THIS AGREEMENT is made this 7th day of March,
1988 between EASCO HAND TOOLS, INC., a Delaware
corporation ("Seller") , and SEARS, XXXXXXX AND CO., a
New York corporation ("Sears") ;
WITNESSETH
The Parties hereto mutually agree as follows:
1. (a) Seller agrees to manufacture and sell to Sears, and
Sears agrees to purchase from Seller, in each contract year
during the term hereof, seventy percent (70%) of Sears
requirements of Sears "Craftsman" grade socket wrenches and
accessories and flat wrenches (open end, box end and
combination end) of the types currently being manufactured by
Seller for Sears, as purchased through Sears Department 609
(hereinafter collectively called "Product"). Sears shall have the
right, at its option, to purchase from Seller and to require Seller
to manufacture and sell to Sears in any contract year during the
term hereof, at the prices and subject to the terms of this
Agreement, additional quantities of product, not exceeding,
however, Sears total requirements thereof for such year.
(b) The parties may agree to the sale and purchase of
item(s) of product outside of this Agreement and under different
prices, terms and conditions except that such purchases shall be
counted as if purchased hereunder for purposes of determining
whether Sears has met its minimum purchase obligation. Such
purchases shall be subject to the terms and conditions of this
Agreement unless otherwise modified. Such purchases and any
additional costs incurred because of them shall not be
considered in establishing, in accordance with Schedule A,
estimated manufacturing costs and prices for goods purchased
under this Agreement. Such product purchased outside this
Agreement shall be treated as if such purchases were additional,
unanticipated, and unestimated sales by Seller for purposes of
estimating manufacturing costs and establishing prices.
However, purchases of product made outside this Agreement
and the costs attributable or allocable, in accordance with
Schedule A, to product purchased outside of this Agreement,
shall be included in the determinations of any excess under
Paragraph 5 hereof as if such product were purchased by Sears
under this Agreement. All such agreements to purchase items
outside of this Agreement shall be in writing and signed by the
Vice President in charge of the appropriate Sears merchandise
group.
2. It is the intent of the parties that product manufactured
by Seller for Sears will be scheduled for production during the
term hereof so as to meet Sears reasonable delivery
requirements, and insofar as possible to achieve manufacturing
efficiency and economical production. Each contract year shall
be divided into two (2) production periods beginning,
respectively on the first day of January and July. Sears shall
furnish to Seller, at least one hundred and twenty (120) days
before the beginning of each contract year, a written estimate of
Sears requirements of product for the ensuing contract year.
This estimate will not be a firm commitment by Sears, it will be
provided as a guide to Seller for purposes of production
scheduling and cost development. Within fifteen (15) days after
receipt of such written estimate of Sears requirements of
product for the contract year, Seller shall furnish Sears
Department 609 a written statement of its estimated capacity for
production of product during such contract year, and a written
statement of Seller's computation of its estimated
"manufacturing cost", as defined in Schedule "A" hereof, of
product to be manufactured for Sears during such contract year,
based an Sears estimated requirements for said contract year.
Such statements of estimated cost shall show, as accurately as
Seller can determine each element entering into "manufacturing
cost" of product and Seller's standard cost hereinafter referred
to. Thereafter, and at least thirty (30) days before the beginning
of each contract year, the estimated "manufacturing cost" to be
used in fixing the contract price to be charged for product to be
manufactured during such contract year (including both
production periods) shall be agreed upon by Seller and Sears, or
otherwise established as provided in Paragraph 7 hereof. Sears
shall then immediately after the estimated manufacturing cost is
so agreed upon or otherwise established, place with Seller a
firm production order for the first production period of the
contract year at the contract price determined in accordance
with the provisions of Paragraph 3 hereof. Sears shall place
with Seller a firm production order for the second production
period of the contract year, at least thirty (30) days prior to the
beginning of such production period, at the same contract price
as determined in accordance with the provisions of Paragraph 3
hereof for the contract year. Notwithstanding the foregoing,
prior to the due date of the firm production order for the second
production period of the contract year, Sears, at its sole
discretion, may revise its written estimate of Sears requirements
of any product for the contract year, and in the event Sears does
such a revision, Sears and Seller shall review the sales,
inventory, production and cost and may agree to adjust the
estimated manufacturing cost to be used to establish the contract
price for any such product the subject of such a revision, to the
extent necessary as a result of Sears revision of the written
estimate of Sears requirements of such product for the contract
year provided that Seller may include considerations of
updating its estimate of manufacturing cost. The revised
contract price established by any such adjusted estimated
manufacturing cost shall be calculated in accordance with
paragraph 3(a). The contract price for the second production
period order shall then be adjusted upward or downward in
amounts determined by Sears for each product so that the total
contract prices paid by Sears for all estimated product
requirements for the contract year, as revised would equal the
amount which would be paid if the revised contract price had
been in effect for the entire year. If Sears purchases two or
more products of different specifications from Seller, the
foregoing procedure shall be followed with respect to each item
of product.
3. (a) Except for items of product purchased by Sears
from Seller which are of like grade and quality as items then
sold domestically by Seller to its other customers and subject to
the provisions of Paragraph 4 hereof, the contract price for each
item of product to be produced for Sears during each production
period shall equal the amount determined by dividing the
estimated "manufacturing cost," excluding the no profit items
thereof, by the number determined by subtracting from one the
decimal figure equivalent to the net operating profit rate plus the
no profit items of "manufacturing cost". [Contract Price =
"manufacturing cost" - no profit items of manufacturing cost" =
1- .127) + no profit items of "manufacturing cost".] The net
operating profit rate shall be twelve and seven-tenths percentage
(12.7%).
The contract price during each production period for
buyout items, which are defined for purposes of this Agreement,
as items approved by Sears purchased by Seller from other
sources for inclusion in combination with product manufactured
by Seller in product its sold by Seller to Sears hereunder, shall
equal (1) the estimated net landed cost thereof and (2) any
"manufacturing cost," as defined in Schedule A, allocable in
accordance with sound and accepted accounting principles to
any such buyout items (which allocable "manufacturing cost"
shall not be included in the "manufacturing cost" of any
product), both (1) and (2) as established for such period by
agreement of the parties, plus (3) a profit equal to seven percent
(7%) of such costs excluding any no profit cost items. There
shall not be any settlement between Seller and Sears with
respect to any variance between the amount of the actual net
landed cost and the estimated net landed cost of the buyout
items provided, however, that any cost increase or decrease
accepted by Sears from current Sears sources for items, which
are purchased by Easco after the effective date of such increase
or decrease and are included as buyout items in product sets
Easco provides to Sears pursuant to this Agreement, may result
in an increase or decrease, respectively, in the cost of such
product sets, but only to extent of the amount of the net
aggregate cost increase or decrease resulting from Sears
accepted price increase or decrease for items included as buy
out items in such sets.
(b) Subject to the provisions of Paragraph 4 hereof,
Seller's price to Sears (F.O.B. shipping point) for each item of
product to be manufactured for Sears during each production
period which is of like grade and quality as an item sold
domestically by Seller to any of its other customers, shall equal
the net price for said item then charged by Seller to such other
customers less a differential (if any) which makes due
allowance for differences in the cost of manufacture, sale, or
delivery for or to Sears, resulting from the differing methods or
quantities in which said item of product is sold or delivered to
Sears as compared to such other customers of Seller. Said
differential shall be computed prospectively in accordance with
generally accepted accounting principles, and shall be based
upon estimates which fairly reflect past results.
4. Seller's "delivered price" of product for any
production period to a Sears Catalog Merchandise Distribution
Center ("CMDC") shall mean Seller's proposed contract price
for such period, determined pursuant to Paragraph 3 hereof, plus
the cost of transportation of product from Seller's plant to such
CMDC. The term "competitive delivered price" shall mean the
lowest price (except a distress price) quoted to Sears for said
production period by any other reputable manufacturer or
source for the same or similar product of comparable kind and
quality, plus the cost of transportation of said product from the
plant of such other manufacturer or source to a Sears CMDC. If
Seller's "delivered price" of product to any Sears CMDC
exceeds the "competitive delivered price" to such CMDC, and
Sears gives Seller written notice to that effect before placing its
order with Seller for any production period, then Seller shall,
within ten (10) days after receipt of such notice, advise Sears in
writing that it will reduce or refuses to reduce its contract price
to each such CMDC and to the retail stores served by each such
CMDC, to such extent that Seller's "delivered price" to each
such CMDC will not exceed the "competitive delivered price"
to that CMDC. If Seller refuses to so reduce said contract price
or fails to advise Sears of its decision within the aforesaid ten
(10) day period, Sears shall have the right, in its discretion, to
purchase from such other manufacturer or source all or any part
of the quantity of product required by Sears in the territory
served by any such CMDC, and Sears obligations to purchase
and Seller's obligation to manufacture and sell product
hereunder shall be reduced by the amount of such purchases
from such other manufacturer or source.
5. Within ninety (90) days after the end of each contract
year hereof, Seller shall determine by audit the actual
"manufacturing cost", as defined in Schedule A, of product sold
to Sears hereunder during such contract year and the actual net
landed cost of, and "manufacturing cost" allocable to, buyout
items sold to Sears during such year. The actual manufacturing
cost shall be allocated between product sold to Sears under the
provisions of Paragraph 3(a) and product sold under the
provisions of Paragraph 3(b). If the total contract prices paid to
Seller for product and buyout items sold to Sears hereunder
during such year shall exceed the total contract prices for the
products, determined by the actual "manufacturing cost" in
accordance with Paragraph 3, and for buyout items, determined
by the actual net landed cost of, and actual "manufacturing
costs" allocable to, buyout items, plus the profit specified in
Paragraph 3 hereof applicable to buyout items sold to Sears
during such year, then Seller shall promptly pay, or, at Sears
option, credit to Sears, one-half of such excess. Seller shall
furnish to Sears within the aforesaid period of time a copy of
each such determination and a statement showing the amount
due Sears hereunder, if any.
6. The parties recognize that a standard cost accounting
system is desirable in order to establish effective cost control
procedures, to provide a means of accurately determining the
length of most efficient production runs and methods of
reducing seasonal production curver to enable the parties to
evaluate the costs peculiar to different specifications and
assortments of product, and to otherwise enable the parties to
achieve economical production. Accordingly, during the term
hereof, Seller shall maintain a standard cost accounting system
based upon sound and accepted accounting practice, using
standard cost representing Seller's determination of the most
economical costs attainable with its facilities under existing
conditions. Since lower costs and efficient production can best
be attained through the joint effort of Seller and Sears, it is
agreed that all books and records pertaining to such cost system,
including the budget for control of overhead, shall be available
for examination by Sears at all reasonable times. Seller shall
also furnish to Sears Department 609 monthly operating reports,
prepared from such standard cost accounting system and
showing a comparison of actual manufacturing cost, as defined
in Schedule "A", of product produced for Sears as compared to
standard cost and a statement of actual profit earned for the
period covered by each report.
7. Sears shall have the right to examine Seller's
accounting and cost records in connection with establishing
periodic contract prices and for the purpose of auditing the
year-end determination of actual "manufacturing cost". If the
parties do not agree on the computation of "manufacturing cost"
in establishing periodic contract prices or in making the
year-end cost determination, either party may have Seller's
books and records audited by a firm of independent certified
public accountants approved by the other party for that purpose.
Said audit and determination shall be final and binding upon
both parties hereto, and each party shall bear one-half the cost
of such audit.
8. Seller guarantees and warrants that product sold to
Sears under this Agreement will be of good workmanship and
material, free of defects, merchantable, and will conform to
specifications agreed upon by the parties. In the event any
product or buyout item sold to Sears under this Agreement
proves to be not in compliance with the above warranty, then
the same may be rejected by Sears and held or returned to Seller
at Seller's expense and risk, and Seller shall, at Sears option,
either replace such item of product or buyout item with a new
item of product or new buyout item respectively, and deliver the
same, shipping charges prepaid, to Sears, or to such person, and
at such place, as Sears may in writing direct, or give Sears full
credit for said returned item of product or buyout item, plus
transportation charges paid thereon by Sears. Ratchet wrench
warrantees hereunder shall be as modified by Letter Agreement
dated December 31, 1985, as amended by letter dated June 1,
1986, between Sears and Seller regarding the Ratchet Warranty
Reimbursement Policy Agreement.
9. Seller shall provide space on its premises for storage
of product and buyout items pending delivery and sale to Sears.
Product manufactured for Sears and buyout items shall be
stored at Seller's risk, shall be packed in accordance with Sears
written specifications, and shall be shipped by Seller at such
time, and in such manner as Sears shall reasonable direct in its
shipping instructions to Seller.
In the event Seller shall fail to ship, in compliance with
Sears shipping instructions, product or buyout item ordered by
Sears from Seller under this Agreement, then Sears shall have
the right, at its option, to purchase or commit itself to purchase
any of such product or buyout item from other manufacturers or
sources, and to the extent of the purchase or commitments
which Sears may place with other manufacturers or sources in
the exercise of such right, Sears obligations in respect to orders
placed with Seller shall be reduced accordingly, and the amount
required to be purchased by Sears under this Agreement shall
likewise be so reduced.
10. Product and buyout items shall be billed at the time
of actual shipment by Seller to Sears pursuant to Sears written
shipping instructions. Terms of payment shall be net thirty (30)
days from receipt of goods with no anticipation.
11. Seller guarantees that product manufactured and sold
and buyout items sold to Sears under this Agreement will not
infringe any patent, and agrees without cost to Sears, to protect,
defend, hold harmless, and indemnify Sears from and against
any and all claims, demands, suits, judgments, damages,
royalties, actions and causes of action whatsoever arising out of
any alleged infringement of any patent or claim of patent by
reason of the manufacture, sale, or use of product or buyout
items sold by Seller to Sears under this Agreement. In the event
of any claim that the manufacture, sale, or use of product or
buyout items sold by Seller to Sears under this Agreement
constitutes an infringement of any patent, Sears shall have the
right, at its option, in addition to all other rights and remedies it
may have, to cease purchasing from Seller the product or
buyout items affected by such claim, and to purchase such
product or buyout item from other manufacturers or sources
until such time during the term hereof as there shall be a final
adjudication of such claim favorable to Seller, and the total
quantity of product or buyout item required to be purchased by
Sears from Seller under this Agreement shall be reduced by the
amount of such purchases. For the purposes of this paragraph,
"product" shall be deemed to include any packaging supplied by
Seller.
12. Seller agrees to protect, defend, hold harmless, and
indemnify Sears from and against any and all liability and
expense resulting from any alleged or claimed defect in product
or buyout items, whether latent or patent, including allegedly
improper construction and design, or from the failure of product
to comply with specifications or with any express or implied
warranties of Seller or arising out of the alleged violation by
product or buyout items or in the manufacture or sale of any
law, statute, ordinance or administrative order, rule or
regulation. These agreements and obligations shall not be
affected or limited in any way by Sears extending express or
implied warranties to its customer, except to the extent that
Sears warranties extend beyond the scope of Seller's warranties,
express or implied, to Sears. Nor shall these agreements and
obligations be affected or limited in any way by any action or
inaction on the part of Sears pursuant to Paragraph 8 hereof.
Seller further agrees to obtain at its expense product liability
insurance, with a vendors' endorsement, in such form and
amount and in such company as may be approved by Sears in
writing. Satisfactory evidence of such insurance shall be
submitted to Sears upon request. For the purposes of this
paragraph, "product" shall he deemed to include any packaging
supplied by Seller.
13. Neither party shall be liable for any failure, inability,
or delay to perform hereunder, if such failure, inability or delay
be due to war, strike, fire, explosion or sabotage accident,
casualty, government law order or regulation, or any cause
beyond the reasonable control of the party so failing, but due
diligence shall be used in curing such cause and in resuming
performance. If Seller's performance shall be prevented,
delayed or materially impaired by any such cause, then this
Agreement, if Sears so elects shall be inoperative, in whole or in
part, so long as such situation continues, but without thereby
effecting an extension of the term of this Agreement, and all
costs and expenses incurred by Seller while this Agreement is
inoperative as aforesaid shall be excluded from the
determination of Seller's "manufacturing cost" in calculating
contract prices, but shall be included in the end determination of
cost provided under Paragraph 5 hereof.
14. Seller represents and warrants that product or
buyout items sold to Sears under this Agreement and any
extension thereof, will be produced in compliance with the
requirements of the Fair Labor Standards Act of 1938, as
amended, and any regulation issued thereunder. Seller further
agrees that a certificate of such compliance will be printed or
stamped upon each invoice issued to Sears covering purchases
made hereunder.
15. If any voluntary petition in bankruptcy or for
corporate reorganization or any similar relief shall be filed by
either party hereto, or if any involuntary petition in bankruptcy
shall be filed against either party and shall not have been
dismissed within sixty (60) days from the filing thereof under
any Federal or State Bankruptcy or Insolvency Act, or if a
receiver shall be appointed for either party or the property of
either party by any court of competent jurisdiction, and such
receiver shall not have been dismissed within sixty (60) days
from the date of his appointment, or if either party shall make
an assignment for the benefit of creditors, or if either party shall
admit in writing its inability to meet its debts as they mature,
then, in any such event, the other party hereto shall have the
right, at its option, to cancel this agreement by giving written
notice of such cancellation to the first-mentioned party,
whereupon this agreement shall immediately cease and
terminate.
16. The term of this Agreement shall extend for the
period of one (1) year commencing January 1, 1988, and ending
December 31, 1988, and thereafter for successive additional
periods of one (1) year each unless terminated as of December
31, 1988, or as of the end of any such additional one (1) year
period, by either party giving the other party at least one (1)
year prior written notice of such termination. Each "contract
year," as the term is used herein, shall commence on January 1,
and shall end on the succeeding December 31.
17. The parties hereto agree that as of January 1, 1988,
this Agreement shall supersede and cancel the Agreement dated
January 3, 1967 between Sears and Seller as amended but that
the Letter Agreement dated September 1, 1986 between Sears
and Seller regarding the exclusive manufacture and purchase of
Sears Best Products shall survive the cancellation of said
January 3, 1967 Agreement for the term of the Letter
Agreement as otherwise provided in paragraph 6 thereof or for
such time thereafter as Sears may decide during the term of this
Agreement.
18. All notices herein provided for, or which may be
given in connection with this Agreement, shall be in writing.
Notices given by Seller shall be addressed to:
SEARS XXXXXXX AND CO
Sears Tower
Attention: Vice President and Comptroller.
Xxxxxxx, XX 00000
or at such other address as Sears by written notice to Seller shall
have specified for that purpose.
Notices given by Sears shall be addressed to Seller at:
EASCO HAND TOOLS INC.
SPECIAL MARKETS GROUP
East Windsor Industrial Park
Attention: Vice President-Operations
Xxxx Xxxxxxx, XX 00000
or at such other address as Seller by written notice to Sears shall
have specified for that purpose.
19. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors
and assigns, provided, however, no assignment hereof by either
party shall be of any force or effect except with the prior written
consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers duly
authorized thereunto, as of the day and year first above written.
ATTEST: EASCO HAND TOOLS, INC.
/s/ By: /s/
Secretary Vice-President, Operations
ATTEST: SEARS, XXXXXXX AND CO.
/s/ By : /s/
Secretary Senior-Executive Vice President
Merchandising
Approved for Signature by
Department 700-7
/s/
Group Vice President
Approved for Signature by
Department 609
/s/
National Merchandise Manager
/s/
Senior Buyer
/s/
Buyer
SCHEDULE A
Definition of Manufacturing Cost of Product
(Including Warehousing and Shipping Expense)
Produced by EASCO HAND TOOLS, INC. ("Seller")
Under Agreement with SEARS, XXXXXXX AND CO.
("Sears")
Dated: March 7, 1988
General Definition
The term "Manufacturing Cost" as used in the attached
Agreement, shall mean the actual costs incurred by Seller,
which, under sound and accepted accounting principle;
consistently applied are applicable to product manufactured for
and sold to Sears, or buyout items sold to Sears.
Specific Definition
I DIRECT MATERIALS Actual net landed cost (after
deducting trade discounts) of materials used directly in
manufacturing product, to the extent that they can be definitely
measured and charged to specific cost units.
II DIRECT LABOR The portion of payroll covering those
employees working directly on the product which can be
definitely measured and charged to specific cost units.
III FACTORY OVERHEAD The portion of Seller's overhead
which under sound and accepted accounting principles is
assignable to product produced for Sears under the attached
Agreement. Overhead shall consist of that portion of the
following items of cost which are properly chargeable to
manufacturing operations.
(a) Indirect Materials supplies and those materials used in
manufacturing product other than those of direct material
classifications.
(b) Indirect Labor that portion of the wages of employes
engaged manufacturing operations which are not classified as
direct labor; including down time, shift and overtime premiums,
vacations and holiday pay, and the salary and wages of factory
supervisory personnel, of employes engaged in receiving,
packing, production engineering, quality control, inspection
warehousing, (including salary of field warehouse custodian),
shipping, and factory clerical employes, of such departments as
timekeeping, methods, time study, scheduling, purchasing, cost
accounting, payroll, first aid, and other departments performing
related manufacturing functions.
(c) Power, Light, Heat, Water and Rent.
(d) Repairs and Maintenance cost of keeping buildings and
equipment in repair and working condition; but excluding
expenditures covering new building and additions to or
extraordinary repairs to existing equipment or buildings,
whether owned or leased, if such expenditures, under sound and
accepted accounting principles, should be capitalized or
amortized over the life of a lease. The depreciation or
amortization on such expenditures however, shall be allowed as
an item of cost, as hereinafter provided.
(e) Insurance net premiums for all insurance, except
premiums for insurance covering lives of officers when Seller is
directly or indirectly a beneficiary.
(f) Taxes all taxes, excluding, however, any tax, or the
of any tax which is based on income.
(g) Depreciation and Amortization fixed asset valuation and
the rate of depreciation or amortization shall be based on the
actual cost and the useful life of the asset, but shall not in any
case exceed the values and rates used by the Internal Revenue
Service in determinating the allowable depreciation or
amortization for income tax purposes and must conform to
generally accepted accounting principles.
Asset cost will not be revalued for redetermination
purposes.
(h) Factory Employee Bonuses payments made to factory
employes, other than management or officers, resulting from a
definite bonus policy shall be considered an allowable item of
cost.
(i) Other Factory Expense general factory supplies,
perishable tools, telephone and telegraph, illness benefits,
workmen's compensation and such other factory expenses
incurred by factory departments as are properly chargeable to
manufacturing operations.
IV ADMINISTRATIVE EXPENSE The portion of Seller's
administrative expense applicable to product sold to Sears shall
be determined in accordance with generally accepted accounting
principles most appropriate to Seller's business. This involves
the principle of allocating specifically to each customer or
product those expenses which can be identified as having been
incurred directly for or with respect to a particular customer or
product. Costs of departments performing common functions
for more than one customer or product shall be allocated on an
equitable basis, taking into account the value of the services of
such department to each customer or product. Costs which do
not lend themselves to the above methods of allocation shall be
distributed to Sears product in the same proportion that the cost
of sales (direct materials, direct labor and factory overhead) of
product sold to Sears bears to the total cost of sales of all goods
sold by Seller during the contract year.
Administrative expense shall consist of executive,
administrative and general office and clerical salaries; including
bonuses paid office employees as a result of a definite policy,
and such portion of other expenses incurred by Seller as are
properly chargeable to administrative functions, such as
supplies, stationery, printing, postage, telephone, telegraph,
dues, subscriptions, legal fees, professional services,
depreciation of office machinery and equipment, office rent,
Federal and State Unemployment Insurance, and Federal Old
Age Benefit taxes applicable to administrative, executive and
general clerical salaries.
V. RESEARCH AND DEVELOPMENT EXPENSE The
amount of research and development expense charged to Sears
product shall be based upon the amount of time spent on
research and development work for Sears product versus the
amount of time spent on that work for products other than Sears.
The amount charged to Sears product on this basis must be
approved by Sears in advance as part of the written computation
of estimated manufacturing cost at the time periodic estimated
"manufacturing cost" are agreed upon. For the year-end
redetermination of "manufacturing cost", the item shall be the
lesser of the amount approved by Sears in advance or the actual
amount spent.
VI PENSION AND PROFIT SHARING PLANS
Contributions to pension or profitsharing plans shall not be
considered an item of cost unless approved in writing in
advance by Sears.
VII BONUSES TO OFFICERS AND MANAGEMENT The
parties recognize that management incentive bonus plans are
desirable; however, a part of bonuses paid to management, at
times, may represent a distribution of profits, and as such, is not
proper element of cost. Therefore, it is agreed that bonus
payments to management to be included in cost of Sears product
shall he agreed to by Sears in writing in advance.
VIII OTHER INCOME AND OTHER DEDUCTIONS That
portion of other income and other deductions which under
sound and accepted accounting principles is applicable to cost
of product produced and sold to Sears. Such items may include
cash discounts, recovery from sale of scrap and waste, the net of
short term interest income and short term interest expense and
fees paid to field warehousing companies for issuing warehouse
receipts on raw materials and finished goods pledged by Seller.
IX SELLING EXPENSE It is understood that no selling or
advertising expense is necessary, nor will be incurred by Seller
in the production and sale of product to Sears. However, the
cost of handling Sears orders, including invoicing, etc., shall be
considered as part of the cost of Sears product. In those
instances where it is necessary to incur expenses for contacting
or servicing the Sears account, such contacting or servicing
expenses will be included in the cost of Sears product where the
amounts involved have been agreed to by Sears in writing in
advance. For the year-end redetermination of "manufacturing
cost", this cost item shall be the lesser of the amount approved
by Sears in advance or the actual amount spent.
X. INTERCOMPANY TRANSFERS Where materials, parts
or services are furnished to Seller by a division, wholly-owned
subsidiary or parent company, all intercompany or interplant
profit on such items will be eliminated in computing the cost of
product manufactured for Sears. In the event that any
substantial amount of materials, parts or services are furnished
to Seller by a partially owned subsidiary or a company having
substantially similar ownership, then all inter-company charges
therefor shall be approved in writing by Sears in advance.
Provided, however, that there shall be allowed as an item of
manufacturing cost, the corporate charge levied upon Seller by
Seller's parent corporation, which is applicable to product sold
to Sears, to the extent that said corporate charge does not exceed
the lesser of Five Hundred Thousand Dollars ($500,000) or
Eight-Tenths of One Percent (0.8%) of the contract price to
Sears of product manufactured by Seller and sold to Sears under
the provisions of Paragraph 3 of this Agreement.
XI NONPROFIT ITEM Patent royalties and excise taxes
which Seller is required to pay on the product that is
manufactured for Sears, and transportation prepaid by Seller
pursuant to Sears request for delivery of product purchased by
Sears, shall be reimbursed to Seller by adding such items to the
manufacturing cost; however, the percentage of profits specified
in the attached Agreement shall not be added to such items in
the determination of contract prices or in the year-end
redetermination of prices.
XII ITEMS NOT APPLICABLE The parties recognize that
the following expenditures and receipts are not applicable to the
product sold Sears, and therefore, shall be excluded in the
determination of the manufacturing cost of product produced for
Sears:
(a) Cost of collecting other than Sears accounts and losses
due to uncollectible notes and accounts receivable.
(b) Interest on indebtedness of Seller having an original
maturity of one (1) year or more and dividends on capital stock.
(c) Organization or reorganization expense, unless otherwise
mutually agreed in writing by the parties; including, but not
limited to business acquisition or disposition costs and
expenses, parent charges resulting from, or in connection with,
an acquisition or reorganization, costs resulting from changes in
accounting methods or cost systems; capitalized cost resulting
from a reevaluation of assets; or expense in connection with
issuance or retirement of stock or funded debt.
(d) Expenditures for patents, profit or loss on investments,
and sales of capital assets.
(e) Selling and advertising expense, except expense incurred
in contacting (excluding commissions) and servicing Sears
account.
(f) Expenditures covering erection of new building, or
expenditures covering additions or extraordinary repairs to
equipment if, under sound accounting principles, such
expenditures, should be capitalized or amortized over the life of
a lease. The amortization or depreciation on such expenditures,
however, shall be allowed as an item of cost.
(g) All Federal and State income taxes and other taxes, or
portion thereof, based on income.
(h) Research and development expense not approved in
writing by Sears as specified herein.
(i) Bonuses paid to management of Seller, or bonuses based
on profits not approved in writing by Sears as specified herein.
(j) Contributions to pension or profit sharing plans not
approved in writing by Sears as specified herein.
The above schedule is hereby made a part of the aforesaid
Agreement between the undersigned parties.
EASCO HAND TOOLS, INC.
By: /s/
SEARS, XXXXXXX AND CO.
By : /s/
Senior-Executive Vice President
MerchandisingAGREEMENT
This is an agreement dated as of November 1, 1990, between
Xxxxxxx Corporation, a Delaware corporation ("Xxxxxxx"), and
its wholly owned subsidiary Easco Hand Tools, Inc, a Delaware
corporation ("Easco"), as one party, and Sears, Xxxxxxx and
Co., a New York corporation ("Sears"), as the other party.
Xxxxxxx, Easco and Sears mutually agree as follows:
Reference is hereby made to the Agreement dated March 7,
1988 between Easco and Sears whereby Easco agreed to
manufacture and sell to Sears and Sears agreed to purchase from
Easco in each contract year during the term thereof a certain
percentage of Sears Craftsman mechanics hand tool products
(the "Products") as specified in such Agreement (the "Basic
Contract").
1. (a) In the event that, during the term of the Basic
Contract, Xxxxxxx determines to sell or otherwise convey a
controlling interest in Easco or any other business entity or
group of assets owned directly or indirectly by Xxxxxxx which
includes the plants and infrastructure necessary to support the
supply of the Products for Sears under the Basic Contract, Sears
shall have a prior right to purchase such interest, entity or assets
on economically equivalent and otherwise substantially the
same terms and conditions as shall have been offered to
Xxxxxxx by a bona fide nonaffiliated purchaser. For purposes of
this Agreement, "control" or "controlling" shall mean any
person or entity owning more than 25% of the voting securities
and more voting securities than the persons currently controlling
the entity or those persons' affiliates, and "change of control"
shall exclude any spinoff of the business entity to Xxxxxxx'x
shareholders or broadly based public offering (one not made to
a controlling interest, other than to the persons who currently
control that entity), and shall exclude any transfer of control
within the Xxxxxxx group or the transfer of Xxxxxxx shares to
any entity controlled by the persons currently controlling
Xxxxxxx.
(b) This right of first refusal shall be exercisable by Sears
only if Sears business represents 60% or more of the past twelve
month's sales (in dollars) or manufacturing output (in dollars) of
the entity, entities or assets being sold. If Sears purchases any
such business entity, entities or assets, all existing business
relationships between such entity and Xxxxxxx, its subsidiaries
or affiliates, will continue under the same terms and conditions
that existed prior to the purchase by Sears.
2. In the event that, during the term of the Basic Contract,
Xxxxxxx sells or otherwise conveys, directly or indirectly,
control of plants, assets or infrastructure necessary to meet
Sears requirements for the Products to a named competitor of
the craftsman brand, as defined below, Xxxxxxx shall make a
"Partners Payment" to Sears equal to 7% of Sears purchases of
the Products during the twelve-month period immediately
preceding such sale or conveyance. The Partners Payment will
be paid in cash to Sears upon a sale to a named competitor and
shall not affect any other rights Sears has under this Agreement
or the Basic Contract. A named direct competitor means any of
four companies whose names are contained on a list delivered
by Sears to Easco every other year in connection with budgeting
meetings held under the Basic Contract, or any subsidiary or
affiliate of such named competitor. In case of a merger,
reorganization, sale of business or similar occurrence of any
named competitor, the successor to the business of such named
competitor shall be substituted for such named competitor,
whether or not notice of any such substitution is specifically
given by Sears to Easco.
3. Xxxxxxx shall commit and utilize sufficient funds as shall
be necessary and appropriate, to modernize and expand Easco's
manufacturing and related facilities to permit increased
production of the Products for Sears under the Basic Contract.
Easco's capacity will be increased with an initial target of
reaching an annual $250 million production rate of the Products
by December 31, 1992.
In order to provide a source of short term cash to assist
Xxxxxxx in funding the expansion and modernization, Sears will
negotiate in good faith with Easco at the 1991 budget meeting
to reduce existing payment terms on Easco's receivables from
Sears on purchases made on or after February 1, 1991 and
returning to normal payment terms on purchases beginning
January 1, 1992. The reduction in payment terms will be tied to
actual cash outflows associated with Easco's capital expenditure
program and will be based on a portion of the total cash outlay
required by Easco.
4. The Basic Contract, as previously amended, shall remain
in place except as amended by this Agreement. Following are
agreed upon amendments to the Basic Contract:
(a) Easco's agreement to manufacture and sell to Sears
and Sears agreement to purchase from Easco, in each contract
year, seventy percent (70%) of Sears requirements of Products
under Paragraph l(a) of the Basic Contract is hereby modified so
that now Easco shall have the right of first supply of Sears
requirements of the Products sold domestically through Sears or
its domestic subsidiaries or divisions (including Sears retail,
catalog, QVC and commercial sales operations and Western
Auto) or sold domestically through Sears authorized dealers of
the Products or, in order to protect the integrity of the Craftsman
trademark and, to the extent legally permissible, sold
domestically under a Craftsman brand license ("Product
Requirements") and Easco hereby agrees to manufacture and
sell to Sears such Product Requirements; provided that Easco
meets Sears requirements with respect to competitive costs,
quality Service of supply and production capacity and is able to
produce such Product Requirements in accordance with the
terms and conditions of the Basic Contract; and provided further
that Sears may purchase up to $59 million dollars, based on
Sears 1990 purchase cost per year of Product Requirements
from third party sources (The "$59 million exclusion").
In the event that Sears discontinues purchasing Products
from its current major third-party source, Easco will have the
right to bid for up to one-half of the volume no longer
purchased from such major third-party source. If Easco meets
Sears re- quirements with respect to competitive costs, quality,
service of supply and available production capacity, such
volume bid upon will thereafter be included under the Basic
Contract.
In the event of a change in control of Xxxxxxx or any entity
controlling Easco, or any other business entity or group of
assets which includes the plants and infrastructure necessary to
meet Sears Product Requirements, Sears shall have the option of
excluding up to $25 Million of purchases (based on Sears 1990
purchase costs) from the Product Requirements in the next to
the last year of the Basic Contract and up to $50 million of
purchases (based on Sears 1990 purchase costs) in the last year
of the Basic Contract term. This optional exclusion shall be in
addition to the $59 million exclusion.
The $59 million, $25 million and $50 million figures will be
adjusted for increases in Sears purchase costs above 1990 costs.
(b) Easco must first take into account the Product
Requirements in determining its production schedules and
product availability. Sears shall have the first right to review
and obtain exclusivity on new product developments or
innovations on the types of mechanics hand tools described in
the Basic Contract. The time period for exclusivity and
purchase volume required to support these products shall be
negotiated in good faith between Easco and Sears.
(c) At each annual budget meeting, Sears and Easco will
negotiate an allowance for certain overhead costs incurred by
Xxxxxxx to be included in manufacturing costs under the Basic
Contract. Such overhead costs included will be only for
functions that replaced those previously performed by Easco
under the Basic Contract and included only to the extent the
total cost thereof will be less than the total costs previously
incurred by Easco for such functions as permitted under the
Basic Contract; subject to increases or decreases after 1991,
based on actual costs, but not to exceed the percentage of sales
of those costs to 1991 sales to Sears.
(d) The competitive price clause of the Basic Contract shall
not be invoked by Sears with respect to Product Requirements
for purchases made through the 1993 contract year.
(e) Interest costs allowable under the Basic Contract shall be
limited to debt incurred for the working capital required to
operate the business as currently handled in redetermination
audits. Specifically excluded will be any debt incurred in an
acquisition of or by Easco or Xxxxxxx, or for the capital
required to modernize and expand Easco's facilities.
(f) Sears will receive product pricing consistent with its
position as Easco's largest volume customer of mechanics hand
tools. As such, Sears will receive all legal price advantages
relative to sale of product to others consistent with the total cost
of manufacturing and going to market with Sears versus other
customers.
(g) Paragraph 16 of the Basic Contract is modified to read in
its entirety as follows:
"The term of this Agreement shall extend for the period
commencing January 1, 1988 and ending December 31, 1995;
provided, however, that the term shall be extended
automatically one day at a time commencing January 1, 1991,
until terminated by either party giving the other party at least
five (5) years prior written notice of such termination. Each
"contract year", as the term is used in this Agreement, shall
continue to mean each calendar year, or, in the event of the
earlier termination of this Agreement, the remaining portion of
such calendar year, commencing on January 1, and ending on
the succeeding December 31.
In the event of a change of control of Xxxxxxx or any
other entity controlling Easco, Sears shall have the right to
extend the term of this Agreement to a date certain that is up to
five (5) years after the termination date as determined according
to the preceding paragraph of this Paragraph 16."
5. This Agreement shall be binding upon the assignees and
successors of the parties hereto; provided, however; that no
assignment hereof by either party shall be of any force or effect
except with the prior written consent of the other party.
6. Xxxxxxx shall give Sears 60 days prior written notice of
any event that would trigger Sears right of first refusal or to
extend the term of the Basic Contract, and Sears will respond in
writing within 60 days after receipt of such notice as to Sears
decision whether to exercise this right.
7. This Agreement shall have a term beginning as of the
date first above written, and ending with the termination date of
the Basic Contract.
8. This Agreement contains the entire understanding
between the parties concerning the subject matter hereof and
supersedes all prior negotiations and agreements, whether
written or verbal. This Agreement shall not be supplemented,
modified or amended except in writing by the parties hereto and
no person or individual has or shall have the authority to
supplement, modify or amend this Agreement in any manner
whatsoever.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers duly
authorized thereunto as of the date first above written.
XXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chief Executive Officer
EASCO AND TOOLS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
Chief Executive Officer
SEARS, XXXXXXX AND C0.
By: /s/ W. E. Xxxxxxxxx
W. E. Xxxxxxxxx.
Vice President
AGREEMENT
This Amendment Agreement is made as of this 22nd day of
December 1995 by and between Xxxxxxx Corporation, a
Delaware corporation ("Xxxxxxx"), and its wholly owned
subsidiary Easco II Hand Tools, Inc., a Delaware corporation
("Easco"), (Xxxxxxx and Easco are referred to herein as
"Xxxxxxx") as one party, and Sears, Xxxxxxx and Co., a New
York Corporation ("Sears"), as the other party.
Reference is hereby made to the Agreement dated March 7,
1988 between Easco and Sears, whereby Easco agreed to
manufacture and sell to Sears and Sears agreed to purchase from
Easco in each contract year during the term thereof a certain
percentage of Sears Craftsman mechanics hand tool products
(the "Products") as specified in such Agreement (the "Basic
Contract") and the Agreement dated as of November 1, 1990
between Xxxxxxx and Easco, as one party, and Sears, as the
other party, relating to certain right of first refusal of Sears,
Partners payment, Xxxxxxx'x and Easco's commitment to expand
and modernize relating to the Basic Contract and certain
amendments to the Basic Contract.
Whereas, the Parties hereto desire to make certain additional
agreements with respect to, and amendments of the Basic
Contract as provided herein.
The parties hereto mutually agree as follows:
1. Paragraph 10 of the Basic Contract is hereby amended to
read as follows:
10. Product and buyout items shall be billed at the time
of actual shipment by Seller to Sears pursuant to Sears purchase
order. Terms of payment shall be net sixty (60) days receipt of
goods.
2. The parties hereby agree that they shall in good faith
negotiate an agreement mutually acceptable to Sears and
Xxxxxxx to replace the Basic Contract and that this process shall
commence and be completed by the end of 1996.
The parties agree that until the completion of the negotiation
of such Agreement, Sears shall not be entitled pursuant to
paragraph 5 of the Basic Contract to any portion of the amount
the total contract prices paid to Easco for product and buyout
items sold to Sears under the Basic Contract during a contract
year exceeds the total contract prices for the products,
determined by the actual "manufacturing cost" in accordance
with Paragraph 3 of the Basic Contract, and contract prices for
buyout items, determined by the actual net landed costs of, and
actual manufacturing costs allocable to, buyout items, plus the
profit specified in Paragraph 3 of the Basic Contract applicable
to buyout items sold to Sears during a contract year.
Notwithstanding the foregoing, this waiver of certain
provisions of Paragraph 3 shall only be in effect as long as
Xxxxxxx continues to invest to remain the low cost domestic
provider and share any such cost reductions with Sears and to
provided to Sears industry leading quality, delivery and costs.
3. The parties have agreed to negotiate in good faith a new
agreement for Ratchet Warranty Returns to supersede the
requirements of the December 31, 1985 Ratchet Warranty
Reimbursement Policy Agreement (the "Ratchet Warranty
Policy") as amended by the June 1, 1986 Letter, and that in the
interim, in lieu of the requirements of such Ratchet Warranty
Policy, Xxxxxxx agrees to pay Sears in December of a contract
year $463,000 per contract year of the Basic Contract,
beginning with the contract year commencing January 1, 1995
as reimbursement for the ratchet warranty expense pursuant to
the Ratchet Warranty Policy; provided, however that
i. in the event Sears determines a product recall of a
ratchet or ratchets or other course of action is appropriate,
Xxxxxxx shall be totally responsible for all costs and expense
thereof and for refunding to Sears, its full purchase price of all
items returned or replaced pursuant to such product recall, and
the costs of any such recall or other course of action shall be
borne solely by Xxxxxxx, and Such cost shall not be charged
back to Sears in any manner whatsoever, including its inclusion
as an allowable "manufacturing cost" in the Basic Contract; or
ii. in the event of a product defect, where the parties
reasonably determine that the defective ratchet returns arc
excessive based upon the normal rate of return over the past
twelve months in which such Product has been in full
distribution to Sears provided the parties shall use other
measures if such Product has not been in full distribution,
Xxxxxxx shall reimburse Sears for all such ratchets returned at
the rate of 100% of Sears current cost for such ratchets and
there shall be no limit on Xxxxxxx'x liability for such
reimbursement for the year or years involved.
4. Xxxxxxx shall continue to invest in its operations to
remain the low costs provider and to attempt to further reduce
its costs of producing Product and will share such costs
reductions with Sears. Xxxxxxx agrees that there shall be no
price increase to Sears for any Product under the Basic Contract
prior to the end of 1996 unless mutually agreed to.
5. This Agreement shall be binding upon the assignees and
successors of the parties hereto; provided, however, that no
assignment hereof by either party shall be of any force or effect
except with the prior written consent of the other party.
6. This Agreement contains the entire understanding
between the parties concerning the subject matter hereof and
supersedes all prior negotiations and agreements, whether
written or verbal. This Agreement shall not be supplemented,
modified or amended except in writing by the parties hereto and
no person or individual has or shall have the authority to
supplement, modify or amend this Agreement in any manner
whatsoever.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers duly
authorized thereunto as of the date first written above.
XXXXXXX CORPORATION
By: /s/
EASCO HAND TOOLS, INC.
By: /s/
SEARS, XXXXXXX AND CO.
By: /s/
AMENDMENT NO. 3
This Third Amendment to the Agreement (this Third
Amendment ) is dated as of December 16, 1997, by and
between Xxxxxxx Corporation, a Delaware corporation (
Xxxxxxx Corp. ), its wholly owned subsidiary Easco Hand
Tools, Inc., a Delaware corporation ( Easco ) (Xxxxxxx Corp.
and Easco collectively, Xxxxxxx ), and Sears, Xxxxxxx and Co.,
a New York corporation ( Sears ).
Xxxxxxx and Sears are parties to that certain Agreement
dated as of March 7, 1988 (the Agreement ), as amended as of
November 1, 1990 (the First Amendment ) and as further
amended as of December 22, 1995 (the Second Amendment ).
Xxxxxxx and Sears desire to make certain additional
agreements and amendments with respect to the Agreement and
Second Amendment.
Now, therefore, in consideration of the mutual covenants and
agreements set forth herein, the parties hereby agree as follows.
1. Amendments to the Agreement: Upon the date hereof,
the Agreement shall be amended as follows:
a. Paragraph 1(b) shall be amended by deleting the third,
fourth, fifth and sixth sentences of Paragraph 1(b).
b. Paragraph 2 shall be deleted and replaced and by the
following: It is the intent of the parties that product
manufactured by Seller for Sears will be scheduled for
production during the term hereof so as to meet Sears
reasonable delivery requirements, and insofar as possible to
achieve manufacturing efficiency and economical production.
On November 1 of each year, Seller shall furnish Sears
Department 609 a written statement of its estimated capacity for
production of product during the following contract year, based
on estimated promotional and regular unit volume projections
provided by Sears.
c. Paragraph 3(a) shall be deleted and replaced as
follows: Except for items of product purchased by Sears from
Seller which are of like grade and quality as items then sold
domestically by Seller to its other customers and subject to the
provisions of Paragraph 4 hereof, the contract price for each
item of product, including buyout items (as defined hereafter),
to be produced for Sears during each production period shall be
the price mutually agreed upon in writing by Sears and Seller.
The contract price during each production period for buyout
items , which are defined for purposes of this Agreement as
items approved by Sears purchased by Seller from other sources
for inclusion in combination with product manufactured by
Seller in product sets sold by Seller to Sears hereunder, shall be
as set forth in the preceding sentence.
d. Paragraph 5 shall be deleted and replaced by the
following: No later than 30 days after the end of each calendar
quarter, Seller shall provide Sears with a profit and lossThe
information marked below with * and [ ] has been omitted
pursuant to a request for confidential treatment. The omitted
portion has been separately filed with the Commission.
statement (the Quarterly P&L ) for Seller's Sears business. No
later than March 31 of each year, Seller shall provide Sears with
an annual profit and loss statement (the Annual P&L ) for
Seller's Sears business. Both the Quarterly P&L and the Annual
P&L shall be (i) prepared in accordance with generally accepted
accounting principles, consistently applied, and (ii) be
consistent with the Seller's internal financial statements utilized
by Seller's management.
e. Paragraph 6 shall be deleted and replaced by the
following: Growth Share Rebate. No later than March 31 of
each year, Xxxxxxx shall pay Sears by wire transfer of
immediately available funds to an account specified in writing
by Sears, an amount (the Growth Share Rebate ) equal to a
percent (the Designated Percentage , as defined hereafter) [*
]
f. Paragraph 7 shall be deleted and replaced by the
following: Sears shall have the right to examine Seller's
accounting books and other records that Sears deems necessary
for the purpose of determining Seller's annual Net Sales to Sears
and the Growth Share Rebate (as defined in Section 6). If the
parties do not agree on the results of the Net Sales or the
Growth Share Rebate, either party may deliver notice of such
disagreement to the other (the Objection Notice ) and the
parties will use good faith efforts to resolve the dispute. If final
resolution is not obtained within 30 days after receipt of the
Objection Notice (the Resolution Period ), the parties shall
submit the dispute to binding arbitration by a major independent
accounting firm. Within 10 business days of the end of the
Resolution Period, each party shall select, and designate in
writing to the other party, an accounting firm. The two firms
selected by the parties, shall, within 15 business days, select a
third major independent accounting firm to solely arbitrate the
dispute. If a party shall fail to designate an accounting firm
within 10 days of the expiration of the Resolution Period, the
firm of the party that has selected a firm shall solely pick the
major independent accounting firm to conduct the arbitration.
The arbitration shall be governed by the Federal Arbitration
Act, 9 U.S.C. Sec. 1-16. Such arbitration audit and
determination shall be final and binding upon both parties
hereto, and each party shall bear one-half the cost of such audit.
g. The following shall be deleted from the last sentence
of Paragraph 13: and all costs and expenses incurred by Seller
while this Agreement is inoperative as aforesaid shall be
excluded from the determination of Seller's manufacturing cost
in calculating contract prices, but shall be included in the year-
end determination of cost provided under Paragraph 5 hereof.
2. Amendments to Second Amendment:
a. The following shall be deleted from paragraph
number two of the Second Amendment by the end of 1996 and
replaced with the following: as soon as practicable .
b. The following shall be deleted from paragraph
number two of the Second Amendment: Notwithstanding the
foregoing, this waiver of certain provisions of Paragraph 3 shall
only be in effect as long as Xxxxxxx continues to invest to
remain the low cost domestic producer and share any such cost
reductions with Sears and to provide to Sears industry leading
quality, delivery and costs.
c. Paragraph number four shall be deleted in its entirety.
3. Miscellaneous. This Third Amendment contains the
entire understanding between the parties concerning the subject
matter hereof and supersedes all prior negotiations and
agreements, whether written or verbal. This Third Amendment
shall not be supplemented, modified or amended except in
writing by the parties hereto and no person or individual has or
shall have the authority to supplement, modify or amend this
Third Amendment in any manner whatsoever. Except as
otherwise expressly provided by this Third Amendment, all of
the terms, conditions and provisions of the Agreement, as
amended, shall continue in full force and effect and that this
Third Amendment, Second Amendment and First Amendment
and the Agreement shall be read and construed as one
instrument.
In witness whereof, the parties hereto have caused this
Agreement to be executed by their respective officers duly
authorized thereunto as of the date first written above.
XXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxx X. Xx Xxxxx
Name: Xxxxxx X. Xxxxx Xxxx X. Xx Xxxxx
Its: Vice President Witness
EASCO HAND TOOLS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx /s/ Xxxx X. Xx Xxxxx
Name: Xxxxxx X. Xxxxxxxx Xxxx X. Xx Xxxxx
Its: President Witness
SEARS, XXXXXXX AND CO "OFFICIAL SEAL"
XXXXXXX XXXXX
NOTARY PUBLIC STATE OF
ILLINOIS
My Commission Expires 06/30/2001
By: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxx Xxxxx
Name: Xxxxxx X. Xxxxxxx
Its: President, Merchandising -- Full Line Stores
