EXHIBIT 10.28
SERVICES AGREEMENT
This Agreement, effective as of March 1, 2001 , is between Sport Supply
Group, Inc. , a Delaware corporation having its principal place of business
at 0000 Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000 ("SSG") and EJB
Development, Inc., a New Jersey corporation having a principal place of
business located at 0000 Xxxxxx Xxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxx 00000
("EJB").
SSG directly and through its subsidiaries manufactures and distributes
sporting goods equipment.
EJB provides management information systems services ("MIS") for
programming, development and MIS operations.
EJB also provides certain telecommunications related services
("telecommunications").
SSG desires to utilize EJB for MIS services for programming,
development and MIS operations and telecommunications services (hereinafter
collectively referred to as "Services") as set forth in this Agreement.
EJB desires to provide these Services to SSG and represents it has the
capability, capacity, personnel and experience to provide the requisite
Services to fill SSG's forecasted needs.
In consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, SSG and EJB hereby
mutually agree as follows:
1. Appointment
SSG appoints EJB as a nonexclusive provider of Services for SSG as set
forth herein.
2. Term
Subject to the expiration or earlier termination of this Agreement as
provided in paragraph 11 below, the term of this Agreement shall be for a
period of thirty-six (36) months from the effective date hereof.
3. Services; Warranties
A. Services
EJB shall and shall cause its employees, agents and subcontractors
(collectively referred to herein as "employees") at EJB's sole cost and
expense, to provide all Services, including operations and support, for
SSG's, and its subsidiaries', operations in the United States.
In performing the Services, it is anticipated that EJB shall provide
such high level talent at SSG's facility in Dallas, Texas, or at such other
location as SSG may be located in Texas, on such basis as it deems necessary
to fulfill its duties hereunder which shall not be less than 13 full time
employees on site per day for at least 8 hours per day during SSG's normal
business hours or as otherwise agreed between the parties. In any event,
EJB shall utilize Xx Xxxxxxx and other individuals therefore with
equivalent knowledge and expertise as approved in advance and in writing by
SSG ("substitute individuals") in its performance of the MIS services. In
the event any employee of, or consultant to, EJB is replaced by a substitute
individual, EJB will be solely responsible for all costs and expenses
related to hiring, retraining and replacing such person with the substitute
individual
For all Services other than that set forth above, the parties shall
agree to an applicable price structure.
B. Warranties and Covenants
EJB warrants and covenants that, in performing the Services:
(1) it will strictly comply with the descriptions and representations
as to the requirements of the Services (including performance
capabilities, accuracy, completeness, characteristics, specifi-
cations, configurations, standards, functions and requirements) as
designated by SSG's MIS Steering Committee;
(2) its Services shall be in accordance with generally applicable
standards in the industry; and
(3) the Services shall not violate or in any way infringe upon the
rights of third parties, including property, contractual,
employment, trade secrets, proprietary information and non-
disclosure rights, or any trademark, copyright or patent rights.
Attached hereto as "Appendix A" is a list of SAP training classes
attended by consultants (Xxxxx Xxxxx, Xxxx Xxxxxxxx, Xx Xxxxxxx Xxx Xxxxx
Love and Xxxx Xxxxx) and paid for by SSG. If any of the listed consultants
resign, are terminated or otherwise leave for any reason, EJB will be solely
responsible at its own expense for retraining and replacing the consultants
(including, without limitation, paying for the replacement to attend
identical SAP classes that the leaving consultant attended at SSG's
expense).
4. Reporting, Recordkeeping
A. Reports: SSG may periodically request from EJB various reports on
the Services. EJB shall submit the reports within the time specified and in
the form designated by SSG.
B. Maintenance of records: EJB shall keep and maintain all records,
by project, of its Services at its main location set forth above for not
less than six (6) years following expiration or earlier termination, as
provided herein, of this Agreement.
C. Inspection of records: EJB agrees to permit any duly authorized
employee, agent or representative of SSG to inspect EJB's records related to
its Services during regular business hours upon telephone notice. EJB
further agrees to permit any duly authorized employee, agent or
representative of SSG to copy and make extracts or compilations from or, at
SSG's request, to send to SSG free-of-charge, copies of all books and
records pertaining to EJB's performance of the Services.
5. Organization and Facilities
EJB is solely responsible for selecting and maintaining a satisfactory
staff sufficient to fulfill its obligations under this Agreement. Except as
specifically set forth herein, all costs and expenses incurred by EJB in the
operation of its business including, but not limited to, all rents,
compensations, fees, taxes, licenses, insurance, permits, telephone,
telegraph, telecopier expenses, and all other audit, administration and
other expenses shall be borne and paid by EJB excluding those expenses
directly related to the Services and incurred at 0000 Xxxxxxxx Xxxxx,
Xxxxxxx Xxxxxx, Xxxxx with SSG's prior written consent. In furtherance and
not in limitation of the above, it is specifically agreed that EJB shall
bear the cost of any data lines installed, with SSG's prior written
approval, at an off-site premises to perform the Services. If SSG
specifically requests that employees, officers, directors or agents of EJB
travel anywhere with a distance greater than sixty (60) miles of SSG's
present headquarters in Dallas, Texas, in accordance with performance of the
Services, the reasonable cost for such traveling shall be paid by SSG in
accordance with SSG's travel and entertainment policy. However, it is
hereby agreed by the parties that any approved air travel shall be limited
to discount coach class.
6. Compensation
In full and complete satisfaction of the Services to be rendered by EJB
pursuant to this Agreement, SSG agrees to pay EJB as set forth on Appendix
B. EJB acknowledges that SSG has paid EJB $159,000 as an advance deposit to
apply against future Services to be provided under this Agreement. EJB
agrees that SSG may apply such deposit in full satisfaction of the fees
payable for the Services provided in the last month of this Agreement. EJB
further agrees to deduct $662.50 from each monthly invoice in lieu of paying
interest on the prepaid deposit.
7. Insurance
Insurance to be supplied by EJB
EJB shall purchase and maintain insurance satisfactory to SSG of the
kinds and in the amounts specified on Appendix C, or in amounts required by
law, whichever is greater, and furnish SSG with certificates of insurance as
evidence thereof, in the prescribed form prior to the commencement of
Services. SSG shall reimburse EJB for fifty percent (50%) of the insurance
premiums required by this Agreement, not to exceed $3,192.00 per year. EJB
may invoice SSG up to $266.00 per month for payment of these insurance
premiums.
8. Independent Contractor: No Franchise Relationship
A. EJB is not, and this Agreement does not constitute EJB as being,
SSG's representative or agent for any purpose except for the Services
provided herein.
B. It is expressly understood and agreed that EJB is, and shall at
all times be deemed to be, an independent contractor. The parties shall not
in any way be deemed or construed to be partners and this Agreement does not
create a partnership, employment relationship or franchiser/franchisee
relationship between the parties or constitute EJB as an agent, employee, or
representative of SSG.
C. EJB and SSG shall not have the right or authority to act for,
incur, assume or create any obligation, responsibility or liability, express
or implied, in the name of, or on behalf of, the other or any of their
affiliates or to bind the other or any affiliate in any manner whatsoever
unless expressly agreed to in writing by both parties.
D. All personnel employed, subcontracted or otherwise engaged by EJB
to perform under this Agreement shall be the agents, servants and employees
of EJB only. SSG shall have no obligations or liability of any kind, nature
or sort, express or implied, by virtue of, or with respect to, the conduct
of any EJB personnel. In no event shall EJB, or its employees, agents or
subcontractors, directly or indirectly, represent that they are employees,
agents or subcontractors of SSG. Under no circumstances shall any of EJB's
employees, agents or subcontractors be deemed to be employees, agents or
subcontractors of SSG for any purpose, including without limitation,
entitlement to employee benefits from SSG as a result of this Agreement.
E. The hiring, firing, direction, selection and assignment of all
personnel required to perform the Services to be rendered by EJB under this
Agreement shall be under the exclusive control of EJB. All wages, salaries,
benefits and other compensation payable to each person employed by EJB to
perform its obligations hereunder, including, but not limited to all
federal, state and local withholding taxes, FICA payments, workers'
compensation and all other items payable in respect of payroll, medical
coverage, vacations and pension plans, now in existence or hereafter adopted
by EJB or imposed by any governmental authority (federal, state or local) or
now or hereafter included in any collective bargaining or union agreements
to which EJB may now or hereafter be a party, shall be the sole
responsibility of EJB. If any agent, independent contractor, servant or
employee of EJB is held by any governmental entity, for any reason or
purpose, to be an employee, servant or agent of SSG, EJB shall indemnify and
hold SSG, and its affiliates, officers and employees, harmless for all
amounts (including reasonable attorneys' fees) SSG may be required to pay as
a result of any order or ruling.
9. Indemnification
EJB does hereby agree to indemnify and hold SSG and its affiliates and
any director, officer, employee or agent thereof (each of the foregoing
being hereinafter referred to individually as "Indemnified Party") harmless
from and against all liability including but not limited to all claims,
damages, expenses, costs, judgments, and reasonable attorneys fees to third
parties arising from or in connection with the violation of any third
party's trade secrets, proprietary information, trademarks, copyrights, or
patent rights in connection with the performance of Services under this
Agreement. EJB shall indemnify and hold harmless SSG, SSG's affiliates and
their respective directors, officers, agents and employees, against and
from any and all claims, actions, liabilities, and suits, whether groundless
or otherwise, and against and from any and all liabilities, losses, damages,
costs, charges, counsel fees, and all other expenses, of every nature and
character, based upon or arising out of the performance by EJB of Services
hereunder, or in any way occasioned by, or arising out of the performance by
EJB of Services hereunder, or in any way occasioned by, or arising from, the
presence of EJB on SSG premises, or due to any act or omission by EJB. In
the event that any claim shall (either during or after the term of this
Agreement) be instituted against SSG by reason of any of the foregoing, EJB,
if SSG so requests, shall defend such claim at its sole expense by reputable
counsel acceptable to SSG. This indemnification provision shall not be
released or waived by reason of any insurance or surety provided by EJB
under this Agreement. EJB's obligation to indemnify any Indemnified Party
will survive the expiration or termination of this Agreement by either party
for any reason. The reference to EJB herein shall refer to EJB, its
officers, directors, employees, agents and subcontractors.
10. Confidentiality
EJB acknowledges that it may create or receive manuals, catalogs, price
lists, customer lists, new product information, projections, diagrams,
models, previews, computer software, and other information ("confidential
information") to enable it to perform hereunder. Accordingly, EJB agrees to
protect and safeguard the confidential information, disclose it only to
those of its employees, agents or subcontractors who have a need to know the
same and to protect the confidentiality thereof including but not limited to
obtaining enforceable signed written nondisclosure and noncompetition
agreements by such employees, agents or subcontractors to be bound by the
provisions of this paragraph. No copies, extracts, summaries or
compilations of, or relating to, such information may be made without the
prior written consent of SSG. EJB shall neither reverse engineer, decompile
or otherwise seek to decipher any coding or technology, nor shall it permit
or assist others to do so. A breach or threatened breach of this section
may be enjoined or restrained without bond or proof of actual damages in any
court having jurisdiction. This Paragraph 10 shall survive the termination
of this Agreement.
Upon expiration or earlier termination of this Agreement, as set forth
herein, EJB shall return to SSG all confidential information and all copies
thereof.
11. Termination
A. SSG may terminate this Agreement immediately upon notice to EJB
for cause (such as a breach of this Agreement) or in the event
that Xx Xxxxxxx does not perform the Services on behalf of EJB.
EJB shall promptly invoice and SSG shall pay for all authorized
Services performed through the date of termination.
12. Results Of Expiration Or Termination
Upon the expiration or earlier termination of this Agreement, EJB shall
promptly return to SSG all inventory, reports, documents, catalogs,
literature, materials and tangible property supplied by SSG, all material
arising from the Services and all other confidential information and provide
SSG with detailed documentation on the Software as of the date of expiration
or earlier termination (collectively "information"). It is understood that
if any such information belonging to SSG is held by officers, directors,
employees, agents or subcontractors of EJB, EJB covenants that it will
ensure that such information shall be promptly returned to SSG. EJB
warrants and represents that upon hiring officers, directors, employees,
agents or subcontractors to provide Services as set forth therein, EJB shall
obtain such officers', directors', employees', agents' or subcontractors'
written agreement to the provisions of this paragraph.
13. Assignment
This Agreement is personal to EJB and is based upon EJB's claimed
expertise, ability and reputation. Neither this Agreement nor any of the
rights or obligations of EJB hereunder may be assigned, delegated,
subcontracted, transferred or conveyed by operation of law or otherwise
without SSG's prior written consent in each instance. Each successive
assignment shall require SSG's prior written consent, which consent shall
not be unreasonably withheld. Assignment shall not release the assignor
from liability hereon.
14. Compliance With Laws
A. EJB and SSG respectively shall obtain, and shall ensure that their
employees, agents and subcontractors obtain, at their respective sole cost
and expense, all necessary certificates, registrations, licenses and permits
required by any applicable law, rule or regulation for each to operate
respectively in accordance with the provisions of this Agreement and
respectively shall pay all applicable duties, taxes, fees or additional
charges (including interest and penalties, if any) required by all
authorities in performance of their businesses.
B. EJB and SSG shall comply with any and all applicable federal,
state or local statutes and laws, and all rules and regulations promulgated
thereunder, relating to their respective performance pursuant to this
Agreement including but not limited to, laws, rules and regulations
regarding employee compensation, hours of work, safety, equal employment
opportunity, nondiscrimination, working conditions and other conditions of
employment.
C. At either EJB's or SSG's request, from time to time, the other
party shall provide adequate assurance and evidence of its continuing
compliance with this section.
D. EJB and SSG agree to indemnify the other from any and all
liability which arise from and shall pay reasonable attorneys' fees and
costs incurred as a result of any violation of their respective obligations
under this section.
15. Trademarks
EJB shall use its own name in all dealings. It may not use any
trademarks or tradenames or rights to use same belonging to SSG or its
subsidiaries or affiliates without SSG's prior written consent in each
instance.
16. Copyright
All ideas, written materials, and other developments or improvements
conceived and creation of any work ("Work") by EJB, alone or with others,
during the term of this Agreement, including but not limited to all
programs, coding, routines, algorithms, programming, changes, functions,
formulas, etc., whether in progress or completed that are within the scope
of the Services of this Agreement and are for SSG, are the sole and
exclusive property of SSG and that any and all patents, copyrights and trade
secrets shall be owned by and belong to SSG. EJB agrees to assist SSG, at
SSG's expense, to obtain copyrights or any other applicable proprietary
rights ("rights") on any such ideas, written materials, and other
developments, and agrees to execute all documents and do anything necessary
to obtain such rights in the name of SSG as requested by SSG. It is agreed
that any filing fees and costs for such rights filings specifically
requested by SSG shall be paid by SSG. EJB agrees that to the extent that
any Work is deemed by a Court not to be the property of SSG, EJB agrees to
fully and exclusively assign all rights, title and interest to the Work to
SSG including but not limited to full and complete copyright rights and the
right to copyright all Work.
17. Miscellaneous
A. NON WAIVER; AMENDMENTS
No delay on the part of either party in exercising any of its
respective rights hereunder, nor the failure to exercise the same, nor the
acquiescence in or waiver of a breach of any term, provision or condition of
this Agreement shall be deemed or construed to operate as a waiver of such
rights or acquiescence thereto except in the specific instance for which
given.
None of the terms, provisions or conditions of this Agreement shall be
deemed to have been waived, amended, modified or altered by any act, course
of conduct or knowledge of either party, its respective agents, servants or
employees, and the terms, provisions and conditions of this Agreement may
not be changed, waived, varied or modified except by a statement in writing
signed by the duly authorized representatives of both parties.
B. SURVIVAL
Paragraphs 3B, 4, 8E, 9, 10, 12, 14, 15, 16, and 17 shall survive the
expiration or earlier termination of this Agreement.
C. NOTICES AND PROCESS
Any notice or process shall be in writing and shall be deemed to have
been duly given to EJB if the same is either delivered personally or is sent
by registered or certified mail, return receipt requested, to the location
set forth on the first page of this Agreement or to such other location as
it may designate by a notice given in like manner. In the case of notice or
service of process to SSG, it shall be duly given if either delivered
personally or is sent by registered or certified mail, return receipt
requested to the Chief Financial Officer of SSG with a copy to the General
Counsel at 0000 Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx 00000 or to such other
location as it may designate by a notice given in like manner. Notices by
counsel on behalf of a party shall be effective as if given by the party.
D. COMPLETE AGREEMENT
This Agreement and that certain Confidentiality and Non-Disclosure Agreement
dated March 9, 1998, by and between SSG, EJB and Xxx Xxxxxxxxxx supersedes
any and all prior agreements or understandings, oral or written, express or
implied, and encompasses the entire understanding between the parties with
respect to its subject matter. There are no inducements, representations,
warranties, covenants, agreements or collateral understandings, oral or
otherwise, express or implied, affecting this Agreement not expressly set
forth herein.
E. NO THIRD PARTY BENEFICIARIES
This Agreement and the rights and obligations hereunder do not and
shall not confer any rights to any third parties and no third parties shall
have any rights under this Agreement.
F. REMEDIES
All remedies available to either party for breach of this Agreement are
cumulative and may be exercised concurrently or separately; and the exercise
of any one remedy shall not be deemed an election of such remedy to the
exclusion of other remedies.
G. SEVERABILITY
If any provision of this Agreement shall to any extent be finally held
to be prohibited, invalid or unenforceable in any jurisdiction, the
remaining provisions of this Agreement shall remain in full force and
effect, and any such prohibition, invalidation or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
H. NON-SOLICITATION
During the term hereof, any renewal term(s) as provided herein and for
1 year after the expiration or termination of the term and any subsequent
renewals, SSG and EJB each shall not, and they shall not permit any of their
employees, shareholders, officers, directors or agents to, solicit, entice
or induce any current employee or person employed or engaged by the other to
leave their employ and work for them or any subsidiary.
SPORT SUPPLY GROUP, INC. EJB DEVELOPMENT, INC.
Xxxx X. Xxxxxx Xxxxxx X. Xxxxxxx
President
Date: _____________________ Date: _______________________
Appendix B
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Compensation
The payment for all Services provided under this Agreement shall be as
follows:
1. Services: Payment for the Services shall be $141,666 per month
on or before the 5th day of each month.
2. Services: Payment for Website Hosting Support and MAC device
Support shall be $8,000 per month on or before the 5th day of each month.
3. Additional Services: Payment for any Additional Services shall be
at rates agreed to in writing by the parties. Any Additional Services to be
provided by EJB, over and above the Services set forth in this Agreement,
must be approved in advance and in writing by the MIS Steering Committee.
Appendix C
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Insurance
EJB shall purchase and maintain insurance satisfactory to Sport Supply
Group, Inc. of the kinds and in the amounts specified in the following
schedule, or in amounts required by law, whichever is greater, and furnish
Sport Supply Group, Inc. with certificates of insurance making SSG (as
defined below) an Additional Insured as evidence thereof, in the prescribed
form prior to the commencement of services:
SCHEDULE OF REQUIRED INSURANCE TO BE FURNISHED BY EJB
-----------------------------------------------------
(A) Workers Compensation - for statutory amounts in each state where
-------------------- EJB employs personnel;
(B) Commercial General including Products/Completed Operations,
------------------ Contractual and Personal Injury Liability
Liability - for Limits of $1,000,000 per Occurrence or
--------- Offense; $1,000,000 Products/Completed
Operations Annual Aggregate; $2,000,000
General Aggregate;
(C) Professional Liability including Errors and Omissions, with
---------------------- limits of $250,000 per occurrence
The Commercial General Liability insurance will name SSG, its subsidiaries
and affiliates, and the directors, officers, employees and stockholders
thereof ("SSG") as Additional Insured for all coverages provided by the
policy except Contractual Liability. The policy will specify that it is
primary insurance with respect to the coverage provided to SSG and not
subject to contribution by any insurance SSG may maintain. All the
foregoing policies will be endorsed to state SSG (at the address stated in
this Agreement) will be provided thirty (30) days prior written notice, by
the insurers, of any cancellation, refusal to renew, reduction in limits of
liability or restriction of terms or conditions of coverage. Copies of the
endorsement to each policy, signed by an authorized representative of each
insurer, will be provided to SSG by EJB. All of such insurance shall be
issued by insurance companies with a Best rating of A or better and a
financial rating of Class VIII or better. No insurance shall have a
deductible or self-insured retention of more than $10,000.
