EXHIBIT 10.7
SERVICES AGREEMENT
Services Agreement, dated as of November 1, 1995, between Rexel, Inc., a New
York corporation (the "Company"), and Rexel, S.A., a French societe anonyme
("Parent").
Parent, the beneficial owner of in excess of 40% of the outstanding common
stock of the Company, is one of the world's largest distributors of electrical
parts and supplies (the "BUSINESS"). The Company is engaged in the Business in
the United States. The Company wishes to obtain from Parent and Parent wishes to
provide to the Company the benefit of Parent's knowledge, expertise and goodwill
relating to Business, on the terms and subject to the conditions of this
Agreement.
Accordingly, the parties hereto agree as follows:
1. INTANGIBLE BENEFITS.
1.1 USE OF NAME. Parent hereby consents (i) to the use by the Company of
"Rexel, Inc." as the name of the Company and in connection with its Business and
(ii) to the registration by the Company with the Patent and Trademark Office of
the U.S. Department of Commerce of the word Rexel and the related logo as a
trademark.
1.2 INTANGIBLE BENEFITS. The Company acknowledges and agrees that the
Company's association with the worldwide Business of Parent provide substantial
benefits to the Company including, without limitation, in matters relating to
customers, suppliers, employees, business methods and know-how and financial
expertise. Parent shall make its personnel available for consultation by the
officers of the Company on matters relating to the Business; PROVIDED that
Parent shall not be obligated to furnish consulting services to the extent that
the Service Charge (as defined in Section 2.2) for such services would exceed
$3,000 with respect to the particular matter or $5,000 in any calendar month.
The benefits and rights furnished by Parent to the Company pursuant to this
Section 1.2 are hereinafter called the "INTANGIBLE BENEFITS".
1.3 PAYMENT FOR INTANGIBLE BENEFITS. The Company shall pay to Parent
$600,000 per year during the term of this Agreement in consideration for the
Intangible Benefits.
2. CONSULTING PROJECTS.
2.1 INITIATION OF CONSULTING PROJECT. Parent shall, upon the written
request of an officer of the Company, provide consulting services beyond those
included in the Intangible Benefits. Such consulting services shall be with
respect to any matter relating to the Business, including, without limitation,
the following:
(a) selling techniques, distribution, identification and development of
markets and strategies;
(b) product lines and product segments;
(c) logistics, the opening and furnishing of display rooms, and
distribution channels;
(d) sales promotion, advertising, brochures, marketing;
(e) selection and identification of suppliers;
(f) organization, administrative and accounting issues and personnel
management;
(g) financial matters, including cooperation with banks, cash management
and investment financing;
(h) preparation of budgets and internal controls;
(i) risk management and insurance matters;
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(j) electronic data processing, including selection, installation or
adoption of systems and software;
(k) asset management; and
(l) acquisitions and divestitures.
Each project as to which Parent provides consulting services pursuant to this
Section 2.1 is hereinafter called a "CONSULTING PROJECT".
2.2 CHARGES FOR CONSULTING PROJECTS. Promptly after completion of each
Consulting Project, Parent shall provide to the Company an invoice listing each
employee of Parent who worked on the Consulting Project, such employee's title
or job description with Parent, the time spent (expressed in hours) by each such
employee on the Consulting Project, a description in reasonable detail of the
work performed by such employee, such employee's Billing Rate in effect during
the period that services were provided, the product of the Billing Rate
multiplied by the time spent by each such employee (such product, the "SERVICE
CHARGE"). Such invoice shall also list Parent's out-of-pocket costs (excluding
all overhead and general corporate expenses) incurred directly relating to the
Consulting Project, which shall be multiplied by 110% to determine the amount
invoiced to the Company for out-of-pocket costs. The "BILLING RATE" shall mean,
for any employee of Parent, 110% of (i) the wages paid by Parent with respect to
such employee on an annual basis divided by 1920, multiplied by (ii) 1.4
(representing payments by Parent for social insurance payments and similar
charges), multiplied by (iii) 1.81 (representing an allocation of Parent's
overhead and general corporate expenses).
2.3 DETERMINATION OF APPROVED CHARGES. The Company shall submit to the
Audit Committee of its Board of Directors at a meeting held in May, June or July
and at a meeting held in October, November or December (and more frequently if
the Company so elects) all invoices furnished to the Company by Parent at least
30 days prior to each such meeting and not previously reviewed by the Audit
Committee, together with a memorandum prepared by an officer of the Company with
respect to each Consulting Project to which such invoices relate setting forth
the following: a brief description of the Consulting Project; the reasons for
the Consulting Project; the benefits obtained by the Company from such
Consulting Project; the reasons that Parent was selected for such Consulting
Project as opposed to other possible vendors; and such officer's opinion as to
whether the amounts invoiced for the Consulting Project are reasonable in light
of the benefits obtained by the Company therefrom. The Audit Committee
(excluding any member thereof that is an officer or director of Parent or any of
its Affiliates or a person that has a material financial relationship with
Parent or any of its Affiliates) shall review the invoices and related memoranda
and determine, in its judgment, by majority vote, the amount of the charges
included in each such invoice that is reasonable for the Company to pay in light
of the benefits obtained by the Company from the applicable Consulting Project
(such amount, with respect to each Consulting Project, the "APPROVED CHARGES").
The Company shall give Parent written notice of the Approved Charges with
respect to each Consulting Project within 30 days after they are so determined
by the Audit Committee. In the event that the Approved Charges with respect to
any Consulting Project are less than the amount invoiced by Parent, Parent may,
by written notice to the Company, discontinue its obligation to engage in
Consulting Projects pursuant to this Agreement.
3. PAYMENTS
3.1 INTANGIBLE BENEFITS. The Company shall pay to Parent one quarter of
the amount required pursuant to Section 1.3 for the Intangible Benefits on the
last Business Day of each calendar quarter, provided that the payment in respect
of 1995 shall be paid for the entire year on the last Business Day of 1995.
3.2 CONSULTING PROJECTS. The Company shall pay to Parent the aggregate
amount of all Approved Charges determined by the Audit Committee at any meeting
within 30 days after they have been so determined.
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3.3 PAYMENT MECHANICS. All payments hereunder shall be made, net of any
required withholding taxes, by wire transfer to such account of Parent in the
United States as Parent shall designate in written notice to the Company given
at least five Business Days prior to the date any such payment is due.
4. TERM
This Agreement shall commence effective as of January 1, 1995 and shall
terminate on December 31, 1996, provided that this Agreement shall be
automatically renewed thereafter for successive one year terms unless either
party shall have given the other party written notice at least 30 days preceding
the commencement of any such renewal term of its election to terminate this
Agreement effective at the end of the then current term. Any such termination
shall not affect the Company's obligations hereunder to pay Parent amounts due
for Intangible Benefits and Consulting Projects provided prior to such
termination.
5. MISCELLANEOUS
5.1 NONEXCLUSIVITY. Nothing herein shall restrict the Company's right to
obtain consulting services similar to those that may be provided by Parent
hereunder from any other person.
5.2 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement sets forth the
entire agreement and understanding between the parties with respect to the
transactions contemplated hereby and supersedes all agreements and
understandings with respect to the transactions contemplated hereby entered into
prior to the execution hereof. This Agreement may be modified only by a written
instrument duly executed by or on behalf of each party. No breach of any
agreement herein shall be deemed waived unless expressly waived in writing by
and on behalf of the party who might assert such breach.
5.3 NOTICES. Any notice, advice or communication required or permitted to
be given hereunder shall be in writing and shall be given by mail, courier
service such as DHL or Federal Express, telecopy or personal delivery to the
party to whom it is to be given at such party's address set forth on the
signature page to this Agreement or to such other address as the party shall
have furnished in writing to the other party in accordance with the provisions
of this Section 5.3. Any notice, advice or communication shall be deemed to have
been given when received or delivery is refused by the addressee.
5.4 BINDING EFFECT; THIRD PARTIES; HEADINGS; COUNTERPARTS. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors, which term shall include any successor by merger or
consolidation, and permitted assigns and their respective successors, except
that no party to this Agreement shall be entitled to assign this Agreement or
any interest herein or right hereunder and any such purported assignment shall
be void. Nothing in this Agreement is intended by the parties or shall act to
confer any right or remedy on any third party. The Article and Section headings
of this Agreement are for convenience of reference only and do not form a part
hereof and do not in any way modify, interpret or construe the intentions of the
parties. This Agreement may be executed in counterparts, and all such
counterparts shall constitute one and the same instrument.
5.5 CONSENT TO JURISDICTION. Each party hereto, hereby consents to, and
confers nonexclusive jurisdiction upon, the courts of the State of Florida and
the Federal courts of the United States of America located in the City of Miami,
Florida, and appropriate appellate courts therefrom, over any action, suit or
proceeding arising out of or relating to this Agreement. Each party hereto
hereby waives, and agrees not to assert, as a defense in any such action, suit
or proceeding that it is not subject to such jurisdiction or that such action,
suit or proceeding may not be brought or is not maintainable in said courts or
that this Agreement may not be enforced in or by said courts or that its
property is exempt or immune from execution, that the suit, action or proceeding
is brought in an inconvenient forum, or that the venue of the suit, action or
proceeding is improper. Service of process
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in any such action, suit or proceeding may be served on any party anywhere in
the world, whether within or without the State of Florida, provided that notice
thereof is provided pursuant to provisions for notice under this Agreement.
5.6 CERTAIN DEFINITIONS. The following terms shall have the respective
meanings indicated below for purposes of the Agreement:
"AFFILIATE" of a specified person shall mean a person directly or
indirectly controlling, controlled by, or under common control with, such
other person. For the purposes of this definition, "control" when used with
respect to any person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meaning
correlative to the foregoing.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which banks in Miami, Florida, U.S.A. are required to or may be
closed.
"PERSON" shall mean and include an individual, corporation, company,
partnership, joint venture, association, group, trust, and other
unincorporated organization or entity and a governmental entity or any
department or agency thereto.
5.7 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida applicable to
contracts executed and to be performed in such State.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
REXEL, S.A.
By: __________________________________
Name:
Title:
Address: 00, xxx xx Xxxxxxx
00000, Xxxxx, Xxxxxx
Fax: 000-00000000
Attention: President
REXEL, INC.
By: __________________________________
Name:
Title:
Address:150 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
X.X.X.
Fax: 000-000-0000
Attention: President
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