto.
(d) No forbearance by any party to require performance of
any provision of this Agreement shall waive such provision or the right
thereafter to enforce it. No waiver of any breach or default shall waive any
subsequent breach or default, or the provision or provisions breached or with
respect of which default occurred. No waiver of any kind shall be effective or
binding unless it is in writing and is signed by the party claimed to have
given, consented to, or suffered it.
(e) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect, and this Agreement shall be construed as if
such invalid or illegal term or provision or term or provision incapable of
being enforced had not been inserted herein.
(f) The validity, construction, and performance and effect
of this Agreement shall be governed by and construed under and in accordance
with the laws of the State
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of Missouri, without regard to conflict of law provisions, insofar as is legally
possible, regardless of the place of execution or performance, and the parties
hereby consent to the jurisdiction of the Courts of Missouri.
(g) This Agreement shall survive the Closing and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(h) Either party to this Agreement who prevails against
the other party to this Agreement through court judgment, arbitration award or
similar enforcement action shall be paid by such party, and such party shall be
liable to pay, any and all costs and expenses, including, but not limited to,
reasonable attorneys' fees, which may be paid or incurred by said party in
enforcement of its rights under this Agreement against such party or in
enforcement of the performance of the obligations of such party.
(i) Nothing in this Agreement shall be deemed or construed
to constitute the parties a joint venture, partnership, association,
unincorporated business, principal and agent, employer and employee, or other
separate or similar entity.
(j) Neither party to this Agreement shall release
confidential information to third parties concerning this Agreement and the
business of the other except to the extent such release may be required by law.
Confidential information shall be deemed to be information the confidentiality
of which is material to the success of either party's business other than
information which is, or becomes, through no fault of the other party from the
date of this Agreement forward, published or otherwise available to the public.
In the event either party shall become required to disclose confidential
information, such party agrees to first notify the other
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party, where feasible, so as to permit such party the opportunity in which to
oppose the disclosure.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
XXXXX & XXXXXX STORES COMPANY XXXXX SHOE COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ R. E. Xxxxxxx, Jr.
-------------------------------- --------------------------------
Title: EVP Title: Vice President
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EXHIBIT A
PERFORMANCE
STANDARDS
Xxxxx Shoe shall perform the function of picking and packing the Merchandise for
Xxxxx & Xxxxxx. The standards of picking and packing will be as follows:
1. Xxxxx & Xxxxxx will provide Xxxxx Shoe with a listing of stores and the
day(s) that the stores are to be shipped.
2. Xxxxx Shoe will pick, pack and ship all allocations that are available
within two (2) working days of receipt of allocation.
3. As to holidays and days that Xxxxx Shoe is closed, all stores that would
have been shipped for that day will be shipped the following work day,
along with all other stores for that day.
[Exhibit B, diagram of space available in warehouse, omitted. The Registrant
undertakes to furnish supplementally a copy of such diagram to the Commission
upon request.]
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