As Amended
March, 1986
Standard Service Agreement, dated February 13, 1989, between XXXXXXXXX
XXXXXX, INCORPORATED, a New York corporation, located at 0000 Xxxxxxxx, Xxx
Xxxx, XX 00000, as Merchandising Counsel, herein called "Xxxxxx," and LAMONTS,
located at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000, as Client.
W I T N E S S E T H :
WHEREAS, Xxxxxx offers and the Client desires to subscribe to services
of Xxxxxx as Merchandising Counsel upon the terms hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. SERVICES TO BE RENDERED: Xxxxxx agrees to furnish to the Client
all or such of the following available services as the Client may desire:
(a) A broad range of information, including market coverage, fashion
reporting, advertising and sales promotion, marketing and research, direct mail,
personnel and training;
(b) Office space assigned to the Client in the Xxxxxx office for
purposes of meetings, displays and buying needs of the Client, together with
access to Xxxxxx general office space and facilities;
(c) Accompanying the Client's buyers in the New York market and
advising them regarding buying plans and programs;
(d) Upon the Client's request, placing individual purchase orders for
the account of the Client and reporting on the status thereof;
(e) Access to the full range of programs, services and functions
carried on from time to time by Xxxxxx and its related companies, including (i)
all programs of Xxxxxxxxx Wholesale Corporation, a wholesale subsidiary of
Xxxxxx; (ii) direct store import activities through Xxxxxx; (iii) exchange of
operating information with participating Clients through performance measurement
statistics programs; (iv) United States or overseas offices or agents operated
or used by Xxxxxx: (v) catalogue and statement enclosure projects; (vi) private
label programs and use of Xxxxxx' trademarks in this connection.
EXHIBIT A
2. AVAILABILITY OF SERVICES: During the term of the Agreement,
Xxxxxx will make available its full services to all Clients on the same basis,
or an equivalent alternative thereof.
3. CHARGES: (a) The Client, in addition to the fee hereinafter
provided for, will be charged for the office space assigned to it, the amount
of such charge to be based on the current rate per square foot, plus electricity
and yearly escalation charges for building operating costs and real estate
taxes.
(b) Xxxxxx may render to the Client and to other Xxxxxx' Clients at
their request certain services, including some of those referred to in paragraph
1(e), of such kind and nature as may require an additional charge. The cost of
such services shall be allocated and charged in whole or in part to the Client
and other participating Clients, the manner of such allocation to be determined
on an equitable basis by the Xxxxxx Board of Directors or Executive Committee,
herein called "Xxxxxx Board."
(c) All expenses and charges incurred by Xxxxxx for account of the
Client, including telephone calls and any other expenses incurred on the request
of the Client, shall be paid by the Client.
4. FEES FOR SERVICES: The Client will pay a fee to Xxxxxx in full
payment of the services to be rendered to the Client (and without regard to the
extent to which the Client calls upon Xxxxxx for such services or any of them)
based on the estimated net sales, adjusted for the actual current net sales of
the Client, as more particularly provided below. (See Schedule A)
(a) Not later than February 15th of each year during the continuance
of this Agreement, the Client shall notify Xxxxxx of the Client's estimated net
sales for the annual period ending nearest to the 31st of the following January
and of the Client's actual net sales for the annual period ending nearest to the
31st of the immediately preceding January. "Net sales" shall be deemed to
include all sales derived from any sources whatsoever, including owned
departments, leased departments, cost departments, alterations, work rooms,
contract departments, restaurants, employees' cafeterias, soda fountains, etc.;
provided, however, that no net sales from leased departments aggregating more
than 10% of the Client's total net sales for the annual period shall be included
in net sales for fee determination purposes.
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(b) Commencing in April of each year, the Client shall pay a fee
based on its current estimated net sales as determined in (a) above. In the
succeeding March, Xxxxxx shall credit or charge the Client for any amount
required to conform the fee to the Client's actual net sales for the preceding
annual period.
(c) The Client shall pay such fee, computed as above provided, on or
before the 10th day of each month, in equal installments (or, if the Client is
on a 4-5-4 calendar, on or before the 10th day after the end of each monthly
period, in adjusted installments).
(d) The Xxxxxx Board may in its discretion at any time or from time
to time increase or decrease the rate of fee, either on a fixed basis or on a
sliding scale for all or such part of a fiscal year as it deems advisable, and
Xxxxxx shall in such event immediately notify each Client of such change and the
effective date thereof.
(e) If a new rate of fee becomes effective, a Client dissenting to
the change shall be entitled to terminate this Agreement as provided, in
paragraph 6. In such case the Client shall continue to pay the fee at the rate
in force prior to the new rate during the period provided in paragraph 6.
(f) When separate stores, if any, of the Client are operated in a
sufficiently autonomous manner so as to require, in the judgment of the Xxxxxx
Board, the performing of substantial separate services by Xxxxxx for such
stores, the Client may be required by the Xxxxxx Board to pay an amount,
determined by such Board on an equitable basis, for any or all of such separate
stores.
5. DEPOSITS: (a) The Client agrees to participate in the Import
Deposit system and to make its full share of import deposits as determined
periodically by Xxxxxx, based on the ratio of the Client's prior year import
purchases through Xxxxxx and its subsidiaries to the total import purchases
therefrom of all Clients, and, in the case of Client's first year, based on
current year's projection of import purchases.
(b) The Client agrees to pay all invoices of Xxxxxx and its
subsidiaries according to the terms shown on such invoices. If the Client has
an unpaid balance
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over 30 days old at the end of any month due Xxxxxx or a subsidiary, the Client
agrees to make a Past Due Deposit with such company for the full amount of the
over-30-day balance, such deposit to be adjusted monthly based on the current
over-30-day balance. Interest at prime plus 1% will be assessed if the Past Due
Deposit is not paid.
(c) Deposits may not be used by the Client to offset amounts owed by
the Client to Xxxxxx or a subsidiary, but, subject to subparagraph (d), will be
returned to the Client to the extent of a reduction in the Client's import
purchases or over-30-day unpaid balances only after such reduction occurs.
(d) Xxxxxx and its subsidiary with which such deposit was made shall
have a security interest in any such deposit and shall have the right to set off
any such deposit at any time against a debt owed by the Client to either Xxxxxx
or a subsidiary.
6. PERIOD OF AGREEMENT: (a) Either party may terminate this
agreement at the end of any calendar month by giving at least 18 months prior
written notice to the other, such notice to be deemed given only when delivered
in person to an officer of the other party or mailed by registered mail to such
party. Xxxxxx may give such notice only: (a) by consent, whether or not given
at a meeting, of at least 3/4ths of its entire Board of Directors; or (b) if
authorized by a vote of 2/3rds of its outstanding stock entitled to vote. In
case of notice of termination by either party, the monthly fee of the Client
shall from the date of such notice be based on the actual net sales of the
Client for the 12-month period immediately prior to the date of such notice and
shall continue to be due and payable for all months to and including the
termination date, subject to subparagraph (b).
(b) If the Xxxxxx Board decides to discontinue availability of
full services theretofore available to the Client during the period between
the giving of notice and the termination date, and the Client is in a
position to utilize such services, the Client's continuing obligation to pay
the monthly fees shall cease with the month in which the availability of such
services is actually discontinued by Xxxxxx.
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(c) Failure to pay such fee on or before the tenth day of any month
during the period between the date of notice of termination and the termination
date shall make the remaining monthly fee payments become immediately due and
payable without notice.
7. PURCHASE OF STOCK: (a) (For new Clients) The Client hereby
agrees to purchase: (1) 950 shares of Class A stock of Xxxxxx at $449.12 per
share, on the following basis: Five shares for each full $1,000,000 of the
Client's net sales, as defined in paragraph 4, for the year ending on the
January 31 immediately prior to the date of this Agreement, the purchase price
per share being the book value thereof as determined by Xxxxxx' auditors on the
basis of assets represented by capital and surplus, excluding any goodwill that
may be on the books, as of the close of Xxxxxx' fiscal year preceding that in
which this Agreement is executed; and (2) 380 shares of Class B stock of Xxxxxx
at $1.00 per share, on the basis of one share of Class B stock for each full
$500,000 of the Client's net sales for the year ending on the January 31
immediately prior to the date of this Agreement. (See Schedule A)
or
(b) (For existing Clients) The Client has previously purchased ____
shares of Class A stock of Xxxxxx at a price previously agreed upon and ____
shares of Class B stock of Xxxxxx at $1.00 per share.
(c) The Client also agrees to purchase 50 additional shares of Class
A stock and 20 additional shares of Class B stock of Xxxxxx if and when the
Client's annual net sales, as defined in paragraph 4, increase to a level which
is $25 million per year in excess of the annual net sales for the year ended
January 1984; and to purchase 50 additional shares of Class A stock and 20
additional shares of Class B stock of Xxxxxx at the end of each year during
which the Client's net sales have cumulatively increased another $25 million.
Such additional purchase or purchases of Xxxxxx Class A stock shall be made at a
price per share based on the book value of Xxxxxx Class A stock, determined as
aforesaid, as of the close of Xxxxxx' fiscal year immediately preceding the
January 31 of the
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year in which such increase in the Client's annual net sales occurs. The Class
B stock shall be at a price of $1.00 per share. The price for such additional
Xxxxxx Class A and Class B stock shall be paid to Xxxxxx not later than March
31.
(d) When the Client has purchased a total of 1,200 shares of Class A
Stock and 480 shares of Class B stock of Xxxxxx, no additional purchases will be
required.
8. REPURCHASE OF STOCK: The Client agrees that during the
continuance of this Agreement it will not voluntarily sell, pledge or otherwise
dispose of any of such shares of stock referred to in paragraph 7 (other than by
reorganization) without the written consent of Xxxxxx given pursuant to a
resolution adopted by the Xxxxxx Board. Xxxxxx and the Client further agree
that in the event of termination of this Agreement, the Client will sell and
Xxxxxx, if and to the extent it may lawfully do so within the limitations
imposed by the laws of the State of New York upon the impairment of its capital,
will purchase the shares of Xxxxxx stock held by the Client, in the case of
Class B stock at $1.00 per share, and in the case of Class A stock at the book
value as determined by Xxxxxx' auditors on the basis of assets represented by
capital and surplus, excluding any goodwill that may be on the books, as of the
close of the fiscal year within which the notice of termination has been given,
less the amount of any indebtedness of the Client to Xxxxxx or any of its
subsidiaries. The stock will be tendered to Xxxxxx duly endorsed at Xxxxxx'
office against payment therefor at any time after notice of termination is given
under paragraph 6, but not later than one year after the effective termination
of this Agreement, on such date as may be specified by Xxxxxx by written notice
to the Client given at least five days in advance of the date so specified, and
upon failure of Xxxxxx to specify another date it will be transferred and paid
for upon the last business day of the fiscal year following the termination of
this Agreement. In case by reason of legal limitations Xxxxxx should be unable
to purchase any of the shares of Xxxxxx stock from the Client, Xxxxxx shall
notify all Clients to that effect and endeavor to procure among such Clients,
pro rata among those who desire to purchase the same, purchasers for such stock
within one year after such termination.
All certificates for shares of Xxxxxx stock purchased or subscribed
for by Xxxxxx Clients shall bear endorsed thereon a reference to the
restrictions upon transfer
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and the agreement to sell set forth in this and other Standard Service
Agreements.
The Client agrees, so long as it remains a stockholder in Xxxxxx, to
take such action as a stockholder by vote, consent or otherwise for reduction of
the capital of the corporation or other measures which may be recommended by the
Xxxxxx Board on advice of counsel in order to enable Xxxxxx legally to purchase
or retire, upon the terms of the Standard Service Agreement, the stock held by
any Client whose Standard Service Agreement is terminated.
9. OVERSEAS PURCHASES: (a) The Client agrees to make use of Xxxxxx
overseas offices, and, if a new Client, to make such use of these offices within
one year after becoming a Client.
(b) The Client agrees that when Client's own direct imports are
handled through Xxxxxx letters of credit, with Xxxxxx acting as agent even
though importer of record, Client will indemnify Xxxxxx from any liability,
loss, costs, damages, penalties and expenses of any kind, including reasonable
attorneys' fees, incurred by Xxxxxx arising out of such import transaction or
the use by anyone of such imported merchandise. Xxxxxx will file insurance
claims for goods that are lost or damaged while in transit from overseas.
10. POLICIES AND AMENDMENTS: (a) The Client in its relationship with
Xxxxxx and with other Clients of Xxxxxx agrees to abide by Xxxxxx' policies and
procedures and to participate in Xxxxxx' service-functions and activities
consistent with loyal membership.
(b) Except as to the paragraphs hereinafter specified, any provision
of this Agreement may be amended or revised by vote of a majority of the full
Board of Directors of Xxxxxx, but only if any such amendment or revision by its
terms is made effective as to all Clients of Xxxxxx covered by a Standard
Service Agreement substantially similar to this Agreement. However, no
amendment or revision conflicting with or superseding (1) paragraph 6 (Period of
Agreement); (2) paragraph 7 (Purchase of Stock); or (3) paragraph 8 (Repurchase
of Stock) shall become effective without the written consent of the Client.
11. This Agreement supersedes any Standard Service Agreement and any
amendment thereto previously executed by the parties hereto.
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12. All notices to Xxxxxx and to the Client shall be sent to them at
their respective addresses set forth at the beginning of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their officers or representatives thereunto duly authorized as of
the date and year first above written.
XXXXXXXXX XXXXXX, INCORPORATED:
BY: /s/ F.O. Xxxxxx, Jr.
--------------------------------
CLIENT:
LAMONTS /s/ Xxxxx X. Xxxx, III
-------------------------------------
BY:
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STANDARD SERVICE AGREEMENT
SCHEDULE A
PARAGRAPH 4
By special arrangement, the service fee will be modified as follows:
1. The annual fee will be based upon Lamonts fiscal year sales (November -
October) rather than February-January as outlined in paragraph 4(a).
2. For the first year of the contract only, Lamonts annual fee shall be
calculated net of leased department sales. Commencing with the second year
and each succeeding year, Lamonts annual fee shall be based on total sales
inclusive of leased sales as outlined in paragraph 4(a).
3. Lamonts first year service fee shall be reduced by the actual cost of fees
up to a maximum of $75,000 paid by Lamonts to its existing buying offices
(Xxxxx Xxxxxxxxxx and Xxxxxxx Xxxxxx) from March 1, 1989 through the end of
those contracts.
PARAGRAPH 7
By special arrangement, Lamonts purchase of Xxxxxx Class A and Class B stock
shall be based on Lamonts Fiscal 1988 (November 1987 - October 1988) sales of
$190,000,000. The aggregate purchase price of Xxxxxx Class A and Class B stock
on this sales volume amounts to $427,044.00 and will be paid in four (4) equal
installments according to the following schedule.
Date Amount Due
---- ----------
March 1, 1989 $106,761.00
March 1, 1990 106,761.00
March 1, 1991 106,761.00
March 1, 1992 106,761.00
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$427,044.00
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CLIENT: XXXXXXXXX XXXXXX, INCORPORATED:
LAMONTS By: /s/ F.O. Xxxxxx, Jr.
--------------------------------
By: /s/ Xxxxx X. Xxxx, III
-----------------------
Date: Date: February 13, 1989
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AMENDMENT TO STANDARD SERVICE AGREEMENT
The undersigned, a Client of Xxxxxxxxx Xxxxxx, Incorporated and party to its
Standard Service Agreement, pursuant to the recommendation of the Executive
Committee of the Board of Directors at its meeting held on September 28, 1989,
hereby agrees to Amendments to the Standard Service Agreement between it and
Xxxxxxxxx Xxxxxx, Incorporated, as follows:
1. To change the fourth line of paragraph 1(e) to read: "Xxxxxxxxx Worldwide
Company, ad division of," and to remove the references to "subsidiary" of
Xxxxxx in paragraph 5.
2. In paragraph 6(b) to insert at the beginning of the first sentence:
"Except as hereinafter provided," and to add a new sentence at the end thereof
as follows:
"However, Xxxxxx shall have no obligation to provide to a Client which has given
notice of termination any performance measurement, expense, merchandise, sales,
or other reports or statistics regarding the operations of Xxxxxx, its clients
or its vendors, and the discontinuance of the furnishing of such information
shall not terminate the obligation of the Client to pay monthly fees as above
provided for the 18 month period, nor shall the Client have any obligation to
furnish to Xxxxxx during this period any reports regarding its operations."
Dated: October 3, 1989
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XXXXXXXXX XXXXXX, INCORPORATED
BY:
--------------------------
CLIENT: /s/ Lamonts
----------------------
BY: /s/ Xxxxxxx Xxxxxx
--------------------------
AMENDMENT TO STANDARD SERVICE AGREEMENT
The undersigned, Client of Xxxxxxxxx Xxxxxx, Inc. and party to the Standard
Service Agreement, pursuant to the recommendation of the Executive Committee at
its meeting held on January 15, 1990, hereby agrees to an Amendment to the
Standard Service Agreement between it and Xxxxxxxxx Xxxxxx, Inc. as follows:
1. To add a new sub-paragraph 6(d) as follows:
"(d) In the event that the Client merges, consolidates, or is
otherwise combined with one or more other Clients, the 18-month termination
fee, whether paid over such 18-month period or earlier, shall continue to
be due and payable until paid in full. In connection with the calculation
of Fees for Services under paragraph 4, the net sales of the Client which
is terminating shall not be added to the net sales of the Client which is
not terminating until the 18-month period has expired. The shares of stock
of Xxxxxx issued to the Client which is terminating shall not be required
to be repurchased by Xxxxxx until such termination fee has been so paid."
Dated: February 5, 1990
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XXXXXXXXX XXXXXX, INCORPORATED
By: /s/ F.O. Xxxxxx, Jr.
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CLIENT: LAMONTS
By: /s/ Xxxxxxx Xxxxxx
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