SERVICES AGREEMENT
This Agreement is made as of October 6, 1997, between General Housewares
Corp., 0000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx 00000 ("GHC"), and Xxxx
Distribution Company, 000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx 00000 ("Xxxx").
GHC and Xxxx agree as follows:
1. Services: GHC hereby retains Xxxx and Xxxx hereby agrees to be retained
by GHC for the purpose of providing the services described in the attached
Addendum 1, "Scope of Work", which is hereby incorporated into this Agreement
by reference. The services to be provided are referred to in this Agreement
as the "Work". The Work may include other services as may be requested by GHC
from time-to-time and which shall be set forth in amendments to Addendum 1,
which the parties shall append to Addendum 1 and which shall also become a
part of the terms of this Agreement. The Work shall be accomplished in
accordance with the mutually agreed upon performance standards which are
specified in Addendum 1 (the "Performance Standards"). These Performance
Standards are the same as those used by GHC at all of its distributing
locations. The Performance Standards attached may be revised by GHC., subject
to Xxxx'x approval which shall not be unreasonably withheld.
2. Liaisons:
(a) GHC and Xxxx shall each designate in writing an employee liaison who
shall work together to coordinate the parties' activities in performing the
Work. Either party may change its designated liaison at any time upon written
notice to the other, but both agree not to change their designated liaisons
more than is necessary to achieve prompt and consistent performance of the
Work.
(b) The two (2) liaisons designated by the parties shall meet regularly, to
set priorities for the Work and, as needed, to deal with issues that arise
with regard to Xxxx'x day-to-day performance of the Work. Xxxx and GHC each
agree to act in a reasonable manner so that the two (2) liaisons may
satisfactorily resolve any issues which may arise during the term of this
Agreement. In the event that the two (2) liaisons are unable to resolve any
matters between them, then the matter shall be resolved in accordance with the
procedures set forth in Paragraph 25.
(c) The liaisons are empowered to:
(i) develop the first drafts of the annual capital budget and expense budget
(the "Budget") in preparation for the annual meeting, described in Paragraph
16;
(ii) develop a proposed Operating Procedures Manual for approval by the
parties;
(iii) update the Operating Procedures Manual with regard to minor changes;
(iv) recommend to their respective management substantive changes to the
Operating Procedures Manual and to any other manual, schedule, exhibit, or
procedure under or pursuant to which the parties are operating; and
(v) undertake any other action provided for in this Agreement.
3. Machinery and Equipment: GHC shall acquire and make available to Xxxx new
machinery and equipment (the "Machinery and Equipment") for its use in
performing the Work. This "Machinery and Equipment" is listed on Addendum 2,
which list shall be agreed to by the parties when the specific machinery and
equipment have been identified. Addendum 2 shall be updated as equipment or
machinery is updated or added. All such Machinery and Equipment shall at all
times be labeled as the property of GHC. Xxxx shall be responsible for the
operation, maintenance, and repair of the Machinery and Equipment. Xxxx shall
maintain the Machinery in good repair, ordinary wear and tear excepted. The
cost of routine maintenance, repair, and replacement shall be reimbursed to
Xxxx by GHC in accordance with Paragraph 7. It is understood that the
equipment may have an ordinary useful period of use that will cause the
equipment to become unusable, nonfunctional, or non-operational during the
term of this Agreement. In such event, GHC shall promptly provide replacement
equipment and GHC shall pay for the cost of said replacement equipment. The
Machinery and Equipment supplied by GHC shall be used for performance of the
Work and for no other purpose. A capital equipment budget shall, when
necessary, be established for the provision of additional or replacement
equipment at the same time as the annual expense budget is prepared and
submitted for approval.
4. Supplies: GHC, in its discretion, reserves the right to directly provide
any supplies reasonably required by Xxxx. If GHC does not provide such
supplies, all supplies reasonably required for Xxxx'x performance of the Work
shall be furnished by Xxxx in accordance with the Budget. If Xxxx purchases
any such items, GHC shall reimburse it for its cost as described in Paragraph
7 below as long as they do not exceed the Budget. The liaisons shall consult
and coordinate regarding provision of supplies and make them a part of the
Budget.
5. Physical Facilities:
(a) Initially, Xxxx shall set aside approximately 131,000 square feet of
space at its facility located in the Airwest Industrial Park, Plainfield,
Indiana for performance of the Work (the "Space"). The location of the Space
is shown on the plat of the building attached hereto as Addendum 3. The Work
provided for by this Service Agreement shall be performed at such facility.
GHC agrees that the Space so set aside shall be the minimum square footage on
which the square footage charge provided for in Paragraph 7(b) of this
Agreement will be computed. The Space shall be secured, and kept in a clean,
orderly, and sanitary condition in accordance with the mutually agreed upon
GHC Performance Standards contained in Addendum 1.
(b) Xxxx shall, upon GHC's written request, provide GHC additional square
feet of space in Xxxx'x facility. This additional space shall be referred to
for purposes of this Agreement as "the Expansion Space". The Expansion Space
must be requested in 10,000 square feet increments only and Xxxx shall not be
required to provide the Expansion Space in any other area or configuration
unless the parties otherwise agree in writing. Notice of GHC's intent to
request the Expansion Space must be supplied to Xxxx no less than three (3)
months in advance of expansion. The square footage charge applicable to the
Expansion Space shall be the base rate applicable to the Space . In the event
that GHC should wish to exercise the option for the Expansion Space under this
subparagraph during the second five (5) years of the initial term, then the
term of this Agreement shall be extended by five (5) years from the date of
the expansion.
(c) Upon thirty (30) days written notice from GHC, Xxxx agrees to provide
short-term overflow space to GHC in 2,000 square foot increments on an as-
needed basis up to a maximum of 10,000 square feet (the "Short Term Space").
This Space shall be made available in the Xxxx facility in which the Space is
located. Short Term Space may be made available provided that there is space
available in the Xxxx facility in which the Space provided for by this
Agreement is located or in any then existing adjacent Xxxx facilities. Any
such Space in the same facility in which GHC is located shall be charged to
GHC at the Base Rent rate plus operating expenses provided for in this
Agreement. Should GHC require more than 10,000 square feet and Xxxx has such
space available in another facility, then the rental rate shall be mutually
agreed to by the parties in advance.
(d) In the event that GHC identifies that it will not be utilizing a portion
of the Space or Expansion Space GHC may notify Xxxx, in writing, of such fact
and request Xxxx to use reasonable efforts to rent such Space to other
warehousing customers. Provided, however, that:
(i) GHC must give Xxxx ninety (90) days advance notice of the non-use of the
Space and its intent to vacate the Space;
(ii) GHC must specify in the written notice the minimum time period during
which it will not utilize the Space;
(iii) the Space so identified may only be rented to compatible use customers,
subject to GHC's prior written approval; and
(iv) such a request may only be made with regard to a minimum block of 25,000
square feet of space or any other size to which the parties mutually agree,
but in no instance shall the leased Space during the term fall below 100,000
square feet.
If Xxxx is unsuccessful in filling the unused Space for which GHC has given
notice, GHC shall continue to be fully responsible for such Space under the
terms and conditions of this Agreement for a period not to exceed nine (9)
months from date of written advance notice of the non-use of and intent to
vacate the Space. Should Xxxx, with GHC's approval, lease the space at a rate
lower than the rate being charged to GHC, then GHC shall receive an offset of
any rate so collected by Xxxx from the third party until the nine-month notice
period is expired, at which time GHC will no longer be responsible for leasing
the vacant space for the remainder of the term.
6. Facility Overhead Expenses and Provisions of Utilities:
(a) To the extent they are not separately metered or otherwise paid by GHC,
GHC shall reimburse Xxxx for overhead expenses incurred for GHC operations
("Overhead Expenses"), as well as routine maintenance charges ("CAM Charges").
Such Overhead Expense charges shall be paid on the first day of each month
without the necessity of invoice. Overhead Expenses shall include utilities,
gas, electric (GHC will pay an additional charge for electricity separately
metered to operate power conveyor and sortation equipment), water, heat, sewer
expenses and trash removal, central station alarm/guards, and security.
Overhead Expenses will be calculated on the anniversary date of the
commencement date of the initial Space utilization by GHC. The calculation of
the Overhead Expense will be based on a review, reconciliation, and
adjustment of the preceding twelve (12) months' actual Overhead Expenses, if
any. In the event that the utilities for the GHC portion of the facility
cannot be individually metered and/or the other costs which make up the
facility overhead expense cannot be individually assigned or identified to the
GHC portion of the facility, and other users have operations similar to GHC's,
then a pro rata approach will be utilized for purposes of the annual
calculation of the Overhead Expense. GHC's pro rata share shall be based on
the number of square feet allocated to GHC, under Paragraph 5, compared to the
number of total square feet in the facility as a whole, which total square
footage is 413,350. In the event that other users have dissimilar operations,
the parties shall agree to an equitable division of the overhead expense in
writing, in advance, as part of the budget process. The CAM expenses shall be
limited to landscaping/grounds maintenance, trash sweeping, snow removal,
interior sanitation, janitorial, lighting and door/leveler repairs. The CAM
expenses shall be passed on to GHC on a pro rata share basis as set forth
above, but is agreed not to exceed $0.01 per square foot per month the first
year and are subject to an increase equal to the change in the CPI the
previous year for each year thereafter until the expiration of the term.
(b) In addition to the Overhead Expense, GHC shall reimburse Xxxx for GHC's
telephone charges related to the Work and shall pay an equitable share of the
line costs based on usage, if any.
(c) Xxxx shall supply GHC with utilities to serve the Space provided,
including trash removal, water, sewage use, electricity, and gas service to
the warehouse and office space. Utilities serving the GHC equipment shall, if
reasonable possible, be separately metered.
(d) All expenses referred to in this Paragraph 6 shall be verified by Xxxx in
writing if so requested by GHC.
7. Compensation: As compensation for the Work, GHC shall pay Xxxx as
follows:
(a) GHC shall pay to Xxxx a fixed management fee of $180,000.00 per year due
and payable in twelve (12) equal monthly installments beginning on the
Commencement Date, as defined in Paragraph 11(a), of the contract and annually
thereafter on the anniversary date of the Commencement Date. The fee shall
remain fixed throughout the entire initial term of this Agreement.
(b) GHC shall pay for storage service $0.27 per square foot per month (gross)
due in advance on the first of each month (the "Base Rent"). The Base Rent
shall be applied against the Space or Expansion Space (if any). The Base
Rental includes base year (1997) taxes, building fire insurance, roof
maintenance and structural building maintenance. In the event the
Commencement Date of this Agreement does not fall on the first day of a month,
the initial and final month square footage charge shall be pro rated
accordingly.
(c) GHC shall reimburse Xxxx its reasonable direct costs for:
(i) Labor, including wages, payroll taxes (state and federal), Indiana worker
compensation, health, dental, life insurance benefits, and retirement/profit
sharing contribution all related to performing the Work. Xxxx agrees that
wage scales/compensation to its employees, for which GHC is obligated to
reimburse it, shall not exceed the local market rates for like positions in
the Indianapolis area.
(ii) GHC shall reimburse Xxxx for all administrative and operational forms
and supplies provided by Xxxx needed to perform the work at cost plus five
percent (5%); and
(iii) GHC shall reimburse Xxxx for maintenance, repair and replacement of
Machinery and Equipment in accordance with Paragraph 3.
The items in (a) and (b) above shall be paid on the first of each month,
without the necessity of an invoice. Each month Xxxx shall invoice GHC for
the amounts payable to Xxxx as set forth in (c) above, detailing each of the
charges contained therein. GHC shall pay Xxxx'x invoices within fifteen (15)
business days of receipt.
8. Waste Disposal: After written approval from GHC, Xxxx agrees to remove
and dispose of any quantities of damaged products, whether damaged in
performance of the Work or whether damaged in transit to the Work location.
Xxxx shall account for in writing all damaged or waste products so disposed of
as well as the location and method of disposal. Xxxx shall not use, reuse,
sell, or otherwise dispose of any of GHC's products for its account.
Provided, however, that in the event that any product directed by GHC to be
disposed of will require special handling or considerations under any federal
or state environmental statute or regulation, GHC shall be responsible for
providing directions for disposal and for all cost associated with such
disposal, and GHC shall hold Xxxx harmless from any future damage or expense
arising out of such disposal, provided that the disposal was conducted
pursuant to GHC's directions.
9. Quality Control: Xxxx warrants that all Work performed by it under this
Agreement shall be performed in accordance with GHC's approved processes and
procedures included in the mutually agreed upon Performance Standards. A
reward incentive program (see Reward Incentive Program) will be formulated to
provide for a gain-sharing incentive should the parties achieve the
performance standards while operating at below budget plan levels, then the
savings would be split on a 50/50 basis.
10. Product Losses: Xxxx shall be responsible for proper handling and secure
storage of products delivered to it for performance of the Work. Xxxx shall
not be liable for any loss or injury to goods stored, however caused, unless
such loss or injury resulted from the failure to exercise such care in regard
to them as a reasonably careful person would exercise under like
circumstances.
11. Term:
(a) The term of this Agreement shall be five (5) years with an option to
extend the term for an additional five (5) years and shall become effective on
the later of the date of execution of this Agreement or the date the Space
has been set aside, cleared, and is available for use by GHC (the
"Commencement Date"). The parties shall sign a commencement certificate
acknowledging the actual Commencement Date. Xxxx shall give written notice to
GHC of the fact that the Space has been set aside, cleared, and is available
for use by GHC. The commencement date shall occur no later than five (5) days
from the date of notice from Xxxx to GHC that the Space has been set aside,
cleared, and is available for use by GHC.
GHC shall have the option, upon giving a six (6) month advance written notice,
to extend the term of this contract for an additional five (5) years. This
subsequent period of five (5) years shall hereafter be referred to as the
Extended Term. Should GHC elect to exercise this option to extend the term,
the storage service fee as stipulated in Paragraph 7(b) herein shall be
subject to an increase on the first day of the 61st month of the term equal to
$0.027 per square foot per month. The adjusted rent of $0.297 per square foot
per month would remain fixed throughout the Extended Term until the expiration
thereof.
The management fee provided for in Paragraph 7(a), $180,000 per year, provided
GHC elects to exercise its option to extend the term of this contract, will be
subject to an increase equal to $18,000 per year paid monthly beginning the
first day of the 61st month. The new management fee of $198,000 per year
shall remain fixed throughout the Extended Term until the expiration thereof.
All the other terms and conditions of this contract shall remain unchanged
throughout the Extended Term unless modifications are mutually agreed to in
writing as provided for in Paragraph 21.
(b) Notwithstanding anything herein to the contrary, either party may
terminate this Agreement upon thirty (30) days written notice to the other in
the event of the other's material breach of or material default under this
Agreement. If, however, the party in material breach or material default
cures the breach or default to the other's reasonable satisfaction within that
thirty (30) days notice period, or such longer curative period as may
reasonably be required, then the notice of termination shall be deemed to be
null and void and of no effect. For purposes of this Agreement, a "material
breach" is defined to be a breach which, if uncorrected, would deprive the
non-breaching party of the benefit of the contract either wholly or in some
vital aspect. The parties specifically agree that any one of the following
actions constitute a material breach of this Agreement:
(i) the filing of a voluntary or involuntary petition for relief under the
bankruptcy laws of the United States;
(ii) appointment of a receiver over a party's assets;
(iii) being placed on a "cash only" basis by creditors;
(iv) inability to meet financial obligations as they become due;
(v) violation of the confidentiality provisions of this Agreement, or
(vi) ceasing to do business as a going concern.
(vii) Xxxx fails to correct, after written notice from GHC repeated failure,
(three (3) times in six (6) months) by Xxxx to meet the Quality Standard.
A pattern of material breaches even if all such breaches are cured following
notice, shall be grounds for termination of this Agreement.
Should the termination be caused by a material breach by Xxxx, GHC shall have
the option to continue to operate from the Space or Expansion Space with its
own work force. Regardless of whether GHC chooses to utilize the Space or
Expansion Space, it is expressly understood that the Base Rent and utility
portion of the Overhead Expense charges provided for in Paragraph 7(b) (water,
gas, electric, etc.) will continue unless otherwise agreed to in writing by
the parties.
(c) If GHC chooses to vacate the Space, Xxxx agrees to use its best efforts
to attempt to obtain new warehouse customers under either similar services
agreements or general public warehouse services for purposes of utilization of
the Space vacated by GHC provided that it is expressly understood and agreed
that nothing contained herein shall require Xxxx to attempt to fill any said
Space if Xxxx has other unfilled Space available in its facility. If Xxxx is
successful in filling any or all of the Space vacated by GHC at a rate equal
to or greater than the total rate then being charged to GHC, GHC shall not be
charged for said Space during such time as the Space is utilized for the third
party customer. Should Xxxx, with GHC's approval, lease the Space at a rate
lower than the rate being charged to GHC, then GHC shall receive an offset of
any rate so collected by Xxxx from the third party and shall be responsible
for the difference between the rate paid by the third party customer and the
then applicable rate to GHC. It is expressly understood that if during the
term of this Agreement or any extensions hereof, such third party should
vacate the Space so leased, GHC shall continue to be fully responsible for
such Space under the terms of this Paragraph 11(c). GHC shall also be
responsible for said Space under the terms of this paragraph, if the Space is
leased and the third party customer fails to pay its account. In the event
that Xxxx is unable to obtain other warehouse customers to fill the Space
vacated by GHC at a rate equal to GHC's then current rate, or in the event
that Xxxx could not obtain a compatible tenant for the Space, then GHC may
retain a commercial real estate broker to rent the Space under a general
warehousing agreement or a similar service agreement to this Agreement,
subject to Xxxx'x prior written approval which shall not be unreasonably
withheld.
Should Xxxx be in material breach of this Agreement with the end result being
the termination of this Service Agreement and GHC desires to continue
operating from the facility with its own employed workforce, then the parties
do hereby agree to split the costs of dividing the space equally on a 50/50
basis. These costs would include the building of a dividing wall (or some
other barrier for which specifications are mutually agreeable) and the
provision of separate offices the size of which do not exceed 4,200 square
feet.
(d) After the termination of this Agreement under this provision, the only
obligations contained in this Agreement which will survive termination are
those set forth in this paragraph and in Paragraphs 8, 10, 11, 14, 15, 17, 18,
25, and 26.
12. Minimum Quantity of Work: Nothing herein shall obligate GHC to provide
Xxxx with any minimum quantity of Work. However, GHC will be obligated to pay
Xxxx a minimum Base Rent, based on the minimum square footage of 100,000
square feet specified in Paragraph 5 and calculated as established by
Paragraph 7(b).
13. Independent Contractor: Xxxx is an independent contractor and unless
otherwise specifically set forth in this Agreement, is not an agent or
representative of or joint venturer with GHC for any purpose. Neither party
shall have any right or authority to assume or create an obligation,
commitment or responsibility for or on behalf of the other except as the other
may expressly authorize in writing. Except as otherwise specifically set
forth in this Agreement, Xxxx shall be free to perform the Work in any manner
it deems reasonably necessary free from supervision by GHC. It is
specifically understood and agreed that the employees of Xxxx are not
employees of GHC and that Xxxx shall be responsible for and hold GHC harmless
from all liabilities with the exception of liabilities arising from the
negligence of GHC, its agents or employees, costs, taxes, and other expenses
or obligations with respect to its employees.
14. Confidentiality: Xxxx agrees that all information about GHC's business
which is disclosed to it or otherwise comes into its possession, directly or
indirectly, as a result of the services to be provided hereunder, including,
but not limited to, information as to GHC's customers, suppliers,
specifications, manufacturing methods and procedures, software programs, plans
and objectives, shall be kept strictly confidential and shall not be disclosed
to any third party nor used for Xxxx'x own benefit without GHC's advance
written approval.
15. Indemnification: Xxxx agrees to hold GHC harmless and to indemnify it
against any claims for liabilities, costs or expense including legal fees
arising out of or in connection with personal injury, death, or property
damage arising as a result of the negligence or claimed negligence or
intentional act of Xxxx, its agents or employees. Xxxx agrees to hold GHC
harmless and to indemnify it against any claims for worker's compensation,
employment discrimination, wrongful termination, or other employment-related
claims.
GHC, for its part, agrees to hold Xxxx harmless and indemnify it against any
claims for liabilities, costs or expense including legal fees arising out of
or in connection with personal injury, death, or property damage arising as a
result of the negligence or claimed negligence or intentional act of GHC, its
agent (other than Xxxx if it should be deemed to be an agent of GHC) or
employees in connection with the performance of the Work.
16. Total Quality Management:
(a) The parties agree that it is to their mutual advantage to maximize the
quality of service provided to GHC's customers. To that end, the parties
agree to cooperate with each other to continuously improve GHC's service to
its customers through seeking out and implementing efficiencies which may be
implemented by GHC to assist in Xxxx'x performance of the Work.
(b) Should Xxxx fail to meet the mutually agreed upon Performance Standards
contained in Addendum 1, the liaisons shall review the reasons for such
failure and attempt to resolve the reasons for the failure. If the liaisons
are unable to agree on a solution to prevent the recurrence of the failure, or
if the failure recurs for whatever reason, the matter shall be referred to
arbitration in accordance with Paragraph 25 below.
(c) Representatives of management from each party with authority to bind each
party shall meet not less than annually to revise, as necessary, the
Performance Standards, the Capital Budget and Expense Plan. Any revisions to
the Performance Standards shall be subject to the mutual agreement of the
parties.
17. Insurance: Xxxx and GHC shall be responsible for obtaining their own
respective property insurance covering their own property on a 100%
replacement cost basis and on an all risk basis. Xxxx will also be
responsible for obtaining statutorily required worker's compensation insurance
as required by the applicable worker's compensation or occupational disease
act, comprehensive general liability insurance with not less than
$2,000,000.00 combined single limit bodily injury and property damage
coverage, and automobile liability insurance with limits of liability of not
less than $1,000,000.00 combined single limit for bodily injury and property
damage. Xxxx shall arrange for GHC to be listed as an additional insured on
its general liability policy and shall provide GHC with current proof of
insurance at the inception of this Agreement and not less than annually
thereafter. Xxxx'x policy shall provide that it may not be canceled nor may
coverage be reduced without thirty (30) days prior written notice to GHC.
18. Access/Record Keeping:
(a) Xxxx agrees to give GHC reasonable access during normal working hours to
the facilities in which the Work is performed for purposes of inspecting any
repackaged product and for observing the Work.
(b) Xxxx shall keep accurate and separate books of account and records
covering all transactions and matters relating to this Agreement. GHC and its
duly authorized representatives shall have the right, at all reasonable hours
of the day, upon 24 hours' notice, to an examination of Xxxx'x records
relating to this Agreement. GHC shall have full and free access to the above-
mentioned records for this purpose and for the purpose of making extracts
thereof. All books of account and records shall be kept available for at
least six (6) years after the termination or expiration of this Agreement.
Any over or undercharges found to be due as a result of the examination shall
be immediately paid by the party found to be owing such charges.
(c) GHC shall have access to the facilities at any time to investigate their
cleanliness and Xxxx'x compliance with sanitation procedures contained in the
Performance Standards. Xxxx shall provide GHC with copies of Xxxx'x internal
sanitation inspection reports. Xxxx shall provide GHC with notice of any
inspection of the facility by governmental agencies as well as any reports
generated as a result of those inspections in the event that such inspections
relate to the quality and safety of GHC's products.
19. Effect of Uncontrollable Events: Neither party shall be liable to the
other for any loss, injury, delay, damage, or other casualty suffered or
incurred due to acts of nature, strikes, riots, war, fire, explosion,
governmental action, or other cause beyond the reasonable control of either
party and any failure or delay by either party in the performance of any of
its obligations due to one of the foregoing causes shall not be a breach of
this Agreement. The party affected by any such event shall immediately notify
the other of the occurrence of such event.
20. Damage to Space. If the Space cannot be used because of fire or other
damage and if any dangerous or defective condition exists on the Space, GHC is
not required to pay the Base Rent or pro rated Overhead Expense for the time
that the Space is unusable. If only a part of the Space cannot be used
because of fire or other damage, GHC shall pay Base Rent and pro rated
Overhead Expense for the usable part thereof. GHC shall have the sole right
to determine whether and which portion of the Space is usable. Xxxx shall
repair the damaged portion of the Space. GHC shall have the right to
terminate this Agreement if the damaged portion is not made usable by Xxxx
within ninety (90) days of the date the damage or destruction occurred.
21. Notices: Notices to be given to either party under this Agreement may be
delivered by hand or by certified or registered mail, return receipt
requested, mailed to the address for that party designated below or by
overnight delivery service directed to that address. The date of notice shall
be deemed to be the date notice is received in the case of notices delivered
by hand, by overnight delivery service and four (4) days after posting in the
case of notices delivered by certified or registered mail. Either party may
change its address for receipt of notices by providing the other with notice
of such change.
If by mail or hand-delivery:
NOTICE TO GHC: General Housewares Corp.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
ATTN: Xx. Xxxxxxx X. Xxxxxx
cc: Xxxxxxx X. Xxxxx
General Counsel
NOTICE TO XXXX: Xxxx Distribution Company
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxx
cc: Xxxxxxx XxXxxx
22. Entire Agreement: This Agreement constitutes the entire agreement
between GHC and Xxxx concerning the Work and supersedes all prior
communications, representations, agreements and understandings, whether oral
or written, made by either of them concerning the subject hereof. This
Agreement may not be modified or amended except by written instrument duly
executed by an authorized representative or officer of the party to be bound.
23. Compliance with Laws: Xxxx agrees that in the performance of the Work,
including, but not limited to, the disposal of any waste materials resulting
from the Work, it will comply with all applicable laws, rules, and regulations
of governmental authorities in connection therewith.
24. Authority: The parties hereby represent that they have full power and
authority to enter into and perform this Agreement and the parties know of no
contract, agreement, promises or undertakings which would prevent full
execution and performance of this Agreement.
25. Arbitration: The parties will attempt in good faith to promptly resolve
any controversy or claim, whether sounding in contract, tort, or otherwise,
arising out of or relating to this Agreement by negotiations between senior
executives of the parties who have authority to settle the controversy. The
disputing party shall give the other party written notice of the dispute.
Within twenty (20) days after receipt of said notice, the receiving party
shall submit to the other a written response. The notice and response shall
include (a) a statement of each party's position and a summary of the evidence
and arguments supporting its position, and (b) the name and title of the
executive who will represent that party. The executives shall meet at a
mutually acceptable time and place within thirty (30) days of the date of the
disputing party's notice and thereafter as often as they reasonably deem
necessary to exchange relevant information and to attempt to resolve the
dispute.
If the matter has not been resolved within sixty (60) days of the disputing
party's notice, or if the party receiving said notice will not meet within
thirty (30) days, the parties hereby agree that such claim or controversy
shall be resolved by submission to arbitration in accordance with the
arbitration provisions of the Indiana statutes.
The parties hereby agree that an arbitrator shall be selected from a list
provided by the American Arbitration Association, unless the parties
specifically agree in writing otherwise. Any arbitration will be conducted
according to the Commercial Arbitration Rules of the American Arbitration
Association, provided that the discovery rules of the Indiana Rules of Civil
Procedure shall be applicable and available to the parties. In the event of
any inconsistency between the Commercial Arbitration Rules of the American
Arbitration Association and this Agreement, the terms of this Agreement shall
control. All statutes of limitations which would otherwise be applicable
shall apply to the arbitration proceeding commenced under this Agreement.
Judgment upon any award rendered by an arbitrator may be entered in any court
having jurisdiction and may be enforced as any judgment rendered by a court of
competent jurisdiction.
The parties hereby specifically waive their right to file any action at law or
in equity arising from any implementation or interpretation of this Agreement
or the underlying transactions which gave rise to this Agreement except as
specifically provided herein. This provision requiring arbitration does not
affect any right of either party to exercise self-help remedies or take any
other action provided for under the Uniform Commercial Code, as adopted in
Nevada or Indiana, such as set-off, or to obtain provisional or ancillary
remedies such as injunctive relief or the appointment of a receiver, from a
court having jurisdiction, before, during or after the pendency of any
arbitration. The institution and maintenance of an action for judicial relief
for the pursuit of any provisional or ancillary remedies, such as injunctive
relief or declaratory judgment, or the exercise of self-help remedies which
are provided for herein, shall not constitute a waiver of the requirements of
arbitration created by this Agreement. This provision requiring arbitration
does not constitute a specific waiver of the right to trial by jury or to
proceed in any Indiana or Federal District Court or in the courts of any other
State, with the exceptions of the right to seek judicial assistance as
provided above, and the right to seek enforcement of or compliance with this
paragraph.
26. Effect of Expiration or Termination:
(a) Upon expiration or termination of this Agreement, the parties shall take
the following actions:
(i) Xxxx shall immediately cease, and cause its subcontractors to cease,
performing the Work; and
(ii) Xxxx shall cooperate with GHC so that within thirty (30) days of the
expiration or termination of this Agreement, GHC may make arrangements to ship
its products to a different location at GHC's expense.
(iii) Xxxx shall invoice GHC, and GHC shall pay Xxxx, for the Work performed
by Xxxx prior to the date of expiration or termination but after the date of
Xxxx'x last invoice, in accordance with Paragraph 7 above.
(b) The terms of Paragraphs 8, 10, 11, 14, 15, 17, 18, 24, and this Paragraph
25 shall survive the expiration or termination of this Agreement.
27. Attorney's Fees and Costs: Should either party to this Agreement be
required to retain the services of an attorney to enforce any term or
provision of this Agreement, and prevail, then such party shall be entitled to
recover any reasonable attorney's fees and costs so incurred.
28. Governing Law: This Agreement shall be governed, interpreted and
enforced in accordance with the laws of the State of Indiana.
29. Warranty. Xxxx hereby warrants that the Space is now in compliance with
all laws including but not limited to environmental and OSHA as well as local
or municipal rules or regulations and all insurance requirements.
By signing below, the parties agree to all of the above.
GENERAL HOUSEWARES CORP. XXXX DISTRIBUTION COMPANY
By:/s/ Xxxxxxx X. Xxxxxx By:/s/ Xxxx X. Xxxx
Xxxxxxx X. Xxxxxx Its: President
Its: Vice President
Chief Information Officer
By:/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Its: Vice President, General Counsel
SCOPE OF WORK AND SERVICES
ADDENDUM I
I. General
A. Communications regarding order processing and inventory activity are
intended to be communicated electronically pursuant to the Services Agreement.
B. Hours of warehouse operations will be scheduled by Xxxx to permit
compliance with the requirements of this Agreement. Typical hours of
operation are Monday through Friday, 7:00 a.m. to 4:00 p.m., excepting
scheduled holidays.
X. Xxxx is encouraged to participate in General Housewares Corp.'s ("GHC")
methods, systems, and product packaging and to provide feedback for
improvements that will enhance GHC's competitive position.
X. Xxxx Distributing Company agrees to perform upon GHC's request certain
display assembly, packaging, shrink-wrapping, kiting, etc. on an independent
work order basis. Compensation to Xxxx for such co-packer functions will be
determined by pre-performance bid submittals and subject to the written
approval of the GHC liaison. Specifications and instructions will be provided
to Xxxx by GHC and the GHC liaison will have the right to inspect the co-
packer operations to verify GHC quality standards are maintained in accordance
with the bid specifications. Payment for such co-packing functions shall be
in accordance with said bid.
II. Performance Standards. With respect to the physical receipt and shipment
of GHC products ("Products").
A. Normal order processing (in stock position) Xxxx shall ship and confirm
to GHC within three (3) workdays of receipt of order or ship on an order's
designated ship date.
B. Emergency orders (those with less than 48 hours notice from GHC) Xxxx
shall ship as soon as possible, but no later than twenty-four (24) hours after
receipt of order.
C. Normal receipt processing Xxxx shall receive and confirm receipt within
twenty-four (24) hours.
X. Xxxx will be responsible for meeting the customer's specific instructions
as provided in writing by GHC (for example, but not limited to the items set
forth in II A., B. and C. above, specific order instructions, customer route
guides, etc. (hereinafter referred to as the "Customer Specifications"). Xxxx
guarantees and warrants that it will meet or exceed Customer Specifications at
least ninety-eight percentage (98%) for each one (1) month period (the
"Quality Standard").
III. Clerical Order Processing and Other Clerical Duties Xxxx shall:
A. Receive daily orders from GHC.
B. Allow GHC electronic access to information regarding orders to facilitate
retrieving orders based on age or priority basis as required by GHC Customer
Service.
C. Maintain a perpetual inventory of products on Logistics Pro to provide
current information on Product availability, and transmit inventory status
reports to GHC daily.
D. Maintain necessary manual files on various documents, including receipt
reports, orders, bills of lading, information needed to reconcile
discrepancies, and other documents as directed by GHC.
E. Receive notification of inbound shipment of Products via Stock Transfer
Shipment Advice through Logistic Pro.
F. Prepare necessary shipping papers through Logistics Pro, but not limited
to, picking tickets, packing lists and bills of lading as well as those
documents required by order documents.
G. Provide necessary documentation to resolve customer deductions and/or
traffic claims.
H. Prepare and distribute month-end operational reports generated within
three (3) working days of the end of each calendar month. The monthly reports
shall include, but not be limited to: number of on-time shipped orders,
parcel service cost per hundred weight, and warehouse space utilization.
I. Provide special reports or analysis on a timely basis as requested by GHC.
IV. Receiving Operations. With respect to the physical receipt of shipments
of Products, Xxxx shall:
A. Receive and unload trucks or ocean container of Products daily, as
authorized by GHC.
B. Schedule the receipt of trucks of containers of Products so as to minimize
detention and demurrage.
C. Handle customer returns as authorized by GHC Customer Service.
D. Shipments should be checked for over, short and damage. Over, short, and
damage shipments shall be noted and reported to GHC and resolved with the
shipping location as soon as possible.
E. Products must be put away to facilitate FIFO controls and be available for
prompt order picking to minimize order exceptions.
F. Perform Quality checking as specified by GHC.
V. Inventory Management. With respect to the management of inventory, Xxxx
is responsible for the management and accuracy of inventory and shall:
A. Maintain housekeeping standards to provide a safe, efficient work
environment.
B. Cycle count locations and verify the accuracy of the inventory control
system.
C. Cycle count Products to ensure accurate available-to-ship information.
D. Upon GHC's request, cycle count selected Products and report results as
soon as possible, but no later than four (4) working hours.
E. Re-warehouse as required to utilize space efficiently.
F. Maintain FIFO controls.
VI. Order Picking/Shipping. With respect to orders picking and shipping,
Xxxx shall:
A. Pick and stage orders in conformance with Performance Standards to meet
scheduled ship dates. Perform checking operations to ensure order accuracy.
Follow FIFO controls established under V. F. above. Check Products for
obvious damage.
B. Xxxx Products with customer information as required by the order and the
carrier.
C. Inspect the carrier's equipment as required by the Performance Standards.
D. Provide void fillers, dunnage, and bracing as required for appropriate
protection of Products on truckload or intermodal shipments.
E. Insure that shipments comply with weight carrying restrictions.
F. Perform retail ticketing services as specified by GHC.
MACHINERY AND EQUIPMENT
ADDENDUM 2
Addendum 2, Machinery and Equipment, is to be submitted as an attachment to
this Services Agreement and become a part hereof at the time the machinery and
equipment is shipped to GHC.
PLAT OF AREA
ADDENDUM 3
Addendum 3, Plat of Area is to be submitted as an attachment by Xxxx to this
Services Agreement and become a part hereof.
COMMENCEMENT CERTIFICATE
General Housewares Corp. and Xxxx Distribution Company hereby sign this
Commencement Certificate in compliance with Paragraph 11(a) of the Services
Agreement between the parties applicable to the Plainfield, Indiana facility.
The signatures on this Commencement Certificate constitute acknowledgment by
General Housewares Corp. that Xxxx Distribution Company has given appropriate
written notice that the Space called for under the Services Agreement dated
October 6, 1997, has been cleared and is available for General Housewares
Corp.'s occupancy. It is understood by the parties that the signatures on
this Commencement Certificate constitute December 1, 1997 as the beginning of
the term of the Services Agreement.
This Commencement Certificate is effective as of the date December 1, 1997.
GENERAL HOUSEWARES CORP. XXXX DISTRIBUTION COMPANY
By:/s/ Xxxxxxx X. Xxxxxx By:/s/ Xxxx X. Xxxx
Xxxxxxx X. Xxxxxx Its: President
Its: Vice President,
Chief Information Officer
By:/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Its: Vice President,
General Counsel
Date: October 10, 1997 Date: October 6, 1997
